Tag: cloud computing

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.

The Best of IaaS is Still in the Making | Gaining Altitude in the Cloud

Most people out there consider IaaS the “dog” of all the cloud computing layers, given its low margins, tough competition and gradual commoditization. However, one thing that is going well for IaaS is that its position as the building block of cloud computing. That makes IaaS the starting point for large enterprise’s consideration of transition to the cloud.

Now, IaaS is turning out to be a new turf war between the cable and network providers. Verizon purchased Terremark, CenturyLink picked up Savvis, Time Warner acquired Navisite, and  AT&T might be a little anxious to go shopping as well with all this commotion. That is signaling consolidation in the cloud provider space. It will be interesting to see how the cloud pioneers and startups  can continue to remain independent in the battle between the behemoths for capturing the attention of large buyers for cloud deployments. As the consolidation progresses, PaaS and SaaS providers like Google and Salesforce.com will need to find partners among the cable and network providers to be part of the discussion with the clients.

We are moving towards an oligopolistic industry in which the providers must better understand and respond to the needs of buyers in their respective industry verticals like healthcare, education etc.,  for prospects to warm up to the idea of leveraging the cloud. (For more insights, please read our recent blog, “Talking the Talk, but not Walking the Walk, in the Cloud”.) Network providers and IT service providers are going to have to urgently fill this vacuum. With many small players trying to race to the top by claiming to be everything to everyone, it’s difficult to meet the custom needs of a vertical business or entity.

What does all this mean for legacy IT service providers like HP, IBM, Cisco, and EMC? They must be happy, as they are receiving some relief around the price wars and commoditization of hardware infrastructure like servers and storage, as the telecom and cable operators will go to a familiar source for their hardware needs.

IaaS providers must be enjoying the attention they are receiving all over again, as PaaS and SaaS providers have had their fair share of the limelight.

What do you think will happen in the IaaS space?

Talking the Talk, but not Walking the Walk, in the Cloud | Gaining Altitude in the Cloud

Over the last two months, we have visited with more than 50 Fortune 500 firms to discuss their thoughts about adopting and harnessing the disruptive technologies and services that are driving the next generation of IT. Inevitably, our conversations focused on the cloud and its potential impact on the price point and flexibility of IT delivered and consumed at the enterprise level.

But most of the firms we met with expressed disappointment in the support they are currently receiving from their incumbent hardware and software providers. We heard time and again that the providers are eager to engage in conversations (often confusing and contradictory) about the power and relevance of the cloud, and each pointed to the groundbreaking products and services they have, or soon will. However, when it came to presenting an actionable roadmap to for planning and/or actually implementing production-ready solutions, the providers launched a major back-peddle. They suggested that despite the hype, the client was already close to best practice, as it was well down the road to virtualization, or that the offerings were not appropriate for firms of its size or industry. If pushed further, the providers stated that the solutions under consideration were not practical because of security and or regulatory issues.

What’s going on?

It is clear that most large enterprises are giving serious thought to actively adopting cloud-based solutions for at least some of their workloads. And fearing they will be left in the dust by the new breed of cloud-specific competitors – including Rackspace, Amazon, and Savas – the incumbents feel they must, at a minimum, engage in conversations with their clients about cloud. When pushed to deliver a public/private cloud solution, the major hardware and software providers are investing considerable time and money on solutions with unacceptable quality, performance and/or resilience. They also lack the internal expertise to implement the new solutions. Perhaps most troubling for the incumbents is that they face a huge conflict of interest as the next generation of IT solutions replaces the existing infrastructure at a fraction of the cost and, hence, dramatically cuts into the providers’ revenue.

In short, their strategy is to obfuscate, delay and criticize. And while enterprises are looking to their existing providers for leadership, and would much prefer to have one familiar throat to choke, the frustrating and confusing conversations they are having with their current incumbents is driving them further into the waiting arms of the challengers that have, solid offerings, real capabilities, and strong value propositions.

Financing Your Way to the Cloud | Gaining Altitude in the Cloud

Just as the dot-com era required an overhaul of financial and funding models, today’s clouding computing revolution is also challenging the status quo of traditional financing. Indeed, with so many uncertainties about the cloud looming in the minds of potential buyers, coupled with challenges in obtaining credit, the technology vendors in all cloud computing areas (IaaS, PaaS, and SaaS) are quickly realizing that to facilitate the transition to the cloud they need to step up to the plate and streamline and overhaul their financial arms. And this means establishment of capital entities, e.g., Cisco Capital, HP Financial Services, etc.

