ConVoyage_Jan11 | Cloud Computing | Software As A Service


January ‘11

JAMNALAL BAJAJ Institute of Management Studies

Issue – January 2011

Page 1

.......................... 12 CROSS WORD ..................14 CONSULTING FUN ........................................................15 consultingclub@jbims................... 7 HOW THE GROWTH OF EMERGING MARKETS WILL STRAIN GLOBAL FINANCE........................................... 3 CONSULTANT TALKS ... 9 INCREASED LABOUR MOBILITY TO MEET DEMANDS FOR ECONOMIC GROWTH ........................ 7 PUTTING STRATEGIES TO THE TEST: MCKINSEY GLOBAL SURVEY RESULTS ............................................................................CONVOYAGE January ‘11 CONTENTS: AN ARTICLE: POWER OF THE CLOUD IN THE WORLD OF BUSINESS Page 2 ....................

he simply logs in by providing a user name and a password. Cloud computing is a mere extension of Software as a Service (SaaS). So how does the User leverage this to his advantage? Well. you have to leverage your IT costs where Cloud Computing helps you out. Plus there are always problems with version upgrades. It is similar to a building where every office in a building uses the same infrastructure and basic facilities available but still has the capability to customize its own office space. It can also be called as a Utility computing similar to utility services like Electricity and Water where you pay only for what you Page 3 . applications and computing power are all lodged at a remote location from the user. But are you doing enough? Are you doing it the right way? When you need to start a business. data.CONVOYAGE January ‘11 An Article: Power of the Cloud in the world of Business By this case the internet). monitor and debug these applications. power costs. or technology becoming outdated. JBIMS and only pays for those applications which he wants. operational and set up costs which can be enormous. Cloud Computing is a concept where the entire applications runs from a virtual cloud (In consultingclub@jbims. you need to have so many resources in your hand: Business applications like SAP or other ERP software. By this. or technical issues which available with you. you need technology and to make the best use of the resources Think about the way you do business. Vineet Inamdar 1st Year MMS. To be in business. Welcome to the world of cloud computing. servers and technical people to run. You might have the best technology available. talented resources and might be highly successful. What does it have in store for the various firms across the globe?? needlessly frustrate you.

software as a service (SaaS). It works on the concept of multi – tenancy where in a single software runs on a server. Web 2. How does cloud computing work? Cloud computing is Internet based system development in which large scalable computing resources are provided “as a service” over the Internet to users. If the application has a fairly consistent load throughout the day. small and medium enterprise firms. reduction in capital architecture. since no time is wasted for resource allocation or for set up. which runs its computer-animation rendering process on Windows Azure (A cloud computing or cloud services operating system for the development service hosting and service The advantages of Cloud Computing is that it gives the organization a very rapid start up. But for start-up.0 and other emerging technologies. which . The concept of cloud computing incorporates web infrastructure. A classic example in this case is of Pixar Animation Studios. What would decide whether you should move your application(s) over the cloud or not?? It depends on how fair is your usage of the data and the application. Also.CONVOYAGE January ‘11 Traditionally bigger firms have deep pockets to buy the latest technology and use the traditional client server since the number of users can grow but everyone shares only one single instance of the software. it is better to move the application since it will have better utilization. the only way to survive and make progress is by expenditure and operating costs. scalable Page 4 management environment) because every frame of their movies takes eight hours to render today on a single processor. but the same is used by multiple clients (called tenants in this case). But in cases of applications with high variations in the traffic. you pay the same amount of money when you move to the cloud and in fact enjoy the advantage of a higher processing power in the form of several shared multiple servers working on your embracing cheap but effective technology. it then makes no sense to move it to the cloud. application.

