The article re-printed courtesy of IBM ForwardView eMagazine

Midsized companies are moving toward an infrastructure that is optimized and responsive to help them meet new business demands. This article in our series looks at the short- and long-term benefits of cloud computing and how midsized companies can start integrating some cloud services into their existing IT environments.

In an increasingly interconnected world, the number of interactions among devices and systems is growing rapidly. As these connections multiply, businesses need to meet the demands of employees, partners and customers for greater access to systems and information. This environment places more pressure on midsized businesses and their IT resources.

By offering a scalable infrastructure and capabilities available as services, cloud computing models enable companies to realize a more dynamic infrastructure, one that can satisfy resource demands when and where they arise. Cloud models can also help businesses become more nimble and work smarter through more agile and cost-effective access to technology and information.

Businesses of any size can benefit from adopting a cloud computing approach. Larger organizations may opt for a private cloud, which holds large amounts of computing capacity behind a firewall and is typically accessed over private networks. Another option is the public cloud model, which many smaller companies find attractive because it keeps IT costs down, while keeping availability up. In a public model, data and applications are stored remotely, on hardware located at a cloud provider’s facilities, and are then accessed over the Internet.

Selecting the right mix of cloud services
Many midsized businesses are integrating some cloud services into their existing IT environments to supplement internal resources for short-term projects and to add new capabilities. In these ways, cloud computing is helping companies realize business goals while streamlining IT.

It’s not an all-or-nothing proposition. According to Ric Telford, vice president of cloud services at IBM, a hybrid environment is often an excellent solution for smaller organizations. He observes that midsized businesses usually have a limited number of servers to pool together. “When you need to get additional resources, you can grow into the public cloud and pay for the servers you use for a fixed period of time,” Telford explains. “Then you shrink back again when you’re done. Now you have the flexibility where you know you’re not going to run out of resources.”

Cloud services deliver short- and long-term flexibility
The elastic scalability gained through public cloud services can be useful for a range of projects with fixed durations. For example, companies can select cloud services to test new applications or render a specific collection of digital assets. By using cloud services, a company can gain the resources it needs for a short-term project without making a large hardware investment. Cloud services also can help businesses accommodate periodic changes in customer demand. “A business that runs an e-commerce site might have a seasonal spike in the workload on their Web site,” says Telford. “For that period of time, they can reserve some additional servers from a cloud provider so they can handle the increased workloads. Once that period of time elapses, they can return the resources back to the cloud.”

Another area where cloud capabilities can deliver bottom-line benefits is with a company’s routine tasks, such as backup, archiving or e-mail administration. By reducing IT administration time, cloud services help speed innovation by allowing skilled IT workers to focus on higher-value initiatives. “In many cases, it will be cheaper to use cloud services for those tasks,” says Telford. By enabling companies to more strategically leverage IT workers, companies can make real strides toward working smarter. “In some cases, it will mean a redeployment of people from the tasks that they do today—like backing up hard drives, rebooting servers and fixing e-mail server problems—and move those people onto something that’s a little more business-differentiating,” says Telford

Deciding which tasks are best served by cloud computing requires careful analysis. Whether businesses undertake the decision-making process on their own or work with a cloud service provider, they must take into account the full costs of IT services. “Companies should look at each workload and conduct a cost analysis, calculating the true cost of running that service in-house,” says Telford. “They should include the space servers take in the data center and the power, cooling and administration costs. They need to figure out the cost trade-off versus using a public cloud provider for that service.”

New business insights boost competitiveness
While cloud services can help supplement existing capabilities and streamline IT, they can also help companies uncover new insights. With interconnected systems and devices that link to powerful back-end systems, companies that tap into the massive computing power and storage capabilities of the cloud can transform growing data into actionable intelligence.

“Analytics is going to be one of the key workloads for the cloud,” says Telford. “Midsized companies are going to accumulate data in a data warehouse from sensors and other means of input, and then they will want to crunch on that data to get some conclusions. They may not have enough processing power or storage capacity to do that, but they could run analytics through a public cloud. They can access business intelligence that they would not have been able to afford before the advent of a cloud.”

The cloud covers an interconnected world Given the intense demands placed on businesses and their IT in an increasingly interconnected world, the value of cloud services will likewise increase. Whenever, wherever access to technology combined with elastic scalability is a big draw for midsized companies seeking to work smarter and more strategically.

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