Moving to the cloud. It’s what everyone seems to be talking about lately. It’s what everyone seems to be recommending. But, it’s not as easy as it sounds. Before migrating to a cloud environment, there are several facets you need to think through.
Smart Business learned more from David Feinglass, director of Solutions Engineering at Latisys, about the key components that make up a smart cloud migration plan.
What does a company need to think through before migrating to a cloud service provider?
Cloud migration is a big step for any organization and, potentially, a risky decision if not planned for properly. There are a few questions that need to be answered before you even think about migration. For instance, why does your business require elastic, on-demand computing? Are you making the move for server virtualization, consolidation, disaster recovery, storage, cost savings, capital expense reduction, etc.? This question rarely applies to an enterprise’s IT infrastructure as a whole — it is more often something that needs to be aligned for each application.
If cloud migration does make sense for an organization, what are the first steps?
Before taking on a migration to a cloud service provider, I always recommend organizations think through three main objectives.
1) Understand what type of migration makes the most sense for your organization:
Staged migration — This requires moving single departments and services over, one at a time, to keep day-to-day business as close to as-is as possible during the migration.
Forklift migration — This requires temporarily cutting out service during the migration process. It’s the quickest and least expensive option, but the scariest for most companies to take on because of that period of downtime.
Phased migration — This requires simultaneously running redundant systems during the physical transition. This is likely the most costly option, but for a company that demands no service interruptions, it may be an essential choice.
2) Understand exactly what you are going to be migrating:
From servers to networking, storage, replication and recovery services, licenses and more, it’s essential that you think through exactly what parts of your infrastructure are going to be a part of your cloud, and whether or not you want to own, rent or buy these capabilities.
3) Understand exactly how much internal and external IT support your migration will require:
It’s probably going to be more work than you think. So, make sure you understand the expertise needed to pull off a successful migration, and partner with the right tools and third-party resources in order to make it happen.
How do you put together the right migration plan for your organization?
There’s a different ‘right’ migration plan for every business. Size matters. Speed matters. But it is what you’re moving that often matters most. Looking at each of your applications and services to understand if they lend themselves to virtual machine migration portability and federated cloud environments is a good first step.
A great way to map the VM migration portability is to put together a matrix. On one axis, identify all of your applications, such as Web, both external facing and intranet sites, e-mail, CRM, analytics, billing, testing/staging, help desk, document management, etc. And then identify what types of services each application represents. Is it revenue generating, frontline support, analytics, back office support, seasonal services, etc.?
Based on the type of service your applications fall under, you should be able to determine which applications are the best fit for portability and which aren’t really portable. There are many applications that will be an on individual-case basis for your organization, but typically the seasonal or one-time project-based applications are the best fit, along with any application that isn’t revenue generating and the only instance of that application.
What should an organization look for in a cloud service provider?
You really need to do your homework and make sure the service provider is a good fit in terms of data center capabilities, security and support. Assess your workload history together and talk through possible solutions. Understand what their role is going to be in terms of strategy, development and the physical migration itself. And get a clear and conservative understanding of what your downtime, if any, will be during the move. The more their pitch sounds like they think migration is a ‘cookie-cutter solution,’ the more you need to be on guard. This move is a strategic decision for your company, and it’s essential you take the right steps now.
David Feinglass is director of Solutions Engineering at Latisys. Reach him at firstname.lastname@example.org.
The use of virtualization and cloud computing is growing quickly among companies of all sizes. Currently, 30 percent of servers are virtualized, and surveys show that by 2012, that number will grow to 50 percent.
Virtualization and cloud computing go hand in hand, and virtualizing servers is just the tip of the iceberg. The trend to virtualize everything from servers to processing power to software offerings actually started years ago in the personal sector. In the recent past, it was common for individuals within major organizations to use virtualized services or cloud computing when at home, but at work, they weren’t using those services at all. Why? Because corporate IT didn’t trust the lack of security of the cloud and they weren’t sure it was a hard trend — something that was definitely here to stay. Today, we know better.
In order to fully understand how virtualization and cloud computing will transform the business world, let’s first look at the evolution of these capabilities.
When talking about virtualization, cloud computing is a natural component. Cloud computing, which refers to companies using remote servers that can store data and allow users to access information from anywhere, takes three different evolutionary forms.
The first is a public cloud. This could be something like Google docs, where you store your data, or something like Flicker, where you store your photos. Basically, you’re storing files somewhere else other than your hard drive and in a place where you can access the items from any device at any time as long as you have an Internet connection.
The second form of cloud computing, which is a private cloud, is emerging rapidly. A private cloud exists when a company wants added security with cloud computing, yet they still want their people to have access to their bigger files and bigger databases from any device anywhere. Since it’s private, it’s secure and the public does not have access to it. Companies are now beginning to establish private clouds.
The third iteration that is part of the evolution of cloud computing is the private/public cloud — also called a hybrid cloud. In this configuration, you have a private part of your corporate cloud that is secure and only accessible by employees, but you also have a part of the cloud that is public where strategic partners, vendors and customers can access limited content.
Virtualization can take many forms aside from servers. For example, you can virtualize a desktop, meaning your desktop is stored virtually in the clouds and you can access it from anywhere. You can virtualize your operating system. That means you can be using a Mac yet running the latest Windows operating system on the Mac, or you can have a PC and have three different operating systems running all at the same time. That’s the power of virtualization.
Another element of virtualization is software as a service. Decades ago, we started with software that you had to buy, install, maintain and update. Thanks to SaaS, the software is in the clouds, so you no longer buy it; you simply buy time to use it. It’s a cost-effective way for companies of all sizes to have access to enterprise level software.
Similarly, we’re also starting to see virtualized processing power. Think of this as accessing a supercomputer in the clouds and having that supercomputer’s processing power available on your smart phone or tablet. In February 2011, the TV game show “Jeopardy” featured IBM’s supercomputer Watson against human contestants. Watson beat the humans at Jeopardy quite well because it knew what it was good at and it focused on those categories. With virtualized processing power, you’re basically getting a Watson on your phone. That means you and your employees can make informed decisions about many things, very quickly.
