Led by Accenture co-facilitators Gene Reznik and Anant Krishnan, the debate took place during the Cloud Computing and Software as a Service in the Enterprise breakout session at the Accenture Global Convergence Forum.
Changing business models, underlying technologies and architecture will create a new wave of innovations and launch a new market for cloud computing services. For enterprise IT users, the cloud holds great potential for delivering lower-cost services, greater IT agility, more flexibility and a better user experience. The software cloud – commonly referred to as software-as-a-service cloud is one example, which allows computer applications to be accessed through a web browser on a per-usage basis.
Panelists agreed that cloud computing and SaaS are reshaping the way IT infrastructure and application services are procured, delivered and supported. These rapidly growing offerings continue the industrialization trend of IT, and let customers benefit from lower-cost solutions. The network-based delivery models are boosting innovation and have become key accelerators for enterprise capability development.
Today's economic environment is speeding up adoption as customers look to conserve capital and reap the gains possible from on-demand delivery models. Analysts predict that within the major IT segments, customer spending on Cloud and SaaS services will grow almost threefold to $42B by 2012. In this environment, cloud computing and SaaS create new growth opportunities for both incumbent and emerging service providers.
This multi-billion dollar market opportunity is attracting a broad number of players, each jockeying for a leadership position. Analysts estimate that the market for cloud services as a whole will reach approximately $150 billion by 2013. Internet-centric players like Google, Amazon and Salesforce.com as well as traditional enterprise powerhouses like Microsoft, Oracle, IBM and EMC have joined the quest for market share. Telcos are also circling the sector, looking for new revenue streams.
Gene Reznik, the breakout session chair, spoke about the opportunities and challenges in the cloud computing arena. With opportunities come challenges. The cloud presents a number of new issues, such as data security, privacy, compliance and service quality. To manage these issues, Reznik believes that companies can take small, incremental steps in cloud computing and SaaS. This way they can reap early benefits and learn how to deal with the associated risks before committing fully.
When competing for multi-national customers who are looking to outsource all or parts of their computing environment, Reznik said that cloud computing services will likely be required. From this point, panelists debated the value of a closed versus a more open approach to cloud computing, or public versus private clouds. Panelists agreed that while some general purpose clouds will exist, other types are likely to emerge. Specialty clouds will cater to the needs of a select group of organizations or a particular industry. Some large multi-nationals may opt to build and operate their own private clouds while continuing to tap into external cloud services. This type of approach would provide both elasticity and control over service quality and data.
When -- or even if -- telecommunications and cable providers will become cloud computing providers has been a subject of industry debate. In the telcos’ favor, the advantage of being network operators, and the services they are increasingly offering, suggest that telcos may be able to sell computing horsepower as well. Infrastructure-in-the-cloud, software-as-a-service and integration-as-a-service, to name a few, are all cloud-based services that would attract an enterprise’s interest, and that telecommunications and cable companies can provide.
“As the cloud continues to gain momentum, more business units and leaders will turn directly to cloud-based solutions to meet their infrastructure and application needs,” said Anant Krishnan. With elastic and theoretically unlimited IT resources on tap, businesses no longer have to wait for the provisioning of servers. By tapping into the right cloud capabilities, companies can quickly enter new geographical markets or launch new products or services in existing markets. And, as demand grows, they can quickly scale up. When demand eases, they can immediately scale down or exit the market with minimum loss of time and capital. The attraction can be found in lower cost services and greater agility – getting exactly the software, server space and cycles needed, for only as long as required.