Magazine Article | July 18, 2011

From The Editor: A Snapshot Of Cloud And Its Value Proposition

By Gennifer Biggs, Security, Storage, and Managed Services Editor, Business Solutions magazine.

In the last couple months, I've twice heard the clearest explanation to date of cloud computing and its value proposition. The source was Renee Bergeron, VP of services and cloud computing for Ingram Micro, and to achieve that clarity, she compares technology solutions — on-premise, managed, and cloud — to real estate — houses, condos, and hotel rooms.

Bergeron starts by likening on-premise solutions to home ownership. The capital investment is high, the levels of control by the owner are high, and the risk lies entirely with that owner. Similarly, when a customer chooses to pursue an on premise technology solution, the capital investment can be high, and the maintenance, management, and risk sits with the business and, ultimately, the systems integrator that built the on-premise network.

With the managed services model, that responsibility is split between the business and its solutions provider, much as when a person owns a condo. So just as you own your condo, but still pay monthly condo fees to offset the costs of maintenance of your condo, in the managed services IT model, a customer owns its on-premise network, but pays a monthly fee to a provider to handle management and maintenance issues.

To explain the cloud scenario, Bergeron suggests that cloud is more like renting a hotel room than owning any real estate. The business owns nothing, but can rent the room as needed, use it as long as needed, and walk away.

In my conversations with VARs and MSPs alike, I have found that the potential for successful cloud sales are there, once both sides fully understand the advantages of cloud and the differences between cloud, managed services, and on-premise solutions. Perhaps Bergeron has landed on the perfect example to drive understanding by all parties.