Defining Your Cloud Strategy

This article originally appeared in the Q1 -2013 edition of Cloud Computing Magazine.

The hype around cloud (yes, it still exists) has made it difficult for senior IT executives to know where to start, let alone begin to understand the benefits of what it means to be a “cloud-enabled” organization. The choices, the jargon and the frenzy around cloud is, well, jarring for IT leaders who are in earnest looking to make the right decision for their respective organizations.

First, to be a cloud-enabled organization requires a clearly defined and comprehensive strategy to obtain the benefits that cloud can deliver. The range and quality of cloud-based IT services available on the market continues to grow as new and traditional service providers continue to invest heavily, according to John Sepple, global managing director of cloud computing for IT consulting firm Accenture (News - Alert).

“We believe in the game changing capabilities of cloud – driving everything from lowering costs to bringing new services to market. Clients are responding, adding cloud to their legacy IT,” Sepple recently told Cloud Computing. “As such, we are seeing the adoption of a hybrid model. Our clients continue to see that by living in a hybrid world, their legacy systems and cloud services can co-exist.”

A hybrid model – with mission critical systems like ERP at the core and cloud-based innovation and on-demand services at the edge – promises organizations the best of both worlds, says Sepple.

“The hybrid model allows an organization to take advantage of the benefits offered by the new solutions in terms of cost and flexibility, while preserving those of the traditional enterprise systems,” he explains.

Cloud can do more than help reduce the existing technology cost base, according to Accenture. A cloud strategy can help IT leaders identify ways to improve the way their business runs and propel top-line growth through new business opportunities.

The Journey to Cloud

Overall, enterprise cloud adoption is at the very beginning of a decade-long shift from “mostly” on-premises to “mostly” cloud computing. But many businesses are taking a cautious approach to “the cloud” by typically identifying 1 to 3 IT workloads that should move from local to cloud as a test, according to Greg Arnette, chief technology officer at cloud archiving and search provider Sonian.

A workload under consideration for migrating to the cloud must pass a justification test, like by moving “this” workload to the cloud will the business save money? Be more reliable? Be more secure? Benefit from better performance? Saving money and at least one additional incentive must be in place, he says.

According to Arnette, enterprises are moving to the cloud in phases, which are as follows:

Phase 1: “Indirect cloud usage” – Businesses use the cloud indirectly when they subscribe to a SaaS (News - Alert) service that uses the cloud. Some examples are Sonian Archiving, DropBox, and ESRI GeoSystems. Business do not deploy or directly control the cloud infrastructure in this phase, but they get comfortable with cloud economics, security and performance.

Phase 2: “3 Workloads to the Cloud” – In this phase, enterprises will consider directly utilizing the cloud for small projects. They may or may not use a third-party service to broker their direct usage (companies like RightScale, EngineYard, Heroku are examples of “cloud brokers”.) Early workloads will be backup, disaster recovery, test and development, and second-tier IT systems. Critical systems (file, print, core storage) will stay on-premises. Phase 2 may include “cloud bursting”... using the cloud as a temporary burst of infrastructure for research and special projects.

Phase 3: Core IT starts using the cloud – Primary systems may shift to the cloud and secondary or backup may stay local. This phase is still five to seven years away.  

Across the cloud stack, Accenture helps enterprises plan, implement and manage their infrastructure, platforms and applications in the cloud. The firm also provides cloud strategy and security services across all of these areas.

“In the area of cloud strategy we’ve rapidly evolved our services with the development of tools as well as diagnostic capabilities, which help guide discussions around living in a hybrid world,” Sepple says.

To help clients develop their cloud strategy, Accenture aims to answer the following key C-suite questions:

• How do I separate the realities of the cloud from the hype?
• What steps should I take to get started in the cloud?
• How concerned should I be about privacy and regulation?
• Which of my mission-critical applications are candidates for cloud?
• How does my operating model need to evolve to support a cloud strategy?

How do I procure for the cloud?

“To give you an example, a European telco came to us to evaluate how cloud services could deliver top-line incremental revenues for the B2B segment. Accenture aligned the various departments behind a common B2B Cloud Vision, and delivered a set of tools that will further support the implementation, including a roadmap to launch new services, an operating model and a go-to market strategy,” explains Sepple. “The result was a common view across the organization on how cloud computing can contribute value and a roadmap to get there.”

