Seven Things the CIO should consider when adopting a holistic cloud strategy

Originally posted @ Gigaom Research 8/25/14

http://research.gigaom.com/2014/08/seven-things-the-cio-should-consider-when-adopting-a-holistic-cloud-strategy/

 

As conversations about cloud computing continues to focus on IT’s inability at holistic adoption, organizations outside of IT continue their cloud adoption trek outside the prevue of IT. While many of these efforts are considered Shadow IT efforts and frowned upon by the IT organization, they are simply a response to a wider problem.

The IT organization needs to adopt a holistic cloud strategy. However, are CIOs really ready for this approach? Michael Keithley, Creative Artists Agency’s CIO just returned from CIO Magazine’s CIO 100 Symposium which brings together the industry’s best IT leaders. In his blog post, he notes that “(he) was shocked to find that even among this elite group of CIOs there were still a significant amount of CIOs who where resisting cloud.” While that perspective is widely shared, it does not represent all CIOs. There are still a good number of CIOs that have moved to a holistic cloud strategy. The problem is that most organizations are still in a much earlier state of adoption.

In order to develop a holistic cloud strategy, it is important to follow a well-defined process. The four steps are straightforward and fit just about any organization:

  1. Assess: Provide a holistic assessment of the entire IT organization, applications and services that is business focused, not technology focused. For the CIO, they are a business leader that happens to have responsibility for technology. Understand what is differentiating and what is not.
  2. Roadmap: Use the options and recommendations from the assessment to provide a roadmap. The roadmap outlines priority and valuations that ultimately drive the alignment of IT.
  3. Execute: This is where the rubber hits the road. IT organizations will learn more about themselves through action. For many, it is important to start small (read: lower risk) and ramp up quickly.
  4. Re-Assess & Adjust: As the IT organization starts down the path of execution, lessons are learned and adjustments needed. Those adjustments will span technology, organization, process and governance. Continual improvement is a key hallmark to staying in tune with the changing demands.

For many, following this process alone is not enough to develop a holistic cloud strategy. In order to successfully leverage a cloud-based solution, several things need to change that may contradict current norms. Today, cloud is leveraged in many ways from Software as a Service (SaaS) to Infrastructure as a Service (IaaS). However, it is most often a very fractured and disjointed approach to leveraging cloud. Yet, the very applications and services in play require that organizations consider a holistic approach in order to work most effectively.

When considering a holistic cloud strategy, there are a number of things the CIO needs to consider including these six:

  1. Challenge the Status Quo: This is one of the hardest changes as the culture within IT developed over decades. One example is changing the mindset that ‘critical systems may not reside outside your own data center’ is not trivial. On the other hand, leading CIOs are already “getting out of the data center business.” Do not get trapped by the cultural norms and the status quo.
  2. Differentiation: Consider which applications and services are true differentiators for your company. Focus on the applications and services that provide strategic value and shift more common functions (ie: email) to alternative solutions like Microsoft Office 365 or Google Apps.
  3. Align with Business Strategy: Determine how IT can best enable and catapult the company’s business strategy. If IT is interested in making a technology shift, consider if it will bring direct positive value to the business strategy. If it does not, one should ask a number of additional questions determining the true value of the change. With so much demand on IT, focus should be on those changes that bring the highest value and align with the business strategy.
  4. Internal Changes: Moving to cloud changes how organizations, processes and governance models behave. A simple example is how business continuity and disaster recovery processes will need to change in order to accommodate the introduction of cloud-based services. For organizations, cloud presents both an excitement of something new and a fear from loss of control and possible job loss. CIOs need to ensure that this area is well thought out before proceeding.
  5. Vendor Management: Managing a cloud provider is not like every other existing vendor relationship. Vendor management comes into sharp focus with the cloud provider that spans far more than just the terms of the Service Level Agreement (SLA).
  6. Exit Strategy: Think about the end before getting started. Exiting a cloud service can happen for good or bad reasons. Understand what the exit terms are and in what for your data will exist. Exporting a flat file could present a challenge if the data is in a structured database. However, that may be the extent of the provider’s responsibility. When considering alternative providers, recognize that shifting workloads across providers is not necessarily as trivial as it might sound. It is important to think this through before engaging.
  7. Innovation: Actively seek out ways to adopt new solutions and methodologies. For example, understand the value from Devops, OpenStack, Containers and Converged Infrastructure. Each of these may challenge traditional thinking, which is ok.

