Business in the Cloud

MICHAEL HUGOS, Principal at the Center for Systems Innovation [c4si], writes, speaks and consults on strategies for IT and business agility and mentors development teams. He spent six years as CIO of a multibillion-dollar distribution cooperative developing a suite of supply chain and business systems, transforming the company's operations and revenue model. He won the CIO 100 Award and Premier 100 Award for his work, and is also author of Essentials of Supply Chain Management and Business Agility.DEREK HULITZKY, Vice President of Content Development at a global technology media company, is a keen industry watcher with an intense focus on how CIOs and companies manage their technology teams and responsibilities. A seasoned technology marketer, he is an accomplished event and panel moderator with a rich background in technology content creation, audience development, and management.

• Preface xiiiAcknowledgments xviiChapter 1 The Evolution and Future of Corporate Business Structures 1Example of a New Corporate Organization Structure 3Model of a Responsive Organization 5A Cybernetic Economy 7Cybernetics is about Control and Communication 9Profit Potential of Self-Adjusting Feedback Loops 11Viable Systems Model: A Framework for Business Agility 14A Cloud-Based Model for Business Organizations 19Notes 22Chapter 2 The New Economics of Business 23Moving to a Variable Cost Operating Model 24Information Technology Finally Becomes a Utility 27Variable Cost IT Operations Enable Business Agility 30A Combination of Technologies Creates Cloud Computing 34Implications of the Transition to Cloud Computing 38Notes 41Chapter 3 Key Technologies Used in Cloud Computing 43Cloud Computing Defined 44Software-as-a-Service 47Server Virtualization 49Service-Oriented Architecture 52Open Source Software 54Web Development and Mashups 58Blending It All Together 60Notes 61Chapter 4 Data Security and Service Reliability 63Will Your Cloud Service Provider Be Here Next Year? 63What to Look for in a Good Service Provider 65Elements of Good Data Security Policy 66Cyber Threats and Perimeter Security in Cloud Computing 69Encryption: The Next Frontier of Data Security 72Contracts, Service-Level Agreements, and Guarantees 73Negotiating Service and Pricing 77Performance Penalties and Restitution Clauses 79Notes 80Chapter 5 Moving to the Cloud: When and Where 83A Business Strategy Based on Agility 84Using the Cloud for Business Advantage 87Business Applications with the Greatest Potential 89Risk Considerations with the Cloud 91Cloud Cost Considerations 94Case Study: Selling ‘‘Designer Chocolates’’ 96Notes 99Chapter 6 The Transition from Managing Technology to Managing Business Processes 101The Fixed Cost of Maintaining Large Data Centers is Being Challenged 102Public, Private, and Hybrid Clouds 103Issues to Consider with Private Clouds 107The Cloud is a Platform for Managing Business Processes 109Automate Routine Processes and Focus People on Handling Exceptions 113Four Technologies that Enable Responsive Business Processes 115Notes 117Chapter 7 The New Role of Information Technology 119Is Traditional IT Irrelevant? 119A Tumultuous Ride for the Chief Information Officer 121The End of IT as We Know It 122Changes in IT and Business Unit Staffing 123Evolution of the Traditional Corporate IT Department 124Agile IT Professionals Using Cloud Technology will be Embedded in Business Operating Units 125Cloud Computing Separates Data Center Operations from System Development 127Do We Need Enterprise Technology Architects, or Business Architects? 128Companies are Investing in New Business Process Design 129A Renewed Focus on Using Technology for Profit and Competitive Advantage 132Notes 135Chapter 8 Five Profit Enablers Driving Business to the Cloud 137Harvard Medical School 137Golden Gate University 140Silicon Valley Education Foundation 143Beachbody.com 147Five Profit Enablers Driving Business to the Cloud . . . and Away from Corporate Data Centers 148Notes 152Chapter 9 The Business Impact of Cloud Computing 153New Economic Engines for Growth 153Time to Get Agile and Reinvent Traditional Business Operations 155Get Ready, Get Set, Go: Success in a Real-Time Economy 157Interconnected, Adaptable, and Specialized 159Collaboration is Now More Profitable than Control 163Necessity Makes Radical the New Normal 165The Recovering Complexaholic 169Notes 170Chapter 10 Global Implications of the Cloud 171Real-Time Global Collaboration 171Serious Games 173Cloud-Based Collaboration Enables a New Way of Working: The Dynamics of Swarming 176Real-Time Visibility Could Make Us a Whole Lot Smarter 180New Realities and New Opportunities 183Notes 188About the Authors 191Index 193