Cloud: Fuelling the crisis of confidence in corporate IT?


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Delivered at the CIO Summit in Brisbane, Australia on the 8th November

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Cloud: Fuelling the crisis of confidence in corporate IT?

  1. 1. Cloud: Fuelling thecrisis of confidence incorporate IT?ROB LIVINGSTONE- PRINCIPAL, Rob Livingstone Advisory Pty Ltd, and- Fellow, University of Technology, SydneyBrisbane, 8th November
  2. 2. What am I going to cover?1. A perspective on Cloud2. Next few years – from confusion to calm3. Some of the less obvious challenges of public cloud4. Migrating to public Cloud: A 14 point „ready-reckoner‟5. Kryptonite and the „power‟ behind the appeal of public cloud.6. The spectre of a Shadow IT Department7. The shift away from the cost centre8. Influences on your career9. The future is now10. Discussions and questions
  3. 3. 1. A Perspective on Cloud Maurits Cornelis Escher (1898-1972) - most famous for his artworks of so- called impossible structures, such as Ascending and Descending, Relativity, his Transformation Prints and more Relativity by M. Escher
  4. 4. 1. A Perspective on Cloud It all depends on your perspective… • No absolutely precise definition • No defined standards • It can mean different things to different people under different circumstances
  5. 5. 1. A Perspective on Cloud Cloud is about getting from one place to a better place, …. however ….The challenge is to know the risks and the endpoint with certainty
  6. 6. 2. Next few years – from confusion to calm“There are known knowns. These are things we knowthat we know. There are known unknowns. That is tosay, there are things that we know we dont know. Butthere are also unknown unknowns. There are things wedont know we dont know”- Former US Defense secretary Donald Rumsfeld , 2002 Let‟s start our Cloud journey to turn the unknowns into knowns!
  7. 7. 3. Some of the less obvious challenges of public cloud1. Which security standards apply to the cloud, and to which components of the vendor‟s infrastructure? • Review the statement of applicability (SOA) of the appropriate Certification • Is your Cloud solution in-scope of the SOA?2. Risk transfer • Can I buy insurance in the event of a problem with the Cloud?3. Can you implement a SaaS Escrow arrangement in case the provider folds? • Some providers cannot offer Escrow due to the technical design of their infrastructure4. Does the provider have a disaster recovery plan? • What form does it take, and what scenarios does it cover?5. What warranty exclusions or limitations apply to all services offered. • Are these important to your organisation?
  8. 8. 4. Migrating to public Cloud: 14 point ‘ready-reckoner’. If the answer to these questions are YES, then you should be able to progress relatively to the public Cloud: 1. Is this a completely new system?... AND…… 2. Will the system always be standalone? (i.e. you do not need to build any system interfaces) 3. Are your business requirements likely to remain relatively static? 4. If the vendor goes out of business (or shuts down their service) do you have a workaround? 5. Are there any contract early termination penalties for services no longer needed (Incl. any write-off‟s of ancillaries)? 6. Are the Cloud system boundaries clearly defined? 7. Are managerial accountabilities clearly defined and assigned? 8. Is there an immediate „crisis‟ on your hands and Cloud is the only realistic alternative given its immediate availability?
  9. 9. 4. Migrating to public Cloud: 14 point ‘ready-reckoner’. If the answer to these questions are YES, then you should be able to progress relatively to the public Cloud: 9. Is your data in the Cloud free from any State or Federal record retention laws? 10. Are you comfortable in having your data (possibly) resident in a foreign legal jurisdiction? 11. Can you manage, maintain and configure the system without the need for IT programmers or other IT specialists? 12. Is your data free from specific legislation (Eg Privacy Act) or is not subject to contractual obligations (eg major customer contract)? 13. Are you happy placing your most sensitive / critical and important intellectual property in the Cloud? 14. Are you looking to use the Cloud system for a short period of time only? (ie: Serving a short term need such as a major project)
  10. 10. 5. Kryptonite and the ‘power’ behind the appeal of public cloud.Is this what happenswhen public SaaSmeets the true facts?
  11. 11. 5. Kryptonite and the ‘power’ behind the appeal of public cloud. Risks associates with asymmetry of understanding of ‘Cloud’ between IT and the business: • While there is largely a solid understanding of what‟s inside the public cloud „black box‟ by CIOs and those within the IT industry, this is largely not the case for line-of-business executives and managers. • As long as this asymmetry of understanding exists: 1. Potentially inappropriate decisions regarding enterprise systems may be made by the business on behalf of IT 2. The full relevance and potential of cloud computing may not be fully realised in organisations. 3. The business may not end up performing appropriate due diligence, which may increase risk exposure • Are you ready to manage this if it occurs in your environment?
  12. 12. 6. The spectre of a Shadow IT Department• Cloud computing in all its forms and flavours is changing the way IT services can be delivered to businesses.• For the first time, business users are able to have a choice amongst a variety of IT services, without always needing to engage with their internal IT departments.• If IT cannot deliver in a manner that meets the business users‟ expectations in a timely and cost-effective way, the business now has plenty of other options.• Can lead to Shadow IT.• Shadow IT will flourish in organisations where: • The prevailing organisational culture is somewhat relaxed about good governance and/or • Where there are poor business-IT engagement and alignments, and/or • IT is just not meeting the real needs of the business
  13. 13. 7. The shift away from the cost centre• CIOs have often had to battle the perception that IT is slow and merely a cost centre.• The perceived speed and simplicity of cloud is shaping the conversations across the business on the role of IT.• As such, IT is now increasingly being expected to deliver more utility-like services to the business – if not, the Shadow IT department will!• It is therefore important for IT Departments to fully understand the cost drivers in a utility costing model, rather than the traditional fixed „cost centre‟ approach.• Those without a solid appreciation of cost accounting, and the cost drivers within IT will be poorly equipped to provide meaningful comparative cost analysis for the IT services „as-a-service‟ to the business. • ie: Is $50/month really cheaper than the $1Million capital investment?
  14. 14. 8. Influences on your careerHere are few thought starters on how to mitigate against anyunplanned career changes that can arise from the „consumerisation‟ ofIT*:• Read widely and be well informed about influences that are or could impact you, your department, business unit, company / organisation and industry.• Start developing trusted professional networks outside of your employer• Broaden your skills base – especially if you are trading salary for largely technical expertise• Develop your own personal „business plan‟* ….or anything else, for that matter!
  15. 15. 9. Cloud – The future is now1. Cloud technology, as with any other innovation, has the potential to do things cheaper, faster and better.2. Cloud has the potential to be a real game changer for the astute3. It also has hidden pitfalls for the ill-informed4. Understand the influences it will have on your IT career, and develop your own personal „business plan‟5. To achieve the real benefits of Cloud technologies, understand: • the true cost • the value • the risk • when to buy • what to buy, and • when to exit the technology and/or switch horses.
  16. 16. 10. Discussions and questionsRob Livingstone Advisory Pty Ltd ABN 41 146 643 165W1: www.rob-livingstone.comW2: www.navigatingthroughthecloud.comE: rob@rob-livingstone.comP: +61 2 8005 1972P: +1 609 843 0349M: +61 419 632 673F: +61 2 9879 5004 rladvisory© All rights reserved. Unauthorised redistribution not without prior approval