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GDS International - Challenges Opportunities for the C-Suite


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It’s an interesting time for cloud computing. For a while now, it has been …

It’s an interesting time for cloud computing. For a while now, it has been
an enduring buzzword in an IT world that specialises in launching new
‘must-have latest things’ practically every month. Most acknowledge that
the future is definitely ‘cloudy’, but many are letting their peers explore
this new frontier before they take the journey. Others have already
accepted the inevitability of cloud – pioneering in terms of service
provision or usage. And there are those who think it all seems strangely
familiar; we’ve been here before but travelled under a different name.
Whatever your position, for those with a vested interest in keeping their
mission-critical environments robust and, above all, available, the cloud is
still perceived by many to be too new to be trusted, particularly for many
enterprise businesses.
Or is it?

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  • 1. CLOUD – Challenges and Opportunities for the C-suite‘UK CIOs’ attitudes to IT and cloud outsourcing’survey reportIt’s an interesting time for cloud computing. For a while now, it has beenan enduring buzzword in an IT world that specialises in launching new‘must-have latest things’ practically every month. Most acknowledge thatthe future is definitely ‘cloudy’, but many are letting their peers explorethis new frontier before they take the journey. Others have alreadyaccepted the inevitability of cloud – pioneering in terms of serviceprovision or usage. And there are those who think it all seems strangelyfamiliar; we’ve been here before but travelled under a different name.Whatever your position, for those with a vested interest in keeping theirmission-critical environments robust and, above all, available, the cloud isstill perceived by many to be too new to be trusted, particularly for manyenterprise businesses.Or is it?A comprehensive survey1 undertaken for SunGard Availability Services shows that thecloud has been embraced to a greater extent than might have been generally thought.It also reveals cloud vendors need to provide greater transparency about the servicesthey can provide. Organisations are seeking a host of benefits a cloud-based solutioncan deliver – it is therefore vital that their choice of provider does not disappoint themat best, or undermine the integrity of their business at worst.This last point is important as, from SunGard’s perspective, the Cloud in itself is not,nor should it be, the be-all and end-all. What is more important is that organisationsget uninterrupted access to the vital systems and data upon which their businesssuccess depends. Cloud can be an important means of delivering this – along withthe other benefits that may be expected.This paper therefore explores the attitudes of UK CIOs to the cloud – both in its ownright and when compared to other forms of IT outsourcing – and addresses the issuesthey raise head-on.The results were in many ways surprising and highlighted a number of apparent contradictionswhich we’ll explore further overleaf.But what the survey did reveal is that the ‘cloud computing business’ is in rude health anddespite (or perhaps because of) the world economic situation the cloud is set to be a verystrong growth sector for the foreseeable future. During Spring 2011 SunGard Availability Services commissioned Vanson Bourne to conduct a survey of 250 Chief1 Information Officers (CIOs) of UK businesses employing between 250 and 1000 people, asking about their opinions and attitudes to cloud deployment. Sectors surveyed included: Business & Professional Services; Financial Services; ICT; Local & Central Government ; Manufacturing; Media; Retail and; Transport & Travel.
  • 2. 2 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER There are many possible challenges the cloud might help the CIO address which explains the appetite for adoption, among them: The desire to eliminate the wasteful practice of “just in case” over-provisioning and improve hardware utilisation The business is experiencing the kind of growth – whether steady or sporadic – that is driving expansion of the organisation’s data centres The need to accelerate business change by eliminating the bottleneck of IT provisioning A lack of internal resources, skills or time to implement an internal cloud in-house The need for a secure, reliable environment for applications that doesn’t come with the price-tag of physical hosting The need for an agile development and testing environment that can be quickly and easily set-up and torn down The ability to rapidly deploy a high-value, business-critical web application that demands performance and availability The desire to migrate an existing virtualised environment off your premises A preference to focus resources on projects that actively drive revenue rather than just ‘fighting to keep the lights on’ The desire to take advantage of the latest technology, where the total cost of ownership is someone else’s problem. Key points raised by the survey Infrastructure outsourcing is accepted and widespread – despite some concerns Cloud computing is used by most organisations – again despite some concerns The cloud continues to gain acceptance and is gaining trust The implementation of the cloud computing model is set to expand dramatically over the next two years Vendors of cloud solutions need to educate and be more transparent about their offerings to overcome the valid concerns expressed by respondents. In the context of the research, ‘Cloud’ was defined as: “The Provision of IT infrastructure in a virtualised environment. This could take the form of a Public Cloud such as those provided by the likes of Amazon and Google, or a Private Cloud where the physical location of the virtual assets are known and may be run internally or purchased as a service from a third-party provider.”
