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Deploying Cloud Services in Challenging Times?

Dennis Anderson, Ph.D.

Guest contributors: Rogerio Panigassi, Albert Eng

As a CIO adviser and professor of management and information technology, I continue to have the privilege of exchanging views with numerous business and IT executives from various industries around the world. Every time, people ask me about trends that I’m hearing about.  What’s the latest technology?  What is  fluff versus “here to stay”?  When do I invest in technology?  At the end of it all, the bottom line question is: “how is it going to help my business generate results”?  Enterprise technologies are no longer just about running the business; they are also about creating a differentiator to compete better, which impacts business performance.  

One common discussion topic among CIOs today relates to cloud services.  Views on the cloud continually evolve and its maturity as a viable technical paradigm is still a work in progress, even though we have made tremendous advances in the quality-of-services.  The Internet, which is arguably the ultimate cloud, is an indispensible channel of information flow in each person’s daily lives.  However, is this publicly federated utility so bulletproof that whole enterprises can run on it with the reliability that one would expect?  

Cloud Services that are based on mission critical business themes however, are still going through various levels of maturation which make it difficult for small and medium enterprises to understand how to leverage the cloud.  Therefore widespread adoption is still lagging.

Whatever technology we are talking about today (i.e., Cloud, ERP, Web 2.0.), it is really about making business processes seamless and cost effective. Contextually, we will get to the point where the cloud is analogous to a bullet train that runs fast and gets you to the destination but you don’t need to worry about how everything works.  So what about the cloud and its impact to today’s economic landscape? 

In a normal economy, companies base their spending patterns against their revenue and profitability forecasts but in a recession, many businesses end up with overstated forecasts which make IT organizations over-spend before it is too late to correct.   Because of this, IT has gone through self-cannibalization exercises resulting in down-sizing and de-scaling fixed IT costs over the past few years.

One lesson that has been learned by IT leaders and the support organizations in general is that IT costs must be re-calibrated more quickly to match these volatile times.  To do this, IT organizations must look at new paradigms for supporting costly infrastructure without having to commit to long term fixed operating expenses.

This is why cloud-based services have become intriguing from both business and financial points of views.  Cloud Services offer a more dynamic and scalable approach to providing technology on-demand and enable smart utilization of resources. The cloud, however, is fraught with skepticism and concern about security risk, reliability and trust in the service provider.  In March 2010 speech, Steve Ballmer said, "This is the bet for the company” and "For the cloud, we're all in."  It is no longer a just fad.  It will have a profound impact on how corporations look at their infrastructure and resources.   Why can’t all IT services be like utilities that you pay for based on what you use? 

Frontier cloud users tend to engage providers of this service in areas of non-mission critical work to assess the robustness, performance and set-up time to provide a more dynamic service such as Exchange Online and SharePoint Online.  This is a good place to start as service providers are also in the process of re-calibrating their infrastructure to create the expected responsiveness required by their customers. 

As service providers continue to refine their on-demand pricing models, infrastructure capacity management methodologies and the variety of technical platforms made available via the cloud, there is no end to the extent that layers of IT can be abstracted as a service on the cloud.

Figure 1: Changing aspects implied by cloud computing.

Companies like Wipro, for instance, are investing heavily in reconstructing their client infrastructure services into a cloud paradigm (Figure 1).  Wipros Cloud services are being extended across the four layers of IT: network infrastructure, hardware infrastructure, applications support and business services.  This will ultimately provide a more dynamically priced infrastructure as businesses continue to be affected by the volatility of the economic recovery.

So the following best practices ought to be examined when looking for a viable cloud services provider:

  • Look for providers that can scale resources up or down as needed, no minimum commits or term limits
  • Establish an architecture that allows for additional compute resources to be added with no interruption to the service
  • Have the proper methodologies to allow for components on the network ecosystem to be updated with new technology, easily integrated into the NOC management console
  • Look for providers and create internal architectures that will evolve, improving on efficiency, utilization and additional features being added

It is the right time to routinely look at the cloud paradigm and assess what can be “cloud-itized.”  As an installed evaluation process, variability can be create which may help reduce fixed IT operating budget.   IT can focus on new business products or services that could generate profits rather than building things in house.

About the writers:

Dennis Anderson, Ph.D. is Chairman and Professor of Management and Information Technology at St. Francis College, New York City (effective September 1, 2010). Prior to this appointment, he was a professor of information systems and associate dean at Pace University. He has also taught at NYU Courant Institute.  He received his Ph.D. and M.Phil. from Columbia University and completed Harvard University's Institute for Management and Leadership in Education Program.  More information can be found at http://www.drdennisanderson.com.

Rogerio Panigassi is a program manager at Microsoft Server and Tools Online Division, working as the TechNet site manager responsible for the website’s learning content dedicated to develop IT professionals’ capabilities with Microsoft products. Having worked for ten years at the company, he experienced many different positions in services, marketing, evangelism, and engineering. He obtained his Masters in Electric Engineering title from the Polytechnic School of the University of Sao Paulo, Brazil in the field of Digital Systems, after getting an Electrical Engineering degree from Maua Engineering School. A university where he returned later and taught computer sciences for four years.

Currently, Albert Eng runs the global M&A Transaction Services Practice for Wipro Technologies, where his team focuses on engineering complex M&A pre-deal and post-deal solutions leveraging Wipros Core Assets and Capabilities.  Albert Eng worked as a senior executive and adviser at major banks and private equity firms including Citigroup, Hong Kong Stock Exchange and Cerberus Capital.  http://www.wipro.com/industries/banking/solutions/ma-transaction-services.htm

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