With the relative ease of procuring and provisioning cloud services, more activity is appearing in institutions outside of IT. Individual departments are jumping in and subscribing to new services without IT involvement. This behavior presents a number of challenges from security to integration, so several IT shops are attempting to reduce the chaos and introduce order. There are some fantastic sources of information and best practices out there for anyone working through cloud options, and in particular trying to organize the fragments of adoption. I’ve always liked the 10 Laws of Cloudonomics, a posting way back in September of 2008 by Joe Weinman, but his points are just as true today as they were back in 2008, and provide key economic facts about adoption that can shed light on what might be happening throughout the institution where adoption may be occurring potentially without all the facts before hand. There’s also a new book out by authors Pamela K. Isom and Kerrie Holley entitled Is Your Company Ready for Cloud?, who do a good job detailing cloud solutions with best fits within organizations. I’ll share some thoughts from these and other points in this post.
First, in the 10 Laws of Cloudonomics, key insights are highlighted relative to understanding costs and usage of cloud options. For the full post, go here, but I’ll summarize the laws below:
Law #1: Utility services cost less even though they cost more. Utilities will always cost more when they are used, however they cost nothing when they are not. Utilization being the key, so if an institution utilize anything at or near 100%, you’ll be paying more in the utility paradigm, however for computing (which most consume far less than 100%) the utility scenario can save money as compared to owning your own computing.
Law #2: On-demand trumps forecasting. Forecasting is often wrong, due to unpredictable demand spikes, however the cloud paradigm allows for on-demand metering.
Law #3: The peak of the sum is never greater than the sum of the peaks. Enterprises deploy capacity to handle their peak demands, where the total capacity deployed is the sum of these individual peaks. In the cloud paradigm however, resources can be reallocated across peak periods and applications, so less capacity is deployed.
Law #4: Aggregate demand is smoother than individual. Aggregating demand from multiple customers tends to smooth out variation. Therefore, Clouds get higher utilization, enabling better economics.
Law #5: Average unit costs are reduced. Average costs are reduced by distributing fixed costs over more units of output.
Law #6: Superiority in numbers. Cloud service providers generally have the scale to deal with difficult and expensive risks, such as security vulnerabilities and availability for service continuity.
Law #7: Space-time is a continuum. Organizations derive competitive advantage from responding to changing business conditions faster than the competition. With Cloud scalability, for the same cost, an institution can accelerate its information processing and decision-making.
Law #8: Dispersion is the inverse square of latency. Reduced latency is increasingly essential to modern applications, and most cloud services providers are able to provide more nodes, and hence reduced latency, than an institution would want to deploy.
Law #9: Don’t put all your eggs in one basket. The reliability of a system increases with the addition of redundant, geographically dispersed components such as data centers and storage arrays, which most cloud service providers have.
Law #10: An object at rest tends to stay at rest. A data center is a very large object, especially in Higher Education, where data centers tend to remain in certain locations on campus for a long time. A cloud service provider can locate greenfield sites optimally and without such limits of legacy logic.
The Cloudonomics laws are great fundamentals; however a successful cloud project requires a vision and solid roadmap. Every cloud project needs a good business case behind it. And a new book by Pamela Isom and Kerrie Holley outlines the business side of cloud and emphasizes point that can help institutions organize the chaos and bring order and control back to IT. The book is called, Is Your Company Ready for Cloud? Choosing the Best Cloud Adoption Strategy for Your Business.
The following are the 10 key points offered in the book that provide worthwhile guidelines for anyone looking to justify and organize cloud efforts:
Point #1: Create your cloud vision. Such as “opportunities for differentiation, market share growth, increased revenue, capital preservation, transformation, or improved efficiency.”
Point #2: Identify cloud use cases. Including business process improvement, business intelligence, big data, or as a “model-driven development platform using cloud for middleware, infrastructure and platform.”
Point #3: Discuss how the project will drive business innovation. “Your cloud adoption strategy should fuel innovation by providing techniques and patterns that equip your company to anticipate business challenges, address complexities, and accelerate problem resolution.”
Point #4: Define business outcomes and projected ROI. Like increasing revenue, return on investment may include factors such as IT queue reduction, capital preservation, time to value improvement, and innovation.
Point #5: Determine opportunities for cloud as a “fifth utility.” Utility computing, like electricity and water service, is all about pay-per-use subscription-style services and flexible pricing structures. “A difference in strategy, however, is that with cloud, you are not limited to IT-focused outsourcing, as is the case with utility computing. Instead, your emphasis is to optimize your business processes.”
Point #6: Treat cloud as a “supply chain.” A cloud adoption strategy “should be viewed as a supply chain that delivers computing power, BPM platforms, analytical platforms, development platforms, services and applications such as CRM or ERP, and other services. Like all supply chains, it requires governance to address privacy and security, and must be actively managed and optimized for all stakeholders.”
Point #7: Determine and publish stakeholder involvement. “The bottom line is your cloud strategy should not be developed in a silo, given that the information and insights that you need to establish a solid strategy are dispersed throughout your organization.”
Point #8: Develop metrics. “Each metric should be traceable to your business goals and expected benefits so that you are effectively measuring the results, impacts, and business outcomes from cloud adoption.”
Point #9: Define governance. “Cloud silos or cloud clutter where the goals for cloud computing fragment or diffuse intent is a real possibility with any cloud adoption. Implementing a governance strategy provides consistency in data usage, integration, and policy management.”
Point #10: Develop roadmaps. “The roadmap reflects immediate to three years of activity and includes targeted rates of adoption as well as metrics.”
This approach is fundamentally different from circumstances where institutions have to adapt their behavior or individual situation to the solution that others recommend. “When you can think about [Enterprise Architecture] and cloud in the same breath with coordinated processes and resources, then you have an [Enterprise Architecture] that can execute at the speed of business.”
Some key drivers in cloud adoption identified in the book are:
- Ability to consolidate information across disparate systems with complete transparency to the user
- Ability to modernize business systems at a low cost and fast speed of deployment
- Ability to move to a remote desktop services model using the cloud
- Need to support high storage capacity requirements
- Rapid deployment emerges as a consistent business value theme
- Ability to provide IT using self-service capabilities
- Need to support mobile services
- Need to support internal and external collaboration for employees and partners
Keeping in mind these points can help drive consolidated and organized adoption, coordinated between departments, hopefully bringing order to some of the disparate and chaotic behavior found in some institutions where cloud adoption is happening individually and outside of IT oversight.