Clouds hit by El-Nino, future of Clouds in Enterprise Infrastructure

In the not too distant future, Cloud computing will be celebrating its 10^th birthday; yes, it has been that long since the term was coined and people started talking about clouds of all kinds. Subject of many barbs, humor, analysis, predictions, conferences, and angst, Cloud has had its share of good and bad with accompanying confusion for those who decide, create, deploy or manage it. Every vendor created their interpretation of what they wanted to offer to their customers, ASPs (Application Service Provider) rebranded themselves which added to the chaos.

It was not just about Public or Private, someone decided that why not create a heterogeneous cloud and called it Hybrid. Not to be left behind, fine tuning of the definition began with Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS); Storage as a Service (SaaS) confusing proponents of Software as a Service. These were followed by Community Cloud and Distributed Cloud which created new business opportunities and models. How to evaluate, differentiate, or create value for enterprise use.

The list of touted benefits from Cloud was long: agility, cost saving, multi-tenancy, reliability, scalability, elasticity, availability, manageability and finally security. Models mushroomed based on assumptions that did not hold water; CIOs and Infra Heads challenged them but they did experiment and explore in bits and pieces. Anecdotal references of swipe your card and solve problems with on-demand extension to enterprise compute/storage made many sit up and take notice. How did they pump TB of data on constrained corporate internet pipes ?

Pay-as-you-go the new mantra; pay for what you use, not peak capacity, differential rates, variable metering (happy hours ?), orchestration layers across different clouds and combinations made headlines invoking CXOs desire to challenge their IT setups. Every IT major, data center provider, telecom operator and pure play companies vied for attention with me too offerings. Cheaper, faster, better, innovators and startups challenged the bigger players only to be acquired or die in the muscle match, the dust is now beginning to settle.

In the decade that went by – with acceptance of different variations and stretched definitions – focus shifted to real life business use cases. SFA, communication and collaboration, on-demand infra for startups, and HR solutions have become mainstream. For purpose task oriented apps are gaining ground, while every legacy solution aspires to offer itself on the cloud. Mobility solutions leveraged the cloud offering new capability. Flexible models of deployment, scale up on demand (conditions apply for scale down).

Today a greenfield enterprise IT roadmap can be created without ownership of software licenses or data center hardware provisioning; almost everything can be bought on the cloud, from office automation, to ERP, CRM, SCM, WMS, BI, Helpdesk, SDIM, the list is comprehensive and deep. The challenge arises in two parts, integrating each of the cloud solutions with the other seamlessly (as compared to monolithic solutions from vendors) and orchestrating all the pieces; on the second part in managing multiple relationships and licensing terms.

The question that keeps popping up is the transition of current enterprise IT to the Cloud; when will it happen and what prevents mass adoption ? On the other hand the counter question is, if it is desirable or adds value or removes complexity ? Why does it have to be either or ? I would propagate coexistence is a fair strategy in comparison to extreme and absolute ends of the spectrum. Enterprise Data centers will lose their relevance and disappear in the coming years pronounced some analysts; sounds familiar to past doomsday predictions.

Clouds are ubiquitous and pervasive today; innovative solutions and business models are emerging by virtue of mass penetration of mobile access devices. The future shall be strongly influenced by these disruptive trends of today. With an open mind and agility, Enterprises and CIOs need to experiment and weave these into strategic business and IT initiatives lest they be caught napping. The future is coming sooner than we thought, be ready to face it, embrace it, challenge it, love it, hate it; ignore it at your own risk !

PS: Clouds fail too like enterprise infrastructure, latest news on AWS failure that impacts business. Can you prepare for them http://www.forbes.com/sites/justinwarren/2015/09/20/aws-outage-doesnt-change-anything/

Insecurity about Cloud Security and Value versus Return

I was at this conference of small and mid-sized Cloud service providers who were discussing the current state of the market and evolution with everyone talking digital. They were hoping to collectively brainstorm and learn from each other’s experience. They discussed the evaluation criteria they were subjected to, problem statements they had to answer, and the two biggest stumbling blocks that would not go away even with the maturity of the cloud solutions and growing customer base; they are ROI and Security.

Some large enterprises have adopted a cloud first approach to their new initiatives while they seriously evaluate movement to the cloud whenever faced with any upgrade or refresh decision. These early adopters and fast followers now are more or less convinced that it does not make sense to continue investing in conventional hardware solutions. Data centers and servers are best left to the experts to manage while application management was outsourced a decade back. DevOps is the way to go and Cloud is where everything should reside.

