Cloud computing is real. It’s here to stay.
It’s turning out to be the biggest gift that ever fell into the lap of business.
But there’s still a fog of vagueness about the best way to use cloud computing to support the business. Here’s a simple, low-fuss roadmap to successful cloud adoption.
First: Some Facts About Cloud In The Enterprise
In case you’ve any lingering doubts about the increasing role and presence of cloud computing in the enterprise, here are some figures worth considering:
- According to IDC, by 2015, one of every seven dollars spent on packaged software, server, and storage offerings will be through the public cloud model, growing five times faster than the total IT industry.
- According to Gartner’s recent survey, cloud computing is among CIO’s 2013 top technology priorities—third only behind analytics and mobile.
- 90% of Microsoft’s 2011 R&D budget of $9.6 billion was spent on cloud computing strategy and products, implying a huge transition in how enterprise customers will deploy and consume IT.
- 48% of U.S. federal agencies moved at least one workflow to the cloud, following a new requirement that agencies adopt a “cloud-first” policy.
These impressive facts confirm the shift in momentum towards the cloud. They should serve as a wakeup call to IT practitioners.
It’s no longer a question of whether to use the cloud, but of how and when.
Something really interesting is happening: Cloud Computing is turning out to be the biggest gift that ever fell into the laps of IT. That’s because cloud has the power to transform IT from cost center to value creator.
How Do I Create A Cloud Strategy?
Creating a strategy based on your actual needs and requirements will make it easier to navigate all the options in the evolving cloud ecosystem.
Your guiding principle should be: Create value for the enterprise. Your goals should be to optimize cost and to find areas where using the cloud can create value. Your objective should be to make IT more agile and responsive to the needs of the business.
My recommendation? Start small. Moving to the cloud can be daunting and intimidating. You need a clear methodology to assess your environment and determine what applications can be easily moved to the cloud.
Follow these seven steps. They’re a template for creating your cloud strategy:
1. Inventory All Your Applications:
How many IT-managed applications do you have? List them, including commercially-available and custom applications. Don’t be surprised if you find hundreds.
2. Determine Whether Each Application Is Core Or Contextual:
Map each application to the business process it supports. If the application supports a key business process, then categorize it as “core.” If it doesn’t, then categorize it as “contextual.” Typically 60% percent will be contextual.
Here are brief definitions:
- Core: Creates sustainable differentiation in the target market resulting in premium prices or increased volume; provides true innovation and differentiation; seeks to dramatically outperform all competitors. For example, a unique customer support system.
- Contextual: Doesn’t differentiate the company; seeks to meet, but not exceed, accepted standards. For example, a tape backup and archival system.
3. Identify Each Asset’s Lifecycle Stage:
Is the target application due for a hardware or software upgrade within the next 12 months? The typical depreciation cycle for the physical assets is three to five years, so assets that are due for a software or hardware refresh may be perfect candidates for the cloud.
The outcome of this exercise is a list of all assets with their retire/refresh dates:
- The typical asset lifecycle phases are: plan, acquire, deploy, manage, retire.
- Focus on assets that are in “manage” or “retire” stages.
4. Perform A Technical Analysis:
For each application on the list, assess the level of customization, amount of intellectual property, number of integration points, network connectivity requirements, and security requirements.
The outcome should be a comprehensive document assessing the technical feasibility of moving this workload to the cloud.
5. Analyze TCO:
Compare the cost of running the infrastructure yourself, versus in the cloud. Be sure to include direct costs like staff, data-center real estate, cooling, power, software costs, maintenance, and support.
The financial analysis should also consider the impact of a capex-centric budgetary process compared to the cloud’s opex-centric process. These aren’t subtle changes, so it would be wise to consult with your finance team to make sure that IT is aligned with the company strategy.
At this point you’re building a business case outlining the financial pros and cons of moving the targeted IT applications to the cloud. Recognize that in the cloud you no longer talk about “total cost of ownership” but “total cost of operations.” It’s the new TCO.
6. Evaluate Cost/Value:
This is a critical step, because you’re now ready to determine if the cloud can optimize cost by reducing expenses, or create value by increasing revenue.
Remember: The goal isn’t just to move a workload to the cloud, but also to create value in the process. For example, if you were to move a backup/archive workload to the cloud, not only are you reducing cost—no more tape, dedicated hardware, software, or staff overhead—but you’re creating the opportunity to unlock the data and make it available to the business. It turns dormant data into an asset that can be used for analytics, dev/test, and other use cases.
This is the often-ignored transformative power of the cloud: turning an otherwise “contextual” application into a “core” asset for your company—a differentiator.
7. Engage Your Technical Partners:
After completing the first six steps, you’ll be in a better position to create a sensible strategy and start engaging your technology partners, based on your specific technical and business requirements.
By Cesar Orosco (@CesarOrosco)
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