Those are seven of the top issues that often come up in the process of setting a holistic cloud strategy. Cloud offers the CIO, the IT organization and the company as a whole one of the greatest opportunities today. Cloud is significant, but only the tip of the iceberg. For the CIO and their organization, there are many more opportunities beyond cloud today that are already in the works.

Death of the Data Center

Back in 2011, Mark Thiele (@mthiele10), Jan Wiersma (@jmwiersma) and I shared the stage at a conference in London, England for a panel discussion on the future of data centers. The three of us are founding board members with Data Center Pulse; an industry association of data center owners and operators with over 6,000 members that span the globe.

Our common theme for the panel: Death of the Data Center. Our message was clear and poignant. After decades of data center growth, a significant change was both needed and on the horizon. And this change was about to turn the entire industry in its head. The days of building and operating data centers of all shapes, sizes and types throughout the world was about to end. The way data centers are consumed has changed.

Fast forward the clock to 2014, a different conference (ECF/ DCE) and a different city (Monte Carlo, Monaco). The three of us shared the stage once again to touch on a variety of subjects ranging from SMAC to DCIM to the future of data centers. During my opening keynote presentation on the first day, I referred back to our statement from three years earlier professing “Death of the Data Center.”

Of course, making this statement at a Cloud and Data Center conference might have bordered on heresy. But the point still needed to be made. And it was more important today than ever. The tectonic shift we discussed three years in London was already starting to play out. Yet, the industry as a whole was still trying to ignore the fact that evolution was taking over. And by industry I’m referring to both internal IT organizations along with data center and service providers. How we look at data centers was changing and neither side was ready to admit change was afoot.

The Tectonic Data Center Evolution

During the economic downturn in 2008 and 2009, a shift in IT spending took place. At the same time, cloud computing was truly making its own entrance. Companies of all sizes (and their IT organizations) were pulling back their spending and rethinking what ‘strategic spending’ really meant. Coming into focus was the significant costs associated with owning and operating data centers. The common question: Do we still really needed our own data center?

This is a tough question to consider for those that always believed that data, applications, and systems needed to be in their own data center in order to be 1) manageable and 2) secure. Neither of those hold true today. In fact, by many accounts, the typical enterprise data center is less secure than the alternatives (colocation or cloud).

The reality is: This shift has already started, but we are still in the early days. Colocation is not new, but the options and maturity of the alternatives is getting more and more impressive. The cloud solutions that are part of a data center’s ecosystem are equally impressive.

Data Center Demand

Today, there is plenty of data center capacity. However, there is not much new capacity being built by data center providers due to the fear of over capacity and idle resources. The problem is, when the demand from enterprises starts to ramp up. It takes years to bring a new data center facility online. We know the demand is coming, but when. And when it does, it will create a constraint on data center capacity until new capacity is built. I wrote about this in my post Time to get on the Colocation Train Before it is Too Late.

Are Data Centers Dying?

In a word, are data centers going away? No. However, if you are an enterprise running your own data center, expect a significant shift. At a minimum, the size of your existing data center is shrinking if not completely going away. And if you are in an industry with regulatory or compliance requirements, the changes still apply. I have worked with companies some of the most regulated and sensitive industries including Healthcare, Financial Services and Government Intelligence Communities. All of which are considering some form of colocation and cloud today.

Our point was not to outline a general demise of data centers, but to communicate an impending shift in how data centers are consumed. To some, there was indeed a demise of data centers coming. However, to others, it would generate significant opportunity. The question where are you in this equation and are you prepared for the impending shift?

HP Launches Helion to Address Enterprise Cloud Adoption

Today, HP takes a huge step forward to address the broad and evolving enterprise cloud demand through their HP Helion announcement. HP Helion presents HP’s strategy to provide a comprehensive cloud portfolio. As HP’s CEO Meg Whitman mentioned, “HP is in it to win.” HP is investing over $1b in their cloud-based solutions. It’s clear that HP is working hard to win the new enterprise game.

Traditional IT demand is not going away, but the demand for cloud is increasing. Most enterprises struggle to leverage traditional IT while adopting Transformational IT. Providers, such as HP, need to address this complex and hybrid approach. With Helion, HP ups the ante in addressing this demand.

