Why the time for cloud computing is now
Forty years ago, IT started to be introduced into mainstream businesses as a productivity tool. This development spawned an entirely new industry, as increasingly sophisticated information systems started to actively drive, rather than merely support, business processes, decision-making and competitive advantage.
While automation has gradually freed up line-of-business workers from many routine tasks, maintaining the IT infrastructure that underpins an organisation’s day-to-day operations is still a people-intensive practice.
Cloud computing is alternately touted as the next big thing by some, and as a reincarnation of the classic mainframe utility computing model by others. Whatever your view, can today’s cloud deliver on the original promise of IT, bringing the simplicity and efficiency that we’ve anticipated for decades?
“While automation has freed up line-of-business
workers from many routine tasks, maintaining the IT
infrastructure that underpins an organisation’s day-to-day
operations is still a peopleintensive practice”
How IT defies the rules of business
During a sustained period of relative prosperity, businesses of all shapes and sizes expected economies of scale from their IT, to support perpetual growth. IT challenges could often be solved simply by throwing money at them. However, today’s unpredictable conditions require greater flexibility, to meet fluctuating demand or seize time-sensitive opportunities.
Organisations are increasingly looking to more sustainable ways of doing business, both in terms of resource consumption and financial stability.
But IT has never operated according to lean principles: technology is invariably over-specified to account for the best (or worst) case scenario. Even when buying a PC or laptop for home use, we have a tendency to future-proof the purchase with the kind of “just in case” processing power and storage that is rarely justified by our day-to-day needs.
The traditional one workload, one box approach means IT asset utilisation rates are typically poor (sometimes as low as 2-3%). This isn’t just a waste of physical hardware, power, space and cooling – there’s a significant resource burden attached in terms of the staff who are tasked with managing it.
It’s not unusual for a retailer to allocate servers specifically to deal with uplift in online transactions during the run-up to Christmas. But what supply chain director would tolerate the mothballing of production facilities for 11 months of the year? What HR manager would happily pay staff to drink tea and play Angry Birds from January to November?
According to ongoing research by McKinsey & Company, server utilisation rarely exceeds 6% and facility utilisation can be as low as 50%. Data centres account for around 25% of corporate IT budget, when you take into account the facilities servers, storage and the labour to manage them.
Virtualisation can address server sprawl issue to a large extent through consolidation, but can come at a hefty upfront cost to the business and requires sought-after (therefore highly paid) architectural skills. With the current rate of exponential data growth, virtualisation doesn’t offer the scalability needed to keep pace. In practice, in-house virtualisation projects often fail to achieve their objectives and IT still tends to feel more comfortable operating with a generous amount of headroom. However, since the global economic downturn, ROI must be demonstrated for every purchase, and this kind of profligacy is no longer acceptable.
Bigger, better, faster, more cost-effectively
For forward-thinking businesses, cloud computing offers an elegant, cost-effective, open-ended solution. So why isn’t everyone getting trampled in the stampede to adopt? Perhaps partly because “cloud” is a nebulous term, used to describe various concepts. This has led to its reputation being dented over recent years by highprofile tales of woe which, in truth, are isolated to the kind of public clouds patronised by mom ‘n’ pop businesses.
So in this context, let’s state three key assumptions:
- For cloud, read “Infrastructure as a Service”
- That means a secure, private cloud environment, shared exclusively by like-minded businesses
- The focus is on reputable vendors with enterprise-grade capability and an SLA to match.
“The overwhelming advantages of cloud
are its scalability and flexibility, embodied in
a pay-as-you-grow managed service model”
So when you need more capacity, for example to cover seasonal uplift, a high-profile advertising campaign, or the roll-out of a new finance application, you simply dial up your exact requirements with your cloud service provider. While it’s not quite as instantaneous as flicking a switch, it’s infinitely more responsive than provisioning the expansion of your own data centre facilities. What’s more, cloud keeps capital outlay and depreciation off your balance sheet, and there’s no need to factor in technology refresh.
A recent study of 500 IT decisionmakers by Sand Hill found that half of respondents cited business agility as their primary reason for adopting the cloud, while 65% of participants in an Information Week survey said responding faster to the business was a key driver for cloud computing.
Cloud can enable your business to focus on its core operations without losing momentum due to IT infrastructure bottlenecks. Bringing greater responsiveness to your IT can enable your business to be more adaptable to changes in the external environment, while reducing time to market will make you inherently more competitive.
Nay-sayers and fence-sitters
A dwindling number of IT decision-makers still view production hosting as a threat – a loss of command over the empire. Cloud infrastructure puts the remote control firmly in your hand so you can continue to orchestrate your will from a distance. A responsible provider will be reassuringly transparent and specific in responding to concerns such as where your data and applications are located.
It becomes the vendor’s responsibility to manage demand, monitor customers’ usage profile across its entire estate, and ensure sufficient capacity is available. But a partner worth its salt will have vast experience and expertise in managing a production environment, as well as the specialist tools to provide the required visibility.
Consequently, you’ll see the emphasis of your IT department’s role gradually shift towards one of strategic advisor to the business and custodian of information technology policy, rather than caretaker of the data centre.
Cloud’s detractors are still quick to raise “health and safety” objections, such as physical and logical security, interoperability, reliability and business continuity. However, an enterpriseclass vendor will invest heavily and continuously in state-of-the-art facilities that are beyond the financial and technical means of most organisations. Its disaster recovery measures will almost certainly exceed typical in-house provisions, and its procedures and practices will have been ruthlessly interrogated and penetration-tested.
Minimising risk in the cloud all comes down to finding a robust provider with a formidable track record in large-scale managed services and business continuity.
Not if, but when
While organisations need to be able to respond at short notice to threats and opportunities, vast IT buffers aren’t in the long term interests of most businesses.
Cloud computing is increasingly perceived as an inevitability. The time has come to stop debating its merits as a concept and start asking searching questions of potential providers to prepare your business for the transition. Infrastructure as a Service doesn’t have to involve migrating your entire data centre on day one – consider exploiting the cloud as a development sandbox or for hosting a specific application in order to accelerate deployment.
Inertia is undoubtedly costing businesses opportunities as well as money, so now really is the time to harness the cloud to bring affordable scalability to your IT and agility to your business.