Lately we have heard a lot about Cloud Computing and seen a number of announcements in this space. Cloud Computing is really all about the simple provisioning of computer power, storage space and services. James Governor nicely characterizes it in his blog entry "15 ways to tell its not cloud computing". According to Gartner's Hype Cycle for Emerging Technologies, 2008, Cloud Computing is entering the "Peak of Inflated Expectations", while the Pew/Internet points out in a report of last September, that 69% of Internet users have either stored data online or used a web-based software application, but mainly for personal use.

Today, Cloud Computing is not risk free for companies, as pointed out by Gartner. They recognize 7 security risks and urge companies to pay attention to following areas:

• 1. Privileged user access
• 2. Regulatory Compliance
• 3. Data Location
• 4. Data Segregation
• 5. Recovery
• 6. Investigative support
• 7. Long-term viability

This means, as the SDTimes describes in an article labeled "What is the state of Cloud Computing?", that it may not be ready yet, but should definitely not be discarded. So, the question manufacturing companies should ask themselves is how to best prepare themselves for this new paradigm.

In our mind, two things can happen right away. First companies should work at developing a Service Oriented Architecture based environment, developing a service oriented approach to address the needs of the business. Second, companies should document and standardize their business processes. Combining both approaches will provide side benefits, including a greater responsiveness to changes in the marketplace, which could be quite useful in the current environment. But let's discuss both elements in a little more details.

By separating business processes and services (or elementary transactions if you prefer), one creates an environment where individual services are orchestrated in business processes. Using graphical tools (similar to workflow tools), the processes can be changed quickly and efficiently. At a later stage, when Cloud Computing has achieved more maturity, certain services may be migrated to the cloud. Because of the separation of services and business processes, and resulting from the implementation of an appropriate SOA management environment, the migration of such services will be done transparently for the remainder of the environment.

This approach requires the development of a certain discipline both in the business process area and in the infrastructure space. Governance needs to be established to ensure the proper management of the services lifecycle. If you are interested in understanding more about SOA and HP's approach, you may want to take a look here.

Let me finish off with a couple words regarding business processes. At HP, we are using the Supply Chain Operational Reference model extensively as a base to design key processes. Not only does it provide a good basis, but through its key performance indicators, it allows the benchmarking of activities between companies. And this serves as a base for continuous improvement.

When will Cloud Computing become mainstream? Nobody knows. It may be in a couple years or in a decade. However, it is important for companies to start planning for it today, and implementing an SOA architecture should become the foundation of any IT environment that may one day migrate to the cloud. By standardizing and documenting business processes, one not only complete the transformation, but at the same time increase the responsiveness of the company, and it's eco-system, while facilitating the improvement of operations.