Posts in ‘Technologies’

I’ve spent many years as a consultant helping companies analyze their business to improve performance and reduce costs, Clients large and small often ask questions regarding outsourcing/managed-sourcing. They’ve often read case study after case study showing how companies of their size/in their industry have shown real cost savings from their IT outsourcing programs, but their own initiative seems to be lacking in some fashion, often experiencing cost overruns and sub-par service levels.

I always come back with the same answer – A question:  Did you have the right information to make this business changing decision, and did you enter into your agreement from a position of strength?  The prospective client’s answer is usually slightly defensive, wondering why I’m questioning that company’s decision-making ability.  Which essentially I am – clearly something is amiss. At this point, the wheels are in motion and a serious conversation about how the agreement was entered into can take place.  This conversation is meant to figure out what has gone wrong and how it can be fixed.

Here are the main points where an outsourcing agreement can go wrong:

1. Is the true cost of IT known and understood?
2. Was proper due diligence performed and a business case developed?
3. Did you open negotiations to multiple companies so as to get the best deal for your enterprise?
4. Are you enforcing the contract?
5. Has your company had any changes that would affect your agreement.

If these five questions can be answered, your company will be well ahead of the game and can facilitate changes that will help resolve the issues you may be experiencing. Lets look at these a bit more:

Understanding the true cost of IT

Many companies think they understand the true cost of IT, but most don’t.  It’s not just what is in the budget, it’s what isn’t as well.  Since every employee is part of the larger family, things are often done in a way that wouldn’t necessarily be the case with an outsource company.  For example, IT support staff would likely service a broken computer while they happen to be in that particular location to fix something else; an outsource company won’t (and unless on-site, can’t) do that.  There are hundreds of other “off book” examples (an ad-hoc server repair in the datacenter without a ticket being called into the help desk, perhaps) that, once outsourced, will no longer occur.  These are true costs of doing business that are challenging to foresee and don’t always get accounted for internally, however with an outsourced vendor these types of activities become chargeable events. In a large organization, this can lead to millions of dollars in additional outsourcing costs.

Performing Due Diligence to get the best deal possible

Knowing the true cost is the first step in the due diligence process.  Other things need to occur, including:

• Prioritizing which functions should be run internally and which should be run by experts that can drive costs out of the equation
• An understanding of which parts of the labor force will be affected either by being re-tasked to the outsourced vendor running the operations or being relieved of their positions entirely
• Service levels need to be agreed to internally; and
• Building a business case that supports the initiative, this includes noting all assumptions so as to be able to go back and audit.  By doing this, the company knows what is expected and then study the agreement forensically to uncover why the initiative is not proceeding as planned.

Handling Negotiations to Secure the “best” deal possible

Each company has their own process by which they procure goods and services.  The key questions to ask here are:

• Were your company’s policies and procedures followed?
• Were RFI’s and RFP’s constructed properly and submitted to all viable vendors?
• Did your company negotiate purely on price, and were factors such as the Service Levels (mentioned above) taken into consideration?
• Did you do research on the providers, talk to their current clients, etc to make sure they were the right fit for your needs?

All of these questions need to be given consideration up front, or you’ll risk the likelihood of compromised service down the road.

Enforcing the agreement with the selected vendor

This is key. Your company, when entering an outsource agreement, must establish a structure to allow for monitoring of the agreement and related SLAs. Is the vendor living up to their end of the agreement? If no, are steps being taken to alleviate the issues?  If you are not monitoring your agreement, you are as much at fault as the vendor for any perceived failures.  The agreement and the activity associated with it need to be continually monitored, and analyzed.

Knowing the changes in business conditions that might affect your outsourcing agreement

These business conditions can take many forms, and some affect all business – the current downturn in the economy, for example.  Perhaps your company may not have grown at the rate assumed in your business case and therefore in your negotiations with your chosen outsource vendor.  Other condition changes to consider include mergers and acquisitions, perhaps you are using more computing power then you estimated and did not take into consideration when purchasing another company.  Have you come out with an incredible new product that has driven growth within your organization? This is a good affect, but one that may not have been included in the portion of the new products business case that deals with internal costs such as IT, manufacturing and supply chain management.  All of these reasons and many others can affect the actual agreement, therefore it’s a must that your agreement be continually monitored as I noted earlier.

