The ultimate guide to cloud computing

CLOUDCOMPUTING

The Ultimate Guide to

HOWTOGETSTARTEDGettingtogripswiththebasics

SAVEMONEYUSINGCLOUDHowtokeepcostslow

WHATISCLOUDCOMPUTING?Andwhyit’sgoingtochangethefaceofITinyourbusiness

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Welcome

03TheUltimateGuidetoCloudComputing

WelcometotheUltimateGuidetoCloudComputing–your indispensablereferencepointtoall thingscloud

YOU’VEPROBABLYPICKEDUP this book becauseyou’ve comeacross the termcloud computing andheard that it’s going to be the dominant platformfor delivering computing resources in the future.Research company IDC estimates thatworldwidecloudmarket expenditurewill bemore than$70bnby 2015 – that’s a 25%annual growth rate.

Over the following pages, youwill read aboutwhatcloud computing is, what applications can run in thecloud (andwhat can’t), how it can streamline yourcosts and how it will change your organisation – bethat amajor enterprise or a small business. You’llsee howcloudwill have an impact on all aspects ofbusiness life, fromsales andmarketing tomanaginga supply chain. And you’ll read about the downsidestoo: fromhandling security tomanaging contracts,licensing and breakdowns in service.

We’re set for a huge change in theway companiesoperate. The parallel that is often drawn iswith theelectricity supply and howwemoved fromapositionwhere companies operated their own local powerstations to using a national grid. It’s an apt parallelbut it doesn’t go far enough – changing the source ofthe electricity supply didn’t fundamentally changetheway that businesseswere run – cloudwill.

The notion of offices in various locationssupported by a dedicated IT team is going to slowlydisappear.What the office of the futurewill look likeis anyone’s guess, but there is one guarantee – it willbe served by some formof cloud computing.

The future starts here.Maxwell Cooter, Editor

Welcome

EDITORIALEditor Maxwell CooterManaging Editor Marc BeishonDesign & Layout Heather ReevesContributors Adrian Bridgwater,Dave Cartwright, Graham Jarvis, BillyMacInnes, Lesley Meall

LICENSING & SYNDICATIONLicensing Hannah Heagney,[email protected],+44 20 7907 6134Syndication Anj Dosaj-Halai,[email protected],+44 20 7907 6132

ADVERTISING & MARKETINGAdvertising ManagerBen Topp +44 20 7907 6625MagBook Account ManagerKatie Wood +44 20 7907 6689Digital Production ManagerNicky Baker +44 20 7907 6056Marketing & Editorial ExecutiveEmily Hodges +44 20 7907 6270

MANAGEMENT +44 20 7907 6000MagBook Publisher Dharmesh MistryPublishing Director Jon WestnedgeManaging Director John GarewalDeputy Managing Director Tim DantonMD of Advertising Julian Lloyd-EvansNewstrade Director David BarkerChief Operating Officer Brett ReynoldsGroup Finance Director Ian LeggettChief Executive James TyeChairman Felix Dennis

The “MagBook” brand is a trademark ofDennis Publishing Ltd, 30 Cleveland St,London W1T 4JD. Company registered inEngland. All material © Dennis PublishingLtd, licensed by Felden 2011, and may notbe reproduced in whole or part without theconsent of the publishers.

LiabilityWhile every care was taken during thepreparation of this MagBook, the publisherscannot be held responsible for the accuracyof the information or any consequencearising. All judgements are based on productsavailable to us at the time. Dennis Publishingtakes no responsibility for the content ofany external websites mentioned or for anyadvertising within the guide.

Printed by Stones

The Ultimate Guide To Cloud ComputingISBN 9781907779831

The “MagBook” brand is a trademark of

Contents

TheUltimateGuidetoCloudComputing04

INSIDE

CLOUDCOMPUTING

The Ultimate Guide to

HOWTOGETSTARTEDGettingtogripswiththebasics

WHATISCLOUDCOMPUTING?Andwhyit’sgoingtochange

thefaceofbusiness

HOWTOSAVEMONEYUSINGCLOUDKeepingcostslow £7

.99The

Ultimate

Guide

toClo

udCo

mputi

ng

06 Whatiscloud?Aclouddefinition,historyandthewaythemarket ismoving

14 CloudconcernsAnynewtechnologythrowsupworriesabout its impact–sowhatdoyouneedtoknow?

22 BusinesschangeHere’sastrongcase forcloudasabusinesschangeenabler

26 PublicvsprivateThedifferencesbetweenthetwomaincloudmodels

30 EnterprisecloudAbriefing forboard levelexecutivesoncloud issues

38 JustforSMEsWhycloud isagreatmatchforsmallerorganisations

43 CloudcontractsBusinessesmustbeawareofthesmallprint incloudservices

12

43

Contents

TheUltimateGuidetoCloudComputing 05

50 CloudstorageStorage is thenumberoneappin thecloud–withgoodreason

54 FinanceandlicensingFinancial factors for thecloud;cautionsonsoftware licences

63 GreencloudIscloudcomputinggreener,andcanweprove it?

68 HRandcloudHowcloudapplicationscouldtransformthepeople factor

72 SupplychainAnotherkeyarea for thecloud iscollaboratingonmovinggoods

76 MarketinginthecloudAlaggardnormally in IT,marketingnowhaspower

80 WhatnottodoNoteverything issuitable forthecloud,andhere’swhy

84 SecurityinmindDatasecurity isa topconcernandadegreeof trust isneeded

88 Leadingplayers/glossaryAwho’swhoofmajorcloudplayersplusaglossaryof terms

54

76

30

06 TheUltimateGuidetoCloudComputing cloudpro.co.uk

Introduction

MaxwellCooter introducesthehot topicofcloudcomputing:what is itandwheredid itcomefrom?

Whatiscloud?IT’S THEBUZZWORDoneverybody’slips butwhat does cloud computingactuallymean? It’s not been an easyterm to define and there have beenmanydifferent attempts to explainwhat thetermmeans. Cloud companies havebeenprone, like Alice’sWhite Knight, todefine the term in away that theywant ittomean.

In someways it’s strange that the termhas been so slippery.Millions of us arehappy to use such cloud-based servicesas Facebook, Gmail andTwitter, thinkingnothing of it, yet pinning downan exactdefinition has been as elusive asgrabbing a cloud itself.

In an attempt to put a stop to these

vagaries, theUSNational Institute ofStandards andTechnology put forward adefinition that has nowbecomewidelyaccepted as the closest that the industryhas to a definitive answer. TheNISTdefinition is as follows.

“Cloud computing is amodel forenabling, convenient, on-demandnetwork access to a shared pool ofconfigurable computing resources(eg. networks, servers, storage,applications, and services) that can berapidly provisioned and releasedwithminimalmanagement effort or serviceprovider interaction. This cloudmodelpromotes availability and is composedof five essential characteristics, three

07TheUltimateGuidetoCloudComputingcloudpro.co.uk

Introduction

Outsourcing iswidely knownand used intechnology circles. It’s when a third party performsan IT function or other service on behalf of itscustomer. Outsourcing can be employed for avariety of reasons – lack of expertise in-house, lackof personnel or because the resources are neededpurely for an individual project.

The key differenceswith cloud are definedbythe underlying technology of the cloud provider.Essential to this is the use of virtualisation – allcloud providersmake use of virtualisationtechnology – and automation (the ideal cloudservice has little human intervention). The otherkey element of cloud computing is the use ofself-provisioning – one of themajor benefits is theability tomake a businessmore agile and flexiblebecause services can be turned up anddownatwill.

Differencebetweenoutsourcingandcloudcomputing

servicemodels, and four deploymentmodels.”

The servicemodels are types ofoffering, such as software-as-a-service(SaaS), anddeployment choices includepublic andprivate clouds. But the keycharacteristics of cloud fromacustomer’s point of view are:• Self-provisioning so a customer canprovision facilitieswithout any humaninteraction

•Delivery of services over a network•Ability to be accessedby a variety ofdevices, not just PCsbut also bynetbooks, tablet computers andsmartphones

•Rapid ‘elasticity’ – the ability to scaleup or scale down computing resources.Fromacloudprovider’s point of view,amajor element of the process is thepooling of computing resources toservemultiple consumers, usingwhat’scalled amulti-tenantmodelwherebycloud services are provided tocustomers as andwhen they’re needed.One of the important factors for cloudservice providers is to be able tomeasure usage accurately and, evenmore importantly, to bill accurately.

SecurityconcernsThe factor in cloud services thatmakesmost users nervous is the level ofsecuritywithin amulti-tenantmodel.This is amajor concern. Customers areentrusting someof their sensitive datato a third party and there is, ofcourse,nothing stopping one of theirmajorcompetitors going to the samecloudprovider for a service.

Service providers believe that thisconcern canbe easily dealt with: they’vegenerally had a long history of keepingcustomers data safe andhave levels ofsecurity that far exceed those of theircustomers. TakeAmazon, one of the

leading lights in cloud technology.Millions of us around theworld arewilling to entrust our personal details andcredit cards to that companybelievingthey’ll be held safely –why shouldtrusting the company’s clouddivision,AmazonWebServices, be any different?

Inmanyways, amore importantconsideration than security is thelocation of the data. This is for tworeasons. First, there is the inherentlatencywithin the system: the furtheraway the data is stored the longer the lagin accessing it. This is becoming less of aproblemas network connection getfaster but it still can be a factor.

The secondproblem is amore seriousone, particularly on this side of theAtlantic. There are various EUregulations onwhere data canbe stored–personal data cannot be held outsidethe EU (within the EU itself, individualcountries have stricter guidelines still). ▲


Introduction

This has been aproblem for somecloudproviders, as part of the appeal is thatunused resources at one data centre canbe usedby another. If data centresoutside the EUcannot store Europeancustomers’ data, providers have to becareful inmarshalling their resources.

Allied to this is a secondary problem:theUSPatriot Act, which compelsUScompanies to handover personal dataheld on their servers if requested byUSauthorities. As this applies to Europeandata held on servers located in Europe,this hasmade someEuropeancustomers rather nervous. Theimplications of thePatriot Act are stillbeingworked through.

VirtualworldThere are other elementswithin cloudcomputing. Virtualisation is another keyconcept. Itmeanswhat it says, the useof virtual resources instead of physicalones. For example, a serverwithin a datacentremaybe operating at just 15%of itscapacity (this used to be a typical usage);virtualisation is a techniquewhere theresources that aren’t being usedby theserver for the application that it’s driving(database, website orwhatever) can beused for something else – driving usagerates up. Virtualisationwill often gohand-in-handwith server consolidationso it helps to reduce the number ofserverswithin a data centre.


Introduction

Like cloud computing, it’s an oldconcept, originating from themainframeworld and only becomingwidely usedafter VMware, a virtualisation specialist,started applying it to servers. Thetechnology has nowbeen adopted nearlyuniversallywithin enterprises and thetechnique of re-allocating resourceshasmade it vital for the development ofthe cloud.

We’ve spoken a lot about cloud serviceproviders but another important partof the cloud is the delivery of software –the so-called software-as-a-service(SaaS) deliverymechanism. This is atechnique thatwas really pioneered bySalesforce.comwith its hostedCRM

product but has since been adopted bycountless other companies. SaaSdelivery helps solve various problemswithin an enterprise: over-provisioning,security updates and licensing amongthem, and iswidely seen nowas thedominantmethod for providing software.

As a concept, cloud computing hasgrownquickly and is set to penetratedeeper into themarket. According to anoft-citedGartner report, 20%ofenterpriseswill have no IT departmentsby the end of 2012.While that looks tobe a bit optimistic (or pessimisticdepending on your view), the impetus isclearlywith cloud. It’s a technology that’shere to stay.■

Anyone hanging around cloud vendors for anyamount of timewill hear one often repeatedmantra – “Cloud computing is not newyouknow, cloud has been around for some time”– generally froma veteran of the technologyindustry. There’s an element of truth in thisbut, at the same time, it’s spectacularlymissing the point.

It’s possible to point toa 1966book byDouglasParkhill,TheChallenge oftheComputerUtility, forthe origins of cloudcomputing. In that book,Parkhill detailedmany ofthe elements of cloudcomputing – elasticprovision, onlinedelivery, perception of infinite supply –it’s just taken awhile for the theory tobecome reality.

Saying that the theories espoused inParkhill’s book are the first elements of cloudcomputing is a bit like saying that Leonardo

DaVinci’s notebooks are the blueprints for thefirst helicopter. It’s one thing coming forwardwith the theory, it’s quite another delivering inpractice. There have been plenty of falsedawns before cloud computing became thebeast it has become.We’ve seen it describedas grid computing, computing on-demand andutility computing before the phrase cloudcomputing took hold. It’s only beenwidelyused since late 2007, although the termwasfirst used in a lecture by computer scientistRamnathChellappa.

For cloud computing to becomea reality,therewere other changes neededfirst.Mostimportant of thesewas the availability of fastand cheap broadband – the early attempts atcloud computing all foundered because of thedearth of such a service. Then virtualisationneeded to becomemorewidespread, as thistechnology is the bedrock of cloud computing.

Other factors are the declining cost instorage, the availability of cheaper devices toaccess cloud services and the development ofautomatic provisioning software.

Abriefhistoryofcloudcomputing

f

infinite supply –

uticomusefirRam

theimpandclodeanee


Introduction

MarcBeishon looks indetail atcloudmodelsandwheretheaction is in theconsumerandbusinesssectors

Whichwayiscloudmoving?IT ISCERTAINLYTRUE thatmanypeople, particularly in business, wouldlike a clear definition of cloud computing.As a report and survey from industrybodyCompTIA, ‘Cloud computing:pulling back the curtain’, says, both theindustry and enduser communities“crave amore authoritative, uniformdefinition of cloud computing to helpthemdetermine howbest to exploitit fromabusiness and technologyperspective”.

It too points to the definition from theNational Institute of Standards andTechnology (NIST), as discussed onpage 7, and it isworth adding the full listof characteristics andmodels in thedefinition (see also the glossary, page 96for explanations ofmost of these terms):Essential characteristics• On-demand self-service• Broad network access• Resource pooling• Rapid elasticity• Measured serviceServicemodels• Software-as-a-service (SaaS)• Platform-as-a-service (PaaS)• Infrastructure-as-a-service (IaaS)Deploymentmodels• Public cloud• Private cloud• Hybrid cloud• Community cloud

TheNISTmodel has the benefit ofsimplicity, but inevitably there aremanymore detailed attributes of cloudservices that are confusing people, whichis not surprising at this early stage of theevolution of cloud computing. But usersin organisations are starting to formaconsensus onwhat they ‘stronglyassociate’ the cloudwith, saysCompTIA,namely ‘offsite’, ‘Internet centric’,‘shared’, ‘scalable’, ‘software-as-a-service’ and ‘virtualised resource’.

What is not confusing is the sheerscale of the projections for the size of thecloud computingmarket, as the analystsare all agreed that, definitions aside,userswill be votingwith their feet andfuelling a globalmarketworthmore than£100bnby 2013with amajor componentbeing the use of cloud softwareapplications such as those fromGoogleandSalesforce.com, the customerrelationshipmanagement specialist.One analyst, Gartner, has predicted that20%of all businesseswill ownno ITinfrastructure by 2012, andwill bevirtually total cloud users.

That’s particularly true for smallercompanies and start-ups, as the kind ofcloud services they can use to runoperations are similar to those that havegained rapid ground in consumermarkets. Sole traders, small companiesand also hobbyists and casual users are


Introduction

allmaking great use of cloudplatformssuch as eBay, Amazon andPayPal toconduct day-to-day businesswithnothingmore than a laptop, Internetconnection and abank account.

CloudforconsumersAndeven a smartphone or tabletwill do– the cloud services thatwill dominatein the consumermarket aremobileapplications, driven by the huge successof products such asApple’s iPhone andiPad, and theAndroid standard adoptedby other handset players. News thatcreatedmuch interest in August 2011was the proposedbuy-up ofMotorola’s

Mobility handset business byGoogle,which points in one direction only – thatof a near futurewhere huge public cloudapplications such as those ofGooglewill be seamlessly available on yoursmartphonewherever you go.

It is no surprise that Apple,meanwhile,planned to launch in autumn2011 itsiCloud – “cloud service done right”, asthe giant firmsays. iCloud is areplacement for Apple’s previous cloudefforts, but clearly the company nowfeels confident to pitch its offeringbadged as a cloud service (‘MobileMe’was themain earlier version forproductivity applications). It has now


Introduction

brought together all its online services –productivity such asmail and contacts,the iTunesmedia store, online backupand storage, and access to newapplications – in one cloud that servicesusers automatically as theymove around(in a so-called ‘push’way).

It’s also free toApple customers, in thesameway that people can alreadymakeuse of freemail and considerableamounts of storagewith services such asHotmail, Yahoo andGoogle. Apple –which briefly became theworld’s largestcompany inAugust 2011 – is great atengineering an almost fanatical userexperience, and it rarely gets itsmarketingwrong these days, so theubiquity of a personal computing andmedia cloud is likely to be taken forgranted bymany in the next few years.

What the companywill have to rely onthough is a large network of partners todeliver its experience, especially themobile phone operators and theirmanysuppliers of base station equipment,

transmission technologyand customer provisioningandbilling systems.Experience of themobilecloud, in particular, can beeasily scuppered if youcan’t get a signal at a vitalmoment, or you get amassive unexpected bill,and it’s no surprise that

poor customer service is now to the foreas peoplemigrate into increasing use ofmobile data and cloud services.

Thatmobility is the key consumercloud area is borne out by research firmBusiness Insights, which predicts thatmobile applicationswillmake up almosthalf of themarket for revenues by 2018.“Mobile applications and services are setto drive the growth of consumer cloudservices, as consumers demand

Mobile dataapplications andservices are set todrive the growthof consumercloud services

‘always-on’ and ubiquitous access todata, entertainment and services,” itsays. Next, and as somemaynot besurprised to hear, is online gaming,followedby ‘voice over IP’ (ie Internettelephony services such asSkype), andpaidmusic content. In termsof revenues,services such as email and onlinestorage barely figure, as they look set toremain free or very low cost.

CloudforbusinessPatterns of use for companies andorganisations in the public and thirdsectors are also becoming apparent, withCompTIA, for example, noting that a‘sweet spot’ for cloud adoption is in themediumsized company sector (saybetween£10mand£100m in turnover).This is because they have similar ITneeds to large enterprises, but less cashfor on-premise systems, and so candeploy cloud computing instead as anoperational expensewith amorepredictable costmodel.

Reducing capital expenditure andother costs is often the number onereason formoving to cloud computing,but coming in second is the desire to addnewcapabilities that just aren’t availableotherwise, and this key factormustsurely rise to the top asmoreorganisations discover just howtransformational the cloud canbe forbusiness processes. Indeed, in anothersurvey of SMEs alone, the benefit ofexpanding capabilities does comeoutahead of cost savings.

Other factors for deploying cloud arethe speedwithwhich it can be rolled out,simplicity, subscription pricing, an end toconventional software licensing, andlower energy use. Pertinently, cuttinginternal IT staff, while a factor for some,is not amajor reason for cloud,suggesting that theseworkersmaybe


Introduction

better deployed on IT activities that reallyhelp the business rather than traditionalIT pursuits such as ‘firefighting’.

The type of service that companies aremostly deploying are software-as-a-service (SaaS) offerings – inCompTIA’ssurvey, of those using the cloud69%have aSaaSproduct in use, 31% IaaSand22%PaaS, although the latter twomaywell be part of a SaaS solution in amanaged service provider’s data centre.

Indeed, amajority of userorganisations plan to source their cloudcomputing froma third party provider,above self-service/direct from theInternet, or direct froma technologyvendor, suggesting that there is plenty ofscope still for skilled IT providers thatcan add value, say, by packaging cloudsoftware into private clouds for superiorandmore secure service.

As far as types of provider go, thereare variousmodels that include:• Public cloudproviderwith owndata

centre• Private cloud specialist workingwith

customers to build internal clouds• Hybrid provider of private andpublic

clouds hosted in ownor third-partydata centre

• Reseller of cloud services (eg. SaaS).

GoingitaloneBut of course there is nothing stoppingany organisation signing updirectwith acloud software player such asSalesforce.com, although itmaybewise to employa consultancy that can adapt thecompany’s business processes toworkwith the cloud offering, as it will rarely bethe case that it will go smoothly ‘out ofthe box’ – therewill be set-up operationsthat need to be carried out.

As for the applications and servicesthat companies are taking up in thecloud, there are certain offerings that are

ahead of the pack, in particular storageandbackup, and email (see also abovefromanSMB– small andmediumsizedbusiness – survey). Storage is one of themostwidely offered cloud services,which is not surprising given its relativesimplicity and value in providing offsitepeace ofmind for data.Most firmswillhave taken up cloud storage andbackupin some form in the next few years.

Email too is prettymuch standard as acloud service now, and is often coupledwith value-added extras such as spamand virusmanagement. Indeed, securityservices on the Internet is a class of cloudoffering in its own right and one that hasbeen abig growth area for specialistproviders. Extra securitymeasures andpolicies are vital whenmoving to publiccloud services, in particular.

