CIO Perspective
Cruising the Cloud: How to Prepare Before You Take Off
 Models are only as good as their ability to faithfully represent reality. Good models can only be built if there is complete clarity about what is being modeled. However well-worn and jaded the cliché might be—the devil, as they say, truly does lie in the details, says Satish Joshi
In every forum that I have been a part of in the last two years, cloud computing has been the most talked about phenomenon by IT leaders and business leaders alike. What makes the case of cloud computing rather unique is the profile of adopters and potential users that cut across different sizes of organization and across industries.
There is a widespread belief that moving to the cloud would result in significantly lower operating costs as opposed to running the applications in-house by transforming the usual cost model for running them to a completely flexible and variable one.
But models are only as good as their ability to faithfully represent reality and good models can only be built if there is complete clarity about what is being modeled. However well-worn and jaded the cliché might be—the devil, as they say, truly does lie in the details.
It is therefore of paramount importance to decide what exactly you are trying to do by ‘moving computing into the cloud.’ The computing cloud can be viewed at three different levels of abstraction:
- At the bottom level, the cloud is simply a virtualized data center that offers you variable capacity for computing, storage, communications etc
- At the middle level, the cloud is a whole platform including the middleware (apps servers, ESB, etc) and a complete application development environment
- At the top level, the cloud actually provides complete business process functionality with variable capacity and service levels on demand. Your roadmap and cost benefit equations will be completely different depending which layers you wish to utilize.
Cloud economics
That moving to the cloud has to make commercial sense is beyond a doubt but in reality the cost structures vary from one enterprise to the other and may not always stack up favorably when compared to the costs of running the current system. Quantifying the benefit is a tough proposition mostly because of non-standard definitions about computing capacity and service levels, among other reasons.
The other challenge lies in understanding the real implications of the commercial model involved in cloud computing. Enterprises would need to evaluate the potential savings not just of CAPEX in the immediate term, but also potential CAPEX investments they would need to make in the longer term.
Similarly, with OPEX, enterprises need to evaluate their current spending on usage charges and service support costs and future investments they are required to maintain. In some cases, the cost of acquisition of a perfect cloud solution may prove to be higher than the cost of the current system which may have depreciated over time.
From a cost perspective one of the critical hidden elements that most enterprises often overlook is the cost of change. This cost—including the cost of acquisition, migration, integration, and support—could potentially present a poor business case for the cloud.
Cloud watch
While cost remains the top consideration for decisions related to the cloud, there are some other compelling considerations that need to be addressed. Two key factors—one a hidden cost, the other a hidden benefit—most often do not find an appropriate place in the cost modeling. These comprise the costs of business continuity and change management.
- Business continuity: Organizations often spend (or need to spend but actually don’t) a large amount of capital to make their IT infrastructure disaster-proof and resilient to ensure business continuity. They also need to spend a large amount of money to manage that (mostly idle) infrastructure which rarely actually gets used. Clouds, by definition, provide excellent insurance against most common disasters and guarantee continuity of operations.
- Change management: Moving a big chunk of your application portfolio into the cloud is a big change. Several issues complicate this change and need to be managed. This may include business process changes because part of the portfolio moves to the cloud and the rest remains in-house which is the most likely scenario. This may also include changes to interactions with external business partners. The change has to be managed efficiently without impacting business continuity and quality of service to end users. This is not just time-consuming but calls for significant investments of expertise, bandwidth and money. Application Integration might also potentially require new capital investments. The cost of implementing this change can be significant and needs to be modeled in the cost-benefit analysis appropriately.
IT Governance impact is another factor that goes unnoticed. Cloud computing is still nascent. As a result, governance is relatively low and if your applications are critical and governed by stringent user industry compliance issues, then you have potential concerns. Users on the cloud also need clarity on usage, processes and methodology and it is important to take into consideration the challenges and best practices that need to be put in place to address them.
Enterprises also need to evaluate the load on computing based on their business process factoring in issues like month-end peaks and frequency of usage. Quality of service is another defining factor as your support ecosystem is likely to be entirely different for the cloud. Enterprises need to ensure that the support system is accessible and that the turnaround times are minimal. More importantly, the quality of service needs to be agile and support the scalability of the enterprise application on the cloud.
Security is a somewhat overrated concern related to movement to the cloud. Security is, without a doubt, an important consideration. However proven technology exists to address security concerns and issues effectively. The emergence of private clouds and hybrid clouds can provide effective answers if deployed with care.
The journey to the cloud
Drawing on our experience here is a quick checklist for you before you embark on the cloud.
- Validate your demand and make a realistic evaluation. In cases of geographical diversity, uneven frequency of usage and inconsistent/unpredictable demand, it may make more business sense for you to seriously consider moving to the cloud
- Plan your cloud strategy with utmost care. The criticality of the business application, business demands and your existing technology and development platforms will determine your mid- to long-term roadmap for the cloud
- Upfront costs of migration and change management can be defining factors to your cloud strategy. Enterprises need to make sure that the right blueprint and roadmap is established to ensure business continuity
This checklist is not exhaustive but definitely key to your cloud strategy. While the cloud may deliver unmatched business benefits to enterprises, the key is to ensure it works well for your organization considering your specific business needs. Meticulous planning, a well-planned strategy for adoption and implementation, combined with a robust support ecosystem will make your journey to the cloud a comfortable cruise.
Satish Joshi is Executive VP at Patni
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