Category: Speaking engagements

This is the second part of the presentation given as part of the City of Sydney’s Let’s Talk Business series of presentations on new business technologies.

Scalability

This scalability, or flexibility, of cloud computing changes the way we buy and use technology. No longer are we locked into major technology investments as leasing services off larger companies means we don’t have the capital costs of investing in computers, servers and all the associated software purchases and support charges.

An architect or designer a few years ago might spend $10,000 per employee every three years kitting them out with the latest workstation capable of running AutoCAD or another high end design program.

While some businesses still need that sort of investment, most can now get away with just a computer running a web browser and the boss can pay the monthly bills on her credit card rather than having to take out a loan against the family home.

The 19th Century Prussian general, Helmuth von Moltke said “no battle plan survives first contact with the enemy” and similarly no business plan survives its first contact with the marketplace. The flexibility of cloud computing means we aren’t locked into expensive technology choices as our business evolves to meet the changing demands of our customers and industries.

Teamwork

Collaboration is another of the big buzz words of today’s economy. The truth is all successful businesses are a collaborative effort and have been since the days of cavemen hunting mammoths.

One of the biggest irritants with PC based systems is how they are designed for one user at a time and how many force you to pay for an unreliable multi user versions.

Think about Microsoft Word, if you’re accessing it on the network you’ll find only one user at a time can read or edit it. This was true of the older desktop accounting packages.

The older, desktop based accounting packages only allow one user. Their multiple user, network packages are expensive and clunky. The cloud based systems like Xero or Saasu, an online service based out of Elizabeth Street here in Sydney come with the teamwork functions built in.

Recently at a workshop in Melbourne, a director of a large services company told me how his board of directors are using Google Docs to work together on agendas and committee documents. Using cloud services are saving him and his colleagues many hours of work and avoiding having big piles of documents dumped on them the weekend before their board meetings.

The team aren’t just your employees, it can also be your customers, suppliers and other business partners. Cloud services allow you to share selected information without compromising your own systems.

Mobile working

By definition your customers and suppliers aren’t in your office. Increasingly your staff and even the boss aren’t there either.

Working on the move has been one of the great weakness of both PC computing and the mainframe era. Cloud computing, made possible by accessible and affordable Internet, means we can now easily access data and applications while we’re on the road.

Remote working has been possible in the past, but it was awkward and difficult. To set up secure connections usually involved setting up a complex and flaky Virtual Private Network that tended to choke at the times you needed it.

In my own IT support business we saw this a number of times where we struggled to set up reliable remote networking connections. For instance the owner of a business in Pyrmont decided to move his home to Orange and telecommute into the office. At the same time his assistant had a baby and wanted to work from home.

The juggling of hardware and server requirements so the client had a secure and reliable service was difficult and expensive. Today the use of online accounting and office packages along with cloud based document sharing services like Dropbox, that business could be paying $100 a month without any upfront capital costs.

Dismantling edifices

Those capital costs are real, a five person Sydney law firm I know ended up spending thirty thousand dollars when their software provider told them they had to upgrade their systems.

Much of a big or small businesses IT budget goes into building impressive technological edifices that add little to the profitability of the business.

Worse, IT is a time consuming beast – in a big business hundreds of people are employed to keep their computers running. In a small business, the proprietor or manager spends a disproportionate amount of time messing with technology.

Cloud services take a lot of that load off businesses.

We should keep in mind though that this is as big a benefit for big businesses as well as small. Last year the Commonwealth Bank of Australia announced they were moving services to the cloud.

The big end of town has woken up to the benefits of cloud computing, while they have a problem in dismantling their massive structures once they do they will be stronger more nimbler competitors as their cloud platforms make it easier for them to respond to market changes.

Barriers are falling

As large businesses are learning, removing big capital costs reduces barriers to testing new ideas. It means getting a new business up and running is cheaper and quicker than ever before.

On the back of Sydney Buses at the moment you’ll see ads for Freelancer.com, stating you can get an iPhone app or website developed from $30. While the reality is you’ll pay quite a bit more than that, the point is well made – with a web browser and a credit card you can outsource large parts of your business.

