BPM-EAI: “Cloud Computing” – A Silver lining in the ‘Clouds’ that helps enterprises battle the economic slowdown

The world economy is passing through one of the worst economic times in the recent history since the great depression of 1930s. There is hardly any industrial sector that has not been impacted by the economic slowdown. Many Governments all over the world are increasing the spending and adopting fiscal measures which in their view will help revive the global economy. The debate amongst the economists of the world, between the appropriateness of the Government intervention led policy as enunciated by Keynes and the non interventionist policy of Milton, rages on and there is no clarity on when the economy will revive and when things will get back to normalcy. The discretionary spending by the industrial houses especially in the IT function has witnessed cuts in these tough economic times. Enterprises are exercising caution in their spending and more than the actual impact of the economic slowdown the fear of the unknown is keeping spending by the enterprises at bay.
In the current scenario, where in the discretionary spending and capital expenditure in IT function is being scrutinized to a great extent, new paradigms like Cloud Computing might just be the prescription to address the needs of the enterprise.

Cloud computing includes Software as Service, Platform as a Service and Infrastructure as a Service and these models can eventually become the one stop shop to address some of the key enterprise IT needs. The enterprises can avoid capital expenditure on the IT Hardware, Software and package implementation costs and can instead look at newer pricing models such as usage based pricing and subscription based pricing. There is no lock in and risks associated with spending as the services from the service provider can be terminated very easily if the customer does not see benefits from the offering. The Cloud Computing “service providers” will have economies of scale which an individual enterprise cannot achieve and can pass on some of these cost reductions to the enterprises. This is a neat way for an enterprise to convert Capex to Opex and still get all the benefits of having invested in a full scale IT infrastructure. The enterprises can also get the benefits of tiding over the peak and trough demands with out the hassle of investing in an infrastructure that is needed to meet the peak demand.
Gartner defines cloud computing as a style of computing where massively scalable IT-related capabilities are provided “as a service” using Internet technologies to multiple external customers. According to Gartner, Cloud computing heralds an evolution of business that is no less influential than e-business.