Conclusion

Several reasons can result in your company essentially leaving dollars and services on the table with respect to outsourcing.  There’s no such thing as too much thought when evaluating an outsourcing initiative.  If you need help, there are many experts available to you who can provide guidance and help develop a sound strategy tailored to your organization. Whatever your size or complexity of project, we’re here to help.

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Tagged as: active garage, business, clients, companies, cost savings, data center trust, IT costs, IT Finance, IT Outsourcing, mathhew carmen, vendors

When beginning or continuing an investment in a Business Intelligence (BI) system, a company must look at how it will be able to garner the largest Return on Investment (ROI) for such an initiative.  There are many factors to take into consideration in reaching the largest possible ROI.  These factors can be grouped into direct and indirect benefits:

Direct Benefits

1. Quantifiable cost savings related the more efficient access to data.  This allows analysts to spend time analyzing and not gathering information.
2. Automation of process, leading to real time savings and greater productivity.
3. Shorter budgeting and financial planning cycles with reduced effort, allowing staff to continue doing their jobs.
4. Improved efficiencies in operational groups such as inventory management, IT, facilities management, etc.
5. Reducing support costs associated with reporting while terminating legacy reports and systems that go unused.

Indirect Benefits

1. A single version of the “truth”, official company records and reports, leading to less rework and manipulation of data by individuals to justify differing views of what that data means to their groups.
2. Facilitates containment of costs based on targeted areas as opposed to just saying every group’ cuts costs by 20%, as an example.
3. Allows for the ability to run “what-if” analyses, the results of which often lead to better decision making.
4. Improved customer service, resulting in increased sales.
5. Allows for the long-term alignment of operations and strategy.

There are many other direct and indirect efficiencies and benefits that can be realized through the proper planning and implementation of BI tools and systems.  The more end-user groups that participate in the planning of a company’s BI system, the easier it becomes to change the ultimate corporate culture. Once the buy-in from the users is attained, the real savings begin, and a platform to accelerate corporate growth now exists.

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Tagged as: active garage, business intelligence, data center trust, IT Finance, matt carmen, Matthew Carmen, Return on Investment, ROI

Reaching Corporate goals using Business Intelligence

by Matthew Carmen, Dec 20, 2010

Noble intentions expressed in a company’s mission statement do not provide an actionable corporate strategy. But this strategy is rarely known by the “workers” who are the majority of the workforce and the operational part of the company. Business Intelligence (BI) is key to successfully aligning corporate operations with its strategy in order to achieve its goals and mission. But what exactly is BI? more…

Project Reality Check #1: The Challenge!

by Gary Monti, Dec 21, 2010

No matter which part of the world you are in, project management is always challenging or you can even say nightmarish. And the reasons for this are the same: Lack of clear requirements, Arbitrary dates / budget, inadequate resources / skill, etc. So how does a project manager get the job done? Answer is, by sticking to the simple path grounded in the 9 areas of project management. But the secret lies in completing a simple sentence  that will be explored in this series: If everything were okay I would see ________________. more…

Social Media and Tribes #25: Sharing ideas gets a discount this holiday season!

by Deepika Bajaj, Dec 22, 2010

Most writers don’t make a living out of simply writing. They do it to change the world, like James Baldwin. Or because like Seth Godin believes, there is no better way to spread ideas. For Deepika, it is because of the power of sharing ideas through social media. That’s what she discovered while writing PINk and Grow RICH. She also found an aspect of “creativity” and “community” along the way. So, as a gift this holiday season, she’s taking 40% off the price on her ebook (regularly priced at $9.95,now $5.99). Gift it to as many people this holiday season…and become an agent to spread the ideas. more…

Flexible Focus #33: The Wonderful World of Flow

by William Reed, Dec 23, 2010

Mihaly Csikszentmihalyi drew the world’s attention to an ancient phenomenon which is at that core of what makes life worth living, the state of being in Flow. The state of being in Flow is associated with intense enjoyment, deep concentration, and optimal performance. He describes it as a state of ecstasy, as if standing outside of oneself and watching things unfold effortlessly. You can download a PDF Mandala on the BENEFITS OF DEEP PRACTICE, and use it as a reminder of how to enter the Flow state through the art or discipline you practice. more…

