With the evolution in IT computing to managed services, outsourcing, virtualization and broadband connectivity, cloud computing was inevitable.  The appeal of low cost-of-entry, minimal disruption to the business during adoption and time to productivity have forced IT computing leaders to rethink and reposition computing solutions as new entrants affect the market and customers’ value and perception of "prepaying" for computing solutions.

Moving from legacy IT solutions to cloud solutions provides customers with risks and rewards.  The cloud attraction is typically minimal capital expenditures with monthly (recurring) payment and reduced need for in-house IT experts.  Plus, you pay for what you consume. 

There are three key cloud solution choices: 

1. Public –  Think of a shared office building with multiple tenants sharing a pool of resources, which for IT includes storage, hardware and network components
2. Private – This relies on your own IT resources.
3. Hybrid – This refers to a combination of public and private cloud resources.

 Each cloud solution model provides risks and rewards.

Public Cloud’s Top Risks for customers include:

• Shared access.
• Virtual exploits.
• Authentication, authorization and access control.
• Availability.
• Data ownership.
• Location of physical data.

Private Cloud’s Top Risks for customers include:

• Private clouds often suffer from “perimeter complacency.
• Internal staff may lack the ability to maximize pools of IT resources across discreet technology areas (for example, datacenter, storage, network, etc.).
• Private clouds may lack sufficient penetration testing.
• Private clouds may rely on or repurpose older technology gear.
• There is potential vendor lock-in with proprietary technology enabling the private cloud.
• There may be lack of data integration and ability to leverage real-time analytics.
• There may be a limited marketplace of third party products to enrich the value of the private cloud.

IT prices have continued to fall over the last 10 years.  Now, many legacy software solutions have morphed into "software-as-a-service" or cloud-based applications.  Plus, thousands of new cloud applications and services are now available that replace or enhance legacy applications, or bring new capabilities to customers.   

Customers have a growing choice of solutions.  And, with pricing falling into or below discretionary spending limits of corporate business units [or line of business (LOB)], LOB is increasing its total percentage of IT procurement.  Today, LOBs procurement accounts for approximately 35 percent of IT spending and the Gartner Group estimates it will reach greater than 90 percent by the end of this decade.  This means corporate IT will be increasingly relegated to support integration of LOB selected cloud applications and solutions into the overall corporate IT environment. 

While LOB procurement of cloud applications and IT solutions provides speed, choice and flexibility, it can also create unintentional consequences: 

• Cumulative IT spending of all LOBs in a corporation may be higher than IT spending when corporate IT manages brand selection, negotiated terms and so forth.
  
• Applications and IT solutions may not comply with corporate governance, regulatory or compliance requirements

Growth and adoption of cloud applications that can be turned on and off require a new set of tools:

• Cloud decision tools to ensure corporate governance, regulatory and compliance challenges
  
• Recurring renewals tools
  
• Asset tracking
  
• Dashboard tools to monitor the customer's business unit and corporate IT environment, track procurement, provide pricing optimization support (i.e. volume and cross brand discounting and support), identify security gaps and improve fault tolerance

As LOBs increase their role in procuring cloud applications and IT resources, corporate IT must establish cloud architectural review committees to ensure the “self service” convenience and flexibility desired by LOB is not limited, but guided to make the best cloud application and IT resources decisions based on corporate governance, compliance and regulatory requirements.

As LOB procurement continues to grow, they have different goals, challenges and business benefit criteria than corporate IT management.  LOB focuses on two key issues:

• Customer value of application or solution (or WIIFM – what’s in it for me as a customer to adopt this solution)
• How the proposed solution will drive business process and productivity improvements and reduce business costs and risk 

For IT vendors and application developers, products, solutions and services based products have historically been sold based on “what it does” (or speed and feeds).  Today, as LOB procurement continues to grow, IT vendors must adopt a new method of selling, which will be focused on customer value or “what it can do.” 

Partners who have historically supported corporate IT with technology solution and services are generally unknown entities to LOB.  Partners will need to change their engagement approach to capitalize on this shift in IT purchasing and value messaging.

AWS has long been considered a go-to resource for developers and well-funded startups.  AWS is now expanding the basic infrastructure it has been providing to some startups with the AWS Activate program. AWS Activate is quickly becoming the platform for startups, which are capital constrained and have elastic computing needs for test and development, pilots and scaling product adoption.  Current AWS' hot startups include AirBnB, DropBox, Etsy, Instagram, Pinterest and Spotify.

In October 2013, AWS expanded and formalized its startups focus with introduction of its "AWS Activate" program.  The Activate program is designed to help AWS capture young startups and to wed them to the AWS platform instead of competitors (such as Rackspace, Microsoft, Google and others).  

AWS Activate offers two packages for startups:

• Self-Starter package, which is open to any business:  The Self-Starter package allows developers to build applications and scale current ones at no cost. It also provides technical support, access to a startups forum, special offers from third-party businesses, web-based training and tutorials for entrepreneurs looking to develop new skills.
  
  
• Portfolio package, which is open only to startups in accelerators, incubators or venture capital funded companies:  The Porfolio package offers all the benefits of the Self-Starter package plus a lot more, including advanced support resources, extra tutorials and credits that can be used for other Amazon services (such as AWS RDS, AWS S3, and AWS CloudFront).

The ability for startups to quickly build and scale is crucial to their success. With access to resources like AWS Activate, startups can swiftly and easily use AWS and focus on growing their businesses.