Cloud services deep dive infoworld july 2010

SPECIAL REPORT

JULY 2010

Cloud Services
Deep
Dive

Create your own cloud
computing strategy
Copyright © 2010 InfoWorld Media Group. All rights reserved.

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i Cloud Computing Deep Dive 2

Running your business in
the clouds
Look closely at your IT needs and limitations before you determine which cloud
services are right for you

i By David S. Linthicum Using the variety of cloud computing known as SaaS
(software as a service), for example, you can decide to
THE HYPE ABOUT CLOUD COMPUTING would adopt a sales management system at 8 a.m. on Monday
lead you to believe it supplies the “magic beans” we’ve and be up and running at 9 a.m. the same day. Applica-
all been waiting for to fix our past and future mistakes. tions that would typically cost hundreds of thousands of
But the truth is, rather than introduce elaborate new dollars to select, install, and deploy can be had for less
technologies or solutions, cloud computing tends to con- than $100 per month, per seat.
centrate on changing the way we consume them. The same nimbleness applies to storage, compute,
Cloud computing refers to an almost infinite variety and even application development and testing. In many
of services, from browser-based spreadsheets delivered cases, the cloud provides an agile, cost-effective alterna-
by Google to the computing infrastructure for a 48-hour tive to purchasing, installing, and configuring your own
actuarial calculation. To fall under the rubric of “the hardware and software. As your business changes, you
cloud,” these services must have several characteristics. can change IT along with it using cloud-based systems
First, cloud services must be self-service: If you can’t that have little to no deployment latency.
go to a Web form, set up an account, and start provision- Such agility can directly enhance a business’s ability to
ing the service you want, then it’s not a cloud service. enter new markets. The potential to scale capacity and
Second, cloud services must scale transparently: If you provide access to new services on demand can provide
need more horsepower, you needn’t worry about pro- a clear strategic advantage. Small businesses typically
visioning physical servers, because a virtualized server don’t have a great deal of cash for IT. When you avoid
infrastructure reallocates virtual machines as needed. capital expenditures, you lower risk and free up money
Along the same lines, that infrastructure is shared—differ- that can be used to grow the business.
ent accounts use the same pool of physical servers and But switching from internal IT to the cloud has its
storage, with secure logical boundaries to protect data. own risks—not the least of which is switching itself. There
Some large companies have the resources to build are always hazards when changing your technology.
cloud services themselves—the so-called private cloud. These include not meeting the scalability requirements
But if small and medium-sized businesses want cloud of the business, opening up security issues, or adopting
services, they must rely on the public cloud: subscription- new cloud-based systems that do not meet expectations.
based or pay-per-use services that, in real time via the For instance, some businesses have found that certain
Internet, extend IT’s capabilities. SaaS applications suffer from performance issues that
can affect productivity.
TO CLOUD OR NOT TO CLOUD Then there’s the lock-in problem. When you move
Cloud services sound attractive, particularly if your data and applications to a cloud provider, it may be hard
resources are limited. You don’t need to pay up front to move to other cloud providers or back to an on-prem-
for software licensing or server hardware, so you’re faced ises infrastructure. This problem arises because many
with operational expenses rather than capital investment. cloud computing providers, in their haste to get to mar-
Increased business agility may be the biggest payoff. ket, use proprietary mechanisms to deploy applications