  • 3. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 3 Cloud Service Models SaaS Apps running on Clould infrastructure ADT, Egencia,, Accessible from a browser or (other) thin client SunGard Consumer does not manage Cloud infrastructure PaaS Consumer-created apps deployed to cloud infrastructure Google App Engine, Microsoft Azure, Consumer does not manage cloud infrastructure SunGard Does have control over the deployed applications Consumer provisions processing, storage, networks IaaS Consumer does not manage cloud infrastructure Rackspace, Savvis, Has an element of provisioning control1 SunGard Availability Services 1 (OS, storage, deployed apps, & limited networking) IaaS = Cloud Infrastructure The components of cloud computing and how, in the right hands, they are brought together are what makes the cloud such an attractive proposition: Software-as-a-Service (SaaS) is a way of providing the same software to different customers via a network, usually the Internet. The software is not hosted on the customers’ individual computers and nor is the customer responsible for the hardware that delivers the service. In this instance a supplier takes care of the creation, updating, and maintenance of the software and, again, customers pay for what they use. (Providers include ADT, Egencia, SalesForce.comand SunGard) Platform-as-a-Service (PaaS) allows for the creation and deployment of applications and services and includes the infrastructure to host the built application. It facilitates the quick roll-out and/or modification of operating system features. (Providers include Google App Engine, Microsoft Azure and SunGard) Infrastructure-as-a-Service (IaaS) refers to hardware for hire, in terms of servers, storage capacity, and network bandwidth, with the software and the maintenance of that software remaining the responsibility of the customer. The servers are virtualised to provide agility and flexibility. IaaS is typically billed on a utility computing basis and amount of resources consumed (and therefore the cost) will typically reflect the level of activity. (Providers include Rackspace, Savvis and SunGard Availability Services)
  • 4. 4 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER The CIO’s perspective As the survey questioned 250 CIOs it only seems fair to get an idea of the challenges they see as most significant. Base: All respondents Total Keeping data secure and resilient 53% Moving applications to new technology platforms 46% Explaining the benefits of technology to the board 43% Moving part of the business to an outsourcing model 41% Sorting out the hype from reality when deciding which technology 25% investments to make Internal pressures for efficiency 24% Recruitment and people management concerns 20% Internal pressures for better performance 13% Other (please specify) 0% Base 250 More than half of respondents (53%) said that keeping data secure and resilient is one of the most difficult technology challenges they have faced throughout their careers. Just under half of respondents (46%) said that cost-cutting while maintaining or increasing service levels and moving applications to new technology platforms (46%) were the other biggest technology challenges they had to face. Interestingly four in every ten respondents (41%) said that explaining the benefits of technology to the board was one of their biggest challenges. A quarter of respondents said that sorting the hype from reality when deciding which technology investments to make was one of the biggest three technology challenges they have had to face. This illustrates that the plethora of solutions available to CIOs is potentially confusing and that vendors (and perhaps the entire industry) must offer greater clarity and transparency in their propositions. It’s an important issue and one we’ll return to later on. The message from the top seems to be ‘We know the goalposts keep shifting, although we don’t fully understand some of the new stuff, but we still want you to give us more for less money.’ That’s a hefty load to bear!
