1)Project Aim – The aim of this project is to analyze emerging business opportunities of the “Cloud Computing” business. 2)Purpose- The purpose of the project is to help inform BT’s corporate strategy teams about emerging opportunities for Group Investment. BT would like to understand how different value chains will form around specific socio-economic and technology trends. This will enable BT management to understand in a systematic way which markets and specific propositions BT might be able to enter to grow the business profitably. 3)Objectives- To make Business and commercial analysis of cloud computing. •To undertake competitors analysis of existing market players. •To explore business case development. •To identify emerging opportunities in the cloud computing business. •To estimate customer value proposition. 4)Context /Background- 4. 1) Introduction – While Cloud Computing is at the top of its hype cycle (Gartner, 2009), it is also real today. It is important to think of cloud computing, not only as technology, but also a new model for consuming services. Cloud computing is also a potentially disruptive opportunity to existing business models.
It enables new and emerging IT services, software and communication service players to introduce competitive products and services faster, more cheaply, and with less risk than in the traditional model. Cloud Services can typically range across Infrastructure services, platform service and software services. Since there is no cloud computing without the network, BT’s opportunity is to leverage its assets to define its cloud services. Those assets include extensive customer relationships, global network reach, security services, network application optimization and service assurance. 4. 2) Company introduction –
Operating in more than 170 countries, BT is one of the world’s leading providers of communications solutions and services. Principal activities include networked IT services, local, national and international telecommunications services, and higher value broadband and internet products and services. BT today serves customers in more than 170 countries. We have one of the largest IP networks in the world with over 1,270 cities connected across the globe. 4. 3) Pre-understanding – BT is the biggest infrastructure provider of UK and currently holding largest customer base with broadband and telephone lines.
They already have launched business in cloud computing area and established tie ups with major industry players like AT and T, salesforce. com etc. They have 5th rank in providing infrastructure services. 5)Literature Review- 5. 1) Introduction- While deriving cloud computing business strategy, main objective is to analyze journey of cloud computing era till date and forecast its direction from its footprints. In addition to this, investigate competitor’s strategies and how they have taken by the market. Based on this environment analysis, we will research obstacles and opportunities in cloud business.
Extensive literature search have been conducted to gather all available information on topic but as this emerging technology is in its primary stage, only 7 books are actually available in university library. In e- library total hits for “cloud computing” was 18372 however many of them are of technical nature and few of them actually address business point of view of provider of Infrastructure as service (I-A-S-S) which is our main focus. British telecom have provided primary documentation available which is very useful in learning what actually cloud computing is and its influence on various sectors of technology.
These documents contain market research reports, presentations from consulting companies like McKinsey. 5. 2) Cloud computing-definition, models, and opportunities- Cloud computing is not a new concept and have dreamed from many years by industry. One of the scientist from ARPANET called Leonard Kleinrock, 1969 stated as “As of now, computer networks are still in their infancy, but as they grow up and become sophisticated, we will probably see the spread of ‘computer utilities’ which, like present electric and Telephone utilities, will service individual homes and offices across the country. It’s a part of computing paradigms which include cluster computing, Grid computing, P2P computing, service computing, market-oriented computing. All these paradigms will provide certain attributes or capabilities of approximately 1 trillion dollars worth of the utility computing industry (Sun Microsystems co-founder Bill Joy). Tasks which used to take years in terms to grow a business to several million customers now can be possible in months. However there is some confusion what it is and when it’s useful.
According to Oracle’s CEO “The interesting thing about Cloud Computing is that we’ve redefined Cloud Computing to include everything that we already do. . . . I don’t understand what we would do differently in the light of Cloud Computing other than change the wording of some of our ads”. Same kind of thoughts have been expressed by Larry Ellison (Wall Street Journal, September 26, 2008) which ahead repeated more mildly by Hewlett-Packard’s Vice President of European Software Sales “A lot of people are jumping on the [cloud] bandwagon, but I have not heard two people say the same thing about it.
