Will the Downturn Accelerate Cloud Computing?

Exploration Before Adoption

IBM customer Sogeti Group turned to the cloud for quick-deployment and collaboration capabilities when it conducted what it called "an innovation jam," where more than 4,300 employees from 14 countries logged on to a 72-hour event hosted at IBM's Dublin facilities.

"We started small and figured out how things work," says René Speelman, a project leader at Sogeti Group, a US$1.5 billion division of Cap Gemini. Explaining that the "innovation jam" gave them more confidence in cloud-based services than they had before, Speelman adds that "it's all about trusting the partner you're working with."

Office Depot, meanwhile, turned to SaaS provider Hubspan for its integration services, which enable Office Depot to integrate its own back end with customers' applications, such as e-procurement and ERP. Hubspan's service allows Office Depot to "utilize cost-effective resources and make transactions happen very quickly," according to Glenn Trommer, director of e-commerce and implementation services at Office Depot.

Trommer points out that Hubspan is the only SaaS or cloud service he'd consider for the time being because he wants to control all of Office Depot's data in-house, which it continues to do. Also, it's one place where Office Depot really benefits from a value-added service. "There've been other situations where it makes sense for us to do it ourselves," Trommer adds. "It depends on the resources we have."

Office Depot is by no means alone in cautiously choosing which cloud-based services to adopt, depending on existing internal resources. Thanks in large part to the turbulent economy, in fact, enterprises are refocusing IT money as they concentrate more sharply on the particular value they offer, says Robert Iati, partner and global head of consulting at the TABB Group. "Companies are going to maintain spending where they have their own value proposition," Iati adds.

That inevitably means some enterprises will reduce reliance on external services and contractors to internally optimize their core business, Iati explains, while others will take the opposite path and look to externalize more. "To some extent, and I hate to say it, this is an opportunity to reduce head count. Those that do so will externalize. Overall, it will tend toward the external."

Gartner's McGee says that, as the situation stands today, it's still too early to tell whether or not enterprise IT shops' accelerated exploration of cloud services will translate into widespread adoption. "But the vendors will be busy filling out requests for information," he adds.

Such cloud services are "a more attractive concept now. But it's more challenging for IT to get the money. Any kind of investment right now will be harder to come by," TABB Group's Iati says. "Perhaps in next year's budgets we'll see more money going toward cloud services."

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