Today, HP launches their Helion brand encompassing their entire cloud portfolio. The formerly know HP Cloud solution is now part of the Helion branding. But the key change isn’t the branding change. It’s the end-to-end products that address an enterprise’s needs regardless of their state of cloud adoption.

Open Source Software Part of HP’s Strategy

HP’s commitment to OpenStack is not new. They have two board members as part of the OpenStack Foundation. And their further commitment to embrace OpenStack as part of their core cloud offerings furthers both HP and the OpenStack movement as a whole. OpenStack is a key opportunity for enterprises and service providers alike. However, open source software, and specifically OpenStack has presented significant challenges for enterprise adoption.

One of the first solutions from HP is their OpenStack Community Edition (OCE). OCE is intended for entry-level use up to 30 nodes. OCE is an approachable way for enterprises interested in OpenStack to get started. For enterprises interested in going beyond 30 nodes, HP’s commercial solution bridges the gap.

OCE is not only open source, but supported by HP. It’s also one of the first distributions based on the OpenStack Icehouse release. HP intends to ship updates every six weeks, which will keep the distribution fresh. HP OCE is available today as a free download.

Also announced today was HP’s commitment to Cloud Foundry. Cloud Foundry presents an additional opportunity for enterprises to embrace cloud through PaaS. For many enterprises, PaaS presents the solution between a core infrastructure solution and SaaS solutions. Plus, PaaS provides portability for applications based on a specific platform.

In Summary

HP Helion presents one of the most comprehensive end-to-end solutions for enterprises today. OpenStack is very interesting for enterprises, but difficult to consume. Helion lowers the bar and gives enterprises options they’ve been clamoring for.

Top 5 Posts of 2013

Over the course of 2013, I wrote a number of posts about CIOs, Cloud Computing, Big Data, Data Centers and IT in general. Here are the top-5 most popular posts in 2013:

5. Time to get on the Colocation Train Before it is Too Late

In the number 5 spot is a post addressing the forthcoming challenges to the data center colocation market and how the ripple effect hits IT.

4. A Workload is Not a Workload, is Not a Workload

Number 4 is a post written in 2012 about the discrepancy between cloud computing case studies. Not all workloads are the same and many of the examples used do not represent the masses.

3. The IT Role in Value Creation is Not a Technology

The number 3 spot goes to a post that addresses the direction of IT organizations within the business and how it is evolving. It is this very evolution that is both very difficult and very exciting at the same time.

2. Motivation And Work Ethics: Passion Fuels the Engine

Another post from 2012 goes to the number 2 spot, which shows that some subjects (like: the importance of passion) have staying power. This post addresses important characteristics for a leader to consider. It addresses the intersection of passion, work ethic and motivation.

1. What is Your Cloud Exit Strategy?

Probably one of the most controversial titles goes to the number 1 spot. This post addresses the challenges faced with cloud when one doesn’t think about their end-state and evolution.

Honorable Mention: So Which Is It? Airplane Mode or Turn Devices Completely Off?

Back in Apr 2012, I was traveling and noticed that many didn’t turn off their devices even though they were instructed to…which prompted the post. Even though the FAA changed their rules in US, this post still gets quite a bit of attention.

Rise of the CDO…do you need one?

The CIO (Chief Information Officer) and CMO (Chief Marketing Officer) roles are in a state of flux and starting to evolve pretty significantly. In the past year, the role of CDO or Chief Data Officer started picking up steam. 2014 will bring the CDO role to prominence among the CIO and CMO roles. But what exactly is a CDO and why is it needed now? And where is the role headed especially in consideration of the changes to the CIO and CMO roles?

THE CDO (CHIEF DATA OFFICER) ROLE

First, the CDO role is not new. Enterprises have had people filling the role for several years now. The specific function of the role, however, varies greatly…and continues to do so. Organizations tag the CDO with functions ranging from ensuring regulatory compliance to IT system integration. With the advent of Big Data, companies are now looking at the CDO to manage the huge influx of data.

Late last year, Gartner published results from a recent study on the 5 Facts About Chief Data Officers. Namely:

  1. There are over 100 CDOs today (double the number from 2012).
  2. Most reside in Banking, Government and Insurance industries.
  3. 65% reside in the US.
  4. Over 25% of those are in New York or DC.
  5. Over 25% are women (almost twice that of CIOs).

