In Part 3 we are going to address how you approach Cloud from an applications perspective and what considerations you need to make on your journey.
A recent CIO Market Pulse survey by IDG found that nearly three-quarters of IT organizations are running business applications in Cloud computing environments now or are planning to do so in the next 12 months. In a McKinsey survey, nearly half of the responding companies are already running collaboration applications in the Cloud, over a third are running customer relationship management applications, over a third are running finance or human resource systems, and a fifth are running supply chain or resource planning systems.
McKinsey also revealed that 75% of executives believe there is value to be gained from the Cloud. The question is where and how. Some applications lend themselves very well to an Internet based application. Salesforce has built a very successful business on servicing the needs of the sales organisation.
So how do you approach where each application, or set of related applications, belong? In the public cloud, a private cloud, a hybrid cloud, or the organisation's legacy computing environment? Let's start with defining the types of cloud and which cloud offer application "workloads" the best combination of performance, cost, and flexibility.
Public Cloud - the type offered by the likes of Google and Amazon as well as a growing range of service providers essentially provide IT infrastructure or applications over the Web. Valuable especially when it comes to applications that the IT department can add little value to. Commodity services like email and collaborative workspaces can be provisioned at a lower cost thanks to the scale economies of the public cloud.
Private Cloud - the type that you build in your own back yard. It gives you greater flexibility but also allows you to retain more control. This is for the 'crown jewels' - the mission critical and perhaps highly complex applications that cannot fail. The major benefits of the private cloud platform, is that an organization utilizes its technology more efficiently and that services are presented to the business with transparent costs and service levels, similar to the public cloud.
Hybrid Cloud - A mix of the two. This basically allows you to add flexibility to the Private Cloud. Often this is used for applications that are highly critical one minute and less so the next. Financial apps for example are highly used and very critical during some parts of the financial year and less so at other times. The hybrid Cloud gives you the ability to ensure they are available quickly when needed without that capacity sitting idle the rest of the time
What makes this interesting is that by optimising the distribution and management of application workloads across public, private, and hybrid clouds, an organisation can lower its total infrastructure and personnel IT spend by 25-30 percent *in addition* to delivering better services *and* being more responsive to the business.
If your organisation's total IT budget is seven, eight, nine or (gasp!) ten digits -- well, that's a matter of potential interest, isn't it?
We just completed an analysis for one organisation where they could save over $30m over a three year period. Imagine if you could go back to your board and offer a similar saving, I'm sure they would be interested in supporting your cloud transformation programme.
The next phase of the discussion gets to the core of the matter: what IT tasks are better performed with internal resources and infrastructure, and which ones are ultimately better done externally?
At EMC we believe that businesses should evaluate specifically what applications and information are appropriate for Cloud computing, and what type of Cloud is the best destination for each. This involves looking at each asset and its potential migration to the Cloud through three filters--economics, trust, and functionality.
Economics: This isn't just a cost issue. It is about whether a particular application is really just a utility. Something that internally the IT team can add very little, if any, value to. If so then it makes sense to outsource it. Finding the right supplier is also not just about cost. For each application there is a priority. Sometimes it is speed - employees need immediate access. Sometimes it is about integration - the ability to move data quickly and easily between that application and another. And sometimes it is about cost. You have to have it but you really don't want to have to pay a lot for it
Trust: For many organisations this is the number one issue. Is my stuff secure? I am not going to spend too much time on this because I shall be going into more depth on my next blog tomorrow, but suffice to say organisations hold a considerable amount of personal data these days and they cannot risk that data being leaked, stolen or lost. One thing I will say is that security is not just a consideration per application but also within it. For example, there is only a very small percentage of email content within most areas of an organisation that would be considered sensitive but if you took HR or the senior executives as a group - the percentage would be considerably higher. You might want to consider a public Cloud solution for general email but not within these two groups.
Functionality: Last but by no means least. The Cloud is a relatively new phenomenon and what it is actually able to deliver is changing all the time. A big question to ask is not just whether an application should be moved into the Cloud but whether current cloud suppliers offer the necessary functions for your business requirements.
The last area to think about when it comes to workload is your timeline. Where are your priorities? Have you given yourself time to test out a few of your ideas locally before unleashing them on the whole organisation? Being able to identify and showcase early successes will be critical, so where are the quick wins? An impatient board will want to see what their investment is delivering. You need to make sure your timeline is realistic and you have given yourself the best opportunity for success.
As I said in my first post on this subject - I believe passionately that Cloud is a big opportunity for the CIO so you need to make sure your plan makes the most of it...