CIO Archives - Page 9 Of 9

Notes from the Interop NYC 2011 Carrier Cloud Forum | Gaining Altitude in the Cloud

October 6, 2011

I had the good fortune to participate in a lively panel discussion at this week’s Interop NYC Carrier Cloud Forum on the topic of Enterprise Expectations for Cloud Services. My co-panelists were Troy Angrignon of Cloudscaling, and Charlie Burns of Saugatuck Technology, and the moderator was Carol Wilson from Light Reading. We covered a pretty broad waterfront, discussing everything from the state of enterprise cloud adoption to enterprise perceptions of telcos/carriers as potential cloud service providers. Some of the more interesting exchanges focused on the following points:

The market noise is getting deafening – one of the biggest emerging obstacles to enterprise cloud adoption is actually the market confusion being created around what cloud is (and isn’t). Every enterprise IT vendor, including hardware, software or services, is pitching a cloud story, whether it actually has capabilities or not. The vendor marketing onslaught is making it extremely difficult for CIOs to separate truth from fiction, and in many cases is slowing down efforts to drive migration. The good news? This is a purely self-inflected wound from a cloud industry perspective, and it should sort itself out over time. The bad news? In the short term, some CIOs are starting to tune out, or at least very skeptical in engaging in yet another vendor discussion around cloud.
It’s all about business agility – on the topic of what ultimately will be the primary driver of enterprise cloud migration, there was some healthy debate around the importance of the cost efficiency value proposition to enterprises. While we all generally agreed that business agility and flexibility was going to be the dominant theme, there were differing perspectives on how important a compelling cost reduction component was going to be. Some think agility alone will be enough, while others (including me) believe that overall cost improvements of 30+ percent will be required to get the attention of enterprise CIOs and to drive wide-scale transformation, particularly in infrastructure.
Cloud security is often more about IT job security – Charlie Burns made the great observation that enterprise concerns around data security often have more to do with IT executives’ anxiety about their future roles, and less to do with actual cloud security. Major cloud service providers have matured quite a bit when it comes to security, and the major enterprise issue now has more to do with transparency than the actual security policies and practices being implemented by providers.
Significant market “white space” still exists – we agreed that enterprises view the network as a critical component of cloud services and that carriers have a strong “card to play” as enterprise cloud emerges. Rather than focusing on horizontal IaaS services, carriers may be better off identifying specific solution areas and use cases where network ownership could create strategic differentiation and advantage – for example, use cases in which high availability or bandwidth are critical. While we all recognized the challenges of carriers entering more horizontal IaaS or PaaS markets from scratch, Troy gave an interesting example of how Cloudscaling has recently helped KT launch cloud IaaS services in Asia that were priced 30 percent lower than Amazon AWS.

Thanks again to Troy, Charlie, and Carol for a great discussion!

Photo Credit: Interop Events

Enterprise Cloud Migration: What if We’re All Wrong? | Gaining Altitude in the Cloud

October 6, 2011

This blog originally appeared on Sandhill.com. Read the original post.

Current conventional wisdom suggests that enterprise adoption of cloud services will accelerate as service providers and offerings become more “mature” and “enterprise friendly.” Adoption will grow and extend beyond initial test/dev website, and backup use cases as enterprises become more comfortable with cloud services. The common belief is that, over time, cloud will in fact become a strategic component of most IT environments but that it will be a decade-long (if not longer) transition. Most also believe that data security, privacy, and audit issues significantly constrain some verticals such as healthcare and financial services from effectively migrating in the near term, particularly to cloud platform and infrastructure services.

But as we discover far too frequently, conventional wisdom often turns out to be quite wrong. While adoption rates for new technologies tend to be overestimated in the short term and underestimated in the long term, it’s an interesting exercise to think about the factors and unexpected developments that could dramatically accelerate enterprise migration to the public cloud.

Let’s consider some of the basic assumptions many in the market make around enterprise and the cloud.

What if enterprises architect around SLAs?

The terms of many current cloud service provider SLAs are effectively meaningless. The burden of proof often falls on the user to fully document service interruptions and outages. Even if proven, compensation for violations often equates to a slap on the wrist at best. But what if enterprises come to the conclusion that SLAs are the wrong way to think about ensuring availability?

