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Using cloud computing to manage risks

  
  

In a recent presentation on cloud computing, I listed four types of risks that can be managed using clouds.

  •      Demand risk is the risk of fluctuating demand or market collapse and may come about from changes in economic conditions, customer taste, or competitive thrusts. Since elasticity is a capability offered by the cloud, variation in demand can be smoothed out. In addition, the pay per use model prevents users from being locked into fixed commitments.
  •        Inefficiency risk is the inability to match competitors’ unit costs. Since companies can divvy up the costs across many users, unit costs for IT processes go down.
  •       Innovation risk is the peril of not innovating as well as your competitors. This effect happens because companies have freed up their time from managing IT and can use this time to innovate in their business.
  •      Scaling risk occurs when a business cannot scale fast enough and efficiently enough to meet market growth. Companies typically plan for growth by building excess capacity into their services. When this excess capacity is shared across many users, the cost of building this capacity goes down.

After our presentation to the group we added another category of risk that could be managed using cloud computing.

  •    Control risk is manifested in an organization’s ability to identify and implement best-in-class procedures to acquire or manage resources that could endanger their survival. In the case of cloud vendors, their focus and specializations (including certification) enables them to excel in managing this risk.

Does cloud computing help manage any other risk factor?

Posted by Bala Iyer on Sat, Feb 12, 2011 @ 04:28 PM

COMMENTS

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http://www.johnseelybrown.com/cloudcomputingdisruption.pdf 
http://dngraham.wordpress.com/2011/02/24/cloud-computing-–-storms-on-the-horizon/ 

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