Other applications are less popularright now for the cloud –CRM though,as pioneered bySalesforce.com is afavourite, and others such as documentmanagement and collaboration havestrong showings. Contentmanagementgenerally – as organisations dobattlewith growing disparate datamountains,and increasinglymobileworkforces – isclearly awinner for the cloud.■

SMBuseofcloud

SOURCE: SMB TECHNOLOGY ADOPTION TRENDS, COMPTIA JULY 2011

14 TheUltimateGuidetoCloudComputing

CloudConcerns


CloudConcerns

Cloudcomputingoffersclearbenefits tomanyorganisations,but likeanynewtechnologyconcept there

arereservationsaboutbeingan ‘earlyadopter’.SimonBrewfindsout if these fearsarereal

Areyouafraidofcloudcomputing?

CLOUD COMPUTING ISN’T REALLY anew idea that’s just sprung up overthe past few months. Rather, it’s thesummation of a series of technologiesthat have been converging for sometime. Now, cloud computing hasbecome a solid option for

organisations of all sizes – so what’sholding them back?

Plenty, as it happens. Here, wetake a look at ten of the main reasonspeople might be holding back ondeploying cloud-based working, andhow valid they are.

▲


CloudConcerns

LosingcontrolofdataIt’s not just an emotional attachment to acomputer room that keeps companiesfromoutsourcing data. It’s the fact thatthere’s an inherent feeling of securityin having data under close control(assuming there’s somekind of remotebackup for disaster recovery, of course).

Removing the need for local storageclearly has somecost benefits, but for ageneration of systemadministrators andsupport staff brought up on adifferentway ofworking, it’s a change that ringssomealarmbells.

One in particular is trusting an externalsource forworking data –what happensif access drops or if someone loses thedata? Even appreciating the security thatcloud computing offers, there’s a leap offaith and an element of uncertainty(alongwith a loss of transparency), thatcreeps inwhendatamanagement ismoved out of the immediate control of anIT department.

InfrastructureAclear requirement for effective cloudworking is fast, reliable Internet access,especially for smaller organisations thatare using public cloudproviders. Youneed enoughbandwidth so that thosewhoneed to collaborate andwork acrosscloud technologies are able to do so.That’s something that’s quite easy tomanagewhen the bulk ofworkers arein an office – provided the Internetconnection is up –but it gets trickierwithremoteworkers and thosewho travel.

Regular travellerswill be aware of thedifficulty of finding aworkable, secureweb connection. And given that one ofthemain benefits of cloudworking is tohave access to files and applicationswherever you happen to be, variablewebaccess quality has to be a concern.

This of course applies equally topeople accessing in-house computersover the Internet. Butwhen everyone inan organisation is dependent on a cloudplatform, there is an understandableconcern that there is no fall-back positionfor a vital part of a company’sinfrastructure – andone that underpinsmost other operations now.

1

2


CloudConcerns

FearofchangePeople do fear any sort of change, evenin a fastmoving industry such as IT. Theydon’t tend to fear upgrades toomuch– although a jump say to the latestMicrosoft Office canmean somefirefighting –but awholesale alteration intheway systems are supposed towork isa challenge.

It’s hard not to have some sympathywith this. Inmany organisations, IT is atool, ameans to do a job, and nothingmore than that. There’s a strongargument that the software industry, inparticular, has becomeadept at sellingupgrades and alterations thatwedon’tactually need, or that don’tmake adifference to daily life. Sowhen a changecomes along that does, reticence ishardly surprising.

Persuading people to alter thewaythat they’ve done things for years,whether attempted via carrot or stick,is rarely a straightforward battle.

So persuading key decisionmakersand their staff to embrace cloudcomputing canbe a heck of a job in andof itself. Even the best-deployed cloudsolutionmight therefore still be a bit of abumpy ride (see also number 10 – thehuman factor).

SecurityWhendata is being looked after byanother party, it’s right andproper thatsecurity issues are raised. Everybusiness has confidential informationthat it likes to keepbehind closeddoors, and the fear that cloudcomputing couldmake suchmaterialmore vulnerable isn’t one that cansimply be ignored.

Yet recent times have seen that thebiggest source of confidentialdocument leaks ismore likely to havebeen amisplacedUSBstick, usingunsecured Internet connections andless than honest employees.

Reputable cloud service providersview security as pivotal towhat theyoffer and,with the addedhelp of a bit ofcommon sense, there’s a strongargument thatmost businesseswouldbenefit frommore robust security ifthey domigrate to a cloud service.

43

▲


CloudConcerns

CloudoutageClearly, this is a very real and sensibleconcern. There’s no computer networkin theworld that doesn’t have the riskof downtime at somepoint in its life.However, there’s still the comfortblanket of being able to yell at an ITdepartment and get up-to-the-minuteinformationwhen it’s a self-hostedcomputer network that’s at the heart ofthe problem.

What happens, though,when that’staken out into a cloud environment?Whogets the ear-bashing then?And,more to the point, what happenswhena cloud service a business is relying ongoes down, even for a short period?With localisedworking, evenwithout anetwork, having somemachineswithworking productivity software installedat leastmeans things can get done.

What’s often forgotten in thisargument, though, is that a cloudservice stands a good chance of havingaworking, operational backup calledinto action quickly. Furthermore, oneby-product of cloud adoption is that themaintenance and repair of problems isalso outsourced, so itmaywell be thatany problems are resolved faster thanan in-house teamcan act.

Service providers should – anddo–also have incentives to ensuremaximumuptime.

PayingthebillThere are someobvious economicbenefits to adopting cloud services, froma reduction in dependency on in-houseIT, to the outsourcing of datamanagement and security, and thesaving, potentially, on expensivesoftware licences, andbattling to keepinghardware performance up to date.

Yet the future is uncertain. Technologyis litteredwith examples of newinnovations anddevelopments thatwereinitially designed to reduce costs, and yetmanybusiness are still investing heavilyin their IT budgets.

Some valid questions arise aboutcloud computing, then. Is it offering valueformoney?What guarantees are in placethat pricingwon’t slide upwards asbusinesses becomemore andmoredependant on cloud services? Is this justsoftware companies trying to get us toswitch to a subscription system forlicences, and so the longer termcostmay actually be higher?

These are appropriate questions, oftenwith no immediate answer. There’s anelement of leap of faith, and a need todowna good service contract. But castiron guarantees? They’re lacking atpresent, and for firmswith razor-tightbalance sheets that has to be an issue.

5

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CloudConcerns

It’stooearlyEven accepting the comparablematurityof someelements of cloud-basedworking (many, for instance, trust theiremail to awebmail servicewith littleworry), there remains a feeling, rightly orwrongly, that this is still an area ofcomputing that’s in its infancy. Let’s notforget, too, that lots of ‘next big things’have gone on to be anything but. Assuch,manybusinesses are holding backfromadopting cloud services as theywait to see how the assorted offeringsdevelop, and as they let others do thepathfinding for them.

There’s always some sense to notmoving business-critical operations toareaswhere you’d be an early adopter(although cloud adoption can, andshould, be donepiecemeal), and there’sa feeling that thewrinkles need to beresolved in cloud services beforemorefirms embrace the potential on offer.

Yet, there’s a degree of obviousmythto the argument that the services areimmature – after all, Saleforce.comhasbeen around since 1999, an eternity inIT terms. Rather, we aremore likelyreacting to changes in theway servicesare packaged and sold, although thereare clear reasons to be cautious if, say,the local Internet infrastructure is ratherpoor and youwant to invest in a publiccloud system.

WearenotlemmingsMuchof the discussion surroundingcloud computing has implicitassumptions built into it. That it’s theright thing to do. That it’s the logicalnext step in business technology. Thatit’s a question ofwhen, rather than if, acompany should take advantage ofwhat cloud computing offers. Inmuchthe sameway that it was once assumedthat everybodywould upgrade theircopy ofWindowswithin a couple ofyears ofMicrosoft releasing a newversion, there’s an impressionsometimes put across that cloudcomputingwill becomecompulsory.

But, of course, it isn’t. There is doubtthat the argument that cloud is thefuture has been convincinglymade.Because, while there are potentiallyhuge benefits towhat’s being offered,there’s no one-size-fits-allmentalityhere. Is cloud computing really theright option for a small business oftwo or three people? Is it the rightway forward for a large organisation,with hundreds of employees inmanydifferent locations?

There are strong cases to bemade inboth instances that the answer is yes(again, down to the fact that you canchoosewhatworks for you,with public,private andhybrid cloud approacheson offer). But that doesn’tmean thatthe case doesn’t have to bemade.

The benefits of the cloud have to bedefined, be tangible, andbepresentedproperly. It’s the userswho tumble overthe cliff to follow the crowdwhowill,inevitably, hit problems, and fail to reapthe intendedbenefits ofwhat the cloudcan offer.

7 8

▲


CloudConcerns

What,actually,isit?Arguably one of the biggest challengesfacing cloud computing is this: how,exactly, do youdefine it? Becausealready, different service providersdescribe cloudproducts in very differentways. There doesn’t appear to be onewidely accepted definition ofwhatcloud computing is, andwithout that,packaging and selling the benefitsto organisations ismade that bitmore difficult.

Furthermore, part andparcel of theuncertainties surrounding cloudcomputing is the argument overstandards. There’s no solid, commonandobvious foundation for cloudservices to build on. Like it or lump it,people knowwhere they arewith aWindowsoperating system, a copy ofLotusNotes and some variant of anoffice suite. Butwhat such common,unifying tools exist in the cloud?Thereare not, at this stage, obvious, dominantplayers in themarket – althoughAmazon,Google andSalesforce.comwould stake claims– and for companieslooking for a big brandname to trust, thatdoes have to come into their thinking.

Until cloud computing canbedefinedin amanner that’s as understandable asan operating systemor an office suite(and arguably, it can be defined as both),it’s going to create someuncertaintywithin firms as towhat exactly they’rebeing sold, and how it allows them toworkwith others.

ThehumanfactorAt the heart of every significantproblem to dowith technology lies thesame factor: people.Wehave seentime and time again that you can havean IT infrastructure that’s seeminglytight and secure, but it’s a simplehuman slip that’s openedup anelement of risk. Furthermore, someonewhodoesn’t fully understand, ordoesn’t want to understand,what it isthat they’re being presentedwith, willalways cause somedegree of problem.

Itmaybe straightforward to get theMDandfinance director to sign off onthe financial benefits, but just look athowhard it is to get ‘buy-in’ for endusers to use systems such asCRM(customer relationshipmanagement).Newweb-based systems in the cloudmaypose similar problems.

Realistically, of course, every issuewe’ve discussed here has a person atthe heart of it, or a fear ofwhatsomeone can and inevitablywill dowhen given the keys to something newanddifferent (and that’s just oneindividual: the potential dangersmultiply exponentiallywhenpeoplehunt in packs).

It’s a big problem, andwhymanybusinesses are keen to retain thetechnological status quo, in that itkeeps the human–technology balancein a position that it’smigrated to over aperiod of time.

It’s important never to forget the‘people factor’ whenbringing in anynew technology ■

9 10

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22 cloudpro.co.ukTheUltimateGuidetoCloudComputing

BusinessChange

HANDSUPWHO rememberstimesharing computers in universities?Or value-addednetworks (VANs) andelectronic data interchange (EDI) inbusiness trading networks?OrPrudential salespeople armedwithPsion palmtop computers?

Manyproponents of cloud computingact as though they’ve just discovered thekind of cloud-type business processesthat organisations have, in fact, beentacklingwith various degrees of successformany years. These advocates alsomaintain that cloud is a technology-driven newwave that, while bringing newbusiness opportunities, ismainly aboutscaling up infrastructure in data centres,with the obvious advantages of access tolatest technology, elimination of in-houseservers and so on.

But the technology itself, whileobviously vital, is really a sideshow torealising the business transformationefforts that enlightened organisationshave been striving for over the last20 years or so. AsWalter Adamson, anAustralian-based consultant, comments:

This talkof technology isall verywell,but thecloud’s truepotentialis in transformingyourbusinesswithspeedandcollaboration,asMarcBeishonfindsout

“Clouds are about ecosystems, aboutlarge collections of interacting servicesincluding partners and third parties,about inter-cloud communication andsharing of information through suchsemantic frameworks as social graphs.”

TransformationvsutilityThis, he adds, is clearly businesstransformational, whereas “computingservices that are delivered as a utilityfroma remote data centre” are not. Thepioneers in VANS/EDImethods –whichare nowmigrating intomodern cloudsystems in offerings fromsoftware firmSAPand its partners, for example –wereable to set up basic trading dataexchange networks, but the cloudtransformation now is integrating, inreal-time, the procurement, catalogue,invoicing and other systems acrosspossibly overlapping andmuchwiderbusiness communities.

Likewise, companies struggled for a

Howthecloudcanmakeyourbusinessagile

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BusinessChange

long timewithmobile and remote accessto sales andmarketing systems, asenterprise integrationwas often verydifficult and expensive. Now thetransformation brought about by cloudecosystems such as theSalesforce.comcommunity is enabling farmore than amobile quotation systemwith data that arep had to download using amodembefore he or she set out for the day.

Andclearly, there aremany individualsand companies, especially small firms,that have happily taken to one of theworld’smost complete cloudexperiences, AmazonWebServices,which is enablingmany tomove fromastaticwebsite to a fully-fledged onlineglobal shop,with everything fromdatabasemanagement tomicropaymenthandling. AndAmazon is also afrontrunner in the enterprise ‘privatecloud’, withmajor software vendors –includingOracle andSAP–nowon itsinfrastructure offering.

But is that offering business agilitybeyond the IT side?A recentBusinessWeek article, ‘The cloud: battle of thetech titans’, looks at Amazon vs the restand focuses prettymuchon the scaleargument, with users renting server timeto analyse sales data, for example. Butit does note that time tomarket is amajor pull.

The city ofMiami, for example, hasquickly built a service thatmonitorsnon-emergency calls. “Local residentscan go to awebsite that pulls up amapofthe city andplace pins in every spot tiedto a complaint. Before the cloud, the citywould have needed threemonths todevelop a concept, buy newcomputingsystems (including extras in case of ahurricane), get a team to install all thenecessary software, and then build theservice.” Such systems are unlikely to bebuilt in the ‘conventional’ way in thesecash-strappeddays.

SandwichcourseGooduse of a private cloud – this timeonGoogleApps – is by food chain EAT,which is improving business processesby usingGoogle Talk for instantmessages between storeswhen one runouts of a popular sandwich, for instance;Google Forms for head office to surveyshopmanagers to capture issues andideas; and integrationwith smartphones,formanagers to access documents andorder stocks on themove, and to overseea number of restaurantswhile beingstationed at one.

The receivedwisdomabout suchbusiness cloud applications is thatvendors are approaching businessdepartment heads, not ITmanagers, tomake sales, althoughnotmuchenterprise software of any type has beensold thisway since the dot-comcrash.

It certainlymakes sense in one of the ▲

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hardest functions to crack, thesalesforce, which has long put upresistance to clunkyCRM(customerrelationshipmanagement) systemsfoisted on them. Just becauseSalesforce.com’sCRMsystem iscloud-baseddoes notmean it does nothave the adoption problems that CRMhas suffered from– incentives and goodmanagement tend to fix that. But a cloudsystemcan greatly helpwith businesschange in hard to reach parts of a firm.

Inmany companies there is a blackhole of forecasting andpipeline data onsales, and it doesn’t help thatmostmajorenterprises – certainly in the FTSE 100– are led byCEOswith no salesexperience. It’s an area tailor-made forthe cloud since somuch knowledge is insilos – arounddepartments and in theheads of salespeople – andbest practiceis not shared.

FastforwardforsalesPhil Codd, chiefmarkets officer fornorthern Europe at software testing firmSQS, choseSalesforce.com to solve amajor sales reporting problem– in thepast, reportingwas on an individualcountry basiswith a complexmix ofspreadsheets, emails andword ofmouthwhich placed a lot of pressure onaccurate and timely sales forecasting.

Codd took advantage of Salesforce.com’s 30day free trial of its SalesCloud2, and thenworkedwith consultancySaasPoint to implement it in just 40working days – and the company nowhas a central repository of sales pipelinethroughout the region in real-time, andall sorts of newopportunities for sharingsales best practice and leads by usingtools such asSalesforce.com’sChatter,an internal socialmedia system.

Anything that producesmore than thesumof a notoriously self-sufficient group

of reps ismore than useful and it’s hardto underestimatewhat this can do for acompany – Larry Ellison, the colourfulboss of software giantOracle andnowacloud convert, famously cracked thewhip a few years agowhenhe realised hehadno ‘dashboard’ to seewhat hisbusiness unitswere doing in a timelyfashion round theworld – and got itdone, of course.

In-housenotanoptionTrying to build an in-house systems to dothis is obviously counter-productive intime andmoney formost companies thatare not of the likes ofOracle. AndwhereSalesforce.comalso scores is in itsbrilliant decision to create theAppExchange platformwhere users canintegrate andusemanymore functions,froman800 long list, and that’s apartfromSalesforce’s own extras.

Another function that’s benefitingfromcloud ‘agility’ is logistics, whereproviderDeltion is gaining a gooddeal ofsuccess for its CarrierNet platform.Managing directorDenisO’Sullivan,himself a logistics expert brought in torun thisUKfirmayear ago, sayslogisticians have been ‘crying out’ for along time for real-time visibility acrossthe supply chain to iron out customerservice problems,which he saysCadbury (nowpart of Kraft) is doingwithCarrierNet, a cloud system.

KeithNewton, customer logisticsdirector at Cadbury says: “Theimplementation has enabled us tomovefroma series of unlinked systems to awebbased interfaced solution that hastotally eliminated a number of areas offailure. It links all internal logistics andplanning teamsatCadbury, all tier onethird party logistics service providers, allsecond tier hauliers subcontracted tothem, and customers via alerts, SMS

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•Human resources (HR) systems are notobvious targets for the cloud but vendorssuch asSuccessFactors are proving thatproperlymanaging the entireworkforce interms of skills, knowledge and structure canhave a big impact on business performance.European users such as constructionsupplier Hilti are big fans.

• The public sector hasmuch to gain from thecloud – in theNHS, CountyDurhamandDarlington Foundation Trust, a consortiumoften organisations, is usingWaxDigital’sweb3procurement system tomake it easierfor staff across the consortium to selectgoods and services for purchase and placeorders quickly and simply, enablestreamlined financial control andauthorisation, and accelerate the supplyprocess to nearly always ‘next day’.

• Projectmanagement is a shoo-in for thecloud, as Vodafone is discoveringwith theProjectplaceweb-based communication

systems. “Finallywe have a central systemfor storing files, working on themandretrieving them, always in real-time. Anyprojectmember can access it, andmostimportantly, the latest version is alwaysavailable,” saysAlexanderGottschlich,global programmemanager at Vodafone.

• TheGreenHouse, a small Northampton-basedbusiness specialising in environmentalservices,manages around 500,000scheduled collections a year through itsrecycling division alone. In the past, all ofthese transactionswould have been carriedoutmanually. Issueswere typically sortedout over the telephonewithmultiple callsroutinely taking place between the company,its suppliers and clients. Thiswas atime-consuming, resource-intensive andexpensive process. Today, the companymanages all of these collections throughSalesforce.com’s ServiceCloud, intowhich ithas integrated a large number ofworkflowsand approval procedures.

Morebusinessapplicationsinthecloud

and emails. “It is no coincidence thatsince implementationwehave recordeda number of ‘100%customer servicedays’, which is a significant achievementfor a large FMCGfirmsuch asCadbury.”

Forwhich read – if the truck breaksdownandnoone knows, the kids don’tget their chocolate. O’Sullivan adds thatlarge retailers are also in themarket forhis system–which againwould beprohibitive now to try andbuild in-house– and alsomentions a client calledRigidPlastic Containers (RPC)which usesCarrierNet to checkwarehouse stock andproduction schedules before processingtransport orders. If there is nowarehousestock, the systemchecks if the ordereditemswill be produced in time for

despatch. If there is a potential problem,an exception alert is raised and theproblemmanagedwith the customer.

Logistics examples are significantbecause they often involve theecosystems that promotemore businesstransformation across partners – addingreal-timebidding systems to take onjobs, for example, is another featureO’Sullivanmentions that a client is doing.An ecosystemalso becomes apparentwithin companies as they use cloudsystems for human resources.

In somecases, it is certainly the casethat cloud technology creates a newbusiness agility opportunity. In others,it’s enabling better a knownneed. DonaldRumsfeld had a good take on this…■

cloudpro.co.ukTheUltimateGuidetoCloudComputing26

CloudTypes

MUCHOFTHEDEBATEabout cloudcomputing has focused on twodistincttypes of operation: the public andprivate clouds. But although they arebundled under the convenient termofcloud computing, they are very differentoperationalmodels.

PublicstartedwithAmazonPublic cloud,which is simply using theInternet to access computer servicesof one sort or another, has its rootsin the decision byAmazon in 2002to use its vast infrastructure to offercomputer facilities to customers. Thecompany launched a range of servicesto developers, including storage and adevelopment platform.

