What does the cloud mean to you? Where is it? What does it
cost? Who owns it? Are we in the cloud now?
Here in halls of NTT DATA Cloud Services, our cloud strategists answer these types of questions on a daily basis with clients of all sizes and shapes. The answer is very simple: cloud is everywhere. Market Research Media predicts the industry will reach $270 billion by 2020. The cloud has penetrated most people’s lives for many years—years before the cloud was even called the cloud. Many companies found themselves at the cutting edge of cloud services with varying degrees of success. An older article from CloudTweaks entitled, “Why Cloud Computing Projects May Fail” illustrated six key reasons as to what caused these failures at around the height of the hype curve. Remember the hype curve?
Right at about its height, John
Roseblum cited six reasons for cloud projects to fail:
1. Lack of managing and monitoring applications
2. Lack of people with skill-set
3. Lack of scrutinizing vendors
4. Failure to understand requirements, technology and legacy data
5. Early adoption
6. Lack of the holistic approach
All good reasons that stand the test of time. However, early adoption is no longer an excuse. Cloud is a maturing market with adoption across all verticals, both in the consumer market and the enterprise. Everybody’s on the cloud, in one way or another.
So why aren’t you? Through the years, our strategists and advisors have seen variations of the following six reasons for why some organizations have not yet embarked on their cloud journey:
1. You’re not listening to your business.
It is commonplace for IT to feel protective of their business end users, and it is within their right to feel this way. They are not only responsible for ensuring these users are able to conduct revenue-generating work streams, but they are held accountable when they cannot.
One of the most common occurrences of Shadow IT within a business is in the form of storage. Due to policy-mandated limits on drive space, mailbox size limits on user email, and limitations on file sharing capabilities, the savvy business user simply signs up for Dropbox, OneDrive, Google Drive, or uses their existing iCloud drives to transfer and store important files they use to get their work done.
Space is cheap, and imposing these limitations causes IT to be seen not as a business enabler, but an obstacle. This also opens your organization up to risk. These Shadow IT users may not be aware of all of the terms & conditions of these public cloud storage services which may inadvertently be giving up ownership of company propriety data. And if this data is bound by federally mandated regulations, it could put the entire organization at risk. Don’t encourage these users to go rogue. Listen to them. Go through a proper IT procurement phase and choose the right storage by scrutinizing the vendors and ensure that the solution provided meets compliance.
2. You’re not listening to the market.
Market demands are very simple: they want it always and they want it now. Solving the problem of high availability, low latency, and absolutely no downtime is an expensive and difficult feat without leveraging cloud hosting and cloud solutions. Traditionally, the solution for higher performance was increasing network bandwidth to your data center, adding additional nodes to your cluster, increasing server memory and CPU, and then hoping that the increase in revenue justifies the drastic increase in capital and operating costs you’ve just taken on.
Optimize your service and your costs by leveraging pay-as-you-use consumption models of the Cloud. Cloud-based platforms hosting your applications (PaaS) offer automated scaling features that will spin up additional instances, geographically or within a cluster, increase computing capabilities of each node, and charge only what you use, when you use it. During off-peak hours for your services, these systems will start shutting down instances and even go into a virtual “sleep-mode” when the service isn’t being accessed for some interval of time, saving even more money. Spend money as you make money. You know your market—give them what they want without hurting your bottom line.
3. You wrongly believe that server hosting in the Cloud will cost more.
Beyond what we just discussed in the previous point, there is more to costs than server cost per hour and bandwidth usage per GB. Depending on the type of Cloud-based model you consider, there is a Total Cost of Ownership (TCO) calculation that should be conducted through an internal assessment of your IT services and budget.
When considering simple IaaS, most of the cost considerations tend to be transferred from capital to operating costs. You still need to manage your environment, perform patching and maintenance, and have a closely monitored governance policy to ensure you aren’t being wasteful with your virtual infrastructure. Those few dollars and cents per hour can add up pretty quickly. However, when you perform an IT Services assessment and audit using an holistic approach on your environment, there are other costs to be considered that fall into that TCO. Leveraging Software as a Service (SaaS) allows the same offsetting of server infrastructure, but what comes with it is no longer having to manage those instances since that is provided by the vendor. No refresh cycles. No maintenance or patch releases. No disaster recovery and backups. No staff required around the clock needed to keep those lights on. Pay per user per month, and watch TCO drop and the ROI rise. The higher up the chain you go, for example with BPaaS (Business Process) such as payroll services, the higher the ROI.
4. You wrongly believe that Cloud puts your company at much higher risk.
Risk can mean excessive downtime, data and security breaches, or having to meet compliance measures mandated by a governing body. In order to meet these requirements, you are required to meet certain criteria in terms of data center maturity, data at-rest and in-transit encryption policies, and many other measures depending on the type of data you store, and in which industry. One of the corner stones of Cloud Computing is the concept of XaaS, or anything as a service. When you procure a business or technology function as a service, you are paying a service provider for the use of their expertise in providing that function and their proven maturity in order to qualify as reputable vendor in the market. Not every company can be every thing. One of the greatest freedoms that the Internet has given to so many business owners is a low barrier of entry in order to operate their business and compete at a global level. By leveraging cloud solutions and vendors who provide services with compliance around HIPAA, PCI, or FINRA, you are able to enter a market and focus your efforts on that core functionality and service that you provide to your customers. Otherwise do it all yourself and be sure to pay large organization a lot of money to perform yearly audits on your environment to ensure that you aren’t already at risk.
5. You wrongly believe that going to the Cloud is an “all or nothing” proposition.
No sourcing strategy is all or nothing. Whether you are outsourcing back-office functions such as Finance, HR, or IT, or you are Cloud-sourcing infrastructure and services to public or private cloud service providers; whether it’s part of your portfolio, or how particular applications are deployed, Hybrid solutions are not only common, they typically are the best of breed solution for many medium-to-large organizations. Refer below to the RIghtScale report:
We live in a world of many clouds. Develop a strategy around
choosing the ones that work best for you.
6. You REALLY like your physical servers.
We get it. If your home is your castle, your data center is your empire. Don’t worry, even though the servers are virtual, they’re all still there. And think, now you can use that space for the much-needed (and well-deserved) company entertainment lounge!
The right cloud solution is out there for you. It isn't just an alternative to hosting or application strategy, it is a means of improving your service levels, optimizing your risks, and ultimately optimizing costs with predictable pay-as-you-go pricing models. Cloud Strategy is Business Strategy. For more information, contact NTT DATA’s Cloud Services and ask about our Cloud Defogger® workshops.
-CJ Kadakia, Director, Cloud Advisory Services – Senior Applications Strategist
Post Date: 7/31/2015