INFOWORLD.COM DEEP DIVE SERIES J U LY 2 010


and store data. You may discover you don’t like your their functionality through a browser-based UI—just as
cloud solution, but it may be too difficult or costly to most locally installed enterprise apps do today, so the user
go elsewhere. experience is quite similar.
Another point about cost: In many instances, cloud The practical difference is that SaaS providers shoulder
computing providers are actually more expensive than the burden of deploying and maintaining the software,
on-premises systems when you look at overall costs servers, and storage instead of the customer. Often, the
across a long period of time. Amortized capital expenses provider charges some minimal up-front fee for provi-
look great in the out years; on the other hand, pay-per- sioning or migration, but thereafter, the customer pays
use or subscription fees always rise and may jump when on a subscription basis, typically per seat. Set up the user
users adopt tantalizing new extra-cost features. accounts and you’re ready to roll.
Finally, you need to consider compliance. There are Enterprise SaaS providers push out updates on a regular
many regulations about how data, such as patient data basis, so all customers get the latest functionality without
and financial data, is stored, protected, and managed. For having to go through the pain of upgrading locally. At the
example, in many European countries it’s illegal to send same time, customers can typically configure their appli-
some financial data outside of the country’s borders, so cations to adapt to their needs, and within certain restric-
you need to make sure your cloud computing provider tions, those customizations still function when updates
is not replicating to remote data centers. Moreover, there occur. In addition, many enterprise SaaS providers have
are very strict laws about the management of patient open APIs, so customers can develop extensions to the
information. If data is mismanaged and not secured in core applications.
the ways as specified by the law, you could find yourself But cloud-based SaaS applications are still applications.
in a great deal of hot water. When selecting any software, you need to consider your
requirements first and then evaluate the applications that
are available, whether on demand or installed locally. Con-
DECIDING WHICH CLOUD SERVICES sider the costs associated with these solutions across a
TO ADOPT five-year span.
By itself, the question of “moving to the cloud” makes little
sense. What exactly do you wish to move and what are the BEST PRACTICE: Understand your core requirements
specific risks and rewards? And if a cloud solution seems and the cost/benefit trade-offs of adopting enterprise SaaS
attractive, you must always compare it against the equiva- applications in the cloud. Keep in mind that, over time, you
lent locally installed solution, whether ERP or email. Finally, may pay more to a SaaS provider than you would pay for
when you choose to adopt, best practices in each functional locally deployed hardware and software.
area can help ensure a smooth transition.
EMAIL IN THE CLOUD
ENTERPRISE APPLICATIONS Most of us already have at least one email account in
Enterprise applications are the low-hanging fruit of cloud the cloud—through Gmail, Hotmail, or Yahoo Mail—
computing. These SaaS applications provide an affordable so email may be the easiest cloud computing applica-
way for small businesses to reap the benefits of high-end tion for businesses to understand. In fact, many small
enterprise software, such as ERP and CRM applications, businesses already shun the hassle of maintaining mail
which would otherwise require installations costing half servers and have chosen either free accounts or have
a million dollars and up if the customer licensed the soft- established paid, low-cost enterprise accounts with the
ware and deployed locally. likes of Google or Microsoft. Even large organizations,
The classic example is Salesforce.com, which was a such as the city of Los Angeles, have moved to cloud-
pioneer in SaaS and has been one of the leading players in based email to save millions of dollars over time.
CRM for years. But today, you can find robust SaaS appli- The enterprise versions of cloud email systems typi-
cations across all enterprise software categories, from ERP cally come with SLAs that guarantee 99.9 percent
to SCM to asset management. All of these apps deliver uptime. They also have much higher storage limits—and,



