Monday, February 17, 2014

Cloud Computing, GE, and a Personal Anecdote

The internet and technology have already changed supply chain management in huge ways, yet it seems like the options get bigger and better every day. In the last few years, the largest growth has been in cloud computing. In 2013 businesses spent about $150 billion on cloud services and this year's spending is predicted to grow by at least 20% over last year. Many companies, new and old, are jumping into becoming providers of cloud services to grab a piece of this sizable money pie.

Fast Company has recognized GE as the 27th most innovative business in 2013, mainly due to their work in creating a new cloud service that contains real-time machine performance data. GE has been adding components to many of their products (machines) to enable the machine to track and share data on how it's operating. GE then analyzes the data to find small ways to make the machine more efficient and avoid potential malfunctions or breakdowns. GE is motivated to pursue even small improvements because the ripples from their impact could be large given the prominent use of their machines. So far GE has applied these techniques to the airline industry. "GE estimates these self-reporting machines, such as the engines on enormous airliners, could prompt a 1% reduction in fuel, which would save the airline industry $30 billion over 15 years."

While major corporations are making waves in cloud computing, there are still major trust and control issues that are preventing lots of small businesses from joining in. Speaking from my personal experience, I was unsuccessful at convincing my employer to switch to the cloud when our on-site data server needed to be replaced. The ultimate decision maker was distrustful of a system of data storage that did not have years of proven reliability. At a time when a new data security breach or hack is reported almost daily, it is understandable that many businesses still want to maintain control over their data by storing it onsite, rather than expose themselves to the hacker threats online. Unfortunately, this risk averse approach leaves these businesses without the many benefits of cloud computing. How would you convince an IT decision maker of a small business to switch to cloud storage and services?


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