Lessons for Procuring Cloud Services at the Enterprise Level: Part 1 | Gaining Altitude in the Cloud

Posted On February 9, 2012

So you’ve read tomes of information on the benefits cloud computing can deliver to your enterprise, are sold, and have already defined a cloud computing strategy and adoption approach. Great. But breaking away from your existing IT environment is far from a trivial exercise and will prove time consuming and costly. To help you avoid potential challenges and surprises, we’ve identified 10 lessons that will assist you in taking the right steps on the path to the cloud. Following are our first five lessons; next time, we’ll address five more.

1. Procuring Cloud Services – Over the years, most organizations have made significant investments in facilities, hardware, software, architecture, etc., that will either be replaced or changed when they adopt cloud computing. Some will consider the move upon reaching a refresh cycle, others at the end of an application’s life, and others still when they can no longer continue operating in older, unsecure facilities. Regardless of the timing driver, we recommend anticipating the end, and rather than making capital investments in replacing old technology, begin proactively evaluating the commercial offerings of multiple Cloud Service Providers (CSPs). In our experience, the CSPs will end up proposing very different solutions, in part based on the enterprise’s specific infrastructure environment, but primarily on their own organization’s evolution as a CSP. Note that an incumbent provider may not be the best option.

2. Application and Workload Analysis – To better assist CSPs in developing a solution that is well suited to the buyer’s specific requirements, we recommend an application to server analysis be conducted. This will highlight the several attributes of the applications/workloads that the CSP will need to best determine the right environment in which to place each application/workload. These attributes include, but are not limited to application criticality and dependencies, data sensitivity, security and compliance requirements, number of end users and their distribution, latency, data volumes, disaster recovery time and point objectives, operating system currency, etc.

3. Evaluating Cloud Services –From a marketing perspective, most CSPs’ claims of cloud computing capabilities appear credible and viable. But the truth is that there is great variance among CSPs.  The best fit choice will be the CSP with capabilities in the areas that are important to the buyer. Examples include experience running ERP on a public or private cloud (whichever the buyer prefers), ability to self-provision virtual machines (VMs) in less than an hour, a pay-by-time-used model, pricing differentiated by the infrastructure being utilized and the man-power required to run operations and support, and the ability to provide end-to-end services beyond the cloud computing component. We recommend developing a precise questionnaire and performing joint solutioning sessions to uncover the true capabilities of each prospective CSP, and checking client references with similar environments.

4. The End-State Environment (Private versus Public Cloud) – Some CSPs are still proposing physical servers under the guise of a dedicated private cloud with a minimum commitment. In this model, the buyer still pays for physical servers, although presumably less than the current environment through virtualization. Ideally, and depending on the bursting attributes of the underlying applications, the ideal scenario is a public or hybrid model wherein the buyer may purchase the base (or minimum compute required), and buy additional compute as needed.

5. Making the TCO work – Organizations may look into cloud computing with the expectation of significant cost reduction. But this may be hard to achieve if the enterprise is already spending less than it ideally should be. This underspend may be evident in lack of services (e.g., gaps in ITIL implementation), services levels (service delivery based on a best effort) and end user dissatisfaction (business units procuring IT services outside of central IT). The reality is that while cloud may help avoid capital investments, the organization must realize that a move to the cloud brings with it an underlying infrastructure and capabilities that if procured separately would be much more costly to the buyer. When doing an apples-to-apples comparison, the buyer must realize that a procured cloud solution provides a level of robustness to which its existing infrastructure may not compare. To make the total cost of ownership (TCO) work, organizations must determine a baseline spend that is not necessarily what they pay today.

That’s the end of our cloud procurement lessons for today. Next time, five more.

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