Welcome!

Microsoft Cloud Authors: Janakiram MSV, Yeshim Deniz, David H Deans, Andreas Grabner, Stackify Blog

Related Topics: @CloudExpo, Containers Expo Blog

@CloudExpo: Blog Post

Business Value and Cloud Computing

What is the business impact of leveraging a Cloud delivery model?

In our last post we discussed the positive shift in the Cloud Computing discourse towards actionable steps rather than philosophical diatribes on definitions. And to support that discussion we offered the following list of things not to do:

  1. Not understanding the business value
  2. Assuming server virtualization is enough
  3. Not understanding service dependencies
  4. Leveraging traditional monitoring
  5. Not understanding internal/external costs

In this installment we are going to focus on the first mistake - failing to understand the business impact of leveraging a Cloud delivery model for a given application or service.

What are you trying to do?
The first step when evaluating a Cloud delivery option is to define the service: is it new or are you considering porting an existing service? Both options have their advantages and disadvantages. If new, there is a lower financial bar to justify a Cloud model (no legacy infrastructure to write off), but there's also the downside of having no historical perspective on consumption trends to aid in evaluating financial considerations or performance. We'll discuss both financial and performance considerations in a future blog, so for now let's continue and assume we are talking about a new service.

Is Cloud a better option than traditional approaches?
The next step is to clearly articulate why you are looking at Cloud, and for many IT executives this may require a dose of painful honesty. Are you looking at Cloud because:

  • Your business requires a highly scalable solution?
  • Your data center is out of capacity?
  • You expect this to be a short-lived service?
  • You need to collaborate with a business partner on neutral territory?
  • Your business has capital constraints?

If so, those are all good reasons to consider a Cloud option. However, if you are looking at Cloud because it takes weeks/months to get a new server in production, or your Operations team has no credibility maintaining a highly available service, or your internal cost allocation models are atrocious...well, perhaps there are some in-house improvements you should be prioritizing before exploring Cloud.

Just because you can doesn't mean you should!
A painful lesson learned early (and for some of us, often) in life is that just because you have the ability to do something doesn't necessarily mean it's a good idea. Look no further than the disastrous results many firms had in the early days of e-business when they exposed legacy internal applications to the Internet for evidence of this axiom. As you contemplate moving applications/services to the Cloud (particularly public services), you need to answer these questions:

  • Does this application consume or generate data with jurisdictional requirements (i.e., data cannot be stored outside of a specific geography)?
  • What will happen if there is a security breach/data loss? Will your company face fines or a public relations nightmare due to an expose on the front page of the Wall Street Journal?
  • If this service runs poorly, what part of your business value chain is exposed? Are there critical systems that rely on it?
  • What happens if the application/service doesn't run at all? Would you be dead in the water, or are there alternatives that allow the business to continue functioning?

The last bullet warrants further explanation, as many IT professionals experienced with outsourcing/hosting relationships may point to contracts with strict SLAs as their answer. Penalties are well and good, but what happens to your business if this service cannot run? Although Cloud Computing is still in its infancy, there are already numerous examples of failures that no SLA can guard against: bankruptcy (and/or going out of business); change of ownership (something that is inevitably going to happen more frequently as the market matures); or even government investigations (if a government agency has a search and seizure warrant to investigate a company using the same Cloud provider as you, it's highly unlikely that they will take the time to sort out the bad from the good - they will take everything). The lesson here is that SLAs are not enough - you must have a contingency plan to restore the application/service/data on another provider or internally or accept the risk of this service being unavailable for an extended period of time.

There are tremendous benefits to embracing Cloud services (public or private). We hope that this piece does not discourage anyone from pursuing this goal, but rather generates a candid dialogue about the business value of the service in question.

In our next blog we'll explore the next segment on our list - holistic virtualization.

More Stories By James Houghton

James Houghton is Co-Founder & Chief Technology Officer of Adaptivity. In his CTO capacity Jim interacts with key technology providers to evolve capabilities and partnerships that enable Adaptivity to offer its complete SOIT, RTI, and Utility Computing solutions. In addition, he engages with key clients to ensure successful leverage of the ADIOS methodology.

Most recently, Houghton was the SVP Architecture & Strategy Executive for the infrastructure organization at Bank of America, where he drove legacy infrastructure transformation initiatives across 40+ data centers. Prior to that he was the Head of Wachovia’s Utility Product Management, where he drove the design, services, and offering for SOA and Utility Computing for the technology division of Wachovia’s Corporate & Investment Bank. He has also led leading-edge consulting practices at IBM Global Technology Services and Deloitte Consulting.

Comments (1) View Comments

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


Most Recent Comments
CloudNinja 06/23/10 09:57:00 AM EDT

There is alot of thrashing in this space and it is hard to determine which Cloud to goto as everyone is doing something a little different – its hard to compare Cloud 2 Cloud.

