Over the last few months I’ve encountered distributed groups of people being very ‘glib’ about Cloud. Discounting it as nothing new. Not being entirely sure what all the fuss is about. Describing Cloud as just hosted applications on the Internet. What I found surprising, is it seemed dismissive of the ability of Cloud to transform IT and the business as well as the significant step it makes to IT becoming infrastructural? There is no way anyone should be ‘glib’ about the large step Cloud makes towards infrastructural IT.
Is It Nothing New?
It’s understandable where some of the glib thinking comes from as you have to factor in:
- The predilection of IT marketing to sell something it can’t deliver until over a decade later
- The predilection of vendors to jump on a bandwagon.
It’s true that the IT industry has been promising Cloud for over a decade: the promise of having your IT resources on tap, delivered to the organisation just as swiftly, as reliably and with the elasticity of electricity or water. The sell of IT as a utility.
There is a reason the Gartner Hype Cycle exists, after all. The Cloud gold rush has also happened once before under a different name.
In the latter half of the 90′s, I got as close to Cloud as you could. I was the IT Leader in an international, multi-disciplinary SME and the problem I faced was an organisation with the financial profile of an SME, albeit a larger one, but the geographical spread of a much larger organisation (20 offices across the UK, Europe and the US). Managing IT was significantly more complex then the head count suggested. IT wasn’t the organisation’s core business either. I wanted the business benefits from the application portfolio I’d established, but not the heavy management cost and complexity.
I wanted IT to be better, faster and cheaper.
The route at the time was the ASP model. Application Service Provision promised applications and desktops like a utility over a network. We trialled an office with an IT service provider offering the ASP model over the Internet. There were parallels to now, with IT service providers exhibiting a ‘gold rush’ to ASP offerings just as they are now rushing to the Cloud. It didn’t work. We then moved to delivering our own ASP service, but utilised an outsourced partner to host and manage the infrastructure and we delivered it over our network provided by another. Basically, we had all desktops and applications delivered from server-based resources to thin clients across the UK and into the US. At the time, this was quite new for large companies, the fact a 200-man SME did it was…quite bold. Cloud didn’t exist, but the ASP model was sold on a similar ‘as a utility’ premise.
If we define a cloud strategy as “the set of decisions required to create and deploy a network based, information service delivery strategy that results in both cost savings and organisational agility” (Iyer & Henders, 2010) then this server-based model fits the bill at the time. I’d got as close to a Private Cloud (see below) as was possible. Despite this, and the delivery of considerably benefits, it wasn’t Cloud.
The journey to Cloud is depicted in the diagram above. This is why it can be seen as evolutionary through a technological lens. There is a point though when ‘baskets’ of technologies evolve to a state in which the business model impact is revolutionary (see later).
So, What Is Cloud?
The major source of being too glib about Cloud is related to pinning it down. When the understanding of something is multi-faceted or the definition of it vague, it’s all too easy, especially for IT people it seems, to be strip it down to the level at which it becomes definable: “it’s just this” or “it’s just that”. People also view these things through multiple lenses. As an example, for IT people Cloud can be both an evolution as well a co-opted term by marketing, but for the business it may seem likes it has come out of nowhere and is revolutionary and transformational.
As is typical with Cloud, both are true. This is because Cloud isn’t a physical thing, or one specific technology, but a model enabled by a number of evolutionary technologies that finally allows IT to get significantly closer to delivering IT as a utility.
The National Institute of Standards (herein NIST)defines Cloud as “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” Cloud can also be said to be elastic and scalable, self provisioning, charged and metered on usage and offering standard interfaces (the last one being the weakest).
The on-demand network access to dynamically configurable resources can be further divided into three different service models (also paraphrased from NIST):
- Software as a Service (Saas): The capability to provide applications to the consumer. The applications are accessible from various devices. The underlying cloud infrastructure is a black box to the consumer. ‘Limited’ user-specific application configuration settings will be available to the consumer e.g Salesforce.com
- Platform as a Service (Paas): The capability to deploy consumer-created or acquired applications utilising tools and programming languages supported by the provider. The underlying infrastructure is a black box to the consumer, but has control over the deployed application e.g Microsoft Azure
- Infrastructure as a Service (IaaS): The capability to deploy infrastructure consisting of processing, storage, networks and other fundamental computing resources for the purposes of deploying software (inc. operating systems and applications). The underlying cloud infrastructure is a black box to the consumer, but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls) e.g Amazon Web Services.
It is clear only SaaS can be conceivably stripped down to “just being hosted applications” as it is a natural evolution of that model combined with a host of other technologies and concepts that now get bundled under the model of Cloud.
The ability to access database resources from Amazon Web Services to run a few experiments for a month or two and then decommissioning the service all through self-provisioning, while being charged on a usage basis and at a moments notice is stretching the understanding of “hosted applications” as well as the transformational nature of the service on the business due to accessing resources akin to turning on the water tap.
Another issue is the different lenses that Cloud tends to be seen through. One lens sees Cloud as an evolutionary development of how datacenters are built, with the focus being on virtualisation (a key technology in the Cloud model). This is seen as a natural progression amongst highly skilled and experienced IT staff building such datacenters. The end result is Private Clouds, potentially.
The more revolutionary view is that of externally sourced IT resources on a flexible, agile and often usage based charging model be it accessing Salesforce.com or rapidly deploying computing, database and storage resources from the Amazon Web Services. These represent the available Public Clouds. It is often this approach this is taken too glibly and dismissed.
The concept of Private and Public Clouds is depicted in the diagram above, along with the concept of a Hybrid Cloud that marshals resources from both. A Private Cloud can ultimately do everything and be delivered under the same criteria as a Public Cloud, but it would hinge on the organisations capability (or service partners) to do so and often stops short.