By reducing the number of servers from 120 to 20. To handle issues like the increasing cost of hardware. CEO and co-founder of Oracle while quoting some companies which boasted of providing ERP systems on the cloud. In order to grow against heavy competition and a complex environment. the company migrated to a virtual environment and optimized the server space utilization. they migrated to Microsoft online services where the software and data were hosted online with real time support. With Azure. The result is huge spikes in Pixar‘s usage of Azure as they render on-demand. India. But now. particularly with its sales employees to deliver information to them in real time. solutions and Coca-Cola Enterprises is the world’s largest marketer. Traditional way of communication was via email to which sales employees had limited access. In order to fill up this messaging need and maintain contact with the employees. power usage and consumption.CONVOYAGE January ‘11 means it would take them about 272 years to render an entire movie. Larry Page 5 . software licenses. producer and distributor of Coca-Cola products. accounts and manufacturing. KPIT Cummins is an emerging leader in providing consulting. Coca Cola Enterprises: consultingclub@jbims. there have been increasing criticisms on cloud computing. Some industry examples where companies have actually cut down on their IT costs drastically and become more optimally competitive: KPIT Cummins: Headquartered in Pune. Negatives on Cloud Computing: While the entire concept of cloud computing has gathered steam in the past few months. said it was unclear on what could be hosted from the server. He said provision servers from several months to a few hours. effectively there was a need with to its communicate employees. and increasing the server utilization. they can get the job done as fast as they need. the company managed to get newer applications deployed and there was ample support for the software through multiple devices like mobile phones and computers. it was possible for them to communicate with the company since services in the fields of finance.

com Another disadvantage is that they would provide you the same set of service to consultingclub@jbims. cloud for computing small might be successful and medium enterprises. only time will tell since there are too many constraints. primarily of security to be handled.CONVOYAGE January ‘11 that the entire issue of ‘cloud’ which is a new name for coined for the ‘hosting from the internet or over the network’ is in fact over blown and has always existed in the past. So even though you could customize It is true today that all organizations providing cloud computing services have to comply with several security standards but instances of data breach are not uncommon. References: www. Also. Whether cloud computing showers itself upon the world or not. But it is definitely a new concept in the use of IT which gives a method to companies to be more cost effective in terms of the technology usage. everyone who uses it. the biggest disadvantage is that of data security. the logic still remains the same: Same set of services to offer from a host of services from which you need to select which service you require. Software as a Service has Page 6 . But for traditional large scale organizations.existed with traditional software vendors for several years. Also. it is always economical to have your own server (private cloud) and host applications rather than migrating your application to some third party vendor. It would not be possible for an organization to deploy its highly sensitive data over a remote server which houses data and provides services to different users.

Yet for many companies. While it’s certainly possible for a strategy to succeed at a company that fails all or even most of the Page 7 . They may not be asking themselves the right questions. The first— whether the strategy will beat the market by creating competitive advantage—is comprehensive. The results of a recent McKinsey survey suggest one reason: just 53 percent of executives characterize their companies’ strategies as emphasizing the creation of relative advantage over competitors. the rest say their strategies are better beating strategy. In this survey. Competitive advantage is the essential ingredient of any strategy. the results underscore that companies can do much more to pressure-test their strategies. executives around the world answered a series of questions that allowed us to test how fully their companies’ business unit strategies pass ten tests that we believe. advantage is an elusive goal. just playing along. Nearly two-thirds of respondents indicate that their companies pass three or fewer of the ten tests. meaning that our description of the test closely describes a particular element of their strategies. some seem content just to play along. and what the implementation plan involves. The remaining nine tests disaggregate the picture of a market- consultingclub@jbims. assessing how the strategy positions the company in the market. And only 2 percent of respondents say their companies pass nine or all ten tests. what level of insight the strategy rests on. The results also suggest some ways that companies can prioritize improvements in their approach to strategy based on the tests respondents say contribute most to financial performance and are most frequently used in their sectors.CONVOYAGE January ‘11 CONSULTANT TALKS Putting strategies to the test: McKinsey Global Survey results Creating a winning strategy is a struggle for most companies. described as matching industry best practices and delivering operational imperatives—in other words. based on years of work with clients and academic research. make for a good strategy.

