Even Bigger than the Internet

Published by: Srini Chari

The cloud is changing everything. The change is even bigger than the change we saw from the Internet. It will change how every business operates. That’s what a cloud computing expert told me – Roger Krakoff, founder and managing partner of Cloud Computing Partners, a venture capital firm that invests exclusively in cloud computing. I didn’t get it. How could this be? Then I had a second conversation with Roger.

An HBR Analytic Services white paper gave me the core of a cloud computing definition I like: “enables access through the Internet to a shared pool of computing resources (hardware, software, etc.) that can be tapped on demand and configured and scaled up or down as needed.” But it stops there. Thanks to Roger I could now add “by any computing device.” That was the missing link. It’s the mobile implications that make cloud computing transformational – not merely evolutionary. Aha!

But then came an e-mail exchange and Roger’s P.S. “better to think of cloud computing as dial-tone or electric power. It is there when you need it. Pay by the unit and it just works.” Bingo! The cloud is the new utility – like electrical power or water or the Internet! One source of its power to transform businesses is what happens when it handles business transactions. And this is already happening in a really big way.

On May 17th, IBM released the following stats about its enterprise SmartCloud services customers: one million enterprise application users working on the IBM Cloud. More than $100 billion in commerce transactions a year in the cloud. 4.5 million daily client transactions conducted through the IBM Cloud. And that’s just one major vendor of cloud services!

What’s more it’s just the beginning. TopCoder, the world’s largest open innovation community, with 400,000 developers is moving to the IBM SmartCloud Enterprise. From this we can expect an exponential increase in innovation, as these developers support the organizations for which they work with the entire innovation process – from ideation, software engineering and analytics to implementation, testing and support.

At YouTube (http://www.youtube.com/ibmcloud) I found the moving story of how the cloud has transformed the Bari fishing industry – and made life better for the fishermen and their families with a new business model. Until recently, the fishermen caught too many fish. They exceeded market demand, Thanks to cloud computing, they can now communicate how many fish they are catching in real time and a virtual market can sell the fish before the boats dock. Now they catch only as many fish as the market consumes, their income is up 25 percent and the time to market is down 70 percent. Wow! That’s innovation that matters!

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