• 01/03/2013
    12:51 PM
  • Rating: 
    0 votes
    Vote up!
    Vote down!

Hard Truths About Cloud Differences

Every medium- to large-sized company must understand today's different cloud computing approaches -- and pitfalls.
Over the next five years, vendors will continue to expand their SaaS and engineered stack offerings because they offer higher profit margins and more- certain long-term revenue streams. Customers will embrace SaaS for its ease of implementation and potentially variable cost, while they embrace engineered stacks for their higher performance and potentially lower costs. You should choose SaaS and engineered stacks where the business cases make sense, with the following cautions:

SaaS Caveats:

-- Be very cautious if it's a core business functionality. You could be locking away your differentiation and ultimate competitiveness.

-- Before you sign the contract, know how you will get your data back should you stop using the SaaS application.

-- Make sure you have ensured the integrity and security of your data in the application vendor's hands.

Engineered Stacks Caveats:

-- Understand where the product is in its lifecycle (older products might not provide lasting benefits).

-- Anticipate the eventual migration path as the product fades at the end of its cycle.

For both kinds of products, avoid integrating key business logic into the vendor's product. Otherwise, you'll face high migration costs once the product hits end of life or there's a more compelling alternative. There are multiple ways to ensure that your key functionality and business rules remain independent and modular outside of the vendor service package.

With these caveats in mind, you'll be successful with your decisions at the project level. But you should drive optimization at the portfolio level as well. If you're a medium-to-large enterprise, you should be driving your internal infrastructure toward a private cloud. Virtualization is just the first step. You should move to eliminate or minimize your custom configurations -- preferably to less than 20% of your server population. Next, invest in the tools, processes and engineering to automate the provisioning and management of the data center. Doing this also will improve quality of service.

Make sure that you don't shift so much of your processing to SaaS that you balkanize your own utility. Should you overreach, expect to incur heavy integration costs on subsequent initiatives, as your functionality is spread across multiple SaaS vendors' data centers. Also expect to experience performance problems as workloads operate at WAN rather than LAN speeds, and expect to lose some negotiating leverage with SaaS vendors as you lose your "insource" strength.

Nonetheless, over the next five years SaaS and engineered stacks will be a part of nearly every company's portfolio. Strong IT shops will leverage these capabilities judiciously to avoid vendor lock-in and other pitfalls, by developing their own private cloud capabilities and retaining critical intellectual property. We'll see far greater data center efficiency as we reduce custom configurations. So although the prospects are indeed cloudy, the future is bright for the thoughtful IT shop.

What changes or guidelines is your organization applying as it evaluates and deploys cloud computing? Please add your perspective in the comments section below.


re: Hard Truths About Cloud Differences

Great practical look at all things cloud. The diagram is very helpful. I agree with the point that engineered systems have been around a while, but the latest form is quite new. So much so that it's hard to predict winners and losers over the long term. Seems unless you have a burning need for exactly that technology - a wait and see approach there might be best.

- I work for InformationWeek

re: Hard Truths About Cloud Differences

As a provider of a cloud-based service, Axeda sometimes struggle in deciding if we should focus on being a SaaS provider or a PaaS provider. Our "Machine Cloud" is now both... for some, they use our out of the box apps... to them we are SaaS. For others, we provide Web Services to build their own apps. I think we'll see this more and more... SaaS solutions with robust APIs to help build extensions/enhancement that differentiate.

re: Hard Truths About Cloud Differences

Jim's comments are insightful and worthwhile. However, I don't think the article comments sufficiently on the changes that "modern cloud" (as opposed to aspects of the solution that has always been there - so to speak) offers in terms of speed of implementation, standardized technology stacks, security, change management, people skills requirements and more. At the same time, seeing cloud purely as a cost saving is short sighted. Our business justifications have found business agility to be a powerful force.

re: Hard Truths About Cloud Differences

Good description, but IaaS and PaaS should be different "Clouds" in your diagram since they encompass different facilities. PaaS would typically include database and middleware services which weren't shown in your diagram for PaaS.

Dave Key,

re: Hard Truths About Cloud Differences

Cloud computing is not for every business and just because it is a trend that will probably stick around does not mean that it is the best solution for your company. These decision must be made on an individual basis and cannot be evaluated as one whole solution, that is where the company will end up in pitfalls. If you are a business and considering cloud computing for you, then do that find a cloud that works around your current system and not changing your business to adapt to the cloud. Great article!

Paul Sprague
InformationWeek Contributor

re: Hard Truths About Cloud Differences

Good article, particularly the point about being locked into a cloud service provider (CSP). Another "hard truth" is contracting for cloud services in such a way that the subscriber is protected in terms of functionality and data--and has the some degree of flexibility so as to not be joined at the hip forever with a CSP. While cloud computing is still in its infancy, contracting for it is even more so... A new book has just been published to assist subscribers in contract, "Contract Negotiation Handbook: Software as a Service"