Tag: CIO

Will Platform Wars Freeze the Enterprise IaaS Market? | Gaining Altitude in the Cloud

As we work with our clients to understand the implications of Next Generation IT technologies, it’s clear that large enterprise adoption of public cloud IaaS is progressing more slowly than other types of cloud services (e.g., SaaS, private cloud). When we ask ourselves “why,” we continue to come back to three critical issues:

  • Vision and reality gap – we continue to be impressed with the sophistication that many of our client IT executives have around how private, public and hybrid clouds can be used to fundamentally transform their IT infrastructures. They then talk to vendors and face the disappointing gap between the state of cloud technologies today and their expectations and requirements (legitimate or not).
  • Risk aversion – it’s one thing for a CIO to passively support their VP of Sales as they roll out Salesforce.com.  It’s quite another to own the decision to migrate critical IT workloads out of the data center to public cloud services. While early adopters are clearly out there experimenting with IaaS, don’t expect your typical Fortune 500 CIO to be eager to get on the diving board and jump in until they have to, or they feel it’s safe.
  • Market “noise” – just when CIOs think the drumbeat of vendor provider announcements around public, private and hybrid cloud offerings and standards can’t get any louder, someone dials it up a notch.  The noise (and uncertainty) is now being amplified even further by the emerging battle around enterprise cloud platforms / operating systems like vCloud and Open Stack (more on this later).

Certainly we’re finding that these issues are reflected in enterprise IaaS adoption patterns that are not quite what many in the enterprise CSP vendor community had hoped for at this point. Namely we’re seeing:

  • Enterprises growing cloud usage from the “inside out” – nearly all the activity we see in the enterprise market around cloud and infrastructure today is focused around private cloud pilots or full deployments (hosted or on-prem). Rather than experiment with cloud with public service providers, they’re opting to try the model internally first. Some call it “server-hugging,” others a reactive move to keep IT spend in house, and still others a rational response to the current state of technology and services.
  • Heavy reliance on proprietary enterprise IT vendors – despite their vision, promise and industry support, new open source platforms (and Eucalyptus) have seen limited adoption in enterprise private clouds. While OpenStack has had success with service providers, many CIOs don’t consider it ready for prime-time yet in their data centers. CloudStack has had more success, but enterprise deployments still likely number only in the double digits. Perhaps not surprisingly we see enterprise cloud deployments (private cloud) dominated by VMware and IBM.
  • Selective, incremental migration of targeted use cases – where we do see enterprise IT migrating to public cloud or hybrid infrastructure models is for very targeted or smaller scale, lower risk use cases. Examples include test / dev environments, backup and archival, websites and batch data analytics. IT is dipping their “toe in the water” with public cloud, and not feeling a compelling need to drive widescale transformation – yet.

So where are we headed?

In general, enterprises are obviously not comfortable with the current risk / return profile associated with public IaaS and hybrid cloud models. We believe one of the few levers that would pull both components of this ratio would be a cloud management platform that would enable true workload portability / interoperability and policy enforcement across private, public and hybrid models. Not surprisingly, competing enterprise cloud vendor platforms, standards and ecosystems are emerging around VMware, Open Stack and Amazon (and to a limited extent Microsoft) to address this market gap. Several major announcements over the past several weeks that have served both to partially clarify and muddy this evolving landscape at the same time include:

  • The Amazon / Eucalyptus announcement around extended  API compatibility for hybrid clouds
  • The Citrix announcement that they will be breaking away from Open Stack and open sourcing CloudStack to the Apache Software Foundation
  • HP’s announcement of the Converged Cloud portfolio of public, private and hybrid cloud offerings based on a “hardened” version of OpenStack and KVM.

Most major enterprise IT vendors are still hedging their bets and publicly keeping feet in multiple camps. With the marketing engines in overdrive it’s difficult to understand what commitments vendors are really at the end of the day making to the different platforms. In fact it’s quite instructive to take a look at who’s putting their money where their mouths are when it comes to open source efforts like Open Stack, not just in terms of sponsorship fees but also developer contributions.