  • 5. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 5 Cloud versus traditional outsourcing In a traditional in-house enterprise model significant capital reinvestment is obligatory to replace hardware every three to five years. Yet today the pace of developments in the IT world is relentless. There are always new ways to do business and better ways to collaborate. Any enterprise burdened with an IT structure that does not permit rapid adaptation to the business environment is at a clear disadvantage on many fronts. Look at telecoms, for example: the transition from Time-Division Multiplexing (TDM) to Internet Protocol (IP) telephony-based platforms is accelerating amongst large businesses: it offers lower Total Costs of Ownership (TCO) and delivers more sophisticated functionality such as unified communications, push button services, intelligent call distribution and more. Enterprises are increasingly pursuing a converged network strategy where data and telecoms are consolidated into one single network for further savings and added functionality. The result is that telephony now has more in common with a major software application spanning an entire business than a standalone box that sits hidden in a corner of an office. There are many sound reasons for outsourcing IT functions which can be summed up by saying that it’s all about keeping IT aligned to business needs. The pace at which business is conducted, stimulated by a constant stream of new technologies means that outsourcing is one way of an enterprise taking advantage of the latest technologies and expertise to stay agile and competitive without making outrageous demands on budgets. The cloud is simply the latest and most efficient way to do this. Infrastructure outsourcing is accepted and widespread… In the past almost two thirds (62%) of respondents have outsourced significant elements of their IT infrastructure (such as hosting and helpdesk support, for example) despite the fact that all but 2% of them had concerns about doing so, most notably the risk of operational downtime cited by over half of respondents (55%) . Did you experience any of the following concerns when you first Did you experience any of the following concerns when you first outsourced elements of your IT infrastructure? outsourced elements of your IT infrastructure? Risk of operational downtime 55% Reduction of flexibility 52% Loss of control over systems and data 46% Fears around security of sensitive customer/commercial data 39% Cost of implementation 39% Moving into ‘uncharted territory’ 35% Interoperability 28% Confusion around what is best for my organisation 27% Legal concerns about data being stored overseas/in unknown locations 13% Other 1% I did not have any concerns 2%
  • 6. 6 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER There is wide variation across sectors though. The great majority of media and ICT companies have outsourced parts of their infrastructure, whilst fewer than half of financial organisations said the same. Have you ever outsourced any significant elements of your IT infrastructure to a third party (e.g. helpdesk support, hosting, etc)? 55% 55% 52% 68% 67% 64% 82% 77% 45% 45% 48% 33% 36% Yes 32% 18% 23% No g ia s t s l T l en ce ce ai rin ve ed IC t vi m vi tra Re tu M er er rn ac ls t& ls ve uf ia na go or an nc sio sp M l na ra es an nt Fi of Tr ce pr l& s& ca es Lo sin Bu …despite concerns with outsourcing infrastructure The risk of downtime, loss of flexibility, loss of control, and cost are the greatest concerns that CIOs had when outsourcing parts of their infrastructure in the past and these same concerns are reflected when moving to the cloud. The concern regarding loss of flexibility is interesting, as a truly enterprise-class solution should facilitate greater flexibility and consequently business agility, which are two powerful drivers for adopting cloud-based IaaS. Concerns about cloud providers are comparable to concerns about outsourcing providers Respondents are searching for the same attributes in cloud suppliers as they have done when sourcing a traditional IT supplier: 64% see reliability as the most important attribute when sourcing a cloud supplier, closely followed by lower costs, reputation and security. Reliability is the most important attribute that over half of respondents (58%) look for when looking for an IT supplier, though half of all respondents also look for a good reputation, lower costs and increased security. However, it is quite significant that for almost every factor listed, a greater number of CIOs look for these things when considering cloud providers, probably due to the very nature of how cloud-enabled services are delivered. Enterprises clearly want to reap the rewards offered by cloud solutions, but it is essential that they define precisely which aspects of their business will fit into which type of cloud – then seek a provider that can match their requirements.
  • 7. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 7 “What attributes have you traditionally looked for in an IT supplier?” and “When looking for a cloud provider, what attributes do you look for?” Reliability Security Reputation Lower costs Proven experience with similar projects Availability (of data, infrastructure, IP etc) Commitment to SLAs Resilience Financial stability Innovation capabilities Track record with blue-chip clients Location (global presence/local support) 0% 10% 20% 30% 40% 50% 60% 70% Cloud Provider IT Supplier The problems that CIOs have experienced when outsourcing have influenced their perception of the cloud. The concerns they had when outsourcing mean they look for certain attributes – reliability, lower costs, reputation, etc – for which they have a near-equal concern about when considering cloud. What CIOs need to know is how to interrogate cloud vendors to ensure that their decision is the right one for current business requirements and which offers the flexibility that may be required in the future. They must also look to ensure that their ultimate choice does not mask any weakness in areas of importance. However, the cloud is also accepted and widespread… Perhaps the first surprise is that the cloud is much more widely adopted than might have been generally thought. The perception is that it’s still in the early adopter stage and somehow still experimental and not quite safe enough yet, but the survey revealed that eight out of ten respondents have already outsourced some of their IT applications (84%) and infrastructure (82%) into the cloud. Across the sample around a third of IT applications and infrastructure (33%, 34%) has already been moved into the cloud. This is a healthy proportion of ‘stuff’ to entrust to what many consider to be a proposition that has yet to reach maturity. Whilst more than two thirds (70%) of respondents are currently happy to outsource data that is not critical or sensitive, only two out of ten respondents (18%) are happy to outsource all of their data. Accounting and Human Resource Management (HRM) applications are the least likely to be held in the cloud, as around half of respondents (51%, 48%) are apparently unwilling or unable to outsource these applications – perhaps due to such factors as the confidential nature of such data and its potential value to competitors, or regulatory restrictions. However, once more, many initial concerns may be able to be overcome by the selection of an appropriate cloud solution with appropriate resilience, integrity, security and control built in.
