It’s happened before and it will happen again. A new paradigm makes a noisy debut on the IT stage, and all of a sudden, business executives are demanding answers and action from IT. Right now, the hype du jour is the cloud. So what does it really mean for the business and for IT?

“We can never underestimate the industry’s ability to create hyperbole,” says Russ Daniels, vice president and chief technology officer of cloud services strategy at HP. “The cloud will be disruptive, but not in the way that most people are talking about it.”

Daniels indicates that most of the hype focuses on the cloud as a lower cost delivery model for what IT does today. Delivering IT at a lower cost is a legitimate concern. But companies are doing that today using virtualization and automation to create an infrastructure utility. In fact, HP has been driving these types of initiatives through its Adaptive Infrastructure approach.

Utility computing focuses on shifting from silos of compute capacity to a pool of resources (servers, storage, networks) that can be assigned dynamically to the most important business demands. This helps to avoid the issues commonly associated with dedicated infrastructure—stranded capacity, increased complexity and the need for specialized expertise.

Confusing utility computing with the cloud distracts customers from understanding the major implications of the cloud. In Daniels’ view, the primary role of the cloud is to solve problems that can’t be addressed by traditional IT models.

The cloud enables companies to deliver certain kinds of workloads otherwise out of reach. It’s not a substitute for delivering existing IT functions, but a new approach. Daniels highlights that the pervasiveness of the cloud contributes to one of its key strengths—connecting businesses to businesses, businesses to consumers and people to people.

Product traceability is a perfect example. When there is a food contamination or product recall, companies clamor to understand the source of the issue. This requires in-depth insight into the flow of products or materials through the supply chain.

When companies rely on traditional IT approaches, answering those questions usually means point-to-point integration of the various supply chain management systems. It’s a complex process, which, because of the difficulty and cost, usually doesn’t occur. In the end, companies employ manual processes, where human resources scour endless volumes of reports. It’s expensive, slow and error prone.

Using the cloud in this scenario, each participant in the extended supply chain would add a report to its supply chain management system, generating a data stream of the relevant information to the cloud. When needed, a cloud-based service that uses search technologies could explore that data and trace the flow of products or materials across the extended supply chain. It’s a simpler and more cost-effective way to access the answers required for discovery and decision making.

So where does HP see itself in the cloud space as the paradigm evolves? With the evolution of the cloud, many new ecosystems will emerge where businesses will connect data to context to create information and insight. The print and publishing ecosystem is a perfect example. Producers, creators, sellers and users could use the cloud to connect to each other, potentially driving the widespread adoption of digital printing. The opportunities stemming from these connections in the cloud are of great interest to HP and it is positioned to support the subsequent growth of this ecosystem. But Daniels prefers to balance the present with the future. While HP is directing significant resources and intellectual property to cloud computing, it also doesn’t want to lose sight of the challenges that companies are facing today. Executives want to understand the cloud and how it works, but they also want to leverage any delivery model that will deliver optimum economics. The conversations that HP has with those executives usually focus on both.

“We work with customers to identify the factors that affect their sourcing decisions,” says Daniels. “But we draw a definitive line when it comes to the cloud. Achieving the economic benefits of the cloud requires more than hosting existing workloads; it means rewriting those workloads to fit the cloud. So most of what customers are hearing about right now is utility computing with a new name. As a trusted advisor, we take clarifying the hype seriously so that our customers are making the most sensible decisions for their businesses, whether it is utility or cloud computing.”

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