The highly visible Amazon outage in its Northern Virginia data center in April resulted in significant interruption and service degradation for users of Quora and FourSquare, while other websites and companies appeared to suffer no impact. The reason? Availability through redundancy. Rather than relying on SLAs, many unaffected companies simply architected redundancy through failover approaches that rolled to other Amazon data centers or service providers. What if enterprises decide that pushing cloud service providers on SLAs is akin to beating a dead horse and, instead, simply decide to take the SLAs as a given and architect around them?

What if enterprises standardize to conform to cloud service provider offerings?

Enterprises historically have been addicted to IT customization – both in what they buy, and how they buy it. Service providers that weren’t willing to modify offerings, pricing, or contract terms for large enterprise buyers were quickly shown the door. Many believe that enterprises will never migrate to cloud services that are essentially “take it or leave it” propositions to the customer.

Yet in many cases, enterprises have driven customization in processes, applications, and services that in fact add little or no business value. Cloud is opening many enterprises’ eyes to the fact that there may in fact be significant value in using cloud services as a lever to drive standardization across the organization, particularly for non-strategic applications and processes.

What if enterprises learn to live with standardization and limited configuration, and dramatically streamline support for non-strategic applications and assets?

What if data security and privacy issues are mitigated?

Data residency, security, and privacy issues are providing significant cloud migration constraints for some global enterprises, particularly those in compliance-sensitive verticals like healthcare and financial services. But what if these barriers were significantly reduced or fully eliminated?

Salesforce.com recently gave a glimpse into one way this may happen through the recent announcement of its Data Residency Option (DRO), which gives customers the ability to keep data on-premise behind their firewall while providing encrypted access to the Salesforce.com cloud application. Some cloud infrastructure service providers, like Savvis and Rackspace, offer dedicated hosting and private/public cloud services in the same data center, enabling hybrid models that support data “ownership” and the benefits of dynamic bursting into public cloud models.

While enterprise customers are seeking more transparency, Amazon has in fact achieved compliance with FISMA, HIPAA and PCI DSS and other standards. Some in the audit community are also discussing the need to reexamine common policies and controls in light of cloud services and architectures. The net net? Data security, privacy, and residency issues may end up being addressed faster than expected. What would happen to adoption if these concerns were taken off the table?

What if pricing for common IaaS services drops by 50 percent?

To date, cloud service providers have very effectively used private cloud economics as a pricing umbrella for their public cloud services. The result? Highly attractive margins for current cloud providers and an onrush of new providers. If microeconomics holds here (and I don’t know why it wouldn’t), pricing for public cloud infrastructure services will begin to drop, and potentially dramatically. Amazon has already established a pattern of driving consistent reductions in pricing for its core cloud services. What will happen when new entrants get aggressive in trying to grab share? The enterprise business case ROI for cloud service migration could be much more compelling in the very near future.

What if mission-critical applications migrate first?

The assumption is that adoption of cloud applications starts at the edge with line-of-business and functional applications and then, over time, migrates to more strategic and mission-critical applications. But what if CIOs determine to go in the opposite direction?

Examples exist of large global enterprises that have migrated to cloud service providers that offer hosted private cloud SAP ERP services in conjunction with community cloud spiking environments. While the common belief is that mission-critical apps will be the final frontier for enterprise cloud migration, what if it turns out to be the first?

All of these scenarios are unlikely to play out as described, but we can be sure that the conventional wisdom will be wrong in a market that is evolving as rapidly as enterprise cloud. Current expectations for the rate and pace of adoption are based largely on past trends in enterprise technology, which is probably a bad assumption in itself. It is increasingly clear that adoption curves for new enterprise technologies are actually accelerating.

I bet my money that the pace of enterprise cloud adoption will surprise many … it will be interesting to see what unexpected scenarios might open up the floodgates.

Live from Bangalore – the NASSCOM IMS Summit, September 21 | Gaining Altitude in the Cloud

September 21, 2011

CIOs, service providers, analysts, and the business media rubbed shoulders on the power-packed first day of the NASSCOM Infrastructure Management Summit (IMS) in Bangalore. This year’s conference has the twin themes of Enterprise Mobility and Cloud Computing, with one day dedicated to each, which seems to lead to a more focused set of discussions than a super broad-based event that leaves you struggling to absorb all of what you just heard.

