Gaining Altitude In The Cloud Archives - Page 2 Of 12

CSC-HCL Partnership – A Big Deal or Much Ado About Nothing? | Gaining Altitude in the Cloud

January 16, 2014

On January 15, rival IT service providers CSC and HCL made an announcement that they were joining hands to deliver application modernization services. The partnership entails modernizing legacy applications (the HCL angle) and hosting them on cloud platforms (the CSC slant). CSC and HCL will open delivery centers in Bangalore and Chennai as part of this alliance, with a CoE for banking, and will share equally all revenues and costs of these operations.

The announcement sounds a lot like the one from Accenture and Dell a month ago where the two companies teamed up along similar lines. Read the release here. So what makes the CSC and HCL announcement more interesting? For starters, the simple fact that it is not the announcement we were anticipating (or were made to believe). The anticipation was for a broader alliance for infrastructure services, which would have had far significant implications on the supply landscape.

In reality, the announcement is not that big of a deal.

In our opinion this is more of a sales and marketing alliance versus a strategic re-alignment. But since it did catch our attention, here’s a brief analysis:

So why is this important?

Our research on cloud services shows that buyers place a high value on application modernization. While clients acknowledge the value of cloud adoption in order to transform their operating models and save costs, cloud-incompatible legacy applications limit the ability to harness this value. But oftentimes they are reluctant to make significant monetary investments for this pursuit and are looking for self-funding mechanisms. CSC and HCL, exploring mutual synergies, will theoretically be able to lower the risks and costs for clients transitioning to the cloud.

How does it benefit CSC and HCL?

CSC will get an additional channel for its cloud platform (BizCloud, a private cloud offering for the enterprise) and gain access to HCL’s offshore delivery capabilities in applications services. Also, this alliance will enable CSC to offer Proof of Concept (PoC) for its cloud platform to its clients at a lower price, something not feasible earlier with its U.S.-centric workforce.

For HCL, the alliance promises to:

Strengthen its presence in the financial services sector to match up with peers (HCL currently gets only 26% of revenues from BFSI, which is lower than that of its larger peers)
Boost its applications services business, which has been struggling for a while (infra business is driving growth) and position it well for potential downstream maintenance work
Allow it to offer a complete modernization solution across the application and infrastructure stack

Interestingly, CSC and HCL have been rivals traditionally with HCL being highly vocal about being a “replacement” for the likes of CSC. Like shrewd warring factions, CSC may have just married its enemy, turning it into an ally. The alliance likely enables CSC to not only protect its market share but also offer a compelling alternate proposition, to existing and new clients.

Key questions that this alliance raises

CSC has been aggressively investing in augmenting its cloud and big data capabilities. The company, already a leading provider of cloud services will now be able to offer these services at a much reduced cost. Is there a possibility of market disruption?
Will HCL Technologies continue to be platform-agnostic with respect to its cloud offerings? Can there be a clause for an exclusive CSC-HCL partnership? We think there is little likelihood of this scenario, but it will be interesting to see how HCL manages demand for competing cloud platforms including IBM, Force.com, Rackspace
Will HCL be demanding a premium price from some of its traditional buyers as it gains access to CSC’s strong technological competency and knowledge of transformational solutions?
The alliance will enable HCL to augment its capabilities for application-related services, bringing it in head-on competition with the likes of TCS and Cognizant. So far HCL’s USP was its infrastructure management capabilities. Will the combination create a formidable competitor among the offshore majors?
Will the two rivals be successful in scaling up this alliance? How will the enterprise buyers react to this changed dynamic?

It is still too early to answer any of these questions. But one thing is clear – cloud and next-gen IT certainly create some strange bedfellows.

Mobility in the Insurance Industry: Insurers Move on, Customers Get their Groove on | Gaining Altitude in the Cloud

January 15, 2014

While insurers have traditionally been slow with technology adoption, they’re now jumping on the mobility bandwagon, leaving no stones unturned in devising their mobility strategies.