Off course there are industries which have seen exceptions for some types of solutions which are still not amenable to be on the cloud. Even the providers acknowledge this and keep away from pitching for such use cases. Big monolithic solutions are facing the agility challenge and the paradigm has shifted to accommodate multiple for purpose apps on the cloud that are making some parts of the big solutions redundant or enhancing productivity by reducing the effort to complete a workflow or task in the conventional solutions.

Consumer and personal apps reside on the same devices that are used at work; this transgression managed or otherwise is here to stay. CIOs and CISOs have learnt that pushbacks are no longer accepted and they have to find a way to make peace and find solutions that allow coexistence. MDM has evolved to provide some level of containerization to separate the official from personal and the ability to brick a device should it be lost or fail to return on exit. So where is the unfulfilled promise of security and ROI or is it just a favorite flogging horse ?

How secure is your cloud solution ? Have you had any security certification done for your software ? When was the last time penetration test was conducted ? What is the uptime offered on your cloud ? Clouds are expected to save money; what is the ROI of your solution ? The service providers’ reality was that they had to field these questions every day with every customer with every opportunity with everyone they met. It was as if repeating the message would strengthen its value and make it work for the customer and stakeholders.

After all the due diligence and certifications, customers then go on and deploy the solution with limited security governance and vulnerable practices that expose the data. Eventually if and when data leakage does occur, the cloud and/or the solution is deemed immature and not upto the mark. Attempting to create idiot proof solutions with all the checks and balances to protect against human stupidity is the final and ultimate step in ensuring that the solution is secure; and this has remained the goal of every enterprise and the challenge for every provider.

Return on Investment is a different ballgame; value is a function of the frame of reference of the perceiver and nothing to do with reality. For someone a dollar a month per user may be value and for another $10 is not expensive. Can service providers do justice to the wide spectrum of expectations ? I am not sure that kind of elasticity exists; volume driven discounts or market entry strategies may offer initially low pricing which is rarely sustainable in the long-term unless the end game is market valuation and not profitability.

At the end of the discussions collective wisdom indicated that alleviating the fear factor will take its time with evolution not being consistent and everyone wanting to reassure themselves of the risk factors. It does not matter how many have taken the leap of faith or how long the solution has been around. Even today there are buyers apprehensive of every decision lest it not work in their unique environment or their inability to leverage the value. I think that the discussion will keep popping up and we will have to reassure a zillion times over.

How much more with less ?

Over the years economic cycles have turned all conventional wisdom upside down; the new normal that became reality before the turn of the decade squeezed all the unnecessary costs out of every line item in IT budgets. Do more with less being the mantra, CIOs scrutinized operations and optimized them ruthlessly. Half a decade later and half way through the year, one of the resurgent themes with many CIOs is conservation of funds; revenue growth has been under pressure for some time, bringing costs back into focus.

In an informal gathering of CIOs this was the predominant theme with everyone attempting to figure out where do they get additional savings from ! Hardware refresh had eliminated maintenance costs for a few years, but now maintenance and support contracts are up for discussion for all the critical and non-critical hardware. Users now expect desk side support for all types of incidents and problems; with rising manpower costs, hardware service vendors and maintenance providers are demanding inflation linked increases.

Last time around there was a flurry of activity around license management; are people really using their allotted licenses ? Thus software license costs were pruned down to the bare minimum required; number of users has gone up now and there is a need to buy additional licenses. Vendors pushed usage audits and attempted to enforce compliance to license agreements putting the CIO in a precarious situation; no one wanted to be non-compliant. Open source again became a discussion with limited success for some.

Back then again contracts for running legacy and custom applications, and maintaining business as usual were trimmed; wherever possible the activity moved to internal resources. Onsite activities were offshored to the service provider’s premises; back office functions relegated to low cost locations in the suburbs. Contracts were examined afresh and brought down to a bare minimum. A few also took the tough step of letting some of their team mates go and reallocated portfolios stretching the remaining team. FUD ruled for a while.

So where do we look for new savings opportunities ? How much more can we do with less lamented the group ? The group had no bright ideas, nor any best practices to share. One of the CIOs present gathered sympathy for a 25% cut imposed on her capital investments as well as operating expenses and still expected to run projects as well as keep the lights on with no adverse business impact. Someone suggested that she conduct an open dialogue with her boss and ask him for ideas on how to implement the cut.

