The Art Is In The Execution : Execution Is In The Cloud
Starting a business in 2010 is very different than 1998. Everything from hiring logistics, financials, telecom, space acquisition to managing my IT infrastructure can be achieved in a matter of hours if not minutes. I am a true believer that your competitiveness lies in how fast, how decisively and how accurately you align execution to tools that allow you to execute effectively. The cloud space is gaining more attention, because the economics of this model are unarguably most appealing to small and mid-sized businesses. Not only that, but even achieving regulatory compliance that meet stringent of guidelines can be done very quickly. Companies like Rackspace are SAS 70 II & ISO 27001 compliant with a fully operational HIPAA / HITECH control procedures in place. Others like Navisite can get your entire development platform up and running within a day with full access to dedicated hardware. And folks like Box.net, HyperOffice and SharePoint 2010 achieve far better scale and real-time colloboration and document management compared to something you will build inhouse.A lot of skiptisism for hosted models come from old school thinking about managed service providers where audit, security and access were big concerns. That is no longer the case given the banking and life sciences industry slowly leaning towards managing sensitive data in the cloud environment. We now have tools (hardware, software) and standardized processes in the areas like server virtualization, encryption and remote device management that will allow you to be very creative and in complete control over who can and cannot get to the information you own even to folks who host your data. These companies are also willing to sign NDA's and provide necessary compliance documentation to meet even the strictest of state privacy guidelines (E.g. MA CR 17).
As the need for data and regulatory controls increase, need for speed, availability and audit increases and from what I can see, having an inhouse IT platform that does all will become the thing of the past. Putting highly depreciable metal in your server room will gain little support 5 years from now and you better have a darn good financial arguement to do that. With small to mid-sized organizations, the trust model seems to be slowly shifting gears from that of an in-house IT department to that of managed service organizations because you are comparing justifying labor + equipment + licenses + space + management + compliance certifications to an hourly labor cost or a per byte cost that does all.
If I do want to hire and build IT, I will do that only if it there is an arguement for building a strong IP portfolio and a disruptive product that truely adds value to bottom line operations. Think about what increases market cap, valuation, M&A attractiveness and your brand and what tools affect these areas directly? Then think about your transactional risk appetitite and operational overhead to own some of these tools. If you think you absolutely cannot operate in the cloud with whats out there, then so be it. The reasons for bring IT inhouse go beyond technical reasons. You are doing it in 2010 because of non-IT related agenda or you know that your operations will not scale as fast as you want by being in the cloud.
Back-office IT as a commodity is already here. Question is - are you using it as well as you should?
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posted by Janak Joshi @ 4/26/2010 10:56:00 AM
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