Clouds reflected in a building facade.

In the late 1980′s, timeshared computing resources allowed enterprises to gain reliable, high-performing computing services without the overhead of in-house computing infrastructure. Cloud computing targets the same enterprises, however, without the lock-in or inherent “stickyness” that timeshared computing service providers created and benefitted from.

The commoditisation of cloud services has been able to go further than timeshared systems because of a number of factors: high-speed, reliable and pervasive network infrastructure, the open source movement, smarter ways of deploying applications on shared infrastructure, operating system, server and software virtualisation; and a more mature entprise consumer who understands more about the true cost of system ownership.

The argument to get into the cloud is compelling and some large players are betting the farm on it. Marc Benioff, CEO of Salesforce.com, in an interview on CNBC this morning, cites that “software is dead” and that “the cloud just makes good  business sense, let alone environmental sense”. His large customer base is proof that others feel the same way he does. Salesforce.com has over 77,000 customers, including the US federal government and even Cisco and Google.

So why is cloud computing possible today and why is it likely to be an unavoidable and seismic shift in the enterprise computing services market? There are six factors making the cloud a sensible step. First, it makes pretty good business sense because it is elastic: you only pay for what you consume so the enterprise avoids creating cost sinks. You can consume services when you need them and dispose of them when you don’t. Second, the services can be charged for like a utility such as electricity or water. You only pay for services you consume. Services may be acquired under contract too, but often the elasticity is more important than predictability of the cost (predictability of the cost is often not an issue as an upper limit is usually easily calculable). Third, cloud based services reside on a well connected set of servers so moving information to other parts of your cloud or to the Internet is a trivial affair. Fourth, services can be provisioned on-demand and typically without human intervention. Fifth, and perhaps the most compelling, costs to provide the hardware, software and internetworking can be leveraged across many customers creating significant economies of scale, especially at the computing, services and administrative layers. Sixth and finally, the savings to the environment are likely to be huge. Concentrating systems into large data centres and sharing resources reduce the overall quantity of computing resources, including electricity for power and cooling, needed around the world.

There are essentially three service models for cloud-based services: software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS). The highest level is SaaS, this is Salesforce.com and Netsuite. It provides software, a hosted operating environment and shared infrastructure in order to deliver one or more software services. SaaS might be to acquire CRM or an ERP system services – more SaaS providers are appearing everyday including Google with their suite of office productivity tools labelled Google Apps. The next level of service provision down is Platform-as-a-service and can be likened to a suite of tools for developers to write applications on and the required hosting environment for those tools to run on. One could buy Ruby on Rails, LAMP or a Microsoft toolset from a PaaS provider. Finally, the most basic configuration of service is the Infrastructure-as-a-Service which is effectively network accessible hardware, operating system and network administration tools. What a customer of IaaS buys is computing power, storage and bandwidth/throughput. The computing power can even be arranged as a virtual data centre when clusters of servers are bought as an IaaS offering.

Apart from making good business sense for enterprises here in developed countries, there will be a raft of less developed countries that will stand to benefit significantly if their enterprises and governments can connect to cloud-based infrastructure, platform and software offerings. In some countries the engineers and experts that design, construct and maintain data centres simply don’t exist. It could be because of “brain drain” or years of civil war or an education system that is still developing – for whatever reason, without these critical human resources, the data centres cannot exist there. Consequently without cloud-based savings, enterprises there cannot attract the same cost savings that enterprises in the more developed countries will attract, making their products/services cost more and themselves as enterprises less globally competitive.

Other issues pertaining to the environment on-the-ground in less develped countries will further solidify the role of cloud-based service provision. In less developed countries, issues affecting the security of high-tech infrastructure may arise, for example in Papua New Guinea security problems are common among mobile operators and their cell phone base stations which are often vandalised. The provision of utility electricity may be unreliable due to poor energy infrastructure like the case of some Pacific island countries. In some cases, software is not available due to holes in national policy on intellectual rights protection or poor legal systems which prevent software authors from bringing their wares into the country, as was the case in Indonesia a decade ago. Finally, we have to remember that over 3 billion people live in BRIC countries and as these countries continue developing, their growing need for stable enterprise services will force them to turn to the clouds.