Amazon’s initiative, which precededthe phrase ‘cloud computing’ itself, hasbeen followedby the likes ofGoogleand a selection of hosting companiesas they seek to capture the interest inthis approach.

As if to demonstrate that there’snothing newunder the sun, this isa throwback to the concept of thecomputer bureau,where companiespaid amonthly fee to buy timeon amainframe. It’s a business that hadseemed to die a deathwhenPCs and theclient-servermodel came into play.

Like the computer bureaux, publiccloudproviders charge their customerson amonthly basis – generally accordingto gigabytes transmitted andbandwidth.The crucial aspect is that the cloud

Shouldyougoprivateorpublic?

cloudpro.co.uk

CloudTypes


It’snot justaquestionofmovingtothecloud;doyouopt forapublicorprivatesystem?MaxwellCooterweighsuptheoptions

provider bears the entire cost of runningthe infrastructure,meaning that as acustomer youdonot have toworry aboutmaintenance or staffing help desks. Nordo you have toworry about investing instorage hardware, a growing budgetarystrain on organisations as data storagevolumesmove ever upwards.

Crucially, it alsomeans that youdonot have toworry about capacityplanning. This can be a big headache forcompanieswith seasonal fluctuations,where theymight have over-provisionedfor peak traffic. That’s a headache thatthe newbreed of cloudproviders candealwith.

So, public cloud offers a number ofadvantages to organisations, particularlysmall businesses and start-ups, bothofwhichmayhave no IT departmentandwhichmaybe reluctant to tie upcapital on an IT infrastructure. There are,however, downsides too.

Themain disadvantagewith publiccloud is that there are some securityissues. Companieswill have to handover confidential data over to a thirdparty and formany firms this is amovetoo far. Therewill beworries aboutcustomer data being released intothe public domain, concerns aboutcompanies being held legally responsiblefor breaches of privacy legislation andworries about sensitive data being heldon a server, particularlywhere twocompetitorsmight be hosted.

But if you’re starting small, public ▲


CloudTypes

cloudwill almost certainly be theway togo as it will be able to handle somethingas small as say a basic client contactdatabase for a couple of salespeople.Andmanyproviders offer simple storageservices for single users.

IncontrolwithprivatecloudThe genesis of the private cloudwas verydifferent. There’s no public operator andeverything – hardware and software – isprovided by you, the user. It soundslittle different fromamore conventionaldata centre, where your servers andapplications are hosted by a specialistprovider. Indeed there are somecommentatorswho claim that theidea of a private cloud is an oxymoron,and reallywe should be talking aboutdata centres.

Proponents of private cloudsmaintainthere is a difference: themain featuresof a private cloud are a ‘virtualised’infrastructure coupledwith softwarethat allows IT users to treat that

In the privatecloud, you haveresponsibilityfor buyingthe hardwareand software,maintaining it andmanaging storage

infrastructure as a centralised pool ofcomputing resources.

Other features of the private cloudare automation,meaning thatmanyof these tasks are handledwithout theintervention of an IT department, andthe ability tomeasure andmonitorwhat resources have been allocatedto different departments, which couldalsomeans companies are able tointroduce chargeback for resourcesthat have been consumed.

In the private cloud set-up, you haveresponsibility for buying the hardwareand software,maintaining it andmanaging storage. As such, privateclouddoesn’t offer somany advantageswhen it comes tomanaging cash flow.

But there are other advantages. Youconnect to public cloudproviders byusing Internet connections – these are,by their very nature, slow. Thismeansthat anyone trying to shift large filesaroundwould find the experience a lotof slower. On the other hand, private

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CloudTypes

cloud infrastructures often use privateconnections, offering amuch speedierexperience, although there are issues forbranch offices thatmay need to use aslowerwide area network to get accessto themain corporate link.

In addition, the private clouddoesn’thave the security issues that could causeproblems for public cloud users. All datais retained by your company and youcontrol all access over a private ‘firewall’.

What’s important here is that not onlydo you keep tabs ondata – but you alsoknowexactlywhere, geographicallyspeaking, it’s being held. This not anacademic principle, as there areimportant legal restraints onwhere datacan or cannot be held and companieshave to bewary of their statutory duty forprotecting customer information.

Whynotgohybrid?There’s no need to choose betweenprivate or public, as organisationswithmore than basic needs for cloud ITcan opt for both in a hybrid approach,with some services in a private cloud,others in a public one. This could stillbemanagedby oneprovider and canaddress concerns such as holdingsensitive data – such as customer creditcard details – only on a private basis.

But youmaybequite happy for staffto use say Twitter or Facebook –whichare public cloud applications, after all– for customer communication, or anyof theGoogle apps, such asCalendarandDocs, or saySalesforce.com, forcommunications amonggroups ofstaff, where ease of use is the foremostconsideration.■

PUBLICVSPRIVATECLOUD:prosandconsPUBLICPROS• Less expensive than private clouds•More accessible than private clouds• Short-termor temporarycommitments

• Faster to deploy a single user thanprivate clouds

PUBLICCONS• Fewer usermanagement controls•One-size-fits all approach (nottailored to a single organisation’s oruser’s needs)

• Impersonal support, often via email,chat, or FAQs only

• Security and uptimemight notmeetenterprise compliance standards

PRIVATEPROS• Can be secured tomeet complianceat almost every level

• Single tenant environments eliminatethe possibility of other companiesaffecting performance

•Private data centres usuallyaccessible to IT auditors

• Customisable tomeet an individualorganisation’s needs, rather than themass approach of public clouds

PRIVATECONS•More expensive to deploy andmaintain than public clouds

•May have longer-termcommitmentsthan public clouds

•May have less flexibility sincehardware is dedicated to a singleorganisation

SOURCE: WWW.FOGODATACENTERS.COM


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Board-levelprioritiesforcloud


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MaxwellCooter takesatourthroughthetopboard jobsaffectedbywhat formanywillbeamajorbusiness

change in theyearsahead

CLOUDCOMPUTINGHAShad a shorthistory. It was unheard of as a termbefore 2007 and in just four years it hasrisen frommarketing shorthand tobecome the symbol of amassive changein technology.

Whatmakes cloud computingdifferent is that it’s a technologicalchange that touches on every part of thebusiness. For the finance director thereare changes in theway IT services arebought; salesmanagers have a newwayto communicate and interactwith theirteamsand customers; the IT directorwillfind his or her budget, strategy and teamtransformed. Above all, theCEOwill haveto think about theway his or her entireorganisation is structured.

In the future, we could be talking abouta complete overhaul of thewaycompanies are constructed, about howthey consume IT, about how theiraccountingworks and, indeed,wherethey’re located (see also section onbusiness change, page 22).

But those changesmeandifferentthings to different parts of the business.If we look at theway cloud servicesimpact on different job roles, we can seethat they’re going to approach thesechanges in very differentways.

ForthefinancedirectorPerhaps the biggest driver for themoveto cloud is the need to save costs, butthatmoveworks onmany levels.

The change that has garneredmostpublicity is themove fromcounting IT asa capital expenditure to an operationalone. Although often cited as a reason tomove fromon-premise hosting to cloud,this is somewhatmisleading.What’sreally at stake is cash flow; by goingdown the cloud route, customers nolonger have to commit to large costsupfront. It isn’t necessarily true to say

▲


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that it’s always going to be cheaper, butthere are other advantages.

Theremay evenbe a price premium inopting for cloud, but that needs to be setaside for other considerations. The priceof renting a server could initially appearto costmore than purchasing, but thefinance director has to consider the costof power and cooling, the cost of staff,themaintenance costs, accounting forbackup anddisaster recovery andvarious other costs.

There’s also the fact there’s no longerthe need to be so rigorous about capacityplanning – that becomes a headache forthe cloudprovider, not yourIT director – and companieswill bemore flexible aboutinstalling new services andscaling up anddown.

This is an importantaspect. Previously the ITdepartmentwould haveinstalled an infrastructurethatwould be able to handlethe peaks of the business.Thiswas always a grosslyinefficientway of organisingIT services. It could be an infrastructurethat is geared up to handle peaks oftraffic – perhaps around the end offinancial quarters, or aroundChristmasfor retailers.

But those brief periods of intenseactivitywould have an effect on ITprovision for the entire year – rather asif a family of four opted for aminibuspurely to copewith the yearly visit ofthe cousinswho lived abroad. Cloudcomputing changes all that: for the firsttime, organisationswill no longer have toplan for the periods of greatest demand.

Coupledwith thiswill be a change ofpracticewhen it comes to allocatingdepartmental costs. Finance directorswill nowhave an accurateway of

Youno longerneed to be sorigorous aboutcapacity planning– that becomes aheadache for thecloud provider,not your ITdirector

decidingwhich costs are set againstwhich department. This is a fundamentalshake-up: even companies that havechargeback to separate departmentshave often found this is littlemore thanan estimate of a share of the costs.Managers have few tools to assess areal cost and have derived a figure fromacombination of real figures andinformedguesses.

Now there’s a real way ofmeasuringjust nowmuch computing time themarketing department has used, howmuch storage the graphics departmenthas grabbed and the bandwidth needsof finance.

That capability, however, could lead tosomefinely tuned judgment.When


EnterpriseCloud

departments’ real costs are assessedaccurately there could be someresentment from those that have beenundercharged in earlier years andnowfind their costs increasing (orresentment fromdepartments that have

been overcharged forseveral years). Eitherway,the finance director islikely to act as thediplomatsmoothing over territorialdisputes, ensuring thewinners don’t gettriumphant and the losersdon’t becomeembittered.

Another key area thefinance directormust keeptabs on is licensing.Many

vendors have not yet grasped thetransformational nature of cloudcomputing and their licensingmodelsare not able to copewith this newparadigm. The finance director, inconjunctionwith the IT head, needs toassess the state of licensingwithin theorganisation,making sure that thecompany isn’t overpaying.

The thorniest problemof all will be thenegotiation andmonitoring of the servicelevel agreements (SLAs)with cloudproviders.While the IT directorwillprobably remain the best person tocheck on service delivery, the financedirectorwill need someunderstandingof the potential level of financial losssuffered and the possible levels ofcompensation. This is a crucial area forthemove to cloud computing: delivery tothis sort ofmodelwill neverwork if thecloudprovider can’t provide the desiredlevel of service and if the customer isunder-compensated.

Ever since cloud computing emergedas a newcatchphrase for the ITworld,there have been several vendors leapingon to the cloudbandwagon and ‘cloudwashing’ existing products to suggesta strong commitment to the cloud.There are somefinance directors or ITdirectorswhomaybe tempted to followthe samepath and ‘cloudwash’ their ITdepartment. These instanceswillprobably be rare but there’s certainlybeen some resistance to the idea ofcloud computing fromsome ITdepartment chiefs and the financedirectormayfindhimself as some sortof cloud arbiter.

The stakes are high for businesses.It will be a rare company that reliesentirely on in-house IT in future. Somecompanieswillmove entirely to thecloud, somewillmove part of theinfrastructure, somewillmove none. It’s

The stakesare high forbusinesses.It will be a rarecompany thatrelies entirelyon in-house ITin future ▲


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a decision that’s going to require somecareful assessment of the pros and consand the finance directorwill play a vitalrole in assessing the financial rationale.

FortheITdirectorIT directors have a different path tocloud. They have been aware of thedebate and someof the buzzwords:public cloud; private cloud;software-as-a-service; outsourcing;cloud-sourcing; crowd-sourcing.But, unusually, these terms are just aslikely to have come from the board asfrom the IT side.

For once, themajority of hardcoretechies and their sources haveunderplayed the significance of cloud.This is partly because it’s perceived as athreat – outsource services and you’llsurely lose part of your team, is thethinking – but also because for themit’s an emergent set of trends invirtualisation andhosting: a confection,made out of pre-existing componentswith the key innovations happeningseveral years ago.

Thismakes the balance of emailshitting inboxes of IT directors all thestranger; a vast number of people, withsalespeople in the vanguard, areattaching theword cloud to their salespitches as if it’s their road to personalsalvation. In this newworld the cloud isthe outsourcing industry’swholeheartedattack on themassive budgets andimposing empires of corporate IT. That’swhy less tech-savvy board colleagueslove it somuch. It isn’t easy for an ITdirector to reject all these overtures.

Among the ambitiousPowerpointpresentations there’ll be a quiet voicefromaclever guywhopromises to chopyour re-investment costs by 75%,withoutmoving a corporate datasetoutside your building. That last guy is

talking about private clouds, which is thedata centre, virtualised and shrunk, andmademobile (in the sense that it canmove fromone compute host to another,and nothing at all to dowith the iPhone).

IT directorswho get drawn into anearly-adopter, single-purposecloud-badgedproject, could findthemselves in great difficulty if they don’tcheck details carefully. This is becausethemomentumof the optimistic,ignorant andmisguided canbe anastonishing thing, andbecause thehosting business has very little in thewayof verification, standards, agreedprocedures, or compensation packagesfor the daywhen something goes ratheramiss. Hosting underpins cloud, and alsowagepackets if the IT director bets thecompany’s operations on it.


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Cloud companies that don’t presentrationalmeans of running their serviceswhen their ownplatforms are offlineare scarcely credible to seasonedtechnologists – so you have to be ableto say, “What happenswhen it doesnotwork?”

The answer lieswith a private cloud.If sales teamsare expected to dothousands of deals a day on an externallyhosted service, then replicating that datainternally on a compatible virtualisationplatform is an insurance policy againstnot just kit failure at the software-as-a-service provider but also the sudden lossof your own Internet connection, perhapstraced to a telco’s engineeringworks inthe street outside.

In all likelihood, the eventual impactof cloud conceptswill be somewhat lessthan the hopeful CEO–dreaming oflosing his entire IT department –currently thinks. But it will also be a lotgreater than the scornful nerd, looking atthe toolbox cloud uses for delivery and

finding nothing neworclever about it, is currentlyable to foresee.

It’s also possible foran IT director to be in abusiness so secure, or soclosely tied to physicalprocesses, or so hugelydependent on a specificand ancient softwaresuite, that there’s nochance ofmaking use ofthe high-profile parts of

cloud computing. Companies running afactory floor ofmillingmachines, or ametro line full of ticket readers, will find itdifficult to run an on-demand capacityexpansion project.

What the IT director does finddifficultis to show that cloud computing hasbeen assessed as a possibility. There’ll

be a lot of pressure on them fromless ‘techie’ boardmembers and it’simportant that the cloud option has beenthoroughly investigated.

ForthechiefexecutiveThemodernCEO isn’t going to beshort of advice in his attempt to getup-to-speedwith cloud computing. Butmany of the opinionswill be proffered bya host of vendors, cloudproviders andchannel partners – all of whichwill havetheir own agenda.

So,where does theCEO look to getthe best advice on amove to the cloud?There are some things to focus on atthe highest level, which lower-levelmanagers and ‘direct reports’ won’tnecessarily have at the forefront of theirminds. Terminology is one of thosethings. Your irritation at technical typesbabbling away using terms they don’tdefine, nomatter howwell-intended youcan see they are, gets some real teethwhen it comes to cloud topics. There areamultitude of definitions out there, sohowdo you sort outwhich is best?

The top priority for anyCEOcontemplating amove to the cloud isto check the small print as if your lifedepends on it – because it could be thatyour businesswill come to dependon it.If you’re unsure, consult with lawyers.

Cloud is about delivery of servicesand ensuring that cloud providersmeetwith their responsibilities. ResearchfromQueenMaryCollege in 2010revealed awide disparity of wordingwithin cloud computing contracts. Thisis one areawhere the small print is notto be ignored as the contract will be thebasis for theway that the company runs– indeed it could be crucial towhetherthe company survives or not if thingsdon’t go quite to plan.

What happenswhen a cloudprovider

Cloud companiesthat don’t presentrationalmeans ofrunning serviceswhen theirownplatformsare offline arescarcely credibleto technologists

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is hit by a denial-of-service attack?What stops a provider frommoving datato another jurisdiction for cost or legalreasons? Is the provider the definitiveprovider-of-last-resort, or is it justreselling someone else’s package?What happens if a customerwantstomoveproviders or go back toin-premise?Duediligence isn’t just a tickbox in taking up services in the cloud, it’samajor component of the project time.

The next question for an organisationto consider is howclosely it wants toworkwith its cloudprovider. Somewillbe hands-off and see themselves as afacility for handling peak demands.Somewill bemore personal and try to beintimately involved in their customers’business. Bewary though: the dreamofmany of the upsellers in the currentwave of cloud hype is to pretend to beremovable, when in fact they fully intendto hook customers for the foreseeablefuture. Keeping independence is verymuch aCEO-level question, as is the exit

strategy. Cloud ismeant to be all aboutsteeringwork to an available resource,notwatching it vanish behind someoneelse’s security gates.

Cloud computing presents theCEOwith amajor opportunity to reshape andreorganise their business. It’s not justabout IT, it’s about how to use, analyseand improve companydata and it’sabout using IT to have an impact onbusiness processes.Many companieshave operated on the ‘we’ve always donethings thisway’ principle – cloudcomputingwill offer the opportunity todo awaywith this thinking.

Cloud computingmaynot be for everybusiness or everyCEObut every oneshould be looking at the technology.The best companieswill be thosewherethe board looks at the direction theorganisation is headed over the next fiveyears and the bestmeans for gettingthere. If that involves cloud, now is thebest time to be thinking about it. If not,your competitorswill be. ■

1 Start by knowingwhere the organisationstands on the cloud computing continuum.Use benchmarking and gap analysis tounderstandwhere you are today

2 Conceptualise and communicate acompelling vision for using cloudcomputing to advance business objectives

3 Develop a cloud strategy and executionplan that incorporates any ad hoccomponents implemented already andlays out a systematic approach tomoving forward

4 Understand the goal, which is not to getto cloud computing, but to achieve

ever-greater levels of business efficiencyand agility

5 Progress systematically through the fivelevels* of cloud computing components,realising that not all components areappropriate in all situations

6 Balance the use of private and publicclouds to formahybrid cloud that drawson both private and public cloud resourcesas needed

7 Focus on automation, which is the key toefficiency, agility and scalability

* SET OUT IN PWC’S PAPER, ‘CLOUDS IN THE ENTERPRISE: NAVIGATING

THE PATH TO BUSINESS ADVANTAGE’, AVAILABLE AT WWW.PWC.COM

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CloudandSMEs


Smallorganisationsareobviouscandidates forcloudcomputing–but there’sstill anawareness issueandSMEsshould treadcarefully, saysMaxwellCooter

Cloudandsmallfirms–agreatmatch

CLOUDCOMPUTING IS anunusualphenomenon in the ITworld as it is beingused equally by small businesses andenterprises. Indeed, it’s the smallerbusinesses that should benefitmost asthey are the companies that tend not tohave large IT departments. Some smallcompanies have no IT departments at alland are serviced by someonedoing thejob in his spare time, or by a localservices company.

This is not the normwhen it comes totechnology. The natural order of thingsis for IT advances to start off in largebusinesses andwork their waydownwards:mobile phones started as anexecutive toy, noweveryone has one;routerswere part of the arcane globaltelecomsworld, nowpeople areconnected at home.

Cloud computing has beendifferent –there aremany instances of SMEsadopting cloud-baseddeliverywholeheartedly, while larger enterpriseshave hesitated. Indeed, AndyBurtonof theUK’sCloud Industry Forumbelieves that cloud computing is thefirst case of a technology that started insmall businesses andhasmoved tolarger ones.

IstheUKlaggingbehind?But that’s not the complete picture. Inreality things are not entirely rosy for the

cloud andSMEs. There have been somevery enterprising small businesseswhohave been happy to adopt cloud as thebackbone of their IT set-up but there’salso a gooddeal of scepticism.

A survey in 2011 revealed someof thishesitancy. According toVMware, aprovider of virtualisation software, only48%ofBritish SMEshadbegunusingcloud technology.While this looksencouraging, the same survey found that60%of small businesses across Europewere going down this path. Other surveyshave found even larger gaps in adoptionand one reported that 43%of SMErespondents didn’t even knowwhat thetermmeant.

There are twoproblemswith this: for astart, there aremillions of peoplewhoare happily using consumer cloudservices, such as Facebook andGoogleMail, not tomention commercial cloudapplications such asGoogleApps andvarious smartphone apps. Second,figures fromanalyst IDChave shownthat small businesses do not appear tobemiserlywhen it comes to cloud –£9.8 billionwas spent on cloudtechnologies in 2009andhalf the figurecame fromSMEbudgets, it reports.

The seeming gapbetween theperception of cloud and expenditure canalmost certainly be explained by a lack ofunderstanding ofwhat cloud is. There’s a

CloudandSMEs


good chance that business people areusing cloud services – even if they don’tactually know it.

Software:thechoiceisyoursThe other issue is that small companiestendnot to beburdenedwith large legacysystemsor have equipment that need tointegrated in a cloud service. That’s notto say that somedonot have bespokeapplications and specialist computer kitthatmay take time to phase out.

But if you’re operating a start-up, thereis little need to run any sort of IT facilitiesat all. By opting forGoogleApps orMicrosoft’s newOffice 365 cloud suite, abusiness could have all its productivitysoftware (word processing, calendar,email and so on)working in the cloud.Thebusiness could alsouse accountancysoftware such asKashFlow to run itsfinancials, Salesforce.com to handle itscustomer relationships and any numberof software packages to look after itsHR,marketing andprocurement.

