February 12, 2011
Cloud is the best thing that happened to consultants
By: Huan Liu

It is no question that Cloud is making a big impact in the industry, but how would it impact consulting firms specifically? If you were to believe some analysis on cloud impacts (see reason #3), we, Accenture, will be out of busy very soon, because we cannot adjust to "the smaller projects, agile approach, and lower margins". But if you were to believe me, I think cloud is the best thing that happened to consultants.

One reason is that I believe faster innovation and the myriad of technology choices require deep technology skills and experience. It used to be simple to determine the infrastructure choice. Simply buy a hardware from HP or IBM, install Oracle software, and most of your stack is in place. Unfortunately, in the cloud, there are many options to choose from. On the server options alone, there are many infrastructure cloud providers and each provides many different virtual machine configurations. Even a simple apple-to-apple cloud cost comparison is non-trivial. Once you choose the hardware, you then have to choose the software stack. Again, there are many options. For example, if you were to use a NoSQL data store, you are faced with many NoSQL platforms. There are many dimensions to compare NoSQL stores, and understanding your application requirement and choosing the right one is a daunting task.

To make the matter worse, the innovation rate is much higher in the cloud era. As an example, every month, Amazon is pushing out new services or new features. Even for a person like me who is focusing 100% on cloud, it is difficult to keep up, let alone someone who is focusing on his business application and just want to choose the right platform. For those who do not want to be bothered with the intricacy of cloud (that is most of us), it is better to contact a consultant.

Indeed, with cloud, the infrastructure cost will be greatly reduced, which could eat into the deal size. But in large-scale projects, infrastructure cost is typically a small fraction, often less than 20%. The majority of the cost is in application development. As the recent Accenture technology vision points out, the value (hence the margin) is in the high-layer of the stack. Consultants' value is in solving clients' business problem, not in saving infrastructure cost.

One thing that is accurate from the cloud impact analysis is that I would not golf with my clients much. But, sadly, it has been true all along :-(.

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