Monday, November 24, 2008

Enterprises can leverage cloud models and manage transition risks using service governance, says HP

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Read complete transcript of the discussion.

Much has been said about cloud computing in 2008, and still many knowledgeable IT people scratch their heads over what it all really means. They want to know: How can enterprises best prepare to take advantage of this shift in IT resources -- but avoid transitional risks and uncertainty?

Cloud and on-premises compute grids exploit breakthroughs in technology architecture and the confluence of new business models, this is clear. In times when every dollar counts more than ever, the enticements to experiment with cloud models is powerful. At the same time, there is very little margin for error. Adopting new IT approaches can not injure the business interests, image or fiscal performance of any company.

To understand more about the balance and best practices route to emerging cloud and utility IT values, I recently spoke to executives at Hewlett-Packard (HP) and its EDS brethren. They point to the need to understand the role of services oriented architecture (SOA) and governance in exploring cloud opportunities. The future looks promising for cloud adoption, as long as there's a coordinated and managed approach.

To learn more about enterprise cloud adoption, please join the discussion with Rebecca Lawson, Director of Service Management and Cloud Solutions at HP; Scott McClellan, Vice President and Chief Technologist of Scalable Computing and Infrastructure in HP’s Technology Solutions Group, and Norman Lindsey, Chief Architect for Flexible Computing Services at EDS, an HP company.

Here are some excerpts:
Really, from an enterprise point of view, when running mission-critical applications that need security and reliability and are operating with service-level agreements (SLAs), etc., the cloud isn’t quite ready for prime time yet. There are both technical and business reasons why that’s the case.

As far as the idea of the cost savings, it’s good to look at why that is the case in a few certain areas, and then to think about how you can reduce the cost in your own infrastructure by using automation and virtualization technologies that are available today, and that are also used in the “cloud.” But, that doesn’t mean you have to go out to the cloud to automate and virtualize to reduce some cost in your infrastructure.

The cloud is an evolution of other ideas that have come before it, grid, and before that Web services. All these things combine to enable people to start thinking of this as delivering service with a different business model, where we are paying for it by the unit, or in advance, or after the fact.

Virtualization and these other approaches enable the cloud, but they aren’t necessarily the cloud. What IT departments have to do is start to think about what is it they’re trying to accomplish, what business problem they’re trying to address, as they look at cloud providers or cloud technologies to try and help solve those problems.

We’ve seen people do their own private utilities versus public utilities such as flexible computing services provide. The idea of a private utility is that, within an organization, they agree to share resources and allow the boundaries to slide back and forth to hit the best utilization out of the fixed set of assets or maybe a growing set of assets.

The same idea is in a public utility or a public cloud, except that now a third party is providing those assets and providing that as a service. It increases the concerns and considerations that you have to bring to the party. You have to think about problems that you didn’t have to think about when you had a private utility.

When you go to a public space, security is paramount. What do I do with my proprietary information and service levels? How certain can I get what I need when I need it? The promise with the cloud is great, but the uncertainty has caused people to come up short and decide maybe it’s better if I do it myself, versus utilizing an outside service.

We need to think in terms of which services provide what level of value, based on the complexion of that particular company -- and it’s never going to be the same for all companies. Some companies can use Google Gmail as an email service. Other companies wouldn’t touch it with a 10-foot pole, maybe for reasons of security, data integrity, access rights, regulations, or what have you. So weighing the value is going to become the critical thing for IT.

In the longer term, the more overarching impact of cloud comes when your IT department can deliver value back to the business, rather than just taking cost out. Some examples of that are using aspects of social networking and other aspects of cloud computing, and the fact that cloud is delivered over ubiquitous media, the Internet, to increase share of wallet, increase market share, maybe bring higher margin to a business, and build ecosystems, and drive user communities for a business. That’s where cloud brings value to a business and that’s obviously important.

You can start to look around at your internal capabilities, versus external, and make some decisions as to how you want to solve that problem, whether buying an external service or creating a service internally and delivering it to your customers with your own internal utility. ... This will force IT to come closer to the people in the business and really understand what is the business objective, and then find the right service that maps to the value of that objective. Again, we can’t emphasize it enough. This should really change behavioral dynamics in IT and how they think about what their job is.

Basically, within the spectrum of things that are cloud computing, you have everything from infrastructure as a service … all the way up through virtualized infrastructure, a platform on top of that, an application on top of that, or perhaps a completely re-architected true cloud-computing offering.

As you move up that spectrum, I think the benefits increase, but in not all cases are the application domains available in all of those environments. ... What services are available through some cloud model, what model of availability, what are the characteristics of that model, what are the requirements for that particular service – and what are the security performance, continuity integration, and compliance requirements? Those all have to be taken in holistically and through a governance model to make the decision whether we are going to move from the traditional deployment model to a cloud-delivery model, and if so, which one.

In the process of getting to a service-centric IT governance model, they’re going to have to deal with the governance model for deploying new services. Again, I think risk is partly a function of benefit. So when there is a marginal benefit or when the stakes are very high, you would want to be very conservative in terms of your risk profile.

The tougher economic conditions would heighten the acceleration of cloud computing, and not just because of the opportunity to save cost. Reinforcing what we brought up earlier, there are some clear opportunities to bring value to your business.

Examples of that are things like being able to drive user communities, users and consumers of whatever it is your business produces, using techniques of social networking, and things like that.

There is the question of how to use the advantages you get from cloud computing to drive differentiation for your business versus your competitors, because they’re hesitating, or not using it, because they’re being risk-averse. In addition, that compliments the benefits you get from cost savings.

What I really meant is that, if you are an IT shop and you are trying to decide what to move to a cloud paradigm or a cloud model, you’re likely to really focus on the places where either you can get that big win -- because moving this particular service to a cloud paradigm is going to bring you some positive differentiation, some value to your company.

Or, you are going to get that big cost savings from the places where it's the most mission-critical -- the place where you have the least tolerance for downtime, and you have the greatest continuity requirements, or where the performance SLA has been most stringent. The thinking may be, “Well, we’ll tackle that later. We’re not going to take a risk on something like that right now.”

In the places where the risk is not as great -- and the reward either in terms of cost or value looks good -- the current economic conditions are just going to accelerate the adoption of cloud computing in enterprises for those areas. And they definitely do exist.
Read complete transcript of the discussion.

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