With the Cloud offering not just lower operating and capital investment costs but also - in the words of IDC analyst David Bradshaw - lower opportunity costs, Computacenter decided to pull together a small group of industry executives and analysts to debate the Cloud-related issues facing CIOs these days and the practical solutions they can adopt.
Bradshaw was joined by Andy Bechtolsheim, chairman of Arista Networks, a co-founder of Sun Microsystems and one of the first investors in Google, Dr Paul Miller, a Cloud/enterprise consultant, and Andrew Vize, Propositions Director for Computacenter.
Cloud hype – still prevalent and often counter-productive – was the first target. Bechtolsheim suggested one simple way of considering the issue. “There are three buckets into which Clouds fit. One is the consumer Cloud, such as Google, Facebook, Twitter and Flickr. There are many Cloud users here, even though they don’t always know or understand what is underpinning and providing the services they consume.
One is the SME Cloud where at the moment the lead seems to be with Google Apps together with Amazon for backup services. The third is the large enterprise Cloud, where the users already have a heavy commitment to their own infrastructure. These will be the last to move, though they are moving that way through consolidation.”
For all three economic questions are the big argument, he suggested. For consumers, 'free' is an important word, while for the SME community, the rates at which Google Apps are charged currently makes them a sensible option for both small and medium-sized businesses, especially if they’re requirements are reasonably straight forward.
IDC’s Bradshaw produced a slide showing the types of business-related applications now available and used within the Cloud, where the factor to be seen was the diversity of application types – from infrastructure management through to departmental tools. “The real issue about the Cloud is not just low cost but low opportunity cost. We are now at the beginning of a very big change in the way people do computing,” he said.
One important factor about the Cloud is the way services can creep into use without being seen as a specifically technological gizmo. Bradshaw pointed to the fact that nearly all organisations and companies are using the Cloud even if they do not realise it. He identified Webex as a classic example, the tele-conferencing tool that many marketing departments now use regularly, probably without really understanding how it works.
The other side of this coin was identified by Andrew Vize, who was more concerned with the attitudes being displayed by enterprise CIOs. Most of them are not showing any interest in the Cloud as such. “All they are still interested in is cost-cutting,” he said.
There is, subsequent discussion revealed, a likely underlying reason for this, namely that most CIOs, especially in large enterprises, are still only responsible for running a cost centre rather than a Profit and Loss (P&L) account. Their quickest and most obvious way of proving themselves a `hero’ to senior management, therefore, is to show remarkable diligence in cutting costs rather than developing ways of better exploiting the resources available.
Concerns
A recent IDC survey of CIOs showed that there are still many concerns inhibiting any move into the Cloud. Top of the list is still security, even though it can be well argued now that most of the typical security weaknesses of IT systems are better defended in a Cloud environment than in many on-premise infrastructures. According to Dr Paul Miller, there is evidence that points to human rather than technological failings being the cause when there has been a security breakdown.
One of the core problems with the Cloud is that user expectations tend towards its infallibility, saving them the need to institute and, most importantly, maintain methodical, secure operational practices that they should already consider normal.
The issue of 'where is my data' still ranks high, according to Bradshaw, and there is a sub-text of this which is now actually becoming a possible management issue – certainly for some businesses. This is the issue of where data is physically located. There are now a number of legal acts with both international and/or national impact that can affect where data is located. The US Patriot Act, for example, allows US authorities access to any data stored on systems in the US. This means any commercially sensitive data held by a service provider with US facilities or likely to have access to them may put their non-US customers’ data at risk of either exposure to or retention by the authorities.
Legislation covering the operations of financial services companies, such as Basel II, and data protection, such as HIPAA, can affect what data gets stored as well as how and where it gets stored.
Two areas of lesser concern to CIOs are, it was felt, the ones most likely to be a real problem over the long haul. One is the possibility of lock-in by service providers, particularly in the SaaS area. This does have real potential to, as once a customer is fully committed to a service provider, making a change could be as dramatic and traumatic as moving a large enterprise from one major database and applications platform to another. At least the database vendors do have suites of porting tools in an attempt to make such transitions easier.
The second area, interoperability, is related to the issue of provider lock-in. Bechtolsheim observed that there is a growing awareness, both amongst users and service providers, of the importance of different services and applications to interoperate together, and service providers are now starting to work towards this goal. Greater interoperability should, over time, also give users a greater sense of comfort that they are not being irrevocably locked in to one service provider.
When it comes to the question of what drives CIO decision criteria, Vize noted that Computacenter is finding that mixed sourcing is now the common practice for most enterprise and medium-sized businesses. “We are definitely seeing the development of a hybrid model for many users which mixes on-premise and Cloud environments,” he said. “It is not our job to force change on users, but to enable change to occur.”
One of the key criteria driving traditional buying decisions is the Return on any Investment, yet this becomes a tool which is at best difficult to use when applied to Cloud services. A major problem here is that some elements of intangibles such as future derived value and wider business issues – which can be difficult to quantify - have to be incorporated. As Bechtolsheim pointed out, Google now builds its own servers and datacentres, and they are arguably built to lower individual standards than those supplied by traditional server vendors. The costs are therefore much lower, while service is maintained through the application of quantity rather than quality. It also makes as much use as possible of largely carbon neutral hydro-electric energy supplies.
Other factors that have to be accommodated include lower staff costs as well as the obvious lower capex and opex, lower property costs, reduced energy consumption and reduction in carbon footprint. As Vize pointed out, this now has to be included in the mix in order to be ready for when accounting for carbon footprint costs becomes required practice.
Lastly there is the time needed to implement any new IT project, as well as the costs of service removal. While the subscription or pay-per-use basis of the Cloud-based business model does allow for easier termination of services if they prove unsatisfactory, there are often unexpected costs, not least the one caused by users signing up for multi-year provision contracts in order to get the best discounts.
As for the skills that CIOs should seek out or build in their staff one of the most important is one of theirs – the ability to spot user innovators amongst their own staff and the willingness to develop and exploit their talents. This, as Bradshaw pointed out, is particularly important for all those many applications and services that fulfil departmental objectives. In this context, he again pointed at Webex as a tool often identified by, used by and paid for by company marketing departments without any reference to the IT department or CIO.
The bigger picture
An important side issue of this is the need to ensure that any such application or service fits with the overall information management requirements and operational policies of the business. It is still too easy for an application to have unexpected knock-on consequences on the operation of other applications in other areas of the business, especially if such possibilities are not considered.
The need for comprehensive Policy planning and implementation right across the board is therefore an important awareness that needs to be built in all staff. In fact, there is a general requirement for all staff to appreciate that the Cloud does not represent any `magical solution’ and that all the steps of good management practice need to be applied still.
Two primary tools were identified as essential to making the Cloud more effective. One, identified by Bechtolsheim, is what he called an “all-embracing Cloud management tool, so that you know what everything is doing in there”. Miller called for the development of far more granular and comprehensive itemisation of what has made up the bill in any one period. According to Miller, services such as Amazon can sometimes fall in to this trap in that a customer has one account with the company and everything bought, say, on a company credit card can go on it and not be effectively identified. So this can include both time and services on the company’s computer resources and book bought by an individual.
There is also a need, Bechtolsheim suggested, for a new career line for some people, as a Cloud Optimisation Consultant – the people who can get complex, virtualised Cloud services running as efficiently as possible.
CIO
Posted by GiselleN on Mon, 29/03/2010 - 08:28If there is a good partnership and collaboration between the different networks of business association and communication between them any plans and vision for any technological and information aspiration can be achieved. And that would surely make Kenneth Feinberg happy about that.
Post new Comment