After the welcome address and keynote speech from Som Mittal, President of NASSCOM, and Pradeep Kar, Chairman of the NASSCOM RIM Forum, we settled in for a series of insightful presentations and panel discussions with global technology leaders.

BMC CEO Robert E. Beauchamp spoke about how the parallel paradigms of cloud, consumerization, and communication (yes, I am in alliteration mode today) require CIOs to think of a unified approach to service management. Of particular interest were Beauchamp’s insights on how different service providers are trying to interpret the cloud differently in an attempt to a) disintermediate the competition; b) avoid being disintermediated; or c) both a and b.

IBM’s interpretation of the cloud: The cloud is all the bundled hardware, software, and middleware we have always sold to you, but now you can buy the whole stack yourself instead of us having to sell it to you.

Google’s counter: Who cares about the hardware anyway? We will buy the boxes from Taiwan – cheaper and better. It’s about what you do with it, and that’s where we come in…again.

VMWare chips in: You already own the hardware – and we will tell you how best to make use of it.

Beauchamp sees more than one way of “belling the cloud cat,” and CIOs need to figure out which direction to take based on their legacy environments, security requirements, and cost imperatives. (“Belling the cloud cat” is my take-off on a fable titled Belling the Cat. It means attempting, or agreeing to perform, an impossibly difficult task.)

As for service providers, he also foresees successful survivors and spectacular failures as the cloud conundrum disrupts traditional business models.

Mark Egan, VMWare CIO spoke about how consumerization and cloud computing are nullifying the efficacy of traditional IT management tools. According to Egan, IT needs to move from a “we’ll place an agent on the device” mode to a “heuristics” mode of analyzing data in order to prevent every CIO’s security nightmare from coming true in a consumerized enterprise.

Next up, Brian Pereira, Editor, InformationWeek, and Chandra Gnanasambandam, Partner, McKinsey, inspired us with real stories about how mobility is transforming the lives of unbanked villagers, saving billions of dollars worth of healthcare expenditure, and improving and optimizing the enterprise supply chain.

Here’s a gem of an insight: Do you know what most urban workers in the Philippines, Vietnam, or India do if they need to transfer money to parents living in rural areas? They buy a train ticket. Then they call Mum and Dad, share the ticket number, and ask them to go to the local railway station, cancel the ticket and collect the refund (minus a small cancellation fee). Wow – that’s what I call consumer-led innovation!

To summarize today’s sessions:

While many discussions highlighted the correctness of what Everest Group analysts are already predicting, it was invaluable to get validation on what we suspected, complete with more live examples.
Cloud and enterprise mobility are here to stay. With the momentum behind them – unlike other hyped up technologies – these are being demanded by the consumer, not dumped on them. And that is always going to mean something.
Service providers and CIOs need to evolve. In themselves, cloud and mobility do not represent a threat. But it’s a lot of change. And the threat lies in how CIOs, and their service providers, gauge the pace of the change, and react to it.

That’s it for now. Tomorrow, I share a panel with CSC and Microland to discuss “Trigger points – Driving traditional datacenter to private cloud.” Right now I’m heading off the gym in an attempt to burn all the calories I’ve put on during the day, thanks to the excellent food. Stay tuned!

How Cloud Computing Is Reshaping The Role Of The CIO | Gaining Altitude in the Cloud

August 4, 2011

This blog was originally posted in Forbes’ CIO Central on August 3 as a contributed piece. Read the original post.

Four disruptive forces are causing executive teams to reconsider how the CIO function will add strategic value in a world where cloud computing, distributed architectures and mobile ubiquity are givens for future competitiveness.

Rising Server-to-Admin Ratios

When 25 physical servers for each IT admin was the norm, CIOs built organizational structures suited to that reality. Hiring, training, reporting lines, compensation, key success factors, annual reviews, career advancement and social norms were all built around that 25:1 ratio. Now, enterprise IT is facing the near-term reality of ratios that are 100:1, 500:1 or even 1,000:1. Google is rumored to be aiming for a 10,000:1 goal.

This massive increase in administrative density signals wholesale changes in the enterprise IT org chart. It changes who is hired, what skills they must have, how they will be trained and managed, evaluated and compensated, how they interact with and support business units, and what their long-term career paths will look like.

