5 Steps to Cloud Success

Moving about the country speaking about cloud, the key pressures and talking points around the subject become very evident. I’ve been asked to list the 5 steps to cloud success so here goes.

1. Know the enemy

As you embark down the cloud path you will encounter opposition from within your organisation. Your IT department may have a competing agenda, as they may see cloud as ‘doing’ them out of a job. It’s true that the role of your IT department is changing, but they are still very important and have a key role to play in the future of how your organisation consumes it ICT resources. Your decision to go ‘cloud’ is an outsourcing decision, nothing more. The best way to handle objections from IT is to assess the risks and present your IT department with a clear documented strategy of how you will mitigate any risks and involve them in the process. Then they will have now choice but to support you. Perception is your biggest enemy so documenting a clear strategy will soon put any uneducated doubters in their place.

2. Compare costs of in-house versus Cloud

One of the key drivers to Cloud is cost. Software as a Service (SaaS) can drastically reduce the entry cost to large enterprise software platforms. And year on year it may still be significantly cheaper. Think of it like this; Instead of maintaining servers and software just for you, vendors can spread infrastructure and support costs across hundreds or thousands of customers; the economy of scale means costs of consuming ICT are coming down, it’s no longer too good to be true.

3. Assess the Risks

Call me crazy but it is more than likely that large cloud providers are more capable of managing data security and data privacy than your organisation. So you should stop thinking that putting your data in the cloud is unsafe. Their core business is ICT Infrastructure and their whole business model depends on their ability to keep your data safe. Make sure your agreement contains a clear transition out plan where your data comes back to you in a non-proprietary usable format on termination, ensure ISO standards and appropriate security mechanisms are in place, and get to work. If your provider’s data centre is outside of Australia it’s ok too. Classify your data and if it’s not appropriate, keep it in Australia. If you can take it off shore do it. But assess the risks and take action; don’t procrastinate. If privacy is your concern, Singapore is on of the safest places in the world to store data. If data sovereignty is your concern the you must have some pretty sensitive data. Classify it correctly and move on. Again, perception is the killer.

4. Get your facts straight

Cloud is the UTILITY MODEL of delivering ICT resources. Don’t worry about complicated explanations. You can now consume software and ICT resources on-demand. That’s take as much as you want, when you want, and only pay for what you use, like water, electricity, gas… The Utility Model. If you have all your ducks in a row and you know your facts about your vendor and the delivery model before starting the conversation you will have a much easier time of convincing others. Don’t let the explanation be ‘cloudy’.

5. It’s Not A Fad

Cloud is here and here to stay. In about 1890 the guys in the boiler room running the steam turbine electricity generator said electricity utilities would never catch on. They were wrong. Cloud is here to stay so embrace it and use it to your competitive advantage.

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Utility Model the way to go when defining ‘cloud’

Amongst all the hype and rhetoric about cloud, many people are unsure of what cloud actually is, and the cloud message has lost its way.

While a simple way to define cloud is as follows, there is a better way to look at it.

“Providing ICT resources over a network, as a service, in a dynamic and scalable way.”

This definition looks at five key characteristics of cloud. But not meeting one of the characteristics should not deprive a service of its cloud status, or of being a better way to deliver ICT resources, just because of a definition. Indeed a truer way to look at ‘cloud’ is to redefine it altogether as a delivery model; the ‘utility’ model of delivering ICT resources.

Back in the late 1800s the power industry reached a maturity where electricity could be delivered ‘as a service’ to businesses and homes, and power generation was managed centrally. Businesses no longer had to manage their own power generation infrastructure, formerly maintaining boiler rooms and steam turbines and such. Subscribers could take as much power as they wanted, when they wanted it, and they only had to pay for what they used; sound familiar?

The same thing is now happening with ICT. It’s now much more
cost effective to take ICT resources on-demand in this way, than to manage your own infrastructure.

Adopting the utility model definition may deprive some types of private cloud, for instance, of being ‘cloud’, if the service is not
delivered ‘on-tap’ so to speak, or as a service. But private cloud has huge advantages for some organisations, and will derive its own identity.

So let’s talk about the utility model moving forwards, and
cloud is just part of that; private, public, PaaS, SaaS, etc.