So what has made mobility adoption a non-negotiable choice for insurers? They’ve realized that investments in mobility are essential for keeping pace with competitors and meeting the demands of an increasingly mobile “Facebook generation,” and that mobile offers unique benefits over the traditional brick and mortar, or even online, engagement models.

Following are some innovative uses of mobility in insurance and how they are transforming the industry:

Usage based insurance (UBI) through telematics: Telematics allows a sensor installed in a user’s automobile to transmit real-time information about his or her driving behavior to the insurance provider. The insured individual is rewarded for good driving through reduced premiums, discount vouchers, etc. And as the practice encourages safer driving, insurers pay out on fewer accident claims. This win-win situation for both the parties is significantly altering the auto insurance landscape.
More effective claims processing: P&C insurers are investing in native apps that can be used for claims reporting. In one form, the insured individual can take a picture of damaged property and post it via the app to initiate the claims process. In another form, inventory management apps allow the consumer to take photos of belongings and catalog all with the product price and purchase date, which can be used for claims processing in case of accidental damage or theft.
Better customer service and support: Many insurance providers today provide “Mobile Live Chat” functionality to enable better connectivity between the insured and the insurer, and a “when I want it, where I want it” experience for the customer.
Sales force automation through enterprise mobility deployment: Most insurers have armed their sales force with tablet/mobile-based solutions that provide real-time access to carrier systems. These enable agents a convenient way to showcase their offerings to prospects, and to readily adapt per unique client needs. Further, team managers can use mobile-based performance dashboards to monitor and optimize sales performance and make commission payments to agents.

To support insurance companies’ needs for industry-specific solutions and enablers, leading service providers are investing in development of a wide range of mobility solutions. While telematics and UBI are broad areas of investment, key insurance functions in which providers are investing are sales, claims and account management. The graphic below illustrates select major investments by service providers:

To gain additional insights and perspectives on leverage of mobility, key mobility initiatives by leading insurance firms, and questions key stakeholders must have answers to, read Everest Group’s IT Outsourcing in Insurance – Annual Report 2013: SMAC is the Panacea for all Insurance Industry Problems, and IT Outsourcing in Insurance – Service Provider Landscape with PEAK Matrix™ Assessment 2013. So, will insurance customers of the future use mobile as their primary interaction channel? Our research and current industry trends certainly bode so!

Does SaaS Have to be Multi-Tenant? | Gaining Altitude in the Cloud

December 17, 2013

We’ve been engaged in a lot of discussions recently around whether or not SaaS has to be multi-tenant. In trying to answer that query, we started with another question: What would a private SaaS look like?

Typically when we think of Saas, we think of the multi-tenant platforms such as Salesforce, NetSuite, Ariba, etc. They have several things in common:

They bundle hosting and software IP and sell those components as a service, not as components.
They typically sell it on some kind of consumption basis, typically at the service level, not at the component level.
The software is loosely coupled with other technologies. SaaS providers create robust APIs that enable this loosely coupled environment, which then allows the SaaS providers to drive their own innovation trajectory.

These aspects make SaaS a very powerful vehicle. Customer benefits are consumption-based pricing, loosely coupled technologies, and simplicity of management. The customer focuses on how to use the service rather than how to manage the components of the service. The net result is lower cost, because the customer manages its consumption and focuses on how to use the technology instead of focusing on the technology itself.

But here’s what you need to realize —

The market seems to want to claim that these benefits only come from a multi-tenant environment. That simply isn’t true. You can achieve the same goals in a private SaaS environment. There can be public and private versions of the same model.

So what if a provider were to provide those benefits in a private world where companies could have their own environment? A customer could enjoy all the benefits I already describe plus avoid the negative aspects of a multi-tenant environment — inflexibility to change the environment and having to make do with only what is available in the SaaS. Would that private world still be SaaS? As the saying goes, if a creature quacks like a duck and walks like a duck, is it a duck?

My claim is that, yes, you can have a private SaaS environment. So … where would you find such a creature?