Systematically the group explored some of the options that vendors pitch in as cost savings measures. Is the Cloud with pay-per-use models a viable option ? Variability has been one of the promises from the cloud; but then the proponents of this model cautioned against if cost savings was the primary objective. If you moved existing loads to the Cloud, what would you do with the existing hardware ? It would anyway make sense only if there was a need to increase compute capacity or hardware refresh was imminent.

Can and should total or strategic outsourcing be explored ? That is when most vendors promise 20+ percent savings and projections are locked down for a number of years ! Transfer the accountability and let the vendor figure out how. A couple of CIOs who had been there done that cautioned against it. They have had a harrowing time making some of the numbers in the spreadsheets stick in real life. Legal teams poured over contracts to find a way to make it stick; the CIOs ended up in getting the stick instead.

Most organizations which are driven by ratios and numbers resort to cost cutting rather than cost management in their attempt to keep the street happy. They want to look better than their competitors and keep the stock price high sometimes even at the price of damaging the DNA of the company. Consultants get hired to find hidden costs while they get paid visible money with diminishing returns. I believe that enterprises driven by customers don’t resort to cycles of cost containment and thrive in adversity.

A lone voice in the room asked, “Can we look at increasing revenue instead ?”

Clouded judgment, slip in the rain

He was one proud adopter of cloud technologies and had moved almost all applications to the public cloud. It was a case study written about and discussed in forums and publications. He was hosted, flown across cities by the provider to talk about his experience and give advice on why everyone should consider the cloud. His stature had grown and he advocated the use of clouds for scalability, lower TCO, variability of cost, almost like the poster boy that the industry was looking for and had found one in him.

I met the CEO of that company last week and engaged him in some small talk on the business and how my cloudy CIO friend was doing ? The CIO had reverted all applications back to the on-premise data centre in a hurry. One fine day the cloud provider declared an outage and it just happened to be the day when the load was high; the revenue impact was substantial. The CEO had then warned the CIO to take care of such eventualities. Then of all things the hosted gate pass application stopped working.

Last week was one with unseasonal rain which surprised everyone with every falling drop. Across multiple discussions with different groups in formal and informal settings, adoption of cloud was omnipresent. How many of you have adopted the cloud for your workloads ? Which apps would you move to the cloud in the future ? Why is manufacturing so averse to adopting the cloud ? Even ERP is now available on the cloud ! Vendors in some discussions offered to conduct a “Cloud readiness assessment”.

On the table were many views on all kinds of cloud: highly virtualized data centres masquerading as private clouds, to Infrastructure, Platform and Applications as a service. All flavours of solutions and orchestration engines including a couple which promised to manage hybrid clouds. Voices raised incidents of hybrids not working effectively or seamlessly, leading to clouds not working with random and frequent outages, leaving the CIO smarting with no real recovery option except to wait it out.

In a discussion, taking examples from Sales Force Automation and some ecommerce applications doing well, CIOs from manufacturing were challenged to find business cases within their industries and organizations. None forthcoming, the vendors provoked the group to stop hugging servers and let go. Chastened the group retaliated and one CIO raised a question to a hardware vendor: “Have you move your ERP that runs your factory and supply chain to your Cloud ?” Sheepishly the answer came “no”.

Many vendors will sell the cloud with financial metrics that belie any rational thought; cost of variable fractional CPU saved and hundreds of MB of storage across 17 applications adds up to some cost, or the additional hour spent by the engineer over a weekend to ensure that the full backup was successful. Do we really pay that way such that we can apply microeconomics to calculate real savings ? I have yet to come across anyone who did and saved big bucks. Decision between capital investment and operating expense is a CFO call.

Coming back to the gate pass application, why is it such a critical application ? Entry and exit of every person, vehicle and goods from the factory premises depends on it. It was the most innocuous and the most critical application for continued operation of the factory. Amidst the lot of hue and cry, the CIO had no option but to come down to terra firma. He admitted that he should have been pragmatic in his approach and not moved everything to the cloud. DR to the cloud was not envisaged and there too laid his folly.

Everyone is experimenting and exploring the cloud in some shape, form or avatar. Many have moved non-critical workloads or external apps; not many references of other kinds of legacy or ERP type apps for largely centralized enterprises. Hybrids remain experimental for now while start-ups are enjoying the benefit of no upfront investments. Pure play technology companies find clouds viable, the rest of the old and large businesses continue to tread cautiously and take a step-by-step approach to the cloud.

You don’t slip in the rain that way !

