Posted by: Christian Verstraete | January 19, 2010

Cloud Computing and Manufacturing


Last week I had the opportunity to talk to a number of CIO’s regarding Cloud Computing and its use in Manufacturing. It turned out a very interesting experience. Indeed, despite the concept of Cloud being out there now for nearly two years, there is still a lot of confusion on the subject. This is probably the result of the current hype. A couple areas of interest came out of my discussions. One was the legal and security aspects related to data in the cloud. How do we ensure privacy laws are respected? How do we address Sarbane-Oxley and Basel II compliance? How avoid proliferation of data in the cloud? How secure the data?

The second one was related to the question whether to use the cloud, and if that was the case, for what purpose and how to transition to the cloud.

While I was having those discussions, Gartner predicted that 20% of businesses will get rid of all their IT assets as they embrace cloud. Gartner does not seem to define what it means by “business”. The only thing I can say is that the statement does not resonate with large enterprises today. None of the people I talked to where any close to get rid of their IT. They were asking themselves whether they should put a toe in the water, no more.

The private cloud on the other hand, had more appeal. Although they recognized that neither Oracle nor SAP officially support virtualization, a major barrier to moving to a private cloud, many felt it was time to transform their datacenters and take advantage of simplification, standardization, modularization, virtualization and automation, to use some of the latest buzzwords.

The next question then was where to start. We had multiple exchanges on whether it was best to take an existing application and move it to the cloud, or start with something new. The concept of community cloud, and the use of cloud to create a tighter integration with supply chain partners, was one that resonated quite well in the discussion. The fact this could be achieved without requiring a large CAPeX investment upfront came as a relief to many.

The discussions confirmed my observations. Where SMB’s are frantically moving to the cloud, enterprises are not ready for it. Too many issues (legal, security, standardization etc.) remain open. The use of a private cloud, or the migration to a utility type computing however, is seen as an intermediate step that could not only add benefits, but also prepare the company (and its ecosystem) for the future.

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Responses

  1. […] This post was mentioned on Twitter by Christian Verstraete and Christian Verstraete, Christian Verstraete. Christian Verstraete said: New blog post: http://tinyurl.com/ygudofb – #CloudComputing and #Manufacturing, are enterprises ready for the #cloud? Apparently not. […]

  2. Social comments and analytics for this post…

    This post was mentioned on Twitter by christianve: Cloud Computing and Manufacturing: http://wp.me/pGxWG-V

  3. On paper the appeal of cloud computing is great – cost saving, scalable, no capex. However, could you trust cloud and SaaS providers to run your business? Given the ocassional outage (such as the one experienced by Salesforce.com recently), question marks over security and no single point of responsibility it would be a brave CIO who staked his career on running a 100% cloud-based operation.

    I agree with Christian that private clouds are the most likely way forward.

  4. Gartner is right about business getting rid of their IT assets, IDC is not. http://bit.ly/bKFgRV


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