Economics of the Cloud

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CloudEconomics(1)Last week I was invited to speak in a joint UK/US session put on the by Utah Chapter of the World Trade Center.

The topic of discussion was “Economics of the Cloud,” meaning cloud computing or hosted services.

There were business leaders from many industries in attendance ranging from Education to HR recruiting to Government and high tech interested in learning more about the cloud, its adoption rate and whether it made sense for their organization or not.


Most of the attendees were to understand business drivers for thinking about the cloud as a delivery model.  Some points I made were that the cloud offers flexibility, scalability, and even redundancy that most cannot afford.  The last point, I think, struck some people as interesting, because a common fear of the cloud is reliability since they cannot look at or touch the box that provides applications to them.  

It came as a surprise to most of the attendees that cloud-based providers like inContact spend millions of dollars and thousands of expert man hours to inContact spends millions of of dollars to build reliability through redundancy. While they didn't expect to hear it, I universally saw smiles form and heads nod as I explained that providing reliability is fundamental to a provider's business.   This is something that most small and medium businesses cannot afford and do not have expertise to address, and I would even argue that the largest enterprises could not duplicate.

I went on to share that, according to a recent Frost and Sullivan study, 55% of survey respondents said that they either are already using or plan to use in the next 18 months a cloud solution for contact center services! That is very telling and dispels any myths about the cloud being a fad.  In fact Gartner went on to say that “by 2012, 65% of all support conversations will happen in the cloud”.

The session was well attended, well received and helped validate the model even outside the US as several were there from the UK representing that market as well.

So all you cloud fence sitters — the cloud is real, it’s here and it’s spectacular.