WHAT SHOULD A CDO DO AND WHY NOW?

The sheer volume of data in both type and source is growing exponentially. The methods used by a traditional marketing and IT organizations are simply inadequate to keep up. A new perspective is needed. In addition, the CMO and CIO are fully bogged down with existing challenges to streamline and evolve their organizations.

The importance of data to a company is simply too valuable to wait for existing organizations to evolve. There is a half-life to the value of data. This is where the CDO comes in. The CDO can take a business-centric approach to the data without being inhibited by existing challenges. Data spans multiple facets from marketing to product development to customer service and beyond. By leveraging a separate organization that is not biased by the priorities of either the IT or marketing organizations, companies can leverage the true value of the data more readily.

Managing data is less about how to store it on physical drives and more about correlation of data points and trends.

CDO DIRECTION

There was a time that I felt that the CDO should be part of the CIOs role. I still feel that way, but it will take time. As outlined above, the CDO role needs to be autonomous from the CIO and CMO roles. However, as each of those roles evolves, so will the CDO role. More specifically, as the CIO role evolves, so will the CDO role.

As IT organizations shift from technology-centric to business-centric, their role with data also evolves. The prevalence of data as a business driver presents a unique challenge and opportunity for IT. Stronger companies will seize this opportunity through the evolution of their CIO and collaboration with the CDO function.

IN SUMMARY

Over time, the CIO & CDO roles become far more inter-related and eventually merge into a single CIO role. However, that will take time to happen. In the meantime, every company should be considering who is responsible for truly managing (and leveraging) their data for business intelligence and growth opportunities. In many cases, that may be the CDO role.

CIO Predictions for 2014

This year, I thought I would shift the focus from cloud-specific to the broader agenda for CIOs. But before I jump into my predictions for 2014, let’s take a trip down memory lane and review how I did on Cloud Predictions for 2013.

How did I do?

  1. Rise of the Cloud Verticals: We have seen an uptick of ‘cloud brokers’ but very little in the way of cloud verticals targeting specific industries or suite of services. There has been a feeble attempt at integration between solutions, but even that was lukewarm at best in 2013. (1/2pt)
  2. Widespread Planning of IaaS Migrations: Spot on with this one! Over 2013, the number of IT organizations planning IaaS migrations stepped up in a big way. That’s great news for the IT organization, the business units and the industry as a whole. It demonstrates progress along the maturity continuum. (1pt)
  3. CIO’s Look to Cloud to Catapult IT Transformation: This has been a mixed bag. Many have leveraged cloud because they were forced into it rather than see it as one of the most significant opportunities of our time. There are exceptions to this, but they are not as prominent yet. (1/2pt)
  4. Mobile Increases Intensity of Cloud Adoption: Mobile is taking off like wildfire. And cloud is enabling the progress, as traditional methods would simply be too challenging and slow. (1pt)
  5. Cloud Innovation Shifts from New Solutions to Integration & Consolidation: Over 2013, the number of new solutions has progressed at a feverish pitch. The good indicator is that new solutions are taking into account the requirement of integration with solutions within their ecosystem. While consolidation within cloud providers started to pickup in the 2nd half of 2013, I would expect it to increase into 2014. (1pt)

Total Score: 4/5

Overall, slower general adoption of cloud paired with strong adoption of specific cloud solutions lead to 2013’s progress. I had hoped to see us further along…but alas, 2014 is shaping up to be a very interesting year.

What to look for in 2014?

  1. Cloud Consolidation: Look for plenty of M&A activity as larger incumbents gobble cloud point solutions up. Also look for incumbents to flesh out their ecosystem more fully.
  2. CIOs Focus on Data: Conversations move beyond the next bell or whistle and onto items that really change the economic landscape for a company: data. Look for the CIO to shift focus to data and away from infrastructure.
  3. Colocation is in Vogue: As the CIO moves up the maturity model toward higher-value functions, look for IT organizations to move to colocation in droves. The challenge will be moving before it’s too late.
  4. CIO, CMO + Other Execs Become Best Friends: We’ve talked for some time about how the CIO strives for a ‘seat at the table’. The challenge is in how to be a relevant participant at the table. As the CIO role shifts from support org to business driver, look for the relationships to change too.
  5. One Size Does NOT Fit All: As we talk about newer technologies, CIOs, IT organizations, vendors and service providers get realistic about where their products/ services fit best…and don’t. OpenStack and HP Moonshot are great examples of awesome solutions that fit this statement.

