5 ways cloud computing is changing product management
Cloud computing has become a major part of how IT organizations are approaching infrastructure requirements. To better support critical applications, networks, and websites, cloud infrastructure through CSPs, managed, and self-service models have become the go-to resource for a range of associated benefits.
However, given the ease with which it can be utilized, cloud infrastructure has appeal beyond the IT department. In fact, many other organizations within businesses readily jump into cloud usage to support their applications, creating a rogue IT that runs throughout the enterprise. While there are associated negative ramifications, the ubiquity of cloud also suggests that IT really is a more horizontal part of how all business units function.
Product management in particular is well suited to cloud usage. Given the speed with which product organizations are expected to produce applications, features, and updates to support growing user bases.
However, there a few key ways in which cloud involvement really does make sense for product managers, including:
- Pricing and contract: Product managers, in planning an application, naturally need to figure out the right pricing model that maps appropriately (and hopefully beneficially) to the proportion of end-users. Pricing can get innovative, but in the end needs to be repeatable and consistent. What a product manager wants must be balanced with what her/his audience is willing to accept. Cloud pricing models enable this balance to be achieved better than traditional IT, with price brackets that accommodate fixed fees if customer usage varies within a few degrees. Add to this the ability to avoid vendor lock-in, given the acceptance that businesses will move their infrastructure if a better deal is available. This translates in to a more flexible set of contract terms that a product manager can leverage to obtain a lower cost for a longer term; savings that can be passed along to customers and make the application more appealing from a cost perspective.
- Price of success and failure: While every product manager wants his/her application to blow up, the chance of that level of success is variable. That doesn’t mean an application won’t be popular; rather than, it might enjoy a demand curve that’s smaller than what was projected. Previously, the cost related to launching an app required either too much or too little infrastructure to be bought, causing problems for both conditions of wild success (with too few resources) and conditions of under usage (with too much unused infrastructure). With cloud, a product manager can provision the necessary amount for testing and production environments as well as consolidate variable costs with burstable IaaS platforms into a dedicated, predictable private cloud.
- Security: Every product manager is concerned about security: she/he wants the end-users to get the most out of an application without undue risk. However, an application’s core to a business’ success makes internal product and IT teams nervous about hosting data beyond their own firewall. Therefore, defining limitations on data usage become incredibly important to ensuring that the business and user information of an application hosted by a third party infrastructure provider generates meet the necessary security. Business Associates Agreements become incredibly important at this stage, and need to be developed collaboratively to best ensure that data liability is clearly defined.
- Integration/upgrades: Outages in the old internal-only enterprise IT were similar to upgrades in that the IT organization was responsible if a failure or missed upgrade threatens business continuity. In the cloud era, such liability is more distributed. With managed service and cloud service providers running the business infrastructure, SLAs, SLOs, as well as a baseline difference in how a business is conducted, becomes a major part of ensuring how failure and updates are handled. There is an incentive for organizations providing cloud services to maintain uptime – their brand credibility relies upon it. Compared to many mega cloud providers, like AWS, smaller managed service providers also live and die by the flexibility of their SLAs, which ensures that their clients remain happy through credits and compensation for downtime. This model also makes upgrades a more proactive part of infrastructure maintenance, since disruption for any reason are important to avoid for cloud and managed service providers.
- ROI: Return on investment is a corporate necessity – and too often it is only loosely defined and barely measurable. However, with cloud, the return is more immediately seen on internal accounting books, with longer-term value generated through its technological flexibility. The reality is that increasingly all IT will move towards as-a-service cloud delivery models. Yes, there will still be a market for DIY, old school IT infrastructure, but the rate of progression of cloud platforms in terms of security, performance and cost are too compelling to ignore. 10 years from now companies that integrated with cloud earlier will be far closer to the cutting edge of development at a better price to return ratio than those spending more to get up to speed later.
Product managers need to be involved in cloud infrastructure decisions. They are in charge of applications that either are or will become the centerpieces of how the business earns profit in the digital world.
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