Seeing Through the Clouds

Guest blog post by Kristen Wylie, Product Marketing Manager at Kronos

Nobody will deny that the adoption of cloud computing is continuing to grow rapidly for organizations both large and small. In a recent webinar reviewing technology game changers for workforce management, consultants at market research firm the SMB Group noted that cloud computing is quickly becoming “the new normal.” In fact, the SMB Group suggests that 31 percent of small- and mid-size organizations already use cloud business solutions, and that this percentage is expected to increase to 43 percent over the next year.

Based on the buzz and hype surrounding anything cloud-related, we can all likely identify the cloud as a business application model that frees organizations from the burden of deploying and managing systems locally. But consider this: 15 years after the launch of Salesforce.com (the poster child for cloud applications), sales force automation applications are still only around 40% penetrated by the cloud. ERP is less than 10% in the cloud.

This suggests that some SMB organizations still might not understand how the cloud works, where it’s applicable or how they can benefit. For these newbies, one of the best definitions of cloud computing – albeit a very high-level definition – was delivered thanks to this guy:

edisonSo how in the world is Thomas Edison related to cloud computing? The evolution of the electric power plant is surprisingly similar to the transition to cloud computing. Here’s how…

Edison had developed a superior light bulb, but he faced a major problem: generating electricity. At that time, every individual business had its own on-premise power plant to power all its machines, and steam-powered electricity generators weren’t exactly easy to install or manage. Many companies employed a “chief electricity officer” focused on how to generate their own electricity on their own private infrastructure. (Sounds kind of like an on-premise software deployment, doesn’t it?)

So in an effort to promote his light bulbs and other appliances (because Edison was just as good at promoting as he was at inventing), Edison set out to develop an electric grid to supply homes and businesses with electricity. In 1882, he opened the first central power plant to distribute electricity. Pearl Street Station in New York City offered people the opportunity to pay directly for electricity delivered to them via uncomplicated, low-maintenance wires, completely eliminating the smoke-blowing generators, along with the coal and workers required to run them.

A year later, the Pearl Street Station was serving 513 customers with 10,164 electric lamps. Edison had even invented a meter to allow customers to be billed for energy proportional to consumption. Within a few years, an efficient way to transmit electricity over long distance was implemented. [This resulted from the George Westinghouse/Thomas Edison “Battle of the Currents,” but alas, that’s a history lesson for another day.]  Electricity could now be efficiently produced centrally at a low cost and then distributed all over the country.

A single power plant can support many customers who can use the power in any way they like. The power plant charges each customer separately based on their usage. There’s a much higher level of service than an on-premise power plant could ever provide – all at a lower cost. (Now THAT sounds like cloud computing!)

On-premise data centers will soon become just as unnecessary as an on-premise power plant. With a cloud delivery model, customers can license the software and support they want to use without installing or maintaining any software or hardware. The application can be subscribed to and accessed over the Internet so that customers don’t need to install and manage the physical product on their own, which simplifies maintenance and support. There are no upfront capital expenses, no on-premise hardware, and no burden of managing the database or applications. So working in the cloud allows your company to be nimble, efficient and cost-effective.

video

To learn more about cloud computing and the benefits of this application delivery model, check out this short video developed by the Creative team at Kronos. And if you want the full story on how we can link Edison to cloud computing, read The Big Switch by Nicholas Carr.