Leader driven Harmony #4: How to make your writing Crisp, Flavorful and Satisfying (Part II)

by Mack McKinney, Dec 24, 2010

Last week’s post discussed the importance of understanding the purpose of anything you write, long before you hit the first key on the old laptop.  This post discusses the crucial importance of understanding the likely audience of your document, the main content and the most appropriate style for your purpose. more…

Tagged as: active garage, business, Business Management, Business Strategy, center for change management, Communication, deepika bajaj, Flexible Focus, gary monti, http://activegarage.com, Innovation, leaders, Leadership, management, mandala charts, possibilities, Project Management, Rajesh Setty, roger parker, Social Media, Strategy, technology, william reed, Writing for Business, www.activegarage.com

Most companies have a mission.  This mission, many times, is some morally high statement that the company will, say, help all the people of the world live in harmony.  While this is a noble gesture, is it realistic?  Unless you’re the Bill & Melinda Gates foundation, probably not.  What a company really needs is an actionable strategy that leads it to meeting and/or exceeding business goals: those of higher revenues, margins and market shares, amongst many others.  A company can still be benevolent, like Ben and Jerry’s Ice Cream for example, who give a portion of their profits to charity.  This is a fantastic thing they do, but their shareholders want value for their investment as well.

What is more important is the corporate strategy that allows a going concern to reach its goals.  The main problem with any strategy is that the people who make it happen very rarely know what it is.  The “workers”, which make up probably 80 percent of employees only know that the company making money is good, and that losing money is bad (and this is probably all they really care about too).  These “workers” however, are the operational portion of the company.  Since the operational portion of the company has little or no knowledge of the company’s strategy, and probably cares about it just as much, how does a company’s leadership align its operations so as to reach its corporate goals?  Many tools are needed, including leadership, management of human and financial capital, logistics, etc.  All of these tools are fed by information and the better the information, the more intelligent the tool’s results. Business Intelligence (BI) is key to successfully aligning corporate operations with its strategy in order to achieve its goals and mission.

What exactly is BI?

Ask 5 people, you will probably get 6 answers.  Wikipedia defines BI as: “computer-based techniques used in spotting, digging-out, and analyzing business data, such as sales revenue by products and/or departments, or by associated costs and incomes.”  I guess this is one way to explain it.  My view:  BI is the use of technology to intelligently analyze raw data which is collected from each operational group.  This analysis is performed in many ways;  reporting, online analytical processing, analytics, data mining, business performance management, benchmarking, text mining, and predictive analytics are just some of the many techniques used.  Once all of the raw data is mined, processed, and analyzed, it becomes usable information that can be reported on, ‘dashboarded’ and presented.

This information often reflects a company’s competitive intelligence or advantage in the marketplace, and one way in which a company can differentiate itself from is competitors.  For example, Netflix and Harrah’s Entertainment are two companies that have benefit from BI initiatives.  These two companies collected raw data and utilized BI tools to analyze that data, ultimately resulting in advantage gains against their competitors – they were able to lead their industries in profit margin, sales and customer service, according to the book, Competing on Analytics by Davenport and Harris.  By efficiently analyzing sales data through the use of BI, a company can make sure that stores in different geographical areas keep the right products on the shelves.  One example of this is Kroger:  they were able to keep the right varieties and quantities of soup in colder weather stores.  Some of BI is basic common sense that is taken to the next level, this is the starting point.  Experts in BI need to take a company to the next level and beyond.

The keys to a successful BI implementation include:

1. Realizing that your company does not use the data it has to make decisions and wanting to change the dynamic.
2. Bring in experts where helpful (for example, Stixis and their BI Center of Excellence) to ask the right questions and properly architect and launch BI initiative.
3. Make sure employees and management participate in the development of Key Performance Indicators (KPI’s), designing dashboards, and providing input to the system designers.
4. A company must decide on BI deployment, maintenance, and continuous improvement.  By doing these things, a company will be able to gain a competitive advantage over competitors and lead its industry.