Higher up the scale, NetSuite offerscloudERP (enterprise resourceplanning) software – the type of packagethat’s normally the preserve of largebusinesses. In fact, just about everyaspect of amodern day business couldbe run on cloud-based software.

And it’s not just newcloud vendorsthat are providing options for these

Cloud computingis thought to bethefirst case of atechnology thatstarted in smallbusinesses andhasmoved tolarger ones

▲

CloudandSMEs


companies: plenty of long-establishedsoftware firms are now in on the act.Accountancy software specialist, Sage,has released its own cloud-basedsoftware, ERP specialist SAPhas takenits first steps down the cloud route andOracle is embracing the technology,despiteCEOLarry Ellison’s initiallydismissive remarks about cloud.

Themost remarkable transformationof all has beenMicrosoft, which is amainstay for somany smallorganisations in all sectors of theeconomy. The company’s reputation hasbeenbuilt on boxedproducts and itslicensingmethodology hadbeen gearedtowards this. But in 2010,Microsoft’sCEO, SteveBallmer, said that thecompanywas betting its future on thecloud and since then it has looked to turnthat vision into reality.

Office 365 is its step in that directionalthoughMicrosoft, unlikeGoogle, itsrival in the productivity suite stakes, has

Microsoft’s CEO,SteveBallmer,said that thecompanywasbetting its futureon the cloud

not quitemanaged to divorce itself fromits roots andOffice 365does requiresomeaccess to elements such asExchange, SharePoint and Lync. Googledoes offer a 100%cloud-based,standalone productwithGoogleApps,whichmany companies are turning to– although the companydid lose somepopularitywhen it reduced the numberof users supported in its free versionfrom50 to 10.

A picture ofwhat smaller companiesare adoptingwhen it comes to the cloudcomes fromUS industry associationCompTIA,which in a 2011 survey reports

that storage andbackupsolutions are themostheavily used cloudapplications (71%of SMEsusing the cloud), followedby email (62%), documentmanagement (59%),collaboration (56%) andcustomer relationshipmanagement (53%).

About a third of SMEs, it adds, are usingcloud services, and an overwhelmingmajority – 92%–say their experiencehas beenpositive or very positive.

CountingoncostsavingsBut it’s not just the availability of heapsof software that’s attractive to smallbusiness. There are also financialbenefits. One of the biggest problemsfacing start-ups is cashflow, and theonset of cloud has reduced the cost ofgetting off the ground significantly in thelast decade. The arrival of cloud has alsomade it easier to plan – financialforecasting becomes easier – andpaying for services is nowmore simple.There are nomore visits to the bankmanager trying to argue about creditarrangements: awhole IT infrastructurecan be arrangedby the judicious use

CloudandSMEs


of the company credit card.But not only that, there’s no longer a

need to guesswhat computer resourcesare needed: a company owner can nowafford to start small and build up afterthe revenue has come in.

Havingmade the decision to gowithcloud, the next stage is towork out thehardware: if you’re not going to runwitha server under your desk or tucked awayin a corner somewhere, you’re going toneed a cloud service provider. Again,there are a host of providers to choosefrom, ranging from thosewhowillprovide youwith your own remote serveror a virtual server (that is, one dedicatedto you or sharedwith other companies ina public cloud).

The company that really kick-startedthe cloud ethos for small organisations isAmazon. The company realised that ithad a large amount of under-used ITresources and it started selling someofits spare computing and storagecapacity. AmazonWebServices nowhasamassive share of themarket – inAugust 2011, the company announcedthat its clouddivisionwas nowabilliondollar business in its own right. It offers a

range of cloudproducts but itsmainones are EC2 (Elastic ComputeCloud)andS3 (Simple StorageService), bothofwhich arewidely usedby smallbusinesses around theworld.

BewarethesmallprintHowever, while it sounds like it could bea perfectmatch, there are still issues forSMEs to consider. Regardless of the sizeof the contract, it’s still essential to get acontract checked to ensure that it coversall possibilities.

Companieswould havemore piece ofmind if vendors had some formofcertification: theUK’sCloud IndustryForumoffers a self-certified code ofpractice that several companies(includingMicrosoft) have signed up to.Alternatively, there’s amore rigorousoffering in the pipeline under the bannerof another industry organisation,Eurocloud. This accreditation scheme,the EurocloudStar Assessment, is notself-certified and costs the vendor a lotmore to attain.

After checking the provenance of acloud supplier, the details of its contract,formulating a disaster recovery plan andprovisioning the initial services, then acompany is ready to go.ManySMEswillhave used a reseller to handle this part ofthe business, inwhich case it’s importantto knowwhat after-sales plans are inplace.Many resellers have beensuspicious of cloudbut the goodonesknow that it presents a newopportunityand are ready tomeet the challenge –a helpful resellerwill be invaluable inthis process.

Small businesses and cloudcomputingmake a natural fit – even ifthey don’t always realise it. Theremaybesomehesitancy out there butwe’re goingto seemost small organisations turn tothe cloud in the future.■

• Start small and build up – don’t overprovision• The pay-as-you-go ethos is helpful but keep an eyeon costs, PAYGcanwork outmore expensive thanon-premise; be sensible in your planning

•Have a proper back-up anddisaster recoveryprocess in place – if something can gowrong, it will

•Make sure that you’re buying services fromareputable supplier – there is a lot of ‘cloudwashing’(ie. deceptivemarketing) out there

• You’re still responsible for compliance – don’t passthe buck to your providerwhen it comes toconforming to regulations

Keyissuesforsmallbusinesses


CloudContracts

If yourelyonapubliccloudserviceyoucouldbe in forashock if theservicegoesdown,asLesleyMealldescribes

WhattolookoutforinCLOUD CONTRACTS

IT’S ALLVERYWELLbeing charged onlyfor the computing power you use – aslong as it is therewhen youwant it. Sothe outage of Amazon’s Elastic CloudCompute (EC2) service in April 2011 –when someuserswere offline for severaldays, an eternity in today’s tradingworld–made a lot of people understandablyvery unhappy. It brought awry smile tothe faces of observerswho said it wasonly amatter of time before somethinglike this happened, although not becausecloud computing is inherently risky.

The incredulous cries of unhappyAmazon users showed just how little

attentionmany had paid to the smallprint before they signed up. AsMartynHart, chairman of theNationalOutsourcingAssociation (NOA), says:“Cloud computing is not like normaloutsourcing,”meaning that contractscan be far less rigorous thanwhensigning upwith say a payroll supplier.That said, private cloud contracts, atleast, can look a lot like traditionalmanaged services, which in turn can bemuch like outsourcing aswe know it.

But public cloud services, whichmanysmaller organisations are nowusing forvital parts of their business such as email

▲


CloudContracts

and payments, can leave a lot to bedesiredwhen it comes to service levelagreements (SLAs), which are one ofthemainstays in outsourcing andservices contracts.

“Someproviders of public cloudservices don’t offer a formal SLA,”observesCraigWest, a sales director atNetSuite, one of the leading businesssoftware playerswith cloud offerings.This is particularly so in the ‘one contractsize fits all’ world of software-as-a-service. “I think thatwemaybe uniqueamong software providers in offering anSLAwith an uptime guarantee,” hesuggests, adding that if his companydoesn’tmaintain its promised 99.5%uptime in any givenmonth, thencustomerswill have theirmonthlysubscription returned.

West freely admits that the form thistakes is a credit to your account (andif you’ve lostmoney because ofsystemdowntime, thiswill be smallrecompense), but this particular remedy

tends to be the normamong software-as-a-service providers. “Thebalance of power sitswiththe service provider,”observesHart, and youdon’t have towade very farintomost public cloudproviders’ carefullyworded ‘terms of service’to see how little theyresemble a formal SLA.

This lack of formality is present inmost public cloud services, and it’ssomething that looms large on the radarof any specialist solicitor (or experiencedbuyer ofmanaged services). “Someorganisations really understand thenature of what they’re entering into,”reports IanMarriott, at analyst Gartner.“If they have been involved in lots of

Cloud computinghas put the powerto select IT intothe hands ofpeoplewho do notalways appreciatethe need for duediligence

these types of relationship there is a levelof knowledge and expertise that enablesthem to appreciate the challenge.”

The trouble is that cloud computinghas put the power to select, commissionand pay for IT services into the hands ofpeoplewhodo not always appreciate theneed for thorough (and ongoing) duediligence. According toGartner, it isessential that those planning to contractfor cloud services do a “deep analysis onthe impact and probability of the risks”,mitigate for the issues that they considermost critical, and then revisit thematfrequent intervals during the lifetime ofthe contract – though understandingthese risks calls formore than a passingacquaintancewith contract law.

So, what can buyers of cloud servicesdo to protect themselves?Well thatdepends onwho you ask, which typeof cloud service you are using orplanning to use, and the size and typeof organisation that is both buying them


CloudContracts

and providing them. At a recentconference on cloud computing, lawyerMarc Lindsey, a partnerwith theWashingtonDC lawfirmLB3, firmlyadvised enterprises to protectthemselves by “demanding” that cloudservice providers “put their ownmoneyat risk” and offer “liquid damages forSLA violations”.

In practice, this is only possible ifthe relationship between the serviceprovider and the buyer is an equitableone, where the balance of power andthe balance of risk are not so clearlyone-sided – as is the casewithmostpublic cloud service providers andsmaller firms that is typical of theircustomer bases. AnSMEuser of a publiccloud service that is unhappywithwhat’sbeing provided (or not provided) haslittle ammunition.

With little negotiating power, theyappear to have a choice between votingwith their feet or followingGartner’s

recommendations. But the lattermeans expending time,money andother resources on a risk analysis, andthen devotingmore time,money andresources to building resilience intotheir own systems, or factoring thecost of not doing so into the cloudcomputing cost-benefit analysis theyshould have done, but probably didn’t.All of whichmakes public clouds seema lot less appealing.

Then again,maybe there’s anotheroption. Despite his disinclinationto consider cloud computing asoutsourcing, Hart at theNOAhas someadvice on contracts and relationshipsthat could stand future SMEbuyers ofpublic cloud services in good stead.“Think about the balance of powerwhenyou choose your supplier,” he suggests,and try tomatch the size of theirbusiness to the size of your business.“You don’t want to be a small fish in agiant pond.”■

Here’s a quick checklist when itcomes to contracts:

• Evaluate howmuch you’rewillingto pay to ensure yourmove to thecloud doesn’t end up losing youmoney, or your business

• Review the level of service from theprovider. Does it provide adequateprotection?

• Take appropriate steps – throughyour provider or otherwise – toensure you have a disaster recoveryplan thatworks

•Considerwhat the provider is liablefor andwhat has been excluded.Is this an acceptable level of risk?

Contractssummary


CloudContracts

ONCEYOU’VEMADE the decision tomove away fromcomputer systems thatare physically locatedwithin yourorganisation, there’s another problem tosolve, and that’s the contract you needto havewith a provider.

The type of contract that you havewith the cloud provider (or a reseller ofthe cloud provider’s service) is crucial.Get this part wrong and your businesscould be looking at some seriousfinancial consequences.

There are threemain areas toconcentrate on: reliability, security andliability, and you should be paying keenattention to a cloud provider’s policy onall of them.

Is it reliable?Reliability is about the technicalperformance of the cloud provider’sservice. Do their servers go down?Whatmirroring options do they have in place?Whatmonitoring systems do they havein place? You should be prepared tocarry out due diligence on the cloudcompanies and assess theirperformance. Look at the company’spast performance – does it have agood reputation?

CONTRACTSwhattofocusonFrankJennings, aseniorpartneratDMHStallard,givesanoverviewof themainareas to lookatwhenentering intoacloudcomputingdeal

On the other hand, cloud companiesmay point out that having an ITinfrastructure in-house does notnecessarilymean that your servers ornetwork aremore reliable. Theywill saythatmanaging data centres is their corebusiness andwill claim that they’remuch better atmanaging thisinfrastructure than user organisations.

However, while it’s true that cloudproviderswill tend to havemore robustand bettermanaged infrastructures, youneedmore reassurance than that. It’svital that all the fine details are built intothe service. And the type of cloudprovider is important here – one factorto bear inmind is that buying a standardpackage froma larger operator willleave very little room tomanoeuvre,while customising an offering fromasmaller reseller could offer amoreflexible experience.


CloudContracts

BesecureThere are a couple of factors to considerwhen it comes to security. If you are infinancial services you have to conformwith the Financial Services Act and allcompanieswill have to consider theData Protection Act and the scrutiny ofthe InformationCommissioner. Andoffending organisations can be hit by bigfines: the FSAfinedHSBC£3m for losingdata, for example.

To be blunt, the liability for anybreaches of security or privacy lies withyou – so you need to be concernedwiththe consequences of handing overinformation to a third party. It’s veryimportant to ensure that cloud providersare taking proper steps to protect data.Are they keeping it in the EU, as they’relegally obliged to do, rather than sendingit over to India? Some insist that UKdata is housed in theUK– that’s not

legally necessary but it does give addedpeace ofmind.

Although you as the customer areultimately liable, there are steps that canbe taken. Youmust include in the

contract where the data isheld andwho it can bereleased to. There shouldalso be an indemnityclause that stipulates thatthe cloud provider hastaken all possibleprecautions to avoidsecurity breaches andtakes legal responsibilityfor any losses.

Ultimately, however,market forceswill come

into play. If a company loses data, thenits reputationwill suffer – cloudcompanies are going to stand or fall bytheir reliability and a few securitybreacheswill quickly destroy that.

Who is liable?The third factor to look at is liability –what happenswhen things gowrongwith the day to day service? Again, levelsof compensation need to be placed inthe contract butmoneywill be of littlesatisfaction to a customer that hasgone bust.

Some cloud providers try to excludeliability, rather in the sameway thatinsurance companieswill look not to payout on their policies – although youcould get around this by taking out yourown insurance.

Another option is that cloud providerswill offer some sort of protection but thiswill involve paying a higher fee for a goldor platinum service. This couldmeanthat the cloud company is offering amore robust service, say at a highquality data centrewith bettermonitoring facilities. Or it could be

Liability foranybreachesofsecurity lieswithyou.Beconcernedabouttheconsequencesofhandingdatatoa thirdparty

▲


CloudContracts

based on the fact that the cloudcompany is prepared to paymore ifthings gowrong.

Bear inmind too that youmay signup not with the cloud service providerbut with a reseller, which couldintroduce another level of complication.Youwill be signing on thereseller’s terms but therecouldwell be a clashwiththe cloud hostingcompany – the cloudcompany could beproviding a bronze levelof servicewhile thereseller could be offeringa gold one.

Oneway round this is

by signing a pass-through contractwhere the reseller supplies a servicefrom a named supplier such as AmazonorMicrosoft.

There’s no doubt that themarket willconsolidate over the next few years asthe poorer providers are found out andsmaller cloud companieswill be takenover.While that’s happening, look tosign upwith an accredited cloudprovider, a company that has beenendorsed by theCloud Industry Forumor ISO, for example.

But one thing is certain: the duediligencework needs to be carried outup-front – there is little opportunity forcomeback after a problem,whether it’s asecurity breach or a service issue.■

1 Uptime guarantees –Gartner says it hasseenmany contracts that have no uptimeor performance service-level guarantees

2 Service-level agreement (SLA) penalties– these should be financial and ideallymoney-back and not credits

3 SLApenalty exclusion – look carefully atexclusions to penalties, such as ensuring adowntime calculation starts exactlywhenthe downtime starts

4 Security –Gartner says the provider’ssecurity practices should be at the samelevel as, or exceed, your ownpractices,especially for national privacy-relatedregulations. It recommends negotiatingSLAs for security breaches

5 Business continuity and disaster recovery– contracts rarely contain any provisionsfor disaster recovery, saysGartner, andsomeproviders take no action to back-up

customer data. You should ensure there isaccess to your ownback-upmeasureswhere necessary

6 Data privacy conditions – no personal datasharing should take place but contractscan be complexwhere there aremultiplesuppliers (eg. both a software and platformprovider is used)

7 Suspension of service –best to have anagreement that payments in any currentlegitimate dispute should not lead to asuspension of service, saysGartner

8 Termination –provider contracts oftenhave 30day termination clauses – look toextend thiswhere possible

9 Liability –Gartner recommends aiming forbetter liability protection than just a returnof yearly fees.

SOURCE: IT PROCUREMENT BEST PRACTICE: NINE CONTRACTUAL

TERMS TO REDUCE RISK IN CLOUD CONTRACTS – GARTNER

INDEPTH:topninecontractareastowatchAnalyst firmGartner suggests the following contract issues to considerwhen signing upwith acloud computing provider:

Duediligencework needs tobe carried outup-front – there islittle opportunityfor comebackafter a problem


CloudStorage

Thebenefitsaresignificant…It doesn’t take a genius towork outthatmultiple copies of your data, storedacross disparate servers, ismuch saferthan having all your data eggs in onebasket. But that can cost a lot ofmoneyif it’s your own hardware, so look to thecloudwhere a service provider will beable to duplicate your data across

Offsitedatabackuphas longbeenastapleofenterprisedisasterrecoverystrategybuthasbeentooexpensiveorcomplex forsmallerorganisations.That’sall changednow,asDaveyWinderexplains

DATASTORAGEIN THE CLOUD

multiple, geographically distributedservers. Not only does this significantlycut the chances of all your data beinglost, it also brings the samedisasterrecovery strategies used by largeenterpriseswithin reach ofmuchsmaller companies.

Complexity costsmoney, both interms of infrastructure (such as tapedrives, virtualmachines, offsite storageand technical staff tomaintain it all) andalso business downtime (if you havedata on tape drives at offsite storage andneed to restore servers, the time torecovery becomes stretched). Keepingit simple in the cloud allows smallerorganisations to budget for businesscontinuity, with the added value ofvirtually instant data recovery.

–nowanyfirmcanbenefit


CloudStorage

…butwatchoutforpitfallsThebiggest pitfall of a cloud-baseddisaster recovery strategy is that youmaybe at riskwith a single supplier.While the ability of the cloud to providedata redundancy acrossmultiple anddisparate servers gives a huge amount ofconfidence, you also have to allow for theworse case scenario: your cloudprovidergoing out of business and taking timelyaccess to your datawith it. So toguarantee business continuity, retaininga full backup on your own servers orcontracting a secondary cloud servicemight bewise.

Service level agreements (SLAs) are avital part of any cloud contract, but theyare not amagic bullet that can save yourbusiness if things go pear shaped at your

cloud storage provider. Nomatter howcontractuallywatertight your SLA is, ifthings gowrong all it actually provides islegal leverage. Ensure, therefore, thatyour SLAexplicitly details an agreedremediation process in event of failure sothat your business does not suffer undulywhilewaiting for compensation to arrive.

GettheprioritiesrightAsking the right questions of a cloudstorage provider is essential if both thetransition to a cloud-baseddisasterrecovery process and its effectivenessonce in place are to be trouble free.Proper investigation is vital when itcomes to determining if a provider canmeet the needs of your business in terms

▲


CloudStorage

of compliance, security, data handlingand recovery.

In fact, the specifics of the datarecovery aspects of the service areprobably the last things that you shouldinvestigate and for good reason: if acloudprovider falls at any of the otherdue diligence hurdles then it isunsuitable to be trustedwith your data.

Remember that cloud-based storageservices are still relatively immature, andwith companies keen to jumpon thebandwagonbefore thewheels startwobbling it is vital to ensure that anyservice provider you contractwith has anestablished track record. Youwill want toknowhow long they have been tradingandhowfinancially stable they are.

It’s not that start-up companies aredefinitely off the radar, but be sure totake into account the impact on yourdata should a small companybeboughtout by a larger one that youmayhavealready discounted forwhatever reason.So be sure to properly investigate howeasy it is tomove your data to anotherprovider should youwant to terminateyour contract at any point.

SecurityandcomplianceIf your industry is covered by specificregulatory requirements then your nextquestionmust bewhether the providercan adhere to them.Obviously, if it

If a cloudprovider falls atany of the otherdue diligencehurdles then it isunsuitable to betrustedwithyour data

cannot, or is unsure, then it’s notworthasking anymore questions. If it can, thenmove on tomatters of security. Askobvious question such as howyour datais encrypted, and less obvious ones suchaswhoholds the encryption keys.

Ask aboutwhohas access to your dataandwhat controls are in place to preventboth accidental and intentional abuse,but also ask about physical security atthe data centres. If your service provideris unable or unwilling to answer yoursecurity questions, find one that is.


CloudStorage

Whatabouttheworsecasescenario?We’ve alreadymentionedSLAs, but eventhough an agreementwill not save yourdata if everything goeswrong, a properlynegotiated one could save your business.Ask about business critical issuessuch as availability, security andcompensation from the start. Deal onlywith a service provider that iswilling toenter into detailed negotiations abouttheSLA.

