Cloud Clarity Is The Key To Success

Cloud Computing

During 2011, in many respects the cloud was extensively covered as a ‘new’ platform for computing even though it is hardly a new concept. With companies offering software via nominal cloud platforms such as Salesforce continuing to do well, ‘old guard’ vendors, such as SAP, Oracle, IBM and Microsoft all trying to get in on the act, and new cloud-based companies appearing at a dizzying rate, one could only expect that cloud will do amazingly well as we move through the year.

However, just where are we with cloud and what will need to change in the near future to ensure that does make it as a game-changing strategic platform for the broad mainstream?

Research carried out for Oracle in February and November 2011 shows that there are still a large number of organisations around the world who still regard cloud computing as an ‘over my dead body’ option. Some have show-stopping worries over security or the end user experience while others still find the whole subject too confusing.

This last area is easy to deal with. Some vendors have done a very good job of almost strangling cloud before it has had the chance to demonstrate its real power. Get three vendors together and you’ll probably have a dozen or more definitions of cloud – this is just plain wrong and if the vendors cannot agree on what cloud really is, the buyers will keep away from it.

SaaS, IaaS, PaaS, BPaaS and every other ‘as a service’ does not necessarily denote cloud, nor does just hosting an application that people can subscribe to. This is definitely not cloud – it is purely application hosting.

Worries about the end-user experience should no longer be a major problem though. An ever-increasing number of people involved in an organisation’s value chain are now remote, mobile or third party workers. An end-user experience that is dependent on how well a private, centralised, non-cloud data centre will generally be more constraining than one from a suitable external provider.

Such a provider can ensure that resources can be adapted on demand and that multiple different internet connections can be aggregated while applying wide area network acceleration technologies to ensure that performance is more than adequate.

Neither should security be an issue. Write down what the basic levels of security are that you would demand – and then see how many of them your current data centre satisfies. For the vast majority, it is likely that pretty much any external provider will have better security capabilities than your existing data centre can manage.

What else will be required? The received wisdom for cloud computing has been to by-pass existing channels and sell direct to the customer via a subscription model. This is fine for functions that can be shrink-wrapped as to what is required by the business (such as expense management, email or even large chunks of customer relationship management (CRM) and other enterprise application).

But, organisations are searching for Nirvana – they want a fully integrated, flexible platform and IT systems that can support the changing needs of the business. This requires more flexibility than just buying cloud applications off the page – and some clever thinking by vendors, channel and users alike.

Firstly, vendors need to be able to provide flexibility that meets both customer and channel needs. They also need to be able to offer flexible contracts that work for customers and the channel alike. Only offering subscriptions to customers may seem to be right, but how about the customer whose budget states that so much has to be spent as capital?

Signing them up on a front-loaded capital model where they gain rights to licences for a period of time may be all that is required to make it work for them. Using the channel to manage this relationship and to offer additional services that a vendor does not provide delvers added value that works for everyone.

For the reseller channel, it has to look at how it compensates its sales force. The archetypal capital plus maintenance model provides a large amount of money into a sales person’s salary cheque soon after the deal closes. A subscription model needs this to be averaged out over the length of the deal – which could be 12, 24 or even 36 months.

Some means of bridging the gap between all capital plus maintenance to mainly subscription is required, along with some means of providing recompense to a sales person who wishes to leave the company, but has several accounts that still have considerable time to run within their subscriptions.

For end-user organisations, the change to cloud is most marked. Just taking existing CRM, enterprise resource planning (ERP) or other enterprise applications and moving them onto other hardware in someone else’s data centre is hardly cloud, and although a co-location approach has much to offer, it certainly won’t provide the full benefits of a true cloud platform to the business.

A more functional approach will be required; one where the business process comes first, and technology is taken in small functional chunks that are brought together as required to facilitate the business tasks that make up the business process.

This aggregation of technical function then results in a highly dynamic composite application, which needs to be audited as to what it is doing, when and what the result was each time it was run. It may be possible for the end-user organisation to do the aggregation itself, but would be far better to outsource this to a cloud aggregator.

This newly emerging model is based around resellers or cloud providers offering some cloud-based functionality themselves (generally areas such as email, shared document management, virtual desktops) and then bringing together functions from other cloud providers to enable a composite application to be built, run and audited as needed.

It is likely that such aggregators will be where the biggest focus lies during 2012. As cloud grows in the minds of vendor and channel organisations as an area to focus on, their choice of underlying platforms will push the capabilities of existing cloud standards to interoperate successfully. An effective cloud aggregator will deal with this on the customer’s behalf – and so could make considerable money in the process.

As it stands, this year will not actually be ‘the year of cloud’ in itself – it remains just one step on a continuing journey towards a hybrid platform consisting of physical and virtual assets in private and co-location facilities combined with various cloud models. Having said this we will see more cloud adoption – and some pretty impressive new usage models that should propel those using them ahead of the competition.

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Clive Longbottom is founder of Quocirca and is a highly respected and globally recognised industry analyst, covering a range of business and technology areas. Clive’s primary coverage area is business process facilitation. Clive has been an ITC industry analyst for over 15 years. Clive has worked with a range of large and small analyst companies, including META Group (now Gartner) as VP Europe. Clive has a B.Sc. (Hons) in Chemical Engineering from the University of Aston in the UK.