The key to successful implementation and usage of a company’s new or expanded BI environment is complete buy-in from all employees and communicating corporate mission, strategy and operational need.  Through this effective communication with the workforce, employees will become contributors of the new corporate culture and help move the company forward.

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Tagged as: active garage, analytics, benchmarking, Business Inetelligence, competing on analytics, corporate goals, corporate success, data center trust, data mining, mathhew carmen, predictive analysis, sales revenue, text mining

Data Backup: Ignore at your own Peril

by Marc Watley, Dec 6, 2010

You can lose your precious data in a flash just like Marc when he was robbed at gun point. Corporations though seem to live at gun point all the time. Whether personal or corporate data, you better back it up or suffer the consequences. Thankfully there are a variety of solutions for individuals and businesses that offer a wide variety of features. Marc has some recommendations. more…

Chaos and Complexity #13: Earned Value versus Sunk Cost

by Gary Monti, Dec 7, 2010

Chaos and complexity play a huge role when working with schedules. In this article, Gary has a list of measurement scales and the more your project lies to the left of these scales, the better are the odds of creating a credible schedule. That’s when traditional project management tools can be applied and hence earned value can be calculated. What ever it takes, avoid entering the world of sunk cost! more…

Social Media and Tribes #23: Customer service tribe hits a home run!

by Deepika Bajaj, Dec 8, 2010

There is no better PR than a compelling customer service story and that too FREE of charge! That’s the home run that United Airlines scored when Deepika was afforded an wonderful in flight experience. This is an example of how customers are sharing their experiences.  more…

Flexible Focus #31: Mobile Mandala

by William Reed, Dec 9, 2010

One of the best ways to benefit from the Mandala Chart is to put it to use, engage in it physically. There are four primary ways of doing this and the best way is to combine one or more of these for full engagement. Now, doing that may be at your finger tips with the introduction of MandalaChart iPad application. more…

Leader driven harmony #2: Communication by Handshake (Part II)

by Mack McKinney, Dec 10, 2010

Who would have thought there are so many nuances in a handshake? Well, first impressions leave a lasting impression and most assessments of a person is made in the first few crucial seconds of meeting them. So, read this article and practice a good handshake. more…

Tagged as: active garage, business planning, Business Strategy, deepika bajaj, gary monti, http://activegarage.com, invincibelle, mack mckinney, marc watley, Social Media, william reed, www.activegarage.com

About a year ago, I was the unfortunate victim of a robbery.  At gunpoint.  Right…no fun at all.  Anyhow, in addition to my wallet, the idiot-with-gun also got my laptop. In an instant, I’d acutely learned the importance of backing up one’s data.

Now truth be told, it could have been much worse insofar as losing laptop data. I’ve used a BlackBerry for years, and so what I’d argue was the most important data on my laptop – contacts, notes (to this day I take all meeting notes via BlackBerry), email, and calendar – was still intact locally on my BlackBerry (which I thankfully kept) and also remotely on my corporate Exchange server.  What was lost however, were scores of other notes, business plans, presentation decks, whitepaper drafts, spreadsheet exercises, some music (sigh) – gone forever in the flash of a second.  I will say that I have benefited from the misfortune – I’ve since used an online backup service – Dropbox – to ensure safe, recoverable storage of everything on my laptop. (This has been a life saver and a service which I can’t recommend enough.)  Also, it was a good excuse to finally make the switch from PC to Mac.  Happiness.

Anyhow, two Captain Obvious lessons learned from this experience:

1. Backup is CRITICAL
2. Anything can happen at any time

These axioms ring even truer for businesses – of all types and sizes – who are increasingly more connected to their customers and suppliers through a plethora of systems and applications. Whether your shop is a five-location dentist practice or a multibillion-dollar technology firm, efficient backup (along with a well-planned recovery strategy) is absolutely key to staying in business.  If you’re reading this thinking, ‘yeah but nothing will happen to me/my business’, I gently refer you to my opening paragraph and also to #2 above.  Several options exist – for personal use, Small/Medium Businesses, and enterprise alike.