CIOs beware, CIOs rejoice

The hall was brimming with people, hardly a seat empty and many standing with their back to the wall. Safe capacity of the premises was pegged at 5000; if there were more, no one paid heed. The session was to be broadcast live and streaming media on screens across the venue. It was not a show on how to get rich quick, nor the speakers had a magic formula on how to lose weight, the speakers were global IT industry icons and leaders who draw crowds when they get on stage with their charisma and speeches.

The audience comprised of CEOs, CFOs, CIOs, in fact CXOs across countries, industries, global and local companies, big and small; many were accompanied by rising stars from their teams. It was a big event spread over 4 days that makes it one of the largest. Partners, system integrators and consulting companies invest their time and money annually to network with customers, solicit new ones and also hear about new offerings that typically get announced in such events. As a bonus, you get to see what competition is up to.

We got off to a great start with a few announcements and partnerships between past adversaries which was a significant milestone that helped the industry and customers. The star speaker did not show up, but most stayed put. The session however took a direction that had many in the audience surprised. The collective energy level suddenly dropped and to bring up the intellectual level in the room, many started playing with their smartphones. A few dozed off which was quite expected, but there were many who listened attentively and took notes.

The speakers had started explaining the step by step process on how to provision a virtual server on the cloud with various options; how to migrate from one platform to another, how to upgrade a few technology components, and how to benefit from the new offerings. The people awake and taking notes were not all IT folks, a large number were users with no technical background or past experience in technology. Were they trying to help their IT folks back home or had a sudden urge to learn cloud server management ?

I met some of them post the session and many more during the evening drinks seeking to unravel the mystery behind their new found love for an IT back office activity which is mostly outsourced. What motivated them to take active interest in something that many CIOs shy away from. I cannot say that the answer surprised me, what did was the extended outcome. The context determines how you view an event and its impact. What would happen when users start provisioning IT infrastructure and services themselves ?

Typical response, how can we allow them to do that ? It’s our job ! They do not know technology, they don’t understand the interdependencies and lack the skills; they should stick to what they know best and come to us when they need something. The IT Relationship Managers will understand the holistic big picture and then get the stuff done. There have been so many instances when they bought some solutions and came running to us when something broke or the project had challenges which were out of their league.

Alternate view, it is good that they are getting into self-service. With interfaces getting idiot proof and general awareness improving, there is no reason for them not to do it. Most of these tasks are easily done by anyone. It takes away a chore from us and gives us time to focus on what matters. Some of the IT team can now move to other value added activities. We are always there in case something was to fail or require deeper expertise or require escalation with the service provider or integration with other solutions.

Which view do you endorse ? The first believes that technology should remain within the IT domain and IT will service requests or provision based on project requirements. The alternate view encourages giving up and offers independence to everyone. The federated model with adequate controls does not necessarily free up many IT resources but creates a perception of self-reliance. Applicability of the model is dependent on enterprise IT maturity and partnership between business, IT and vendors.

Trusting Cloud Lords

Everything is moving to the cloud if not today it definitely will in the near future, so say almost all the learned consultants and everyone who has an opinion on IT. Every large IT vendor has invested in creating their own cloud offering and acquired many start-ups who loved the dotcom like phenomenal valuations with their offerings. Private Equity, Venture funds and Angel investors have bet big on this new found paradigm that once again threatens to change the world (the last time was with dotcoms a long time back).

Different models have emerged with software, platform, infrastructure, storage, what have you, being available as a service with enterprises being pushed towards perceived agility and budget shifts from capital investments to operating expenses; pay as you go, variable cost, scalability, numerous benefits being touted with all kinds of engagements and service models. They have indeed been beneficial in many cases, disruptive in some cases with licensed software model being challenged.

Retaliatory steps from big packaged software vendors did not deter the cloud providers which continued to get funding and mushroomed all over. Unable to beat them at the game, all of them have now joined the bandwagon with their own offerings in an attempt to retain the customer. Their agility has remained a challenge competing with the nimbler start-ups. They do have the big budgets and deep pockets to squeeze out their smaller competitors and if that does not work, acquire them.

When I recently came across news that one of the prominent niche cloud players was going bust, it had my undivided attention. The provider had many partners big and small selling their solution and many major enterprises using it. The service offering was good, the price attractive and their growth meteoric. They had good funding available through the rounds. And then suddenly they announced that they had run out of cash will be winding up in two weeks’ time asking customers to find alternatives.

Not too long ago another cloud platform provider had shut shop with 30 day notice to their customers. Their largest customer had pulled the plug; that implied more than 50% of their revenue disappeared. They were smaller and not highly visible, and thus their demise did not create many flutters. The business impact to many of their customers was severe as they were left scurrying to protect their business and revenue; in a few cases survival. There have been other insignificant ones who did not really take off, becoming an epitaph in history books.

