Company X is rethinking their IT structure. They currently have their own servers and use most Microsoft software for their operating system and business applications. Owning and maintaining their own servers and licensing software from Microsoft is very expensive in terms of hardware costs, software costs and technical support. To reduce their IT costs they are considering using cloud computing to run their main business processes and for various application programs such as emailing, word processing, presentation graphics and so forth.
Cloud computing is a software distribution process originally developed by Salesforce.com over a decade ago.(1) Merrill Lynch estimates that within the next five years the annual global market for cloud computing will reach $95 billion.(2) Cloud computing is a potentially very cost effective method for provisioning processes, applications and services while making IT management easier and more responsive to the needs of the business.(3) Cloud computing also offers the advantage of remote storage capabilities, further reducing the need for expensive servers to store data. Another big advantage of cloud computing is that data and applications can be accessed remotely from PCs, hand-held computing devices and smart phones. As cloud computing is evolving more and more uses are being developed for its use.
Software as a service is an ideal application of cloud computing where companies can use software offered by a company from remote servers on an as needed basis. This greatly reduces the need to buy expensive software applications and licenses and reduces the amount of IT tech support required by the company. Company X is currently in discussions with IBM, Microsoft and other companies offering software as service through cloud computing to determine the most cost effective way to restructure their IT organization and structure.