IT Becomes a Variable Cost

In the early 90s, when the CIO title was gaining popularity, the chief driver for bringing IT into the executive suite was the massive capital allocations required to give organizations a competitive advantage through rapidly changing technologies. These technologies demanded larger and larger percentages of the corporate budget, so a direct line to the president or CEO was paramount in justifying these spends.

Cloud and next-generation IT strategies dramatically change this. What was once CAPEX increasingly becomes OPEX, and long-term risk falls accordingly. So, where’s the strategic value in having IT in the executive suite? Arguably, it’s more important than ever.

The increase in business agility and responsiveness that cloud computing makes possible shifts the strategic value of the CIO from a technical role to a business role. CIOs must understand the functions they support, so they can help these functions quickly put the infrastructure and applications in place to support quickly moving new ideas to market, testing them, and iterating them to general release. Competitors will be doing this (and already are, in several industries).

End-User Auto Provisioning

End users are gaining a level of power that makes past demands for integration of Blackberries and iPhones seem whimsical by comparison. CIOs accustomed to pushing back against new ideas based on security threats and support burdens will increasingly find themselves cut out of the deal by end users who can go online and provision SaaS (software as a service) and IaaS (infrastructure as a service) with a credit card.

As Vivek Kundra, until recently the White House CIO, has said, “the more a CIO says ‘no,’ the less secure his organization becomes.”

Infrastructure Becomes Commodity

New — and largely uninvented — processes are required to deal with all of this change. Governance, compliance and security are all matters that 20 years of client/server policy is ill equipped to deal with. On top of this, CIOs must develop policies for the rapid growth of collaboration technologies (and, yes, social media) that employees will increasingly require in order to do the job the CEO is asking of them.

These shifts signal the need for the new CIO to bring an entirely new set of skills to the game. Yes, the new CIO’s job will continue to require an understanding of infrastructure and architecture, but a knowledge of how to turn the dials and knobs will be far less important tomorrow than it was yesterday. Tomorrow’s winning CIO will bring an MBA’s understanding of finance, marketing, operations, HR and the other functions. CIOs will understand how to say “yes” to new services that make their companies competitive, while mitigating risks and allowing for small-scale failures in the pursuit of long-term success.

Captivating Clarifications: Don’t Make the Wrong Comparison | Sherpas in Blue Shirts

July 11, 2011

This is the second in a series of thought leadership articles by Eric Simonson on the continuing role of captives in the global services landscape.

Building upon a May blog post, we recently published a report on the health of the offshore captive model entitled “Captives are Staying Alive.” The report was in partnership with Tesco HSC, a Bangalore-based captive with more than 5,000 employees providing IT, business, and finance services to the rest of the global retailer’s organization. CIO magazine picked up on the report and asked some additional questions for its coverage of our analysis.

In the course of providing additional input to Stephanie Overby (the author of the magazine article), I realized that one critical question was not highlighted strongly enough in our analysis: can you compare the captive sourcing model with the third-party outsourcing model?

On first glance, the obvious answer is “yes.” And indeed, many of us have spent time picking apart the ways in which to compare the costs of both models, plus the merits of outsourcing lowering time to implement and reducing up-front investments (see our deepest, off-the-shelf assessment from almost four years ago).

Any effort to develop a global services strategy that includes a meaningful thought process on the optimal mix of sourcing models will have to sort through how the various strengths and limitations of both models align with a particular organization’s needs and objectives.

But is that really the whole story? Is a one-to-one comparison of models going to provide the right insights to inform a strategy?

First, let me caution that captives require a commitment to scale in order to be successful. Many of the reported failures of the offshore model (bringing jobs back onshore because offshore is too expensive or complicated) are actually caused by lack of scale and associated commitment to manage these issues properly to reduce or eliminate their impact. In others words, do not use the captive model on a whim – only do so if you are deeply committed to ensuring it attains sufficient scale in total headcount and in size and quality of the leadership team. It requires both enough people (say 500-750 minimum for most types of work delivered from “farshore” locations) and enough leaders.

