Deflation, Hyperinflation and Cloud Computing

Here's a link to a interesting article from the Motley Fool about the risk of hyperinflation in the U.S. economy and which types of companies are in the best position to survive even double-digit inflation, which seems to be a real possibility as the U.S. government debt/deficit increases. Hint: it seems to be companies that can fairly comfortably cover their debt with their profits.

Also, here's a link to the great Michael Lewis article on Iceland's hyperinflation, which is referenced in the the Motley fool article.

Interestingly, the Motley Fool article also talks about deflation the negative effects it can have on an economy. I know I've mentioned a few times that the document imaging industry is no stranger to a form of deflation, especially when it comes to hardware. It's no big secret that users are getting way more bang for their buck from scanners than they were 10, 5, and even two years ago. Fortunately, overall scan volumes have continued to increase, which means more scanners are being sold and keeps the demand reasonable for higher-volume production models. But, with some of this IDR (intelligent document recognition) technology starting to come downstream, we really have to be careful not to let our margins disappear, in what has historically been a good B2B market.

I also wanted to highlight this interesting press release from A/P document imaging specialist VersionOne Software. I couldn't find a link, so I've pasted the entire release below. But, it basically talks about the some of the uncertainty and mystery surrounding the term "cloud computing." It's a term that people have started to throw around as a future trend for our industry and others, but it still seems to be a ways off before the rubber hits the road, as a lot of IT professionals still apparently don't even know what "cloud computing" means, much less do they plan on investing in it.

Here's the release, which details some of the results of VersionOne's survey on cloud computing:

The findings of a survey by document management software company, Version One (www.versionone.co.uk), has revealed that 41% of senior IT professionals admit that they “don’t know” what cloud computing is. Version One carried out the research with 60 senior IT professionals (IT directors and managers) across a range of UK public and private sector organisations. This research follows-on from a similar survey carried-out by Version One which highlights that two-thirds of UK senior finance professionals (finance directors and managers) are confused about cloud computing.

Of the remaining 59% of IT professionals who profess to know what cloud computing is, 17% of these understand cloud computing to be internet-based computing while 11% believe it is a combination of internet-based computing, software as a service (SAAS), software on demand, an outsourced or managed service and a hosted software service. The remaining respondents understand cloud computing to be a mixture of the above.

Despite cloud computing being in the media spotlight, only a minority of respondents (5%) say that they use it “a lot” and less than a quarter of those surveyed (19%) reveal that they only use cloud computing sparingly. Almost half of respondents (47%) admit that their company doesn’t use cloud computing with the remaining 29% conceding that they “don’t know” whether their organisation uses it or not.

Julian Buck, General Manager of Version One, says, “Although this is only a small survey of IT professionals, the results are nonetheless very alarming, especially as IT professionals are the very people that need to understand cloud computing so that they can explain its benefits to management.”

Buck continues, “It is clear from the survey results that there are a number of contrasting views as to what cloud computing really is, which is hardly surprising in light of the many different cloud computing definitions in the public arena. For instance, Wikipedia defines it as ‘Internet-based computing’ while Gartner refers to it ‘as a service’ using Internet technologies. IT expert, John Willis, writing in his cloud blog says that ‘virtualisation is the secret sauce of a cloud’ and provides different levels of cloud computing. With so many definitions circulating, clarity is urgently needed.”

Only 2% of respondents say that their company is “definitely” going to invest in cloud computing within the next twelve months whilst 30% state that their organisations “may” invest in this technology. 45% admit that they “don’t know” whether their organisations will be investing in it or not with the remaining 23% stating that they currently have no investment plans. For those who definitely or maybe have plans to invest in cloud computing, some of the key business drivers cited include reduction in overheads and paper, ease of use, cost savings and the ability to provide collaborative tools for teaching and learning.

Buck adds, “If organisations are going to embrace cloud computing in the future it’s essential that a single, simplified explanation is adopted by everyone. Failure to cut through the confusion could result in organisations rejecting this technology and missing out on the benefits it provides.”