Can and should enterprises and business bet on offerings from cloud providers ? Is there a way to safeguard the adverse impact if the company went kaput or even got acquired ? Should companies put their operations or for that matter IT and information assets at risk with cloud lords ? Legal contracts and SLAs rarely offer a solution despite the lawyers debating every clause and punctuation. The impact whenever it happens even with an outage or a security compromise is real and threatens reputation beyond the revenue or profitability.

I do not believe that anyone can ignore the clouds and continue to work with the conventional models of yesterday while preparing for tomorrow. Reality is that clouds will continue to be disruptive, their value propositions worth evaluating and experimenting with; the pragmatism required is to ensure that the advantage it creates to either business or IT is taken into consideration along with the risks and potential impact should there be a need to migrate across public clouds or transition back to private cloud.

It is evident that there is no ubiquitous solution that can be applied to all cases. The CIO with end accountability along with business stakeholders should highlight the benefits along with the risks of the step towards clouds. The mitigation plan should be tested like all Business Continuity Plans (BCP) and Disaster Recovery (DR) are executed periodically. This is a necessary inclusion now for every cloud service that an enterprise subscribes to. Costs related to such a plan should be factored into the initial budgets when calculating the benefit of the cloud solution.

Go for it, you have nothing to lose and everything to lose depending on how you approach it; if you don’t, the business will always find a way to get it leaving you to manage the mess when things go wrong.

IT is windy and cloudy

The last fortnight could be classified as the official cloud period of the year with multiple conferences vying for attention; it also saw business newspapers and magazines write about clouds. A couple of television channels aired hyperbolic programs with the usual set of vendors and spokespersons talking about why enterprises have to adopt the cloud for survival. One of these had an interesting open and candid discussion between two senior CIOs on clouds which kept the organizers on their toes and the audience regaled.

A brave move by the organizers, in an unstructured dialogue with no moderator, their bantering got off to a good start with sharing of experiences on how they had used various technology solutions to create purported private clouds as well as engaged with third party service providers to leverage varied cloud offerings. They unanimously admonished the vendors for creating hype more than they could deliver in reality. The hysteria parallels the dotcom era in its fervor with everything being tagged to the cloud.

The senior retired CIO used his sharp wit and tongue challenging the audience if they had different experiences. He demolished a few hypotheses and claims as myths with no evidence apart from anecdotal references. He sought to differentiate between public cloud solutions for consumers from ones available for enterprise users. The clouds are drifting with the wind created by a lot of hot air in the room, so let’s be practical and realistic in promises to customers on cloud solutions.

We all know that cloud for the consumer has been a big hit connecting mobile devices to ubiquitous cloud solutions offering multiple for purpose apps. Almost all the content is uploaded or downloaded to or from the cloud with seamless access across multitude of devices. Try for free, if you like it, buy it; micropayments allow easy download and upgrades, and if you don’t like it, you don’t feel the pinch. From tweens, teenagers to grandfathers and grandmothers everyone is hooked on in varying degrees.

The corporate journey started with sales applications gradually moving on to full-scale sales force automation solutions; employee self-service and customer facing portals (B2B or B2C) kind of rounded off the foray on the public cloud. Test & Development, archiving, and experimentation of new solutions were the other deployment cases. None of the core applications moved to the cloud; small and medium enterprises, and start-ups though did find the cloud offering quick solutions at affordable costs.

All As-A-Service models worked on the assumption that enterprises are desperate to move their capital investments to operating expense; in reality all of them were not excited. The variability of expenses that clouds promised was rarely delivered with rigid contracts and time to (re)provision. ROI remained elusive in the public and hybrid cloud models, the private cloud (which was created as a term to appease the CIOs who did not embrace the real cloud) did provide some benefit with agility and higher utilization.

Re-purposing a consumer offering to the enterprise (read the micro-app nemesis) has many challenges which I guess will eventually get resolved; the reverse may to the consumer as I know is not been ideated; the boundaries are blurring between the two. While the transactional need fulfilled by enterprise applications will rarely move to the cloud or onto the mobile, information consumption and field data gathering will become key processes working off the same personal mobiles on the public cloud.

With the boundaries between consumer and corporate devices no longer tenable and enterprises adopting BYOD, the next disruption will be the convergence and unification of the consumer and enterprise device, and applications. Until that happens, the debate will continue on where the cloud has a promise for the CIO and where it impacts the person the CIO is. Stock tickers, games, utilities and what have you gratify the individual and are perceived as a distraction and risk by the enterprise.