One of the ways Watson has been used since Jeopardy is looking at MRI scans. When Watson reviews an MRI scan, it can detect anomalies and see things a human doctor can’t see. Watson can also analyze many variables in an effort to help the human doctor make a better diagnosis faster. It’s about allowing professionals rapid access to vast amounts of information and knowledge that can help them work faster and smarter.
Health care is just one example. Could people who do sales, R&D, purchasing, delivery, sourcing, shipping, accounting and a host of other functions benefit from a Watson-like supercomputer in the palm of their hand? Yes. Could it make them work smarter, better and more effective? Most definitely.
The game changer
Part of this evolution of virtualization and cloud computing is that we can now virtualize various components of IT. And in the near future, we’ll start seeing IT as a service (much like how SaaS became popular). This means that much of the IT department will be virtualized and running in the cloud.
The benefits of IT as a service are immense. Not only will it save money, but it will also increase speed and agility. Since your servers aren’t being used 100 percent all the time, the efficiency varies. With IT as a service, a company will be able to scale in real time as demand dictates by the nanosecond. As sales increase, instantly the system will self-configure. As sales decrease, it does the same. Now you’re only paying for what you’re using. In this case, you’ll be able to benefit from dynamic resource allocation so you’re able to maximize what you have and what you’re paying for at all times.
IT as a service is a game changer. Because you now have components of the IT department existing in the cloud, you’re freeing your in-house IT staff to shift from a maintenance mode to an innovation mode. As such, your IT department can focus on achieving business goals, creating innovative solutions, and driving sales rather than upgrading individual user’s computers and firefighting everyday problems. It allows the IT department to really look at the industry trends unfolding so your company can give customers the products and services they’d ask for, if they only knew what was possible.
It’s time to V-enable the organization
In terms of implementing virtualization and cloud computing options, organizations are now starting to move quickly. Virtualization received a big push in 2009 and 2010 because of the recession, which prompted many companies to cut their IT budget. Companies realized that one way to save money is through virtualization. For example, virtual desktops alone lower costs by 15 percent.
Now in 2011, the factors that are increasing an organization’s interest in virtualization are speed and agility. Virtualization enables you to do things faster, thus making your company more agile. Instead of delivering a new service in two months, companies are able to do it in two days.
As virtualization and cloud computing become more prevalent, companies are going to need to form new strategic relationships because existing relationships may not have the core competencies needed to drive the fundamental changes that will be needed. At this point, it would be good to ask yourself if you have the relationships you need to move forward given this shift? Do your current strategic relationships understand the shifts taking place and are they embracing the things you know will happen?
Realize, too, that the wrong question to ask is, “What should we buy?” Rather, you have to look at the bigger picture of what you’re trying to accomplish in this transformational time. How can you use virtualization and cloud computing as game changers for your company based on where it’s evolving? The key is to understand the new capabilities, because in order to know what to buy or what to do, you first have to know what is possible.
2011 is the year most are sticking their toes in the waters of virtualization and cloud computing. It’s the year organizations realize this isn’t a fad that’s going to fade. Virtualization and the cloud are hard trends that provide transformational opportunities and will continue to rapidly evolve. The time to embrace this trend is now.
Daniel Burrus is considered one of the world’s leading technology forecasters and business strategists, and he is the founder and CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology-driven trends to help clients better understand how technological, social and business forces are converging to create enormous, untapped opportunities. He is the author of six books, including The New York Times and The Wall Street Journal best-seller “Flash Foresight: How To See the Invisible and Do the Impossible” as well as the highly acclaimed “Technotrends.” For more information, please visit www.burrus.com.
SaaS (Software as a Service) can help organizations improve their processes, increase efficiencies and reduce costs. By doing business in the Cloud, it’s possible to swiftly position an organization for significant growth and increase its competitive advantage.
Here at Smart Business, our question was: How aware are small and mid-sized business (SME) leaders of SaaS, the Cloud and their potential?
To better understand this issue, as well as the adoption of SaaS by SME executives, Smart Business surveyed 1,000 of our senior-level executive readers from organizations with $50 million to $1 billion in annual revenue.
Our premise was straight-forward: Cloud Computing is growing in popularity. Organizations in the middle market have traditionally been quick to adopt new technology as an effective tool to accelerate business growth and differentiate themselves from the competition. We wondered:
- How many companies were doing business in the Cloud?
- What was the depth of their Cloud knowledge?
- What perceptions – and misperceptions – did they have regarding Cloud?
To accomplish this, Smart Business partnered with SAP, whose SAP® Business ByDesign™ is a SaaS product already used by 85,000 SMEs around the globe.
What we found surprised us.
Most intriguing was that there was no clear understanding of SaaS and Cloud Computing, despite 100 percent of those surveyed – who included C-level executives, IS and IT directors and managers – saying their organizations used software and technology as a strategic tool to make them more effective and efficient.
Also, SME leaders were worried about the affordability of SaaS, believing that the costs are high and that there is no clear path to achieving an ROI.
There were concerns about accessibility, primarily whether doing business in the Cloud ceded control of an organization’s data or made it less accessible when it was most needed.
And, a majority of those surveyed mentioned their belief that SaaS held inherent security issues that put their data at risk.
Smart Business’ exclusive white paper is designed to address each of these misconceptions – and others – expressed in the Smart Business survey and dispel the myths that we found exist among SME business leaders. Get a copy of the white paper here.
And then, join us from 1 p.m. to 2 p.m. EST on Wednesday, October 12, 2011, for a special Webinar where we’ll present business leaders and an SAP expert, who will bust myths about the security of doing business in the Cloud. Click here to register!
You may not know it yet, but cloud computing is going to change the way you do business.