Most of these outsourcing businesses are run on cloud services. Many of the social media successes like Facebook and Twitter grew by hiring space off cloud computing services such as Amazon.

For established businesses, the cloud is changing the very fundamentals of their operations. One of the biggest growing areas in the outsourcing industry is the legal profession where law firms are giving lower level work to companies in India that can carry out the tasks of junior lawyers or paralegals. The cloud technologies these services use allow the law firms to supervise and bill for the workers as if they were in the same building.

Because you can be up and running in minutes using cloud computing services without the need of installing software on your computer, let alone the time involved in managing and downloading updates, it’s a quick and effective way to grow your business.

This is the second of a series of four posts taken from The Networked Business presentation. Parts One, Three and Four are also online.

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This is the first part of the presentation given as part of the City of Sydney’s Let’s Talk Business series of events on new business technologies.

The IT industry loves buzzwords and one of the biggest buzzwords at the moment is Cloud Computing.

Another thing the IT industry loves is overselling concepts, think of Y2K or the Dot Com Boom, so in this presentation we’ll look at what cloud computing is, whether it’s being overhyped and what it can realistically do for today’s businesses.

In 2003 Nicholas Carr wrote in the Harvard Business Review that Information Technology no longer matters. In Nick’s view, computers, the Internet and IT are all becoming a utility and we’ll take computers and the Internet for granted just as we in the Western world consider clean running water and electricity today.

That point of view is probably true and the always on nature of the Internet and cloud computing is bringing us closer to the day we’ll assume IT is always there.

In the always on, always connected society each of the nodes we see on this screen could be a customer, a supplier, an employee or even the tax man and this changes the way we do business.

But every innovation has its risks and every revolution its victims. So we’ll look at the risks as well as the opportunities in an economy where cloud computing is changing the fundamentals of our businesses.

What is the cloud?

Before we go on, let’s explain what the cloud is. The analogy of a cloud is quite appropriate, just as a rain cloud is made up of many individual water particles, the Internet is made up of millions of computers talking to each other.

In fact there are so many computers on the Internet that the Internet Protocol version 4 developed in 1980 allowed around 4 billion address and we’ve just run out of those.

The Internet Protocol 6 now being introduced allows 34 undecillion addresses. An undecillion is a trillion, trillion, trillion so 34 undecillion addresses is a big number, although in 1980 4 billion seemed to be a lot and it was unthinkable we’d use them all up in 30 years.

The Internet though was designed to survive the unthinkable. Surviving a nuclear war was the reason for the Internet’s design. The fundamental idea behind the net is redundancy, should one group of computers fail the network adapts and sends the information around the damaged area.

The same principle applies to cloud computing, the tens of thousands of computers in each data centre – the buildings that house the cloud computing companies – are duplicated many times so if one or a hundred fail then others will pick up the work and the person using the service should never notice there has been a problem.

Naturally the data centres themselves are duplicated so the failure of one centre won’t interrupt the service. When you open a document in Google Docs, the data and the program are being run on computers in Oregon, Belgium possibly even here in Sydney.

Interestingly, the computers in these data centres are cheap and basic with most of them having less power than our home or office desktop computers.

The real power lies in combining the capabilities of these modest systems, as a group they are far more powerful than most supercomputers.

For our purposes we can define cloud computing as using someone else’s computers to do the work rather than our own systems.

Cloud computing is nothing new

The idea of cloud computing isn’t new, it goes back to the earliest days of computers.

Until the arrival of the personal computer, academics and businesses had to use mainframe computers where time was allocated to them by the computing department. These were only really feasible for well resourced organisations.

The Personal computer took the data off the servers and onto the desktop. It’s notable that IT departments back then resisted introducing personal computers for almost identical reasons that they are resisting cloud and web based services along with social media tools today.

PCs and later laptops and smartphones had advantages that the old mainframes could never offer and while the old ways of centralised computing didn’t go away, most people and businesses preferred the advantages of the smaller, more flexibile systems.

With the arrival of the Internet, it was possible to link computers in the same way again and take advantage of the economies of scale of what we call client-server systems while retaining the benefits of personal and mobile computing.

This is the first of a series of four posts taken from The Networked Business presentation. Parts two, three and four are also online.

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