Tomitigate any need to resort to the

Cloud storage can addressmanychallenges that physical storagedoesn’t:

• You are not dependent on a singleserver

• There is no direct dependency onany hardware

• You don’t have to buymore diskspace than you initially need toaccommodate future data growth

•Business continuity is provided inthe event of a site disaster

• A ‘virtual’ storage container can beprovisioned that is larger than thephysical space available

• You can drastically reduceover-provisioning in apay-as-you-gomodel

• You can access your entire storagepool froma single point.

SOURCE: WWW.I365.COM

CLOUDSTORAGE–benefitssummary

SLA, be sure also to ask the provider forfull details of its owndata protection,recovery and auditing procedures, anddon’t be afraid to prod themall with yourdue diligence stick.

What,whereandhowmany?This is data storage anddisasterrecoverywe are talking about, so be sureto ask appropriate questions of anyprovider such as howmany copies ofyour data sets are kept, where they arelocated geographically and how far backyour archive stretches. Don’t be afraidto get technical and ask about thefrequency of data verification tests andavailability of verification reports.■


CloudFinances

CrunchingthenumbersWouldyouweighupthefinancialbenefitsof thecloud?Or is ita ‘nobrainer’?LesleyMeallasks therightquestions

WEAREALLAWAREof the need tofactor financial considerations into anytechnology-related decision-makingprocess – but this doesn’tmake it easy todo. So although accounting conceptssuch as net present value (NPV), returnon investment (ROI) and total cost ofownership (TCO) are routinely used toestimate and compare IT costs, asChasRoy-Chowdhury, head of taxation at theAssociation of CharteredCertifiedAccountants points out, there is plenty ofroom for interpretation, and “you couldhave a situationwhere two accountantsendupwith different figures”.

It’s not hard to understandwhy.Whether you are considering usingsoftware-as-a-service (SaaS), orcomparing alternatives such as publicclouds andprivate clouds, or totting upthe bill formaintaining the status quo,there aremany cost-related factors toconsider. These range fromset-up,service and training, to overheads suchas floor space and electricity, to lesstangible costs such as those associatedwith security breaches and their impacton reputation.

Then there are the implications ofcloud computing for tax andfinancialreporting, and the great CAPEX vsOPEXdebate.

“It’s difficult towork out the costassociatedwith any technologypurchasing decision, but cloudcomputing ismore challenging,” saysRoy-Chowdhury, citing barriers such asnot being able to compare likewith like.“Youpay forever to use cloud services,”he observes, which adds up to somepretty big TCOnumbers. But as he adds:“Being able to access information andinfrastructure any time and fromanywhere is very advantageous, and the


CloudFinances▲


short-termbenefits of cloud computingmayoutweigh the long-termcost.”

All of which helps to explainwhysomecost-related decisions on cloudcomputing seem to havemore to dowithgut feeling than hard numbers. “Wedidn’t do any detailed analysis financiallybefore deciding to run the business in thecloud,” saysGaryWhite, chief executiveofWhite Springs, which is both aprovider and user of cloud computingservices. But even though the financialanalysiswas done only “at a high level”he says “the decisionwas a no-brainer,because the benefits of subscribing toSalesforce.com [the customerrelationshipmanagement provider]versus buying andowning the hardwareand softwarewere absolutely clear”, andthe gainsweren’t just to dowith cost.

Cross-companyvisibilityWhite Springs is a fast-growingUKcompanywith operations in Europe andtheUS, so it was obvious toWhite thatputting in his own infrastructurewouldrequire huge resources, and impede thedevelopment of the business. “I wantedmy staff to focus on growing the firm, noton running the infrastructure,” he says,White Springs did start with aPCaccounts system, but as soon asFinancialForce.com (accounting thatruns onSalesforce.com)was available, itswitched. “Gaining greater functionalityand visibility of customer andfinancialinformation across the companywasmore important than the long-termcostof doing it,” he adds.

While the benefits of SaaSmaybe sogreat that the long-termfinancial costsseem like an irrelevance, things are lessstraightforward in theworld of virtualdata centres and infrastructure-as-a-service (IaaS), from the point of viewoftechnology andfinance. Cloudpurists

maydrawa line aroundpublic clouds(such asAmazonWebServices) anddecry private clouds andhybrid cloudsas oxymorons, but once these termsentered themarketing-speak of vendorssuch asCisco and IBM, cloud computingwas further redefined, so businessesmay aswell acknowledge this andconsider the relative costs of all theavailable options.

The decision-making process is notnecessarily a private data centre and anon-demanddata centre (ie. IaaS). It’s amore complex choice that also includesall sorts of hosted andmanaged services(many ofwhich youwill find described astypes of cloud). It’s not an ‘all or nothing’choice either, because there is thepossibility of combining on-demandpublic resourceswith those providedbyyour owndata centre (whether that’ssoftware applications, computing power,

CloudFinances


or file storage –whichmayormaynot bemanaged in-house, or hosted – oroutsourced, if youwant to split hairs), inwhat’s often described as a ‘hybridcloud’ solution.

UpsanddownsofIaaSThedecision onwhich to opt formay notbe asmuchof a ‘no brainer’ as choosingSaaSover the on-premise alternative.Although IaaS canprovide youwith‘elastic’ access to computing power,memory and storage, and is charged onapay-as-you-go basis only for theresources used (without installing newequipment orwaiting out the hardwareprocurement process), there is adownside. One of the big benefits ofSaaS is its capacity to relieve the user ofall of the burdens associatedwithsoftwaremaintenance andupgrades;IaaS requires a littlemore attention.

Somebody has to be responsible formonitoring,managing andpatching youron-demand infrastructure. There aresoftware tools designed specifically tohelp youdo all of this, andwithminimaltechnical knowledge andnoprogramming skills, butwhile someorganisations are comfortable doing thisthemselves, others prefer to hand it overto a third party. That’s one of the reasonswhy a variety of hosted,managed serviceand outsourced solutions are beinglabelled andmarketed as private clouds,and one of the reasonswhy there are somanypossible approaches to financingall of these different types of cloud.

For example, in a private cloudwhereyoupay for the software licences and youown the computer servers, there arevariousways to avoid taking the hit upfront. Financing options include contracthire, hire purchase, loans and varioustypes of lease.

A private cloud can’t exploit the buyingpower of the public cloud, so the costsmaybe higher, and unless you invest insome very big servers, you aren’t goingto have the elasticity of the public cloud(though youmay think you’re nevergoing to need it). But you can exploitvirtualisation to better use the computingresources youdohave in a private cloud.

NoroomforinternalITSilverdell, an asbestos removal andmanagement contractor, considered allthese factorswhen it was contemplatingthe sorry state of its IT infrastructure.“After a series of acquisitionswehadthree operating divisions at 25 locationsand a hotchpotch of systems,” explainschief financial officer, Ian Johnson.“Whenwe reviewed the IT infrastructureand supportwequickly realisedweweren’t big enough to support our owninternal IT team,” he says, and after

Oneof the bigbenefits of SaaSis its capacity torelieve the user ofall of the burdensassociatedwith softwaremaintenanceand upgrades

CloudFinances▲


considering various options, Silverdelldecided that a private cloud and virtualdesktopswere themost cost-effectivesolution.

Silverdell owns its own servers andpays for traditional software licences, butJohnson says: “Forwhat one competentIT headwould have cost us, wewere ableto get a hosted solution.” This providesweb-based access to processing powerand applications, and the desktops havebeen virtualised for the threeSilverdelloperating divisions – also using themostcost-effective solution.

“We consideredCitrix andMicrosoftdesktop virtualisation, but 2X [anothervirtual desktop player] offered the bestprice-performance ratio,” says JohnAbrahams, technical directorwith ITManagedServices, whichmanagesSilverdell’s software licences,infrastructuremaintenance and staff

support, in an arrangement that isbacked upby a customservice levelagreement (SLA).

These are rare amongproviders ofpublic cloud services, but if you don’tfactor the termsof your SLA into yourcost-benefit analyses, you could enduppaying for services you can’t use, or haveno intention of using.

Which iswhat happened to onesoftware engineerwhodidn’t read hisAmazonWebServices contractwellenough to knowwhat hewould be billedfor; when themeterwould be running;andwhen it would stop. “I put some testvirtualmachines on the servers of AWS,and for awhilemybillswere just a fewpennies each, sowhen I got amonthlybill for $40 Iwas a bit surprised,” saysAdamRamsay. “Turns out, when Ifinished the tests, I forgot to turn off thenetwork.”■

Factor On-premise Cloudcomputing

Expenditure type Capital expenditure (capex) Operating expense (opex)Operating expense (opex)

Cash flow Servers and software are Payments aremade as thepurchased upfront service is provided

Financial risk Entire financial risk Financial risk is takenmonthlyis taken upfront, and ismatched to returnwith uncertain return

Income statement Maintenance and Maintenance expense onlydepreciated capital expense

Balance sheet Software and hardware Nothing appears on theare carried as a long-term balance sheetcapital asset

SOURCE: TALKING TO YOUR CFO ABOUT CLOUD COMPUTING, FORRESTER RESEARCH

Financialbenefitsofcloudcomputingandservices

CloudFinances


FREEDOMOFCHOICE can sometimesfeel like amixed blessing. Take therecently releasedMicrosoft Office 365,the software giant’s new cloud servicethat combines its productivity offeringssuch asWord andPowerpoint. On theone hand, you can nowchoose fromnumerous variants ofMicrosoft-hostedOffices (P1, K1, K2, E1, E2, E3, E4, and soon), and you can use them instead of, ormixedwith, other approaches toproviding remote and local access toMSOffice tools; on the other hand, you could

lose thewill to live trying towork out howto license all of this or estimate howmuch it is eventually going to cost you.

In the time-honoured tradition of thesoftware industry, licensing forMicrosoftOffice can be rather opaque, particularlyfor enterprise users. Youmaybe able tofigure outwhich variant youwould needif youwere radical enough towant toaccessOffice 365 fromsomewhere suchas an airport kiosk or an Internet café(not all subscriptions allow this). But ifyou already have a traditional Office

CloudFinances

SOFTWARE LICENCESastateofflux

It’sbeenhardtoenoughmakingsenseof traditionalsoftware licenses–nowthecloudmeansthingsmaygetmorecomplicated,warnsLesleyMeall

▲


deployment, and youwant to understandthe differences between licensingOfficeas a ‘software product’ and as a‘subscription service’ you face achallenge of a different order.

According toMicrosoft, “the volumelicensing of softwaremakes it easier andmore affordable to run software onmultiple computerswithin a singlepurchasing organisation”. Yes, well.The enterprise volume licensingarrangements forMSOfficeProfessional

Plus forOffice 365 are so complex thatexplaining them requires a seven pagedocument, which is not an easy read.

This level of complexity is not uniquetoMicrosoft. “Working through softwarelicensing issues requires a lot of upfrontplanning,”warnsAmyKonary, an analystat IDC, “andmoving to the cloud doesn’tnecessarilymake this easier.” Licencesfor subscription-based public cloudservices are relatively uncomplicated,butwhen organisations are trying tomigrate someor all of their applicationsor infrastructure into hybrid or privateclouds (hosted by the enterprise or bythird parties), licensing ismore complex.

“Negotiatingwith software vendorsthat have varying degrees of interestin cooperatingwith you can beexcruciating,” saysKonary, and not justbecause youmayhave to go throughthe negotiation process onmultipleoccasions. “Attitudesmaydepend onyour company’smonetary and strategicvalue,” she suggests, though in some

cases, the vendorwon’t have given theirposition thismuch thought. Konary’sresearch indicates thatmany arecurrently deciding their policies ‘on thefly’, and that very fewhave yet to comeupwith ‘cloud-friendly licensing’.

Software vendorCCH, an accountingspecialist, is not untypical in being in astate of flux. “In theUSwearemovingvery strongly towards on-demandcloud-based offerings,” says SimonCrompton, executive director of CCHUK.But in theUK, someof its softwareproducts are available only via traditionalon-premise installations, despite beingavailable as both on-premise andon-demandofferings in theUS. “Wearevery openminded andpragmatic aboutthe cloud,” he adds. “If clients ask forsomethingwe look at it and consider thecommercial implications.’”

Sowhat happens if aUK clientwantsto build their ownprivate cloud andvirtualise someCCHapplications?Well,the software licensing is based on thetraditional ‘concurrent users’model andtheminimumcontract term remains oneyear, which isn’t very flexible. “Wehaveused temporary licences to supportclients during peak processing periods inthe past,” recalls Crompton, but he’stalking about years ago, when a changein legislation created someone-time‘seasonal spikes’ that affected lots ofCCHusers. At themoment, he says:“There isn’t a demand for this.”

HybridlicensingMeanwhileUnit4, a business softwareplayer, has gone further, as TonDobbe,vice president of productmanagementexplains. “Wehave put in placeintegration betweenAgressoBusinessWorld and FinancialForce.com,” he says,adding that these are both ownedbyUnit4, and provide customerswithmixed

CloudFinances

Working through softwarelicensing issues requires alot of upfront planning andmoving to the cloud doesn’tnecessarilymake this easier


Feworganisations knowwhat software theyare usingThe vastmajority of organisations have only partialknowledge of the software that they have deployed.A significant proportion have nomonitoring tools inplace capable of auditingwhat software is deployed,and even fewer have accurate information onwhat is actively in use. The result is significantoperational risk and overspend.

The proliferation of licensingmechanisms isaggravating the problemUser, server, processor, site, enterprise and anumber of other commercial licensing schemes arein commonuse, with organisations large and smalloftenmanaging a complexmix of arrangements.Open source licencesmay ormay not be used undersubscription/support contracts.

Use of software-as-a-service (SaaS) is rising, butbeware contract inflexibilityWhile ‘utility’ SaaS offerings such as hosted emailare used themost, there is evidence of SaaS startingto be adopted for both core and departmentalapplication needs.While this delivery option is stillin the early stages ofmarket acceptance, it looks setto take its place in themainstream.Many, however,report that SaaS is not always as flexible asproviderswould have us believe.

Many licences and subscriptions are based on the‘ratchet’ principle of commitmentOn site or in the cloud,most commercial softwarearrangements appear to scale only oneway – up.Reducing commitment is too often costly, difficultor even impossible. This artificial restriction onflexibility is perceived to exist to the benefit ofsuppliers, and potentially stands in theway ofdynamic cloud basedmodels being used to dealwith fluctuating demands.

SOURCE: SOFTWARE LICENSING AND SUBSCRIPTION, FREEFORM DYNAMICS,

WWW. FREEFORMDYNAMICS.COM

Softwarelicensingfactfindaccess to on-premise and on-demandversions of products. “We already havesomeorganisations doing thiswithAgresso,” saysDobbe,wheremost of thesystem is licensed and accessed in thetraditionalmanner, but applications suchas expenses andpayroll are licensed ona subscription basis.

Unit 4 also supports other approachesto software licensing and subscription.“This reflects the needs of the public andprivate sector, verticalmarkets, anddifferent countries,” saysDobbe. Sopricingmaybe based on the number ofcitizens in a city, active users, or levels offunctionality. Facilities have also beenbuilt into Agresso so that users can seewhat their ‘active consumption’ ofsoftware licences is, whether they havean on-premise installation and aremixing thiswith on-demand (hosted byUnit4), or have their ownprivate cloud(hosted internally or externally).

Benefitsofa‘true-up’modelBut in general, licencemanagement isone of the biggest challenges of creatinghybrid or private clouds. “In the absenceof cloud-ready software licensingmodels, a negotiated approachwith atrue-upmodel is generally preferred,”reports Konary, with IT departmentsopting for an annual true-up approachover quarterly ormonthly comparisons– thoughmore automationmay changethis. (A ‘true-up’model ismoving up to ausage bandwith, say, a higher set fee ifyou are consistently going over a limitand incurring extra costs.)

“Tools that helpmonitor licence use tomake the true-up process less onerousare desired,” she adds, as is amorecloud-friendly approach frommanyvendors.Meanwhile, freedomof choicecan sometimes feel like a bit of amixed blessing.■

CloudFinances

Environment


cloudgreen?Iscloudcomputingagreenerwaytogowith IT?Yes,says

MaxwellCooter, but it’sacomplexcalculation toprove it indetail

SOMETHINGSTRANGEHAShappenedin the last decade: green issues –whichused to be the preserve of hippies andenvironmentalists – have quietly invadedthemainstream.One can scarcely look ata newservice for anything these dayswithout being remindedof its greencredentials. Newcar? Fewer emissions.Newboiler? Energy efficient. Newlightbulb? Eco-friendly.

Needless to say, this philosophy haspermeated the IT industry toowithmuchmore attention being paid to the energyrating of servers andPCs than there hasbeen in previous years.

Cloud computing has been a key partof this debate and there’s a long-running

discussion onwhether the technology isenergy efficient or not. So howdoes acompany interested inmaintaining itsgreen credentials go about decidingwhether to go the cloud route or not?After all, youmayneed to showwhatyour IT is consuming as part of astatutory carbon audit, especially inlarger companies. Regulation on energyuse can only increase in the future.

It’s not an easy question to answer. Ononehand,wehave a school of thoughtthat says because cloud computing datacentres are not adding to the actualcomputing power, but are using serversmore efficiently, then they are, bydefinition, the greener option. There are

Isthe

Environment


opponents, however, who say that thereare somebig questions to be answeredfirst and that the blanket statement thatcloud computing is greener is amisleading one. It’s getting to be aheateddebate –with both sidesbrandishing the figures to supporttheir case.

The latest entrant in this formofclimatewar is research company,Verdantix, which releaseda report in 2011 claimingthat American companiescould drastically cut CO2emissions by turningto cloud computing.According to the report, awholesalemove to clouddeliverywould deliver CO2emission reductions of85.7m tonnes each year,the equivalent of nearly200mbarrels of oil.

That translates into energy savings forUSbusinesses of $12.3bn in the next tenyears if they adopt cloud services. TheVerdantix research predicts that thefinancial benefits fromenergy reductionand increased IT efficiency in 2011 alonewould reach$824mby the endof theyear in theUS.

Meanwhilemarket research firmPikeResearch has predicted that cloudcomputingwill lead to a 38%reductioninworldwide data centre energyexpenditures by 2020.Microsoft too hassaid that the cloud can cut energyconsumption and carbon emissions by30%ormore, as the scale anduse ofvirtualisation in the cloud justmakescomputingmore efficient, whilecomputermakers are busymakingcomponents such asmemory andprocessesmore efficient too.

TheVerdantix surveywas sponsoredby theCarbonDisclosureProject – an

organisationwith a vested interest inpromoting greenmeasures. And it wasn’tlong before dissenterswere rounding onthe research findings andfinding flaws inthe argument.

What’stheenergysource?Oneof themain critics of the survey,GreenMonk analyst TomRaftery, pointedthat there hadbeen some rather dubiousassumptions. “Themistake here ispresuming adirect relationship betweenenergy and carbon emissions.While thismight seem like a logical assumption, itis not necessarily valid,” hewrote.

“If I have a companywhose energyretailer is sellingmepower generatedprimarily by nuclear or renewablesources for example, and Imovemyapplications to a cloudproviderwhosepower comesmostly fromcoal, then themove to cloud computingwill increase,not decrease,my carbon emissions.”

Amove to thecloud in theUSwould deliverCO2 reductionsof 85.7m tonneseach year, theequivalent ofnearly 200mbarrels of oil

CAPGEM

INI

Environment


This is the key tomanyof thearguments: what is the source of thepower that is driving those data centres?It was a question raisedbyGreenpeacein 2010when it published a report, ‘Howdirty is your data?’, pointing out thattherewere serious concerns about someof the big players in cloud computing.

GaryCook, the lead author of thatreport, said that the problemwas the lackof transparency fromsomeof the cloudcompanies – the secretive nature offirms such asGoogle andMicrosoft hasmade it difficult to assess the claims theymake.He agreed, however, that datacentre and server design innovation cangreatly improve efficiency and reduceoverheads in energy demandand thatmore in the sectorwere comfortablewithsharing best-practice data, but thatwithoutmore transparency, such effortswere notworthmuch.

Cook has a point and somecloud

providers have indeedbeen rathersecretive about their operations, and totry to get an idea of howenergy efficienttheir servers arewould prove to beimpossible. But data centre specialiststhemselves – those that hostmanyclients – are currently vyingwith eachother for the accolade of running theworld’s greenest facilities, with all sortsof design and supply innovations in theway they are built, located and fuelled.

The problem is that evenwith anoverall rating for the efficiency of datacentres, the actual usage of a set ofservers by a client ismuchmore difficultto assess, anddetailed breakdownof therating by factors such as the energy typecanmake comparisons less valid.

Location,location...Agood case in point has been anargumentmadebyGreenpeace about adata centre runby Facebook inOregon,which takesmuchof its power fromcoal-fired sources. But in fact it is said tobe one of theworld’smore efficientfacilities, because the cool climate in thestate allows it to runwithoutmechanicalchillers, one the biggest energy hogs in adata centre.

One organisation that is trying toimprove theway inwhich sustainablecomputing is reported is theGreenGrid,a non-profit consortiumof end-users,policymakers, technology providers,facility architects andutility companieslooking to improve the efficiency ofdata centres.