Gone will be the days of provisioning hardware and software, creating space to house them, doing data backup and paying for maintenance. Instead, companies are paying a monthly fee and having that all done for them, says Ben Grele, director of the IT services practice group at Burr Pilger Mayer.
“You could compare cloud computing to a utility such as electricity, where no one is running a generator to power their business,” says Grele. “Yet everyone expects that when they flip a switch, the light comes on. Cloud computing offers that same value proposition, where all you do is log in and off you go. You shouldn’t have to worry about running IT systems yourself; it makes a lot more sense to focus on your core business.”
Smart Business spoke with Grele about how cloud computing can help move your company into the future.
What is cloud computing?
Cloud computing is basically referring to IT resources that are accessible over the Internet and available as a service, on demand. There are many services that can be provided over the cloud that are commonly referred to as Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) or Software-as-a-Service (SaaS). Whatever the service, it is completely managed by the provider, and is for the most part immaterial to the end user. For example, enterprise grade e-mail, CRM or ERP are available as cloud computing services from many providers.
How can cloud computing benefit a business?
First, it gives businesses the ability to deploy new applications very quickly without having to provision expensive hardware and software or going through the installation and setup, as they would normally do in a traditional on-premise deployment. Second, it’s flexible and allows businesses to rapidly scale resources up or down depending on needs. Ordinarily for an on-premise deployment, companies go through a complex sizing process to determine the amount of computing power they’ll need to handle peak processing, even when peak represents a very small percentage of the time. This means that the rest of time the environment is well underutilized. Third, in a cloud computing model, companies end up paying for how much of the service they use as they use it, much like they do with any other utility.
Additionally, in a traditional on-premise environment, companies have to account for the whole lifecycle of the new application they just deployed, like power and cooling, patching, hardware and software upgrades, backup and archive, disaster recovery and so forth. All these functions are complicated, costly and time-consuming and, let’s face it, do not contribute positively to the bottom line.
Can a business make the transition on its own, or does it need expert help?
Whether migrating an existing application to the cloud or deploying a new application in the cloud, it is a good idea to leverage an experienced consulting firm. Most companies, especially small and medium-sized companies, have limited IT capabilities and personnel. So hiring an outside consulting firm to help with the deployment of applications on the cloud to shorten the timeline and avoid common pitfalls makes perfect sense. Migrating to the cloud is an iterative process and an experienced consulting firm can help put together the optimum migration strategy to match requirements.
A consultant can help you identify your needs and integrate your specific business processes into your new cloud solution. An experienced consultant will also be able to help you take advantage of new features or functions that are now available to your business.
What are some common mistakes businesses make when moving to the cloud?
Pitfalls include failing to leverage solutions to their full capability and not provisioning the security aspect of using an application on the cloud. It does require a different approach from a security perspective, and take into consideration that some of the traffic between end users and the application goes over the Internet.
It is also important to understand where your proprietary data resides on the cloud and how it is protected. Most cloud computing service providers have very strict security protocols to guarantee any data protection level to meet even the most stringent regulatory compliance levels. Most cloud service providers will match or exceed the security level that you would have in your own data center.
Do you foresee a time when on-premise systems become a thing of the past?
Absolutely. The world of information technology is evolving at a pace that even large companies with mature IT departments and sophisticated business processes struggle to keep up with. Typical deployments of new applications require substantial investments in both money and people and are quite complex and lengthy. Cloud computing is changing that paradigm by removing most capital expenditures, shortening deployment timelines and greatly reducing the overall costs of deploying new applications. It enables business leaders to drive adoption of new ‘in the cloud’ solutions based on business requirements, without burdening the ROI with the traditional IT costs of on-premise deployments.
Ben Grele is director of the IT services practice group at Burr Pilger Mayer. Reach him at (415) 677-4595 or BGrele@bpmcpa.com.
Audrey Dunning is CEO of Summa, an IT consulting and software engineering firm. Dunning and the folks at Summa are helping companies cut through the hype and understand how they can identify real opportunities for accelerating the business value for their business with cloud applications.
“That’s our role as a consulting and integrating firm,” Dunning says of the $14 million company. “Cloud computing is really a way for companies to add new capabilities, increase capacity, essentially on demand, without needing to invest in new infrastructure, training new people, and licensing new software.”
Cloud computing is being used more and more and it’s companies like Summa that help others better understand how it can be utilized to it’s best and fullest potential. “It’s clearly one of the fastest growth opportunities that we’re seeing in the business,” she says. “Some see it as a seismic shift in IT and others just sort of see it as a next-step evolution.”
Generally, cloud computing is a subscription-based pay-as-you-use versus more traditional models of acquiring IT computing resources. People tend to think of cloud computing as covering three areas. “Software as a Service (SaaS) is one,” Dunning says. “There’s also the notion of Infrastructure as a Service (IaaS). That’s an aspect of cloud computing about getting access to compute cycles. The third area of cloud is Platform as a Service (PaaS). Platform as a Service is probably the newest notion of cloud that’s really hot right now for 2011.”
Whatever area of cloud you may be considering or already using, it is important to have someone help you make sense of it all. Summa uses the cloud application readiness assessment offering.
“That allows us to work with an organization, help them evaluate whether [cloud] fits and the intersection of the business value of a cloud solution with technology within their company,” she says. “It looks at the economic drivers for leveraging cloud in their environment. It helps educate them on the different cloud types and associated services that might be out there. We help them take a look at the real opportunities in their organization and where they can take advantage of it. We help them rank the different potential initiatives and which might have the nearest-term business benefits.”
Cloud computing is everywhere right now and gaining a solid understanding of it and where you can use it moving forward is what will set your company apart.
“Starting with a pilot somewhere is something we advocate a lot to take a look at what are the candidates,” Dunning says. “Pick a place to get started and then work through a pilot application. Something we advocate a lot to organizations is transitioning to new technologies in an incremental way versus a big bang approach.”
There is a lot of information available so you’ve got to take that into account and make sure you know what area of cloud you want to start using.
