The CLOUD. For techies - it is as real as an ashtray - to the non technical - it is invisible - can't be held in your hand or described - find out what all the chatter is about!

1. Cloud Primer for Client
Joe Orlando Beroe Page 1
A rose by any other name is still a rose. This is much the same with the way people look at
“cloud computing.” Not so long ago, Application Service Providers (ASP) came to the markets
with innovative approaches to provide services and applications that people and organizations
would “pay for what you use” model. It fell on deaf ears, for the most part until the
marketplace reshaped the offer and introduced a new model called “Software as a Service” or
Saas – designed to virtually provide all the services and benefits of an application – as you
purchased the software, servers and networks – but simply paying for it all as a metered
service- “pay for what you use.” Sound familiar? Saas has fared better than most ASP but now
Saas is being reborn as a kernel of the “cloud services” innovation. “Pay for what you use.”
The most commonly known services delivered using this innovative model has been around for
many years – people with HotMail; Yahoo Mail; and GoogleMail accounts are some simple
examples.
That brings me to position the two primary sections of this new model – “cloud computing” and
“cloud services.” The latter is described above. Cloud Computing is broad and often
misunderstood. Some confuse Cloud
computing with GRID computing – a method
to spread processing requirements across a
wide number of processing elements across a
network – typically the internet – in a
managed fashion to derive the same benefits
of, say, a super computer. This is a
misconception.
Cloud computing is an approach to more fully
leverage the technology known as the world-
wide-web. In the early years of the internet –
most pictograms, diagrams, charts and
presentations that addressed the internet in
some fashion would insert clipart of a cloud. It represented the transit or connection vehicle to
bring together people, organizations and enterprises around the world.
The evolution of the Cloud has been to recognize that there are elements with an IT
infrastructure that don’t have to be resident or installed in any particular place or even owned
or installed by any individual organization – creating “virtual” resources via the internet.

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Joe Orlando Beroe Page 2
Industry pundits to include Gartner,
Yankee, IDC, Aberdeen and scores of
others have been relentless in trying
to get their arms around what this
can/will mean by definition.
One commonly accepted definition is
a way to increase capacity or add
capabilities, as needed, without
having to invest in new
infrastructure, training new
personnel, or licensing new
software. This approach brings to
the surface a metered approach to computing in real time or over the internet on a
subscription basis or pay-for-use. The objective is to significantly make more dynamic and
responsive the dependence on available technologies.
Latest trends for cloud computing in terms of
• Sourcing (how generally the large enterprises procure this technology from the
vendor)
Currently there are dozens of vendors providing scores of services and
applications ranging from application services (SalesForce.com as an example) to
secure data storage to development environments to on demand compute
power. The primary issues are Quality of Service and Service Level Agreements
that define services, metrics, deliverables, price tiers based on how much of the
services are used over what periods and penalties for failures. Ths is a summary
list –not all aspects.
What is commonly offered includes:
Saas – applications access via browser or VPN
Utility Computing – Amazon, IBM, Sun and others offer storage capacity
and server power on demand to meet fluctuating demand with flexible
offers. Generally, these are non-mission critical services, but some day
may become mission critical.
Web Services – like email, CRM, US Postal Services and the like