  • 8. 8 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER …for a number of very good reasons… A near equal number of respondents reported that the cloud is being adopted to reduce cost of the IT infrastructure (26%), to provide competitive advantage (24%), and because of the inflexibility of the current infrastructure (23%). Running and maintaining an enterprise-class data centre is an expensive business, beginning with the building and maintenance of the facility itself and it made sound financial sense to design them to cope with business growth and increased storage needs. The advent of the cloud means this is now viewed as expensive over-capacity, which reduces the cost-effectiveness of the whole IT operation. Furthermore, the cloud provides opportunities for enterprises to wean themselves off complex, and possibly outdated, legacy equipment which leech much of the available IT budget. Cloud computing means that IT can be delivered by specialists as a leased service with predictable costs from bottom to top, turning capital expenditure (CAPEX) into predictable operating expenditure (OPEX) and reducing under-utilised (and therefore wasted) resources. What is driving your adoption of cloud-based infrastructure? Reduction in the cost of our IT infrastructure 2% 10% The competitive advantage it gives us 26% The inflexibility of 15% current infrastructure The need to support additional users or services 23% 24% Technology refresh Developers using cloud platform for new applications The modular nature of the cloud allows businesses to buy exactly what they need today, rather than speculate on a costly IT solution that they hope the business will grow into at some point in the future. The timing and scale of necessary investments in IT, hardware or software can thus be aligned to business requirements. It’s entirely possible to roll out new services or provide additional capacity in a matter of hours, rather than days or weeks. Adding extra storage, increasing network bandwidth, memory, computing power, for example, can be achieved, often instantaneously, just by asking for it. This provides businesses with a level of agility undreamed of just ten years ago: they can pay for what they use – ‘pay as you grow’ – and buy results, not assets. IT can be deployed dynamically, to run with the curve of the business, rather than sitting waiting to be used. In other words, these businesses want to cut costs and/or optimise IT budgets, and view the cloud as a way of providing more flexible infrastructures and greater business agility for their IT investment. Isn’t that what the cloud is all about? Delivering on the promises that the IT department has long dreamed of providing.
  • 9. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 9 …and despite the ‘issues’… Scalability and flexibility are key attributes that the cloud is meant to provide, but some serious concerns about the reliability and resilience of the cloud remain. Two thirds of all organisations that have adopted cloud have experienced downtime from the applications they have put into the cloud. Amongst the largest organisations surveyed, this increases to four in every five businesses. Although organisations are using the cloud extensively, by many it is not yet considered reliable enough to migrate the whole infrastructure. We’re all aware of the high profile nightmare scenarios that occur from time to time that have taken out or disabled numerous high profile public websites. But where do the faults lie? Component failures are going to occur, that’s just the nature of technology and computing to-date. There has been plenty of investment in advanced multi-tenant architectures and advanced infrastructures to reduce the number and severity of breakdowns, but the days of perfect component reliability are still some distance over the horizon. But that’s not to say that such failures must be tolerated by any means – they should not. The responsibility for such failures must be shared with businesses that have not made certain that resilience and availability are built-in to their cloud environment from the start. Those organisations who have experienced the downtime of cloud-based applications may not have selected the IaaS offering best suited to their resilience and availability – or business – needs. Businesses must seek vendors that can supply solutions that can failover to a secondary cloud or locally hosted system – or even both – ensuring that the money-making machinery of business continues as usual. What concerns did/do you have around moving to the cloud? Fears around security of sensitive 55% customer/commercial data Loss of control over systems and data 54% Risk of operational downtime 47% Cost of implementation 42% Moving into ‘uncharted territory’ 36% Legal concerns about data being 28% stored overseas/in unknown locations Reduction of flexibility 28% Confusion around what is best for my 24% organisation Interoperability 18% None of the above 4%
  • 10. 10 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER In asking the question previously, the main fears are still predominantly technological, centred on security, control and downtime. Whether these fears are justified is probably down to the nature of the cloud solution and/or provider thereof – CIOs certainly need help to overcome some pretty fundamental conflicts. If you recall, when asked, ‘What is driving your adoption of cloud-based infrastructure?’ the three main reasons were to reduce cost of the IT infrastructure (26%), to provide competitive advantage (24%), and because of the inflexibility of the respondents current infrastructure (23%). Yet 42% say they have concerns over the cost of implementation of a cloud solution and more than a quarter of respondents said they were concerned about a reduction in flexibility from the cloud. Furthermore 24% of respondents admitted to being confused about what was best for their organisation. Clearly, the industry has an opportunity, if not a responsibility, to provide both clarity for buyers as regards the types of cloud on offer and what they are suited to – especially where enterprise-class requirements are concerned. In addition, potential business consumers of cloud have every right to expect their providers to be transparent as regards what their the cloud-based IaaS solutions entail. Only a third say that moving into the cloud feels like moving into uncharted territory which means that for the majority (64%) the cloud is now an accepted and established technology. Still