“There is a lot of hype around the cloud right now and a lot of product vendors and technology vendors are seeking ways to rebrand their solutions with cloud in the name,” Dunning says. “You have to be a bit careful of the vendor hype. You have to educate yourself and really understand your organization. Take a look at where it might make sense to get started based on the needs of your organization and priorities and your readiness to adopt a new solution. And obviously work with a provider who can help give you good advice in that process. You have to get educated about the space and what it is and what it isn’t and where would be a good place to get started.
“There’s all sorts of research and statistics out there that say large percentages of organizations are going to be shifting to this model. I think at this point it’s become something to not really avoid, you have to have an eye to it. You have to look at where you can get started and get your feet wet.”
HOW TO REACH: Summa, (412) 258-3300 or www.summa-tech.com
While cloud computing is stirring up a lot of interest, Software as a Service is still largely the model that most companies are utilizing.
“Salesforce.com is an example,” Dunning says. “Salesforce.com is a pretty popular application for customer relationship management and sales force automation. The Software as a Service model is basically a way to deliver functionality to many customers at once through a service versus installing that software on premises.
“Some of the advantages of that to businesses are it increases their agility and the ability to bring up new functionality and new applications quickly. It has the promise of reducing their costs.”
Summa got involved in that particular part of the cloud computing space. It acquired a company last summer.
“We acquired a local firm called Harvest Gold,” she says. “They were an existing Salesforce.com business partner, so their experience was more along the lines of helping organizations with their sales business processes. As more companies and larger enterprises are looking to the SaaS model for deploying application functionality, Summa was involved with Harvest Gold as a partner. We saw an opportunity to bring Harvest Gold into the firm as a way to really represent an end-to-end solution from the business through the IT organization. It helped to fuel our growth.”
Last month, at one of the Information Technology trade shows, one of the industry’s pundits made a startling prediction — that the shift to the cloud computing platform will be bigger than the shift to the Internet or the shift from the mainframe to the PC.
“This seems to be a pretty outlandish claim,” says Mark Swanson, the CEO of cloud communications provider Telovations, Inc., headquartered in Tampa, Fla. “After all, the PC and the Internet were two of the biggest technology waves in the past 50 years.”
Smart Business spoke with Swanson to find out if this speaker had his head in the clouds or had at least one foot on the ground.
What do you think of the prediction that the cloud is the biggest IT transition ever?
I think it depends on how you look at it. Cloud computing is really not all that new. In fact, many people claim that we are back to where we started from in the 1960s when computers were time shared from a remote location. Sun Computer coined the phrase, ‘the network is the computer’ decades ago when they had a vision of computing as a utility. This transition is not about inventing a new platform like the mainframe or the PC, but really a transition of how we use computing.
What is fueling this transition is bandwidth. We now have enough fast bandwidth to deliver the same kind of experience that we have on desktop computers so we are starting to use devices to access the platform rather than use the device itself. This transition actually started over a decade ago, but it is past the tipping point and accelerating. I think of it like pouring water from one container to another, once it starts, it flows faster and faster until the first container is empty. It is affecting everything — hardware, software, the way we use computing and even the way we view computing. This is the phase where it truly has become a utility. If you look at it this way, I think that it is at least as big as the shift to PCs or the Internet.
From the end-user perspective, what is driving this shift?
The interesting thing about this question is that it is consumer end-users that have been driving this transition. Corporations’ budgets have been in lock-down mode for the past four years, while applications like Google Mail and Facebook have been growing exponentially. Consumers are years ahead of business in adapting the many tools and conveniences found in cloud computing. In my opinion, the reasons for this are as follows:
- You can use the cloud from any device. iPhone, Android, iPad, notebook, netbook, it does not matter. Regardless of the way you hook up using cloud apps, you can complete your work as long as your Internet service is reliable.
- You can use the cloud independent of location. Remember the days of running around trying to find a phone data port to dial up the Internet? We can now browse from our car, the train or the park; get our e-mail; complete our part on a project plan; or help a buddy half way around the world to finish her research paper. We send our e-mails while we are stuck in traffic — on the median, of course! It really has become an anywhere utility.
- You can use the cloud to pool resources. Certainly there’s the ability to harness processing power of remote computers to do things faster, but it is not just that. You can also pull together knowledge resources, human resources, process resources, etc. Want to put together a team of great accountants? Geography is no longer a factor, as you can find talent on LinkedIn. In an argument about a fact with a co-worker? ‘Google it’ and leverage some expert who might be half way across the world. In the pursuit of leveraging the world’s resources, cloud computing is revolutionary.
From the vendor perspective, are they pushing or holding back on delivering Software-as-a-Service in the cloud?
Well, there are certainly many software vendors who have held back because they had great business models in the old delivery paradigm. Almost all are adapting now. I think there are lots of reasons this appeals to vendors, but three primary reasons stick out:
- Revenue smoothing. Software sales — and in particular enterprise sales — are very lumpy. It is feast or famine. What vendors like is there’s a nice predictable revenue stream.
- Piracy prevention. Prior to delivering software in the cloud, hackers were always trying to break into software and license keys were always floating around in some digital form. Delivering via the cloud stops piracy as it is very easy to check credentials each time users log in on the Web.
- Support costs. Supporting multiple versions of software that is deployed on different forms of media can be costly. Version control management was often a multi-staffed function, keeping up with the various versions deployed.
Where do you think we are in the transition process in business?
I still think we are in the early stages — less than 10 percent there. In our business, the vast majority of companies still keep their phone systems in the back closet and pay someone $125 an hour to come out and make a change to them. They don’t think about all the capability of a cloud system or worry about it until there’s a crisis. Most companies are still figuring out how to use the cloud and whether or not they’ll use the public cloud, private clouds, or hybrid clouds. There are still a lot of questions out there, but that’s a great thing!
MARK SWANSON is the CEO of Telovations, Inc. Reach him at email@example.com.