Coming back to the chat, a vendor in the audience challenged the duo that the vendor had customers who have successfully deployed the cloud but meekly backed off when challenged to verbalize the business case and benefit. The hot air was indeed clouding a normal discussion; so the CIOs agreed to wind up the discussion with the conclusion: clouds are here to stay, they are/will be a part of the IT setup, don’t go gaga over it, be pragmatic, practical and deploy only if it fulfills a business need. Sound advice if there was one !

Making hybrids work

When the phenomenon called Cloud made appearance on the IT landscape, it promised to disrupt many existing paradigms. You don’t need to buy any server hardware and storage, capacity is available on demand and you pay for what you use. Applications with licencing models that can adapt to business cycles, Everything-As-A-Service (SaaS, PaaS, IaaS and many more), no capital investments, only operating expense. It was touted to be the silver bullet to solve all the budgeting challenges of the CIO including getting rid of the CIO.

Evolution brought competition and a hysterical wave that caught every Vendor, System Integrator, Research Analyst, and the CIO alike. New terms were coined to depict the key attributes that the cloud promised: agility, flexibility, resilience, scalability, and on-demand. Alliances of hardware, software and networking vendors vied for attention; everything was cloud-enabled or ready. When corporate data centres could not be classified, the term “Private Cloud” came to rescue.

It brought some comfort to the CIO that s/he was not seen as “not doing the in thing”; almost everyone now had a cloud, private or public. From there rose the challenge of making them work together. After all if some apps are on the public cloud while the transactional systems or other apps are still in the corporate data center  they need to inter-operate  Tools and technology solutions attempted to bridge the chasm; everyone had a variant that did something better than the other confusing the heck out of IT teams.

Someone christened the new reality of the coexistence as “Hybrid Cloud” and the term has stuck on. For simpler solutions, applications and processes like collaboration, sales force automation and the likes of Human Capital Management, the challenge was easily overcome by most. Pervasive challenges of security, data residue, service levels, interoperability between different clouds, or difficulty in migrating from one service provider to another, cut across every offering.

Evolution of the services and technology has not been uniform; a few still struggle to offer a consistent experience straddling between the data center and the public cloud. A CIO narrated a harrowing story of his journey towards making a hybrid cloud work to offer a consistent and uniform experience to his users. The vendor in question either due to ignorance or over-enthusiasm promised everything to be possible and the delivery team struggled to get even the basics working.

Step by step through the early stages of making things work, they did not just lose time, the arduous journey had the IT team struggling to explain to the CIO why the project was running totally off target. Most were not technology challenges but oversell to the CIO on what would work and how it would. Straddling the physical and cloud world to offer a seamless and uniform experience to users did pose a few challenges. I guess all clouds are not created equal as competing solutions did offer to expectation.

The CIO called for a review and experts from all over the world joined in to rescue the situation. It was a one-sided affair with no real solution emerging to the problem at hand. The CIO concluded with the pilot being disbanded. The resultant credibility loss alienated the vendor in no small measure undoing a lot of the good work that they had delivered in the past. It was almost like the nursery rhyme in real world “All the king’s horses and all the king’s men could not put the vendor back on track again”.

I guess when it comes to hybrid, cars work and have achieved a maturity level that brings consumer confidence; with clouds I guess there are still challenges to overcome and technology to reach stability and interoperability. Until then stay cautious and don’t bet on everything to work the way it did in a pure cloud or in-house model. The user experience with hybrids can be a dampener on the enthusiasm that vendors and system integrators want you to feel while they experiment at your cost.

P.S. it would appear that the next wave promises Autonomic Computing, anyone game ?

OMG, I saw a Data Center

Last week one of the global IT biggies invited a bunch of CIOs to their R&D Centre with the defined agenda being a discussion on future trends and movements in their technologies; the idea was to get some early traction with old and potential customers and field testing that helps fine tune a product. Apart from all this were the good old peer networking and some high spirits if you know what I mean. So I was enticed enough to join the group to give away a weekend in the name of learning and networking.

Like all such gatherings it was a good start with key leaders and guys oozing tech from their ears talking about new disruptive technologies are coming our way in the next 2-4 years. They held sway in the graveyard sessions post lunch with sleep overpowering only the infirm or the bored indifferent which did not matter. Most cynical CIOs on the wrong side of forty acknowledged the prowess and the future opportunity.  Good things don’t last and this one too didn’t.