Scale issues aside, there are two fundamental differences in the captive model that need to be considered to understand its potential role in a global services portfolio:

Additional scope of services
Ability to re-leverage human capital investments

Both of these factors are often overlooked because they are second-order implications that derive from successfully building a captive delivery model; as a result, they are not commonly considered a first-order benefit in the target business case.

Additional scope of services

In an outsourced model, scope is primarily defined in terms of process responsibility and number of FTEs completing various tasks. This is also true in the captive model, but captives can further act like offshore corporate centers and take on work that: 1) is not easy to define; and 2) stretches across the front, middle, and back offices. This opens up the ability to deliver from offshore almost any work that doesn’t require close proximity to the end customer. It also helps explain why captives tend to outgrow their initial real estate plans quickly, and with significant “other bucket” work.

Examples of advanced roles I have seen in captives include product management, pricing strategy, corporate communications, talent management strategy, operations research and optimization, and IT standards and security architecture. While these are not normally outsource-able activities, the captive model provides the opportunity to deliver more scope from offshore – it is simply about adding offshore employees in sales, marketing, or other functions to the global team, not signing SOWs with negotiated pricing and service levels.

In short, a captive enables the option to add lots of additional activities that are not initially planned and that do not lend themselves to the outsourcing model. For organizations seeking to manage themselves in a truly global manner, this is an important consideration and can provide value in a wide range of ways.

Ability to re-leverage human capital investments

The process of fully bringing an offshore resource up to speed to complete a job is critical, and takes longer than most like to admit. In an outsourced model, once the time has been invested to make an individual fully functional in understanding all the nuances of a system or the business’ needs, he or she may be promoted within the client service account, or may leave the account to work for another client. (And organizations do benefit by receiving talent from other accounts as the associates do possess certain forms of expertise, although they lack organizational context, which takes time to cultivate.)

In the captive model, fully functional associates remain in the organization and advance to related roles, or may be moved to other locations to cross-pollinate or further deepen their skills. This ability to retain and enhance the understanding of organizational context is an important factor in capturing value from human capital investments in a captive model.

If you’re creating a global talent model, resources gaining experience with your enterprise in an offshore location can prove to be very valuable for the rest of your organization – you have greater ability to predict success in new roles, they inherently understand your organization from multiple angles, etc. Net-net, specific skills can be developed in both the outsourced and captive models, but deep organizational context is best cultivated in the captive model.

Large organizations must continue to optimize their global services strategies, and the external versus internal sourcing mix debate will continue to be emotional. Emotion is fine; but just be sure you are framing the right comparisons, and don’t forget the real, yet hard to value and compare in a business case, second-order benefits of the captive model.

What unexpected benefits have you seen from internal service delivery in captives? Can those benefits be valued?

CIO: The Captive Model for Offshoring Is Thriving, Says Research Firm

Report: Captives are Staying Alive

Report: Comparison of Outsourced and Captive Solutions for Capturing Value from Offshoring

Cloud’s Impact on the CIO | Gaining Altitude in the Cloud

May 13, 2011

Disclosure: I’ve never been a CIO. However, I’ve worked with and advised them on many engagements, so I have an understanding of how they think and the challenges they face in today’s business environment.

Much has already been written about the technology revolution emerging from cloud-delivered services, I wanted to turn the tables slightly and ponder how these technologies influence the role and skills of IT management and the office of the CIO.

Macro Trends CIOs Face

1: Strategy Replacing Operations
CIOs are facing tremendous pressure to think strategically about how IT can better align itself with business needs. An operations-focused “we’re just here keeping the lights on” approach to IT management is, at best, the minimum expectations of the job. As organizations demand more technological enablement in all parts of the business model, CIOs must fully integrate into strategy setting and change enablement within their company.

2: Era of Big Data
A study conducted by the University of California, San Diego, estimated that the volume of enterprise data produced per year (2008) topped out at 9.57 zettabytes (1 zettabyte =1 million petabytes), which translates to an average of 63.4 terabytes per company per year or 12 gigabytes per worker per day.

Although it’s a gross oversimplification, CIOs are continually asked to do more with less. They need to support their company’s desire to take advantage of big data to make better business decisions and more data-rich transactions, yet simultaneously are burdened with the liabilities of processing capacity limitations, storing and retrieving requirements, and data protection, all while capital budgets are under tighter scrutiny.

