Bank cloud computing strategy unleashes new era of opportunity

Banks, the bane of our lives and the object of our derision over their lack of innovation and customer service – see mine recently – but hey! here’s a decision which is business-innovative and one which will change the computing landscape in Australia from this day on, for the better.

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The Commonwealth Bank of Australia announced (at a private gathering of the Committee for the Economic Development of Australia CEDA) their new IT purchasing consortium with Deutsche Bank and Bank of America, AND their commitment to cloud computing.

So why the excitement?

Well the consortium is one thing, OK that’s smart if they have common interests and can combine their purchasing power and save more than it takes them to coordinate the effort. But not transformational.

But the CBA’s group executive of enterprise services and CIO, Michael Harte, also said that they intended to decrease their current (in-house) infrastructure costs by 80% by moving to cloud computing.

The Australian IT press reacted in a perhaps predictable way - CBA attack dogs growl at computer giants – taking the plan as an attack on vendors and and IT suppliers and their businesses. Forgive me for differing but I think that Harte’s decision and plan is the best thing that could happen to the Australian IT industry. More coverage.

Let’s count off some points:

1. Harte has in one fell swoop knocked the “security and privacy” arguments on the head (see below);
2. He has in one fell swoop lifted the burden of education from cloud service provers;
3. He has in one fell swoop opened up avenues for massive innovation in the offering of cloud enterprise services;
4. He has in one fell swoop forced the IT industry to face up to where things were headed anyway, saving most the death of a thousand cuts.

While the IT industry is always keen to push change onto others (the users) and often fast to blame them for not bing willing to change, I’ve found myself, over many decades, that the IT industry and IT managers are the most stubborn and the most resistant of all to change.

Harte has done us all a favour

I can’t help it if you don’t like it – just suck it in and get on with it or get out of the business. We can’t say that we haven’t seen it coming as Harte himself has been telegraphing this strategy for about 4 years!

He’s done us a massive favour by saying that, with respect to cloud computing, the security and privacy concerns are “actually the most easily fixed”. This puts the bogey to rest that is most often rolled out by company execs as the reason not to move ahead on cloud offers. Just as this held back outsourcing, these decades down the path the same old reasons not-to-act are trotted out. From now on, refer them to the CBA and DB and BoA and ask these clients if they are really so special in their privacy and security that they cannot do what these global banks can do? This is a manna from heaven to cloud service providers.

For Software as a Service (SaaS) vendors, Harte says, ”While infrastructure-as-a-service is mature, software-as-a-service is catching up fast. With inevitable security and legal structuring, applications will be more widespread and the terms of trade will continue to shift in favour of the buyer.”

Great. This is also good news for the SaaS providers who really understand the game. This moves the SaaS game from technology with some plugged-on customer and web-centric engagement to a customer-centric web-centric value-added offer enabled by some appropriate technology. We help SaaS companies transform themselves that way, so we’re hot to trot on this shot over the bows by Harte.

Succinctly, SaaS and cloud vendors need to move their innovation up, and their costs down.

Don’t do that and you become the walking dead. You have Harte to thank for putting you out of your misery sooner rather that later, and he’s done the industry a great service in firing the starting gun for a new era of transformation and opportunity in IT adding value to business.

http://xeesm.com/walter

PS Computerweekly quoted an “industry source” as saying “It is hard to tell if this is just a procurement play or a broader initiative, clearly the official announcement will tell us that. It is interesting that even the biggest players appear to believe that they still need more scale than they have individually to enable themselves to negotiate with the large providers, both in terms of price and product direction.“ 

When you have an industry which is brain-dead then you at some point have to turn off the life support system!

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