As I’ve said before, this has got to be the best time to work in Information Technology. How will you embrace and leverage change? Here’s to an awesome 2014!

Time to get on the Colocation Train Before it is Too Late

The data center industry is heading toward an inflection point that has significant impact on enterprises. It seems many aren’t looking far enough ahead, but the timeline appears to be 12-18 months, which is not that far out! The issue is a typical supply chain issue of supply, demand and timelines.

A CHANGE IN THE WINDS

First, let’s start with a bit of background… The advent of Cloud Computing and newer technologies, are driving an increase in the number of enterprises looking to ‘get out of the data center business. I, along with others, have presented many times about ‘Death of the Data Center.’ The data center, which used to serve as a strategic weapon in an enterprise IT org’s arsenal, is still very much critical, but fundamentally becoming a commodity. That’s not to say that the overall data center services are becoming a commodity, but the facility is. Other factors, such as the geographic footprint, network and ecosystem are becoming the real differentiators. And enterprises ‘in the know’ realize they can’t compete at the same level as today’s commercial data center facility providers.

THE TWO FLAVORS OF COLOCATION

Commercial data center providers offer two basic models of data center services: Wholesale and Retail. Digital Realty and DuPont Fabros are examples of major wholesale data center space and Equinix, Switch, IO, Savvis and QTS are examples of major retail colocation providers. It should be noted that some providers provide both wholesale and retail offerings. While there is a huge difference between wholesale and retail colocation space, I will leave the details on why an enterprise might consider one over the other for another post.

DATA CENTER SUPPLY, DEMAND AND TIMELINES

The problem is still the same for both types of data center space: there is a bit of surplus today, but there won’t be enough capacity in the near term. Data center providers are adding capacity around the globe, but they’re caught in a conundrum of how much capacity to build. It typically takes anywhere between 2-4 years to build a new data center and bring it online. And the demand isn’t there to support significant growth yet.

But if you read the tea leaves, the demand is getting ready to pop. Many folks are only now starting to consider their options with cloud and other services. So, why are data center providers not building data centers now in preparation for the pop? There are two reasons: On the supply side, it costs a significant amount of capital to build a data center today and having an idle data center burns significant operational expenses too. On the demand side, enterprises are just starting to evaluate colocation options. Evaluating is different from ready to commit spending on colocation services.

Complicating matters further, even for the most aggressive enterprises, the preparation can take months and the migrations years in the making. Moving a data center is not a trivial exercise and often peppered with significant risk. There are applications, legacy requirements, 3rd party providers, connections, depreciation schedules, architectures, organization, process and governance changes to consider…just to name a few. In addition to the technical challenges, organizations and applications are typically not geared up to handle multi-day outages and moves of this nature. Ponder this: When was the last time your IT team moved a critical business application from one location to another? What about multiple applications? The reality is: it just doesn’t happen often…if at all.

But just because it’s hard, does not mean it should not be done. In this case, it needs to be done. At this point, every organization on the planet should have a plan for colocation and/or cloud. Of course there are exceptions and corner cases, but today they are few and shrinking.

COMPLIANCE AND REGULATORY CONCERNS

Those with compliance and regulatory requirements are moving too…and not just non-production or Disaster Recovery systems. Financial Services organizations are already moving their core banking systems into colocation. While Healthcare organizations are moving their Electronic Health Records (EHR) and Electronic Medical Record (EMR) systems into colocation…and in some cases, the cloud. This is in addition to any core legacy and greenfield applications. The compliance and regulatory requirements are an additional component to consider, not a reason to stop moving.

TIME CHANGES DATA CENTER THINKING

Just five years ago, a discussion of moving to colocation or cloud would have been far more challenging to do. Today, we are starting to see this migration happening. However, it is only happening in very small numbers of IT firms around the globe. We need to significantly increase the number of folks planning and migrating.