of course, get rid of those annoying ads. Moreover, the you want the full range of advanced features, nor if you
email clients often integrate with other cloud-based want complex Microsoft Office documents to be view-
applications, such as calendaring, document sharing, or able and editable in all cases. That’s why most people
browser-based office productivity suites. use SaaS productivity suites as a complement to Micro-
The core value of cloud-based email is to allow enter- soft Office, not a replacement.
prises to escape from the licensing costs of Microsoft That said, there is change afoot. Many companies are
Exchange Server—and from paying administrators to tired of the high licensing fees incurred by Office—and
maintain the company email system (sometimes a sur- the retraining demanded by Office 2007 rubbed many
prisingly difficult task). There will still be some admin- businesses the wrong way. As Google, Zoho, and others
istrative activities required with cloud-based email, just add features and enhance Office compatibility, some
no hardware and software to maintain. small businesses may seriously consider making the leap
Part of the reason locally maintained email has gotten to the cloud, especially for employees with both light-
so difficult is the steady increase in requirements over duty requirements and a persistent need to collaborate.
the last decade. Enterprise cloud email providers offer
all the modern amenities: archiving, spam blocking, mal- BEST PRACTICE: Consider the core business functions,
ware protection, and a range of compliance features. If the needs of the end-user, and the distribution of the team.
you have special compliance requirements, make sure
your provider—or one of its partners—can accommodate DEVELOPMENT AND TESTING
them. Otherwise, you may have to stick with a mail When companies large or small discuss “using the cloud,”
server in the back room. development and testing generally appear at or near the
top of possibilities. Organizations that build and deploy
BEST PRACTICE: Understand your email needs and applications typically have huge hardware and software
examine all aspects of cloud-based email systems, such costs that include maintaining development platforms
as monthly costs, SLAs, the amount of administrative time as well as platforms for all aspects of application test-
required, and special features such as archiving and com- ing—including performance, integration, and stability.
pliance features. PaaS (platform as a service) cloud computing pro-
viders have emerged over the last few years to provide
OFFICE PRODUCTIVITY APPLICATIONS application development and testing services. Although
Office productivity suites from Google, Zoho, and Google App Engine is the best-known PaaS player, other
others—including most recently Microsoft itself with major players include Salesforce’s Force.com and Micro-
Office Web Apps—provide free SaaS alternatives to soft’s Azure cloud computing platform.
Microsoft’s venerable Office software. As with SaaS Beyond PaaS, there are many IaaS (infrastructure as
email, enterprise versions of these apps are available a service) providers that provide complete development
for a minimal cost per seat (or, in Microsoft’s cases, a and testing platforms on demand—typically open source
Microsoft Office license). environments. Again, the idea is that the cloud provider
The real value of SaaS productivity applications is not supplies the hardware and software development tools
in the apps themselves but in the collaborative possibili- as a service, typically replacing dozens of on-premises
ties they offer. It’s actually quite useful to work on the systems and licensing fees.
same spreadsheet or presentation in real time via the Why such an interest in development and testing in
Web with remote users. Indeed, entire companies rely the cloud? Mainly because these activities have a begin-
on Google Apps or similar services, with employees near ning and end point. In this day and age, you don’t want
and far collaborating as if they were all sitting together to provision infrastructure for a temporary activity only
in the same room. to have that infrastructure lie fallow until the next work-
But can SaaS versions of office productivity suites load comes along. Here, cloud computing’s pay-per-use
actually replace Microsoft Office—or even its open model is particularly cost-effective.
source clones, IBM Symphony and OpenOffice? Not if Determining whether your development and


