What is Cloud?

For a technical definition of cloud computing please see the National Institute of Science and Technology’s definition of Cloud Computing. In my opinion, Cloud is a term that refers to anything that is delivered “as a service”. The term “as a service” means you use it when you need it, but you don’t have to own it to use it. You probably also shouldn’t care about how it is delivered as long as it meets your requirements.

For the sake of simplicity, LinkedIn, Facebook, and Twitter are cloud services that provide interactions to their customers as and when required. Just 20 years ago, if you wanted to send your favorite pictures to grandma or to your friends, you had to buy a physical album, and mail it to them. Now this whole process can be turned around in seconds, and can be viewed all over the world. No more buying an album—Facebook provides that facility as and when you want it.

Impact on Business

Let’s translate this into a business scenario: cloud computing communication options like Webex, Slideshare, etc. have revolutionized business interaction. Now you can work from home, airport, hotel room, or coffee shop and interact with your customer. This changed the travel industry as more and more businesses required essential travel only. Just a few years ago, when you wanted to present an idea or pitch a sale to clients or management in different offices, you would have to travel around the country, schedule travel schedules and get everyone in the same room. Now all you have to do is make sure the calendars are aligned and the presentation can be worked on. Does that mean human interaction is dead? No! The level of the human interaction has significantly increased because of the increased frequency of online touch, and our ability to use services as and when you want them in the cloud. In these scenarios, cloud acts like a tool to increase human interaction. And like any tool, it is how you use it that makes the difference.

Real World Examples

For example: In 2009, a US based retail business customer came to the organization I was working for at the time with a problem: they faced major competition from online retailers and their in-store shopping model had taken a beating. To compete in their industry, they needed to completely revise how their customers were interacting with their organization and buying products. However, given their older systems and their past performance, they did not have the budget available to make a major upfront investment in building solutions to make their customer experience better, let alone retrain their staff to implement and manage those new solutions. And considering the timing: 2008-09 recession period, this was also not a good time to get managements / investors to make major investments in any business. We helped them deal with this situation by delivering to them a cloud based solution for e-commerce. We kept the upfront investments down by replacing this with on-going costs which matched their usage of resources and sales. Retailers in America love this because 3 months out of the 12, they have a great spike in sales and then most of the year, can be slim pickings at best. The impact was that retail business was able to survive the recession, able to come out leaner and meaner, and able to face competition from the online retailers in their industry.

In another case, we recently had a small business come to us that competes with the organizations much bigger in size and scale, in their industry. Their major issue was that they had no idea how well their discount campaigns worked. While larger companies can typically tell how their campaigns are working, this small organization didn’t know if the customers who were cashing in the discounts, were loyal and how quickly were they interacting with their organization due to these campaigns. This was primarily because the organization could not combine customer data (from loyalty email registrations) to data from sales. Plus the small business had a very limited technical staff, so deploying any IT solution to help combine the multiple data sources, was next to impossible. So we developed a cloud based solution where we managed the solution, and combined the data sources and delivered reporting on the impact of discount campaigns. In this case, we were managing the whole IT solution in the cloud, so that the customer could derive the business value, and limit their attention to business problems.

In the end, one of the lessons to be learned is that cloud computing a tool to solve problems. At the end of the day, it is a hammer, but it needs its nail: a business or personal problem, that must be solved to make it valuable.

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