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SAP HANA Cloud Authors: Elizabeth White, Kevin Jackson, Dana Gardner, Liz McMillan, Jayaram Krishnaswamy

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What’s Next Toronto: Cloud Computing and the Drummond Report

CN_Tower_Lightning2Last year we began the process of organizing an event and white paper series entitled ‘Cloud Computing and the Drummond Report’.

Due to the volume of preparatory work required to make this a home run we had to put it on the back-burner for a while. This is now complete and we’re re-starting the project, stay tuned for further news.

The end result will be to establish Toronto as a lightning rod for attracting the best Cloud innovations in the world!

What’s Next Toronto?

The Drummond Report is the nickname given to a commissioned review of the state of Ontario’s finances by economist Don Drummond. (Read the full report here).

In short it’s been proposed that Ontario faces a bleak future due to a growing financial deficit and Drummond makes a number of cost-containment recommendations to address this situation.

Our goal for the white paper is to establish the link between the goals of the report and the value of Cloud Computing, how it can achieve these goals.

This is quite straight forward: Recommendation 16-10 specifically calls for more effective use of outsourcing for services like Cloud-based IT. Better efficiencies here will yield considerable cost savings.

More challenging is that an additional goal is to identify how this trend can be used to grow more local innovation. Dealing with cost over-runs is a fairly simple challenge, but financial difficulties are also due to a lack of growth, expansion that generates more tax revenues, attracts new investment and so on.

This is especially so if the issue is systemic – As a nation Canada experiences a dreaded “Innovation Gap” and this manifests at the provincial and even city level.

As described in this article, Ontario’s experiences an economic rut that sees it also languish at the bottom of peer rankings, and in this report from the George Brown College, quite startling insights are presented into why the innovation required to turn this around isn’t happening, such as this gem:

“Half of GTA businesses and organizations perceive little to no return on investment in new technologies, innovative skills training product development or fostering R&D partnerships with academic institutions.”

Wow, no ROI from investment into new technologies, in this day and age!!

cloud-brokerCloud Service Brokerage – New Portfolio Economics for IT

So with these two objectives of both government cost savings AND also innovation ecosystem development, a headline goal of the white paper is to identify those technologies that offer the potential for BOTH simultaneously.

An example of this super sweet spot is ‘Cloud Service Brokerage‘. This is an area where major buyers like the USA Government are planning substantial procurements, for the same reasons that Ontario are seeking.

CSBs facilitate a marketplace of Cloud suppliers, automating procurement of Cloud services from across a pool of suppliers. This helps streamline cost management in line with real-time resource use.

In short some agencies have too much IT budget and some too little. For example Ontario Province recently opened a data centre in Guelph, a massive expenditure, while there are many small Municipalities throughout the province who struggle to deliver citizen value due to limited IT budgets and teams.

This doesn’t reflect on the abilities of any one involved, but rather the limitations of the systems for budgeting and how funds are dispersed down through the hierarchies of government organizations.

It`s these changes to the economics of how IT is planned and paid for that will have the bigger impacts for government efficiencies, more so than the technical features.

bootstrapEureka! It’s a Virtual Innovation Cluster

Hand in hand with deployment of these Cloud marketplace systems will be the use of “Virtual Innovation Clusters”.

Described in our short white paper this is simply the use of online technologies to better implement the well known concept of economic development through industry clusters, originally conceived by business guru Michael Porter.

Roger Martin identifies a lack of the use of these techniques as the reasons for Ontario`s poor performance, and I agree:

The reports constantly chide Ontario for “cluster under-performance,” a factor apparently responsible for $5,300 of the $7,500 per capita wealth gap between Ontario and its North American peers.

The purpose of the Canada Cloud Network is to not only utilize these techniques to grow a powerful Cloud Computing industry cluster based here in Toronto, Ontario, but to pioneer world first advances in how the concept is applied.

I believe this portfolio of activities will indeed function to act as a lightning rod to attract the best and brightest from around the world and from that position the decline can not only be reversed, but we can go on to shake the world!


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