Vendor View: Clarifying the Case for Cloud Computing

Cloud computing is a hot topic at the moment, and for good reason. With it, companies have the potential to gain competitive advantages that could make a real difference to business performance. Yet despite its continued evolution, concerns remain. Is cloud computing secure? Will it provide reliable availability? Can I maintain control over business-critical systems and data that exist in the cloud? Is it an enterprise-ready solution that can deliver on all the hype?

Enterprise Overbuild

Building an enterprise infrastructure is challenging and costly. Yet many businesses today are actually intentionally overbuilding -- and therefore overspending -- as this has historically been the only proven means of ensuring that business-critical operations will remain in service, no matter what. Ironically, one of the biggest threats to infrastructure stability can, for many organisations, be their own success.

Companies depend on being able to provide consistent, reliable access to business-critical applications --particularly external Web sites or customer portals, which represent their brand, and their business. Yet too many organisations today have suffered from crashed Web sites or unavailable applications resulting from usage spikes. This is why overbuilding has become the norm -- it ensures that the network will withstand the unexpected -- and day-to-day activity can continue uninterrupted. Organisations therefore feel almost obliged to build and maintain redundant systems, which are expensive and difficult to manage.

Not surprisingly, therefore, that cloud computing is of such interest to organisations all around the world. In the cloud computing environment, functionality is transferred out of the network, and made available to enterprises on demand. Gartner defines cloud computing as “a style of computing in which massively scalable IT-enabled capabilities are delivered ‘as a service’ to multiple customers using Internet technologies.”[See "Gartner: Data In the Cloud: The Changing Nature of Managing Data Accessibility", 27 February 2009, ID:G00165291 by Eric Thoo]

In essence, service providers can leverage economies of scale to provide a highly reliable platform with greater cost and management efficiency. Companies gain flexible access to large amounts of scalable computing power, giving them the freedom to adjust capacity to support the natural cycles of their business. Resources can be added, turned off, or reassigned whenever necessary. Cloud computing is therefore a business enabler rather than a technical construct -- a function that IT leaders are finding increasingly necessary as the IT role evolves.

The Advantages of Cloud Computing

The advantages of cloud computing are especially clear when looked at from the perspective of business solutions. For example, by reducing the time and effort required to launch new applications, cloud computing helps IT become more responsive to the pace and dynamic nature of business. Applications supported by the cloud don’t need large infrastructure to be deployed at the customer’s location, which dramatically reduces the upfront commitment of resources. New applications can be approved and deployed quicker, making it easier to satisfy the needs of all departments. And the financial case is radically altered -- there’s no need for large capital outlays to launch new applications, moving the decision out of the investment realm and into the operational.

Transitioning from a capital expense model to an operational expense model reduces financial risk to monthly increments and provides a higher degree of flexibility to manage expenses over time. If the market slows, organisations aren’t locked into expenses their budgets can no longer support. If applications produce disappointing results, an enterprise can pursue a different direction without having to abandon expensive on-premises infrastructure.

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Driving IT Change

Cloud computing also creates an opportunity for IT departments to change their focus from deploying and supporting applications to managing the services that those applications provide. This allows them to focus on high-value activities that align with and support the enterprise business goals. The CIO can then function as a technology strategist, working with business units to understand their business needs and advise how best to use technology to accomplish their objectives.

But this is a big change in business strategy and, perhaps understandably, some business and IT leaders remain hesitant about stepping off the parapet and into the cloud. The usual concerns cited are security, availability, and control. An effective cloud computing strategy must incorporate these factors, if it is to drive business success.

Building a Trusted Cloud

In cloud computing, servers, network capabilities and storage are provided to the enterprise as a service. In turn, data is delivered from the enterprise to the cloud, with attendant concerns about letting sensitive information move outside the company firewall.

These concerns must be adequately addressed. Industry standards and regulations such as HIPAA, the Payment Card Industry Data Security Standard (PCI-DSS), the Gramm-Leach-Biley Act (GLBA), and the Statement on Auditing Standards 70 (SAS-70) have very defined and measurable security requirements. For cloud computing to be viable, providers must adhere to the same standards and controls that an organisation would impose in house.

IT systems that support key enterprise applications need to be stable, reliable, and highly available. Theoretically, on-demand computing should offer a high degree of reliability since the cloud distributes compute, network, and storage functions across a substantially larger pool of physical and virtual resources, making it more tolerant of individual hardware failures. However, to support this, providers should back their service with stringent SLAs for availability and define liability for unplanned outages.

By their very nature, cloud computing service models involve transferring some control to a trusted service provider. But not all organisations will want all systems to migrate to the cloud -- and therefore varying levels of control can be provided within the cloud computing model.

Service providers should offer a high level of real-time visibility into the systems that reside in the cloud. This should include accurate and meaningful reporting on availability, performance data, service requests, how well the service provider is meeting SLA requirements, and other key metrics. Ideally, a provider should also offer the option of self-service provisioning via a customer management portal, which allows hands-on control of systems in the cloud.


Cloud computing is more than the driving force behind the next wave of technology innovation. It is a sound business strategy that helps organizations practice better financial management and creates a more sustainable, cost-efficient model for supporting IT services.

While valid concerns exist, they can be managed with proper preparation. Detailed planning can help determine when and how IT infrastructure should be moved to the cloud. Careful evaluation of vendors can help identify a service provider whose solution is enterprise ready in key areas such as security, availability, and control.

Ronald Gauci is Area Vice President Sales -- Australia and New Zealand for Verizon Business. Gauci is responsible for the management, growth and transformation of the business. His focus is on raising awareness of the Verizon brand and helping employees to deliver a world-class customer experience. Gauci is also a member of the board of the Australian Information Industry Association (AIIA).


Copyright © 2009 IDG Communications, Inc.

Security vs. innovation: IT's trickiest balancing act