The Cloud: Another View for VARs

Everyday there’s a new story about cloud computing and it is an increasing challenge to understand how all of the pieces fit together and how one actually leverages it in a practical and meaningful way. MSPmentor’s recent Cloud Computing Explained in Four Paragraphs did a great job simplifying and explaining cloud computing. But there are some deeper angles VARs need to explore. Here they are.

Let’s recap some of the basics:

• Software as a Service (Applications): Such as  Google apps, SalesForce.com, Workday, and Taleo provide you with immediate access to powerful applications in an on-demand model. This has been around awhile, is a mature model, and many people use  SaaS applications today.
• Platform as a Service (Development): Such as force.com and Google app engine which provide an on-demand development environment that reduces development environment complexity, time and cost so that developers can focus on building applications. This is growing quickly but still quite new.
• Infrastructure as a Service (Computing): Such as Amazon EC2 and CohesiveFT which provide a computing environment to run existing applications in the cloud rather than on your own servers.

How VARs Should Pitch the Cloud

What is particularly interesting is the business impact of cloud computing to drive significant cost savings for companies who take advantage of it. On average IT spend for most companies is 4% of annual revenue and almost 70% of that is spent on infrastructure, maintenance, and support — exactly the areas that the cloud can help with the most. According to Appirio CEO Chris Barbin, cloud computing can help companies save a third of their total IT spend. That’s huge and that savings can either go to the bottom line or it can be used to grow or transform the business, all of which is much better than spending it “just to keep the lights on.”

The number of companies taking advantage of the cloud is still quite small but it is quickly gaining momentum. The challenges ahead won’t necessarily be technical but rather in knowing how best to leverage the cloud in an optimal way or perhaps even not at all. This can be accomplished best by building a strategy and roadmap that defines, over time, how a company will take advantage of cloud computing. Companies like Appirio help develop an overall strategy specific to a business to help them understand how to manage, administer and integrate a cloud computing environment into their business.

Today, leveraging the cloud is mostly about reducing infrastructure and support costs. While this is great, what is really interesting is what cloud computing enables in terms of new ways of doing business.  Consider that a cloud application is not encumbered by a physical location behind a company’s firewall but simply exists for anyone to access as long as they have the proper authorization.

Now consider for instance the IT industry ecosystem that involves thousands of companies who are either vendors, partners, or distributors and their need to work together in a very complex selling and support environment. There are lots of solutions that enable direct, one to one interaction between companies but what if there was a solution that could span multiple companies and bring sanity and efficiency to the complexities inherent in the IT industry.

Up to now – technology was the obstacle – and the result was proprietary, closed, on-premise systems only available for one company. Interactive web applications running in the cloud provide the potential for game-changing innovations that will alter the way we do business.

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