stress the importance of management having a strong belief in the strategy’s underlying assumptions. there is a rough correlation between passing a test and executives saying a test is instrumental to financial performance. arise some among interesting differences industry sectors (Exhibit 4). more executives select flexibility to make choices in the future than any other test. meanwhile. for example. when asked which three tests have the most positive effect on financial performance. And as Exhibit 2 shows. When executives assess the tests’ impact on financial performance. novel insight is the test rated least important to financial performance and passed least frequently.CONVOYAGE January ‘11 While it’s certainly possible for a strategy to succeed at a company that fails all or even most of the tests. Executives in the energy industry. For example. Conversely. nearly half of them cite that test. the results underscore that companies can do much more to pressure-test their strategies. to be partly related to whether they think it Page 8 . The results also suggest some ways that companies can prioritize improvements in their approach to strategy based on the tests respondents say contribute most to financial performance and are most frequently used in their sectors. this is the test the most companies pass. with 46 percent saying so. consultingclub@jbims. of course. Executives in the health care and hightech sectors. Taking the tests to the bottom line Whether executives say their companies pass a given test is likely. And indeed. are likelier than all others to say a focus on trends has a good effect on their financial performance.

led by developing economies. They enjoy healthy cash capital. could put upward pressure on interest rates and crowd out some investment. consultingclub@jbims. as developing economies continue to pick up the pace of urbanization. The gap between the world’s supply of. Short-term doldrums aside. the world’s supply of capital—that is. the prognosis for companies that can tap into that growth over the next decade looks promising.CONVOYAGE January ‘11 How the growth of emerging markets will strain global finance Surging demand for capital. crowd out some investment. machinery—may put unexpected strains on the global financial system. and financial institutions alike. government policy makers. These findings for have business important executives. with $3. and an aging population seems unlikely to reverse that trend. ports.8 trillion in cash holdings at the end of 2009. Indeed. and other kinds of public infrastructure—and the many companies building new plants and buying potentially act as a drag on growth. Moreover. with real long-term interest rates languishing near 1. and they have access to cheap capital. water and power systems. and balances. Yet all those new roads. the world’s corporations would seem to be in a strong position to grow as the global economy recovers. capital to invest could put upward pressure on real interest rates. capital flows between countries will likely change course. as patterns of global saving and investment shift. and demand for. household saving rates have generally declined in mature economies for nearly three decades. The McKinsey Global Institute’s (MGI) recent analysis finds that by 2030. its willingness to save—will fall short of its demand for requiring new channels of financial intermediation and policy Page 9 . or the desired level of investment needed to finance all those projects. China’s efforts to rebalance its economy toward increased consumption will reduce global saving as well. implications investors.5 percent. Indeed.

CONVOYAGE January ‘11 Surging demand for capital Several economic periods in history have required massive investment in physical assets such as infrastructure. Asia. Considering the very low levels of physical-capital stock these economies have Page 10 . schools. factories. our analysis suggests that high investment rates could continue for decades.8 percent of GDP in 2002 to 23. factories. the demand for new homes.7 percent in 2008 but then dipped again during the global recession of 2009. These eras include the industrial revolution and the post–World War II reconstruction of Europe and Japan. consultingclub@jbims. and shopping centres has already caused investment to jump. this time fueled by rapid growth in emerging markets. and housing. hospitals. water systems. Across Africa. offices. transport systems. The global investment rate increased from a recent low of 20. The increase from 2002 through 2008 resulted primarily from the very high investment rates in China and India but reflected higher rates in other emerging markets as well. and Latin America. We are now at the beginning of another investment boom.

airports.8 percent. But the coming investment boom will involve relatively more investment in infrastructure and residential real estate.7 percent of GDP versus 2. When we examine alternative growth demand of about $4 trillion in infrastructure and $5 trillion in residential real estate in 2030. and people make home improvements. We project global investment consultingclub@jbims. roads. respectively. global investment will amount to $24 trillion in 2030. followed by power and water Page 11 .CONVOYAGE January ‘11 In several scenarios of economic growth. The gap exists in all categories of infrastructure but is particularly large in transportation (for instance. though less so in the event of slower global GDP growth. we project that global investment demand could exceed 25 percent of GDP by 2030. in 2008). scenarios. compared with about $11 trillion in 2008. When mature economies invest. if the global economy grows in line with the consensus of forecasters. we find that investment will still increase from current levels. To support growth in line with the forecasters’ consensus. and railways). they are largely upgrading their capital stock: factories replace old machinery with more efficient equipment. The mix of global investment will shift as emerging-market economies grow. Consider the fact that emerging economies already invest in infrastructure at a rate more than two times higher than that of mature economies (5.

