A Down-to-Earth Discussion About Cloud Computing
Cloud computing is transforming IT infrastructure for businesses and other organizations. But industry hype surrounding cloud computing is creating confusion for executives, and the all-encompassing term “the cloud” does little to clarify its business benefits or its real-world limitations. “The cloud” implies a one-size-fits all solution, clouding executives’ thinking about cloud computing.
Members of iVision’s Infrastructure Services practice and their partners from Microsoft gathered recently for an informal roundtable to help clarify cloud-related issues, such as various forms of cloud computing, its business benefits and its potential limitations. Below is a summary of the dialogue.
Private Clouds
Cloud computing environments generally fall into three broad categories: private clouds, public clouds and hybrid clouds. In a private cloud environment, groups of dedicated virtualized servers are set up solely for use by a single organization. The IT infrastructure may reside on or off premise, and can be managed by either the organization itself or an outside partner.
The main advantage of a private cloud is the amount of control the organization has over its own data. For example, businesses that require regular data audits for corporate governance or compliance purposes can audit their data as frequently as they choose. In addition, the organization has direct responsibility for the security of the data.
Private clouds also reduce IT infrastructure costs by reducing the amount of hardware required, and they help make those costs more constant as the infrastructure grows. However, the reduction in infrastructure costs is far less pronounced than it is with public or hybrid clouds.
Public Clouds
Public clouds essentially hand over control of data to an outside cloud services provider. The organization’s data resides on servers owned by the provider rather than the organization itself. This type of approach is appropriate when it does not make sense strategically for the organization to invest in IT infrastructure or to be actively involved in its day-to-day management.
The advantage of the public cloud model is dramatic reductions in infrastructure costs and other IT expenditures. Public clouds essentially turn IT into a utility akin to the organization’s electric or water service, transferring a good deal of the burden of building, managing and maintaining the infrastructure to the cloud services provider. In this environment, organizations are able to control IT costs through a “management-by-exception” model. In other words, the organization can determine its IT costs based on the feature set they choose from the cloud services provider. For instance, the organization can decide to use shared-tenant servers on which other outside parties are utilizing the same servers where its data resides, or pay additional fees to have dedicated servers.
The loss of control associated with the public cloud model may have drawbacks for some organizations. For instance, an organization employing a public cloud may not be able to audit its data as frequently as it could if it had direct control. Microsoft, for example, provides no right to audit data in its public cloud offering, but customers can have independent, third-party verification of security, privacy, and continuity controls.
In addition, the public cloud environment requires placing tremendous trust in the cloud services provider not to lose valuable data or to have downtime that disrupts critical business functions. Cloud service providers, such as Microsoft, have capped liability for these types of scenarios. Microsoft’s liability, for example, is capped at 12 months of service fees and limited to direct damages. Organizations considering a public cloud environment must weigh this potential risk against the cost savings and other advantages a public cloud environment provides.
Similarly, security is outside of the organization’s control and in the hands of the cloud services provider. While this may be discomforting to some organizations, in most instances, the data may actually be more secure under the control of a cloud services provider. For example, Microsoft’s data centers require retinal scans to access the physical facilities, data resides across multiple data centers to minimize the likelihood of security breaches, and organizations benefit from a global suite of anti-spam and anti-virus software to protect their data. These and other sophisticated security and data replication measures may be cost prohibitive for some businesses. This is one of the benefits of working with a well-established and responsible cloud services partner like Microsoft.
Hybrid Clouds
Hybrid clouds are a combination of the public and private cloud environments. Hybrid clouds reside on two or more servers or groups of servers that are separate, distinct entities. Under this model, an organization may employ a private cloud for applications or data where a greater degree of direct control is desirable, and utilize a public cloud for applications or data where less control is necessary. These clouds can also be bound together by standardized or proprietary technology enabling data and application portability across them. The advantage of the hybrid cloud environment is the flexibility it provides, offering the best of both worlds from private and public cloud models.
The Question of Control
The question of control is central to the entire discussion about cloud computing. In recent surveys (Cloud CIO The Two Biggest Lies About Cloud Security) IT professionals cite apprehension over control and security. An organization must carefully consider issues regarding data auditing, security, and the real and perceived risks of handing over control to an outside party.
In addition, IT departments are often reluctant to relinquish control of their data centers because they fear it will make their jobs obsolete. This fear is understandable and not without merit, but it may be exaggerated. In a recent survey of IT leaders conducted by CIO magazine (CIOs Are Putting The Cloud First), 27 percent of respondents indicated cloud services could result in decreases in IT staffing, but 49 percent expected their head count to remain the same. In all but the smallest of environments, leveraging a cloud provider simply transfers the ownership of the underlying technology and software to third party. Largely for this reason, job elimination is rare. More often, there is a refocus of the IT team’s primary responsibilities on other projects or actives, while still retaining internal ownership within the business to ensure he cloud provider is meeting its commitments.
Apprehensions over cloud computing may be largely generational. The younger generation of IT leaders is comfortable and familiar with the concept of operating “in the cloud.” They have grown up on Hotmail, iCloud, SkyDrive, Flickr and many other cloud-based services. It is innate to how their worldview and how they operate. They may be less likely to be tied to the notion that “the data has to remain physically in this office,” and more likely to embrace the idea that the cloud can make them and their organizations more efficient and effective.
