Bandwagons are a useful thing. If you can jump on them at the right moment, they promise to take you to your destination faster, cheaper and without you having to worry about pitfalls and ditches on the way. However, bandwagons can also be dangerous because some of them may not go where you need to and some of them may not go anywhere at all!
In every forum that I have been a part of in the last two years, Cloud Computing has been the most talked about phenomenon by IT leaders and business leaders alike. There is widespread speculation about the extent of actual adoption, but the projected potential for growth in Cloud Computing is really where the excitement is. What makes the case of Cloud Computing rather unique is the profile of adopters and potential users that cut across different sizes of organization and across industries. In fact industry observers point out that smaller organizations are adopting faster and embracing the Cloud more aggressively.
There is a wide spread belief that moving to the cloud would result in significantly lower operating costs as opposed to running the applications in-house by transforming the usual cost model for running them, to a completely flexible and variable one. But models are only as good as their ability to faithfully represent reality and good models can only be built if there is complete clarity about what it is that is being modeled. However well worn and jaded the cliché might be – the devil as they say truly does lie in the details.
It is therefore of paramount importance to decide what exactly you are trying to do by “moving computing into the Cloud”. The computing Cloud can be viewed at three different levels of abstraction. At the bottom – the cloud is simply a virtualized data centre that offers you variable capacity for computing, storage, communications etc. Instead of running your application portfolio in your own data centre, you are now running it in the virtual environment where you don’t know (and don’t need to know) exactly on what physical server is your application executing and where exactly it is storing its databases. At the next level the Cloud is a whole platform including the middleware (apps servers, ESB etc.) and a complete application development environment. At the top level the cloud is actually providing complete business process functionality with variable capacity and service levels on demand. Depending on which of these layers you wish to utilize, both your road map and the cost benefit equations will be completely different.
Cloud economics
That moving to the Cloud has to make commercial sense is beyond a doubt but in reality the cost structures vary from one enterprise to the other and may not always stack up favorably when compared to the costs of running the current system. Quantifying the benefit is a tough proposition mostly because of non-standard definitions about computing capacity and service levels among others. The other challenge lies in understanding the real implications of the commercial model involved in Cloud Computing. Enterprises would need to evaluate the potential savings not just on CAPEX in the immediate term but potential CAPEX investments they would need to make in the longer term and similarly with OPEX, evaluation of what they spend today on usage charges and service support costs and the future investments required to maintain. In some cases, the cost of acquisition of a perfect cloud solution may prove to be higher than the cost of current system which may have depreciated over the years. From a cost perspective one of the critical hidden elements that most enterprises often overlook is the cost of change. This cost including the cost of acquisition, migration, integration and support could potentially present a poor business case for the Cloud.
Cloud watch
While cost remains the top consideration for decisions related to the Cloud, there are some other compelling considerations that need to be addressed. Pulling out some threads from my experience of being a part of the Cloud strategy of top organizations, I want to share a few key perspectives that are rarely talked about but are hugely business critical.
Two key factors, one a hidden cost the other a hidden benefit, most often do not find an appropriate place in the cost modeling. These are cost of business continuity and cost of change management.
Cost of Business Continuity: Organisations often spend (or need to spend but actually don’t) large amount of capital to make their IT infrastructure disaster proof and resilient to ensure business continuity and spend large amount of money to manage that (mostly idle) infrastructure which rarely actually gets used. Clouds by definition provide excellent insurance against most common disasters and guarantee continuity of operations. In any cost modeling the savings on account of avoiding the need to invest in and own excess capacity for this reason must figure prominently.
Change management: Moving a big chunk of your application portfolio into the Cloud is a big change – Several issues complicate this change and need to be managed. This may include business process changes because part of the portfolio moves to the cloud and the rest remains in-house which is the most likely scenario. This may include data migration and integration with other critical applications, retraining of users, role and responsibility changes of the organization that was managing the portfolio hitherto. This may also include changes to interactions with external business partners. The change has to be managed efficiently without impacting business continuity and quality of service to the end users. This is not just time consuming but calls for significant investments of expertise, bandwidth and money. Application Integration might also potentially require new capital investments. The cost of implementing this change can be significant and needs to be modeled in the cost-benefit analysis appropriately.
IT Governance impact is another factor that goes unnoticed. Cloud Computing is still nascent. As a result, the governance is relatively low and if your applications are critical and those governed by stringent user industry compliance issues, then you have potential concerns. Users on the Cloud also need clarity on usage, processes and methodology and it is important to take into consideration the challenges and the best practices that need to be put in place to address them.
Enterprises also need to evaluate the load on computing based on their business process factoring in issues like month-end peaks and frequency of usage.
Quality of service is also a defining factor as your support ecosystem is likely to be entirely different for the cloud. Enterprises need to ensure that the support system is accessible and that the turnaround times are minimal. The quality of service more importantly needs to be agile and support scalability of the enterprise application on the Cloud.
Security is one a somewhat overrated concern related to movement to the Cloud. Without a doubt it is an important consideration. However proven technology exists to address security concerns and issues effectively and the emergence of private Clouds and hybrid Clouds can provide effective answers if deployed with care.
The journey to Cloud
Drawing on our experience here is a quick check-list for you before you embark on the Cloud.
- Validate your demand and make a realistic evaluation. In the case of the existence of geographical diversity, uneven frequency of usage and inconsistent/unpredictable demand, it may make more business sense for you to seriously consider movement to the Cloud
- Plan your Cloud strategy with utmost care. Criticality of the business application, business demands and your existing technology and development platforms will determine your mid to long-term road map for the Cloud
- Upfront cost of migration and change management can be a defining factor to your Cloud strategy. Enterprises need to make sure that the right blue-print and road map is established to ensure business continuity
This checklist is not exhaustive but definitely key to your cloud strategy. While the Cloud may deliver unmatched business benefits to enterprises, the key is to ensure it works well for your organization considering your specific business needs. Meticulous planning, a well laid out strategy for adoption and implementation combined with a robust support ecosystem will make your journey to the Cloud a comfortable cruise.
Satish Joshi is Executive Vice President, Patni
Post new Comment