March 1, 2011 3:55 pm

Guest column: Top issues related to cloud

All the hype that cloud computing has got over the past few years tends to push business leaders into one of two camps: those who love the simplicity and convenience of Software-as-a-Service (SaaS) offerings, like those supporting sales force automation (let’s put everything in the cloud!) and those who do not believe the false promises from vendors and think cloud computing is not ready for enterprise-class security and business continuity requirements.

The truth, as usual, is somewhere in between, and the most rewarding adoption patterns will vary considerably depending on the market and competitive situation individual enterprises are dealing with.

The list below offers a set of issues many enterprises are discovering as they engage with cloud computing. We recommend senior leaders spend a little time “in front of the mirror” and make sure they have not fallen prey to them.

1) Thinking cloud computing is only about public cloud services, or only about transforming internal IT into private clouds.

All the great stories about companies taking advantage of public cloud services leads some enterprises to think the cloud computing opportunity is only about external service providers. But much of the medium term value to be harvested from clouds will come from transforming internal IT by emulating the style of computing defined by these types of external services. This requires a deep appreciation for their differences in architecture, technologies, processes, and differentiating roles for IT staff. In other words, by creating private clouds. But putting all your efforts into private clouds ignores the real value that can be found from the on-demand, limitless capacity of public cloud services and the instant-on availability of applications. The best use of cloud computing is derived by adopting an integrated model, one that transforms internal data centers into private clouds and makes use of external clouds where their value proposition is distinctive.

2) Not anticipating the new challenges created by integrated clouds.

Acknowledging the disruptive opportunity of the integrated cloud model is only the start. Companies that adopt the technologies and external cloud services willy nilly end up recreating a complexity and maintenance challenge that defeats two of the biggest paybacks from cloud investments: business agility and business alignment.

Virtualisation technologies, for example, have already recreated “server sprawl” in its virtual form in situations where staff are able to request new instances of virtual servers without guidance from IT policies or “cleanup” systems in place. Enterprises also need to anticipate the scalability and security challenges of systems integration in cloud environments and the impact that rapid introduction of new metadata from SaaS vendors will have on data management in integrated cloud computing environments.

3) Moving forward without a strategy.

Many companies already have elements of this emerging integrated cloud model in place; they use server and storage virtualisation, they have partially automated the management of the data centre and they use SaaS offerings. Few companies have laid out a vision and strategy for moving to a defined future of integrated clouds. A leading practice is to use a cloud maturity framework so you can proceed logically from assessment of current state to realisation of desired future state. This includes important delineations of the core component parts of this future state. PwC has established a conceptual model of exactly this architecture comprising 7 categories of technology types. By establishing this reference architecture it is possible to define your road map, avoid wasteful spending on solutions that promise “instant clouds” but introduce proprietary technologies that will not fit into the architecture, and establish an order for what comes first. Without a strategic plan of this type it is not obvious whether an individual decision to use a service or technology will get you closer to real benefits of cloud computing — agility and business alignment.

4) Failure to recognise the transformative value of cloud to the business — cloud computing is not just a better way to deliver IT.

The openness and architecture of cloud infrastructure establishes a disruptively powerful business collaboration platform that empowers companies to deeply integrate their business processes with partners. We see this already with Web-centric businesses, such as those in retail and hospitality industries. Without leaving, say, a convention Website, customers can make restaurant reservations or purchase tickets to events. The user has an integrated experience even though the convention, restaurant, and ticket service providers are separate companies. And traditional “bricks and mortar” companies, such as those in financial services, are unbundling functions like risk exposure management that were formerly parts of an integrated offerings and making them available in the cloud as “e-services.” As a result cloud is positioned to transform how we integrate and communicate between businesses. However cloud puts new demands on strategy and governance with its agile applications and infrastructure, far more so than previous generations of IT. Although ERP and CRM have had major impacts on the enterprise the focus has been almost entirely on internal processes. Cloud moves that focus to external business collaboration and integration.

Tom DeGarmo is a principal in PwC’s Advisory Practice and leader of the firm’s U.S. Technology Consulting Solutions Practice

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