A similar diagnosis is by David Chappell: "If I ruled the world”, says David Chappell, “I would make the phrase ‘private cloud’ illegal”. In conversation with David Gristwood, David Chappell, during his recent world tour, discusses the Cloud, its importance and role in the partner ecosystem, and cloud players, such as Google, Amazon, Salesforce.com, VMware and more. You can see his Cloud2Cloud comparison in brief here:

A more recent talk" with David Chappell on this topic where he covers others issues such as:
- IaaS vs PaaS
- Private vs Public Cloud
- Applications that are not a great fit for the Cloud and those which are.
- The threat of Public Cloud to IT departments

thoughts?

hope that helps,
-cn

@ThingsExpo Stories
SYS-CON Events announced today that Fusic will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Fusic Co. provides mocks as virtual IoT devices. You can customize mocks, and get any amount of data at any time in your test. For more information, visit https://fusic.co.jp/english/.
SYS-CON Events announced today that Ryobi Systems will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ryobi Systems Co., Ltd., as an information service company, specialized in business support for local governments and medical industry. We are challenging to achive the precision farming with AI. For more information, visit http:...
SYS-CON Events announced today that Keisoku Research Consultant Co. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Keisoku Research Consultant, Co. offers research and consulting in a wide range of civil engineering-related fields from information construction to preservation of cultural properties. For more information, vi...
SYS-CON Events announced today that B2Cloud will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. B2Cloud specializes in IoT devices for preventive and predictive maintenance in any kind of equipment retrieving data like Energy consumption, working time, temperature, humidity, pressure, etc.
SYS-CON Events announced today that N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
SYS-CON Events announced today that Mobile Create USA will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Mobile Create USA Inc. is an MVNO-based business model that uses portable communication devices and cellular-based infrastructure in the development, sales, operation and mobile communications systems incorporating GPS capabi...
SYS-CON Events announced today that Daiya Industry will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Daiya Industry specializes in orthotic support systems and assistive devices with pneumatic artificial muscles in order to contribute to an extended healthy life expectancy. For more information, please visit https://www.daiyak...
SYS-CON Events announced today that Interface Corporation will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Interface Corporation is a company developing, manufacturing and marketing high quality and wide variety of industrial computers and interface modules such as PCIs and PCI express. For more information, visit http://www.i...
In his session at @ThingsExpo, Greg Gorman is the Director, IoT Developer Ecosystem, Watson IoT, will provide a short tutorial on Node-RED, a Node.js-based programming tool for wiring together hardware devices, APIs and online services in new and interesting ways. It provides a browser-based editor that makes it easy to wire together flows using a wide range of nodes in the palette that can be deployed to its runtime in a single-click. There is a large library of contributed nodes that help so...
Elon Musk is among the notable industry figures who worries about the power of AI to destroy rather than help society. Mark Zuckerberg, on the other hand, embraces all that is going on. AI is most powerful when deployed across the vast networks being built for Internets of Things in the manufacturing, transportation and logistics, retail, healthcare, government and other sectors. Is AI transforming IoT for the good or the bad? Do we need to worry about its potential destructive power? Or will we...
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.
SYS-CON Events announced today that Suzuki Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Suzuki Inc. is a semiconductor-related business, including sales of consuming parts, parts repair, and maintenance for semiconductor manufacturing machines, etc. It is also a health care business providing experimental research for...
SYS-CON Events announced today that Nihon Micron will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Nihon Micron Co., Ltd. strives for technological innovation to establish high-density, high-precision processing technology for providing printed circuit board and metal mount RFID tags used for communication devices. For more inf...
SYS-CON Events announced today that SIGMA Corporation will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. uLaser flow inspection device from the Japanese top share to Global Standard! Then, make the best use of data to flip to next page. For more information, visit http://www.sigma-k.co.jp/en/.
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
While some developers care passionately about how data centers and clouds are architected, for most, it is only the end result that matters. To the majority of companies, technology exists to solve a business problem, and only delivers value when it is solving that problem. 2017 brings the mainstream adoption of containers for production workloads. In his session at 21st Cloud Expo, Ben McCormack, VP of Operations at Evernote, will discuss how data centers of the future will be managed, how th...
SYS-CON Events announced today that Enroute Lab will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Enroute Lab is an industrial design, research and development company of unmanned robotic vehicle system. For more information, please visit http://elab.co.jp/.
Agile has finally jumped the technology shark, expanding outside the software world. Enterprises are now increasingly adopting Agile practices across their organizations in order to successfully navigate the disruptive waters that threaten to drown them. In our quest for establishing change as a core competency in our organizations, this business-centric notion of Agile is an essential component of Agile Digital Transformation. In the years since the publication of the Agile Manifesto, the conn...
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...