How Are Fiscal Cliff Fears Impacting Cloud Computing?

Purposeful View: Find silver linings in the current economic Clouds to align your businesses with the right set of Cloud solutions (by Chander Khanna, 18 December 2012)

As Congress and the administration struggle to dig themselves out of their deeply entrenched ideological positions to avoid our nation’s fiscal fall off the cliff, businesses are on strike when it comes to capital expenses (CapEx).

However, you can count on IT’s relentless and innovative processes making our businesses and all of us more efficient. As you know, for quite some time now both the Cloud Service Consumers (CSCs) and Cloud Service Providers (CSPs) have been realizing business values of Cloud computing. Current economic conditions are further accelerating this process. For example, CSCs, represented by start-ups, small, medium or large businesses, are increasingly using their operating expenses (OpEx) to pay for an increasing portions of their IT what they use: on-demand, highly scalable IT services. For some, Cloud Computing is the only viable option.

CSPs are building more and more data centers worldwide and launching new services to further improve economies of scale for their Cloud Computing portfolios. CSPs are putting large cash reserves to better use than just investing in an almost zero interest rate environment.

We can call the two phenomena above the unintended positive consequences of our current economic and political stalemate.

Looking ahead there is good news and there is not-so good news. First not-so good news: we can count on having to live with the uncertainties, frustrations and anxieties related to the likes of the Fiscal Cliff, details of the potential deal or grand bargain, the next debt ceiling crisis, health care costs; the list will be endless. On the other hand there is good news: we can also count on the IT world being driven, inspired and motivated by delivering more certain business value in the form of step function improvements in economic efficiencies through innovation with Cloud Computing playing an ever more central role.

Our view: There are many silver linings in the current economic Clouds. We need to align our businesses to the right set of Clouds to take advantage of those opportunities.