Historically IT platform markets end up with a dominant leader and one to two credible challengers that end up with 2/3 to 3/4 of the market, with the remainder shared among niche players. When we take a look at the enterprise cloud operating system or management platform market, we don’t see why it would be any different here, though we’re obviously still a long, long way from the end game.

The critical question in our mind is: Is a cloud platform market shakeout required for enterprise adoption of IaaS to accelerate and hit the tipping point? If so, we could be waiting a long time.

What are your thoughts?

Using Cloud Flexibility to Drive Enterprise-Class Cost Efficiencies – A Tale from the Frontlines | Gaining Altitude in the Cloud

Myth

One of the current mantras that many enterprise cloud enthusiasts are chanting is that “it’s not about cost.” Cloud is all about business agility and flexibility with cost being an interesting side benefit, but not necessarily compelling on its own. Focusing on cost efficiency and TCO is indicative of a stodgy, legacy IT mindset that doesn’t understand the true paradigm shift of cloud.

Nothing could be further from the truth. In fact, we’re finding that some of the more interesting cloud enterprise use cases these days involve leveraging cloud agility to aggressively reduce infrastructure and IT costs.

Take a recent client of ours, a Fortune 500 global energy company seeking to reduce corporate IT infrastructure costs. Its focus was on reducing costs across two primary datacenters that delivered HR, finance, accounting, operations and other applications to business operations across 30 countries. Understanding cloud options for migrating its SAP deployment was a central focus of their effort.

Facing an imminent and significant hardware upgrade cycle, it was more interested in exploring opportunities to reduce costs through traditional IT outsourcing (ITO) vehicles, as well as next generation, cloud-enabled delivery models. Critical objectives included:

  • Reducing asset ownership
  • “Variabilizing” its IT cost structure
  • Outsourcing commodity IT skills

Based on these requirements, our client evaluated potential solution options from nearly 20 service providers, including traditional enterprise IT service providers, cloud service providers (CSPs), offshore ITO vendors and telcos/carriers.

Our client narrowed the field to three potential solution providers, each with different recommendations on where to migrate existing applications and workloads (which were largely in dedicated and virtualized models). Recommended solutions varied not just across cloud delivery model (public vs. private), but also across asset ownership (on-prem private vs. hosted and virtual private):

Cloud Providers Solution Overview

And what did the client find? As shown below, leveraging a mix of virtual private and public cloud models offered the opportunity to reduce its annual infrastructure costs by over 30 percent!  “Provider A,” which suggested migrating approximately 30 percent of the clients’ workloads to public cloud environments ended up with the most compelling business case. While they recommended migrating 80 percent of the workload portfolio to cloud-enabled models, they did recommend keeping the client SAP instances in a traditional, dedicated model.

IT Infrastructure Annual Cost

Some additional observations:

  • Costs reflect all required migration and replatforming investments
  • Public cloud costs were indicative of current market pricing generally at the same unit price levels across the period. As shown by the recent AWS price drop of up to 37 percent on reserved instances, this is a very conservative assumption
  • Efficiencies do not reflect additional potential opportunities from active workload management

So where did the savings come from? Our client found that the savings were driven by four primary levers:

  • Consolidation and rationalization of underutilized servers
  • Migration of unpredictable and “spiky” workloads to public cloud models with consumption-based billing
  • Reduced IT operations and management costs
  • Defacto outsourcing of maintenance and support to CSPs

We’re seeing similar results across our other clients, who are finding that cloud-enabled delivery models, leveraged correctly, can drive substantial and lasting reduction in IT infrastructure costs.

Maybe cloud and cost efficiency aren’t so boring after all…

Video Interview: Outlook for Mad Cloud Skills | Gaining Altitude in the Cloud

Cloud skills are different than traditional IT skills. At the recent CloudConnect conference in Santa Clara, we had a panel discussion on how cloud is changing the CIO’s wish list for new hires.

In this last video blog of the series, Clayton Pippenger, Applications Development Manager at Quest, shares his thoughts on the outlook for hiring cloud skills in the coming years.