After the first two sessions started the mundane, the irrelevant and the hard sell; data centre density, cooling, and power consumption. Virtualization and private cloud are good, a higher virtualization ratio even better, but 20K VMs in a rack ? Why do I need 20K virtual servers ? The nail in the wall was when someone decided it’s a good idea to teach CIOs how to configure a VM and then move it across racks with no downtime. I am not sure if CIOs want to be doing that or enterprises want high cost CIOs to do that !

I mean does a CIO teach the technology architect the finer nuances of VM management ? To rub salt into the wounds, they extended the session over the coffee break to cover private cloud extension to the public cloud. Now I am sure that my server admin would be kicked by this demo, none of the CIOs in the room were. They expressed their displeasure in no uncertain terms, some decided to leave the premises as soon as the break was declared closed. I asked the presenter if their CIO knew how to ! Patience too has its limits…

The climax was waiting for the following day; a visit to the R&D facility ! We all got into a bus, arrived at the big building, signed in with sobriety and were taken to the show. We entered a room with biometric authentication to be faced with rows and rows of racks with cables dangling from some. Proudly the scientist pointed to one of the racks and started talking about why it was different and the innovation that went into making the hardware inside and why we should immediately order it.

I could not remember the last time I had visited a data centre (even my own); digging deep into memory it dawned that it was more than a decade back. I whispered to the CIO next to me and he too reminisced a long time back. A few others had been to their outsourced or co-located data centres when they had signed the deal. I wished my infrastructure head was present; maybe he would have appreciated the significance. To us the CIOs it was a lost experience, we did not share the enthusiasm.

Does or should the data centre matter to the CIO ? The vehement answer would be yes from many. Then what about the cloud ? Have you visited the Google or Amazon or Salesforce.com data centre ? Do you know when you buy SaaS where it is delivered from ? I believe that we need to come out of this obsession; the vendors need to start defocusing the data centre and start engaging on business outcomes. Yes the data centre makes the IT run, but to pick a line from Nicholas Carr, the data centre does not matter anymore !

Achieving business agility between ERP and Cloud

An intense debate between two CEOs ensued while I was listening with concentration to them; there was no debate on the need for every business to leverage technology to stay ahead of industry growth curve. Both had experienced success, but there was indeed a bone of contention. One of the leaders vehemently recounted the inability of ERP solutions and vendors to address the market dynamics. He cited many instances where the ERP vendor as well as his IT organization took longer time than business could afford; small solace that his competitors also used the same solutions and thus had similar issues.

The other CEO countered with an equal number of scenarios when the specific ERP had indeed been ahead of others. Now every ERP solution provides a complex array of parameters and settings that can be manipulated to provide functionality for most business processes. This complexity also becomes a bottleneck when any change is required. It is rarely as agile as other smaller solutions that can quickly be customized. CIOs have had difficult discussions on this aspect with Business and Vendor alike. The monolithic nature of the solutions indeed poses a challenge. Not that there are too many options, so the technology ecosystem has created multiple layers to manage the agility requirements.

Grudging acknowledgements later, both glared at me as if to validate their arguments and then turned back to each other. Before they could continue, I pitched in with thoughts on the new opportunity that has everyone confused and wondering with benefit statements ranging from better ROI to TCO, time to market, productivity, and the panacea to all ills that face every enterprise that uses technology.

This brought a smile to the face of the second CEO who began to lecture on the future being cloudy and why current IT models will no longer survive. He elucidated the benefits of the new disruptive paradigm the Cloud is and why enterprises should be embracing this. Now the other looked imploringly at me to help him and I could not refuse the request. After all I had broached the subject so I had to provide a perspective.

Differing flavours of clouds offer different value propositions; the viewpoint put across by the CEO related to Application and Software as a Service. Both offer an easy way to deploy and get started on any new business area or process. The most widely accepted scenarios are sales force automation and collaboration; for SME the benefit is limited upfront investments and no worries about managing complex technology. Beyond these mainstream business process remain firmly grounded in corporate data centres.

Irrespective of their physical location, the big ERP remains the same animal, big monolithic and complex. Separating processes like sales force or collaboration (read email, chat, etc.) does not in any way create an opportunity for agile business process alignment for the rest of the enterprise. In fact with the cloud, the base expectation is that business processes are standard and can thus be uniform across multiple companies. Clouds provide faster start points, but the change ability remains similarly constrained. A question from the audience inquired about ROI models for evaluating Clouds; that is another story for another day.