A few suggestions:

• Dropbox.  Services such as Dropbox are highly recommended for personal files (good if you need to occasionally share files with others as well).  Simple to use (auto-synchronizes your files between local and online) and runs $9.99 per month (or $99 per year) for 50GB of storage space.  Learn more at http://www.dropbox.com/features.
• Servosity. Servosity provides an agentless, on-demand backup solution suited particularly well for SMB and mid-market enterprise shops. Tape libraries are still in widespread use within datacenters today, and Servosity  provides an efficient alternative to this.  Data is compressed and encrypted before being mirrored to Servosity’s Data Vault.  Backups can be managed by OS or application, scheduled, and restored (downloaded) via secure web browser.  (Disclosure: The company I work for, Datacenter Trust, currently includes Servosity in their services portfolio.)  Learn more at http://www.servosity.com.
• nScaled.  For enterprise shops, nScaled provides a unique approach to backup and recovery: continuous on-premise data protection, offsite backup, and remote failover. Data is continually stored both within your datacenter as well as at a remote highly-available facility.  Using a secure web interface, data can be recovered and restored either on-premise or from the remote location within 15 minutes or less.  Supported server platforms include Windows, Linux, and IBM AIX.  (Disclosure: The company I work for, Datacenter Trust, currently includes nScaled in their services portfolio.)  Learn more at http://www.nscaled.com.

Other solutions to check out include Carbonite, CommVault’s Simpana, and the recently-launched Whitewater appliance by Riverbed Technology. Whether your need is personal or business, there are many options available for synchronizing, retaining, and restoring your data. This is a must-do, as continuous access to personal and work data becomes increasingly important.  As Foghorn Leghorn would say, pay attention when I’m talkin’ to ya!  Don’t let some nutball with a gun or, say, mother nature with an earthquake, teach you a lesson the hard way about keeping ALL of your data continuously backed up and quickly recoverable!

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Tagged as: active garage, backup, carbonite, commvault, data backup, data center trust, data centers, data recovery, data storage, dropbox, flash drives, foghorn leghorn, hosted solutions, IT backup, marc watley, nScaled, riverbed technology, servosity, simpana, storage, technology, whitewater

Let’s save answering the question posed in the title, for later on… lets first address a more fundamental question – What exactly is project accounting?

Project accounting is the act of tracking total costs of a project, from concept through implementation. This means all of the expenses, labor and capital expenditures related to completing any operational or strategic project. This project tracking can be done in tandem with the corporate accounting department (usually the case in large companies) or separately (as with small and midsized companies, when these companies actually perform project accounting). Depending on the size of the projects that a corporation is undertaking, the complexities of project accounting grow.

As the complexities of project accounting grow, technology plays a greater role. The business may be able to get away with Excel spreadsheet models – at least in the early stages of proving its concepts. This can continue to be useful for small companies that have small straight forward projects that are usually expense related. Once the use of internal labor, software development, and capital expenditures come into the mix, additional resources should be considered – irrespective of the size of the company – in order to reach conclusions successfully.

These added features include:

1. Project accounting software – There are many packages on the market, from inexpensive versions that allow a small company to track their costs, to large modules that plug into a company’s SAP, Oracle, or other enterprise-class financial system. The larger and more expensive the software package, the more time and energy it will take to integrate into the company’s technology environment.
2. Legal expertise – As a company’s projects become more intricate and complex, the project accounting office will need to understand things such as tax implications, capitalization of assets and labor, etc. The company’s legal and corporate finance teams will need to get involved.
3. Information Technology – In most cases, new servers will need to be leased or purchased, power usage in the company’s datacenter will need to be reviewed (either with owned or outsourced datacenters). The datacenter strategy itself may need to be reviewed (depending on the size of the project, A large project may not fit into the company’s current datacenter), as well as any related labor costs going forward.
4. Financial – The actions in this area of the company include the creation of a business case, business intelligence initiatives, the ability report on the successes of the project, activity based costing, budgeting, etc.
5. Regulatory – depending on a company’s business, there may be regulatory issues that make project accounting necessary. Some regulatory programs may be tax deductable, while others just have to be done. Tracking regulatory projects is necessary to show that these are one-time costs associated with doing business.

