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Clouds, cloud computing, and the ashes of Eyjafjallajökull

by Davin Wilfrid

April 20, 2010

By Davin Wilfrid, Managing Editor, ERP Expert

If the eruption of the Eyjafjallajökull volcano in Iceland has taught us anything, it's that disruption can come from the unlikeliest places. Several of my coworkers were grounded from flying to our SCM/Logistics/Manufacturing event in Milan, and my colleague Jackie Howard was forced to spend a few extra days in Scotland on vacation (terrible, I know).

The disruption caused by Eyjafjallajökull is more than just a nuisance for several businesses, with airline losses topping $1 billion. Der Speigel reports that some airlines estimate accruing losses that top those of the 9/11 terrorist attack in 2001. Lufthansa estimates it is losing 25 million Euro per day as the volcano continues to pump ash into the atmosphere above Europe.

The giant billowing clouds above Iceland are a good metaphor for another major disruption that affects SAP customers -- cloud computing (and its close associates SaaS and hosted services). As "the cloud" has grown in capacity and reliability, customers are being forced to adapt to a new environment.

Companies will now have greater flexibility to choose solutions that, in many cases, require little or no onsite maintenance. SAP is fast at work improving its own cloud-based offerings, including SAP Customer Relationship Management (SAP CRM) on-demand. Last year John Wookey, vice president of Large Enterprise On-Demand at SAP, called cloud-based offerings “the next stage in the evolution of application development,” and promised to release several function-specific applications over the next few years in areas such as strategic sourcing, contract life cycle management, and expense management.

Even if you invest heavily in cloud-based technologies to reduce your overall IT footprint, experts I've talked to warn against too much complacency. Even the best applications are worthless without quality data, so there will always be a need for cleaning, uploading, and maintaining information. Fail to do that and your investment may be reduced to ashes.

 

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