In 2010, Netflix made a very bold move. It decided to completely move all its Internet media streaming business to the cloud. The company would rather focus its engineering effort on solving challenging business problems rather than spending money on data centers. Besides, that lets someone else worry about being experts in a technology. Amazon’s Cloud Computing group actively is solving problems such as storage solutions, hardware failover, and networking infrastructure so that customers like Netflix don’t have to be superstars. Using the cloud’s elastic computing capability, Netflix’s business has grown and its traffic today comprises more than 30% of all North America’s peak Web traffic.

Yet, the decision to move to the Cloud was not easy for Netflix, and that is true for many other businesses. Here I explore some of the best practices around selecting the right type of cloud computing vendor, running your business processes on the cloud, what to run on the cloud, and how to know if you are doing it right.

Successful businesses have long understood that managing critical data—and transforming that data into usable information—makes a big difference in informing the business intelligence that enables productivity, agility, and competitive advantage. Many of these organizations have traditionally relied upon desktop solutions to house such data, but desktop databases and other tools lack flexibility, scalability, and security—and they have administrative headaches and support costs.

When your business is growing, you have important decisions to make, and – as uncomfortable as it may feel – you need to change your processes to manage that growth. However, instead of focusing on the business problems at hand, many businesspeople feel nervous about losing control. In an effort to know exactly what they’re doing, they expend many staff-years of their budgets on internal IT projects, putting attention on computing instead of their business. Instead, clear criteria can drive the selection process of a business process platform. With several choices available at one’s fingertip, companies can always find creative ways to be productive without breaking the bank.

Cultural Fit: IT Manager as Service Provider

For you and your team to stay current and economically viable, consider a cloud computing platform as a necessary part of your business strategy.

Cloud computing has grabbed headlines for a few years now, and businesses and IT departments have acknowledged the need to integrate Web-based applications into their operations. Cloud advocates point to flexibility, efficiency, and development speed and on-demand resource allocations as major adoption benefits. They also have warned that status-quo would surely make businesses fall behind on the technology adoption curve.

However, for many – especially IT managers – cloud computing can feel challenging when it comes to governance, responsibility and accountability and with possible sense of loss of control.

In fact, it should be the other way round. Business and IT managers should think of themselves as the service provider.

This is a big shift in thinking. Instead of a “build your own” attitude towards business problems, companies (of any size) can buy the services they need, for as long as they need. (That’s why it’s called Software as a Service, or SaaS.) When the business grows, and needs more – more functionality, more storage, more users – “upgrading” consists of paying a little more money to use a system that’s already familiar. Not migrating your users to a new system with all the concomitant expenses and uncertainty.

For many personal activities, you may already be benefiting massively from cloud-computing. If you use online banking or use social media like Facebook or LinkedIn, you are already doing different types of transactions with services on the Internet – services that run on platforms that you don’t control, though you have some access rights with your login and password. In other words, if you trust that your money, credit card or personal information can be safely processed on a computer that you don’t manage, why not use strict criteria to select cloud computing vendors who can meet your standards?

Not every business should move every computing function to the cloud. Consider metrics associated with costs, reliability, and responsiveness.

In the next post, I’ll help you define each of these cloud vendor selection criteria.