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Joe Orlando Beroe Page 3
Platforms as a Service – Develop applications “in the cloud” that will be
delivered as Saas on the service providers infrastructure.
Managed Services – Spam and virus protection services – for example,
have been around for some time.
Service Commerce – like check clearing, expense reports, claims
processing, even administrative services, for example.
Internet Integration – the hub or facilitator that enables and facilitates
the relationships between Saas providers and users.
• Industry (which are the industries adopting private cloud and how they are using
this technology considering the existing infrastructure)
Most all industries are “dipping their toe” into cloud computing to see if, in fact,
there are real benefits to moving services into the Cloud
• Adoption rate
The current economic climate is pressing capital budgets and pushing IT
expenditures down – driving more organizations to look at this pay-as-you-go
model. IDC predicts spending in the Cloud to triple over the next five years
reaching over $40 billion by 2012. By 2012 they predict 25% of IT spend to be
spent “in the Cloud.”
1. What are the hardware, software required for the adoption of Cloud Computing and in
which departments it should be adopted in a typical large pharmaceutical company
One of the primary drivers of web services is that it can be made agnostic, for the most
part, and not require any specific technologies – as users. Providers of cloud computing
or to create internal cloud computing environments (the latest generation of sharted
services) requires real time monitoring, metering, balancing and performance
optimization tools but overall, it doesn’t demand any new architecture for the user
community. This is a benefit and a caution – lack of standard – security concerns –
service outages – are just a few concerns that are causing adopters to tread softly.
So, Pharmas (and others) will typically take more mundane applications that are not
critical to the operation of the business to move into the cloud. For example, employee
services, payroll, expenses, benefits, expense reports, are common. Sales force
automation, CRM, call center applications and others are additional examples.
2. Whether there is any restriction for the number of computers, laptops which are being used
in a cloud computing environment.

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The most salient selling point for the Cloud is that it grows and shrinks with the demand
and need of an organization – use more- pay more; use less – pay less. Dependent only
on the kinds of services contracted for and what the limitations are of the Cloud
computing environment.
3. What will be the impact of Cloud Computing on the procurement of other hardware (like
desktop PCs, laptops, tablet PCs, individual servers etc) and software how much % can they
save
As outlined above, it will replace capital budgets with operating expense budgets and, most
importantly, enable enterprises to move toward charge back or actual cost based
accounting to be attributed to the user groups, departments, and business units – more
accurate way to have the enjoyment of the technologies be paid for by those who use them.
IT can evolve to be the facilitators and integrators that they are intended to be but are most
often, instead, viewed as a source of tax and paying for that which some people feel they
don’t use.
4. According to my knowledge for the software which is needed, if one enterprise is going to
adopt Cloud computing they will have a single license rather than having many license. So
here my question is currently the enterprise will be having many licenses and many
hardware also, so by adopting Cloud Computing should they have forgo those or how they
will proceed with the current IT infrastructure set up
There is a new model in the Cloud – no license but a subscription for use – whether you use
their application and services or access applications the enterprise has built in the cloud
environment. There may be a “portal” license that looks like a license to manage access
points or user seats – but it is still largely viewed as a subscription.
5. What is the growth rate of the usage of Cloud Computing
As stated above – in these economic times – the growth rate is exponential – growing
three fold over the next five years in certain segments.
6. Major hurdles in adopting Cloud Computing in a traditional IT environment from the
perspective of pharma companies (is their any migration issues with respect to taking the IT
environment into the Cloud Computing environment and how to overcome these issues)
For pharma, there are no exception or specific issues for their segment – outside the
ones every segment faces around security, service quality, and metrics. It isn’t a matter
of migrating fromSAP to Oracle, per se, the real migration is of the data – into a scure,
reliable environment and accessed through tailored interfaces that act, look feel and
function much like what exists today or has been enhanced through business process
reengineering.

