Thursday, March 17, 2011

Advantages of Cloud Computing– Part XIV – Data Value and Security

If you’re among the 3.9 million followers of  “Gold Rush: Alaska” on the Discovery channel, you may have seen where the miners had to sift through scores of five-gallon buckets of ‘black sand’ to find a mere few ounces of the precious metal.  It reminded me of the plight many business leaders face today.

In a 2004 article appearing in Progressive Grocer magazine and written by Joseph Tarnowski, the author cites a report released in the previous month of the same year, where he states, “Most retailers don’t suffer from a lack of data, but many suffer from a lack of clean, well-organized data and/or skills or tools to take advantage of whatever good data they have.”  Tarnowski added, “The year 2004 will be the year retailers zero in on what matters most, and [information technology] and business leaders will work side by side to improve how they capture, analyze, and make decisions from accurate and centralized data.” What happened? Not much, but events are taking place that may change all that.

In an article published today in “The Business Times,” an English language publication in Singapore, the technology editor, Amit Roy Choudhury published the results of a request he made to information technology experts to express how they felt recent advances in technology such as cloud computing have been responsible for the seminal shifts in technology they are seeing today. What came out of the study was one of the greatest advantages of cloud computing is the move toward ‘shared IT structures’, which in turn will drive demand for storage solutions toward a new, flexible and efficient environment.

Notice they don’t say ‘shared resources’, they are saying ‘shared structures’. It does my friend no service if I agree to share my power mower with a man that lives in a high-rise apartment complex. So the ability to ‘share’ implies at least some common attributes on both sides. When Walmart required their suppliers to join in Retail Link, it required their suppliers to standardize the way they handled data processing. Nearly 150,000 convenience stores share common attributes with each other, but not so much with other trading partners. The quickest, most efficient way to open up the supply chain is to use a common environment for the integration of data. 

Storage-as-a-service (StaaS), on a pay-as-you-go basis, will make it possible for smaller enterprises to link up with suppliers and store and analyze huge quantities of data currently being accumulated by their POS systems and other devices… but every paradise has its serpent. How do you select a third party to be the gatekeeper? And equally important, who will be the one that sifts through those buckets of black sand to find your gold?

The advantages of cloud computing aren’t just about lowering costs and increasing storage. It’s about a network of interconnected business that is made possible by the cloud.

If you’re a huge company like Walmart, and have an entire floor occupied by number-crunchers with nothing to do but tell you what to buy, where to put it and for how much to price it, you have a huge advantage over everyone else; but, suppose someone else could do that for you for a fraction of the cost of attempting to implement that yourself?

In our book, “Turning Convenience Stores Into Cash Generating Monsters,” we advise sharing the costs wherever possible with others. The outsourcing of not only data processing, but of all services involving information technology makes good sense. If a five-store operator were able to share in the same services larger retailers have access to, everyone would benefit. Does that mean giving up your competitive advantages? No, not at all. Service providers will be chosen according to the unique services they offer a given set of businesses. In fact, you will continue to have a variety of service providers just as you do today. The cloud will simply give you more options.


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