3: Speed and Agility
Almost every new technology comes attached with a promise of saving time. But to the adopter, the outcome isn’t more free time; rather, it’s a shortened expectation of the time it takes to complete a workload. In the enterprise, this is manifested in the demand of increasingly greater organizational agility and nimbleness. And as a CIO’s performance is measured by the rate at which he or she pushes initiatives that enable faster achievement the organization’s goals, one perceived as creating more bottlenecks than accelerators will not last long in the role.

Cloud to the Rescue

CIOs are challenged with consistently meeting (and hopefully exceeding) their stakeholders needs, despite the mounting pressure caused by these macro trends. Thus, even in cloud technology’s relative infancy, CIOs need to at least consider evaluating cloud solutions because of their ability to address common pain points.

Cloud technologies have the potential to help CIOs focus more on the business and less on the underlying infrastructure. While traditional ITO promised this, anecdotal and empirical evidence suggests that the reality was more often than not “your mess for less.” The subtext here is CIOs are spending too much time managing their outsourcing providers to solve technological, rather than business, problems. But fundamental to cloud architecture design is delivery of a service to the end user, which ultimately will disaggregate the supporting infrastructure from the service, and enable the CIO to focus more on solving business problems.

Cloud technologies can also address the do more with less issue. IT departments are starting to realize that the traditional one application per server approach to running enterprise infrastructure is unsustainable in a big data world. CIOs can yield benefits from cloud (and virtualization) technologies from two major drivers:

1) Increasing utilization per server – meaning either requiring fewer servers to do the same data processing volume, or squeezing more data processing out of the same volume of servers. Either way, cloud delivers more for less.

2) Thinking strategically about load balancing – an enterprise’s requirement on its IT department is neither predictable nor equal in terms of business priorities. But cloud technology enables evaluation of the trade-offs presented by flexible, on-demand data management.

Cloud technology is already having a seismic effect on expectations around business agility. For example, when the time required to procure a server goes from weeks to minutes, there is a quantifiable shift in productivity gains. And as cloud technology evolves, these gains will be further amplified.

How does the CIO’s role change?

So what does this all mean for next generation CIOs? In the short term, they will have to become informed, poke at the promises coming from suppliers, and manage the cloud hype curve on behalf of their organization.

Beyond the short term, they will need to address and manage – via a robust and sensitive change management program –the impact of the cloud’s technological transformation on a much broader set of stakeholders, including the internal IT team.

Another subtle but significant shift will be from the role of service manager to one akin to an air traffic controller for workloads. For example, with a workload that requires 240 CPU hours and you have procured a cloud that gives you 10 virtual machines, a CIO can choose to turn on one virtual machine and leave the nine others to run other workloads, but the process will take 10 days. Or, the CIO can turn on 10 virtual machines to process the same workload in one day, but the organization will be out of capacity for that day. Managing that trade off will be a new to many CIOs, and a regular situation for all.

What other concerns should CIOs have, and how should they prepare themselves?

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For information on what CIOs want from the cloud: http://cloud.savvis.com/information-center and download the CIO LinkedIn Market Pulse Survey

For how roles are changing because of the cloud: http://www.pcworld.com/businesscenter/article/227238/panel_the_cloud_requires_fresh_it_skills.html

For an introduction to the economics of cloud enterprise computing that CIOs should consider, register and attend the May 24 Everest Group webinar on the topic.

Cloud Services and CFOs’ Triple Hat Role | Gaining Altitude in the Cloud

March 25, 2011

We had the pleasure this week of participating in a CFO Forum hosted by TechAmerica, along with representatives from Microsoft, Softlayer and SOURCE, on the topic of “Navigating the Cloud.” The overall discussion focused on the benefits of the rapidly expanding universe of cloud services, along with key risk, compliance and security considerations for CFOs. During the panel discussion and audience Q&A, it became apparent that CFOs wear three different hats when thinking about the cloud:

CFO as Cloud User – like everyone else, CFOs are potential users of cloud services, primarily via ERP and F&A-related SaaS offerings. Discussion in this area focused on several topics:

Cloud ERP and accounting solutions from vendors like NetSuite and Intacct have been traditionally focused almost exclusively on SMBs. Though still early, enterprise options are emerging from cloud-focused vendors such as Workday. CFOs need to keep on top of the rapidly evolving set of alternatives that exist for the F&A function.
New cloud deployment models are emerging for ERP, such as the ability to run SAP on virtualized private clouds, and availability of select modules through public multi-tenant models. CFOs need to realize that it’s not just SaaS or nothing – new models are being introduced that capture virtualization and private cloud benefits without the perceived risks of moving sensitive financial data to the public cloud.

