Everyone is talking about cloud computing, but most of the debate misses the point. Cloud computing isn’t really about computers at all, it is about business services which are delivered in new ways. Much of the time it is about combining offers in the market.
As with many new things, there is confusion over the terminology with Infrastructure as a Service (IaaS), Software as a Service (SaaS) and Business as a Service (BaaS) all overlapping with more general concepts of cloud. While the more effective use of computing resources is a feature of cloud computing, it is not the most valuable.
As business gets more complex, it is harder and harder for organisations to maintain every capability internally. Even the deployment of packaged software requires both IT and business project staff to have a good understanding of the business problem. This is the reason why cloud solutions for specialised problems like staff expense management have become so popular so quickly. Another reason why these have formed the first generation of deployed solutions is that they are easy to segment from other operations of the organisation.
Cloud delivered computing services, often provided on a pay for service basis also offers an alternative to the buy or lease options traditionally evaluated when acquiring computing resources. Use of on-demand, pay for use services also offers a way of temporarily delivering Information technology in support of merger, acquisition and separation activities.
Where consumers have had access to cloud-based services that simplify their lives by synchronising data, integrating their online purchases or bringing together their files they have grabbed them enthusiastically. Presented with a simple way to manage their telecommunications or banking services they typically embrace it quickly.
In the near future, the cloud will make a range of payment solutions possible, possibly rendering mobile payments (through Near Field Communications or NFC) redundant before they’ve even hit the market. What will make these new services interesting is that they will be independent of merchant or customer technology and rather combine location services with other aspects of the shopping experience.
One of the most common concerns that organisations raise about cloud computing is the potential for data to become fragmented, ungoverned or worse, exposed to foreign parties. All of these concerns are valid, however cloud also offers the opportunity to provide a much tighter framework to protect and govern that very same information. By assigning and contracting responsibilities, a proper governance structure can actually create greater accountability and remove many risks from within an institution.
The only certainty is uncertainty. The competitive market for customers means that everyone is looking for an edge, something to bundle or use to add value. Be it through loyalty points or one-off rewards. With cloud, the third party becomes a service which participates fully in the client experience, but leaves the client relationship intact.
Without cloud, a retailer, financial institution or utility looking to white label a specialised product has to re-host the content on its own website and either hand-over the client to the third party or develop a full application on their own servers. With cloud, organisations can offer third-party products delivered through the cloud as a seamless part of their own service. Not just the website but also the retail, digital and call centre channels.
It is likely that banks will partner with retailers to provide an integrated online experience. Why would a customer want to go all the way through to an online store if all they want to do is repeat a purchase they made in a previous month. Their credit card statement on their internet banking portal is probably the first place they’d like to go to repeat the purchase. Done properly, this will be a true cloud service with a seamless set of rich shopping applications embedded.
One of the best examples of this would be female cosmetics which are often purchased without change over many years. Partnering with retailers or even wholesalers, banks can offer a re-order application within their banking environment without ever needed to develop retailing expertise within the IT or business teams.
While change is a challenge to incumbents, cloud computing provides an exciting opportunity to create an agile organisation and to launch products in response to new entrants almost as quickly as they can.