Ultimately, we’ll see levels of standardization among cloud-focused funding models. But until then, technology providers are developing and offering customized financing structures for key customers to enable them to meet their Capex budget requirements. The offerings include on pay-as-you-grow or pay-as-you-go bases for server/hour and RAM/hour computing.

The upside of these new financing models is initially for buyers, as they make it more palatable for CIOs, who would otherwise be thinking and sitting on the fence, to transition faster to the cloud. In the short term, however, they are having an adverse affect on cloud technology vendors’ financial statements, as they cannot immediately recognize the revenue for hardware and software sales. And this will make it appear that margins and revenues are distressed. But as the financial analysts at investment banks gain greater understanding of the nature of the cloud computing business, they will gradually rewrite the rules on how they financially evaluate cloud computing providers.

But we all need to hope that the financial analysis done for the cloud computing business is done right. Remember Kozmo.com? It was a company with a doomed business plan, but it was still able to attract millions of dollars in capital. We don’t want to go back to a time where capital is committed based on the promise of the business but which makes little financial sense.

In our next blog, we will talk about the operational and financial challenges technology vendors face in rolling out these new business models.

ITO, Cloud and Next Generation Outsourcing – How Do You Get There? | Webinar

Thursday, October 20, 2011 | 11 a.m. CDT

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New cloud and next generation IT models are starting to deliver global enterprises disruptive improvements in cost and performance. Unfortunately, many organizations that have outsourced parts of their IT environment have been unable to capture these benefits. And perceived contractual constraints have prevented many of these enterprises with ITO agreements from aggressively exploring the benefits of IaaS, PaaS and SaaS models.

However, forward-thinking enterprises are starting to find that traditional outsourcing agreements in fact do not significantly constrain organizations’ ability to develop and pursue cloud strategies. Innovative enterprises with ITO solutions in place are still developing new approaches for capturing the benefits of cloud and rethinking their approach to outsourcing and IT providers.

In this webinar, learn:

  • How next generation IT models can reduce infrastructure costs by 30+% over ITO solutions
  • How cloud solutions can be leveraged even when an ITO solution is in place
  • The myths around ITO contractual constraints to cloud migration
  • Why your ITO vendor may not be incented to migrate you to the cloud
  • New approaches for IT vendor governance and management in cloud environments
  • How to develop a migration strategy and roadmap in preparation for ITO end-of-term

Everest Group’s Next Generation IT Practice is focused on helping leading enterprises navigate the opportunities and challenges associated with transformation and cloud migration. Based on extensive work with leading enterprises and cloud service providers, Everest Group has developed the first comprehensive set of analytics, frameworks and fact-based economic models for enterprise IT transformation and cloud migration.

Who should attend?

  • Enterprise IT executives and senior professionals with ITO agreements seeking to understand how they can begin capturing the benefits of cloud.
  • CFOs and procurement executives looking to understand the potential financial benefits of cloud migration, and implications for managing their IT vendors.
  • Enterprises “experimenting” with cloud services who are seeking to take the next step and develop a broader perspective on the transformational potential of cloud for their businesses.
Presenter:
  • Scott Bils, Partner and Next Generation IT Practice Leader, Everest Group
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Notes from the Interop NYC 2011 Carrier Cloud Forum | Gaining Altitude in the Cloud

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

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.

The Consumerization of IT may be a Bigger Problem for Business than IT | Gaining Altitude in the Cloud

King Cnut (Cnut the Great) of England, Denmark, Norway, and parts of Sweden once famously instructed the tide to refrain from rising, only to hours later find its disdain for his royal decree. Today’s CIOs find themselves faced with similar limits on their power and influence as Androids, iPhones, and iPads flood the workplace. The power of the purse cannot control these new and disruptive technologies as they are funded directly by employees. Corporate policies and other traditional control mechanisms are also being eroded or washed away in the rapid adoption of these easy to install and attach devices. Even more worrying is the ocean of ready-to-use, high-power business applications that are only one click away from installation. As enterprises find themselves waist-deep in this new reality, they are forced to accommodate these new technologies, user expectations, and business certainties.

Without belittling the significant technological and security questions this new reality poses, it is the challenge to the way enterprises do business that may have the most far-reaching implications. One of the key challenges these technologies and capabilities present is the effect they have at the interaction points between parties. Employees expect to have instant access to HR support systems and be able to conduct their interactions through mobile-enabled self-service applications. Customers have instant price look-up and competitive information at the point of purchase. Patients have their medical records on their iPhones and expect healthcare providers to be able to utilize this information yet conform with the right to privacy. Payment systems are only a Bluetooth click or barcode swipe away. The point is this: even small changes to how parties interact can create significant and sometimes surprising impacts on a firm’s structure, controls and completive models, sales channels, and governance. When these changes are imposed by the broad scale adoption of new technologies – as is the case with mobility – the question is not how to control or gate them but rather what to do now that they are here.

