Cloud IT Infrastructure Spending Trending Skyward

By Lindsey Patterson
Contributing Writer

It has long been the opinion of IT specialists that the value of a network increases in direct proportion to the number of machines attached to it. The advent of the Internet, of course, has brought this value proposition into the heart of most businesses and not-for-profit organizations, to say nothing of government agencies. The practical developments in cloud technology, however, have provided those organizations with achievable value.

What the Cloud Offers

As network speeds increase, the ability to harness powerful and specialized hardware for a wide variety of commercial uses becomes more practical. The best example of this kind of client/server architecture is Netflix's use of the Amazon server infrastructure to reduce costs and obtain high failover tolerances network-wide.

The reason arrangements like this work so well is because it allows companies to concentrate on areas where they are highly competent and simultaneously allows them to hire outside organizations to provide specialized services geared to a retail product. A properly maintained relationship between technology and customer value therefore produces higher sales and higher satisfaction with the product.

Spending Improves Results

While adding more servers rarely, if ever, produces proportional gains when it comes to IT strategy, a properly designed cloud service can generate exponential gains in certain circumstances. The best example of this kind of service is something like Google (News - Alert) Docs. The ability to use network services to collaborate on the development and editing of business documents is a vital service, especially in companies where multiple departments have input on the same work.

The more those documents are shared, the higher the multiple in cost savings gets. The reason is simple: each "share" of a document always involves at least two people, and sometimes far more than two. Each of those people generates cost savings realized from the fact they don't have to walk the document to the next person in line.

The practical upshot of all this is that companies spending on cloud services are not necessarily just adding more servers, but they are adding more value. How much storage space or CPU power is available on a bank of server computers is far less important than how many useful services are being offered by the cloud provider on that hardware. This has the effect of reducing the money value of the hardware, but dramatically increasing the value of the services provided.

Spend on the Cloud First

The strategy that emerges from the combination of these two outlooks on cloud architecture should be fairly obvious. As companies continue to increase their spending on cloud services, they are using data configuration and the captured value to improve their products, streamline their services and improve their bottom line over time. The results should speak for themselves. While many might contend this is simply the end result of a drive towards automation, the practical effects are much more due to simple increases in efficiency. Even a medium-sized business can understand the value of a cloud-based document management system when compared to the idea of installing the same software on several hundred workstations.

The cloud is not necessarily a panacea for the enterprise any more than intranets or spreadsheets are. Ultimately the "cloud" is simply a method of insuring business by arranging client-server architecture to provide a maximum benefit to an organization while leveraging the power of specialized computers to perform specialized tasks. Overthinking the solution to a simple problem doesn't produce better results, so companies should be cautioned against the potential problems that could result when there are too many efficiency dollars chasing too few inefficiencies. With well-considered spending on cloud services, these problems are far more easily solved.