DATA CENTER ELASTICITY

On the downside, even if an enterprise started to build their data center strategy and roadmap today, it is unclear if adequate capacity to supply the demand will exist once they’re ready to move. Now, that’s not to say the sky is falling. But it does suggest that enterprises (in mass) need to get on the ball and start planning for death of the data center (their own). At a minimum, it would provider data center providers with greater visibility of the impending demand and timeline. In the best scenario, it provides a healthy ecosystem in the supply/ demand equation without creating a rubber-band effect where supply and demand each fluctuate toward equilibrium.

BUILDING A ROADMAP

The process starts with a vision and understanding of what is truly strategic. Recall that vitally important and strategic can be two different things. Power is vitally important to data centers, but data center providers are not building power plants next to each one.

The next step is building a roadmap that supports the vision. The roadmap includes more than just technological advancements. The biggest initial hurdles will come in the form of organization and process. In addition, a strong visionary and leader will provide the right combination skills to lead the effort and ask the right questions to achieve success.

Part of the roadmap will inevitably include an evaluation of colocation providers. Before you get started down this path, it is important to understand the differences between wholesale and retail colocation providers, what they offer and what your responsibilities are. That last step is often lost as part of the evaluation process.

Truly understand what your requirements are. Space, power and bandwidth are just scratching the surface. Take a holistic view of your environment and portfolio. Understand what and how things will change when moving to colocation. This is as much a clear snapshot of your current situation, as it is where you’re headed over time.

TIME TO GET MOVING

Moving into colocation is a great first-step for many enterprises. It gets them ‘out of the data center’ business while still maintaining their existing portfolio intact. Colocation also provides a great way to move the maturity of an organization (and portfolio) toward cloud.

The evaluation process for colocation services is much different today from just 5 years ago. Today, some of the key differentiators are geographic coverage, network and ecosystem. But a stern warning: The criteria for each enterprise will be different and unique. What applies to one does not necessarily apply to the next. It’s important to clearly understand this and how each provider matches against the requirements.

The process takes time and effort. For this and a number of other reasons, it may take months to years even for the most aggressive movers. As such, it is best to started sooner than later before the train leaves the station.

Further Reading:

Applying Cloud Computing in the Enterprise

Cloud Application Matrix

A Workload is Not a Workload, is Not a Workload

What is Your Cloud Exit Strategy?

Cloud computing is still one of the hottest subjects in IT and business today. As the cloud market starts to mature, the interest to leverage cloud only grows further. And the sources of demand are not limited to only IT. Business units and non-IT users are quickly discovering they can engage cloud-based services on their own.

While there is quite a bit of interest in discussing how to best apply cloud and moving to leverage cloud services, there has been little conversation about a Cloud Exit Strategy. Yes, thinking about the divorce even before marriage. While many have enough on their plate with thinking about how to best leverage cloud, how one exits a cloud is equally important.

And there are a number of different factors that one should consider with regards to their cloud exit strategy. In addition to terms in the service provider agreement, data integrity, size of data and alternative providers are just a few of the considerations.

CONTRACT TERMS

Cloud Service Providers (CSPs) may, or may not include terms in their contract outlining what happens to data in case of contract termination. However, the details outlined in the terms vary widely from provider to provider. Here is how two different providers addressed the issue.

Provider 1:

(iii) we will provide you with the same post-termination data retrieval assistance that we generally make available to all customers.

Provider 2:

12.1 You will not have access to your data stored on the Services during a suspension or following termination.

12.2 You have the option to create a snapshot or backup of your Cloud Servers or Databases, respectively, however, it is your responsibility to initiate the snapshot or backup and test your backup to determine the quality and success of your backups. You will be charged for your use of backup services as listed in your Order.

The concern is that not all providers will include terms in their default contracts. And even if the terms outlined above, it leaves many of the important specific details up for question. What is the method in which the data is provided? If we are talking about database files, are they provided in a CSV flat file, Excel spreadsheet or database? Before you engage a contract, it is important to work out the details on what works best when it is time to cancel the contract. If you don’t, the downside is that the provider might tack on professional services fees to ‘help’ export your data into a useful format. And that assumes they are willing to do it since you have effectively cancelled the relationship with the provider and left them with little to no incentive to help.