only 4% of CIOs say that they do not have any concerns about moving to the cloud and it will be interesting to see by how much this figure grows over the next couple of years. Perhaps unsurprisingly, more respondents in finance are worried about the security of sensitive data (63%) than the overall average (55%). A common concern with over half of the respondents (54%) is losing control over systems and data to cloud providers. It is true that many technology hosting businesses are equipped to provide basic cloud services, but it is necessary for users or customers to be satisfied that the vendor can protect the confidentiality, integrity and availability of data with measures and controls that are extensive, efficient and sophisticated. Not all are equipped to do so and, as we will see later on, cloud suppliers need to provide greater transparency on the services they offer. A reputable and experienced cloud provider would advise customers that some of the financial savings made by the shift to the cloud should be invested in building the required controls into their cloud environment to enable them to independently analyse risk, privacy and security on an ongoing basis. The sheer speed of acceptance of the cloud concept means that the regulatory environment and any framework of industry good practice standards, for example, still lag behind the market and consensus is still some way off. In the absence of this, customers should be prepared to seek contractual assurance regarding the geographical storage and transit of their cloud-based data, to ensure compliance with existing (as well as the inevitable introduction of new) laws governing international data traffic flows. Jurisdiction is a complex and constantly evolving issue, but any data hosting business worth its salt will already be adhering to good practice guidelines and be prepared to offer competent advice on any relevant developments.
  • 11. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 11 CIOs want to keep sensitive applications in-house When asked what they would be least willing to move into the cloud, half of respondents selected accounting, closely followed by human resources management. Which applications would you be least willing to outsource/move into the cloud? Accounting 51% Human resources 48% management (HRM) Payroll Customer relationship 38% management (CRM) 35% Enterprise resource 34% planning (ERP) 32% Websites 31% 29% Treasury management Procurement 18% Email 17% Supply chain management The functions they are more reluctant to virtualise tend to be related to sensitive data. Yet only 38% are worried about virtualising their payroll. But are CIOs worried by cloud’s security? As previously observed, cloud has been seen as an emerging, experimental technology and it is inevitable that big conceptual shifts in infrastructure creates wariness and uncertainty. But as we have also seen the concept is now broadly accepted and adoption is widespread. From our first look at CIOs we know that keeping data secure and resilient is one of the most difficult technology challenges that over half of respondents (53%) face throughout their careers (page 4). Which relates to the biggest challenge CIOs believe they are facing as cloud becomes more widely adopted: the most-cited concern (64%) is keeping data secure and resilient. The cloud certainly engenders an increased degree of uncertainty and wariness in the minds (page 12) of CIOs.
  • 12. 12 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER What do you see as the three biggest technology challenges your organisation is facing as cloud is more widely adopted? Keeping our data secure 64% and resilient Cost-cutting while maintaining or increasing service levels 52% The logistics of moving data or infrastructure to cloud platforms 44% 43% Explaining the benefits of cloud to the board Sorting out the hype from reality when deciding 30% which cloud investments 28% to make 25% Recruitment and people management concerns Internal pressures for efficiency 13% Internal pressures for better performance Since the emergence of cloud only around a third of CIOs said they are now more concerned about data security (38%) and the loss of data availability (35%). These are perhaps a surprising figures and many might have expected the proportion to be higher; it gives greater weight to the idea that cloud is becoming more accepted and trusted and this is supported in the survey by the revelation that 18% are now less concerned about data security and 19% are less concerned about the loss of data availability since the emergence of the cloud. So despite there being increasing concerns over data security, and despite four fifths of respondents having already outsourced IT applications and infrastructure into the cloud, only a quarter of respondents (24%) are not at all confident in cloud. To what extent has your attitude to potential loss of data availability and data security changed over the last few years with the emergence of the cloud? 35% 38% More concerned Just as concerned 46% 44% Less concerned 19% 18% Potential loss of Data security data availability
  • 13. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 13 And despite concerns about hype, only 30% said that it is a big challenge to sort hype from reality. The much greater challenge is trying to explain the benefits of cloud to other members of the board. Greater migration into the cloud is planned As we have seen, organisations already have deployed cloud-based ‘as a Service’ offerings with an average of 33.5% having placed their applications and infrastructure into the cloud to-date. What percentage of your IT applications/infrastructure do you plan to move into the cloud? 51% 46% 48% 44% 34% 33% Applications Infrastructure Current Within the next Within the next twelve months twenty-four months Over the next two years this figure seems destined to grow: on average respondents expect to move around 45% of their IT into the cloud within the next twelve months, and even more within the next 13 – 24 months. Within the next two years they are expecting to move slightly more of their IT infrastructure into the cloud than their IT applications. Greater clarity of cloud providers’ capabilities are needed… The message to the industry could not be clearer. When asked where cloud suppliers should clarify their capabilities and records, there were no areas of delivery that lacked a need for additional clarification. To some extent, all CIOs feel that more clarity is needed.