AliMoinuddin at data centre player,Interxion, is also the Europeancommunications committee co-chair oftheGreenGrid and is aware that thereneeds to be abetter standard ofassessment. “The greendata centre isat the heart of thewholemovementtowards sustainable computing.Weneed

Environment


The ultimate in green data centres could beIcelandic cloud provider, GreenQloud,whichuses geothermal energy to power its datacentre, with a lot of hydroelectric powerthrown in for goodmeasure.

Of course, there aren’tmany cloudproviders that are sitting in a geographicregionwithmillions of litres of naturallyheatedwater on tap. The company uses100%renewable energy drawn from theIcelandic grid, which is 30%geothermaland 70%hydro.

CEOEirikurHrafnsson says that datacentres that claim to be green base the claimon spurious reasoning. “Whenbig players talkabout their ‘greenness’ all they are saying isthat their data centres are nowmore efficientin cooling IT equipment. Energy efficiency ofdata centres and servers cannot keep upwithfuture energy needs and be effective in

reducing carbon dioxide emissions.Weneedto change the energy sources to renewables;it’s that simple.”

And in a lesson to other providers, thecompany records all energy use and carbonemissionsmadeby each customer andmakesthe data freely available to them.

There are certainly other providers thatwould claimequal credentialswithGreenQloud. In theUK, Capgemini’sMerlindata centre, in Swindon, is said to be setting aglobal standard for energy efficiency, with apower usage effectiveness (PUE) rating of just1.08 (1would be perfect). NextGenerationData (NGD) Europe, based inNewport,Wales,is claiming to be the first in Europe to run on100%renewable energy. AndTelehouse takeswaste heat froma centre in London’s East Endto pipe hotwater to 1,000 local homes, freeof charge.

Who’sthegreenestofthemall?

tomovebeyond justconsidering power usageeffectiveness [PUE–astandardmetric for datacentres], to carbonusageeffectiveness (CUE) andwater usage effectiveness(WUE),” he says (water isoften used for cooling).

“Itmakes environmentalandbusiness sense to evaluate thesemetrics. Now theGreenGrid hasdeveloped theDataCenterMaturityModel that sets goals for improvingenergy efficiency and sustainabilityacross all aspects of the data centre.”

Meanwhile, there is a range ofquestions for a company interested incloud andgreen issues to ask a provider:•What’s the energy source of the datacentre?

•Whatmetrics does it use tomeasureenergy efficiency?

•Whatmeasures has it taken to reducepower consumption?

•What temperature does it run its datacentre at?

• If the cloudprovider describes itself asgreen,what criteria has it deployed(planting a few trees outside isn’t goingto cut it)?

•What information does it provide to itsown customerswhen it comes toenergy consumption?Energy consumption has really only

beendebated for a few years now, so it’snot surprising that there’s confusionaround. But it’s not an issue that’s goingto go away– a lot of companies areinterested in energy savingmeasures andcloudproviders are going to have to getused to the idea of beingmore open.■

TheGreenGridhas developed amodel that hasclear goals forimproving energyefficiency

CloudandHR


UnlockingyourorganisationaltalentHumanresourcescouldbeoneof themost importantcloudapplications, thanksto itskeyorganisational role, saysBillyMacInnes

CloudandHR


ADOPTINGCLOUDSYSTEMSholds thepromise of givingHRexecutives accessto systems that enable them to improvetheir roles by applying amore analyticaland strategic approach to their work. Italso gives themanewwaymeet changesin the business. The increasing adoptionofmobile technology andmobileworkingpractices inmany companies, forexample, is putting an emphasis onemployee self-service and accessibilitythat is often easier to deliver fromacloud-based system than an onsite one.

Businesses are evolving and adoptingnewworking practices and styles, puttingpressure onHR tomeet and supportthose changes.With budgetarylimitations on IT expenditure, cloudsoftware canbe an attractiveway ofkeeping pacewith such changeswithoutbeing constrained by in-house IT.

There’s no doubt this is awelcomedevelopment. A global survey ofmorethan 200HRexecutives bySaugatuckTechnology, a cloud consultancy,identified significant limitations in theeffectiveness of their existing systems tomeet their priorities for the organisation.The survey identified a number of areasHRexecutivesweremost concernedabout their ability to fulfil:

• Acquiring and retaining key talent• Developing key talent• Aligning employee performancewith

business results and compensation• Building leadership capabilities• Supporting organisational innovation

and change.

When theywere asked to rank theability of their HR systems to deliverthese priorities, it becameclear thesystemsdid notmeasure up aswell astheywould like. Inmost cases, therewasa difference of 30points ormore

betweenwhat theywanted to do for thebusiness andwhat they could dowith thesystems. Amore recent survey returnedto the same issues and found, if anything,that the gap is gettingworse in someareas, such as acquiring and retainingkey talent, developing key talent andbuilding leadership capabilities.

All of which suggestsHRprofessionalswould like systems that do a better job ofsupporting them in fulfilling theirobjectives for the business. Cloudsoftware could help to bridge the gap.If the cloudmeans they are no longerhamstrung by the performanceconstraints that affect their in-house ITresources, HRprofessionals should bebetter placed to concentrate on strategicissues such as talentmanagement,building leadership capabilities andsupporting organisational innovationand change.

ThesecurityobjectionBut one big objection is of coursesecurity. A specialist provider ofcloud-based human resources (HR)software, HRLocker, recently noted howthe issue of hostingHRdatawas raisedas a security concern during a customermeeting. So the customerwas askedwhere the company’s existingHRsoftwarewas installed andwas showna server in the corner of the office: “Itwas accessible to everybody and therewere fourUSBports staring invitinglyout at us.”

TheHRLocker teamaskedwhetherthe customer felt thiswas secure andthe reply cameback that hewasn’t surebecause “the IT guy” looked after it.It then emerged that the company hademployed three of these “IT guys” in asmany years.

While this anecdote concerns onecompany, it’s probably indicative ofHR

▲

CloudandHR


operations inmany organisations. Howorwhy should anyone inHRknowwheretheHRdata is stored andhowsecureor not it is? That’s the responsibility ofthe IT guy.

This level of ignorance about thesecurity of data internally is not confinedtoHRbut very likely applies tomost, ifnot all, functions of the business. Butdata security is amajor concernwhenit comes to the adoption of cloudcomputing,most particularlywhen itapplies to employee information.

A recent Cloud Industry Forumsurveyfound thatwhen it came to using cloudservices, respondentsweremostreluctant aboutmoving employeeinformation to the cloud, ahead even ofaccounts andfinancial data services.The survey also revealed that datasecurity (64%of respondents) anddataprivacy (62%)were themost significantconcerns about the adoption of cloud intheir business.

DebunkingtheobjectionThis highlightswhat could be anintriguing contradiction in the shift tocloud computing, namely that one of themost prominent causes of anxiety in anypotential adoption of cloud-basedsoftwaremay also be one of thestrongest benefits it can deliver. HRLocker, for example, usesMicrosoft’s$500mdata centre outsideDublin tohost its service, which providesmuchgreater resilience anddata security thananything its customersmight have sittingin a corner.

But if suppliers are confident enoughto use hosted providers to deliver theirproducts and services, shouldn’tcustomers feel the same?HRandpayrollservices provider, Cintra, recentlyannounced that its Cintra iQ offeringwould behostedby theCloudComputing

Centre.Why? “Initially, we tried to hostCintra iQ ourselves,” saysCEOCarstenStaehr, “but our on-premise solutiondemandedhuge upfront costs topurchase the required equipment, buildthe infrastructure, add the necessarydisaster recovery capabilities andmaintain the necessary high levels ofdata security to store our clients’sensitiveHRandpayroll data.”

All of the reasons cited byStaehr foropting to use theCloudComputingCentre as a host apply equally toHRandIT departments. Removing or assuagingconcerns about security is one of theways inwhich the cloud can helpHRprofessionals to concentratemore on thecore functions of their job. And aswe

CloudandHR


have seen, despite professed concernsabout security,most parts of thebusiness are completely unaware of thelevel of security (or lack thereof)currently being provided in-house.

HRhasthebiggestcloudAnd if HRexecutiveswant reassurancethat cloud is not just pie in the sky, theycan look to the fact that the largest cloudcomputing deployment in theworld is atSiemens – its human capitalmanagement system.

When the company set out to alignits human resources operationsmorecloselywith the strategic objectivesof the business, Siemens decided tostandardise all its global recruitment and

personal development objectives onto asingle system.But rather than going forone of the larger, well-knownenterprisesuppliers, it opted for a cloud approachwithUSprovider SuccessFactors. Thesystemcoversmore than400,000employees in 190 countries – so the sizeclaim iswell justified.

SuccessFactors published researchlast year that claimedbusinesses thattook a strategic approach toHR, usingsystems that capture,measure andpresent information for analysis abouttheworkforce, outperformed theaverage. It found companies that

benefited from this betterbusiness intelligenceincreased the time theyspent on strategicpriorities by 40%andproject completion roseby 67% throughbetterunderstanding of theirtalent andputting theright people on the rightprojects.

The larger operatorsare starting to get in on

the act too. In a recent interviewwitheCRMGuide.com, GretchenAlarcon, vicepresident ofOracle FusionHCMstrategy,revealed thatHCM(human capitalmanagement) andCRM(customerrelationshipmanagement) havebeendrawing themost interest fromcustomers looking for cloud apps. Shealso highlighted the better businessintelligence providedby these types ofsystems,which could be used toenhance thework of theHRdepartment.

That, surely, is the heart of thematter:if they can use systems to deliver betterintelligence about the business, HRdepartments can strengthen their rolewithin an organisation and enhancetheir effectiveness.■

The largestcloud computingdeployment intheworld is atSiemens – itshuman capitalmanagementsystem


SupplyChain

ONEOFTHEMOST important processesin business – andone tailor-made for thecloud – is the supply chain, which hasbecomemore complex and turbulent inrecent years.Manufacturers have beenamong the first sectors to act tomaketheir businessesmore ‘agile’ in the faceof difficulties in forecasting demandandavoiding stockpiling products that aren’tselling, while pressures on the supplychain itself have intensified as

Becausethesupplychain involvesa lotof fastmovingcomplexity itwillbenefitgreatly fromthecloud,asBillyMacInnesexplains

manufacturing has been outsourced todifferent partners, often in the Far East,bringing added complexity to transportand logistics.

In turn, with somany companies beingcalled on to provide different links in theoverall supply chain for a product orservice and engagingwith it at differentpoints, the pressure has grownonsystems to be able to handle andinteractwith a diversity of suppliers orsub-suppliers.

IT solutions have typically beendeployed tomake the supply chainmoredynamic and tomake engagementwiththe different links in the chain lesscomplex. In 2010, analyst firmGartnerpublished a survey entitled ‘Significant

SUPPLY CHAINahotspotforthecloud


SupplyChain

benefits realisedwith supply chainmanagement in the cloud’, which foundthat 95%of those surveyedwere eitherusing or considering using cloud-basedsupply chain applications. It found52%were using cloud or software-as-a-service for CRM, 44% for supply chainexecution, 43% for supply chainplanning, 43% forB2B/B2Ce-commerce, 42% for ERP (enterpriseresource planning) and39% for sourcingandprocurement.

In all those areas, another third or soof respondentswere evaluating usingcloud technology. Themajor focuswasonpartner applications that addressedthe connectivity and collaborationrequirementswhenprocesses are

extended to “the trading partnerecosystem”. Gartner suggests this is notsurprising because companies havespent billions on financial ERP systems

thatwere designedmainlyto provide visibilityinternally. One companytoldGartner it wasattracted to thecloud-based approachbecause it was “tired of thelong installations of ERPandupgradeswhenotherbusinesses are reaping

value such as quicker time toproductivity, greater return oninvestment and lower costs”.

This comment highlights the

Pressure hasgrownon systemsto handle andinteractwitha diversity ofsuppliers orsub-suppliers

▲


SupplyChain

disruptive force cloud computing isexpected to unleash onmany areas ofthe business landscape, including thesupply chain. For example, start-upcompanies could disrupt the establishedlandscapewithout significant investmentin infrastructure, and newcompetitivethreatswill emerge to existing players.Product and service lifecycleswill beshortened further, forcing companieswith infrastructure-intensive supplychains, such as the companyquoted byGartner, to add cloud-based supplychain solutions to enhance theircompetitiveness.

Potential problemareas in using cloudcomputing in supply chainmanagementare prettymuch the sameas they are forany area of the business. In a recentarticle, supply chain experts at Accenturesuggest companiesmayhaveestablished sophisticated supply chainmanagement systems to give themacompetitive edge against competitors,but cloud computing relies onapplications andprocesses that are notcustomised. It’s up to companies todecide how those cloud applications andprocesses candeliver.

Cloud computingsystems couldlead to arevolution in theway supply chainservices areprovided

Of course, cloud computingmakes iteasier for other companies involved inthe supply chain to engagewith differentlinks in the chain and access systemswithoutmajor upheaval to their ownprocesses or additional costs tomakethemcompatible. Sharing a commonplatformmeans there are no concernsthat a suppliermaybeproviding accessto its internal IT to a partner that could bea competitor tomorrow. Standardisedapplications andprocesses should alsostrip awaymuchof the technical supportandmaintenance requirementsassociatedwith bespoke systems.

Again there are potential pitfalls as notmany companies ownor operate theirentire supply chain internally, so anydecision about using cloud technology islikely to involvemultiple partners. TheAccenture experts believe this couldcreate “complexities and sensitivitiesbetween theparticipating organisations”.But itmay also help remove someof theexisting complexities in their currentsupply chain.

Additionally, if those organisationsengagewith other businesses, it wouldmake life a lot simpler andmore flexible


SupplyChain

if those engagements could take placeusing cloud-based systems. According toAccenture, adoption of cloud computingsystems could “lead to a revolution in thewaymore supply chain services areprovided” by supplanting the currentcontracted outsourcingmodelwithmoreflexible, transaction-basedmodels.

This should lead to amodel based onflexible collaboration rather than amoreformal, rigid, top-downapproach. Theissue at themoment is howwillingcompanies are to take this route andhowquickly they do it.Michael Higgins, seniorvice president for IT at AdvancedInnovations, an electronics supply chainspecialist, is someonewhohas alreadymade the shift to the cloud. Hebelievesanybody cando it “if they arewilling toput the effort in and to overcome thetypical fear, uncertainty anddoubt”.

AndAdvanced Innovations didn’tchange its ERP system: it simplydeployed it in Amazon’s cloudplatform.This hasmade access to the firm’ssystems “more robust and available toour partners”, enhancing ability to sitbetween customers and the supplychain. The company uses theOracleE-Business Suite but haswritten its ownweb services platform,which hasmade iteasier, for example, for a small transistormaker inChinawith a laptop to dealwiththe company through abrowser. “Ourphilosophy is if you canbuy a book fromAmazon.com, you canmanage yoursupply chainwith us,” Higgins adds.

He argues the cloud is a “brilliantplatformonwhich to build standards”,adding that “the days of bespokebusiness processes are hopefullydrawing to an end”. He believes the cloudcould be a big advantage for ‘tier two’players. “Players like us are leadinglarger players into the next generationsupply chain,” he comments. ■

• Decide which processes can be provided by acloud-based supplier andwhich need to beretained in-house

•Work to a detailed return on investment and riskanalysis with prospective suppliers to quantifyanticipated benefits based on total cost ofownership

• Agree definitions for success: in addition to cost,include areas such as flexibility, scalability andspeed tomarket

• Keep up to speedwith developments in the cloudcomputingmarket

• Collaborate with supply chain partners andinvolve them in decisionmaking

• Evaluate frequently to ensure the hoped forbenefits are being achieved

Hotspots for thesupply chain•Planning and forecasting – capturing spenddata, performing basic analytics, planningmanufacturing runs and executing statisticaldemand forecasts

• Logistics – applications such as networkstrategy, inventorymanagement, warehousingand transportation are appearing; global tradecompliance, replenishment planning, orderprocessing, transportation load building, fleetmanagement and transportation route planningare likely candidates

• Sourcing and procurement – the cloud gives agreat opportunity to cut the total cost ofownership, as cloud tools are inherentlycollaborative and accessible

• Service and spare partsmanagement –manycompanies underperform in this area, despitetheir often high contribution to the bottom line.Tools such as warranty validation are availablenow, and applications for returns processing,inventory pooling and distribution are on theirway, says Accenture

SOURCE: ACCENTURE. SEE ALSO ITS PAPER, ‘SIX QUESTIONS EVERY SUPPLY

CHAIN EXECUTIVE SHOULD ASK ABOUT CLOUD COMPUTING’

Preparingforthecloud

Marketinginthecloud


AgreatleadformarketingCloud-basedsystemsformarketingfunctionsareboomingbutmarketershavemuchtodostill in integratingdata,findsGrahamJarvis

ALTHOUGHMARKETING (and itscounterpart, sales) have traditionallybeen among the last functions to receivethe full attention of the IT department,the rise of themultichannelworld, inwhich customers aremuchmore in thedriving seat, has elevatedmarketers inthe pecking order. Not only do they havemore budget to spend, but it’s an areawhere they often have a gooddeal ofautonomyonbuying decisions,especially now the cloud is opening upapplications to non-technical audiences.

Applications that are on the agendaincludemarketing automation solutionsto trackmarketing campaigns, webinarandweb conferencing services such asWebEx, aswell as the various array ofsocialmedia anddirectmail and emailmanagement tools. A key driver is thattoday’s onlineworld allowsmarketers totrack almost everything a customerdoes, because somuch is nowdone onthe Internet.

But it is not so easy to findoutwhatapplications are likely to be the best fitfor an organisation. It’s important tothink aboutwhich cloud andon-premisesolutionswill improve amarketer’sability to increase an organisation’ssales, customer loyalty, revenue and

profitability, with particular attention tocompanypriorities, which are likely toinclude customer retention in currenttough trading conditions.

Analyst firmGartner has a goodpicture of themost popular cloud-basedandon-premisemarketing solutions. Itregularly produces ‘magic quadrants’ toanalysewhere certain vendors and their

Marketinginthecloud


‘best of breed’ products are positionedin themarket, including quadrantsfor ‘CRMmultichannel campaignmanagement’ and ‘social CRM’(CRMbeing customer relationshipmanagement, of course).

There is a huge choice of CRMsoftware and the termcanmeanmanythings to differentmarketers, butmarketing does need awide range oftools to fulfilmany activities, such asemailmarketing, social CRM, searchenginemarketing,mobilemarketing,socialmedia, e-commerce, customerservices and lead generation.

“If you look atGartner’sMagicQuadrants, youwill see that on-premise

solutions are best of breed formulti-channel campaignmanagement,and so youwould look at systems fromcompanies such asUnica, SASandTeradata,” says LaurenceBuchanan,head of CRMatCapGemini. These topsystems are thoughmainly aimed atenterprise customers, and there is nowagreat choice of cloud systems that caterformany nichemarketing functions andalso integrated solutions – butintegration does remain a big challenge.

WhythecloudisvitalAccording toArthur Sweetzer, chiefmarketing officer at 89Degrees, aUSmarketing agency, “manymarketingexecutives are struggling to gather andleveragemarketing intelligence acrossdisparate addressablemarketingchannels”, and only a third ofmarketershave integrated their CRMsystems intooperationalmarketing systems such asprofile- andbehaviour-driven email.

He gives four reasonswhy cloudsystems can accelerate time tomarket,promote relevance to prospects, andimprovemarketing revenue by asmuchas a third over a year. First, as fewhaveintegrated themarketing ‘datawarehouse’with emailmarketingapplications, he suggests using a cloudmarketing intelligence database instead,and second, the sheer speed of gettingsuch a cloud system runningmeans thatdisparate data silos can quickly bebrought together.

ThenSweetzer notes thatmarketerscan pick and choose the functions theyneedmuchmore easily fromcloudproviders than from traditionalmanagedservices companies, and finally that akey goal is to look at the insight thatcentralisingmultichannelmarketing datacan give.

“Cloudbasedmarketing can help you

▲

Marketinginthecloud


navigate successfully through the seaof data smarter, faster, and at a lowercost than ever before,” he says.

Cloud-basedcategoriesHere’s a listing of current cloudmarketing categories and abriefselection of providers.• CRMsolutions:Whenever onementions cloud-basedCRM, the

Beforemarketers rush out to buy any of thesesolutions, and considering that there are somanydifferent cloud software offerings on themarket,take note of these tips:

•Don’t be blinded by the features of any givensolution, butmake sure that itmeets your keybusiness requirements

•Be clear about howyou are going tomeasure thesuccess of implementing cloud-basedmarketingsolutions

• Ensure that each solution is integrated to capturecustomer data and track online behaviour for CRMpurposes

•Recognise that themarket has changed, and howpeople buy has altered too: solutions thatwereeffective in the pastmight not be today

• Look for cloud-based solutions that are affordable,easy to use and adopt

• Invest in quality training andmake sure that you tryout and test the cloud-based applications beforeyou are committed to them

•Do it because it will drive benefits like being ableto reactmore quickly to changes in themarket,reduce the time-to-market of a campaign, and leadto revenue growth

•Get going now. There’s no point inwaiting as thetechnologies tomakemarketingmore efficient andeffective are there, andwasting sixmonths testingeach applicationwon’t help anyone, so learn bytrial and error

Topmarketingbuyingtips

company that is first suggested isSalesforce.com. There aremany othersnow, such asMicrosoft DynamicsCRM,andNetSuite, RightNowandSugarCRMoffer alternatives to thelargerCRMplayers. Salesforce.comhas a huge range of add-onapplications from third parties that canmeet almost anymarketing need.