In my opinion, the clouds are rolling in are already overshadowing the desktop paradigm – this will continue as the Internet becomes ubiquitous.

Welcome, to this the second article of a new series of monthly articles on information and communication technologies for development (ICTD) written for the national planning & development agency of the province of Naggroe Aceh Darussalam (NAD). The series is intended for the non-technical reader. The aim of this series is to broaden the view of what ICT is and to take a lot of the mystery out of it so it can be used more effectively, in a way that suits the people of Aceh and our culture and customs, and to enjoy a better quality of life because of it.

The world is rapidly changing and there can be no doubt that ICT is firmly placed at the center of that change. Changes are seen in how people live from day-to-day, how people educate their children, how people interact and communicate with each other, how people find work, the kinds of jobs that they can do, how government conducts their “business”, how citizens interact with government, and how information moves between organizations. The changes are significant, permanent and ICT cannot be removed from the equation – ICT is at the heart of most of the observed changes. The constant factor is that ICT will continue play a sizable part of every aspect of human existence.

BAPPEDA, the provincial arm of the national planning and development agency within the Government of Indonesia, continues to work on the social and economic development challenges facing our province and nation and has a deeply renewed emphasis on ICT and how it can be used as social and economic developmental tool.

So, let’s start by understanding what ICT is. Later we will explore its uses and possibilities.

Most of us have come into contact with ICT as we use mobile phones, a PC, or access the Internet to use email and “surf the web”, but ICT is not just about dealing with phones, computers and the Internet. ICT is a broad, mature, well-structured and diverse social & scientific discipline encompassing an wide and deep body of knowledge.

Planning, designing and implementing ICT initiatives demands knowledge of: new processes and methods for doing things, new ways of applying financial resources, new business and service models, new jobs and learning and training pathways, new environmental impacts, new organizational structures and methods of governing those structures, new policy, legislation and regulatory frameworks, new cognitive and psychological science, new human behaviors and physical interactions, new branches of mathematics and physics, new language…and, yes, of course, there is also an expectation that one is accustomed to new hardware, software and ways of networking them.

Incorporating technology into an environment, whether that environment be a private sector enterprise, a non-governmental organization or a government agency, can only be sustainable and effective if all aspects of ICT are accounted for in the planning, designing and implementing of an ICT project. Accounting for financial resources, human resources, risk, timing, environmental sustainability, procedures, protocols, existing institutional structures needs to occur – without such considerations made, the ICT projects are destined to face challenges if not failing altogether. The number of international development ICT projects that are challenged or have failed altogether are numerous and easy to find. The common link among these projects is that they often failed to account for technical and organisational factors. Challenged or failed projects often exhibit a “gap” between the technology and the organisation.

For us to harness the power of ICT we must recognize that ICT is no longer just about hardware, software and networking – attending to only technology-related factors is an outdated and over simplistic view of ICT and ICT governance. ICT is a deep and wide discipline and understanding this, as a “first step”, will help us engage the right people, foster the right relationships, expect the right attributes in our organisational managers and develop the right skills within our organisations – to realize and enjoy the benefits that ICT can provide our organizations and government agencies is possible when ICT is seen as not just a driver of change or a facilitator of change in the organisation, but seen as the change to the organisation itself.

This is an adaptation of an article written for the Provincial Government of Nanggroe Aceh Darussalam, Indonesia by ICTD Corporation. ICTD Corporation specialises in the provision of consulting & advisory services for the design, planning, implementation and review of e-government initiatives and field research in developmental ‘leapfrogging’ in the area of ICTs. The author, Tony Willenberg (tony.willenberg@ictd.com), is managing director of ICTD Corporation and based in Sydney, Australia.