Cloud computing offers organizations a range of benefits, from lower costs to higher speed, agility and scalability, all enabled by flexible access to applications and processing power on a pay-per-use basis. In particular, cloud enabled-businesses have agility that is so important in today’s hypercompetitive and connected world. It does so by supporting the following key dimensions of agility:

• Connectivity and integration everywhere across every device – something that the next generation of consumers and employees demand and expect.
• Quick, seamless and real-time collaboration between and among stakeholders across the value chain. 
• Improved speed – the cloud allows IT departments to respond to new circumstances in hours, not months or years. 
• The ability to derive greater value from data and knowledge, using advanced, real-time analytics to drive business decisions. 
• Cost reduction and the capacity to do more with less
• And importantly, the use of cloud to introduce new business models for the enterprise

“While the concept of cloud is simple, determining how cloud best fits with the business strategy and organizational structure is incredibly complex,” explains Sepple. “It changes the way the business and IT interacts at a strategic level. ITs role must shift dramatically and quickly, lest the business move forward without it.”

For a business to truly benefit from cloud computing a fundamental reshaping of the IT operating model and the whole relationship between IT and the business is required. This transformation enables the business and IT to escape the restrictions of its physically constrained past.

Best Cloud Strategy Practices

In terms of best practices, Arnette advises organizations consider the following when developing their cloud strategies:

• Make a plan that stages cloud adoption. Take it slow and thoughtful.
• Trial 1 to 3 sample workloads that can return quick payback in either cost, security or performance.
• Understand “you” may already be using the cloud indirectly with cloud email, cloud file storage, cloud syncing, and cloud archiving. These services are seeping into the enterprise at the business department level and not necessarily vetted by enterprise IT.

“The cloud has allowed companies to fundamentally change the approach to programs/projects to a ‘test and learn’ methodology based on lower costs and speed of implementation,” adds Sipple. “This is opening new opportunities and accelerating adoption.”

However, to some, cloud is nothing more than a different way of arranging resources for a company’s applications to run on – either on premise or off premise.

“IT still has to understand what the business goals are and deliver resources to support those goals. Looking at how business and IT view each other is always an interesting study that most companies do not take the time to examine,” Kevin Gruneisen, senior director of data center solutions at Logicalis (News - Alert), recently told Cloud Computing.

Organizations are starting their cloud journey at different entry points and with various initiatives. If they are to realize the full potential of cloud, they will need to complete the following actions:

• Revisit the IT strategy to incorporate cloud.
• Design and implement new governance, IT organization, IT architecture and service catalog. Select strategic ecosystem partners.
• Establish the cloud integration services capability.
• Select and implement chosen software-as-a-service (SaaS) solutions.
• Replace/replatform existing applications and build new applications.
• Design and implement a hybrid cloud-based infrastructure.

Slow and Deliberate – or Trial and Error?

While many businesses have taken a “trial and error” approach to cloud over the past few years, in 2013 and beyond they will be more strategic, according to Arnette.

The reason for the cloud is either “best cost” or “best performance,” he says, and with the cloud, there is the opportunity to have both. For on-premises IT, these two goals were always at odds with each other.

However, a reasonable internal ROI analysis should find a few IT pain points that might be better deployed to the cloud.

“Priority should be given to the pain point that can save budget, or deliver a faster result. Typically an IT solution that has bursty activity is a priority for moving first to the cloud. The cloud is best for dynamic workloads, and worse for static workloads,” explains Arnette. “An application that needs to spin up for a few hours or few days a month would be a good example. Or an application that needs lots of storage and CPU for a month and then never used again is another example. Many large IT shops have a few of these in the search, analytics, reporting area.”

With many organizations already reaping game-changing benefits by using the cloud, remaining on the sidelines waiting for the right moment to commit to the cloud isn’t an option, warns Sipple. “Strategically planning cloud adoption and evaluating where cloud plays a role is fundamental in order to generate the desired business benefits.”

Logicalis is seeing is a lot of companies that have the understanding that cloud means “off premise” and initially get turned off on the idea.

“Reaction is often tied to the industry that the company is in. Healthcare for example is very anti-public cloud but the technology of on-premise IT automation still makes sense,” explains Gruneisen. “What I see most is customers treating cloud solutions as point solutions and missing the need to strategize. Companies think they are just too busy and it could come back to haunt them. Our recommendations are to take a step back and spend time understanding the service models and the types of clouds and how they map back to the goals of the business.”