Why have cloud technologies become popular, what is the innovation?
Communicating with programmers, I often hear the question: why have cloud technologies become popular, what is the innovation? Based on this issue, I would like to express my opinion.
No matter how strange it may sound, the point is not in the technologies as such, but in the financial side of projects or products and the business as a whole.
In business, it is customary to talk about two types of expenses:
1. CapEx - capital costs, i.e. we invest money in something and then try to recoup something for some time.
2. OpEx - operating costs, ie regularly pay and use something.
An example, an initiative group of employees has developed a new IT service, for this service you need a server and not one, you need to install the server somewhere, extend communications, etc. They made a calculation, received a figure of 100500 in a certain currency and went to the financial manager to ask for money. And here the most interesting thing begins, that 100500 it is immediately necessary to immediately find the amount, pay taxes. This amount actually breaks out of the company’s overseas for an indefinite period, these servers must be amortized somehow, then at the end of the term of use they must be written off the balance sheet, disposed of and, of course, paid bills for maintenance and repair. Will the investment pay off? And what to do with servers if a crisis has happened and you need to curtail your business? And what if the service is successful, will there be enough server performance?
In general, a purchase decision will be difficult, if at all, to convince them to invest. This is Capex.
Now let's see how this works in the event that you decide to take the path of minimizing CapEx by increasing OpEx. In this case, the team says we need 1000 to set up the infrastructure and 500 per month for its rental. If something goes wrong, we will turn off the infrastructure or even close it. And if the service is popular, we will expand by simply renting more servers. This decision is much easier for business to make. Cloud technologies offer such a solution for business and this has become popular.
There is another scenario when there are already servers and there is a desire or requirement to increase the efficiency of their use, it is no secret that the servers are idle 80% of the time. Here virtualization and self-service services come to the rescue of business, which marketing has called the private cloud and can increase the efficiency of server utilization, due to self-service to reduce costs.
These two scenarios also underlie the popularity of SaaS (software as service), which is a subspecies of the clouds and also the sale of subscription software. Why buy software, create infrastructure for it, if for a small rent you can get a product ready for use. And in the case of buying software by subscription, the price is small compared with the purchase forever and at any time you can refuse if you haven’t liked or decided to change the product.
So at the heart of the popularity of cloud technology is the idea of flexibility and convenience for business, not technology for the sake of technology.
No matter how strange it may sound, the point is not in the technologies as such, but in the financial side of projects or products and the business as a whole.
In business, it is customary to talk about two types of expenses:
1. CapEx - capital costs, i.e. we invest money in something and then try to recoup something for some time.
2. OpEx - operating costs, ie regularly pay and use something.
An example, an initiative group of employees has developed a new IT service, for this service you need a server and not one, you need to install the server somewhere, extend communications, etc. They made a calculation, received a figure of 100500 in a certain currency and went to the financial manager to ask for money. And here the most interesting thing begins, that 100500 it is immediately necessary to immediately find the amount, pay taxes. This amount actually breaks out of the company’s overseas for an indefinite period, these servers must be amortized somehow, then at the end of the term of use they must be written off the balance sheet, disposed of and, of course, paid bills for maintenance and repair. Will the investment pay off? And what to do with servers if a crisis has happened and you need to curtail your business? And what if the service is successful, will there be enough server performance?
In general, a purchase decision will be difficult, if at all, to convince them to invest. This is Capex.
Now let's see how this works in the event that you decide to take the path of minimizing CapEx by increasing OpEx. In this case, the team says we need 1000 to set up the infrastructure and 500 per month for its rental. If something goes wrong, we will turn off the infrastructure or even close it. And if the service is popular, we will expand by simply renting more servers. This decision is much easier for business to make. Cloud technologies offer such a solution for business and this has become popular.
There is another scenario when there are already servers and there is a desire or requirement to increase the efficiency of their use, it is no secret that the servers are idle 80% of the time. Here virtualization and self-service services come to the rescue of business, which marketing has called the private cloud and can increase the efficiency of server utilization, due to self-service to reduce costs.
These two scenarios also underlie the popularity of SaaS (software as service), which is a subspecies of the clouds and also the sale of subscription software. Why buy software, create infrastructure for it, if for a small rent you can get a product ready for use. And in the case of buying software by subscription, the price is small compared with the purchase forever and at any time you can refuse if you haven’t liked or decided to change the product.
So at the heart of the popularity of cloud technology is the idea of flexibility and convenience for business, not technology for the sake of technology.