Gartner defines Cloud 1.0 as “a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a service to external customers using internet technologies”. However, Gartner’s definition is more appropriate for Cloud 2.0 as opposed to Cloud 1.0. Amazon’s S3 (Simple Storage Service) is a good example of a Cloud 1.0 proposition where the focus is on highly reliable, scalable storage with a robust security layer, limited to a customer specified region, for example Europe.
Cloud 2.0 will go beyond basic services like storage or email and as transfer speeds increase, will become a truly global service.
Cloud 2.0 will be a game changer for CIOs. There will be a greater emphasis on service management as opposed to infrastructure lifecycle management. CIOs will spend less time on software licensing, datacentres, and support or maintenance issues.
Choosing cloud service providers will require criteria to be based on reliability, availability, suitability, accessibility, security and cost. Interconnectivity between cloud service providers will also be a key consideration. This is because it’s unlikely that a single provider will meet the entire needs of most businesses, much to Google’s chagrin.
Understanding the cost models on offer will determine how profitable products and services derived from Cloud based solutions will be. Cloud 2.0 will enable CIOs to leverage everything from cheaper electricity prices to off-peak processing cycles (due to time zone variances). Batch processing, which is often done out of trading hours can now be done during the day using a cloud provider in a different time zone. The arguments and logic used for off-shoring e.g. cheaper labour costs, time zone benefits, access to better skilled resources, can all be translated to argue in favour of cloud services.
The shift away from infrastructure lifecycle management will require greater focus on reliable, redundant connectivity to the cloud, both domestically and internationally.
Businesses will be positively impacted in many ways. More investment will be available for research and product development. Virtually limitless scale will be available at a low cost. This will enable innovative solutions that would otherwise be hampered by a lack of funding.
Cloud 2.0 doesn’t just mean service offerings that exist and originate in the cloud. All businesses, not just the large ones, will have access to utility scale computing, ‘a mainframe in the sky’, for a fraction of the cost.
Google BigQuery and Google Cloud SQL as well as other cloud based data processing solutions will enable new offline opportunities. Companies will create and mine data warehouses that were previously unaffordable and technologically out of reach. Businesses will have the ability to process billions of rows of data in seconds thereby identifying new ways to create tailored customer solutions. Transaction data could be pattern matched and cross referenced over long periods of time to determine sweet spot locations, dates and times e.g. for high value purchases, impulse buying or just basic trending. Offers and discounts could then be personalised and targeted more effectively.
Cloud 2.0 won’t just mean new internet only services for customers. CIOs should be looking to leverage the cloud more effectively to reduce cost/risk and improve security inside the enterprise.
Google Apps for business is already taken seriously by large organisations looking to drive down email and collaboration costs. It competes directly with Microsoft’s Exchange server, which although more feature rich, is largely underutilised, with the emphasis placed on messaging and calendaring.
As governments around the world invest in connecting their nations together with fibre, Cloud 2.0 will inevitably change the face of IT services, forever decentralising them to a point where location is no longer relevant.
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.