New York – I’m just back from a visit to the cloud computing summit put on by Saugatuck Technology, the Connecticut boutique analyst firm dedicated to the topic. 

Based on a couple of interactions and the analysis I’ve been reading from this group, I figured it would be a good set of meetings -- and it was. 

A lot of the talk at the conference was about acclimatizing to the arrival of cloud technology, and more importantly, integrating it to the existing IT environment in places and ways that make the most sense.

I’ll touch on the content in a couple of posts, starting with a morning chat between Saugatuck founder William McNee and Eric Armour, president of the graphic communications business at Xerox, who’s taking an incremental opportunistic approach to cloud deployment, via virtualization or software or platforms.

We know how hype works for being around it so long and we've tracked the market. Still, for you remaining unconvinced “clouders” out there, your day has come. No more laughs at those cloud commercials on TV, We have more important issues to talk about.

Added to the conversations I had with consulting practitioners and our new 2011 list of 25 Top Information Managers coming out today, I can tell you the sideshow is over.

To that point, Armour said that a slower business environment at Xerox initially greased the investigation of fixed cost reduction in infrastructure and services at his company.

“Existing infrastructure was full of opportunities to virtualize,” Armour said. But there were many more opportunities in back office processes, expense reporting and time tracking that have been passed to cloud-based software. As seems to be happening everywhere, sales reps were given Salesforce CRM as a service on iPads (a reminder to editors everywhere of who’s more important, by the way).

Enterprise standardization lowered overhead at Xerox as expected, but also reduced errors arising from multiple system entry.  Mobile services help sales or tech reps answer information requests, shift gears and resolve issues on the spot. It was a good start.

Having acquired business process outsourcing provider ACS, Xerox was looking to take its solutions down market and also reach out to its customers’ customers. Users of big commercial printing devices (that cost $500,000 to $1 million) offer their own services to their customers, and cloud was a likely place to host these services.

Those big capital investments also call for sophisticated commercial printer software that, to my initial surprise, perform tasks like database mining and analytics. Millions of dollars in revenue flow through these expensive devices and customers extend the value of commercial printers with enhancements over time. Xerox can use the cloud to host and incrementally sell and deliver software features for customers who avoid some of the upfront cost and can also do much of the field work and maintenance that once fell to Xerox. (I’ll note here that other companies at the conference, like Thomson-Reuters, said they are initially resistant to rolling customer facing cloud services and favor internal development.) 

With so many potential cloud-based opportunities and ideas at hand that can be quickly enabled, “business can become IT’s worst nightmare,” Armour said. To help the transformation, Xerox set up a 12-member steering committee for cloud strategy and another group to build solutions on top of hardware.

It’s not so much governance as an attempt to reach agreement, develop some common business cases and gather reusability, Armour said. “We didn’t want groups of people fighting for resources.”

His advice? Think first about what’s right for the customer being served. Look outside as well as inside the business for opportunities to develop the cloud. Add capabilities incrementally and look for low-hanging fruit.

Familiar strategies applied to a new computing paradigm really can carry over and make sense in updated practices. You’re going to see more of this buy in from our new 25 Top Information Manager list.

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