In case you are just tuning in, this is the fourth video interview of a series we taped at CloudConnect 2012 in Santa Clara. Everest Group’s Scott Bils chaired the Organizational Readiness track and enlisted an impressive lineup of speakers.

Watch the first video, featuring Francesco Paola of Cloudscaling.

Watch the second video, featuring Simon Wardley of the Leading Edge Forum.

Watch the third video, featuring Erik Sebesta of CloudTP.

Video Interview: Balancing Cloud Decisions between Executive Team and Business Unit | Gaining Altitude in the Cloud

At CloudConnect 2012, Everest Group’s Marvin Newell moderated a lively panel discussion on next generation IT governance. The panelists included Thomas Barton, Global Enterprise Architect at Novartis Pharmaceuticals; Jeromy Carriere, Chief Architect at X.commerce; and Erik Sebesta, Chief Architect and Technology Officer at CloudTP.

The panel focused on the governance concept of holding on loosely but not letting go. Though executive buy-in is important for cost-efficient and holistic migration to the cloud, the business unit knows operations and needs the best.

In the third CloudConnect video interview of the series, Erik Sebesta answers the question: How does one balance the decision-making between the executive team and the business unit?

In case you missed the first blog, this is the second video interview of a series we taped at CloudConnect 2012 in Santa Clara. Everest Group’s Scott Bils chaired the Organizational Readiness track and enlisted an impressive lineup of speakers.

Watch the first video, featuring Francesco Paola of Cloudscaling.

Watch the second video, featuring Simon Wardley of the Leading Edge Forum.

Watch the last video, featuring Clayton Pippenger of Quest.

Video Interview: Simon Wardley on Cloud Adoption Inertia | Gaining Altitude in the Cloud

In my last blog, you watched Francesco Paola’s response to CIOs’ willingness to fund a “cloud account team.” Another resistance an enterprise could face is the agnostic feeling towards the cloud promise and the resulting reluctance to move to the public cloud at the opportune time because of its perceived insecurity compared to the private cloud.

In today’s video interview, Simon Wardley, researcher for the CSC Leading Edge Forum, answers the question: Do you think enterprises who are adopting private clouds over public clouds are fighting the inertia due to computing utility? 

Simon also added to his first response by explaining how organizations can transform themselves to fight this inertia efficiently.

 

In case you missed the first blog, this is the second video interview of a series we taped at CloudConnect 2012 in Santa Clara. Everest Group’s Scott Bils chaired the Organizational Readiness track and enlisted an impressive lineup of speakers.

Watch the first video, featuring Francesco Paola of Cloudscaling.

Watch the third video, featuring Erik Sebesta of CloudTP.

Watch the last video, featuring Clayton Pippenger of Quest.

Video Interview: How Willing are CIOs to Fund a “Cloud Adoption Team”? | Gaining Altitude in the Cloud

Last week, Everest Group was in Santa Clara at CloudConnect 2012, the defining event of the cloud computing industry. Produced by UBM TechWeb, Cloud Connect brought together IT professionals, developers, infrastructure and service providers, and cloud computing innovators at the Santa Clara Convention Center for a three-day conference.

Our Next Generation IT Practice Leader Scott Bils chaired the Organizational Readiness track, which focused on best practices for enterprises adopting cloud technologies.

One of the track’s sessions titled “Will Culture Eat Your Strategy? How to Turn the Tables” focused on how cloud migration fundamentally changes the way things have always operated. Going to the cloud requires more than merely adopting the technology; rather, it requires an underlining cultural shift and that demands more than a memo saying, “We’ve gone to the cloud. Call IT if you have questions.”

I caught up with Francesco Paola, Vice President of Client Services at Cloudscaling, who was one of the session’s panelists to ask him the million-dollar question: How willing are CIOs to fund a “Cloud Account Team” to drive the adoption of the cloud?

Watch Francesco’s response:

Watch the second video, featuring Simon Wardley of the Leading Edge Forum.