Cloud computing is the talk of the town. It seems like everyone is doing it, and anyone who isn’t is thinking about it. But is the cloud the answer for everything? How can companies leverage the cloud in ways that are smart for their business? What should companies be thinking about as they transition?
Smart Business spoke with Mike Landman, CEO of Ripple IT to get some insight.
The cloud seems to be everywhere. What should businesses be thinking about? Is the cloud right for everyone?
The short answer is: Yes, it’s right for everyone. The long answer is: Maybe not right now, and not for everything.
First, everyone has their own definition of cloud computing. But I’ll use the shorthand that cloud computing is pooled, distributed, mostly virtualized computing resources. The cloud might be utilized for applications like Google Apps or hosted Exchange, or it might be used for all of a company’s servers and infrastructure.
Cloud computing will be for everyone because there is really no turning back. Over the next five years, nearly all server computing will be pooled, distributed and virtualized. This is good. Cloud computing is cheaper, more reliable and easier to manage.
The issues are more about the transition, how to get there and what will and won’t work right now. A five-person company has it pretty easy. The founder can just decide they don’t want any servers and put everyone on Google Apps on Sunday afternoon. A larger company has lots of legacy computing and applications; and disruption, training and workflow become larger considerations. They don’t have it so easy.
So why would a company want to hold off on moving to the cloud?
It’s unlikely that anyone would hold off entirely on cloud computing. Most companies are using at least one tool that is cloud-based right now, but the transition may be slower for certain types of companies.
We work with a lot of ad agencies, for example. They have a great use case for moving e-mail to the cloud. We have at this point transitioned almost every client to cloud-based messaging. But transitioning all of their server infrastructure is much more difficult and, in many cases, not yet possible. An ad agency is filled with people that routinely work on 500MB files. There’s just no reasonably priced bandwidth option that gives an agency a satisfactory experience working on such big files across the Internet. They still need a LAN. That’s going to apply to most companies with lots of big files. But those companies can still take advantage of many cloud benefits by making sure their IT people are leveraging virtualization for the resources that need to stay in-house. Virtualization allows for many cloud benefits, even on a LAN.
What’s virtualization and what is its role?
Virtualization is basically where you take a server — something that has traditionally been dedicated to a single OS — and allow it to run multiple ‘instances’ of servers. It is traditionally thought of as a way to consolidate resources. Instead of running three servers, each on its own hardware, perhaps you can run three servers on one piece of server hardware.
To me, that’s pretty cool, but it’s not the most important thing about virtualization. The best part is that in order to run multiple servers, virtualization has to ‘fool’ the OS into thinking it’s running on one type of hardware, no matter what the hardware actually is. As a result, the underlying hardware isn’t particularly important. Since the OS thinks all the hardware is the same, the server instances can be moved around with relative ease. Like when there is a hardware failure, a migration, or when you are moving from your LAN to a public cloud. The reason that’s cool is that it means less downtime, faster recovery from failures, faster (cheaper) migrations, and a much easier time moving to public (or semi-public) cloud resources.
That’s why, even at our very smallest clients, we leverage virtualization. A virtualized environment opens up options and makes most everything easier for a move to the cloud, whether that cloud is public, private or something in between.
That’s terminology I have been hearing a lot. Private versus public clouds. What’s the difference?
Public clouds are large, distributed pools of resources that everyone can use. Amazon, Rackspace, and Google are the biggest public clouds. Private clouds still use pooled, distributed and virtualized resources like public clouds, but they are under the control of the company using them. Most large companies have data centers they operate themselves. They are increasingly becoming private clouds.
The importance is blurring though. There are a number of ways to use public clouds privately. Much like using VPN technology to privately access computers over the Internet, it is possible to use public cloud resources privately with restricted access and encryption. At Ripple, for example, we run our cloud technology with total separation between clients, creating completely separate networks and servers while still leveraging a pool of technology to increase redundancy and uptime, and provide a cost-effective way for our clients to leverage the cloud.
So what should companies do as they transition to the cloud?
My counsel would be to work it through with a trusted IT resource, someone that can help you think things through from a business perspective, not just an IT perspective. At the same time, don’t just walk in and demand that your IT folks ‘put your business in the cloud.’ There is a lot to consider from both sides (strategy and infrastructure) and moving to cloud infrastructure, while inevitable, needs to be well planned, and with the entire business in mind.
Mike Landman is the founder and CEO of Ripple IT, an IT company that makes IT run smoothly for companies with less than 100 employees.
If someone told you that you could drop your operating costs by 40 percent, would you listen? If that same person said you could you save between $70 and $150 per user per year in energy savings alone if you tried something new, would you try it?
A lot of companies are listening, and those same businesses are trying something new — cloud computing and software as a service (SaaS) — and reaping the many benefits, which start with the aforementioned cost savings.
Renee Bergeron is vice president of managed services and cloud computing at Ingram Micro Inc., a Fortune 100 company and the world’s largest technology distributor.
“(Savings) vary by solution, and I’ve seen some models that are in the 20 percent range all the way up to 70 or 80 percent,” Bergeron says. “I know it’s a big range, but it is significant. If you’re in an organization that has its own server that isn’t leveraging any virtualization, and you’re moving to the cloud, you’ll get into the 70 or 80 percent [range].”
Jeff McNaught, chief marketing officer at Wyse Technology, says that nearly 80 percent of IT budgets are spent just to keep the lights on.
““It’s about saving money, and there’s a tremendous amount of money to be saved,” McNaught says.
McNaught’s company builds a device that replaces the PC, uses one-tenth the energy of a PC and connects you to the cloud. The device doesn’t make a lot of noise, but more importantly, it doesn’t cost a lot of money.
“When you look at cloud computing, operating expenses can drop by about 40 percent a year, and that’s real money,” McNaught says. “These devices use one-tenth of the energy of the PCs. Now you’re really talking about saving real money.”
How cloud works
So the idea of saving that much money has caught your attention, and now you may be asking, “What exactly is this whole cloud computing thing anyway?”