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7. What the enterprises does in terms of infrastructure, maintenance and services for
adopting Cloud Computing. How should a pharma company make change themselves to
adopt to this technology.
This is, in every aspect, outsourcing. The same considerations have to be taken into
account – how to manage the service provider, ensure security, be assured or reliability
and responsiveness and MOST IMPORTANTLY, understand the “path back” to either
bring things back in house or to move to a better service provider if things aren’t
working out… Many service providers (and those who valuate service providers) see
these service revenues as nearly constant or “golden handcuffs” as it may be too
difficult for an enterprise to go back or move.
8. Does these enterprises will be having their own in-house service provider or is it outsourced
any third party/vendor itself
It is an “either – or – or both” proposition. Larger enterprises can consolidate and
manage their own Cloud to deliver these shared services using the Cloud and tap the
Cloud, through a provider, when demand exceeds existing infrastructure (bandwidth,
storage, processing power, for example)
9. Will there be a regional Cloud Computing or Global Cloud Computing
Both, for example, virtual data centers are examples of regional vendors who provide
access to processors, storage and network capacity in a certain city or region. Also,
there are already global players that provide services almost everywhere.
The bigger names include:
Akamai, Amazon, Areti, Enki, Fortress ITX, Layered Technologies, Rackspace, IBM,
Microsoft, Tertemark and xCalibre.
10. In which department this Cloud Computing technology is applicable, profitable and
beneficial
The current assessment is being made around non critical applications and services that
may grow and contract due to seasonal demands ( order processing for catalogues, for
example) but most enterprise are looking at areas wherein there may new applications
to be adopted (call center, CRM, for example) and the cost to create the infrastructure
and create the applications would be daunting. Classic adopters include human
resources, sales, payment processing, IT (email, virus and spam filtering, data
warehousing), and marketing services.
11. How my client can adopt this technology in terms of whom they should contact , how they
can procure this technology, what price model they should adopt for procuring Cloud
Computing
As this is a very young industry, there are few “best practices” directed to the Cloud but
standard approaches will suffice. For example, know exactly first what is required, why,

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how to measure, and then there is an exploration of what is available by which vendors.
Clearly, the enterprise must know, well defined, what they want to keep control of and
what they are comfortable relying on the 3rd
party to deliver.
12. Who takes the decision of adopting this new technology in a large pharmaceutical company
As in my previous memos surrounding outsourcing, it is the same group. An assessment
has to be made well in advance to define the objectives – establish a baseline (what will
it cost for us to do this internally?) and who are the people this will impact?
Additionally, it is imperative that there is an active dedicated resource to regularly
manage the delivery of the services – taking input from all stakeholders and users.
13. What changes my client should bring for adopting this technology in the existing IT
infrastructure
Just as in outsourcing any IT related activities – the interface and hand off has to be well
defined and clearly understood to avoid the classic “finger pointing” when something
doesn’t go as well as expected. IT may have to address some encryption, access and
security policies put forth from a particular service provider – some may opt to establish
a VPN environment which comes with additional “handshake” requirements specific to
the environment inside the enterprise IT infrastructure and into the service provider.
14. Sourcing strategies for my client to adopt this technology (who takes decision, whom they
will approach, procurement method, what my client needs to do with respect to adopt the
technology)
I strongly recommend the same managed acquisition process as should take place for
any outsourcing procurement with defined roles inside the enterprise and within the
service provider. Legal, IT, Finance, the Business Unit, Users and an executive sponsor
(CFO, CMO, COO, CIO) are critical roles in solid SLA development and enforcement.
15. Regulations on cloud computing in different regions impacting a pharma companies.
I am not aware of any specific regulations inherent to Cloud computing – naturally,
requirements that exist for Pharma to operate regulated networks and ensure data
security, integrity and content authenticity will remain and regulators will likely hold the
Pharma responsible – those responsibilities are unlikely transferrable to the 3rd
party -
ultimately.
16. Does any of a pharma company have adopted this technology? If so name a few.
I am not aware of any in particular but I suspect some are utilizing tools like
SalesForce.com, for example.
17. What is the security concern related to this technology with pharma companies and how to
overcome these challenges.
This remains a particularly spirited area of contention and is a primary obstacle to
overall growth. While there are classic approaches to security and many will use

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commonly applied processes, there are no published standards. Specifics on security
have to be detailed and well defined – monitored, managed and assured through the
SLA and contract for services. Remember, the applications and the data can either be
segregated and well defined – costing a little more – or left to the service provider to
allocate, move, balance and optimize – leaving it more nebulous when it comes to
where, exactly, is my data.
18. Is it possible to have a single cloud computing environment through which my client form
different geographies across the globe can access to it.
Absolutely, an enterprise can create its own Cloud environment and develop all the core
tools and skills to gain the inherent benefits of Cloud computing and maintain complete
control. Additionally, just as in a managed service, there are providers who will step up and
segregate their Cloud to dedicate resources but this reduces the cost benefit to the Cloud
approach and is merely outsourcing infrastructure costs outside and creating operating
expenses over capital ones.