How Cloud Computing Is Disrupting IT Acquisitions Management

Introduction

One of the most disruptive technologies affecting IT acquisitions management is cloud computing. This disruption is not only technological but also economic: the business models of enterprise software are changing drastically, shifting from being budgeted as a Capital Expense (CAPEX) to being part of an Operating Expense (OPEX) (Marston, Li, Bandyopadhyay, Zhang, & Ghalsasi, 2011). This shift is also transforming the purchasing and deployment cycles of enterprise software, enabling applications to be up and running in a fraction of the time required to install and implement on-premise or server-based software (Rose, 2011).

Disruption Begins at the User Level

Enterprise software developed and delivered as part of an on-premise application suite is typically very difficult to customize to users' specific needs over time. Completely changing a given process workflow or creating an entirely new series of screens, for example, is expensive and time-consuming. With cloud computing-based platforms, however, it is relatively easy to change the look and navigation of an application, making it more adaptable to the way users work now and in the future (Marston, Li, Bandyopadhyay, Zhang, & Ghalsasi, 2011). This adaptability makes cloud-based applications more widely used throughout an organization, driving up the Return on Investment (ROI) while also ensuring they contribute to enterprise goals more effectively.

Scalability and Organizational Needs

A second aspect of how cloud computing is disrupting IT acquisitions management is scalability relative to organizational needs. Cloud architectures — including Amazon Web Services (AWS) and others — are specifically designed to support a wide variation in the number of users, flexing or scaling from small to very large user bases quickly and transparently (Rose, 2011). This scalability is critically important for large-scale enterprise applications, including Enterprise Resource Planning (ERP) systems, which have also begun to be implemented on cloud-based architectures.

Conclusion

Cloud-based technologies continue to disrupt enterprise software by changing how people perform their jobs today (Marston, Li, Bandyopadhyay, Zhang, & Ghalsasi, 2011). Cloud computing is also having a major effect on the economics of enterprise software, fundamentally revamping the approaches IT acquisitions management uses for purchasing software (Rose, 2011). The transition from CAPEX to OPEX funding — driven by the exceptional popularity of applications such as Salesforce.com that significantly increase organizational performance — will accelerate in the years ahead, further reshaping IT acquisitions management.

References

Marston, S., Li, Z., Bandyopadhyay, S., Zhang, J., & Ghalsasi, A. (2011). Cloud computing — The business perspective. Decision Support Systems, 51(1), 176.

Rose, C. (2011). A break in the cloud? The reality of cloud computing. International Journal of Management and Information Systems, 15(4), 59–63.