Feyzi Fatehi, CEO of Corent Technology, which is a leader in SaaS transformation, says that cloud can fall into two categories — hardware and software, but both of them essentially move you to a service as opposed to buying the hardware or software.
“Instead of buying a computer, you subscribe to the amount of computing that you need to accomplish the tasks you’re focused on,” Fatehi says. “That’s really the big trend — moving from computers to computing and moving from buying stuff to subscribing to services.”
Dave Hitz is the co-founder and executive vice president of NetApp, a company that sells enormous amounts of storage, which many companies build their cloud systems on. From his perspective, Hitz also sees two different definitions of cloud computing.
“Definition No. 1 of cloud computing is you no longer buy a computer,” Hitz says. “You access computing service over the Internet to somebody else’s data centers, and they spend the capital and they hire the people to build them and they do everything, and all you do is pay a monthly bill and access the service over the Internet. Style No. 2 of cloud computing is a completely technical definition (that) has to do with if you’re going to build a data center, what does the architecture look like? And if the architecture has a lot of shared infrastructure, then people tend to call that kind of environment a cloud computing environment.”
The idea of the cloud is essentially that you plug into the wall, and you get a whole data center without having to build it and take care of it yourself.
“In the old times, people needed electricity, and they had to buy a generator to have at their office or home,” Fatehi says. “They had to pay money to buy it and spend money to maintain it, and now we simply subscribe to it as a utility, as a service. The monthly fee we pay for our power takes care of all the maintenance and everything else that takes place at the power plant. Cloud computing is moving from generators you have to buy to a power-plant model.”
John Dillon, CEO of Engine Yard Inc., a company that delivers an environment for software developers to write programs that run inside the cloud, points out that in the United States, capital expenditures are huge and about 50 percent of capital expenditures are information technology.
“Unbelievable,” Dillon says. “How many people are getting the ROI on this? What’s happening with the cloud is some big companies are saying, ‘Look, I’ll build the data center.’ It’s changing who buys, why it’s bought, and it changes the capacity and the economic decision-making process around IT.”
When you look at how much of capital expenditure is spent on IT, Fatehi says cloud presents clear advantages, such as taking your cost of maintenance and administration of your hardware or software down to zero. For example, if you wanted to buy a CRM solution, it may cost tens, if not hundreds or thousands of dollars. Or you could start paying about $500 a month to subscribe to a service like Salesforce.com. You don’t have to purchase any hardware or software, and instantly you start receiving the service.
“At the heart of it, it moves capital expenditures to operational expenses,” Fatehi says. “People don’t need to allocate millions of dollars to budget to buy a piece of hardware or software that could be very quickly obsolete — probably the same week they purchase it. They can start subscribing to a cloud computer service provider and get their need for computing for a service and pay on a monthly basis.”
Bergeron says it’s also important to note that cloud technology allows you to pay for only what you use. For example, if you have to build a system that can handle your peak volume time, such as month end, you pay for that all month long, even though you may only use that system at 10 percent capacity the rest of the month. With cloud, you pay for the higher volume only when you use it instead of all month long.
When you look at how much money most organizations spend on their IT systems, these cost savings are a big driver and will, ultimately, be a game changer for business.
The other benefit aside from cost is that everything that is on your PC is now in one location that can be accessed from anywhere — not just from the PC itself — and that comes with numerous benefits.
“When you take your software and your applications and your data and you move it to the cloud, something’s happened,” McNaught says. “First off, the cloud is the data center of your company and you can always get to it. You’re connected to the Internet, so you can get there from home, from the conference center, from the airport. And guess what? Because it’s not on a PC with a hard drive failing and memory getting filled up, it’s protected. It’s backed up. It’s secure. So the cloud provides this real opportunity to take the things that make up our work life, and within five years our home life, as well, and move them to this one place where we can always find our stuff.”
One other benefit that cloud technology provides is agility.
“Cloud solutions can be brought to an enterprise within hours, days or weeks,” Bergeron says. “We’re no longer talking about months to procure the hardware, the software, get it tested and up and running. Solutions that used to take six, nine, 12 months can be done in hours, days or weeks because the environment is already in place and ready to go.”
The evolution of cloud
Dillon is amazed by cloud computing, and if you look at how it’s evolved and how it’s changing business, it’s hard to disagree with him.
“This cloud thing is the biggest thing that’s happened in technology since the IBM computer, and that’s pretty big, and at least as big as the Internet in terms of economic disruption because it changes how and where we do our computing,” Dillon says.
He says to go back a few years and remember how every small and medium-size business had a room with computers in it and maybe a server or two.
“As businesspeople, you probably didn’t understand what they were for, but you knew they were important and you wrote checks,” he says. “It was hard to be good at that because you had a business to run and, presumably, you were an expert at that business, and you used technology to be good at that business or best at that business, so it was a necessary evil.”
Over the last 10 to 15 years, a variety of things happened that became game changers. First, we got the Internet.
“Everybody is connected — not just a few people are connected — and we’re connected not just inside our companies but outside our companies,” Dillon says.
Second, access became ubiquitous with the advent of cell phones, iPhones, BlackBerrys, iPads and laptops.
Then access got cheap — almost free. It doesn’t cost you anything to go to Google and look up any information that you want.
McNaught would add another element to that perfect storm — the PC itself. He asks how many people really love their PC with all the noise and the weight and the fact that if you drop it, it’s useless.
“People don’t want to buy these anymore,” McNaught says. “The cloud is really the place where you take the things that were on the PC, and you go put it there.”
McNaught says the data indicates that PC market share, which is about 94 percent now, will drop over the next decade to about 10 percent.
“It’s not because less PCs will be sold — maybe a few less, but it will lose its role as the core device we use to access our stuff,” he says “You’ll see this huge proliferation has already started with tablets and mobile devices and mobile phones and the mobile Internet exploding now. The question becomes, how do I access my stuff? How do I access it securely? And how do I access it at the lowest cost?”