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Open Windows on Azure

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Legal Counsel need to act

We built Open Windows 17 years ago around what we identified as the ‘Contract Management Problem’.

That, ‘Organisations expend a great deal of time and money negotiating and executing contracts, but when they finally sign them, the lock them away in filing cabinets, and don’t bring them out until something goes wrong’.

I think many in-house legal counsel feel that their job is to negotiate agreements to include appropriate legal protection for the level of expenditure or risk to be contracted. What some possibly think is not their responsibility, is how that risk is managed post execution.

It’s fine to have all that legal protection should something go wrong, but then we all know prevention is better than the cure. Especially when it comes to litigation.

Managing milestones, deliverables and commercially critical trigger points in contracts ensures pre-emptive action may be taken, before something goes wrong. With the level of sophistication and the volume of agreements being managed by most larger businesses, systems are needed to manage contracts, and can take over the administration component of management, leaving the people to manage the relationships.

In addition to managing the risk, who’s ensuring that hard faught volume breaks and rebates are being monitored. Many procurement organisations negotiate terrific deals, yet have no systems in place to manage transactions to contract. Staff continue to buy from uncontracted suppliers, and even contracted suppliers, but off contract. So transactional contract management is as important as commitment management to the Ts&Cs.

I think Legal Counsel need to take some responsibility for how agreements are managed post-execution, and look at methods for enforcing their negotiated value, across the organisation.

Can you believe it’s four months until Christmas?…

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Are you ready for Cloud?

Vendors are currently investing R&D now almost exclusively in cloud delivery of their software and service applications and platforms, and for the most part at the expense of traditional on-premise deployment models.

Are you ready for cloud?

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Cloudy with a chance of clarity

The rapidly increasing momentum around Cloud software and services adoption will sometime soon lead us to some clarity around what ‘cloud’ actually means, the real reasons for fast business adoption, and some intelligent insight in forecasting adoption rates.

Cloud computing is simply the consumption of internet based software. It’s been around for many years. Instead of downloading and installing software onto your PC or server, you or your organisation signs up to a web-based system and you log in when you need to use it. Most consumers use web-based software for mail or banking, and have done for years; Hotmail, Gmail, Facebook, and your bank’s net banking platform. Business has been slower to adopt because of security concerns and the investment already made in supporting vendors on in-house IT infrastructure. This infrastructure is now aging, hence another factor driving adoption is the question of cloud versus replacing server infrastructure.

Cloud computing will almost completely replace the internal hosting of business and consumer software within 5 years in the same way that many other non-core business processes have for the most part been completely outsourced. There will be simply no need to continue to manage IT infrastructure beyond facilitating your end-users’ access through terminals such as laptops and various other portable and mobile clients. CIOs roles will grow, and undergo a massive transformation, becoming enablers of your organisation’s interaction with business critical global communication and productivity platforms, as opposed to managing internal datacentres and applications.

Application maintenance will be performed exclusively by vendors, lowering the cost and speeding up consumption of new functional and technical innovation. Infrastructure maintenance will be performed by global platform and infrastructure providers, rapidly lowering the cost of processing power and storage at a rate we can still not yet grasp.

So for businesses, consuming software and services (these terms will begin to converge) from the cloud lowers the cost of providing business critical outcomes to your end users by sharing the cost of platforms with other customers, in an integral and secure shared environment. Your vendor only needs to allocate a fraction of the resources per customer on a cloud platform to provide a better service through to your business than you are currently receiving. Lower cost and better service. That’s pretty compelling. “That’s cloud power.”

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Why is Government sourcing still failing?

In the wake of the ever repeating cautionary tales of poor probity, conflict of interest, and lack of visibility and auditable process in all levels of Government sourcing, I wish to highlight the still under-recognition of the benefits of good system support of these processes.

The lack of good systems and reporting means there is still poor transparency in government tender and quoting processes, which leads to the failure to identify and highlight conflicts of interest early enough in processes to prevent inappropriate contracts being signed, or at minimum the declaration and correct handling of such interest early in the process.

The lack of good IT systems for post award contract management boasts a long list of Government project poster children to highlight the need for close governance of IT and capital projects post award.

But the inability to enforce visible and value driven processes in technology sourcing prevents the correct procurement and contract management systems from being implemented to enforce those very processes.

This presents a kind of confusing conundrum.