Recently we explored ERP in the cloud. SAP and Oracle, for example, provide these offer sets as a SaaS product but without the multi-tenant component. They bundle the hosting, the service, the IP, sell it to you on a consumption basis and provide robust APIs so the customer benefits from the software vendor’s innovation trajectory. Notably, this model also allows the customer to have meaningful customization.

Other than NetSuite, at the large enterprise level we’re not aware of any multi-tenant ERP SAP or Oracle offering. While it’s true that SAP is multi-tenant at the fringes, you can actually run its core ERP system by the component parts as a private SaaS. That way you get to enjoy the benefits of consuming the service on a consumption basis and loosely coupling your innovation trajectory to allow it to evolve on its own separate from other technology innovations.

If you look at the many offerings in the marketplace, there are actually as many or more offerings that give customers a private SaaS environment as there are multi-tenant public SaaS environments.

I think we need to free ourselves from believing that SaaS only can be public (multi-tenant). Otherwise, we deny ourselves the possibility of real benefit from software services that are yet to go multi-tenant and perhaps never will.

Is MAM MAD? The Confusing World of Mobile Apps | Gaining Altitude in the Cloud

December 12, 2013

Just as today’s enterprises are becoming accustomed to Mobile Application Development (MAD) and Mobile Device Management (MDM)…bam! They are realizing there is one more critical part of the story: Mobile Application Management (MAM). Unfortunately, while most organizations have established IT security and management policies to support mobile devices via a MDM solution, they’ve started to believe they don’t need to manage mobile apps, erroneously thinking that securing the devices is sufficient.

It seems the ease of consuming consumer-oriented mobile apps from public stores, e.g., Apple iOS, Blackberry World, Google Play, Windows Store, etc., has made buyers believe it will be just as easy within enterprises. But this is far from the truth. Organizations must have a mobile application development, distribution, maintenance, and support program to effectively cater to the business user’s requirements for mobile apps.

A MAM strategy goes way beyond securing data on mobile devices and deploying an access policy. MAM is about adopting a comprehensive lifecycle management for mobile apps (developing, distributing, maintaining, and retiring).

There are five foundational dimensions of an effective MAM strategy:

With enterprise mobility expanding its horizons and becoming pervasive, organizations can no longer avoid managing their mobile app portfolio. Yet, it is becoming increasingly common to see “mobile app sprawl” where enterprises have multiple mobile apps, but no mobile app strategy. So, how should they approach it? Major providers of MDM solutions such as AirWatch, Apperian, Good Technology, IBM, SAP, and Symantec also support mobile application management. All the mobile application development platform providers, such as Antenna, Appcelerator, Dojo, Kony, IBM, Microstrategy, Netbiscuits, and SAP, do as well. Therefore, enterprise buyers will typically deploy one of these solutions, assuming it is the only required foundation of their “mobile apps” strategy. This is where they confuse device management and application development with comprehensive application lifecycle management.

To add to the confusion and angst in a mobile apps environment, organizations face substantial challenges with development and distribution of mobile apps, and technology providers’ aggressive marketing and high decibel sales efforts continue unabated. For example, despite earlier investments in BYOD initiatives, per the assumption that MDM solutions would help them manage these, some buyers are now having second thoughts. Moving to rework their BYOD strategy, these buyers have become further indecisive and apprehensive about investing in MAD and MAM platforms. Moreover, there is a growing debate around whether buyers really need MDM, or whether MAM will suffice.

Given so many complexities and the rapidly changing environment, buyers need to closely watch the mobility space to create a coherent mobile strategy. None of them want mobility to end up in the same siloed and fragmented state as did traditional technologies adopted within their organizations.

If you are implementing a mobile application development and management strategy, feel free to reach out to me at [email protected] to share your experiences, good or bad.

The Good and Bad News in Governing Cloud-Based Services | Gaining Altitude in the Cloud

November 18, 2013

Cloud-based services are distinctly different from traditional outsourcing not only because of the obvious cost and agility benefits but also because they fuel the need for a different kind of management of the services. From a management perspective the governance is transformational because it allows the governance team to change their focus on how they manage the services.