These are questions that most people would agree are incredibly important. In fact, these questions are reasons why cloud hasn’t been successful in the past.
“This had been tried before and it’s failed because there were two things we couldn’t get right as an industry,” McNaught says. “Early on, we couldn’t make all the software that was important to your business work reliably. We walked into the hospital and the hospital says, ‘We have 400 applications; we can only make 350 work on the cloud. Where are the other 50 we need to execute?’”
The other factor was user experience.
“If you get, from the cloud, an experience that is the slightest bit less robust than the experience you get at home or the office today, what are you going to do?” McNaught says. “You’re going to go beat the living daylights out of the IT guy who suggested the cloud.”
But now the technologies have changed, and these two pieces have largely been addressed. On top of that, security is now stronger than with a PC, and that’s why companies large and small are now deploying the cloud.
“If you think of the early security concerns that were raised with cloud service, but you look at multimillion clients on Salesforce.com with customers’ information with no breach of security, that’s really done a couple of things,” Bergeron says. “It’s quieted down the initial concerns around technology. It’s demonstrated that cloud solutions can be secure if it can be done properly.”
How cloud can affect you
You may read this and think how great it all sounds and see how it important cloud is to the future of business. But if you’re on the opposite side, the experts would caution you to rethink your approach.
“At the end of the day, there is no choice,” Fatehi says. “If a business needs to succeed and compete for the future, they have to do this. They better enjoy it and do it with a positive attitude if they want to stay in business. The cost of doing business the old way is so costly that the business, if they don’t move to the new cloud computing model, they cannot compete. The cost of doing business would be so high, it would not be competitive.”
For example, if somebody’s IT cost is 30 percent of cost of goods sold versus another’s is 10 percent, that’s a 20 percent margin for profit — the one operating at 30 percent simply cannot compete with that.
And if you think that cloud isn’t really affecting you, Hitz says to think again.
“I’ve had the opportunity to ask a lot of CIOs, ‘How is cloud computing affecting your business? How much cloud computing are you using?’” he says. “The most common answer I get is, ‘It doesn’t affect our business at all yet, and we’re not using it at all yet.’ I will tell you that almost all those CIOs are wrong. They’re already using it but not thinking right.”
He say that CIOs need to think differently and compares it to the early days of the transition from the mainframe to the PC. In those days, if you asked a CIO if they had a PC strategy, many said, “Oh no, that’s not part of what we’re doing,” but half the employees had PCs.
“When data started leaking out the door because somebody lost their PC, who do you think the CEO went to beat up?” Hitz says. “The CIO, and the CIO said, ‘Well, PCs aren’t really IT.’ Those are the CIOs that are gone. I predict the exact same thing is going to happen to the CIOs who think that cloud computing isn’t happening in their business.
“… It’s affecting a lot more than people are realizing because they’re not defining it broadly enough. If they look at that broader definition, the stuff they’re already sort of doing or in denial about, that stuff is a pretty good road map to where the future is headed, just more.”
Bergeron couldn’t agree more. Ingram has seen its cloud services grow 88 percent year over year. She also says how we live our private lives should be a huge indicator of where business is heading.
“It’s going to radically change how business is done — cloud service is not a fad,” she says. “It’s here to stay. It’s already had an impact. Look at what impact it has on us as consumers. If you look at us as consumers, we embrace the cloud every single day. We have our e-mail on maybe Google or G-mail, which is in the cloud. We store and distribute and post pictures through Kodak Gallery or Snapfish, and that’s in a cloud. … It’s been pervasive in our lives as consumers, and it’s starting to do the same for business.”
Not only is it affecting how your business will run, but it’s also going to change the game for how new companies enter the market. Brian Jacobs is founder and general partner of Emergence Capital Partners, a Silicon Valley-based venture capital company.
“Silicon Valley is very much a startup culture — there’s always something starting up here, and it’s important to note that cloud computing also changes the economics of a startup,” Jacobs says. “A startup today doesn’t need as much capital to get going because of cloud computing. A developer, who could be an independent contractor, an engineer who’s working at a day job and at night has a new product he wants to develop — he can log in to a platform as a service like Engine Yard, and they can start developing their product without a single dollar of investment. They can work for free developing the product until they’re at the point they can introduce it to the market.”
As a result, the venture capital industry is much different than it was 20 years ago. In fact, Jacobs’ company started in 2003 with the idea that more and more technology would be delivered as a service as opposed to built by companies within their four walls.
“Cloud computing and software service has really hit technology like a giant wave and all of these business models are service providers — companies that are building technologies and not selling to their customers but operating it on behalf of their customers and charging their customers a monthly fee in exchange for that service,” he says. “That’s a different kind of venture capital and that’s the focus of Emergence Capital.”
Aside from all the ways that cloud computing will change business, it’s also changing how employees approach their jobs. While people can work from home in their pajamas, it’s often difficult, and in many cases, employees don’t have access to everything that they could if they were on their PC actually in the office. But cloud gives you everything from the convenience of your home, and you get to work in your pajamas on your couch, so employees tend to be willing to do a little more because they have the luxury of being in the comfort of their home.
To give you a real example, Hilton Hotels decided to close its physical reservation centers and send all of its reservationists home with these devices that connected them securely to the Hilton system, which saved Hilton big money on real estate costs and not having to call IT people as often.
“Cloud computing allowed Hilton to save money in so many ways that satisfaction increased, and they found that people working at home would take a lower pay,” McNaught says. “They saved on all sorts of fronts. Cloud computing has a transformative effect on all kinds of business.”
How to reach: NetApp, www.netapp.com; Engine Yard Inc., www.engineyard.com; Wyse Technology, www.wyse.com; Emergence Capital Partners, www.emergencecap.com; Ingram Micro Inc., (714) 566-1000 or www.ingrammicro.com; Corent Technology Inc., (949) 614-0634 or www.corenttech.com
There has been a growing amount of buzz around the cloud and its benefits such as improved productivity, greater cost savings and increased efficiencies. Your company may already have deployed its own cloud. However, if you are like most, you are still considering the cloud from afar and unsure exactly how to turn a seemingly amorphous concept into a real business advantage. The trick is in figuring out how the cloud can work for your specific organization and how to best implement it.