Watch the third video, featuring Erik Sebesta of CloudTP.

Watch the last video, featuring Clayton Pippenger of Quest.

Grief Counseling for the CIO | Gaining Altitude in the Cloud

The accommodation and integration of disruptive technologies into the enterprise IT ecosystem is a significant issue for IT executives. And just as distributed computing did 20 years ago, successful adoption of cloud computing in its many forms requires substantial change across the IT enterprise. The rapid pace of innovation and ability of business users to deploy cloud services without IT involvement are raising these issues much faster than past transformation waves.

At Cloud Connect in Santa Clara, CA, on February 15, I’m going to have a “fireside chat” to discuss this “keeps me awake at night” issue. While I’m sure the conversation will take some unexpected turns, I plan to navigate our talk to some of the more challenging factors enterprise IT organizations face as they embrace cloud.

  • A different mindset – To be able to fully leverage the benefits of the cloud service model, IT organizations are finding they have to adjust a number of strongly held beliefs that have served them well in supporting their current environments but constrain them as they move into the next generation cloud world. These include changing their orientation and thinking about how and when to provide customization for both applications and infrastructure, embracing the power of speed to impact by utilizing commonly available components, adjusting expectations about how security and compliance issues can be resolved…and many more. Indeed, there are a significant number of mindset adjustments that, when taken together, present a steep learning curve and cultural change requirement.
  • A new framework for IT architecture – As enterprises embrace cloud service models, they find that the existing architectures, frameworks, methods, and processes need to be adjusted, and, in some cases rethought and reinvented.  .
  • A new orientation toward innovation – One of the more difficult aspects of the new cloud world is the dilemma posed by a constantly evolving marketplace with a wide array of attractive options at competitive prices. The quick access to robust functionality allows and often encourages business units and other empowered stakeholders to experiment with cloud tools and applications. If they find the functionality useful, they often scale its use, creating new layers of technology outside the constraints of IT policy, compliance, and security. The lack of widely accepted industry standards and APIs and the constant evolution of the underlying technologies further complicates the enterprise IT agenda. Traditional approaches IT organizations utilize to evaluate, integrate, and mange the introduction of applications and technologies are often unable to accommodate these conditions without restricting the very flexibility and choice that make cloud services so attractive. The result of these challenges drives many IT executives to reexamine their approach to innovation, and challenges them to adopt new thinking about the lifecycle of technology, how integration is accomplished, and compliance is assured.
  • Alterations to policies, processes, and the organization – As enterprises more deeply embrace these next generation technologies and associated changes, they find that to fully capture the benefits they must revisit some of their long held policies, adjust many of their existing processes, and facilitate and reinforce these with organizational alignment and change. New skills are required, other skills are in less demand, and the old ways interfere with or constrain progress in the new world. In most cases, these adjustments that will enable successful leverage of cloud computing must take place simultaneously with protection and maintenance of the work that will continue to be delivered from the legacy environment.

As we reflect on the size, scale, and depth of the changes cloud computing drives, I want to press my discussion partner(s) to think back to our experience with the adoption of distributed computing. We are now 20 years into that journey, and many enterprises are finding that they still maintain some applications in a mainframe environment. While it’s not possible to know how long the cloud expedition will take, it seems prudent to believe that most enterprises will be on it for at least a number of years. And, as with distributed computing, we may find that some workloads have a very long tail.

Given the realities of most large IT enterprises, it is clear that in most cases we can’t expect to achieve a clean break, making it likely that the legacy organization and the people in it will have to balance the realities of the new world while dealing with the old. As IT executives contemplate the journey ahead, they can be forgiven for nostalgia for the status quo. While our conversation next Wednesday will not solve all the problems, the grief counseling may at least help us sleep better.

Cloud Connect 2012 Organizational Readiness Track | Gaining Altitude in the Cloud

This blog originally appeared on Cloud Connect Blog. Read the original post.


“The technology is the easy part.  It’s the cultural issues that are hard.”

