Cloud computing as an IT service not only assists organizations to cut costs, but also spurs innovation, according to recent research conducted by the London School of Economics. Since its inception, cloud computing has attracted attention and criticism in equal measures. Nevertheless, one thing is for certain - as a technological innovation it suits the needs and interests of both tech-enthusiasts and businesses alike.

The primary benefit of using cloud services is that it enables users to access and share information from anywhere and everywhere. Couple this with the cost cuts associated with using the technology and its increasingly wide spread adoption is easy to understand. In addition, companies that have shifted to cloud services profess that it results in increased productivity.

As pointed out by the London School of Economics study, cloud computing inspires innovation in an organization. This can be attributed to the fact that cloud services are tailor-made to suit a company's needs. This has the indirect effect of freeing up employees from unnecessary tasks, and giving them more time to think creatively and development company-wide innovation, such as IP. Additionally, cloud computing is flexible enough to accommodate changes quickly and at a low cost.

One key feature of cloud computing that inspires innovation is that it engages an organization's technical team during the experimentation and prototyping stages. This is a paradigm shift from traditional IT models where a decision to prototype a new-system involved costly procurement and installation exercises. Experimentation was unheard of as the cost of carrying out the exercise would blow up the IT budget to astronomical levels. As well, upgrading or changing the system involved revamping the whole IT infrastructure, which is a risky affair and to some extent explains why most companies rarely upgraded their IT systems. Moreover, traditional IT infrastructures have overhead costs in terms of operation and maintenance.

Despite adoption of cloud computing services promising drastic cost cuts and increased innovation, the transition from traditional IT models to cloud computing is usually mired by numerous system bottlenecks. So it is imperative for organizations to invest time and money during the transition process. Organizational readiness is actually the key in determining how effective the shift to cloud computing will have on spearheading innovation.

Research for this post was provided by eFood ERP, a food distribution software solution provider.