  • 14. 14 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER In which areas would you like to see greater clarity and visibility of the suppliers’ capabilities and records to enable you to distinguish between them? 71% 66% Data protection Data security Pricing 45% Resilience 42% Provisioning Scaling 31% None of the above 22% 0% Unsurprisingly, when one considers the main areas of potential concern relating to deploying the cloud, the majority of respondents feel that data protection and security are the primary areas where suppliers are not being open enough about data protection and security. Pricing and resilience are also cited as areas for greater clarification amongst almost half of managers surveyed. …above all demonstration of security is needed What is the most important attribute that a third party cloud provider should be able to demonstrate to your organisation? A solid record and history of 12% resilience and protecting customers’ data 12% 47% A well-known brand name Impressive ROI stats 29% Proof of delivery/concept
  • 15. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 15 The increasing faith that CIOs have in cloud’s security is dependent upon a foundation in reality: when asked what single attribute a cloud provider should demonstrate, the most-cited answer is a solid record of resilience and data protection. This is especially true in finance, where 54% of respondents nominated history of data protection as their main concern. There is one simple but golden tenet: security in the cloud is exactly the same as security in a physical shared environment and should be approached and treated in exactly the same way. CFOs are concerned about the cost of cloud On average, 42% of CIOs said that their CFO has shown concerns about moving into the cloud. Has your CFO shown any opposition or concerns around your plans to move to the cloud? (broken down by size of company) 28% 38% 60% Yes No 72% 63% 40% 251 to 500 501 to 750 751 to 1000 employees employees employees There is a big difference in response according to organisational size. In companies of 251-750 employees only around a quarter of CIOs said this, whereas nearly two-thirds of managers in organisations of 751-1000 employees said their CFOs expressed concern/opposition. This would explain why only 35% of CIOs in organisations of 251-500 employees want to see clearer pricing, compared to 51% of managers in 501-750 organisations and 49% of CIOs in organisations of 751-1000 employees. Clearly as companies grow in terms of complexity and technological deployment there is a greater need across the Board for projects to deliver both in terms of ROI and business benefits – and for the costs and advantages to be self-evident. CFOs may therefore be interested in a recent study of mid-sized organisations moving their existing production IT environment to SunGard’s Infrastructure-as-a-Service (IaaS) model whereby an average reduction of total IT running costs by between 35% – 55%2 could be demonstrated. 2 The calculations have been based on real-life numbers across entire business budgets and SunGard’s experience of working with 10,000 customers, SunGard investigated the relative cost of ownership (RCO) of adopting cloud- based Infrastructure as a Service. The investigation took into consideration not only the basic in-house data centre and infrastructure maintenance costs, but also include ‘invisible’ ancillary charges that are often overlooked when considering the expense of moving to the cloud, including such items as hiring staff to run 24/7 data centres; financing in-house data centre builds and the costs of power, security and rates.