DATA INTEGRITY

Determining the format of the data for export is a good first step. But what happens with relational data? Simply dumping the atomic level data into a CSV file technically fulfills the terms of the contract, but leaves the data unusable. Without understanding the relationships between data elements, the data goes from readily usable to practically unusable. This is where the nature of the data needs to drive how it is exported and the format in which it is exported. That, in turn, must drive the export process that is outline in the terms of the contract.

SIZE OF DATA

Moving small amounts of data is a relatively trivial thing to do today. The amount of preparation, time and effort to do so is relatively small. In addition, the cost of high-bandwidth network connections has dropped considerably in recent years. At this point, it is common that even the average home may have a high-speed connection to the Internet.

But what if you need to move large quantities of data? Even with cheaper bandwidth and larger connections, it may still be cheaper and faster to ship physical storage devices to the CSP for initial upload. The CSP often has a service to allow shipping storage devices for importing large data loads. What they often do not have is a clear process to export large quantities of data via storage devices. And again, you have terminated the agreement and they are less inclined to work with you and your data.

It is important to think ahead about the volume and type of data being considered for the CSP and how best to move it around.

ALTERNATIVE PROVIDERS

Even if all of the details about exporting services and data have been worked out, where does one go to form a new relationship? Even with a maturing cloud marketplace, not all cloud providers offer the same services or ecosystems. Before pulling the plug on one provider, consider the process to move to an alternative provider and what they offer based on the application’s requirements.

Leveraging the evaluation criteria and selection process used to get to your first choice can provide a guide to consider alternative solutions. Be careful to consider that in such a volatile and ever-changing market such as cloud computing, the providers, services and ecosystems are constantly in flux. The list of providers used last month might not apply for this month.

WHERE TO GET STARTED

Contract negotiations on their own are a fine art. If the terms are left to an attorney to negotiate, the outcome might not be what was expected. One needs to appreciate that an attorney works with what they know. Unfortunately, they cannot be expected to know everything about cloud services nor the nuances as mentioned above. This is a good opportunity to partner with your counsel (either internal or external). They can help guide you as much as you guide them to a successful outcome.

In parallel with engaging legal counsel, map out the workflow of your application, processes, connections and data elements to provide a clearer picture of the service. Consider what you need going in and coming back out. Imagine the entire lifecycle of your relationship with the CSP from start to finish. Use that as your model for the next steps. Then take a look at the prospect CSP and their service agreement. What terms already exist regarding export and contract termination? How well does the CSP map against your requirements with both application and lifecycle? This is where the negotiations and adjustments come into play. And this is all before the contract has been signed.

IN SUMMARY

Hopefully you can see how thinking ahead and doing some planning will save quite a bit of time and headaches on the backend. As with most vendor agreements, think through the entire process before engaging. What are the most common scenarios and does your exit strategy address the needs? If not, consider what changes are needed to the cloud exit strategy to best match the requirements.

The IT Role in Value Creation is Not a Technology

For CIOs and the IT organizations they lead, what is their role in value creation? Can IT create value or are they simply an enabler to value creation? And can the implementation of technology really create value? Those seem to be hot topics of contention today.

First, let’s take a look at what value is and where it comes from. There are two types of value sources in a business organization: Those that contribute to lowering ‘bottom line’ expenses and those that contribute to ‘top line’ revenue growth. Some of the most valuable contributions to a company come in the form of top line revenue growth.

So, what is IT’s contribution to value and where does it come from? In past years, IT was perceived as a cost center. In essence, IT was an expense that pulled from the bottom line. IT was seen as simply a support organization that users engaged when technology is needed or broken. IT, in turn, looks for ways to lower the hurdles and to use technology more efficiently. In this paradigm, much of the ‘value’ IT provided came from cost efficiencies that contributed to bottom-line operational savings. The paradigm considers IT as a service ‘delivery’ organization to the company and business units. For many IT organizations, they still work within this paradigm today.

It is time to change the paradigm. IT needs to think of itself as a business organization that drives value rather than simply a delivery or technology organization. And transformational IT CIOs are doing just that. There are many who question IT’s ability to contribute to top line value. Based on the traditional paradigm, the question is well supported. However, in the new paradigm, IT can provide top line value creation through new revenue streams. Examples might include online portals or ecommerce activities. IT essentially creates new revenue streams not previously possible.

