Head in the Clouds, Money in the Bank
Cloud computing could be the next evolution in today’s high-tech revolution.
With an unpredictable market and the rate of technological advancements approaching light speed, manufacturers must adapt to changing situations more quickly than ever. But as every CFO knows, keeping up with the Jetsons comes with a major price tag. Luckily, a new option, cloud computing, is quickly becoming available.
Cloud computing is a pay-as-you-go service that provides companies with business infrastructure capabilities on the Internet, such as network storage and computing as well as applications. Instead of buying and maintaining a server and applications, a cloud computing vendor offers this as a service to businesses from a remote data center. Monthly fees typically range from $20 to $100, depending on a company’s computing needs. Because vendors rarely require contracts, customers also can turn off service in seconds, which could save companies big bucks, especially when a fluctuating market may call for varying levels of computing power.
Jason Baker, chief technical officer at VISI Incorporated in Eden Prairie, likens the cloud computing pricing model to that of utilities such as gas and electricity, noting that cloud computing requires no capital expenditures and eliminates maintenance headaches for businesses.
“Today, companies have to deal with these physical servers,” Baker says. “In the future, companies will buy computing resources as a metered service, just like they buy power from the power company as a metered service.”
For Minnesota, that future is fast approaching. VISI Incorporated, a data center and hosting services business, is on track to roll out the state’s largest cloud computing network before the year is out. While some companies’ customized applications—such as those physically tied to a machine—cannot transfer to a cloud computing environment, most are good candidates for virtualization.
As manufacturers seek to improve efficiency within their operations, Baker believes they will adopt the service from VISI Incorporated and other cloud computing vendors. “I look at cloud computing as being like Just-In- Time manufacturing,” Baker says. “It is IT computing resources at the exact time when [a company has] that demand for those resources. Ten years from now, most applications that companies are running will be running within a computing cloud. To me, there’s no question that will be the case. It’s like how water flows downhill. Cloud computing is the most efficient way for us to offer computing resources, and it’s the most efficient way for organizations to buy computing resources.”