  • 16. 16 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER But which cloud? There is little wonder why there is so much confusion. The cloud is not a ‘one size fits all’ environment. A rapidly expanding bandwagon of technology hosting businesses is growing; all are equipped to provide cloud services in one form or another, but existing and potential customers need to ascertain precisely what they want the cloud to do for them and develop their strategy accordingly. The diagrams below depict the cloud’s five essential characteristics and the spectrum of choices – with possible deployment and servicing options that exist and which may help inform buying decisions. Five essential characteristics of a cloud Consumer concerns are abstracted from Service provider concerns through service interfaces On-demand scalability adds or removes resources as Scalable & Elastic needed, flexible contracting (short term, ease of exit) Multi-tenant Shared resources allow economies of scale Services are tracked with usage metrics to Metered billing enable multiple payment models Internet Services are delivered through use of standardized Technologies identifiers, formats, and protocols Spectrum of IaaS Cloud Solutions Hosted Closed Community Hosted Commodity Enterprise Private Private Private Public shared Cloud Cloud Cloud Cloud cloud For use by a For use by a Publicly group of For use by a group of accessible, For use within a collaborating single enterprise collaborating developer What single enterprises, but via a service enterprises, but oriented shared enterprise including supply provider via a service cloud or demand providers infrastructure chains Service Providers Commodity DIY DIY Service Providers e.g. SunGard, clouds e.g. Who (by an (by an Savvis, e.g. SunGard, Amazon, enterprise) enterprise) Terremark, Savvis Rackspace Rackspace Source: The 451 Group, SunGard customer research SunGard It is therefore essential that enterprises seeking the benefits of cloud computing ensure that their cloud providers can deliver the levels of capability, transparency, security, availability and control that they need and should expect. Additionally, enterprises need to ensure that providers can accommodate both physical and virtual environments.
  • 17. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 17 Four Infrastructure Deployment Models PUBLIC PUBLIC Hybrid cloud: Public cloud: composed of two made available to or more clouds the general public Compute Database Compute Database that remain unique Services Services Services Services entities but are bound together by Storage Storage standardized or Services Services p proprietary technology that enables data and t a application portability t Int ne et er er rn Int ne te In t PRIVATE Community cloud: Private cloud: Enterprise shared by several operated for a single organizations. It may organization. It may Compute Database Services Services Compute Database be managed by the be managed by the Services Services organizations or a organization or thirdparty and may third party and may Storage Services Storage exist onpremise or exist on premise or Services off premise. off premise. Intra net Source: Cloud Computing Use Cases, a white paper produced by the Cloud Computing Use Case Discussion Group, Version 2.0, 30 October 2009 Public cloud: is made available to the general public. In a public cloud multiple customers share servers, storage and connectivity as well as the operating environment and resources are dynamically allocated according to levels of demand. It enables the deployment of an entire IT infrastructure without the capital costs associated with ‘owned’ systems and offers pay-as you-go usage and elastic capacity. In a public cloud, access is usually through standard – and that means shared – Internet connections and all management of the, again, shared environment is in the hands of the service provider. Private cloud: is operated for a single organisation. It may be managed by the organisation or a third party and may exist on or off premise. A private cloud offers a closed operating environment with applications and resources dedicated to one customer. With extremely secure Internet connections, data never shares space with data from any other business. In addition to offering the benefits of a public cloud in terms of elasticity, dynamic provisioning, multiplexing and pay-as you-go billing, private clouds offer a more bespoke solution and can be configured to provide whatever components of security, control and auditing are required. Some providers offer either public or private cloud systems. Others, most likely to be established businesses with greater expertise and more advanced technology, can provide both, and even offer interaction between public and private environments without compromising security. For example, this interoperability allows users to run applications in-house, to modify and store data that lives in the cloud and vice-versa. Hybrid cloud: composed of two or more clouds that remain unique entities but are bound together by standardised or proprietary technology that enables data and application portability. Many IT specialists expert agree that this ‘hybrid’ model is the real future of cloud computing. The concept of hybrid constituting a private/public cloud combination is evolving to recognise that companies transitioning to cloud are likely to have a requirement which will need to combine virtual and physical infrastructures. Hybrid solutions will then need to offer appropriate technologies and environments to deliver applications and data irrespective of where they reside, all whilst ensuring availability, security and resilience. Community cloud: shared by several organisations. It may be managed by the organisations or a third party and may exist on premise or off premise.
