Geeks With Blogs
Keep It Simple Simple Solutions for Complex Scenarios

Advantages

Security

Security is a nonnegotiable requirement for a cloud service offering to be successful. Access control and security for business data is of utmost importance. Business data stored in the cloud needs to be encrypted during not only during storage but also transport. Secure data and network channels across application domains in the cloud should be built right into the cloud service infrastructure. Access control prohibits unauthorized access to the data and applications and provides authorization schemes for multiple applications. Businesses already have full-blown access control systems like Active Directory located on-premise and expect to seamlessly integrate cloud services with these systems.

Cloud service providers must also provide a secure virtual execution environment that is isolated for other applications running in the same infrastructure.

Overly complex security architecture increases the barriers to entry for businesses to jump on to the cloud services bus. To reduce barriers to entry, the security architecture of a cloud service offering should be easier to integrate and transparent to businesses. One of the advantages of cloud services is the platform and infrastructure security can be totally transparent to the businesses lowering barriers to entry.

Following is the list of security business drivers for cloud services:

• Data storage security

• Data transport security

• Transparent storage and transport security

• Authentication and authorization control

• Single sign-on with other cloud offerings and on-premise systems

• Recommended design patterns and architectures for application access control

• Secure and isolated execution environments

• Easy integration with on-premise security infrastructure (e.g., Active Directory)

Total Cost of Ownership

For any new technology in its infancy, total cost of ownership (TCO) is the first criteria businesses evaluate for finding the return on investment (ROI). If the business is not satisfied with the TCO, the technology or product is shelved until it matures. For businesses to jump on to the cloud services bus, the TCO of the cloud services should be significantly lower than on-premise software. For example some CRM cloud services charge customers per seat. This pricing structure works out cheaper for small businesses, but for medium to large businesses, it turns out to be expensive because savings from economies of scale are not clearly passed on to the customer. Even if the TCO for on-premise CRM application is within the five percent margin of its cloud counterpart, businesses would prefer the on-premise CRM application because of the flexibility and control an on-premise CRM application offers.

Business would consider moving to a cloud service only if its TCO is lower than 15 percent of its on-premise counterpart.

Control

An on-premise application offers businesses significant technological control compared to a cloud service. Control can be in the form of data storage, customizations, security, deployment, operations, and integration with other applications. When evaluating cloud services, businesses assume the loss of control and conduct a trade-off analysis between loss of control and TCO. For some businesses, control of the application is important for customizing specific business processes. Every enterprise has some unique business processes that are not supported by any out-of-box applications. Enterprises then customize applications as per the business requirements before deploying it. So, to reduce the barriers to entry, software vendors must provide a customization platform in the form or an API or a software development kit (SDK) for businesses to customize the software for their specific needs. Software vendors offering cloud services must offer a customization platform and a developer SDK that is comparable to the on-premise applications. So, control is an important business driver for cloud services to be successful in the enterprise.

Culture

Company culture plays a significant role in technology adoption. Some companies’ cultures dictate that they remain at least two versions behind the current released version of the product. These companies never evaluate a product unless a competitor has implemented it or it has gained popularity in a particular industry, irrespective of the business value or cost savings it offers. In industry terms, these companies are called laggards and are not going to be interested in cloud services anytime soon.

Another kind of companies, called visionaries are exact opposite of laggards. Being on the leading edge of technology is embedded into the culture of these companies, and they do not hesitate to deploy beta version of a product in production if it offers business value or satisfies key business requirements.

Cloud services vendors should market their services to these companies and get them aboard the cloud services bus.

Competition

Competition can force a company to take extreme business decisions to avoid risking its current market position. By saving operating expenses, a company can exert pressure on its competitor’s market position by reducing the product prices. Companies are constantly analyzing their competitors technology stacks to evaluate the operating expenses its competitors may be incurring and find a way to beat those expenses. For example, recently in a consulting project at a Fortune 100 pharmaceutical company, I did a technology stack analysis of its competitor to compare the overall IT portfolios. As a result, my customer found out that the competitor’s IT portfolio consists of only 600 applications, whereas my customer’s IT portfolio consisted of 10,000 applications. If the business models are the same and revenues, market shares, growth rates are similar, how was the competitor’s IT department providing services to its businesses through only 600 applications? This analysis triggered a massive application consolidation effort for reducing my client’s IT department’s application offerings to less than 1,000 over the next three years.

If efficient companies embrace cloud services to reduce their operating expenses, competitors will soon follow to remain competitive and avoid risking their relative market position.

Time to Market

Time to market (TTM) is the time required for a particular product to be available in the market once it is conceptualized. TTM is critical for product companies where release of their products is scheduled years in advance and cannot be adjusted because of changes in technology. Cloud service is a platform for product and service companies to build applications on top. Cloud service providers must offer a significantly lower TTM as compared to on-premise software because of the minimal infrastructure and platform investments required by enterprises for cloud service adoption.

Reliability

Reliability is one of the quality attributes businesses look for in any software investment. Reliability encompasses the entire spectrum of quality attributes like availability, stability, scalability, performance, and maintainability. Businesses do not automatically assume the reliability of cloud services platforms because of lack of customer evidence available during the early stages. Cloud services vendors must not only demonstrate the reliability in hosting business critical applications but also outperform their on-premise competitors.

Service Level Agreement

A service level agreement (SLA) is an agreement between the cloud service provider (CSP) and the customer. Even though an SLA is a broader topic than the scope of this book, it is important to understand that an SLA can make or break a deal. A common misconception about SLAs is that they represents the availability of a service. An SLA not only covers the availability of a service, but also other objectives like customer expectations, performance measurements, reporting, quality standards, and relationship management. A successful business driver for cloud services is an SLA addressing the quality of service required by the customer.

See u!

Posted on Monday, August 9, 2010 5:38 PM Azure | Back to top


Comments on this post: Cloud Drivers and Barriers

No comments posted yet.
Your comment:
 (will show your gravatar)


Copyright © Juan Mestas J. (aka gotchas) | Powered by: GeeksWithBlogs.net