• 03/18/2013
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CIOs Consider Skipping Private Cloud

Some top companies are rethinking their cloud roadmaps, looking to stall until the public cloud matures in 2015, CEB says.
10 Tools To Prevent Cloud Vendor Lock-in
10 Tools To Prevent Cloud Vendor Lock-in
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Is cloud just a way to outsource low-risk, low-return business processes to save money, or a potentially revolutionary new way of working?

That's the kind of question one might expect of a hard-core cloud convert or cloud services provider. But according to Mark Tonsetic, practice manager in the IT practice at CEB, a member-based global advisory organization, it's a question that blue chip CIOs are beginning to ask.

And what they are beginning to decide, he claimed, seems pretty radical. "Cloud often presents itself as not that much of a different way of working than on premises," he said. "If it is a change at all, that's often presented as just a change in the technology, which is often seen as at a lower altitude than business process."

But for at least some of the user organizations he's talked to, the idea is to turn all that on its head: Why not use cloud, in close partnership with appropriate service providers, to look at cloud as a way to do genuinely new things -- or in Tonsetic's words, "change their business capability."

What's perhaps even more radical: Some of these CIOs may not do what is seen as the "sensible" thing of building out a private cloud infrastructure, but decide to hold off and wait until public cloud matures just a bit more.

Tonsetic offers CRM as an example of the kind of discussion he's hearing on the topic. "Yes, you could do CRM as a hosted app, where you don't really change that much at all. But if you start using CRM as a service, then you are empowered by that move to start asking questions about what information about customers is really desirable and worth capturing. For a minority of CIOs, this is the kind of change they are starting to look to cloud to apply to more and more business processes to derive greater capability."

[ Think you know the cloud? Let us set you straight. Read 7 Dumb Cloud Computing Myths. ]

Tonsetic told Information Week that his analysis is based on a recent poll CEB performed among 45 of its CIO members about what factors are shaping their cloud strategiesand follow-on interviews with a number of them.

In terms of that study, he said, there are clearly reservations about the standard cloud worries CIOs seem to typically report, such as fears over security, data privacy and avoiding potential lock-in with a vendor.

But, in a finding he said surprised him, CIOs are also now saying they are prepared to "filter out" the vendors whose positions on these problems they feel are simply not convincing -- and have a much greater interest in working with the remaining suppliers to "try and jointly resolve" these challenges.

Tonsetic say these cloud "readiness flaws" can thus be sidelined in favor of the more long-term thinking he said is starting to emerge. Meanwhile, emerging pragmatism around private cloud is also shaping thinking, he claimed. "In 2012, we found that members were expecting that by 2014, 25% of their data would be a private cloud basis and only 15% in public ones, 14% in traditional outsourcing arrangements and so on. But now -- and again, yes, it's a minority -- some wonder if that's going to be too complex to manage, and whether it might not be better to skip a couple of years of private cloud work and simply do more on public cloud in 2015 instead."

Tonsetic said that it's going to be interesting to see if 2015 really will be what commentators see as a year of active hybrid private-public cloud development, or whether the enterprise will go in a completely new direction altogether.

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re: CIOs Consider Skipping Private Cloud

The economics that appear to work in a big public cloud are often lost as a single enterprise tries to do the same. One of the few firms to actually measure the difference and record a savings as it built a private cloud was Cisco. I suspect there's a loss on this front for every enterprise win. The public cloud, with its ability to balance widely varying workloads from different sources, would seem to me to have unbeatable economies of scale. Charlie Babcock, Information Week editor at large

re: CIOs Consider Skipping Private Cloud

While the issue of security does loom large for any CIO who's looking to move to the cloud, what we're finding in large enterprise organizations that span physical, virtual and cloud environments, is that CIOs G and to an increasing extent, the executive suite was ell G have a huge (and justified) concern that legacy security approaches designed to deal with known threats are ineffective in today's world of sophisticated APTs. Regardless of where their valuable data is at rest, they must protect it or risk serious financial ramifications and brand issues . This is best accomplished by securing that data as close to the source as possible, putting in place strong policies, advanced encryption and key management, and gathering security intelligence in near real-time. To be honest, I wasn't at all surprised that CIOs want to work with a handful of suppliers to "try and jointly resolve" these challenges. The stakes are enormous. In today's world, only a layered data-centric security approach will be 100% effective, and the potentially disastrous business implications of a major data breach can be great forcing functions for cooperation across the ecosystem.

re: CIOs Consider Skipping Private Cloud

As a view from the SMB market space it appears from the main article and the comments to date that the larger enterprise market space is still working through quite a bit of the issues of using the 'cloud' as part of their integral infrastructure. If history is a guide, this level of discussion generally means the small to medium sized businesses who look for more out of the box standardization and affordable pricing are still some years away. This feels very similar to other technology changes over the past 40 years like Windows and now browser based ERP systems along with eCommerce and EDI systems.

John Gabrys - President -

re: CIOs Consider Skipping Private Cloud

While some CIOs may be hesitant to move to the private cloud, there is no reason to be. In many organizations the private cloud is an important stepping stone to the public cloud. Embotics has helped many clients transition to the private cloud for regulatory and economic reasons. This blog post is a great reference piece relevant to the topic: GWhich Comes First, the Private or the Public Cloud?G

Colin Jack
Lead systems engineer G Americas
Embotics Corporation

re: CIOs Consider Skipping Private Cloud

I think that the cloud is more than just about cost saving, it can indeed revolutionize the way we work. The fact that with clouds, new VMs are so easy and cheap to provision, makes prototyping and testing new IT ideas very easy. As a result, we are seeing innovations around new business processes and we will see more of them in the future as the public cloud technology matures. A very similar process took place when virtualization was first introduced, as a disruptive technology in the datacenter, about 10 years ago.

However, for the cloud to be successful, it needs to be cheap, safe, and without vendor lock-in. The only way to achieve it is by keeping the cloud simple. With the complexity that we have right now in IT, we should move away from the infrastructure layers, into the application layers. In other words, cloud providers should focus on the infrastructure layers, while business owners and IT managers should focus on the applications. They should insist on cloud solutions that are easy to consume and build their business values on top of simple and safe cloud services.

Benny Schnaider, Ravello Systems