The distinction between managing cloud-based services and traditional outsourced services is critical to the outcomes and value achieved from the service.

In traditional outsourcing, the customer has a lot of say, particularly up front, in terms of designing the solution. The solution often starts with taking over what the customer currently has and then moves into a transformation journey. The customer is responsible for defining how the service components fit together and also is responsible for managing the use of those components.

But this tends to lead customers to overbuy. For example, in infrastructure the customer tends to buy more service space and more storage than is needed at any particular point in time just to ensure coverage for peak usage times and volume growth. Because it is cumbersome to contractually change the volumes, the customer ends up buying usage in step changes with the net result of overbuying.

But the real issue is how much time and effort it takes to manage this traditional kind of service. The governing cost in time and effort can overshadow the benefits of the service.

In contrast, the fundamentals of cloud-based or next-generation services are usage-based pricing combined with bundling. The customer buys bundled services rather than discrete components, and this impacts service management. For example, in traditional outsourced services, the customer manages how much capacity is needed for storage, how many licenses to purchase, etc. In the newer service models, the customer manages a few metrics around usage rather than managing the components that allow utilizing the service. The newer models enable customers to avoid the trap of overbuying.

But more importantly, cloud-based and next-gen service models profoundly change the governance aspect in the following ways:

Governance is much simpler and communication with the vendor or service provider is much simpler.
Governance efforts focus on how the organization consumes the services and on spending time helping the business units to better use the service for more value outcomes instead of managing the vendor or provider.
Governing demand management is much easier and reduces the complexities of billing and invoicing to keep track of usage.

The real issue of simplicity in governing cloud-based and next-gen services carries both good and bad news. The good news is that the simplification of management tasks means the customer will need a smaller management team. The bad news: The team will need a different set of skills. Instead of skills in managing vendors, purchasing, and invoice tracking, the governance team needs skills in change management, project management and business transformation.

OpenStack Hong Kong Summit 2013 – The Battle Is On | Gaining Altitude in the Cloud

November 15, 2013

The OpenStack Foundation invited me to be a part of its Hong Kong Summit on November 5-8. While the event traditionally has focused on developers, this year the Foundation also made it a point to include leading adopters. The OpenStack-based cloud service providers community consisted of innovative start-ups, medium-small sized companies, and the big boys, such as Blue Box, Canonical, Cisco, Cloudscaling, DELL, DreamHost, eNovance, Gigaspace, HP, IBM, Mirantis, Nebula, NetApp, Piston Cloud, Rackspace, Red Hat, RightScale, SwiftStack, VMware, and Yahoo.

While my work spans global technology and IT services, with a wider area of interest than only cloud (or OpenStack), I was happy to be a part of this event and witness the passion, commitment, and real investments being made in OpenStack.

So what did the Summit tell the market?

What’s working

Despite being only three years old, OpenStack has made significant progress as one of the leading cloud platforms for infrastructure services
The OpenStack community, comprised of developers, sponsors, and users, is rapidly growing (over 1,600 developers and 250 companies)
There is a growing intent within the OpenStack foundation to communicate with the outside world about the increasing adoption and maturity of the OpenStack platform
Different technology companies are now integrating OpenStack and its support in their product strategy, even though some of these organizations believe that OpenStack may disrupt their business model
Various buyers from technology companies are asking these providers about their OpenStack strategy, and even pushing them to support it

What are the challenges?

As technologists at heart, OpenStack developers are passionate about the coolness of the technology, but have difficulty articulating the business impact and market perspectives
While it’s easy to track the number of OpenStack downloads, there’s no process to track or estimate the real adoption
OpenStack’s inability to communicate with buyers that despite the rapid “new developments and features” (which this Summit further propagated), there are multiple functions that are enterprise ready across its compute, storage, and network projects
Despite rapid growth in the community, the number of contributors working dedicatedly full time on OpenStack is not significantly growing, and there is a constant dearth of suitable talent
With the increase in community in terms of number of contributors, geographies, expertise, etc., a method for channelizing this energy in a meaningful way is missing

Despite the challenges, OpenStack is perhaps the strongest candidate for being the leading cloud platform and may soon witness an inflection point. It is providing a new lease of life to hosting providers that are now transforming to offer cloud services and could simply not have afforded a proprietary technology. It is enabling global collaboration to solve real business problems, and offering a true enterprise-class cloud platform that many adopters (especially those frustrated with proprietary expensive technologies) are finding very useful.