There are multiple definitions out there of “the cloud”. Going further in same feelings Andy Isherwood, quoted (ZDnet News, December 11, 2008) Richard Stallman thinks “Cloud Computing is a trap for users—if applications and data are managed “in the cloud”, users might become dependent on proprietary systems whose costs will escalate or whose terms of service might be changed unilaterally and adversely: its stupidity. It’s worse than stupidity: it’s a marketing hype campaign. Somebody is saying this is inevitable — and whenever you hear somebody saying that, it’s very likely to be a set of businesses campaigning to make it true. Cloud computing can be preciously defined as “Large pool of easily usable and accessible virtualized recourses such as hardware, platform, which can be dynamically reconfigured to adjust to a variable load allowing also for an optimum resource utilization this pool of resource will typically exploited by pay per user model in which guarantees are offered by the infrastructure provider by means of SLA’s (vaquero et al)”. Three aspects are new in Cloud Computing in term of hardware: 1) Infinite computing resources available on demand, which eliminates the need for users to plan far ahead for provisioning. ) Up-front commitment can be eliminated by Cloud users where companies can start small and increase hardware resources only when there is an increase in their needs. 3) The ability to pay on a short-term basis as needed (e. g. processors by the hour) and releases them afterwards. To play a role of cloud provider companies need to have already developed strengths. States by Berkeley “Realizing the economies of scale afforded by statistical multiplexing and bulk purchasing which requires companies to construct extremely large data enters Building, provisioning, and launching such a facility is a hundred-million-dollar undertaking.
However, because of the phenomenal growth of Web services through the early 2000’s, many large Internet companies, including Amazon, eBay, Google, Microsoft and others, were already doing so. Equally important, these companies also had to develop scalable software infrastructure (such as MapReduce, the Google File System, Big Table, and Dynamo [16, 20, 14, 17]) and the operational expertise to armour their data centres against potential physical and electronic attacks. Therefore, a necessary but not sufficient condition for company to become a Cloud Computing provider is that it must have existing investments not only in very large data centres, but also in large-scale software infrastructure and operational expertise required to run them. Given these conditions, a variety of factors might influence these companies to become Cloud Computing providers: 1. Make a lot of money 2. Leverage existing investment 3. Defend a franchise 4. Leverage customer relationships. IT service organizations 5. Become a platform” Though this new buzz word is getting popularity, it has many obstacles in the path.
According to Jennifer Belissent (Forrester) “Despite the buzz about cloud computing, global adoption rates for infrastructure-as-a-service (IaaS) remains anaemic. However, a look at regional differences in adoption and local concerns reveals that security and privacy are often top of mind as potential customers weigh the advantages and risks of moving their applications — and consequently their data — into the cloud Despite the buzz about cloud computing, global adoption rates for infrastructure-as-a-service (IaaS) remain anaemic.
However, a look at regional differences in adoption and local concerns reveals that security and privacy are often top of mind as potential customers weigh the advantages and risks of moving their applications — and consequently their data — into the cloud” In addition to above obstacles there are things like Availability of Service, Data Lock-In Standardize APIs, Data Confidentiality and Audit ability, Data Transfer Bottlenecks, Performance Unpredictability, Scalable Storage, Bugs in Large Distributed Systems, Scaling Quickly, Reputation Fate, Software Licensing are also there.
According to IDC “The long-term nature of outsourcing will require that vendors build not only a Road map of customer adoption from traditional outsourced models to new outsourced models but also a road map of their own “transformation” to these new outsourced models. ” 5. 3) Conclusion- According to literature review, though this new era will trigger investment in hardware and infrastructure, in long value lies increasingly in services rather than hardware.
In addition to this although hardware resource costs continue to decline however there is still some variation in rates which companies can track and potentially pass them through to the customer. This can be more effective than building one’s own data centre. Also to be effective in competition companies should take account of the SLA (service level agreement), local laws, and location of the data centres as the key points for long term sustainability in the business. 6)Methodology- 6. 1) Introduction – To achieve objective of this assignment, information collection has been made through various resources.
