Presentation by Startup Canada Innovation Advisor Shahab Khan at the Canada Cloud Council Conference in Ottawa, October 15, 2012.
Hi, my name is Shahab Khan and I have also been called the man with many hats by at least a few of my peers and my interest in cloud technology comes from these many different perspectives. My day job is just a few minutes drive from here on March Road working in IT Strategy at Innovapost, which is an IT Shared Services provider for the Canada Post Group of Companies which includes Canada Post, Purolator International and SCI Progistics. Outside of that I am also on the Advisory Committee of the Canadian Cloud Council hosting today ‘s event, and the Innovation Director for Startup Canada. The hat I am wearing today, in this panel, is that of Startup Canada as we focus on the commercialization benefits of the cloud.
For those of you that do not know, Startup Canada a non-profit organization and is Canada’s first-ever, entrepreneur-led, national movement with its goal, to provide the entrepreneurship community with a strong voice, promoting a vibrant entrepreneurial culture, and creating a unified brand that Canadians can rally around. Launched in May this year, Startup Canada has engaged more than 13000 Canadians in over 25 cities coast to coast during its nation-wide tour which ended this past September, consisting of community-led Town Halls, networking events, expert meetings, to name a few as well as an online media campaign with over 5000 social media followers (twitter, facebook, linkedin, etc.). Through this tour and discussion, we have been able garner a number of insights that will form the basis of a collective vision on Canada’s entrepreneurial future. If you want to learn more about it, I will be running the Startup Canada table at The Cloud Social Networking Event tomorrow.
Now, I wanted to focus on two key areas for my part of this panel discussion that relate to the insights we have received on the entrepreneurial challenges and how the cloud can provide opportunities if the benefits are communicated in a way that is relevant to the target audience. The first is the misunderstanding of the cloud term and its business impact and the second relates to the cost saving but more specifically as it relates to the organization’s situation.
There have been a number of studies regarding the adoption of cloud computing to the perception from small and medium business to enterprises as a whole and I want to highlight some relevant findings from a few of them. By the way, you can find them all on the Canadian Cloud Council’s LinkedIN group by using the search function. So let’s start with the positives:
In February of this year, Microsoft released the SMB Business in the Cloud study and found that the number of very small companies (2-10 employees) using paid cloud services was going to triple over the next few years and half of those surveyed agreed that cloud computing is going to become more important to their business. Also, while 70% want to know where their data is being stored, only 20% believe their data is less secure in the cloud than it is in their on-premise system. Which is good, since only 40% of them actually have the resources to implement new technologies and applications.
This is just one survey but the cloud is definitely full of promise and potential with a number of acquisitions occurring in the past year to transform business models or build out capabilities. SAP with Success Factors, Bell Canada Enterprises with Q9 Networks, and Oracle with RightNow to name a few.
As we look more towards room for improvement, one quote that sums up the perception side came from the Cloud Security Alliance/ISACA Cloud Market Maturity study which stated:
As a first step, we as an industry must still work to provide a clearer definition of what cloud is and how the many innovative and secure services can help positively impact today’s businesses. (global research director at CSA).
CA Technologies created an Infographic just this month called “Is your IT organization Clouding the Issue. Here are a few interesting fact. 80% of IT leaders surveyed said that cloud is a driver of IT and business innovation but just over half of them have no plans to implement it. Even worse, even if companies are using the cloud, end users are not using IT to get there with 68% believing cloud services can be used without IT’s involvement and half not even knowing that cloud services are available to them.
So we definitely have a perception problem to deal with both internally within IT organizations and externally in the market as a whole.
For small business to understand the commercialization benefits, they must first understand the cloud. Most people know the big three: infrastructure, platform and software as a service models at a high level but now the niche players are coming out with backup as a service, database as a service, desktop as a service, etc. Next you look at the various flavours of virtualized hardware; is it on-site, co-located or off-site and if off-site is the hardware dedicated or shared and is the capacity on demand or reserved? This has also led to the technology focus vs. the business impact of the cloud which needs to be brought back to the forefront.
When we look at the cost savings resulting from the cloud, it is really important to look at the various scenarios as not all small businesses are created equal and they range from the single shingle accountant, technology start-ups, coffee shop/convenience store owners, franchise owners, for example with local, regional and even International ambitions.
Aside from the obvious that for everyone of them, cash is king and we all look for savings where possible, a recent Intuit Canada survey called “The $5000 question” found that 58% of Canada’s small business owners start with less than $5,000. For one-person shops, the number jumps to 77% reporting starting with less than $5,000 in their pocket. These are not the people to talk about the cloud being easy to scale, provides elasticity of demand or no IT department required. They will look to Google apps, Microsoft’s Bizspark program, Yammer, and Rackspace. They are looking for free or very close to it.
Now let’s look to a company further along but in the business to business space such as a small firm providing outsourced development and testing to larger firms. Now all of sudden, standardized and robust environments, demand fluctuations, integration requirements start becoming a stronger value proposition to an organization that lives and dies on its ability to execute and credibility on security and reliability. In addition, having a geographically dispersed workforce provides more flexibility and reduced overhead costs by leveraging a PAAS vendor for collaboration purposes.
Now coming back to Startup Canada, one of the key goals is that entrepreneurship should be for everyone, everywhere. It is for everyone to understand and experience. I can’t think of a better technology to leverage towards attain this goal than the cloud where anyone has the capability to hit the ground running with the full suite of services they need, can collaborate globally with peers, mentors and hopefully even crowdfunding and expand their business at their own pace with a secure and reliable service provider.
Thank you for listening and I hope I have provided some new information or pique your interest in learning more about how the cloud can help in commercialization.