There are two fundamental reasons why technology sourcing is failing in this area.

Many technology purchasing decisions are still being driven by processes that fail because of too heavy a weighting on price, instead of informed value driven processes awarding contracts to vendors capable of delivering the appropriate outcomes for Australian Government sourcing and contract management, which sometime comes at greater price.

It is proven that a formula that appropriately weights price with other capability and experience based criteria drives a process to a better outcome than to be more heavily influenced by price. The old adage of paying peanuts to get monkeys is well cautioned by many who have gone before us, paying peanuts. There is a certain level of capability, experience, functional and technical compliance that must be met prior to evaluating price in a well governed sourcing process. Even after the recent publicity in the sector around improper process, there are still Local Government agencies that award contracts on the basis of price, and write and pre-pay open-ended purchase orders for unspecified works and services. When will they learn?

Additionally many technology purchasing decisions are being made outside appropriate process and at inflated prices because Government agencies are still being led by Global systems integrators who have partnerships with Global software providers inside of existing Government services arrangements. Multiple millions of dollars are spent annually on sole sourcing unfit for purpose technology solutions from incumbent vendors who have been proven uncompetitive against Australian best-of-breed solutions. Yet small local firms without the same senior relationships are being made to compete through multiple public tender processes for the same goods and services to the same Government agencies, even when existing arrangements are in place.

So because of the inability of governments to put in place systems that drive visibility and value selection, the end result is more failed projects at all levels of Government, even in efforts to implement systems that would enforce the proper process for all future sourcing events (the conundrum again).

Having said all that, there are some State and Local Government agencies implementing good systems for sourcing and contract management, seeing the benefits and cost savings year after year, and delivering the process improvements that drive visibility and better value for rate payers. These are the ones you don’t read about in the paper.

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NBN Dream?

South Korean Seoul Government to provide city-wide wifi. http://www.smh.com.au/digital-life/digital-life-news/wifi-all-over-capital-20110615-1g3q5.html Now that’s progressive. Where’s our NBN?..

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Flexible Workplaces

The Optus funded ‘future of Work’ report released this week found 84 percent of IT departments  plan to support tablets such as iPads within three to five years. To me that says 84 percent of IT departments are unable to make an informed decision. If it takes your IT department three to five years to support a technology that has massive positive implications for your business, then you should fire them all.

The tablet is here now, and you need to make a decision now if it will be supported or not. In three to five years there’ll be other new technology taking over. Forget your 100 page business case. Try a one page business case and get something done.

So this is what I mean about IT departments changing. Your IT department should be able to make informed recommendations to the business about new technologies and maintain their place as a facilitator and a service for the business or they will fade away.

It seems clear that if IT departments in large-sized organisation are unable to move quickly, tablets supporting the Windows 7 platform may have some early success because they do not require any organisational change to be supported.

I think organisations must embrace new technologies and find flexible and accommodating ways to support them, or staff will move to workplaces that can. Staff are already demanding it.

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The evolution of internal IT

So I want to start talking about the evolution of your internal IT department, as the adoption of cloud computing gains momentum.
Your internal IT department is a facilitator of the IT products and services that you consume, second by second, day by day. They support deployment for your consumption. But that has now changed somewhat. Many products and services provided by software vendors no longer require the support of your internal IT team, and you are able to consume as much or as little as you want from the cloud, faster, and often cheaper than if supported internally.
So what does this mean for your team? A little soul searching certainly.
When consuming from the cloud, you’re consuming software sure, but it needs little or no support. So I dare to say that IT is no longer IT, you’re now buying what a piece of software does and the chance to use it to produce the outcomes you need, rather than having to find a place to install it and manage bandwidth and disk space.
I’ve seen buyers frustrated by delays and costs from internal IT. They have been looking for vendors who can deliver traditional software from the cloud. This is now happening, and the intangible cloud is becomming tangible, and starting to show real benefits.
So buyers of software are now only buying the outcomes the software brings. They no longer want to support vendors with infrastructure.
So where does this leave your internal IT team? Well they still have a role, but it’s changing. Watch for IT professionals becomming advisors in the cloud space. Listen to advice but ask for supporting data to back claims. Your teams may not shrink, on the contrary the need for IT professionals in your organisation will grow, but the space is now evolving rapidly.
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