The David versus Goliath battle between open source and proprietary technologies will always continue. However, there are times when one solution can change the entire industry and buyer perception. OpenStack has that capability and, despite being fairly new, its on-the-ground adoption, and increasing developer base suggests that it can be a flag bearer of open source cloud platforms, much the same way Linux was for open source operating systems.

While hybrid cloud platforms will be the norm in enterprises, OpenStack will be the leading contender for creating private and public clouds. Both cloud service providers and enterprise buyers will adopt this platform to develop scalable infrastructure to support business growth.

Photo credit: Phil Wiffen

Video: PEAK Matrix Assessment of Enterprise Cloud Service Providers | Gaining Altitude in the Cloud

November 12, 2013

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix™ provides a detailed assessment on the service provider landscape in a given market. In this video, Practice Director Chirajeet Sengupta outlines the positioning of cloud application and infrastructure service providers on the PEAK Matrix.

Download the preview of the report referenced in this video
Learn more about PEAK Matrix
Learn more about Cloud Vista™ research

What I Learned at Cloud Connect: The Cloud Is Moving to a Different Level | Gaining Altitude in the Cloud

November 1, 2013

My first impression when I recently attended this year’s Cloud Connect conference is that there is a significant increase in interest in all things cloud, as there were more attendees than at last year’s conference. What impresses me most as I reflect on the case studies and insights discussed at the event is the fact that cloud services are showing clear signs of moving from the domain of the business users into the core of the enterprise. And there is a completely different kind of usage of the cloud at this core level.

At the business-user level, cloud provides a fairly straightforward capability, whether that be CRM through Salesforce or application development and testing through Amazon. But when the enterprise adopts cloud, usage and benefits move to another level.

One of the most notable case studies presented at Cloud Connect highlighted how Revlon completely transformed its IT to the extent that it was able to create a degree of flexibility that it had never known before.

Revlon’s cloud benefits included a significant $17 million reduction in cost while providing agility in rapidly developing applications and the ability to move applications and functionality around the world at a whim.

The most striking aspect of value Revlon achieved was its disaster recovery capabilities. The night before Hurricane Sandy hit, Revlon moved the processing in its data center on the East Coast to a Mid-Atlantic location. Then they discovered that during the hurricane there were no users on the network, so they were also able to get through their release updates at the same time.

This enterprise-level agility in moving workloads around while also creating rapid application releases — and at a much lower price point — brings to light the potential for cloud to change how IT is done in enterprises.

Only a year ago we saw cloud services validated primarily by the business users. This year’s Cloud Connect case studies demonstrated that validation has moved into the core of the enterprise with CIOs fundamentally embracing it to the degree that it completely changes the way they do business.

What will be the cloud’s impact over the coming year?

Download the Revlon case study

Watch the Everest Group Vice President Jimit Arora’s video interview with David Giambruno, Revlon’s CIO.

KISS Your Mobile Apps | Gaining Altitude in the Cloud

October 21, 2013

“We want to create comprehensive mobile apps that mirror the functionality of traditional applications.” Every time I hear an organization say that, I think about a mobile application or strategy that is fast forwarding toward a grand failure.

Why? There is a simple answer. No one wants, or can actually use, a mobile app that is like that. Traditional applications have so many features and complexities that, if “mobilized,” will significantly degrade the overall design, code quality, user interfaces, and user experience. These applications typically offer many functionalities that consumers are neither aware of nor use. Unfortunately, the market is fast approaching a state of “fat client native mobile apps” in which we could see a further divergence of users’ core requirements and developers’ fanciful creations. Indeed, even in the typical mobile apps that connect to a cloud or hosted application, developers are unable to grasp the real requirements of the end-user.

