Reality check for cloudy ambitions

Reality check for cloudy ambitions

The cloud will be an essential tool for addressing business demands of IT, but it is not for everyone.

IDC analyst Tim Dillon says enterprises should apply the “fitness for purpose” perspective when deploying cloud computing. “You will hear a lot of organisations touting it as a panacea to all the problems the organisation faces. This is not true,” he told those attending a recent Auckland briefing on cloud computing organised by AT & T.

IDC defines cloud services as “consumer and business products, services and solutions delivered and consumed in real-time over the internet”. For example, cloud applications, cloud collaboration and cloud IT management can be grouped under the software-as-a-service package; cloud platforms can be delivered as platform-as-a-service; while cloud storage and cloud servers/processing can also be delivered as infrastructure-as-a-service.

The benefits commonly ascribed to the “cloud” or on-demand model, in order of importance, are “easy/fast to deploy”, “pay only for what you use”, and “offers the latest functionality”, according to recent IDC research.

These three benefits outrank others, including “less inhouse IT staff and costs” and “low monthly payments”, says Claus Mortensen, citing the findings from the IDC Asia Pacific End-user Cloud Computing Survey released in January 2009.

Dillon says the cloud will be part of an expanding portfolio of options for the CIO. With the cloud, he says it is important to look at certain characteristics of the enterprise. An enterprise may find it is fine to send applications and processes to the cloud, but not critical or sensitive data. The enterprise could also be working in a capital constrained environment, which is a huge issue for Australia and New Zealand, he says.

"Try to pick areas in the enterprise that suit you best, because it doesn’t suit everyone at this point," says Dillon.

“I can not stress this enough, fitness for purpose with the cloud."

New Zealand companies are taking a more strategic approach to cloud computing, he says, compared to Australia where the focus is on cost.

“New Zealand was much more about, ‘how do I use this to improve business operations? How do I compete? How do I bring new products and services to the market’?”

The “really interesting point of differentiation” between the two markets was there is less perceived resistance to the cloud by New Zealand organisatons. They are thinking this is far more long term and strategic, as opposed to the short-term focus in Australia.

Rosalie Nelson, IDC NZ telecommunications research manager, says one of the challenges in New Zealand is productivity and the ability to manage IT skills to drive and deploy internal services.

From the perspective of a small business, which might have five to 10 people and not able to employ an internal IT team, this is where you start to see the discussion and the interest in cloud computing, says Nelson.

In Australia, cloud computing is seen as a cost saver and a cheaper alternative. “In New Zealand they believe it is a way of improving the business operating environment," says Nelson.

Dillon says a lot of organisations have already been using cloud-based services for quite a while. But enterprises have been getting different messages from the suppliers and IT service professionals.

He says one of the things that will change in coming years is the service level agreements (SLAs) around cloud computing.

SLAs, he says, are becoming increasingly important and will come from the business perspective. It will not be about network uptime, but around areas like time to process transactions.

Roger Payne, general manager, AT & T Global Network Services in New Zealand, says dairy giant Fonterra is one of the organisations using AT & T's Synaptic Hosting, an application hosting service that provides pay-as-you-go access to virtual servers and storage with security and networking functions. Fonterra staff - remote and office users - in the US and Latin America go into the AT & T network, which provides authorisation and authentication for legitimate users. The users are routed to web security software in the cloud, which validates what websites each user can access. "They have total control in terms of security policies, we just supply the services," says Payne.

Payne cites the advantages of the hosting application which include the ability to build a reliable, scaleable, secure online business; avoiding the cost of deploying expensive hardware; and growing on demand based on business requirements. With reporting from Carol Ko, MIS Asia

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