What the Enterprise Needs to Know About Cloud Computing

Cloud computing is becoming a real alternative for companies and governments needing to provide better services while reducing costs. Accenture leverages its High Performance Business research and the extensive experience in commercializing new technologies of Accenture Technology Labs to outline the opportunities and challenges.

Don Rippert Defines and Illustrates the Value of Cloud Computing in the Enterprise
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Cloud computing—defined by Accenture as the dynamic provisioning of IT capabilities (hardware, software or services) from third parties over a network—is becoming a real commercial possibility. This development is driven by the maturation of the Internet as an IT platform, virtualization, hardware commoditization, standardization and open source software.

Accenture believes that cloud computing should be considered another important step in the continuing industrialization of IT, and that it could thus play a future role in helping to enable high performance. However, cloud computing also presents a number of new challenges in data security, privacy, control, compliance, application integration and service quality.

A classic disruptive technology, cloud computing had its origin in the need of small and medium-size companies for simple and low-cost solutions. Its significance, however, lies far beyond cheap computing. Its Web-enabled, variable cost model is a clear departure from existing practice and holds far-reaching significance for IT providers and users alike.

IT departments within business are likely to see their roles gradually shift as business units turn directly to cloud-based solutions. They are likely to experience increased demand for security, procurement, data and similar services. Accenture believes that cloud computing will generally be a catalyst for business growth, enabling businesses to innovate and compete more effectively.

Accenture has identified five major challenges that organizations must confront when considering cloud computing:

• Security. How is enterprise data safeguarded in a shared third-party environment?
  
• Data location, compliance and integration. Even when the market consolidates, most companies will likely use several clouds, making it difficult to keep track of data, control versions and integrate it.
  
• Service-level guarantees. Until service-level guarantees are possible, critical enterprise applications will not migrate to cloud computing.
  
• Legacy systems. In general, these systems do not adapt well to cloud computing.
  
• Procurement. Few corporate finance and procurement processes are set up to deal with the potential flexibility in payment options offered by cloud computing.

CIOs are under pressure, as never before, to cut costs and do more with less. For that reason, cloud computing's pay-as-you-go model is highly attractive, despite the challenges. Based on its extensive client experience, Accenture believes there are three steps that will allow CIOs to take advantage of the cloud today:

• Use the cloud for the right jobs. Today’s infrastructure clouds such as Amazon EC2 offer a relatively inexpensive and flexible alternative to buying in-house hardware. They are mature enough for non-business-critical projects including research and development and software development and testing. They are also well suited for computation-intensive jobs such as data cleansing, data mining, risk modeling, optimization and simulation.
  
• Target the right users for cloud applications. Instead of buying or renewing software licenses for every employee in the company, CIOs may want to switch some workers to lower-cost, cloud-based solutions based on the type of work they do. For example, workers at contact centers and offshore locations are good candidates for using desktop clouds.
  
• Take small steps toward an internal cloud. One of the CIO’s top priorities is to continue improving the utilization of existing IT resources through virtualization and datacenter consolidation. The same effort will eventually lead to an internal cloud.

Contact us to find out how Accenture can help your organization take advantage of cloud computing to support your drive toward high performance.