) • Health care research and development alone will generate enormous demand for skilled labor worldwide.” said Hans-Paul Bürkner. and communications industries in developing nations. exceeding 4 percent across all countries sampled. and demographic changes in the Northern Hemisphere. Today. In Canada.CONVOYAGE January ‘11 Increased Labour Mobility to Meet Demands for Economic Growth Industries and countries worldwide will require major increases of highly educated people in their workforces to sustain economic growth If left unaddressed. the United particularly high demand in the trade. and the United States. demand for professionals in manufacturing will peak at more than 10 percent in developing countries. talent scarcity will become a threat to sustained growth. Improved Page 12 . Kingdom. “Human capital has replaced financial capital as the engine of economic prosperity. transportation. compared with 4. technicians. • Employees without critical knowledge and technical skills will be left behind. where retirement of the baby boomers will result in an unprecedented talent deficit. • Demand will be biggest for highly educated professionals. Germany. The roots of the global talent risk include the widely uneven quality of educational systems. erratic employability of the workers in the Southern Hemisphere. and managers. expected immigration and birth rates will not offset the workforce losses caused by aging populations. (Labor-demand growth rates are compounded annually. particularly in knowledge-based economies. Professionals will be in BCG’s president and chief executive officer.5 percent in the United States and nearly 10 percent in Canada. foreign-born workers with university degrees or equivalent qualifications make up just 2 percent of the European labor market. • In the next two decades.

as well as more than 100 high-level contributed experts to and the the disadvantaged. • Ease migration to attract the right talent globally.” said Piers A. and New York in 2009 and 2010. World Economic Forum. • Increase employability by advancing hand with increased labor migration. The World Economic Forum Annual Meeting 2011 in Davos-Klosters will seek to catalyze a pragmatic. senior director. • Extend the pool by tapping women.CONVOYAGE January ‘11 education and training must go hand in “The global problem is no longer a mere talent mismatch. • Foster “brain circulation” to mitigate brain drain. head of partnership. older professionals. Doha. The scale of the predicted talent gap requires concerted action. • Develop a talent “trellis” by focusing on horizontal and vertical career and education paths. New Delhi. Davos-Klosters. technological literacy and cross-cultural learning skills. starting with—and going well beyond—removing barriers to the mobility of talent. The report proposes seven core responses to global talent risk: • Introduce strategic workforce planning to address imbalances between labor supply and demand. consultingclub@jbims. and practitioners. • Encourage temporary and virtual mobility to access required skills easily. Montreal. recommendations in the report and to the talent mobility dialogue hosted by the World Economic Forum online and at meetings in Brussels. result-driven action focused on effective sharing of good Page 13 . immigrants. Cumberlege. Members of the Global Agenda Council on Skills and Talent Mobility. Dubai.

legal agreement 16. wealth of person or business 12. money paid for a loan 10. ask the bank to advance money 6. proof of payment 3. money paid to owner of copyright or patent Page 14 . Names of the early three winners will be published in the next month edition of ConVoyage) consultingclub@jbims. part of the capital of a company 8. amount of money spent 14. where shares are bought and sold promise to repair or replace 13. neither cheque nor credit card 15. money lent 11. put money into a company or business 5. amalgamation of two companies 14. share of profits paid to shareholders Down 2. money returned (Note: Solve the crossword and mail the solution to consultingclub@jbims. total sales of a company 17. rate and efficiency of work 4.CONVOYAGE January ‘11 CROSS WORD Business and Finance Across 1.

edu Page 15 .CONVOYAGE January ‘11 CONSULTING FUN consultingclub@jbims. Parinita Jatkar Cell Kush Tandon Cell . Rahul Salvi Cell.mayankgoel12@jbims.parinitajatkar12@jbims.+919987442845 Email id – kushtandon12@jbims.+919819539767 Email Saurabh Sonparote Ekinath Khedekar Cell.+919920018159 Email id .+919819292862 Email id .+919867393620 Email id .+919769220527 Email id Senior Junior MembersMayank Goel Cell .+919867798948 Email id .edu Pramod Kanojia Cell .edu Prasad Gholve Cell.+919821708412 Email id .edu Page 16 .CONVOYAGE January ‘11 The Consulting Club -Enhancing Quality… Contact us.

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