Cloud Computing: A Perfect Fit for Midsized Companies
Midsized companies will find cloud computing suits their focus, operational requirements, and investment capablities, says CIO.com's Bernard Golden. Here's why midmarket may be a cloud sweet spot.
Thu, August 26, 2010
Midsized companies, on the other hand, could be the real beneficiaries of cloud computing. These are companies typically in the $250 million to $2 billion revenue range, and they commonly share these characteristics:
• They have technical personnel on board, but try and staff very efficiently. In other words, no fat. While their technologists are skilled, they're stretched, and there's never really enough of them. And if they have to hire fewer really good technology people, they want to hire ones that focus on business-oriented efforts (i.e., applications), not great talent that knows how to run infrastructure.
• They're capital constrained. It's no secret that the financial crisis has reduced the availability of loans, and that shortage has hit smaller companies disproportionately. And midsized companies want to focus their investment in areas that make a difference to what customers see, not in keeping the lights on.
• They may be growing rapidly. Or, if they're not in an expansion mode, they're trying to trim costs. In either case, a mode of computing that allows them to map resource use to business activities — while avoiding large upfront costs — is bound to be attractive.
• They don't have the illusion of brand. Big companies often operate with the notion that customers will wait for them to figure out what they're going to do about a market development because they're the market leader. Midsized companies know they don't have that luxury: they need to be agile and responsive. Cloud computing allows them to quickly react to market changes or customer demands. Every day they can shave off of reacting to a market change or business opportunity positions them better to succeed.
• They face rapidly changing markets and need to avoid being locked into a capital investment or any particular mode of operations. The call option that cloud computing represents — the ability to change in the future without a penalty — is critical to a midsized company trying to succeed in a world of giant competitors and disruptive change.
For all these reasons, I believe that midsized companies may turn out to be the sweet spot of cloud computing. Naturally, every midsized company differs, and some of them may skew toward an SMB orientation regarding SaaS adoption, while others, particularly those with highly technical business offerings, may look more like their larger brethren in terms of previous capital investment and a bias toward private cloud computing.
Nevertheless, there is a high probability that midsized companies will find cloud computing aligns extremely well with their focus, operational requirements, and investment capabilities. If you'd like to see the checklist we go through with midsized companies to determine how well the cloud fits, you can download it here (registration required).
Bernard Golden is CEO of consulting firm HyperStratus, which specializes in virtualization, cloud computing and related issues. He is also the author of "Virtualization for Dummies," the best-selling book on virtualization to date.