The buzzword in the IT industry at present is cloud. Although there is a lot of hype, it is not really a new concept, just a new name. In the same way you buy water or electricity (municipal services), you can now buy e-mail, document storage or even business applications as cloud services.
Cloud comes in two main flavours; public and private. Public cloud services are those that are shared with multiple other customers. Private clouds are dedicated to you specifically. There are also combinations or hybrid models, where some applications, such as e-mail, may be a public utility, and business-centric applications are privately hosted.
For any industry in South Africa today, there are a number of advantages and disadvantages to the utility model of IT. Additionally, there are specifics for each industry vertical, such as mining. Common to both are the benefits of flexibility and agility, allowing companies to scale up and down quickly, and even change to new applications on short notice. The biggest disadvantage in South Africa today is still the high cost of connectivity. Cheap, reliable and fast bandwidth will eventually be commonplace, but for now connectivity is more often than not the roadblock on the path to the cloud.
The mining sector can gain a number of benefits from the cloud/utility model of IT. The biggest of these is the immense flexibility it gives for short and medium term projects. New users and contractors can easily be added and removed for each project as it is commissioned and then completed. The applications, security accounts and data storage can all be seen as temporary. Even though connectivity is not currently ideal, fixed and mobile satellite links allow for exploration and prospecting teams to have full access to all the IT facilities available to someone at an office.
The softer benefits of the cloud are issues like compliance and the environment. Because the cloud model is utility-based, issues such as storage restrictions and archiving can be remedied by procuring on a 'just in time' and 'as needed' basis. Services can be tiered so that archived data storage is cheaper than online data. The green issues are addressed through the economies of scale that cloud services offers. Server virtualisation and on demand capacity means more efficient use of resources; electricity to power servers and cooling, smaller physical footprint and consolidation.
Financially, cloud computing moves business away from a capital expenditure (CAPEX) model to an operational expenditure (OPEX) model. In traditional IT environments, a company has to purchase the equipment, software and support infrastructure such as data centres, generators and HVAC systems. Then they have to build the environment, manage the environment, manage the employees that manage the environment, troubleshoot, repair and upgrade the environment. There is a large CAPEX component to all of this and it is not the company's core business. Financing or leasing of equipment also adds costs. Utility computing is just a service. Pay for what you need, when you need it.
Overall, all sectors are all likely to move most, if not all, of IT to a services-based utility model. The flexibility it can give you coupled with the reduction in complexity of owning and managing IT will far outweigh the perceived price premium that is associated with the cloud.
* Contributors: Cedric Abrahams and Dawn Hollingworth Group Marketing & Business Development Director
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