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The Forecast Is 'Cloudy' For Manufacturers

hile new processes, materials, and software tools are helping manufacturers rebound from the economic downturn, few technologies hold more promise for supporting a prosperous manufacturing future than the emergence of cloud computing. While perhaps vague in its meaning to some, most Americans actually have been relying on the cloud for many years.

hile new processes, materials, and software tools are helping manufacturers rebound from the economic downturn, few technologies hold more promise for supporting a prosperous manufacturing future than the emergence of cloud computing. While perhaps vague in its meaning to some, most Americans actually have been relying on the cloud for many years. The term simply applies to applications and services available through the Internet. Anyone with a Web-based e-mail account, such as Hotmail, is using the cloud to send messages and documents. Though you may not realize it, such simple tasks as booking travel online or participating in a webinar also leverage the cloud.

Today, the opportunities for enterprises to take advantage of cloud computing are abundant. The cloud has the power to change the way manufacturers do business, whether it’s giving them the power to reduce costs, the power to be more flexible or the power to be ready for anything. Microsoft is committed to — and investing heavily in — helping customers and partners reap the benefits of the cloud, putting the power of the cloud in their hands.

For example, workers on a factory floor may need common productivity tools found in Microsoft Office. With the cloud, the manufacturer can simply connect those employees to the Web and use the same software in the cloud, rather than install software on the computers of hundreds of employees. However, this same manufacturer may find that installing CRM and ERP programs for employees at company headquarters works best for its business process. Employees can use the same familiar applications in the cloud as on their PCs. The value of the cloud to manufacturers is its ability to empower businesses with the choice to mix on-premises tools with tools in the cloud to support the most efficient and cost-effective decisions for the company.

How might the cloud work for a manufacturer? Cloud services typically are “metered,” meaning that companies pay for only the amount of service they use. No longer do they need to spend an exorbitant sum on a software application that employees may use infrequently or that they may call on for only a very few of its functions. Now users can access what they need directly from the cloud application and pay only for that measured amount. Microsoft recently commissioned a “Cloud Computing as an Engine of Growth Study” that examined perceptions and attitudes towards cloud computing, surveying more than 2,000 IT decision-makers across the U.S. In this research, 44 percent of IT decision makers in the manufacturing industry noted their adoption of cloud computing allows them to improve the bottom line and save money.

Moreover, IT personnel no longer need to maintain the software on all those office computers. Nor must they keep an increasing number of servers up and running, consuming ever growing amounts of electricity for cooling and operations in server rooms, and spending more and more on licenses. Instead, the manufacturer subscribes to “software as a service”- or SaaS- for everything from word processing and spreadsheets to data storage and customer relationship management systems. The companies that host these services in the cloud now are responsible not only for keeping them running 24/7 but also for automatically updating them when new software versions are released. The manufacturer’s employees all have access to new versions the moment they are installed, without making any changes to their own computers. Clearly, then, the cloud allows manufacturers to scale up the number of employees using online software easily, seamlessly and rapidly.   In fact, according to our survey, 35 percent of manufacturers bought into cloud computing due to the technology’s ability to scale and accommodate business growth.

Furthermore, the organization is able to store more data in the cloud more safely than it could with its own private computer systems. The result is that more authorized users in the enterprise can have access to more information from more places at more times than ever before, without the worry of unintentional or purposeful data loss from in-house systems. Providers of cloud services employ the industry’s most advanced security technology, ensuring a level of security that most companies could not afford to install and maintain in their own facilities.

Not only can the cloud reduce or replace on-premises software and servers, if a company desires to do so, but also it makes possible new features for collaboration. Unified communications systems allow company personnel and suppliers in different offices, plants and geographies to send and receive instant messages, phone calls, and videoconferences through their desktop computers. Online collaboration sites for document sharing help ensure accurate, up-to-date communications across the supply chain and provide trackable version control for shared documents. This trend is beginning to catch on in the industry - 35 percent of manufacturing IT decision makers surveyed stated the cloud allows for more collaboration between colleagues, clients and partners, regardless of their location.

Combining such technologies can lead to even greater efficiencies. Automaker Daimler AG, for example, recently adopted Microsoft’s Lync unified communications solution, its SharePoint cloud-based collaboration technology and the cloud-hosted versions of Microsoft Exchange and Office so that 180,000 Daimler employees worldwide can communicate and collaborate through e-mail, instant messaging, web conferences, and document sharing.

The cloud can accelerate the product development cycle by providing 24/7 access to data from anywhere in the world, by expediting collaboration and by providing transparency to the supply chain process. As part of this process, the cloud helps empower the remote workforce, allowing managers, engineers and other personnel to access all relevant data from home and from the road, so that they can immediately apply their creative solutions and heighten productivity.

While it’s easy for manufacturers to reach for the cloud, and it’s an opportunity that all manufacturers should be exploring, the real opportunity for today’s business leaders is having the power of choice across in-house and online tools, which allows organizations to move at their own pace and integrate cloud computing as appropriate to their business needs.

Without the need to buy hardware, software licenses, or implementation services, companies are realizing the opportunity to get off the ground and into the cloud rapidly and for a fraction of the cost of setting up computer systems on their premises. And manufacturers are beginning to take notice. In the same previously mentioned survey, close to 40 percent of manufacturing companies have at least one cloud computing project planned or underway. 

With its capability to promote cost reduction, heightened efficiency, improved productivity, and comprehensive global communication, the cloud has become a bright idea for enlightened manufacturers.

As General Manager of Microsoft’s U.S. Manufacturing and Resources Group, Craig Hodges has ownership for the overall performance of the sector, which represents automotive & industrial equipment, high-tech & electronics, chemical, oil & gas, and utilities industries. For more information, check out Microsoft’s Solutions for manufacturers.