This ambiguous term seems to encompass almost everything about us. Cloud computing is the delivery of hosted services over the internet, through a network of remote servers. These remote servers are busy storing, managing, and processing data. Download our free cloud computing tips!
Saugatuck Technology research clearly shows that cloud transitions typically impact the IT organization in very significant ways, affecting roles and responsibilities, organizational structure, governance, architecture, budget process, employee retention, asset management and customer relationships.
The shift in acquisition of business and IT resources from on-premise licensed software solutions to Software-as-a-Service SaaS and from on-premise data center infrastructure to public and private cloud deployment continues to transform the information technology sector.
In this article, we present an overview of the four key challenges we have seen CIOs handle as enterprises transition to the cloud. Identifying opportunities Over the past decade, much of the SaaS and cloud technology buying has been one-off and reactive, focused on point solutions — across the vast majority of IT shops.
While the initial impact of the Cloud has been primarily economic — better, faster, cheaper — we now are beginning to see the transformative effects of cloud technology on businesses.
As enterprises evolve their IT investment toward the new opportunities presented by the cloud, the business solutions portfolio will more frequently be assessed proactively rather than reactively, and in collaboration between the CIO and the business unit heads, cutting across all business processes and functions.
The evaluation and assessment of business processes, both inward- and outward-facing, will increasingly be conducted in conjunction with the planning and development of the business solutions portfolio and the cloud strategy. The key to identifying cloud opportunities lies in understanding how and where cloud IT fits with established business and IT operations — creating leverage, innovation, and synergy.
New business opportunities can also be identified by recognizing how cloud-specific value is realized. Geographic reach and the ability to coordinate, Cloud computing trends and challenges synchronously and asynchronously, across organizational boundaries can yield transformative effects.
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The use of mobile devices to access information in the cloud, to share that information with co-workers, to launch business transactions and control on-premise Cloud computing trends and challenges remotely through the Cloud brings still another dimension to how businesses may now operate.
Success in the cloud transition will require creating manageable projects that, like jigsaw puzzle pieces, exploit opportunities, yield tactical benefits and bring the longer-term strategic vision into view. To accomplish this end will also require that the CIO become fully aware of how the cloud can transform business and IT processes and the relative capabilities and limitations of the cloud providers of IaaS, PaaS and SaaS solutions via public and private clouds, as these continue to evolve, deepen and mature.
For example, even if operational costs are projected to be flat or increase slightly, moving to the cloud could yield very positive results, regardless of how internal financial metrics portray the opportunity. The business model and the relative intensiveness of technology utilization, the appetite for risk, and the technology maturity of the IT organization will dictate how aggressively the CIO can pursue the Cloud transition.
It is important for the CIO to understand the difference between sufficiently mature Cloud solutions and those that are still experimental or experiential. More conservative CIOs may choose to implement only those Cloud solutions, such as SaaS, that promise clear economic benefit in comparison with on-premise solutions, yielding accelerated payback through more rapid and less costly implementation, avoidance of capital investment and reduced IT personnel expense.
However, as discussed above, some Cloud IT business solutions can offer transformative value through innovation, leverage and synergy with existing on-premise solutions as the hybrid IT portfolio evolves.
Acquiring cloud solutions Transitioning to the cloud provides CIOs and their business unit partners with the opportunity to rethink business processes and workflows in new and creative ways. The CIO is usually in the ideal position to review the overall applications portfolio with the business team and determine whether to augment, migrate or replace an on-premise application or technology platform with cloud solutions capability.
Early discussions that we have had with progressive CIOs who are further down this path suggest that anywhere from 10 percent to 40 percent of existing custom-built application portfolios can potentially be moved to the cloud, but with a much smaller percentage likely to be moved after ROI models have been applied.
In regard to replacement of existing business solutions with SaaS, this will clearly be situational — although many closer to the core will be replaced more slowly. This will often depend on how old and brittle the solution may be — and if a packaged ISV application, how far from being release-level current it may be.
Regardless, we believe that the hybrid business portfolio will be dominated by cloud solutions inas the on-premise segment transforms from the driver of transactions to the repository of business data.
The key will be to judge how real this value proposition may be, and how it would evolve over time. In consultation with IT architects, the CIO should be able to identify new cloud offerings that make sense, and which part of the enterprise applications portfolio or technology architecture should be Cloud-based and which should remain on-premise.
Understanding this potential complexity is an important part of making decisions about the acquisition of cloud solutions. Managing resources Moving to the cloud also means a fundamental change in how business or technology solutions will be managed.
While assuming responsibility for managing the complexity of the hybrid architecture, the CIO will be transferring responsibility for operating and maintaining the cloud solutions from his IT organization to the cloud provider. Moving to cloud technology solutions such as IaaS or PaaS brings a requirement for evaluating operational excellence alongside the suitability of the cloud platforms for any particular workload or development objective.
The challenge of managing new cloud assets will require the IT organization to change significantly. The move to the cloud will entail a fundamental shift from managing assets to supporting platforms, solutions and business processes.
CIOs may increasingly acquire cloud and hybrid solutions thru business consultants and system integrators. System Integrators of all sizes and flavors will increasingly be key partners for CIOs in enabling migration of new and existing workloads and making cloud and on-premise solutions work together more effectively.
IT organizations will also have to become more rigorous, adopting new processes that extend ITIL and other operational protocols to accommodate the growth of investment in the cloud.
Over time, enterprise portfolios will become workflow-driven hybrids of cloud and on-premise data and functionality that are monitored, measured and managed to meet enterprise performance objectives.The trends which exist in the industry are being discussed, and then the trends which are emerging in the ICT are discussed thereafter, specifically the role of ICT in Education is highlighted with the challenges which are being faced.
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