  • 18. 18 Cloud – Challenges and Opportunities for the C-suite WHITE PAPER Creating an enterprise-class cloud solution… An enterprise cloud offers a virtualised, multi-tenant infrastructure that can provide many of the same benefits as running a private cloud for your company, without requiring the same up-front investment. Unlike most public clouds, an enterprise cloud also lets you control many of the resources and policies you are used to controlling, such as IP addresses, network layout, network transport (in addition to internet), and monitoring and backup policies. In addition, all virtual machines (VMs) can be protected by an enterprise-class firewall. For companies that want to focus less on IT operations and use their high-level technical people for important business goals, an enterprise cloud is more appropriate. The enterprise cloud offers management and systems monitoring services just as in-house personnel would. If an application hangs or crashes, the enterprise cloud technicians take action to restore it. They also install patches and new software releases, take backup copies, and proactively monitor uptime, storage capacity, usage, etc. In short, an enterprise cloud provides the infrastructure and computing resources for current and future requirements, and is provided with the management and monitoring services required to ensure that critical operations remain available and secure. Benefits of a comprehensive IaaS solution Reliability Operational Efficiencies Innovation Increase availability Reduce time to provision, Access to new capabilities & performance move, or change & business solutions SLAs for critical Increase time spent on Service enablement applications strategic initiatives via new technologies & processes Cost Change Management Reduce capital expense Critical Areas Need for additional resources (equipment Shift from Capex to Opex for Enterprise or staff) Defer or eliminate data center expansion Adoption Manage dependencies on others (e.g., vendors) Staff Expertise Customer Service Data Center Standards Expertise Focus on quality of the Security Round the clock support customer experience Regulations (e.g., PCI) Tailor solutions using Local & personable Procedures (e.g., standard components ISO standards, ITIL)
  • 19. Cloud – Challenges and Opportunities for the C-suite WHITE PAPER 19 Conclusion It’s no longer rational to think of the cloud as an emerging technology. It is one of the fastest growing and potentially most significant innovations in a generation and it is destined to reshape the IT landscape. Cloud computing has thus gained widespread acceptance because it saves money and provides greater agility than in-house data centres, allowing companies to focus on their business – not their IT. However, there are a plethora of businesses offering cloud solutions and it can be difficult to find the wood amongst the trees. Concerns remain, particularly around the security of data but also about losing control of systems and data and the risk of operational downtime. But why? Data is either secure or it isn’t. Data is either available or it isn’t. You have the requisite level of control or you don’t. For buyers Any enterprise looking for a cloud solution must define precisely what it needs and expects from a cloud-based IaaS solution and then satisfy itself with the provider’s capability to fulfil those requirements through a thorough evaluation – and might even want to consider third party audits. It must examine the viability of the vendor’s business; the expertise it applies to providing individual solutions and its track record of managing the availability and security of data. It must also look for accountability and ask what resources are in place to enforce service level agreements. The provider must also be conversant with customer-domain-specific regulatory requirements governing the whereabouts of data. It’s worth repeating the mantra that ‘the cloud’ is not a one-size-fits-all solution. Each enterprise will have its own demands and priorities – including, perhaps, the need to knit their cloud-based IaaS environment with their physical one. Look for a provider that can demonstrate their abilities to provide a comprehensive ‘menu’ of services – and offer transparency in terms of the costs. Ensure your data isn’t held in a proprietary format, which makes it difficult and expensive to move to another vendor. Be prepared to seek detailed answers, particularly when it comes to: Focused expertise Flexibility Availability Scalability Manageability Experience and track record Proportional, predictable, affordable TCOs.
  • 20. Conclusion (continued) For Vendors Cloud providers must deliver the levels of transparency, security and control that their customers clearly need and should expect. The vendor must be able to demonstrate its capabilities in a clear and concise manner: offer proof of its viability as a business; the expertise and resources it applies to providing individual solutions and its track record of managing the availability and security of data. It must demonstrate its accountability, and be able to detail precisely the resources that are in place to enforce service level agreements. The provider must also prove that it is able to satisfy customer-domain-specific regulatory requirements governing the whereabouts of data. Business continuity and disaster recovery services are a fundamental requirement for most enterprises, simply to protect the viability of the business and to comply with legal requirements. The cloud is no different, in fact it is an extension of the platforms and processes that may be deployed to help businesses enjoy uninterrupted access to their key information. SunGard Availability Services, for example, has built its success in the business continuity and disaster recovery sector over five decades, and operates four purpose-built fully- resilient Technology Centres across the UK and 34 worldwide. Each is linked to the others by multiple secure and fast links. Its enterprise-class private cloud services can be spread across multiple data centres for double or even triple resilience. Ask to see where your data is kept and many providers will show you a humming suite of hardware and be unable to detail precisely where yours resides. SunGard can point you to individual servers: it builds and configures each individual component of a cloud for every customer and assigns discrete management teams for each solution. For any CIO looking to build out a cloud solution, and who quite rightly places data resilience, security, availability and recoverability high on the list of concerns to address, it is important to partner with an organisation who factors such attributes into the DNA of their solution. That way, armed with a sense of what needs to be demonstrated by any prospective cloud provider, an organisation should be able to enjoy the business benefits of cloud in the absence of the pitfalls. United Kingdom & European Head Office, Unit B Heathrow Corporate Park, Green Lane, Hounslow, Middlesex TW4 6ER 0800 143 413© 2012 SunGard Availability Services (UK) LimitedSunGard and the SunGard logo are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in theUS and other countries. All other trade names are trademarks or registered trademarks of their respective holders. V2:01/12