Most discussions about cloud computing involve Software as a Service (SaaS) applications, Amazon Web Service (AWS) or other public cloud infrastructure, and the private/hybrid cloud evolution happening within enterprise IT departments and data centers. These, of course, are all huge trends so it’s only right that they get the lion's share of the attention. However, there are many other examples of how the cloud is changing business practices.
Supply chains are one area undergoing tremendous change due to the cloud. The cloud is impacting supply chains in a tangible, physical way. A good example of this is how converged infrastructure supply chains are getting "cloudified."
Converged infrastructure is taking the data center market by storm. IDC predicts that the converged infrastructure market will grow at a compound annual growth rate of 33% from 2014 to 2017, reaching $14B by 2017. As a category of data center infrastructure that started at zero not too long ago, this is a remarkable shift. Converged infrastructure is rising in popularity because it takes the burden of systems integration off of enterprise IT teams by offering integrated, full-stack solutions of compute, storage, networking, and virtualization.
Nonetheless, it’s important to remember that while converged infrastructure simplifies private data center to a certain degree, it’s still a complex set of hardware and software that needs to be designed, shipped through distribution and systems integration channels, and provisioned to meet baseline customer requirements. It’s also important to understand the context of the larger cloud infrastructure market, where spending is tilting towards public cloud. As a result, private clouds are measured against public clouds such as AWS.
IDC’s latest "Worldwide Quarterly Cloud IT Infrastructure Tracker" predicts that by 2019, the overall cloud infrastructure market will be $52B, with public cloud being the destination of over 60% of that spending. What does this mean? In the words of a cloud infrastructure systems integrator I spoke to at the recent EMC World, “We have to move way faster to keep up with public cloud expectations.” This is where cloud automation and business models are making a difference.
While there’s no way to overcome the laws of physics in terms of the time it takes to physically ship products from manufacturers to distributors, cloud models can impact the configuration and communication stage of the supply chain. It’s not exactly a secret that a large, rack-sized converged infrastructure product can take a few weeks to configure, and requires the expertise of multiple domain knowledge workers for storage, networking, computing, virtualization, and management tool products.
Some manufacturers and distributors are now using a cloud model to change this costly and slow way of doing things. Increasingly, manufacturers blueprint common configurations for distributors to provision converged infrastructure then automate those blueprints and make them available via a cloud self-service catalog.
This means that instead of having to dedicate their best trained, brightest and most costly engineers to supply-chain operations, distributors can delegate these duties to operations personnel. More advanced cloud supply chain models also capture key details from the provisioning process and communicate those back to ERP and support systems back at the manufacturer so that ongoing support, RMA, warranty and other processes are kicked off automatically.
The result is instead of weeks, these distributors can prepare and provision products down the supply chain to systems integrators in well under a day. Of course, this still isn’t as fast as going to AWS and virtually swiping your credit card, but it’s a smart move to meet customer expectations.
By the way, this cloud-based model is affecting many other parts of technology manufacturers’ businesses beyond the supply chain. These areas include running demonstrations and full proof-of-concepts (PoCs) from a VPN-accessed private cloud rather than shipping gear to customers; using cloud infrastructure self-service principles to speed issue replication and fix verification in support processes; and exposing cloud-based sandboxes to let customers and partners develop against both proprietary and open API’s. These are all indicators of how the cloud is profoundly changing the way world does business.
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