CFO as Cloud Buyer – the second major relationship CFOs have with the cloud is as a buyer, given the ownership they have over corporate and IT budgeting processes and spend. Points mentioned during the Forum included:

CFOs should give strong consideration to “Cloud First” policies such as one recently announced by Vivek Kundra, CIO of the United States, who is seeking to move 25 percent of the Federal Government’s IT budget to cloud services. The policy doesn’t say that cloud should be adopted whenever available, but rather that it be strongly considered “whenever a secure, reliable, cost-effective cloud option exists.” Sounds like a smart policy for the private sector as well.
CFOs should also work with CIOs and business owners to ensure that a comprehensive assessment has been made of the potential value of migrating to cloud services at the SaaS, IaaS (infrastructure-as-a-service) and PaaS (platform-as-a-service)levels, and that an overall transformation plan exists. Many experiments currently exist, but there is little understanding of where adoption goes after that.

CFO as Fiduciary – the panel also explored the impact of the cloud on CFOs fiduciary responsibilities for the organization.

Duke Skarda, CTO of Softlayer, described the four categories of risk in the cloud that CFOs need to evaluate: compliance, governance, security, and disaster recovery. As with cloud services overall, there’s no one right answer – organizations need to understand their risk posture, requirements, vendor capabilities, and supporting SLAs and contractual agreements. It was also noted that, in some cases, cloud services can actually serve to decrease organizational risk profiles.
CFOs need to understand any potential impacts of applicable compliance or data privacy regulations (especially in Europe) on where and how they can leverage cloud services.
IT policies and controls themselves don’t necessarily change with cloud services, but how they are implemented likely will. CFOs need to ensure IT has taken the right steps to implement appropriate governance and control of cloud services.

Overall, it was a great discussion, with interesting questions and comments from a very engaged CFO audience.

Welcome to “Gaining Altitude in the Cloud” — Another Blog on the Cloud? | Gaining Altitude in the Cloud

March 21, 2011

Does the world really need another blog about the cloud?

Here at Everest Group we believe the answer is a resounding yes.

The “signal to noise” ratio around the cloud is reaching a fever pitch. In fact, the hype alone has driven most enterprises to dip their toe in the water with initial pilots and “experiments.” While moving dev / test environments to the cloud is a good thing, we believe most enterprises should be moving faster and smarter.

What’s missing in the current market conversation about the cloud?

Real, data-driven perspectives on the true ROI and business impact enterprises can expect to see, and in many cases are seeing from the cloud. In what scenarios do IAAS (Infrastructure-as-a-Service) or StaaS (Storage-as-a-Service) offerings make sense in a given enterprise, and from which vendor? Can IAAS and cloud services make sense today even if data center assets are fully depreciated? Can 90 percent of the economic benefits of the cloud be captured via private cloud and virtualization? Or is there more on the table to be gained? While opinions on these topics abound, fact-based analysis is hard to find. And we think the answers might surprise you.

Our goal with “Gaining Altitude in the Cloud” is to create a forum to help enterprise decision-makers, cloud service providers and technology infrastructure vendors better understand the underlying customer economics driving cloud adoption dynamics. Our blog will take a comprehensive view and look across enterprise-class cloud services and major vendors in the areas of:

BPaaS (Business Process as a Service)
SaaS (Software as a Service)
PaaS (Platform as a Service)
IaaS (Infrastructure as a Service)
StaaS (Storage as a Service)

We’ll be featuring best practices, case studies and insights and analysis on how cloud and other next generation IT technologies and services are driving fundamental changes in the economics of IT. By providing customer-centric, vendor-neutral analysis of cloud economics, we hope to inject a much better fact base into the market conversation.

We’re looking forward to the discussion – we hope you are as well!

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

Tag: CIO

Captivating Clarifications: Don’t Make the Wrong Comparison | Sherpas in Blue Shirts

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