For me, the cloud has become the “HP Garage,” the famed and humble birthplace of what is now the world’s largest IT company, Hewlett-Packard, and of Silicon Valley itself.
The cloud is the reason my company exists.
As evidenced by the company’s name, Cloud.com, the cloud is an integral part of the business: providing an open source software platform to enable enterprises to launch their own public or private clouds. But the cloud is not only important because of our value proposition and product; it’s played a crucial role in several aspects.
By using the cloud to manage our communications, e-mail, financial systems and development environments, we have kept the need for costly physical resources very low, something crucial for any growing company. As a result, we have been able to invest in the development of our intellectual property instead of worrying about expensive infrastructure. The cloud has helped us grow our business and spend money on smart services and other value-added resources.
Now make the cloud work for you.
If you are uncertain about using the cloud, begin with a pilot program. Start small, and along the way, you can pinpoint areas where you might extend your existing strategy with new technologies. The reality is that most business environments will be a mix of the physical and virtual, so here are four key points to consider when evaluating the cloud model that best suits your company:
Understand the cloud and its benefits to your business. Don’t force-fit your business strategy to suit technical capabilities. Instead, consider what type of cloud would best fit your current operations and enhance your IT strategy. The cloud comes in many shapes and sizes, such as hosted applications, hosted infrastructure, Software as a Service (SaaS), Infrastructure as a Service (IaaS), on-premise or off, and more.
If it ain’t broke, don’t fix it. Build off your existing operational choices and be application-specific. The last thing you want to do is create confusion by transitioning something to the cloud that is already functioning well, whether it’s your CRM system or e-mail. The cloud can be ideal if you are implementing a service for the first time and can take advantage of the cloud’s cost savings and other benefits.
Evaluate all options, and stay agile. When determining whether to deploy a public or private cloud, consider your unique requirements for cost, security, availability and control, and weigh each deployment model’s pros and cons against each of these. Select a solution that works within your existing system but does not lock you into a specific environment; portability and flexibility are other important considerations. It will prove valuable to have a solution that allows you to migrate to public clouds in the future.
Recognize the cloud’s immaturity, and move forward any way. Despite the cloud’s relative newness in enterprise IT, advancements are constantly being made that push it to new levels of sophistication and reliability. More companies and developers are focused on advancing this segment than many traditional enterprise applications; therefore, moving now will ensure you don’t miss the wave of innovation and opportunity.
Sheng Liang is the CEO and founder of Cloud.com and is a recognized expert in virtualization technologies as the lead developer on the original Java Virtual Machine team at Sun Microsystems. He also was co-founder and CTO of Teros (acquired by Citrix) and has held technology leadership roles at SEVEN Networks and Openwave systems where he developed software products for leading service providers and operators around the globe. Reach him at (877) 349-7564 or firstname.lastname@example.org.
In these tough economic times, the ability for companies to become more profitable is being challenged not only by a more competitive business climate but tremendous business uncertainty, which is caused by the government. Moreover, many organizations must deal with inflation, which is increasing commodity costs in an environment where these additional expenses are difficult to pass along to customers.
In such a situation where everything is in flux and everyone, it seems, is demonizing business while simultaneously asking it to hire more and increase its costs, you must do everything you can to become and stay profitable.
These are the steps I would prescribe to help your company become and stay profitable.
1. Eliminate waste at every level, scrutinize every cost, and do it publicly. The worst thing you can do is allow an environment to flourish where workers believe management does not care about costs.
2. Have no sacred cows. Look at everything from a fresh perspective.
3. Be transparent. Some managers may be concerned about sharing too many facts with workers, but the reality is rumors can be much worse than the reality you share. If your company is in a cash crunch, discuss how you plan on getting out of it and how the team can come together to help you get through it.
4. Talk to the star performers separately — let them know how valuable they are. Be sure to do everything you can to keep them with you as you navigate tough times. Offer them incentives to stay on and continue doing positive work.
5. Use technology and cloud-based applications from companies like Google and Salesforce.com that are often a fraction of the cost of in-house solutions that require servers and a tech support team.
6. Explore unified communications and VoIP to save money and allow you to take advantage of lower-cost workers who are not physically located in your office.
7. Find freelancers to help lower costs and pay them based on performance. Use sites like Craigslist and Elance and others specific sites in your industry.
8. Consider a shorter workweek — four days instead of five or a week off over the holidays or summer. Unemployment payments from the government will offset some of the financial pain this could bring on.
9. Solicit ideas from your team on how you can lower costs, and give a reward to the best suggestion.
10. Do not cut the little things like bagels, doughnuts or other cultural cornerstones of your company.
11. Remind everyone that most companies and industries go through cycles: GE was thought to be going bankrupt; GM needed government assistance to survive and so did AIG and myriad banks.
12. Look at recognizing top performers in other ways besides using money: Give awards for best performer, best team player and best customer support, etc.
13. Hold regular meetings to ensure people see you are confident about the company’s future. Remember, your fear and concern about the future can be amplified by your workers and can do worse harm to your business than the original problem.
14. Do not be aloof or act in any way that will make your workers think they aren’t appreciated.
15. Have a vision for the company’s future and share it frequently — nothing is worse than working in the dark in an uncertain economy.
Rich Tehrani is CEO of TMC, a global media company serving the communications and technology markets and reaching more than 2 million global decision-makers each month. Many of the ideas above have been gained from navigating a publishing company through the tech and telecom bubble bursts of 2001 and transforming an organization relying on revenue from printed magazines into one which generates most of its revenue online. His company can be reached at www.tmcnet.com and his blog is located at www.tehrani.com.