This quote from a recent conversation with a Fortune 500 CIO perfectly summarizes why we’re holding the first-of-its-kind Organizational Readiness track at Cloud Connect.  As enterprise adoption of public and private clouds continues to accelerate, the majority of focus continues to be on technical issues. Organizational and cultural issues though are starting to pose significant barriers and challenges as CIOs work to implement their cloud strategies. Just a few of these emerging issues facing enterprise IT include:

  • What does our future IT organization need to look like? How do our key roles, processes and skills need to change?
  • How do we overcome internal resistance to cloud adoption? How do we help employees make the paradigm shift, and rethink IT, services, and even their own roles?
  • How does our governance need to change in a world where business users have much more choice and control?
  • How we ensure we have the internal skills we need to support cloud? How can we compete in the market for increasingly scarce talent?

Just as the shift from mainframe to client / server architectures drove a wave of transformation for IT organization and governance, so is the migration to cloud services.  The focus of our track will be on exploring the “soft issues” around enterprise cloud adoption, and discussing emerging models for success for building next generation IT organizations.

The track will include sessions that will surface the around real organizational, cultural, skills that are emerging with enterprises migrating their environments to the cloud. These sessions include “Will Culture Eat Your Strategy? How to Turn the Tables,” where Simon Wardley will lead a discussion around how IT leaders can overcome the cultural barriers to change. We’ll have a series of panels and discussions on how enterprises are navigating the organizational changes being driven by cloud, which will include IT leaders from Best Buy, eBay, Novartis, InterContinental Hotel Group and others. David Linthicum’s session on “In Search of Mad Cloud Skills” will help us understand the new cloud skills that will be required in the enterprise, and where to find them.

Failing to address the organizational issues associated with transformational change can doom even the best cloud strategies and technologies. Join our Organizational Readiness track to learn how to effectively prepare your organization to embrace the change that’s coming with your migration to cloud.

Not registered for Cloud Connect yet? Visit the conference registration page to learn how to join what I’m sure will be an exciting and insightful event. Enter the promo code EVEREST for 25% off!

Enterprise CIOs Get no Cloud Satisfaction from Incumbent Vendors | Gaining Altitude in the Cloud

Enterprises are frustrated when it comes to cloud migration, and it appears they have good reason to be.

During the past three months, we have had conversations with IT and executive leadership in upwards of 50 Global 2000 firms that rely on distributed, global IT operations. These companies operate dozens of data centers running hundreds of workloads that support tens – or hundreds – of thousands of employees around the world.

Our discussions covered three basic topics related to their migration path from dedicated and virtual infrastructures to cloud. Their answers revealed disappointment and a growing sense of frustration with the incumbent vendors that built their global network of data centers. And their comments suggest a major misalignment of technology and marketing, as well as a potentially huge opportunity for disruption by new competitors in enterprise cloud.

1.     “Tell us about the conversations you’re having with your incumbent equipment and software vendors about next generation IT migration.”

IT leadership stated that vendors are “stuck in technology speak,” focusing on their latest version of private cloud rather than demonstrating reference installations that support a business case. They also reported frustration at how each vendor defines cloud terminology differently, making rational comparisons impossible. Market noise has become deafening, creating distractions for their IT staffs that are trying to cut through the cloudwashing and map out a cloud migration strategy.

Perhaps most troubling is that these enterprises reported that their incumbent vendors are focusing on technology, with little to no focus on business value.

2.     “Are you impressed with what they’re telling you?”

Despite the answer to the first question, the CIOs told us they are impressed in select cases, primarily with vendors that have developed vertical-specific solutions to address data privacy, security and compliance issues.

For the most part, however, the IT professionals we spoke with reported seeing lots of impressive slide decks with long-term cloud visions, but receiving unsatisfactory answers about the ability to execute in the short-term.

They also cited transparency of security and controls as a major issue. Those we spoke with require a level of visibility into solution performance that their incumbent vendors are simply unable to deliver.

3.     “What action plan have you developed with your legacy vendor?”

Here’s where it became apparent that incumbent vendors are missing the mark.