testing project is right for the cloud is simply a matter files and data to the cloud is not enough to ensure suc-
of understanding your own requirements and selecting cess. The cloud is simply an inexpensive alternative to
a PaaS or IaaS to match. From there, it’s rather inexpen- remote wholly owned systems, but all clouds—and their
sive to do a quick prototype to see whether the use of ability to support DR services—are not the same.
cloud computing is practical. If you need to develop
in an environment that includes licensed software, make BEST PRACTICE: Create a larger DR plan—don’t just
sure you take any potential costs for that into account. jump into the clouds as a DR strategy. Make sure to con-
sider the reputation of the cloud provider, as well as secu-
BEST PRACTICE: Consider the types of applications rity and privacy.
being developed and the testing requirements. Evaluate
both PaaS and IaaS solutions and make sure to do at least BUSINESS INTELLIGENCE
one prototype before moving to the cloud. Small- to medium-sized businesses typically can’t afford
business intelligence software licensing and infrastructure
BACKUP AND RECOVERY costs. Here, the cloud is really opening up new frontiers.
Using the cloud as a DR (disaster recovery) platform has The core idea behind cloud-based business intelligence is
some clear cost and technology advantages. Those who to allow those shut out of big-ticket, on-premises BI systems
need to ensure that their business continues no matter (such as those from IBM or Oracle) to gain more basic
what—and must do so on a budget—will quickly learn but nonetheless valuable business intelligence on demand.
that cloud computing platforms (typically IaaS providers Many cloud systems provide the ability to manage
that supply storage as a service) are prime contenders for huge amounts of data, well into the petabyte range,
inexpensive places to replicate data. These cloud-based thanks to the cloud’s ability to leverage any number of
DR sites can be used as redundant data storage loca- provisioned servers—and through new approaches to
tions, for the simple backing up of files, or as hot standby “big data” management such as MapReduce using open
sites, ready to provide the core location of data processes source products such as Hadoop.
until the primary data center is restored. Suddenly, smaller companies can use massive
Like development and testing, DR is often high on the amounts of data to make business decisions, such as the
list of cloud possibilities. Shared platforms, which charge ability to plan for inventory levels based on tracking with
only for the storage and compute resources that you use, specific market indicators, or sales-by-this and sales-by-
are almost always cheaper than creating a remote DR site, that reporting. The cloud lends itself to using intensive
which typically means paying for servers and data center resources for short amounts of time, and business intel-
space you’ll probably never access. Larger companies may ligence applications fit perfectly into that model, allowing
be able to afford their own DR sites, but for many smaller small to medium-sized businesses finally to understand
businesses, a cloud-based solution may be the only afford- the true meaning of their data.
able way to engage in sound DR practices. All that doesn’t change the fact, however, that
The cloud provides a good alternative to both tra- obtaining a deeper understanding of your data through
ditional backup and recovery services as well as use of business intelligence typically requires specialized exper-
a geographically different site for those services. If you tise—and pricey consulting. You’ll also need to select a
lose your data center due to a hurricane in Florida, your cloud-based database that can handle the amount of
cloud provider with points of presence all over the world data you’re looking to mine and ensure that you have
should be able to keep your data safe. Also, you have the reporting and analysis tools you need to gain mean-
the option of building systems and managing data in the ingful insight.
cloud to create a failover site should core on-premises
systems fail or be destroyed. BEST PRACTICE: Look closely at the features of the
When considering the use of DR with cloud comput- cloud provider when moving to business intelligence in
ing, frame your decision in the context of your overall DR the cloud. Look at the “all in” costs, including the consulting
or business continuity strategy. The simple act of copying talent that may be required to get running.


IS THE CLOUD RIGHT FOR YOU? reevaluate the affordability of those systems, given the
Or should the question be, is the cloud a good option new opportunities in the cloud.
for you, considering the nature of your business and Second, make sure to do your homework about the
the limited ducats you’re able to spend? The cloud is true ROI of using cloud computing for some of your
bringing applications to smaller players who were once IT needs. Look at costs and benefits across a three- to
out of reach, and it’s quickly changing the playing field five-year horizon. That’s a good indicator of value. In
in terms of who can access and utilize enterprise-level certain cases, cloud computing systems could be more
cloud applications and infrastructure. expensive than on-premises systems, despite the cloud
There are other factors you need to consider as well, computing hype crowd telling you otherwise. The truth
including how to synchronize data now stored in the is somewhere in the middle, and it depends upon your
cloud back into your on-premises systems. Most of those organization.
who move to the cloud will do so in segments, so inte- Finally, stay on top of cloud computing developments
gration is going to be a persistent problem. as part of your strategy. If no cost-effective solutions exist
Also, make sure to keep security, privacy, and per- today in the cloud, chances are a few will show up next
formance on your radar. Despite what the naysayers are year or the year after. Cloud computing is evolving rap-
spouting, these are typically easy problems to solve, but idly, and cloud computing providers should get better
you need to do some advanced planning. and cheaper as time progresses.
The best way to proceed is to understand your exist- Cloud computing is an evolution in thinking, technol-
ing limitations first and map that to the core needs ogy, and the way we consume IT resources. There are
of your existing IT solution. There is always some- no magic beans here, but some real opportunities now
thing desired that has not been affordable in the past, and in the future, particularly for smaller enterprises that
from CRM to calendar sharing. Now is a great time to can’t afford big-ticket, in-house solutions. i


Cloud services deep dive infoworld july 2010

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