Cloud Computing Interview with Joseph Pucciarelli
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The Types of Cloud
Public: Service shared among unrelated enterprises and consumers; open to a largely unrestricted universe of potential users; designed for a market, not a single enterprise.
Private: Service shared within a single enterprise (or extended enterprises), with restrictions on access and level of resource dedication, defined/controlled by the enterprise, and beyond control available in public cloud offerings; can be onsite or offsite, can be managed by a third-party or in-house staff.
Hybrid: Service that is delivered through a combination of public- and private-cloud models.
Source: IDC
Moving to the cloud requires more than just the swipe of a credit card. To help organizations as they shift to the new technology and to spotlight the range of issues they’ll encounter when adopting cloud services, IDC conducted a study, “IT Cloud Decision Economics: 10 Best Practices for Public IT Cloud Service Selection and Management.”1 For a few insights into the report’s recommendations, CSC World spoke with Joseph Pucciarelli, the report’s author and IDC’s IT Financial and Executive Strategies program director.
How do you recommend customers evaluate cloud services and determine whether they are a fit for their organization?
Pucciarelli: Cloud computing — both outfitting internal IT infrastructure to a private cloud and the purchase of externally sourced public IT cloud services — is basically shaping the IT agenda. We recommend reviewing cloud offerings from both existing preferred vendors as well as new providers, and assessing them with existing portfolio needs.
We also suggest they identify small, discrete projects their IT organizations can use as an opportunity to gain exposure to these new technologies, assuming they meet both technical and financial targets.
How should the cloud be addressed within a company’s existing governance framework?
Pucciarelli: Right now cloud is new. Initially when we talk about cloud services, we think most organizations will set up an external governance framework. It’s a new technology, and until the organization becomes comfortable with it, it will require special handling. In 18 to 24 months, they will be redesigning their existing governance framework, and cloud services will be made an integral component of that. Organizations should really think about this. It’s at least a two-step process.
There’s the initial, learning phase, and then there’s the incorporation phase. Most IT organizations should be thinking about cloud services with the idea that by 2014 there should be no special handling required. Cloud computing should be an integral part of the overall governance process, but the path to get there is going to require some special handling.
What are some best practices for defining and measuring business value and key performance indicators [KPIs] around public cloud services?
Pucciarelli: The challenge is, when you’re talking about cloud services, there are real issues in calculating the financial metrics. Most organizations base their capital investment analysis on some form of return on investment. However, technically when you’re buying IT cloud services, it’s really cost avoidance.
We recommend building multiple 36-month scenarios, i.e., on-premises versus public cloud services, and then essentially calculating the total cost analysis of the multiple scenarios and contrasting them to form the decision.
Regarding performance, our view is that the art of the deal is in setting adequate, but not gold-plated, KPIs. It’s easy to say, “We can’t tolerate five minutes of downtime a year.” However, that implies having enormous amounts of back-up and much more expensive requirements.
The real issue is setting requirements in a realistic way based on the services that are deployed. Historically, the notion has been, “We can’t tolerate any downtime.” When organizations discuss business value, we think it’s absolutely critical that they not just sit back and say, “This is just the way we’ve done it.” Instead, they need to set those service standards in a way that’s consistent with what they need in their business.
Within an organization, does business or does IT own the relationship with the cloud providers?
Pucciarelli: Ownership, accountability and responsibility ideally are shared between the line of business and the IT organization. We recommend that business units continue to rely on their IT organizations to provide governance, contract administration and sourcing services. When we first saw software as a service, we saw a lot of businesses go out and plop down the proverbial credit card, and then a year out there was nobody who owned the application, the technical interface or the associated problems.
Ideally the business and IT are partners with clearly outlined and assigned operational responsibilities. It’s not just about acquiring the services; it’s about that footprint and the tail that follows it.
What organizational change management skills are associated with supporting cloud services?
Pucciarelli: In our view, one of the most critical yet least discussed issues regarding cloud services is the question of standardization. Complexity, especially complexity that fails to enable strategic differentiation, is IT’s eternal enemy. Organizations are in a constant battle, as far as their technology goes, with undifferentiating complexity.
The critical question that should be asked is how a proposed cloud implementation affects an organization’s overall complexity. If it simply adds to it, then arguably the ideal use case hasn’t been found. The goal should be that each cloud implementation nets zero complexity increase, and ideally there’s a net complexity reduction to the organization. To achieve this requires careful thinking about what cloud services add and what they replace.
When people ask what the strategic opportunity is with cloud, this is one of the strategic vectors that we really encourage our clients to think about.
Download the full IDC report.
1 Doc #229207, July 2011