To further explore the extent of this impact, let’s use a major healthcare institution as an example. Healthcare is covered by strict laws that regulate how key information and data is captured, shared, and utilized. This web of regulation has contributed to the slow adoption of new information technologies across the healthcare industry, and resulted in most healthcare institutions adopting closed networks with tight controls on new devices and applications. The existing structures and polices are under attack. Patients arrive with instant access to their own data, stored on their own devices or resident in a host of cloud-based vehicles, with the reasonable expectation that clinicians utilize this information to avoid duplicate tests and take advantage of patient history. At the same time, clinicians face uncertainty on efficacy of the data, yet encounter far more educated and interactive patients. Patients are able to receive second opinions from a variety of qualified and unqualified sources in real time. When combined with changes in how clinicians (who are often independent of the provider networks) expect to interact with healthcare institutions and further complicated by payment systems that are shifting to real-time mobile-enabled devices – it is easy to see that mobility will and is changing the way medicine is and will be practiced across the entire supply chain. The organizational and business model implications look to be huge and all because nearly everyone today has the power of the Internet in their pockets.

Live from Bangalore – the NASSCOM IMS Summit, September 22 | Gaining Altitude in the Cloud

Hello everybody! I’m back, reporting from day two of the NASCOMM IMS Summit in Bangalore. Today’s conference was focused on discussing alternative models of cloud computing and what works best for who.

First, Adam Spinsky, CMO, Amazon Web Services (AWS), told us his view of what happening out there in the cloudosphere. An interesting factoid to chew on – as of today, AWS is adding as much data center capacity every day as the entire Amazon company had in its fifth year of operation when it was a US$2.7 billion enterprise.

Even more compelling proof of the fact that the cloud revolution is really happening were Spinsky’s examples of the types of workloads AWS supports – SAP, entire e-commerce portals that are the revenue engines of companies, and disaster recovery infrastructure…all are hosted on the cloud. Fairly mission critical stuff, rather than “ohh, it’s only email that’s going to go on the cloud,” you must admit.

Next up, Martin Bishop of Telstra spoke of the customer’s dilemma in choosing the right cloud model. This segued nicely into the panel discussion, “Trigger Points – Driving Traditional Data Center to the Private Cloud,” of which I was a part.

M.S. Rangaraj of Microland chaired the panel and set the context by talking about the key considerations of cloud implementation. According to Rangaraj, the key issues are orchestration and management, as the IT environment morphs into new levels of complexity with multiple providers delivering services across a multitude of devices.

I spoke of the business case for a hybrid cloud model. While private cloud is good, and current levels of public cloud pricing provide slightly better business value, a combination of the two enables clients to reduce the huge wastage of unused data center resources they now have to live with. Today, infrastructure is sized to peak capacity, which is utilized once in a blue moon. The dynamic hybrid model enables companies to downsize capacity to the average baseline. Associated savings in energy, personnel, and maintenance imply dramatic cost advantages over both pure public or private models.

Kothandaraman Karunagaran from CSC took up the thread and spoke of the role of service providers in this new paradigm. While outsourcing may not “die” as a result of the cloud movement, it’s jolly well going to be transformed. Service providers will need to spend far more time in managing, planning, and analyzing usage and consumption data, and less time on monitoring and maintenance. In other words, service providers’ roles will evolve from reactive to proactive management.

Some of my key takeaways from the conference include:

  • Everybody agrees that there is no silver bullet model, meaning that there are no clear winners in a cloud environment, and the hybrid model will keep getting traction as the world becomes increasingly, well, hybrid.
  • Until not long ago, we spoke of the need to simplify IT. Well, the only part of IT that’s going to get simplified is the consumption bit. If you are a CIO reading this, we’ve got bad news for you. Management of IT is going to get more, not less, complicated. Multiple service providers, networks and devices, reduced cycle time, and self-provisioning means that management just got a whole lot tougher.
  • Service providers need to rapidly engage with this new reality and figure out business models can adapt to it. The unit of value is no longer the FTE. It’s what the FTE achieves for the client, or even more complicated, what the consumer actually ends up using. We live in interesting times, and they will only become more interesting as time goes on.

That’s it from my end. I enjoyed the conference, look forward to more illuminating discussions next year, and, hopefully, to seeing you there!

If you weren’t able to attend this year’s conference – or even if you were – you can download all speaker presentations at: http://www.nasscom.in/nasscom/templates/flagshipEvents.aspx?id=61241

 

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