We are using a combination of the two approaches which also supported by Tricker (2004:205), gill and Johnson (2002:202), mason (2002:33) because of its strong point of complementing each other with their strengths to weaknesses. Being an information technology engineering graduate and having 4 years of extensive experience in technology industry will help me to analyze technicality of the cloud computing technology which is mandatory to understand what possible it can and can’t offer in realistic world. This is necessary to validate what promises could possibly come into reality and which are not.
My approach to achieve required objective would be to use two different research methods which are Desk based research and Semi structured interview. 6. 2) Desk based research- Client wants a fresh view to see the current problem which can only be created through working outside the organization on outside data without knowing current company approach or strategy. This approach will increase possibility of generating altogether a different way of looking towards the same problem. This might help client to create a potential new strategy or make existing strategy versatile.
This advice is leading me towards choosing inductive approach because I am not validating existing strategy or process instead I am analysing current flow of the cloud technology and forecasting future opportunities that may or may not be complementary to the clients existing business strategy. Working on a concept like cloud computing which is having tremendous potential to change transform existing system thoroughly, one can always find ample amount of material and opinions expressed by various technology scientist who usually sense future technology trends before they come into reality.
Journals written by such scientist can be best option to predict the future or at least understand where it can possibly go. Also working on such secondary data will not only offer you different opinions register by experts but also it will save your significant amount of time. It is also easily available on World Wide Web (Bryman and Bell 2003:230). Various kind of white papers, literatures, books, journals are the sources of this secondary data. Client already has actively working on this topic and invested significant money on collecting market research data.
They have their own R team working on innovation in infrastructure and networking field. Documentation developed by all these company internal sources can be very much useful while deriving business strategy. This documents will also portrait current strengths and weaknesses company has which absolutely necessary while choosing various strategic options. Client has been agreed to provide these internal and confidential company documents in the second stage of project after sighing data protection agreements. 6. 3) Semi structured interviews-
These are the interviews which are going to happen with client managers and R persons. They will be conducted as and when required so are called as semi-structured. The primary reason behind these interviews is to extract current problems which internal people are facing while developing business strategy. This will help us to hit the right area where company current facing problems. In these interviews, dynamic questions will be asked based on their response to avoid shadow of preconceptions of researches on those questions (Jesson 2001, ph 336).
Questions would both open and close ended questions. As research will progress, serious of questions will be prepared and will be discussed either in face to face meeting or weekly teleconferencing meetings. Also open ended questions can dig more into what approach they have previously taken and have they faced any failures in their strategy which will guide us to the proper direction and ultimately will save our time. As mentioned by Easterby-smith et al (1991), data from these interviews will be transcribed and analysed systematically.
This will be highlighted the main themes and points of respondents on cloud computing. As this project is confidential and only for the internal use of client, all these interviews are not going to be recorded. 6. 4) Conclusion- Desk based research will fulfil the client requirements of understanding the opportunities in the whole cloud computing field. This will offer them current external environmental analysis and competitive analysis of major players in the cloud canvas. All these things will be in the first phase of the project.
There is still some risk of evaluating something which company might already know however we have to take chance as this is the only way by which outside company view can be brought in. Semi structured interview will provide internal company analysis where we can investigate current and past business strategies and their success and failures. Also only after this company internal analysis, we can derive suitable strategy according to their expertise. Various strategic tools like SWOT; Porter’s Five Forces model etc can be used to obtain various possible strategic options.
Recommendations will be based on these strategic options which will suggest client whether to use current strengths or develop some new expertise which seems possible. 7)Ethical Issues- This project is for British telecom and all the material and information is mandatory to use for this project only. All the necessary precaution will be taken care of about the confidentiality of the company internal documents. I have signed copy right and data protection agreement with client.