• Emailmarketing:Twoof the leaders inthis field are ExactTarget andResponsys, andmost of these solutionsare nowcloud-based. ExactTarget hasgrownon the back of Salesforce.com,offering high-volumeemailmanagement solutions.

•Data quality andmarketingautomation:Marketo, Eloqua, Aprimoand Informatica are all recommended.

•Web and data analytics:SAS is oftenthe first to bementioned inmostconversations about analytics, butmarketersmight alsowish to look atthe cloud-based solutions ofQlikView,Google,Microsoft, Yahoo andothers.Google tends to lead themarketwhenever it comes to cloud-basedwebanalytics. Omniture is a company saidto offer a strongweb analytics, testingand targeting tool.

• Business information:Hoover andOneSource are commended as beingbest of breedby FergusGloster,managing director of the EMEA regionatMarketo.

• Socialmediamanagement:Radian6was recently acquired bySalesforce.com, and so has a strong position in themarket. “If you have a look at the role ofmanaging social interaction to findoutwhat’s happening in the socialmediasphere, it probably has the bestplatform for doing that,” saysGloster.The key task is to be able to integrateCRMsolutions, for example, withFacebook, Twitter, Linkedin and other

Marketinginthecloud


socialmedia platforms to createmeaningful online conversations andrelationshipswith customers.

•Multichannel campaignmanagement:Eloqua,Marketo, Responsys, AlterianandExactTarget can also be foundwithinGartner’smagic quadrant. CapGemini, for example, isworkingwithRoyalMail, which has decided to useEloqua. The reasons behind the choiceinclude speed of deployment, ease ofuse, its range andmix of capabilitiesand ability to drive consumer andbusiness-to-business campaigns.Another driverwas the ability tointegrate Eloquawith Salesforce.com.

• Inboundmarketing: LaurenceBuchanan suggests thatHubSpot is asolution that’sworth examining here.

•Marketing research:Clive Longbottom,services director at analyst researchfirm,Quocirca, suggests SurveyMonkey andGoogle Forms as optionshere. Another offering is Confirmit.

•Web-based audio andvideoconferencing:Twobig offeringsareCiscoWebEx andMicrosoft LiveMeeting. Both allow companies toreduce the need to travel, and they can

be usedbymarketers to holdwebinarsandmeetingswith colleagues andcustomers fromany location in theworld. These tools are available in thecloud. Another big player is Citrix.

• Customer referencemanagement:This is a growing area that aims tostandardise customer successstories and relatedmaterial to helpsalespeoplewith replicable salesprocesses. Providers include aUSfirmcalledBoulder Logic.By considering also the top tips (see

box), andworking collaborativelywith IT,marketers should be able better to provetheir value to their organisations – it haslong beendifficult to show return oninvestment frommarketing, but cloudtools should improve this aim.

Certainly, with the cloud,marketerscan achievemany of their objectivestodaywithoutwaiting for a suitablesolution to be developed for thembytheir IT departments.

Start with a budget inmind, but don’toverly focus on cost; the cloud isscalable, and even small organisationscan gain access to secure and scalableenterprise level applications.■

What do people useCRM for?Overwhelmingly, of course, it’s for contactmanagement (94% in a recent survey).The top applications/areas are (in order):• Contactmanagement•Opportunitymanagement• Sales analytics/forecasting• Telesales/inside sales•Customer service• Lead generation•Mobileworking• Territorymanagement.

Add-ons that companies are using (in order):•Customer record lists/data cleaning service•Customer reference system•Customer satisfaction surveys/monitoring• Extra reporting/analytics•Business intelligence services/market research

•Call centre systems•Relationshipmapping tools•Webanalytics.

SOURCE: INSTITUTE OF SALES AND MARKETING MANAGEMENT/

ONESOURCE CRM SURVEY 2011

WhatorganisationsuseCRMfor–andwhattheyaddon

CloudExceptions


There isa lotof industryhypeonwhatweshoulddowith thenewpowersofferedbypubliccloudcomputing.AdrianBridgwaterprovidesarealitycheck

Whatnottodoinpublic

IFWECANAGREEonwhat not to doinside the cloud computingmodel of ITdeliverywe should be steered towardsareaswhere the clouddoes excel. Sohere are ten issues to consider in yourcloud computing strategy as exceptionsto the rule of the neworder in IT.

1HEAVYWEIGHTINPUT/OUTPUTAPPLICATIONS

Let’s start with a good solid truism.Software systems such as databasesthat require high performance in termsof communications traffic are, generallyspeaking, not best suited to sharedpublic clouds. There is always thepotential with any shared infrastructurethat youwill be competing for the samehardware performance.

2COMPLEX,SENSITIVEMISSION-CRITICALDATA

Asoftware application that is builtaround the need to collate andmanagesensitive data is not best suited to sharedmulti-tenancy cloud computing. Yes thepublic cloud is very safe and there aresecurity controls andfirewalls thatwillprovide customerswith adequate levelsof protection, but youwill be introducingadditional risk that could bemitigated

simply by keeping the data in questionon aprivate server.

3 CONSISTENT24x7WORKLOAD

If an applicationworkload is flat andunchanging, then public cloudcomputing is hardly a best practicechoice formaximising financial benefits.

According toNigel Beighton, chieftechnology officer at cloud infrastructureplayer, Rackspace: “Public cloudcomputing, with utility PAYG [pay as yougo] charging offers immense flexibility,but if yourworkload is constant andunvarying then the ‘usage charge’modelis unlikely to be advantageous.”

He adds: “A flat and unchanging ITrequirement logicallymeans that youcanbuy the appropriate amount ofon-premise hardware to fit the bill.Using the cloud in this instance is notnecessarily a problem, but it is really notprudent or efficient. For example, if youknowyouneed a car seven days aweek,you don’t go out and hire one everymorning nowdo you?

“It is the sameconcept. The cloud isthere to help copewith unpredictabilityand changeability, not computingscenarios characterised by stability.”

CloudExceptions


4 STRINGENTAUDITandCOMPLIANCE

Somedata regulations and compliancyrulings require the auditing ofwhere acustomer’s data andprocesses actuallysit. By thiswe reallymean ‘where’ –street address, floor, server roomnumber, blade rack anddisk partition.But the public cloud is a virtual world,where it is often not possible to identify(or the public cloudprovider cannotdisclose)which physical server or diskthat hosts processes anddata.

5 ASOFTWARELICENCEBRICKWALL

It’s a plain and simple fact that far toomany software licences have still notevolved to accommodate cloudcomputing. NathanMarke, chieftechnology officer of 2e2, an IT servicesprovider, suggests that existingmaintenance, support andmanagedservice contracts can act as a barrier tomoving IT services into the cloud. Hecites recent research that found that57%of organisations said such contracts

▲

CloudExceptions


would lead to delays in deploying somecloud services andMarke says that thisisn’t surprising considering that oftenorganisationswill have three to five yearfixed-termcontracts.

“Organisations do need to bewary ofmigrating to the cloudwhen theymaystill be committed to legacy contractsthat theywon’t nowuse,” he says.

6CLOUDGROWTHISHORIZONTAL,NOT

VERTICALApplications that can only scale fromincreasing the performance of the serverthey are running on are not really able toexploit the fundamental benefit of cloud,which is horizontal scale –weneed theright vehicle for the job in hand. “Don’tuse a helicopterwhen youneed aHercules,” saysStephenEveleigh,productmarketingmanager at Star,an on-demand computing andcommunications company.

“Multi-tenanted/public cloud has itsplace, butwill notmeet all businessrequirements,” he says. “Someapplications need to be integrated andtailored to company needs –with adedicated, private cloud you can achievethis. The newbreed of cloud-savvy ITdirectors understandbusinessrequirements andmakebusiness-focuseddecisions onwhether public,private or hybrid are the right choice foreach application.”

Michael Newberry,WindowsAzurelead atMicrosoft UK, points out thatsincemulticore computer processorbecamemainstream, performancegrowth has generally come from theadoption of concurrency. Applicationsthat cannot scale concurrently, thosethat are ‘single-threaded’ for example,will not run fasterwithmore coresregardless ofwhether those cores are

on-premise or in the cloud.He adds: “But scalability is not the only

benefit of cloud. There are other goodreasons, such as rapid provisioning oragility, formoving something into thecloud even if the application itself doesnot scale linearly.”

7 AVOIDCLOSEDSOURCECLOUDS

Evangelists of open source IT argue thatthe core issue of escalating expensesassociatedwith any vendor is inherentlycausedby lock-in to that provider. If weaccept this as true, then there areramifications for the cloud, saysAramKananov, a productmarketingmanagerat open source specialist, RedHat.

“We see such tactics adopted by amajority of vendors that base theirtechnology on closedproprietarysoftware andproprietary standards,” hesays. “This iswhy allmajor players in theemerging cloud space often base their‘stacks’ on open source software andopen standards to prevent any particularvendor dictating their future technologydecisions. This is also the reasonwhy thevastmajority of public cloud serviceproviders run their infrastructures on theLinux operating system. Indeed, the newemerging cloud applications areextensively using open source software.”

8 CRITICALSEPARATIONSITUATION

Just as application performance needs toexploit the inherent cloud feature of‘scale through replication’, so doesapplication resiliency. A single instanceon any public cloud canbe vulnerable toall the aspects of a shared public service,as Star’s Steve Eveleigh comments. “Acloud-savvy IT directorwill workwithcloud services providerswho ‘get this’andwill work tomitigate this risk.”

CloudExceptions


9 STANDARDBUILDGOOD,CUSTOMBUILDBAD

Cloud computing does not necessarilysuit a computing environmentwhere acustomer has an extremely complex‘custom-build’ job for certain softwareapplications. “Cloud computingenvironments havemuch lower runningcosts in part because they arestandardised,” saysMicrosoft’sMichaelNewberry. “So applications that requirenon-standard hardwarewill notnecessarily benefit from the sameeconomies of scale.

“Software designers need to considerextensibility and configurabilitywhenthey design applications so softwarecan service individual customerrequirementswithout necessarilyneeding to be a custombuild. Thisenables them to take advantage ofstandardised infrastructures.”

10 CRUMBLINGFOUNDATIONS,

PALTRYPORTABILITYThe cloudmaybe ‘up there’ and the newcomputing resources it offersmaybe

strong, butwe still need to have strong ITfoundations on the ground if we are tolook skywards. Thismeans that it’s not agreat idea tomove to the cloud if yourunderlying network is a flaky, archaiccollection of resources built aroundlegacy applications that are closelytied to obsolete equipment – anddisentangling themmight be a tough ask.

If you’ve got aRoman ruin here onEarth, then not even Jupiter, Zeus andApollo can get you into the cloud.Equally, if your legal teamhas not beenable to ratify the holy scriptures of yourcloud agreement’s small print, then youmaywell find that your IT departmentquickly becomes abunch ofnon-believers.

Analogies aside, the small printgoverns the precision-engineeredelements ofwhether a cloudmigrationwith enjoy fluid portability – and at thistime,we are still in need of hard andfast standards. Fromportability ofcloud-to-cloud applications, to bringingcloud-basedworkloads back into theenterprise data centre if circumstanceschange, portability is paramount.

Security


Theweakestlink:howsecureisthecloud?Cloudsecurity is thenumberoneconcern formostusers,andasAdrianBridgwaterdiscusses,wemayhavetowait for trust tobuild

WECURRENTLYAPPEAR to be at astagewhere confidence in cloudcomputing security is (if you believe thesurveys) still verymuch in question. Thisperception appears to be driven at leastin part by the ‘distance’ between thecustomer and the cloudprovider –inevitably, havingmuchof your vital ITapplications anddata not under yourown roof does raise concerns. But thisdoes not inherentlymean that cloudapplication security risks aremoredifficult to curtail than running all yoursystems in-house.

Sowhere shouldwedraw the linesaround cloud applications anddatasecurity? A good starting point is aPonemon Institute cloud security survey,which found that only 36%of the 925respondents questionedbelieved theirorganisations are vigilant in conductingaudits or assessments of cloudcomputing resources prior todeployment.More specifically, thesurvey found that IT practitioners(at all levels) lack confidence in theiremployer’s ability to secure data andapplications deployed in cloudcomputing environments (especiallypublic clouds).

TherootoftheproblemSo it is important to standback at thispoint andquestionwhether it is the cloudthat is at risk of being insecure, or is it

really the application itself that needs tobe lockeddown?The greatest data risksto any organisation come fromwithin;susceptibility to data damage fromemployees’ ownuse of a network,whether via premeditated or accidentalaction, remains the biggest securityissue of all.

This ‘insider threats’message isrepeated by anti-virus vendors again andagain; enterprise-level applicationsmaybe inherently insecure, whether they siton the corporate network, in a privateclouddata repository of somemaking, orultimately, out in the public cloud. Thecloud itself is not insecure: what youputin the cloudmaywell be insecure. If youaccept this basic truism, thenwe canmove on.

And if we have been thisworried aboutcloud security, then surely there shouldhave been somekind of governing bodyestablished to oversee cloud securityfundamentals? This is of coursewhat theCloudSecurity Alliance (CSA) sets out todo. TheCSA’sCertificate of CloudSecurity Knowledge (CCSK) aims to seta professional bar forwhatwe tend tocall ‘practitioners’, butwe shouldperhaps just call users, softwaredevelopers and ITmanagers.

TheCloudSecurity Alliance describesitself as a not-for-profit organisationwithamission to promote the use of bestpractices for providing security

Security


ty

assurancewithin cloud computing.The organisation is clearly having someinfluence on the industry; its corporatemember list doubles as a handywho’swhoof the cloud industry, and this year’sCSASummit drew inVivekKundra, chiefinformation officer at theWhiteHouse,as a keynote speaker.

Whatcancompaniesdotostaysecure?But at a lower level than industry bodyedicts and infrastructure standards, whatkind of thing can companies to doaddress security issues in the cloud?First, no right-minded commercial entity

should approach the deployment of anyapplication (froma simple email clientapplication to amission-criticaldatabase)without security softwarecontrols in place.

Encryption layers, firewalls,anti-malware suites and spamfilters allhave a purpose –but this is not the placefor a complete list of security controls.So take it as read that if these protectionmechanisms are needed on the groundin your organisation, then they areneeded in the cloud in equalmeasure.

At a deeper level still, fine-grainedaccess controls can help. This is the levelatwhich users should only be able to

▲

Security


access the ‘rows’ or table values in (forinstance) a cloud application databasethat they are authorised to have accessto. For example, a sales rep using acloud-based application and itscorresponding data storemay only beable to view their own sales – andnot thefigures of their colleagues or theirdepartment or company as awhole.

Thevendor’sviewpointCloudproviders themselves are ofcourse best placed to handle customers’security concerns because theythemselves sit closest to the data. In an

effort to share someofthis ‘proximity’, cloudinfrastructure providerRackspace recentlylaunched its so-called‘extreme’mission criticalcloud offering, knownasCritical Sites. This serviceis said to drill into the

People havetrusted theirmoney to banksfor years, butmayonly have hadcloud formonths

application layer to provide real-timevisibility of clients’most importantwebsites and applications.

What thismeans is that customerswill get performancemanagement toolsand a ‘web-scale’ engineering teamonafive-minute ‘notification of events’service level agreement (SLA) toaddress sensitivities.When cloud userswant security analysis reviews forapplications, infrastructure andarchitecture, with this service they canhave it. As the cloud computing evolves,this kind of SLA is likely to becomeincreasingly prevalent.

Echoing this ‘proximity’message isMichael Newberry, productmanagerforWindowsAzure atMicrosoft UK.“Cloudproviders uniquely understandtheir platformand are best placed todescribe the controls customers canuse to achieve their required level ofsecurity, so customers can thendetermine if the capabilities and controls

Security


are suitable for their own requirements,”he explains.

Again resonatingwith the assertionthat the cloud is “only as good as theapplication”, Newberry continues: “Whileresponsibility for compliancewith laws,regulations and industry requirementsremainswithWindowsAzure customers,Microsoft’s commitment to providingfundamental security capabilities is keyto our customers’ successwith theoffering.” So theword ‘trust’ is key.

TakenontrustWeoften use the analogy of bankingwhen it comes to cloud security. Asindividuals, we entrust ourmoney to ourbank on the understanding that othercustomers don’t get to see our detailsand transactions. This is not dissimilarto the cloudmodel in someways; weplace our data and applicationswith“reputable” cloudprovider brands, safein the knowledge that these companieswill honour the sanctity of theSLAanddata privacy agreements thatwecustomers sign.

Whether this trust ever needs to bebrought into question is still amootpoint formany IT directorswho areconsidering cloudmigrations. But as JonHoneyball, whowrites forCloudPro, hassaid, people have trusted theirmoney tobanks formany years, butmayhave onlyhad cloud formonths in somecases.

Aswenowmove forward,wemayneed to endure the natural passage oftimebeforewe collectively assign thesame levels of trust to cloud computingaswemight do today to say corporatebanking. From this pointwemay thenexperience a level where the cloudactuallymakes datamore securethan if left unmanaged.Will thisultimately happen? “It can and it will,”is Honeybull’s prophecy.■

1 Encryption equality –Application encryption onthe ground should equal application encryptionin the cloud. Firms need to initiate this processby first performing an inventory analysis of allcloud resources to bemanaged, and thenassessing the business risk associatedwith eachelement of the IT ‘stack’. Appropriate levels ofencryption can then be applied.

2 Mission-critical omissions –All applications arenot the same. So-termed ‘extreme’ (or high risk)mission-critical cloud-based applications aredifferent, so therewill always be somedata thatyou don’t host in the cloud. This could be datarelating to national security, business intellectualproperty or sensitive customer account data.

3 SSL andVPN is the ‘ABC’ – Look to see that yourcloud provider has basic secure sockets layer(SSL) and virtual private network (VPN) layersin place. This should be among the ‘ABC’ firstprinciples of cloud security best practice, sothat information in transit has a core level ofencryption.

4 Policing policy practice – Formalised securityand access control policies are a prerequisite tousing the cloud securely.Whether your firmproduces a one-page document or conductsformal in-house training, policy controls are thebedrock of cloud security best practice.

5 Transparency, clarity and visibility –Constantlyauditing your cloud provider’s service for truevisibility is crucial. ThePonemon study foundthat half of all respondents recognise thatmanycloud resources are not evaluated for securityprior to deployment. In practice, the processof pre-evaluation, re-evaluation and auditanalysiswith a view to achieving applicationand data transparency, clarity and visibilityis essential.

Topfivecloudsecuritytips


AtoZofProviders

Therearehundredsofcompaniesactive in thecloudcomputing

space–wepick thetopmoversandshakers in the industry

Who’swhoincloudcomputing

IT’S IMPOSSIBLETOLIST all themanycompanies active in cloud computing – sohere’s a list that includesmost of the bigplayers plus a selection of smaller firms.Cloudproviders come in all shapes andsizes, but key categories are:• Infrastructure players, which provide thedata centres andmanagement tools tohost public, private andhybrid clouds

•Platformplayers, which allowmanydifferent application vendors to supplya service

•Application software firms,which havecloud-based systems such as sales,accounts and so on

•Operationmanagement providers, whichoffer services such as remote storage.

Somecompanies are active in severalcategories and the lines are blurred in anycase – this is one of the fastest evermovingsectors in IT.

AkamaiAkamai is aHawaiianwordmeaningintelligent orwise. The companyprovides a distributed computingplatform thatmirrors content fromcustomer servers on its global platformof servers.WebApplicationAcceleratoris Akamai’s infrastructure-as-a-serviceoffering, designed to speedup theperformance ofweb applicationswithout the client requiring additionalinfrastructure.

AmazonWebServicesAmazonWebServiceswas establishedin 2006and yes, it’s part of themulti-billion dollar online bookseller. Infact, AWSusesAmazon.com’s globalcomputing infrastructure –which is thebackbone of the retail business andtransactional enterprise – to provide


AtoZofProviders

on andmakes themavailable as if theywerestored locally.

BeyondTrustBeyondTrust is anAmerican companyspecialising in privilegeauthorisationmanagement, access

control and security solutions forvirtualisation and cloud computingenvironments. The company’s offeringsare designed to strengthen security,drive compliance and eliminate therisk of intentional, accidental andindirectmisuse of privileges ondesktopsand servers.

BTBT, themajor British telecoms companyof course, nowprovides cloud computingservices including products such asSalesforce.comandNetSuite. BT’sVirtual DataCentre offers a range ofcloud capabilities, including both publicandprivate cloud systems.

CATechnologiesCATechnologies is an ITmanagementand software solutions companyoperating across all IT environmentsfrommainframe to the cloud, includingboth public andprivate cloud computingsolutions. In 2010, CATechnologiesacquiredNimsoft, a provider of ITperformance and availabilitymonitoringsolutions that can be used in cloudapplications.

