Cloudonomics: The Business Value of Cloud Computing, + Website

Industrialization of IT

Author and technology prognosticator George Gilder has called today’s cloud data centers “information factories.”14 This is a wonderful parallel, since the cloud can be viewed in part as representing the industrialization of IT and the end of the era of artisanal boutiques. Many of the lessons learned in the evolution of manufacturing are being applied—consciously or not—via the cloud.

In the same way that some product companies such as Apple focus on design but leverage upstream supply chain partners such as Foxconn for actual manufacturing operations, companies can leverage cloud providers to do the “operations” of IT.15 Most companies also partner downstream for logistics and distribution: even global consumer packaged goods giants such as Procter & Gamble (P&G) don’t operate their own cargo lines or retail stores; they use commercial shipping and distribute via a shelf or two at retailers such as Walmart. Using a cloud content delivery provider or getting a shelf or two in a server rack in a colocation, hosting, or cloud provider is similar.

In a reflection of the way that firms use a mix of employees, part-time workers, temporary or seasonal help, and outside contractors with specialized expertise, they can use a mix of owned equipment, virtualized resources, on-demand pay-per-use resources, and software as a service providers, with such software often encapsulating specialized expertise. Whether for human resources or IT resources, such a hybrid balances ...