While it seems obvious that vendors would recommend their own solutions, enterprise buyers want objectivity when it comes to the cloud. “Vendors guide us to their own solutions,” and “their incentives to do so are apparent,” were consistent themes. Consequently, enterprise buyers are not relying on one vendor when it comes to cloud migration action plans, even if their incumbent is a Tier 1 ITO vendor.

This seems to be a direct result of enterprise buyers’ frustration with the lack of direct answers regarding what is available for deployment today, and what is merely a toolkit or development environment.

There’s not much improvement when talking about native cloud providers. Several people noted that while these vendors are able to bring ready-to-wear solutions to the table, their experience bases are either with the developer community or with service providers, but not enterprises. This experience gap raises questions among enterprise IT leadership regarding these providers’ ability to provide a seamless implementation and ongoing support.

We drew several important conclusions from these conversations:

  1. Vendor “over-marketing” in the race to grab cloud share is confusing the market, and may actually be slowing adoption by introducing risk and doubt among enterprise buyers. This became apparent when several CIOs told us they have essentially black listed some of their incumbent vendors from further conversations about their cloud migration strategies.
  2. We’re seeing a surprising volume of Global 2000 enterprises – most prominently in the U.S. and Europe – issuing RFPs for complete outsourcing of their data centers to IaaS providers. Of course, this does not mean they’re going to do it, but the aggressiveness with which they’re exploring the option points to a fundamental dissatisfaction with the ability of their trusted partners to deliver them to the cloud.
  3. The next issue to contend with is organizational and cultural readiness within the enterprise IT function. CIOs are aware of this, they’re concerned about it, and they don’t see any reliable best practices to guide them.

It’s clear to us that incumbent vendors have stumbled, leaving the door to the enterprise CIO’s office open. Opportunity awaits providers that can bring ready-to-deploy cloud solutions to the enterprise, backed by vertical market experience and an ability to assist with cultural transformation.

Cloud Computing is not a Technology….But an Idea with Different Meanings | Gaining Altitude in the Cloud

Following are just a few of the many definitions you will find for cloud computing in technology publications, forums, blogs, etc.

“Cloud computing is scaling infrastructure on-demand within minutes or seconds.”

“Cloud computing is the shift from a single-tenant software development model to a multi-tenant, multi-network model.”

“Cloud computing is a broad array of web-based services providing a wide range of functional capabilities on a pay-as-you go basis.”

“Cloud computing is transformation of the physical layer to software based virtualization.”

“Cloud computing allows people to access technology-enabled services over the Internet.”

“Cloud computing is everything as a service. Grid computing, SaaS, PaaS, IaaS, etc.”

One of my favorites is:

“There sure is a lot of confusion when it comes to talking about cloud computing. Yet, it does not need to be so complicated. There really are only three types of services that are cloud based: SaaS, PaaS, and cloud computing platforms.”

Reading all these varying definitions, it would appear that cloud computing is everything but the kitchen sink. But I think it’s important that we view cloud computing as what it really is – an idea or a concept on which technologies are built – just like the Internet, which means different things to different suitors depending on the context in which it is being defined.

Is cloud computing as revolutionary as the Internet? It’s hard to say because it’s still evolving, but in my opinion it holds lots of promise. Just as technologies, such as TCP/IP, BGP, OSPF, MPLS, etc., were built on the idea of the Internet, we will see new technologies emerging with the idea of cloud computing.

The Internet has evolved over the years, and everyone conceptually knows what it is. Yet I would never tell a CIO that he or she should move its business to the Internet.

In that same vein, I think we need to reorient the discussion of cloud computing with CIOs to avoid any more confusion. Talk about the technologies that make cloud computing possible. Talk about multi-tenancy, virtualization, dynamic provisioning, storage technologies, unified fabric, etc., and those are just the beginning.

Start a discussion with a CIO with something like, “Are you ready for IT transformation based on new technologies?” That will get the conversation moving in the right direction, with no confusing or constrictive preconceptions.

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

"*" indicates required fields

Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.