CanonicalCanonical is aUK software firm thatoffers cloud computing services throughitsUbuntu software, which allows usersto create a private cloudwithin their ownIT infrastructure or to deploy a cloudwith

TelcoslikeBTare naturalcloudplayers

scalable and secure cloudcomputing infrastructureto clients. Amazon is oneof the giants in the cloudand its offerings are billedon usage.• EC2 is aninfrastructure-as-a-service offering thatstands for ElasticComputeCloud. It operates on a simpleweb service interface, which allowsclients to obtain and configure capacityreadily, and provides developerswithtools to build resilient applications.

• S3, or Simple StorageService, isAmazon’s storage offering, andprovides a simpleweb servicesinterface that can be used to storeand retrieve any amount of data at anytime, fromanywhere on theweb, usingthe cloud.

• Elastic Beanstalk is Amazon’sdeployment andmanagement service.It allows users to quickly deploy andmanage applications inAmazon’scloud. Users upload applications andElasticBeanstalk automatically handlescapacity provisioning, load balancing,auto-scaling and application healthmonitoring.

• AWSCloudFormation gives developersand systems administrators an easyway to create a collection of relatedAmazon cloud resources andprovisionthem in an orderly andpredictablefashion.

AppleApple has enjoyed extraordinary successin recent yearswith the iPhone, iPad andtheMac computer range, and hasrecently trialled a newcloud offering, notsurprisingly named iCloud,which isaimed at consumers and storesmusic,photos, applications, documents and so

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AtoZofProviders

one of Canonical’s partners, includingAmazon,Microsoft andRedHat. It isflexible – enabling customers to switchbetween clouds – and features frequentlyupdated security procedures.

CiscoCisco is amultinational systemscompanyproviding communicationsandnetworking technology. It’s cloudofferings include:• SecureMultiTenancy – ownedcollectively byCisco, VMware andNetApp, this cloud-hostinginfrastructure-as-a-service offeringuses pre-tested and validatedcomputer ‘stacks’ and fault-tolerantarchitecture

•WebEx –Cisco’s collaborative suitethat combines real-timedesktopsharing andphone conferencing, andallows the sharing of documents,presentations and applications acrossPCs,Macs andmobile devices. Up tosixwebcams canbe streamedat once.

CitrixCitrix provides cloud services such asserver anddesktop virtualisation,software-as-a-service, conferencing,open source products andnetworking.The company has data centres aroundtheworld including theUK, India andAustralia. It acquiredXenSource inOctober 2007. CitrixOpenCloud is themain cloud computing platform.

CloudSharePreviously knownas ITStructures,CloudShare is aCalifornia-based cloudprovider founded in Israel. It offers aself-service platform that enablesorganisations to create virtual datacentres for a range of business functionsincluding application development andtesting, demonstrations, proofs of

concept and IT training and certification.CloudShare Enterprise is themaininfrastructure-as-a-service offering, andother products includeCloudSharePro,a free, individual version of the platformthat enables individuals and smallteams tomanage complex virtual ITenvironments in the cloud.

CommensusAUKprovider of a cloudplatformknownasC-VIP,which operates across five datacentres, three in London, and one each inParis and Frankfurt. It backs its servicewith a 99.999%uptime service-levelagreement.

DellDell is knownmainly as aPCmaker,but it also provides cloud computing,consulting anddata storage services.Offerings include infrastructuremanagement, virtual integration andmobilemanagement services.

ElasticHostsElasticHosts is a London-based cloudprovider. The company stands outmainly because it charges by theresources required, such asmemory,disk, processor andnetwork, as separate

CloudShareenables youto createvirtual datacentresusing aself-serviceplatform


AtoZofProviders

entities, allowing customers to createvirtualmachineswith any configurationsthey choose. Its scalable infrastructure-as-a-service offerings can run on anyOS.

EMCEMC isa long-standingdatamanagementgiant thatdelivers cloudservices suchasAtmos, a large-scale storagesystem. Itrecently announcedProSphere, a storageresourcemanagementoffering “designedfromthegroundupspecifically toaddressthe rapidly evolvingneedsof enterprisesas theymigrate tohighly virtualised,cloud-basedcomputingmodels”.

FasthostsFasthosts is a leadingUKwebhostingandcloudsolutionsprovider.Aswell asofferingacomprehensive rangeofwebhosting, email andserverproducts,Fasthosts is at the forefront of developinginnovative cloudsolutions for theSMEmarket includingvirtualservers,software-as-a-service, secureonlinestorageandback-up.Fasthostsdevelopedits ownvirtual serverplatform, calledDataCenteronDemand, as the foundationof its virtual solutions. This year thecompanyhaswon theMicrosoftHyper-VCloudPartnerAward2011andMicrosoft’sHostingPartnerof theYearAward.

FujitsuFujitsu is amajor provider of IT systems,services andproducts in theUK. Itsinfrastructure-as-a-service offering usessecure data centreswith the resilienceandperformance levels required forbusiness systemshosting. Client datais hosted in the original country,maintaining data privacy and legaljurisdiction for business information.Fujitsu’s platform-as-a-service offeringenables software vendors to reachmarkets on a pay-per-use basis.

GoGridGoGrid is aCalifornia-based cloudinfrastructure service provider that firstbegan offering cloud solutions in 2008.The company offer cloud solutionshosted by Linux andWindows virtualmachines. GoGridCloudStorage is afile-level back-up service forWindowsand Linux servers.

GoogleCalifornia-basedmultinational Google isbest-known for its leading search enginebut also provides cloud computingsolutions and other Internet-basedservices andproducts. It was foundedin 1998 to “organise theworld’sinformation” and runsmore than amillion servers in its data centres. Itoperates thewell-knownGmail emailservice, webbrowserGoogleChrome,theGoogle Talkmessaging applicationand evenproduces operating systemsformobile telephones.•GoogleApps is the company’ssoftware-as-a-service offering,providing customisable versions ofGoogle’s ownproducts, includingGmail, Docs, Talk, GoogleGroups, SitesandGoogleCalendar. It providesservices for business and education(the latter is free).

• GoogleCloudStorage enablesdevelopers to store and access dataon the company’s data centreinfrastructure. All data is replicated to

Google: afirm that’sorganised

towork in acloud

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multipleUS-baseddata centres, hasindividual and group-based accesscontrols and key-based authentication.

HPHP, orHewlett-Packard, is theworld’slargest computermaker, producingservers, laptops,mobile phones, printersand scanners, and has entered the cloudmarket.• EnterpriseCloudServices-Computeoffers computational services usingHP’s data centres. The service is apre-built, off-premise clouddesigned torun core applicationswith scalability.

• CloudServiceAutomation isHP’ssoftware-as-a-service offering, andoffers a package of cloud-buildinghardware, software and services. Itallows systems to be integratedwithEnterpriseCloudService-Compute sousers can jumpbetween their privatecloud andHP’s.

IBMIBMhas joined otherwell-known ITbrands in offering cloud services, suchas LotusLive, a cloud-based enterprisenetworking and collaboration toolintegrating email, social networkingfor business, file sharing, instantmessaging anddata visualisation,integratedwith Skype, LinkedIn andSalesforce.com.

IntuitThe companyproduces financial andtaxation software to service the smallbusiness and the accountancy industry.Its flagship products areQuicken,QuickBooks andTurboTax. Intuit nowoffers cloud-based versions of itsapplications.

IomartUKfirm Iomart has figured highly inglobal rankings of cloudproviders. Itoffersmanagedhosting andprivate/hybrid cloud computing based on itsdata centre estate in theUK, and runsdata centres in London,Maidenhead,Glasgow,NottinghamandLeicester.

JoyentFounded in 2004andheadquartered inSan Francisco, Joyent is a software,virtualisation and IT services companyspecialising in the cloud. It offers cloudservices for large online clients, includingsocial networking site LinkedIn (it wasalso the original host of Twitter). Thecompany is also active in the onlinegaming industry.

MicrosoftMicrosoft has dominatedmany aspectsof computing andhas nowentered thecloudwithMicrosoft CloudPower, andhas a number of software andplatformofferings that use familiarMicrosoftinterfaces:•Office 365 is an evolution ofMicrosoftOnline Services and combinesMicrosoft Officewith the advantagesof the cloud. Users can access email,documents, contacts and calendarsfromanywherewith an Internetconnection

•WindowsAzure is both a software andplatformservice provided on apay-for-usemodel. It offersmultiple

Computinggiant IBMhas recentlylaunchedLotusLive


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application development tools,automated servicemanagement and aglobal data centre presence

•Microsoft’s BusinessProductivity Suitedelivers the company’s familiar suite ofservices from the cloud, including 25gigabytes ofmailbox storage, andaccess through a variety ofmobiledevices to key services such as email,calendar and shared content

• SharePoint isMicrosoft’s collaborationplatform, bringing together familiarMicrosoft interfaces andusing thecloud to provide a single, integratedlocationwhere employees canworkwith their teammembers, shareknowledge andfindorganisationalresources and information.

NetSuiteNetSuite is a provider of cloudcomputing businessmanagementsoftware. Key offerings include:•NetSuite’s business softwareincorporates everything fromaccounting andfinancial resourceplanning (ERP) to customerrelationshipmanagement (CRM)

•NetSuiteOneWorld, a cloud-basedon-demand system to deliver real-timeglobal businessmanagement andfinancial consolidation tomid-sizedcompanieswithmultinational and

multi-subsidiary operations• SuiteAnalytics, which providesreal-timebusiness intelligence usingreal-timedashboards. It uses the cloudto give real-time views of companyperformance, finance, sales,marketingand service fulfilment.

NimbusNimbus offers business processmanagement software to help its clientscapture,manage anddeploy theiroperational processes and supportinginformation to their workforce, whereverthey are, using the cloud. The companyis aMicrosoft GoldCertifiedPartnerand apartnerwith SAP,Oracle andSalesforce.com.

NovellNovell is aUSmultinational software andservices company that offers platformcloud services, includingCloudManager,which automates complex provisioningworkflows, from requests and approvalsto creating and employing newbusinessservices, andCloudSecurity Service,which improves security if a companyusesmore than one cloud application,through a secure, single password log-in.

OracleSoftware giantOracle delivers bothprivate andpublic cloud computingsolutions. Clients pay forwhat they useandhave a choice of deploymentmodelsusingOracle’s scalable cloudinfrastructure. Offerings include:•Oracle Exalogic Elastic Cloud – aplatform for enterprise-wide datacentre consolidation on any scale, fromsmall departmental applications tolarge anddemandingmainframeapplications

•OracleOnDemand– aflexibledeploymentmodel for applications.

Microsoft’sOffice appsare nowmaking acloudmove

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AtoZofProviders

ParallelsParallels provides virtualisation andautomation software across all of themain operating systems. The companyisworkingwith a group of independentsoftware vendors and service providersto expand their cloudproducts forcustomers of all sizes, including helpinglarge companies to develop in-houseclouds.

PlanBPlanB is a specialist IT disaster recoverybusiness based in theUK. It says itprovides ‘near instant recovery’ ofworking systemson its RescueCloud ofremote virtual servers.

RackspaceRackspace has been hostingwebsite,applications, email servers, security andstorage since 2001. Itmakes a big deal ofwhat it calls the “fanatical support” itoffers to customers andhas severallevels of hosting services in both thepublic andprivate clouds. Offeringsinclude:• Cloud Files, which provides unlimitedonline storagewith easy upload andspeedy file transfer

• CloudServers, which allow you tochoose your ownoperating system,choose a server size and only pay forwhat you use

•CloudSites, which spreads your trafficacross a cluster of servers

• JungleDisk andCloudDrive, whichallow small business andpersonalusers to securely store, back-up andshare files in the cloud at low cost.

RedHatRedHat is an open source and cloudproviderwhich recognises that eachclient’s IT infrastructure is likely tocomprise hardware and software froma

variety of vendors. Its philosophy is thatyou should be allowed to use andmanage those assets as one cloud ratherthan being locked into one vendor and itdelivers a number of cloud solutionsincluding its Enterprise Virtualisationplatform for businesseswith heavy clouddemands.

RightScaleRightScale is a cloud computingmanagement company that offers anautomated platform for on-demandcloud services. Products include theCloudManagement Platform forreducing administration and thecomplexity ofmanaging clouddeployments, while still giving flexibility,control andportability.

Salesforce.comSalesforce.comspecialises inCRM(customer relationshipmanagement)applications. It started as aCRMsoftware-as-a-service provider, and hasnowexpanded into thewider cloud andsocial enterprise arena. Services include:• SalesCloud2, themainCRMcloudapplication

• ServiceCloud2, a customer serviceplatform

RedHat’sEnterpriseVirtualisationplatformis idealfor heavydemand


AtoZofProviders

•Chatter, a private social network, likeFacebook,which canbe used internallyin a company

• Force.com, a cloudplatform forbusiness applications, allowingdevelopers to create applications thatare hosted onSalesforce.com’sinfrastructure.

SavvisSavvis offers a flexible, scalable andeasy-to-use cloud interface. It providespublic andprivate network connectivityand has 31 data centres across theworld, including in Europe, theUSandAsia.

StarUK-basedStarwas founded in 1995 andpioneered a cloud-based spamand virusscanning system for business email thateventually evolved intoMessageLabs, amessaging andweb security specialist.An IT and communications servicesprovider, Star offers email, telephony,hosting andnetworking, and nowdelivers a range of cloud computingsolutions, includingWorkLife, whichbrings together email, telephony, instantmessaging, documentmanagement,conferencing and collaborationtechnology.

SunGardAvailabilityServicesThe companyprovides IT operationssupport including integrated disasterrecovery,managed services, ITconsulting andbusiness continuitymanagement software. It offers anenterprise-class private cloud service, aback-up service calledReplication-as-a-Service, Electronic Vaulting, forencrypted and secure storage of datathat links directly to a recovery system,and a cloud-based continuitymanagement solution.

2e22e2describes itself as an IT “lifecycleservices” provider, and theUKfirm isactive in cloud infrastructuredeployment. It says: “Webelieve thatvarious hybrid strategies –marryingexisting dedicated IT investmentswith either public or private cloudtechnologies – are the inevitable answerfor at least the next five years as thecloudmarket evolves and stabilises.Cloud shouldmean reduced costs andrapid deployment of innovativeapplications, but never at the expense ofprocurement difficulties or piecemeal,indifferent support levels.”

UnisysThe company has focused onwhat itconsiders to be the three challengesthat need to be addressed for cloudcomputing to be viable, namely security,compliance and application rewrites,andmigration. It offers solutions acrossmanybusiness areas including finance,budget planning, HR, payroll, email,collaboration, analytics anddatastorage. Offerings includeVirtualOffice-as-a-Service, which provideshosted ‘desktops’ usingUnisys’s securecloud infrastructure on a subscriptionbasis. It is designed to simplify desktopmaintenance, reduce support costs andimprove security comparedwithtraditional desktopPCs.

VMwareVMware offers virtualisation systemsand cloud infrastructure from thedesktop to the data centre. The companyprovides private cloud andpublic/hybridcloud solutionswith safeguards andgovernance compliance, and clients canbuild applications that are portablebetween the cloudswithin a commonmanagement framework.■


Glossary

AgilityCan refer to faster, simpler steps forprovisioning IT and alsowider businessprocesses.

CAPEXCapital expenditure – the traditional wayto purchase IT equipment. Largeinvestments aremade in one financialyear to benefit the business over thelifetimeof the hardwarewhichwouldtypically be three to five years. This is incontrast toOPEX.

CloudSimply the global internet, the networkbeyond your ownbuilding.

CloudbackupBacking updata to internet-basedstorage systems. Aswell as being asimpleway to backupdata it has theaddedbenefit of keeping a copy of dataoffsite. Disadvantages canpotentiallyinclude the amount of time to backupand restore files, particularlywhere datachanges frequently and internetbandwidth is limited. Zmanda, CarboniteandMozy provide services in this area.

CloudbrokerAnorganisation that acts as a liaisonbetweenmultiple cloud service providersand customers, by selecting the bestprovider for particular services.

CloudburstingCloudbursting is a commonpracticewithin hybrid clouds toprovide additionalresources to private clouds as andwhenthey’re needed

Cloud infrastructureConsists of servers, storage areanetworks (SANs), networkingcomponents and virtualisation softwarethat combine to provide a fault tolerant,flexible and scalable system.Cloudinfrastructures are housed in datacentres.

CloudpyramidApicture of cloud computing layers byfunctionality, such as infrastructure,platformand application.

Cloud serviceproviderAcompany that provides cloud servicesover the Internet. Large data centres areused to run applications and store data infault tolerant configurations. The long listof providers includesAmazon, Google,Microsoft andSalesforce.com.

Cloud storageStorage of files on Internet basedsystems. Cloud storage canbe used aspart of a SaaS solutionwhere theapplication and storage are both locatedon the cloud. Another option is to use itas a store for data that can be transferred

Glossarytocloudcomputingterms


Glossary

to or from the local network via awebbrowser or locally installed application.Companies offering cloud storagesolutions includeAmazon, RackspaceandMicrosoft.

CloudwashingA tactic by vendors, especially softwarecompanies, to rebrand their offerings ascloud computing butwithout true cloudfunctionality.

Community cloudAcloud that is shared by a number oforganisationswith somecommoninterests and aims.

Data centreBuildings that house cloudinfrastructures including servers, storagesystems andnetworking equipment.Also knownas cloud centres.

ElasticityCloud computing can scale up anddowndepending ondemand.

Hybrid cloudAsystem that uses a combination ofprivate andpublic clouds.

Internal cloudSeePrivate cloud.

Infrastructure-as-a-service (IaaS)Aservice that provides access tovirtual servers. In the case of a publiccloud, this servicewould be hostedby a third party and accessed over theinternet. It’s important to be aware oflicensing implicationswhenusing thistype of service. Services are normallybilled on the consumption of resourcessuch as processor andmemory.

Amazon andRackspace both offerservices in this area.

Mash-upCombining input frommultiple sourcesin aweb application.

Multi-tenancyAsingle instance of an application usedformany customers, with each customeronly able to access their owndata.Customersmaybe able to customiseaspects of the software for their data, butonlywithin the limitations imposedbythe developers.

OPEXOperational expenditure costs incurredfor serviceswithin a financial year.As cloud computing is charged on asubscription basis, itmarks a shift fromCAPEX toOPEX,making budgeting for ITa simpler process.

Platform-as-a-service (PaaS)Service that provides a framework fordevelopers to run their own code and socanbe used for in-house applications.This service is particularly useful whenSaaS solutions don’tmeet the particularbusiness needs. Publishing applicationscanbe greatly speededupby using thistype of service as the hardware andrequired components are set up by theprovider. Services such as Force.comandMicrosoft’sWindowsAzure fit intothis category.

Public cloudCloud services provided across theinternet by third-party providers.Virtualisation technology is used toprovide fault tolerant, flexible andexpandable systems that can bedivided

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Glossary

up to provide isolated services on asubscription or usage basis. Companiesproviding services includeAmazon,Salesforce.com,Microsoft andGoogle.

Private cloudUses virtualisation technology to providesimilar functionality to a public cloud,but is owned andmanagedby a singleuser company. Private cloudsmaybemore suitable than a public cloudwhenhighly sensitive information is stored.The largemanufacturers such asCisco,Dell, HP and IBMprovide hardwaretailored for private clouds.

Storageareanetwork (SAN)A fault tolerant storage system that canbe accessed through fast networktechnologies to provide storage tomultiple servers. SANsworkwithvirtualisation technology, enabling virtualservers to bemovedbetweenphysicalservers on the fly.

Software-as-a-service (SaaS)Aservice that provides access tosoftware across the internet, includingoffice applications, email services andcustomer relationshipmanagement(CRM) systems. The hardware andsoftware ismanagedby the provider, sothere is little requirement for local IT stafffor this type of service. Providers includeSalesforce.com,NetSuite andGoogle.

Service level agreement (SLA)Defines the level of service that asupplierwill provide, normally includingthe percentage of uptime and levels ofcompensation offered if the supplierdoesn’tmeet their stated figures.

Serviceprovider lock-inThe fear that organisatiions opting forcloud serviceswill be stuckwith theiroriginal provider and unable tomove thedata to an alternative provider. Variousorganisations are looking to createcommon standards for cloud, theOpenCloud Initiative is probably the bestknownof these.

Storage serviceSeeCloud storage.

Utility computingProviding computing services andcharging on a usage basis inmuch thesameway as utility bills. This is a shiftfrom traditional networkswhere serversneed to be purchased and then replacedaccording to a schedule schedule.

Virtual PrivateCloudSimilar to the long-familiar concept oftheVirtual PrivateNetwork (VPN).Allows organisations to create cloudsthat look private, froma security point ofview.

VirtualisationTechnology used for cloud computingthat divides physical servers intomultiple smaller virtual servers that eachcontains their own fully functioningoperating system. Virtual servers can bemigrated betweenphysical servers andresources, such as processor andmemory, and canbe increased ordecreased as required. VMware, CitrixandMicrosoft provide virtualisationsolutions.■

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The ultimate guide to cloud computing

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