The Cloud is Not a Fad. Neither Was the Automobile.

Did you hear the one about the lawyer who took out a loan?

As the 19th century drew to a close, one man from the small town of Leslie, Michigan was making big moves.

After outgrowing his hometown, Horace Rackham migrated to the burgeoning metropolis of Detroit where he would find a wife and a profession, working as a lawyer for his own law firm. Success was a result of following his instincts and those instincts would garner him some very high-value clientele including one of the biggest coal dealers in the U.S.

It was that same client who would introduce him to another man teetering on the edge of success, Mr. Henry Ford.

Embracing a Vision. Embracing Innovation.

In 1903, a 45 year-old Rackham was employed by Ford to incorporate the Ford Motor Company – Ford’s humble, second attempt at producing a profitable car company. Rackham knew he was getting involved in something special, so when Ford told him that he should buy stock in the business to help get it off the ground, Rackham set out to find the funds to do just that.

But despite his success as a lawyer, it was still a matter of Rackham scraping together the means to finance a significant percentage of shares to have a worthwhile stake in Ford. To supplement his savings, the lawyer began selling real estate parcels and meeting with banks to borrow money.

It was his pursuit to borrow money from the bank that would lead to the president of Michigan Savings Bank uttering a line that would live in infamy, or idiocy rather, for the rest of time. You see, the bank’s president had a stern warning for Rackham before he turned down the loan for the car company’s shares:

“The horse is here to stay, but the automobile is only a novelty – a fad.”

Luckily for Rackham, he shrugged off this advice and managed to put together the $5,000 he needed to purchase 50 shares of Ford stock (roughly 5.6% of the company at the time).

Everyone Loves a Happy Ending

And for following his instincts and realizing that Ford’s automobile was an innovation that could change the world, Rackham would be made the chairman of the stockholders and his $5,000 investment would transform to $12.5 million by 1919. Thus ended his law practice and began a comfortable life for Rackham and his wife as they spent the rest of their lives as philanthropists, giving to charities and other noble causes.

Rackham knew the automobile was here to stay. He knew that the people would look past the current way of doing things to embrace an easier, more efficient way to commute. He knew it would affect their personal lives, and he knew it would especially affect their business lives.

And that is why Rackham’s story resurfaces today.

The Value of Cloud Computing

Unfortunately, many enterprises are still parroting that president of Michigan Savings Bank’s logic.

They see cloud computing and the advances in security, availability and performance that the cloud is wielding for businesses as a fad? A flash in the pan in a world that will, what, regress back to doing business with on-premises servers, higher costs, lowered reliability and increased workloads for your IT staff?

Thanks to managed hosting and cloud solutions, IT teams are rejoicing at the opportunity to innovate rather than just maintain an infrastructure – and it’s garnering big results: first to market, increased productivity, more informed support, etc.

The ones who stand back in the shadows as more than half of U.S. businesses step into the cloud and the global cloud services market reaches $180 billion by the end of 2015 will be the ones with egg on their faces soon.

Yes, some CEOs and company presidents are still going on record as firm opponents of cloud computing. And this is not to be confused with those who may not be ready yet or are hesitant to pull the trigger for various reasons (presumably because they haven’t heard of a hybrid cloud model yet) – no, these are men and women who see the cloud as a problem, as just a fad and as a drain on their business.

Where do these Cloud concerns come from?

Maybe they have their business to look out for. Maybe they fear the risk. Maybe they still don’t understand exactly what is at play, or rather, at stake.

They want to see metrics or standards that can tuck them in at night, but their lack of sleep will more likely be the result of not only missing the opportunity for their organization to innovate, but also for attempting to stand in the way of a technology that is snowballing into one of the most efficient ways ever to do business.

To paraphrase Narasimhan (Kishore) Mandyam, CEO of PK4, it comes down to two personas that oppose this impending change of cloud computing:

  1. Those who don’t know enough about it
  2. Those who just don’t care enough to pursue it

How can he say this? Because any business leader that investigates their business options for incorporating the cloud will inevitably stumble upon a cloud solution that will save their enterprise significant time and money as opposed to the in-house alternative.

