Innovation is necessary to ride the inevitable tide of change. Indeed,
the success of the transformation of IBM to an On Demand Business
depends on driving the right balance of productivity, collaboration,
and innovation to achieve sustained, organic top line growth ”
and bottom line profitability.

Enterprises strive to reduce computing costs. Many start by
consolidating their IT operations and later introducing virtualization
technologies. Cloud computing takes these steps to a new level and
allows an organization to further reduce costs through improved
utilization, reduced administration and infrastructure costs, and
faster deployment cycles. The cloud is a next

Generation platform that provides dynamic resource pools, virtualization, and high availability.

Cloud computing describes both a platform and a type of application. A
cloud computing platform dynamically provisions, configures,
reconfigures, and deprovisions servers as needed. Cloud applications
are applications that are extended to be accessible through the
Internet. These cloud applications use large data centers and powerful
servers that host Web applications and Web services.

Cloud computing infrastructure accelerates and fosters the adoption of innovations:

Enterprises are increasingly making innovation their highest priority.
They realize they need to seek new ideas and unlock new sources of
value. Driven by the pressure to cut costs and grow”
simultaneously”they realize that it™s not possible to
succeed simply by doing the same things better. They know they have to
do new things that produce better results. Cloud computing enables
innovation. It alleviates the need of innovators to find resources to
develop, test, and make their innovations available to the user
community. Innovators are free to focus on the innovation rather than
the logistics of finding and managing resources that enable the
innovation. Cloud computing helps leverage innovation as early as
possible to deliver business value to IBM and its customers.

Fostering innovation requires unprecedented flexibility and
responsiveness. The enterprise should provide an ecosystem where
innovators are not hindered by excessive processes, rules, and resource
constraints. In this context, a cloud computing service is a necessity.
It comprises an automated framework that can deliver standardized
services quickly and cheaply.

Cloud computing infrastructure allows enterprises to achieve more efficient use of their IT hardware and software investments:

Cloud computing increases profitability by improving resource
utilization. Pooling resources into large clouds drives down costs and
increases utilization by delivering resources only for as long as those
resources are needed. Cloud computing allows individuals, teams, and
organizations to streamline procurement processes and eliminate the
need to duplicate certain computer administrative skills related to
setup, configuration, and support. This paper introduces the value of
implementing cloud computing. The paper defines clouds, explains the
business benefits of cloud computing, and outlines cloud architecture
and its major components. Readers will discover how a business can use
cloud computing to foster innovation and reduce IT costs.