In an economy where every dollar counts, businesses can quickly boost productivity while significantly cutting capital and labor costs by moving to cloud computing, a senior IBM official said Wednesday, during a keynote presentation at the Interop Las Vegas 2010 conference at Mandalay Bay.
"Cloud economics and technologies are real, the benefits are real," said Kristof Kloeckner, CTO for Cloud Computing at IBM. "It's a fundamental shift in how you can deploy and deliver IT services," said Kloeckner.
The numbers Kloeckner presented are indeed compelling, assuming they can be achieved in real-life implementations.
He said cloud computing, in which businesses tap data and applications from remotely managed and maintained servers, promises to reduce IT labor costs by up to 50%. It also can improve capital utilization by 75% and reduce provisioning times from weeks to minute, according to Kloeckner.
Such gains flow from the fact that cloud computing brings a standardized, industrialized service model to IT, Kloeckner said.
A number of IBM customers are already realizing some of these benefits by moving to cloud-based computing models, Kloeckner said. The Bank of Tokyo-Mitsubishi is moving 30,000 end users to desktop clouds, while the U.S. Air Force is adopting a highly secure "mission cloud."
IBM itself recently rolled out an internal IM system on its Innovation Cloud that almost immediately ramped from 200 to 20,000 users, Kloeckner said.
What does it take to get a CIO to consider cloud computing? Kloeckner said organizations polled by IBM want to see the potential for 20% to 30% IT cost reductions. 69% cited security concerns as the factor most likely to inhibit a move to the cloud.
Not surprisingly, industries facing the greatest budget and margin pressures are the most aggressive cloud adopters. More than 50% of IBM's customers in the retail, manufacturing, utilities, and government sectors have cloud projects planned or underway, according to Kloeckner.
"The big switch is that customers and IT organizations now have choices about how to source and deploy IT services," said Kloeckner.
IBM is working with a number of partners, including Google and open source software vendors Red Hat and Novell (which distributes SUSE), to develop a range of cloud offerings--from the management of private clouds to fully hosted engagements that run on the IBM cloud.
"There will be many cloud shapes," said Kloeckner. "Cirrus, cumulus, stratocumulus, public and private," he said.
IBM earlier this month launched the Smart Business Development and Test Cloud that customer can use to develop and test application code.