Evaluating Cloud Services: Five Tips

It’s still the early days for real enterprise-level commercial cloud services offerings by IT providers. Most providers have only a handful of offerings to enable cloud services for clients or to directly deliver services. Organizations need to be skeptical about some claims made by providers about cloud services. There are critical differences between managed services repackaged as cloud offerings and true scalable, flexible, easily accessible, utility services.

Based on client interest expressed to Forrester and recent survey data, there is clearly a growing desire by enterprise decision-makers to learn more about this potentially disruptive services model, but IT sourcing teams should start thinking about cloud options now, particularly in selecting providers for the long haul.

So what is motivating the growing interest in cloud services by enterprise IT decision-makers? We’ll go into more detail at Forrester’s upcoming Services & Sourcing Forum, but here are five tips to help you better understand a provider’s current capabilities.

1. Differentiate between enabling and delivering cloud services.

Most of the providers Forrester reviewed either enable cloud services for companies via consulting, deliver cloud services (which can include aggregating services from other providers,) or both. Companies should be clear about whether a particular service provider is implementing, managing, or delivering the services provided by external cloud providers or their own internal capability.

2. Vendors should demonstrate latent capacity.

Every true utility has some latent capacity. If you plug a new appliance into your home, the expectation is that there is almost always enough electrical power to make it work. Providers should be able to demonstrate at least some level of latent capacity if they are claiming they can deliver, not just enable, cloud services.

3. Ask to see a commercial client base.

This is a relatively new business space for the big IT service providers, so most of them have only a few cloud delivery clients. Some providers are a bit too enthusiastic about claiming that internally used capabilities are equivalent to commercially offered enterprise services, but there is real evidence of a growing install base of commercial clients.

4. Evaluate partnership ecosystems – and pay attention to Microsoft.

Size matters when building out true commodity services—and IBM stands out in this regard. But mass alone is not enough, and providers are all working to build technical and business alliances to mature their offerings. Companies should assess provider partner strategies when making sourcing decisions. One key alliance partner is, and should be, Microsoft. Enabling cloud services requires software to make it work, and Microsoft has been aggressively creating IP and tools that will likely be necessary to make cloud services a scalable reality. [Editor’s note: So has Microsoft rival, VMware. See “With SpringSource Buy, VMware Constructs Cloud Platform,” for more on VMware’s cloud ecosystem.]

5. Don’t believe that cloud services are a “magic bullet.”

Keep your attention on traditional outsourcing models. Issues of technology maturity, security, legacy systems, licensing, data ownership, and weak or absent standards are still significant today, and these hurdles to cloud adoption will ensure a long life for traditional outsourced IT service delivery. Rapid changes in this space mean that IT services clients should consider cloud options now and in the future, but traditional service models will remain.

Paul Roehrig, Ph.D., is a principal analyst at Forrester Research, where he serves Sourcing & Vendor Management professionals. He will be speaking at Forrester’s Services & Sourcing Forum, October 6-7, in Chicago.

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