The problem with IT is it’s too damn slow, and Cloud offers the opportunity to be faster, better and cheaper. In either model, a Cloud approach allows for the delivery of IT services and applications at the speed the business demands. The end goal should be to deliver IT ‘on tap’ like a utility.
In the past, we had Chief Electricity Officers in organisations. We used electricity in similar ways to steam before we learned how it could fully transform factories. Individual organisations produced their own electricity before shared infrastructure scaled and became available. It was a while before electricity fully became the dynamic, easily available, ubiquitous utility it is today.
It’s taken a lot longer with IT because of its variety, complexity and potential for transforming our lives, but Cloud is essentially a big moment in the journey to infrastructural IT and from this point we’ll get their with ever increasing rapidity and with ever increasing IT resources being sourced from ‘utility IT providers’.
The Promise of Cloud
As can be seen, Cloud is is significantly more than just hosted applications. The vast coverage of Cloud in the business, IT and general press means the majority of business leaders know its out there and can do something for them. Cloud is almost certainly catching the eye of the CFO. It probably feels like it’s come from nowhere. It empowers the CIO to finally deliver in a number of areas.
The diagram above provides the landscape. A combination of four broad areas, which can deliver significant transformation and value through IT being better, faster and cheaper.
One of the big reasons IT is often seen as a cost, is because it invariably sits on the balance sheet as exactly that. A large lump of a figure that is very hard to attribute accurately to the on-going operations, services, cycle and activities of the business. Numerous models exist to breakdown costs into charge back mechanisms, but invariably none of them are perfect and as a result it causes significant acrimony. We need transparent costs.
Cloud allows for better unit costs and for them to be more clearly attributable, capital expenditure to be avoided and replaced with usage fees, resources to be more effectively utilised and matched to the business cycle and IT staff to be reduced and those remaining to be used in higher level tasks. This ability to bring IT costings close to that of a utility, which can be clearer and more accurately linked to business operations, transforms the ‘black box’ which significantly impacts the language of discourse around IT and how it is viewed.
You know what is often frustrating about being an IT leader: the fact IT is too darn slow. Invariably when initiatives come along you have to be the guy putting on the breaks, querying why you didn’t get informed about the idea way before it was even an embryonic idea in someone’s head? I don’t want to be that guy! Strategy is emergent these days in response to sensing shifts in ever more dynamic environments, so you can’t afford to be slow. You want IT at the speed of your highest velocity operation.
Cloud allows you to be agile, to respond to the needs of the business and not be the break on new initiatives. New IT resources can be released faster, with considerably less effort and most likely self-provisioned, policies allowing. The resources can be from a Private Cloud or a Public Cloud based on set criteria. Near instant on and instant off. If you’re Cloud Computing strategy is correct, a range of ‘IT resources on tap’ of various kinds can be provisioned at almost a moments notice. It’s hard to be glib, and dangerous to boot, about this opportunity for agility and flexibility.
Business is concerned with beneficial outcomes and being able to act with speed and transparency re-focuses the language of the conversation. The language can be ever more focused on cost efficiency measures, but sensible ones tied to the business not just to drive down a large figure on the balance sheet (or vague attributable measures). The velocity of the services in terms of changes and responses to new initiatives shows agility. The reliability of systems due to enhanced business continuity and disaster recovery. The opportunity for innovation via the release of IT resources to more high level tasks like scanning for and assessing new technologies or new capabilities bundles (of people, process and technology). The list could go on when you have IT much closer to a utility model.
While the weakest area of Cloud at the moment, the area will undoubtedly improve: integration. As IT becomes more infrastructural, inevitably more and more IT resources and applications will exist in the Public Cloud. The effect of this can be seen already with people collaborating in different ways across and between organisations via Cloud services. Critical mass will eventually hit with businesses using Public Clouds and then it’s not hard to see the impact on organisational collaboration and supply chains as Public Cloud services offer standard integration services. In the future, will business and supply chains be managed and conducted through integrated, infrastructural public clouds? Certainly a one to watch and place on the strategic horizon.
Cloud presents the opportunity for IT to move beyond being a service provider which, while necessary, I never felt was a great model. Which two departments orientate themselves as service providers? IT and HR. Which two departments have historically had the hardest time at the top table? IT and HR. If you organise yourself as a service provider that’s pretty much how you are treat. Cloud presents the opportunity to change the business model and shape the language and deliver IT in a way that’s so integrated with the business it becomes a collaborative, enabling and innovative thread that just needs the right Governance to drive it (the subject of another article – probably).
I like to call myself an optimistic realist. This means, at any particular time, I’m an optimist about the potential in IT-enabled business change, but I’m also a realist about what actually is technically possible rather than what might be marketed as possible. The server-based, thin client infrastructure enabled in the late 90′s is a good example. It wasn’t Cloud, it certainly wasn’t computing as a utility as marketed, but it was a service-based model. It transformed the organisation and how they could work, it delivered the maximum of what could be delivered at the time. This is a good thing.
Cloud is a significant step towards the utility model and infrastructural nature of IT, in terms of how IT resources can be commissioned and financed. Anyone who believes this is just about applications being available over a network or it be nothing no more than hosted applications is missing the point. They are looking at it too much through the evolutionary technological lens, rather than the revolutionary business model lens. Cloud certainly shouldn’t be given a glib response considering it’s potential to transform how IT is viewed and valued.
The infrastructural nature of IT has taken a significant step forward. Cloud will and is changing everything. It’s an opportunity. While the shape of that opportunity will differ with each organisation, it’s an opportunity that should be grasped with both hands.