The reality is that mobile applications must have their sanity intact and offer functionalities that users will actually consume.

While designing mobile applications, developers and architects need to remove their traditional approach and segregate the functionalities into “must-have,” “should-have,” “good-to-have,” and “may-have.” But they must always keep top of mind that a must-have functionality for traditional access could be a “may-have” for mobile devices. Therefore, they need to see the application landscape through a different lens before deciding which functionalities should fall under which bracket. It goes without saying that this exercise must be performed from an end-user perspective.

Given that mobile apps is still a growing area with lots of yet to be answered questions, organizations need to be careful in adopting a mobile application strategy. It should, at bare minimum, address the following:

Relevant functionalities: Only the core features of an application should be available on its mobile avatar (at least to begin with). Once end-users are comfortable and there is an increase in demand for more functionality, newer features may be added. Moreover, the definition of “core features” on mobile may be very different than that for the desktops
Minimum learning curve: End-users need to comprehend, appreciate, and start liking a mobile application in a very short time (say two-five minutes). Beyond that, the chances of them looking at it again are very low

Functioning features: When a mobile application is dependent on another system, data connectivity to the systems must be functional or performance will be hindered and the user experience spoiled
Easy to use: While this is an old horse in application development, the importance of ease of usage increases manifold with mobile platforms. Developers should focus not only on different mobile OSs, form factors, etc., but also on the intuitiveness of the interfaces and easy availability of key features (e.g., search).

While all the above may appear to be very generic and obvious, it’s not…believe me. I am seeing various buyer organizations struggling with evangelizing the adoption of, and technology provider’s inability to create, meaningful mobile apps. And in the meantime, they’re investing millions of dollars that are not delivering the returns.

Therefore, the crux of a successful enterprise mobile apps strategy is to KISS it…or, Keep it Simple and Sane!

When Flying in the Cloud You Can Be Struck by Lightning | Gaining Altitude in the Cloud

September 30, 2013

Once upon a time there was a cloud storage provider with a compelling offering. Hundreds of small companies and prominent world-leading companies became its customers and reseller partners and moved their data to the provider’s cloud. Then bigger cloud companies offered services at lower prices and drove the storage provider out of business.

Unfortunately this is a true story. Nirvanix announced on September 17 that it was closing its doors and customers — including resellers whose customers might not have known their data was stored in the Nirvanix Cloud — have been scrambling to move their data in the allotted two weeks.

The Nirvanix story serves as a cautionary warning: You should care whom your service provider selects as its subcontractors and partners, especially if your data is mission critical or your company is in a highly regulated industry.

Nirvanix Cloud’s target market was enterprises and addressing enterprise requirements made its solution more expensive than other cloud storage options. Its pricing couldn’t compete with lower-cost options from larger players such as Amazon, Google and Microsoft, so the venture capitalists refused to do the next round of funding, thus shutting the company down.

Often cloud solutions are ecosystems that have been put together with a lot of subcontracting relationships. It’s a sign of the times and harkens back to the bubble days of the Internet in 2000. You need to conduct careful due diligence to understand those relationships and their ramifications to your business before you turn your workflow and data over to a service provider.

Our advice is to make sure that subcontract relationships are transparent to you so that you can evaluate their risk and evaluate the stability of the subcontract relationship. Above all, make sure that your provider has contingency plans in place that are transparent to you; it’s also wise to develop your own contingency plans in place just in case.

Announcing our inaugural conference: Everest Group Engage, The Pragmatic Edge: Designing Your Future. Learn more.

Category: Gaining Altitude in the Cloud

Mobility in the Insurance Industry: Insurers Move on, Customers Get their Groove on | Gaining Altitude in the Cloud

Is MAM MAD? The Confusing World of Mobile Apps | Gaining Altitude in the Cloud

KISS Your Mobile Apps | Gaining Altitude in the Cloud

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