But not every CIO or IT organization is ready for this level of transformation.  Even so, at a minimum, the transformational IT organization should provide value enablement. In other words, enabling others within the company to contribute top line revenue growth rather than directly driving it. In either case, IT plays a central role in driving the conversation and opportunity for value creation.

Of late, the subject of cloud computing has been suggested as an opportunity for value creation. Technology does not create value; at least not by itself. Technology is, however, an enabler to create value (top line and/or bottom line). And, cloud is one of the most significant opportunities to leverage for value creation today. It provides two significant opportunities for IT organizations: 1) It provides the ability to maximize efficient use of traditional infrastructure and capital resources. And 2) it enables IT organizations to change their paradigm from focusing on infrastructure to focusing on value creation.

Earlier this year, I wrote a piece titled “Transforming IT Requires a Three-Legged Race.” The premise of the piece talked about the need for IT transformation and how there are three components that need to change: 1) the CIO, 2) the IT organization and 3) the business’ perception/ expectations of IT. In order for IT to create value (value creation or value enablement), these three components will need to be considered. And the CIO should lead the charge to do so.

So, going back to the original question: What is IT’s role in value creation? The bottom line is that IT’s role in creating value is significant. Whether IT creates value or enables value, the opportunity is there waiting. Changing the paradigm is not trivial, but needs to happen across the industry, not just with a few leading CIOs. The question is what will you contribute to the evolution?

Applying Cloud Computing in the Enterprise

There has been a bit of confusion around the applicability of cloud computing in the enterprise space. Recently, the question has come up as to where/ when/ how/ what cloud applies to enterprises and the challenges that enterprises face when considering cloud. Now, that’s a big ball of yarn to address even before you address the secondary complexities.

Ben Kepes wrote a good article in Forbes responding to comments made by an SVP at HP portraying Amazon Web Services (AWS) as a ‘legacy cloud’ and the reality of the situation. Does it really apply to addressing the enterprise ball of yarn? My point of view: If AWS is a legacy cloud, traditional IT infrastructure must be downright Jurassic. Neither statement is true. Nor does it directly address the reality of the challenges that exist.

In response, Jeff Sussna wrote a good counter missive suggesting that NetFlix is more than just an edge case. Jeff goes on to suggest that current enterprise legacy applications are far from static and IT orgs would prefer not to perform an ‘forklift’ upgrade of their legacy apps into the cloud. I couldn’t agree more…but the devil is in the details as to why.

There are several factors to consider:

  1. Differences in workloads: I wrote a missive 18 months ago about the differences in workloads (A Workload is Not a Workload, is Not a Workload). It’s important to characterize what you have (legacy and otherwise). No two will be the same.
  2. Application of Best Practices: There is a common misconception that how one company leverages cloud will apply directly to others. The thinking being: If NetFlix has success, so will I. I call this the ‘lemming approach’. It may have worked for IT in the past, but will not serve us well moving forward. First, one has to go back and understand point #1 and more importantly understand the reasons the solution was chosen. Which leads to point #3.
  3. Business Drivers: What factors apply when considering different cloud solutions? Aside from the technical merits, there are business factors to consider too. Not everything is about technology. Is there a regulatory or compliance requirement? How would one solution support my business drivers better than the next? While those are just examples, the business drivers are unique to each company.

And when you’re ready to move into the cloud, especially a legacy app, a forklift upgrade is probably not at the top of the list for a number of reasons. Risk, cost, effort just being three of the top ones…but there are many more to consider. What about all of the 3rd party partner connections? What about the interconnections between apps? How will processes and data governance change? As you can see, there are many factors that need to be considered before taking that first step.

For many, the simple thought of moving a legacy app and its tentacles into the cloud can bring shutters. That doesn’t mean it shouldn’t be considered. But it does mean that it needs greater care and consideration than a greenfield application.

In the end, does this mean that enterprises can’t learn from what companies like NetFlix, Zynga, Dropbox and others have done in the cloud? Of course not. It just means that it should not be taken as a cookie-cutter approach and adapted as appropriate. Use the aspects that are relevant for your situation and leave the rest behind. One size of cloud does not fit all. This is especially true for legacy applications.

If this sounds downright hard and potentially not worth the trouble, then the point has been lost. The move needs consideration, planning and quite a bit of preparation. Best to get started down the path now.