Once a company has implemented the project accounting system that works best for its size and needs, something amazing things starts to happen, information that can be acted upon to make operational and strategic decisions is created. For example: In large scale projects – those that take place over years and have multiple layers of complexity – costs can be looked at by repeatable activity (i.e. labor during a certain stage of the project that happens at different locations) and ways in which these costs can be minimized become apparent. Business intelligence is then created to illustrate that having the right labor in the right place will minimize costs and keep the project on or below budget.

Conclusion

The time has come to finally address the question in the title! Project accounting, whether implemented on a small or large scale, can provide great value to more efficient management of the business. In these challenging economic times, managing a business at the highest level of efficiency is more important than ever. Reporting on and containing costs is a priority and should be pursued with great care and scrutiny. Not only do you need to have solid Project Accounting in your organization, your organization’s long-term success DEPENDS on it!

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Tagged as: active garage, costs, data center trust, financial, IT Finance, legal expertise, matt carmen, overruns, project accounting, Project Management, regulatory

Project Leadership #3: Courage and Stupidity

by Himanshu Jhamb, Nov 1, 2010

Well, you think Courage and Stupidity are two separate categories of actions? May be not. They may be separated by a very fine line indeed. Asking what may seem to be a dumb question or taking a stand for your team in front of your boss may seem stupid. But they may end up saving the project. more…

Chaos and Complexity #8: Governance, Boundaries and managing Time

by Gary Monti, Nov 2, 2010

As a leader you do not have enough time to get involved in every decision the team has to make. Traditional management technique of dealing with individual situations or exception management is not the solution. Applying management efforts across a boundary will decrease the number of interactions a leader must and returns some of their time. more…

Social Media and Tribes #19: Travel tribe takes medieval ages online

by Deepika Bajaj, Nov 3, 2010

Prague still uses the local currency and does not accept the Euro. It lacks a reliable taxi service, among other things a tourist would need. Thanks to social media, in spite of these handicaps, Prague is successful in attracting a fair share of tourists. more…

Flexible Focus #26: Leveraging your time

by William Reed, Nov 4, 2010

We all perceive time in different ways and not all of them are equally powerful. Some approaches are to redefine it as experience or think of it as change. But the first step to gaining a flexible focus on time is to free ourselves from the tyranny of a single perspective on time. more…

The Origin of Leaders #1: Imagination – Developing your most powerful human talent

by Conor Neill, Nov 5, 2010

Imagination is what sets humans apart from animals. We don’t just respond to the world, but can begin to see a new world and thus plan and act accordingly. Especially true for a leader. A leader must see a future that is not yet here. The clearer you can see and touch and feel this potential future, the more compelling you can communicate it to others. So, how can you develop your imagination? more…

Tagged as: Action, active garage, Business Management, business planning, Business Strategy, Communication, conor neill, deepika bajaj, entrepreneur, Flexible Focus, gary monti, himanshu jhamb, http://activegarage.com, Innovation, invincibelle, leaders, Leadership, management, possibilities, Project Management, Social Media, william reed, www.activegarage.com

3 Ways to Save money and Increase Productivity

by Matthew Carmen, Oct 25, 2010

Save money and increase productivity need not be an oxymoron, especially in the IT department. But if that strategy starts with cutting the labor force, it will be detrimental to the company. Matthew suggests several ways to achieve these seemingly conflicting goals and some of them may be applicable to your situation. more…

Chaos and Complexity #7: Black swans, Randomness and your Career

by Gary Monti, Oct 26, 2010

If you believe in sustained stable outcome in complex situations, you will be doomed. Chaotic systems (like our life and career) have deterministic, interrelated rules producing nonlinear, unpredictable results. In order to be successful in your career, you need to practice a form of cognitive dissonance and learn to carry two streams of thought simultaneously : What is the best outcome and what is the worst outcome. more…

Social Media and Tribes #18: Better than Google

by Deepika Bajaj, Oct 27, 2010

Every tool has its purpose and each tool has its strengths and weaknesses. Once you get accustomed to using a tool, the tendency could be to to use it for purposes it is not effective for. Google is great when you need information, but it may not relate to your situation. That’s where your friends can come to your aid on Facebook! more…

