I recently had the privilege of spending a couple of hours with my 5 year old granddaughter. I am usually surprised at what I learn when seeing the world through a fresh set of eyes. My granddaughter is a born planner and she decided that we should plan a party for my wife. There was no special occasion for this, the party itself being enough reason to celebrate! Among the activities she came up with was “cloud watching”.
I’m sure most of us have enjoyed watching the shapes of passing Cumulus, Stratus and Cirrus shapes (but probably didn’t schedule it!). Now, with the trend towards cloud computing impacting business models, our cloud watching has become a more serious endeavor.
I have recently moved to Schneider Electric’s Digital Services Platform, so I am now working “in the cloud”. I have been thinking about how the cloud will impact the traditional businesses of Schneider Electric and our customers:
• The cloud enables lower cost software. Schneider Electric has many software solutions with common features (for example energy costing). These common components have been developed and maintained separately by each development group. The cloud can enable centralizing common functionality to reduce development and support costs.
• The cloud computing model is inherently scalable. The efficiency of cloud computing lies in the ability to scale easily. Businesses pay for the computing resources as required and let the cloud hosting services worry about how to manage the infrastructure.
• Data is not Intelligence. My resting heart rate is different than yours, who is healthier? It all depends on a variety of factors of course. In many cases it still takes human intelligence to put data into context. The cloud enables centralizing human intelligence and delivering expert services at a much lower cost.
• Centralization of IT and human expert systems will provide value for small and medium business. If businesses accept the cloud model, the cost of using sophisticated software and leveraging human expert services will be much lower than in the past. Business that couldn’t afford or support on-premise software, can increase productivity and save by paying to use rather than own software. Energy and asset management software come to mind as two potential applications of cloud computing that will be more accessible to smaller firms.
• The possibility to scale businesses exponentially will provide tremendous opportunities. The cloud computing model provides scalability both in terms of number of users and geographic scope. Depending on the type of product and service offering, expanding your business globally will cost less, due to the inherent scalability of cloud applications. Software and services stand to benefit the most from this capability.
The lower costs of developing and maintaining software using common components will lower costs. That in turn will allow small and medium businesses to “use” rather than “own” software to become more productive. Growing businesses to a global scale is now more accessible and affordable. For the mobile workforce of the 21st century, “the cloud” is a storm front that is coming quickly and will change business models in the very near future. Got to go now, my weather app just informed me that a formation of Cumulonimbus is coming my way!