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A fundamental shift is taking place around how to deliver technology solutions to support business.
“What we are currently experiencing is arguably the most important evolution in the last 20 years,” says Philip Grosch, partner and national technology consulting leader for PwC.
Thanks to the arrival on the scene of software as a service, infrastructure as a service and platform as a service, the playing field for private companies, at least as it pertains to capability, is becoming level with the big players.
“The emergence of these three pieces allows private companies to access functionality and capabilities that historically have only been available to very large, very well-funded organizations,” says Grosch.
“Take CRM as an example. Traditionally, smaller companies were limited to using very simple CRM applications. If you wanted to do an Enterprise CRM deployment, you needed to buy a more expensive product which would have cost millions of dollars. Now, you can be a start-up with five people and you can rent this functionality on a pay per use basis This is a huge shift in the ability of a private company to effectively compete with anyone.”
And it comes as a result of cloud computing, which is driving the change.
Cloud computing played a key role as an enabler in the evolution of the innovative consumer offerings provided by companies such as Amazon, Google, Facebook, Microsoft and Flikr. These gave consumers access to new technology without them having to add anything onto their computers. All of that functionality was out there in a cloud in cyberspace.
Cloud computing in a business context is broken into three main components:
Software as a service is the delivery of business functions using an on demand utility model within the cloud.
“The cloud means you have the ability to access this technology without any investment in traditional servers or operating systems within your organization. Instead, you basically reach out and rent it,” says Grosch.
Infrastructure as a service: In a traditional model, if you need to run business applications, capture data, documents, history or transactions, you would need to buy hardware and put it into your office/retail space. And every time your business grew substantially, you would need to buy more hardware to deal effectively with all the management of a growing IT infrastructure.
“Cloud computing allows you to rent infrastructure,” says Grosch. “Companies like Microsoft, Google and Amazon are all now leveraging the massive investments they have made in virtual data centres that you as a business can now rent out. You just connect to one of those cloud infrastructure service providers and rent as much as you need as you need it, effectively removing any of your challenges around infrastructure.”
Platform as a service: In the conventional model, if you want to build and deploy a business application that is specific to your organization, you have to use a traditional operating system, put a server in place, hire coders and build the application within the realm of your organization. “Platform as a service takes that concept to the next level. In other words, you don’t need an operating system, you don’t need a development toolkit and you don’t need an infrastructure,” says Grosch. “You utilize the capabilities from a provider to build and deploy your specific and that application will reside within the cloud.”
All of these advances are now starting to give private companies the ability to do everything they need to do from a technology perspective without having extensive internal IT infrastructure. The benefits are clear: cost savings, speed to market and access to all of the functionality large corporations have long enjoyed. Of course, this quantum shift in the delivery of technology has ramifications.
“Business owners have to be clear on how they contract with these providers,” says Grosch. “They also have to be aware of the security and privacy implications and how to best integrate these services with existing operations and technology including the implications of repatriating data and applications at a later date. It’s important to have expert advice to help you understand the potential benefits and applicability of the power of The Cloud and where it makes sense to be used within an organization.”
All of this is happening just as another fundamental shift is taking hold in the area of mobile computing. The evolution of smart phones and tablet computing presents new opportunities for private companies to enable their mobile workers in a way that was not possible in a cost-effective manner just a little over a year ago.
“It is early days, but it is a very important capability that private companies should understand and selectively start to consider or pilot, depending on the nature of their business,” says Grosch.
“We are at the intersection where the evolution of mobile computing meets software as a service i.e. mobile cloud computing. This means private companies now have the ability to integrate and deploy enterprise scale business applications that are prebuilt on devices like the soon-tobe released Blackberry tablet and iPad,” says Grosch. “It’s an exciting time. Early adopters are already benefitting but soon all of this will be mainstream. In fact, the emerging generation of business leaders is already so accustomed to using software as a service and mobile devices that at some point in time organizations that don’t deliver it will be at a significant disadvantage.”
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Let’s Talk is part of our PwC Private Business Exchange program — a dynamic, interactive community of private business owners and executives. To read all articles in the Let’s Talk series, please follow the links below:
Embracing the Power of the Cloud
Internal Controls
Building Value
Fighting Fraud
Back to Basics
Five Steps to a Greener Business
Freezing Your Estate
Managing in a Downturn
Maximize Your Tax Savings
Playing the Long Game
Risk Management
Show Me the Money
Upside of a Downturn
Dealing with Your Banker
About PwC:
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“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
