Obama, Paygo, and Cloud Computing

One of President Obama’s points that struck me the most in his State of the Union address yesterday was his support for the pay-as-you-go (paygo) amendment, which the Senate approved today. From the Wikipedia, “The paygo rule compels new spending or tax changes to not add to the federal deficit. New proposals must either be ‘budget neutral’ or offset with savings derived from existing funds. The goal of this is to require those in control of the budget to engage in the diligence of prioritizing expenses and exercising fiscal restraint.”

President Obama indicated that an earlier paygo statute in effect from fiscal years 1991 to 2002 helped create from 1998 to 2001 the first federal budget surpluses since 1969, and that he wants to re-enact paygo to curb the current spiraling budget deficit.

One of the most attractive aspects of cloud computing is the ability to pay as you go. With cloud-based solutions, you can eliminate or restrict the large initial investments and lengthy commitments that traditional IT investments normally require. You can get up and running in days with systems that quickly deliver business value and information services that your company needs to remain competitive. Paygo for enterprise cloud computing also ensures that cloud providers remain competitive; with shorter contracts and lower initial investments, there is little inertia between you and an alternative cloud provider.

If all goes well it will take several years for a full economic recovery and a healthier federal balance sheet. Businesses can’t wait that long; they slashed IT budgets by more than eight percent last year but still require return on investment and success with IT initiatives that support business objectives. As I wrote in my last post, these factors are transforming IT’s primary role from maintenance and support to strategic contributor.

In a recent press release about global IT budgets for 2010, Mark McDonald, group vice president and head of research for Gartner EXP said, “Transition gives the enterprise and IT the opportunity to reposition themselves and exploit the tough corrective actions taken during the recession. CIOs see 2010 as an opportunity to accelerate IT’s transition from a support function to strategic contributor focused on innovation and competitive advantage. They have aspired to this shift for years, but economic, strategic and technological changes have only recently made it feasible. Asymmetric technologies like virtualization, cloud and Web 2.0 enable companies to get out from under a front-loaded heavy investment model that limits IT’s agility and flexibility.”

Paygo may be one way to help decrease our federal budget deficit; it is clearly an approach that business management prefers for information systems in this business climate that requires flexibility, faster time to market, and better return on investment.

Try these cloud-based solutions on a pay-as-you-go basis:

• Enterprise mashup dashboards such as mashmatrix Dashboard provide rapid, personalized development of dashboards from any web-facing data source; get a complete view of all the information you need on one screen without having to switch between screens and applications.
• SaaS business intelligence (BI) applications from Birst and eiVia provide quick reporting and predictive analytics for decision-making.
• Enterprise relationship management solutions such as BranchIt help your business leverage relationships that colleagues may have with prospective customer or partner contacts.
• Price optimization applications from companies such as Mimiran help you avoid leaving money on the table in pricing your products or services.
• Enterprise brand management solutions from Biz360 aggregate, measure, and analyze news media and consumer opinion from print and social-media sources to yield insights that enable sales, marketing, PR, and executives to better understand their customers, competitors, influencer communities, industry trends and issues, the press, and the investment community.
• Enterprise cloud databases such as TrackVia help you quickly design and deploy cloud-based applications to solve business problems.
• Integration products from Pervasive Software and Sesame Software provide data exchange and interoperability between legacy on-premises and software-as-a-service (SaaS) applications.
• Cloud-based single sign-on systems from companies such as TriCipher provide a secure, single login for a user to access all authorized cloud-based applications.

What changes occurred in your IT budget during the recession, and is your management now steering your organization toward a paygo approach to budgeting and spending?