Companies with Their Head in the Clouds

The cloud-based company, is no stranger to nay sayers. In 2001, Tom Siebel, the then founder of Siebel CRM Systems (which would soon be absorbed by Oracle Corporation), famously said, regarding Salesforce:

“There’s no way that company exists in a year.”

And Oracle itself would continue to make the news for some rather foolish musings from their outspoken CEO Larry Ellison who made his puzzlement with the cloud well known in 2008 by stating:

“Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?”

…Oracle would soon after release a cloud offering.

But’s CEO Marc Benioff pursued a different line of thinking that propelled his business to become one of the biggest leaders in enterprise cloud computing. His message was one of acceptance and excitement at the growing technology:

“The cloud services companies of all sizes… The cloud is for everyone. The cloud is a democracy.”

When Benioff said that in 2010, the cloud as we now know it, was barely even a buzzword, yet Benioff embraced the cloud’s vision similarly to how Rackham embraced Ford’s, to both of their benefit.

The Cloud Gains Steam for Small to Large Businesses

As the technology blossoms into a more secure, highly available option for small to large businesses all over the world, the excuses are running out to remain uneducated about its capabilities or to refuse your organization the value that it promises.

Gone are the days of several week turnarounds to set up servers and dictating which team members will be on the clock to support the infrastructure. Now, everyone can innovate. With shared costs, provider-based support and total administrative access, businesses can employ the same enterprise features to their data that previously could only be possessed by large corporations and those who could spend the dollar amount to purchase the most ironclad security and deepest expertise.

Now teams of experts can support your data and manage your environment around the clock. All while you save money.

Roy Stephan, Director of IT Architecture and Engineering at Intelligent Decisions shares his enthusiasm for the cloud:

“Individuals and small businesses can snap their fingers and instantly set up enterprise-class services.”

It’s no surprise then that we’re seeing a resurgence of start-ups that require very little capital to get their business on its feet and begin producing even more products and technologies that will help us innovate further.

That beloved snowball effect continues…

Using Water Services to Explain Cloud Services

And it’s so simple, even the government gets it.

Federal CIO of the United States Government, Vivek Kundra is credited with one of the clearest explanations of cloud computing:

“There was a time when every household, town, farm or village had its own water well. Today, shared public utilities give us access to clean water by simply turning on the tap; cloud computing works in a similar fashion. Just like water from the tap in your kitchen, cloud computing services can be turned on or off quickly as needed. Like at the water company, there is a team of dedicated professionals making sure the service provided is safe, secure and available on a 24/7 basis. When the tap isn’t on, not only are you saving water, but you aren’t paying for resources you don’t currently need.”

With the cloud, you’re not just enjoying playing with the tools previously only handed out to the bigger enterprises on the playground; you’re also operating under the financial protection of being able to scale your environment to the size that is currently proportionate with your business. Never mind building an environment that you hope to aspire to or one that you will quickly outgrow, the elasticity of the cloud lets you only pay for what you need. And when the time comes that you need more, it’s rapidly deployed so you don’t miss a beat.

Start Doing More With Less

It’s real. It’s innovative. And it’s changing the way that people do business.

So, as the cloud conversation continues to find its way into your board meetings and the power of the cloud is introduced, sometimes even through desperate post-it notes left behind by overworked IT managers, take the actual time to investigate it as a palpable option for your business.

Ask yourself: How is it going to make a difference for you and your team? What risk will be involved? What savings can you expect? In what ways can you expect higher efficiencies, increased productivity and faster ROI? Can you afford to remain on-premises while your competitors go to the cloud?

It’s time to bring the value of the cloud to your business. Or just get on your horse and ride into the sunset…

2014-01-27T09:21:22+00:00 January 27th, 2014|

One Comment

  1. […] CEO of PK 4 Media knows this story all too well. According to Narasimhan Manyam there are two kinds of business […]

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