Cloud computing aside, IT departments are already losing control. Mobile devices and the overall consumerization of technology are increasingly requiring IT departments to be more flexible. Employees within organizations are demanding that their personal devices are incorporated into the IT environment. Employees want to use technology, and when it’s adopted at the consumer level and seamlessly integrated into employees’ work lives, it can improve productivity. Cloud solutions can actually help IT departments embrace and advance this consumer-driven technology adoption, which ultimately results in a more tech-centric employee base and a more innovative culture. Wise CIOs realize they should no longer decide which end-user devices their teams will support, but rather on the speed at which this adoption and support takes place.
To understand this impact and to see how IT’s customers will continue to make demands on internal support, consider consumer technologies. For example, the adoption of tablet computers is growing five times faster than the traditional PC market of five years ago. A careful review of their approach to providing services to these and other common consumer devices is simply a precursor to what corporate IT will be expected to support.
The smartphone, tablet and even netbook markets are driven by the use of a device as a portal to cloud based services. The Android Market, the iPhone Application Store, a NetBook providing online storage as a compliment to a smaller internal hard drive, and finally Microsoft and Google providing online productivity tools (Office 365 and Google Apps) are all examples of consumers – who are IT’s clients - beginning to expect the power, speed and capabilities only a cloud solution can provide. Business strategies in the consumer technology market are driving demand for more and more cloud-based services, and in turn, cloud solutions will continue to gain traction in corporate IT.
IT leaders should view cloud computing as yet another tool in the toolkit. In its various forms, it can help them unlock the full potential of technology for their organizations. By implementing cloud computing solutions that are a good fit strategically, IT leaders can better focus their efforts on applying technology to improve business functions, allowing them to add greater value to their broader organizations.
The Future of the Cloud for Microsoft
iVision’s partners at Microsoft indicate the company recognizes the vast potential of cloud computing for its enterprise customers and its own business model, and suggest the company will continue to invest resources in cloud services. These services are largely based on three separate cloud models with converging futures.
1. Office 365 for e-mail, web, CRM, voice, video, IM, web based office applications and shared document storage. Flexibility and the ability for customers to choose cloud solutions that are the best fit for them will drive the future of cloud computing.
2. Windows Intune for cloud based device and user management and monitoring as well as application deployment and providing remote support.
3. Windows Azure for distributed application, web and database services for large numbers of users.
What is most interesting about Microsoft’s approach to the cloud market is their stated shift of development from their traditional on-premises only model. Though support for key solutions such as Exchange, SharePoint, Lync, System Center Configuration Manager and others will continue, enhancements of these on-premise versions will trail cloud-based services. In other words, due to the ability to more tightly control and provide quality assurance for a system under Microsoft’s direct control, features will first be deployed to the cloud services, and then be deployed to the on-premise counterparts. While this may seem logical and even benign, it could be very influential in moving clients to the cloud offerings when the features sets most valuable to corporate IT and users alike are only available in the cloud offering.
According to iVision’s partners at Microsoft, the company will reemphasize having a rich-client architecture. Office applications will continue to reside on the end-user’s machine allowing them to carry their data on it. Moving all aspects of client-side computing to the cloud would harken back to back to the “dumb-terminal days,” employing cheap desktops or laptops with very little memory. Users are simply unwilling to operate in an environment where they cannot store documents or other data locally. Such an environment means end users are completely dependent on a browser connection, which can still be very limiting at times.
iVision’s partners at Microsoft believe the rich-client architecture, where Windows and Office are running on the local machine, will continue to provide a better experience for the end user. But browser-based capabilities, such as Office Web Apps, can help enhance that experience.
Hybrid Design Driving Current Cloud Market
Currently, the market seems to be gravitating towards a hybrid design, and this is iVision’s strategic focus. For example, core business assets such as the financial systems and document management are most often hosted in a private cloud. But there is an increasing desire to move certain workloads, such as e-mail or backups, to a cloud-based model. Additionally, the power of a hosted remote desktop experience is still a desire, but this is most often paired with the traditional local desktop experience and extended with tools such as Citrix, VMware or others and hosted in a private cloud. In these ways, IT is providing cloud-like services but doing so in a controlled and highly predictable way.
Additionally, Microsoft confirmed Enterprise Agreements (packaged licensing and support agreements) are not likely to go away anytime in the foreseeable future. However, these agreements often include cloud offerings and licensing for at least a portion of the seats. In this way, Microsoft is attempting to entice users to adopt cloud solutions for a portion of the users in an organization with the hope this will transcend into greater adoption long term.
Conclusion
Cloud computing will become more and more ubiquitous. However, CIO’s are taking a staged approach to cloud adoption, beginning with a private cloud, then evolving to a hybrid approach. It will likely be some time before mid-market clients move to a full public cloud model, though smaller IT organizations may be earlier adopters of public clouds. The precursor to this is seen in increased cloud-related spending, with 48 percent of CIOs indicating they plan to spend more of their budgets on cloud-based solutions, up 10 percent from 2010 (Survey - CIOs Are Putting The Cloud First). And by 2014, cloud computing expenditures are projected to account for $13 billion in IT spending (Cloud Computing Spending To Raise To USD $13 Billion In 2014).
As businesses and other organizations are forced to do more with less, and a greater share of spending shifts to cloud-based solutions, it is even more important that executives have a clearer understanding of cloud computing’s benefits and potential limitations. If you have questions or comments related to cloud computing, please contribute to the dialogue and share them below in the comments section.