Flexible Focus #25: Assessing your situation with a Mandala SWOT analysis

by William Reed, Oct 28, 2010

The SWOT Analysis model is originally attributed to Albert Humphrey from his work at Stanford University in the 1960s and 1970s. This gives you more clarity, but risks leading to 2-dimensional or checklist thinking. A better way to go beyond is to use a Mandala Chart. You can start by using the downloadable A-frame Mandala SWOT Chart. more…

Cloud: A truly nebulous term

by Marc Watley, Oct 29, 2010

The term “cloud” is one of the most over-used technology terms in recent times. We have been using the so called “cloud” for a long time. Think about Yahoo!, Hotmail, Gmail, Facebook, LinkedIn, etc. So what exactly is the meaning we are trying to convey when we use “cloud”? The answer is simply “on-demand”. more…

Tagged as: active garage, Business Management, business planning, Business Strategy, Communication, deepika bajaj, execution, facebook, Flexible Focus, gary monti, http://activegarage.com, Leadership, management, marc watley, Matthew Carmen, possibilities, Social Media, Strategy, william reed, www.activegarage.com, www.deepikabajaj.com

Yes, yes I know…ol’ Marc has subjected you to yet another bad pun. You’ve got to admit though that it fits the bill here. The term “cloud” is, in my book, one of the most over-used technology terms in recent memory, and it’s high time for change.

(Ridiculous sidebar: Anyone else watch Science Bob conjure that “cloud” on Jimmy Kimmel Live the other night? Hilarious!)

The thing is, almost all of what we use on the web today exists ‘in the cloud’ at some level or another. Think about it – your mail isn’t fed from a server sitting in your basement is it? No, it’s typically one of a cluster of mail servers in the “cloud” – perhaps located within your company’s datacenter or provided by Yahoo!, Hotmail, Gmail, or the like.  What about shopping? Our profiles, containing our shipping addresses, purchase preferences, and credit card numbers, likewise exist in the “cloud”.  The social utilities we’ve come to depend on for business and fun – LinkedIn, Facebook, Salesforce, Twitter, Foursquare, etcetera, are also services used almost entirely in the “cloud”.  The technology that powers the various “cloud” solutions continues to advance rapidly.  This, along with increased availability and reduced costs worldwide for high-speed Internet access, has allowed the service offerings to evolve as well.

The fact that both individuals and growing businesses can tailor solutions from the breadth of available “cloud” services is fantastic.  The issue at hand is the term “cloud” itself: an umbrella term most often used to describe and present ‘hosted’ or remote services – services which have expanded rapidly during the last two years. The term “cloud” has simply reached a point of causing confusion.  For example, though commonly referred to as “cloud computing”, it’s not always actually computing, is it?  We can now select from solutions allowing us to compute, store/archive/recover data, manage content, send/receive mail, place calls, conference, and network with colleagues, friends, and prospects – all with a moniker of “cloud” attached. “Cloud” is descriptive in this sense, sure, but only mildly so. My $0.02 is that the term “on demand infrastructure” – or simply “on-demand”- is more reflective of available solutions and less confusing than the term “cloud”.  Adopting the “on demand” term virtually eliminates the need for wonder, fretting, or quarrel over the best flavor of the solution – public/multi-tenant (Amazon EC2), private (your own VMware or Terremark Enterprise Cloud instance), Platform (Salesforce), or hybrid form. Whatever the end solution, simply think of it as on-demand infrastructure; the level of access, control, and security needed upon deployment are completely up to – and configurable by – the user.

I’ve noticed in the past several months that several technology companies including Oracle, F5, Servosity, and Rackspace have begun to use “on demand” (seemingly in place of “cloud”) to describe their services, features, and benefits. I think it’s a smart move, but who knows where this will end up; the term “on demand” might work best for everyone. Might not.

Anyhow, Cloud: you’ve served us pretty well…thanks. Now it’s time to bid adieu and bon voyage.  Oh, and when you reach wherever it is that you Internet buzzwords fade away to, please do say hello to our old friend “Web 2.0”, will you?

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Tagged as: active garage, cloud, cloud computing, data center trust, datacentertrust, IT Infrastructure, marc watley, on demand, technology, web 2.0