Steps to take when you consider the cloud
Such is the exponential rate of growth in cloud services, and so enthusiastic are vendors of all shapes and sizes to investigate the cost savings and adopt the cloud, that the lines appear blurred as to what actually constitutes a cloud-based service as compared with traditional (outsourcing) models. Everyone from hardware suppliers such as HP and Cisco to traditional managed service providers like CSC now offer some flavour of cloud-like services. Sometimes this simply means the hosting of an application remotely, or in other cases it involves multi-tenanted connectivity platforms, storage facilities and other infrastructure components. Increasingly IT service providers are offering a hybrid service dependant on the clients security requirements and adversity to perceived risk.
Stay under the RADAR or go into the cloud?
One of the key questions arising out of the rapid rise of cloud computing is What is the most cost effective way of managing one’s IT environment? (inhouse; through a traditional managed service provider or by using one of the new breed of cloud-based providers). The answer depends on the services being considered. Some areas such as technical support may be better handled inhouse for immediacy of response, or those applications that require expertise specific to the company’s business. In other areas, like the data centre, it may be deemed that corporate and customer data is too sensitive to relinquish close control – either for reasons of competitive advantage or compliance requirements. In this case server consolidation and virtualisation within the data centre may be the best route to achieve productivity efficiencies.
For smaller organisations that do not have significant inhouse resources, outsourcing the IT infrastructure may be the correct option. For larger corporates there are numerous functions that may benefit from outsourcing, both from a cost and operational efficiency perspective. These can range from offsite document management to Email services and application development. In these and other cases it may be that outsourcing, even on a long-term tie-in, is more cost efficient and timely than making an upfront capital investment in hardware, software and staffing expertise required to launch a new application or service.
Variable Cost Models
For services which are to be sourced from outside the organisation, the question then is whether to go for a traditional or a cloud-based provider. What is the difference? Given that most service providers now claim some level of cloud offering (even if only on the grounds of using virtualisation software, which in essence, could be said to be cloud-like) the difference is not necessarily clear. Broadly speaking it comes down to cost models. With a traditional service, a high degree of customisation is typically required and few corporates want an ‘off-the-shelf’ solution. The more customisation needed, the greater the investment the supplier must make and consequently the greater the upfront cost and longer time-commitment required of the customer.
By contrast, big public clouds like Amazon sell services on a highly standardised platform. They can provide cost-efficient computing power for a company’s application, data centre or an entire infrastructure by running them in commoditised segments of server clusters within a complex matrix of shared connectivity. However don’t expect up-close-and-personal attention from the supplier. The great attraction of the public cloud is that this ‘vanilla’ offering makes it easy to charge on a ‘pay-as-you-use’ basis. This is ideal for SMEs and large organisations looking to limit their capex. The downside is that data security can be an issue in an environment where resources are shared by many, particularly if isolation software is weak, although this can be resolved by doing a security risk assessment. The good news is there are many tasks requiring computing power, such as some aspects of application testing which are not necessarily data security sensitive. The cloud is also an attractive solution for environments where additional system redundancy is needed but there isn’t the capex budget to buy in the hardware.
Getting the best of both
What if you want the cost and flexibility benefits of an “Amazon-style” cloud service but need the privacy and customisation? Enter the private cloud. What exactly is a private cloud? It can be a virtual platform with isolation software that creates a firewall to isolate a company’s data and operations. Or it can be an entirely separate, offsite physical environment with servers, storage, etc. within a dedicated “cage”. For all intents and purposes a private cloud is a traditional managed service that uses different cost models, including the pay-per-use model established by cloud computing. That said, there are infinite shades of grey depending on a customer’s requirements and provider’s platform and cloud strategy. This ranges from providers who simply lease out hardware racks (which can be easily added or subtracted), to those who can add any number of management layers to running the entire IT infrastructure including applications. They may do this using a multi-tenant virtualised server environment on multiple shared networks, or in private cages on a dedicated network. With all choices there is a sliding scale of costs from commodity-based consumption at one end to full customisation at the other.
As the market matures, there will no doubt be greater definition of services within the cloud computing space and a clearer distinction between traditional outsourcers and the emerging generation of cloud service providers. Until then navigating one’s way through what is best for the corporate IT strategy may be a challenge, however following steps should ensure success in making the right decision:
A) Record and assess your IT estate and costs. It is often not easy for companies to perform this task due to disparity of information, lack of recording and data access. Nevertheless a best attempt should be made (or hired) to gather volumetric data, complexity information, quality and service delivery metrics and process information.
B) Compare your costs and service levels with that of your peers and against cloud service offerings.
C) Assess and align your service components to cloud offerings and ensure your other services as correctly sourced.
D) Select the providers and agree terms. Security concerns can be alleviated here by adopting modified offerings instead of the standard ones.
E) Implement the strategy and it is most important to track results. Don’t be surprised if challenges from stakeholders in the business require a fact-based defence (including metrics for service performance and quality).
F) At this point being able to compare results gathered in Step A with those of the prospective new service provider will be invaluable. Of course, the same process used to gather internal KPIs can be used to monitor supplier merits.