The two CEOs representing a large business house and a leading global ERP vendor acknowledged the reality and it was time to move on. The CEOs and CIOs listening to the interaction went away with both sides of the coin clear (?) to create their own agenda and discussion in their enterprises.

Do Clouds really save money ?

The beginning of the monsoon season in Mumbai inspired me to push the boundaries again in quest of the silver lining in the Cloud. Recent events around outages and security across multiple global Cloud pioneers poses doubts on the movement of even non-mission critical applications outside of the corporate data centres. We are not just talking about Infrastructure or Platform as a service, but everything that is the manifestation of the Public Cloud.

Over the last couple of years every offering saw two shifts, first it had to have a Cloud flavour and second around social networking (that is another story); some termed this new euphoria as bubble 2.0 tinted by valuations achieved in recent IPOs. So everyone justified how this time it is different and why it is sustainable. Many large and small enterprise found efficiencies (at least short term), in moving field functions like sales and service, and collaboration on the move, to the Cloud.

 

Leaving aside the debate between public, hybrid and private clouds, the real issue is about the promise of the Cloud irrespective of the vendor, type of cloud offering, or engagement model. The big benefit that every type of Cloud offered was savings, real quantifiable savings or better Total Cost of Ownership. CFOs would agree that TCO is always a good measure for any financial model if all other dimensions remain unchanged.

 

Cloud service providers financial models are contingent on multiple customers adopting their base solutions which give them the efficiency of scale and repeatability. As the number increased, beyond a threshold they start making money. Non-concurrency improves yields, but prices remain the same for customers. So the financial models attempted to capture some efficiency based gains making them look attractive to the prospects.

 

Most discussions got off to a good start with worksheets providing easy decisions. The newness of the paradigm left some questions unanswered, but during the slowdown, these were brushed aside. Some of these were 

1. What happens if the SLA is not met ?
2. Is my data as secure as it is in my current state ?
3. Can I move off to another Cloud if I don’t like something ? How easy is the transition going to be ?
4. As I upgrade internal systems, how do I ensure integration with the external systems does not break ?
5. What recourse do I have if the Cloud Service Provider goes bust ? ...

I will stop here, the list is a bit longer, but you get the point.

 

Business impact due to recent outages and security breaches for some of the smaller customers was significant. Some of them just had to wait and watch with no option. A few had spread the risk across and thus the impact was limited. The big enterprise shrugged and moved on. How does one balance the adverse business impact against the cost savings ? To me this is a bad compromise as everything is subservient to business interest.

 

Why do vendors sponsor CIO events ?

It is a general belief that CIOs are a pampered lot, with every vendor equipped with a marketing budget vying for time of the CIO wining and dining them, or taking them to exotic locales under the aegis of a larger event organized by, say an IT publication. A destination’s lure or the fine dining opportunity is what the vendors believe attracts their audience to accept these invitations.

Now, the CIO is usually attracted by headlines promising to transform the business, strategies to enhance business value, getting ahead of competition or additions to the corporate bottom line, to just name a few juicy titles. It does not matter what product or service the IT company offers the titles are very similar in their stated intent to help the CIO in being a winner. Expectation mismatch?

The reality is more on the lines of a captive audience, subjected to what can be described as Auschwitz style torture by presenting presumptuous facts of a micro-segmented market that has no correlation to the reality (of the audience). They then propose the same old solutions around data centers, storage and server virtualization, wrapped on cloud computing enabling the business statements using logic defying rationale.

Recent times have seen the gas chamber (read conference room) pumped with cloudy trends and solutions suffocating CIO prisoners and adding to the confusion. The CIOs’ silent cries are lost in the din of the collar-mike-d speaker who avoids eye contact with the victims, so as to not be cursed by their souls. Sighs escaping occasionally are drowned by the amplified voice of the person standing a head above the rest (on the stage). Basic decency and courtesy prevents the CIOs from walking out; a few regularly pass out, even as their snoring disturbs those who seek solace.

This cycle repeats endlessly, with the CIOs hoping in vain that IT vendors have probably taken their last feedback. That they have changed their way of using the precious face time with a group of decision makers. But no, it is as if the basic principles of customer engagement have been thrown to the winds. Forget the customer or his needs, sell what you have; it does not matter whether the customer needs it or not. Twist the message adequately to make the square peg fit into a round hole.

The vendors’ defense is typically on the lines of, “Listen to the customer? How can I do that when I have only 45 minutes of stage time? I have to tell them my story (the story that my company wants to propagate). I will read the slides, take a few minutes longer than the allotted time, so that there is no time for questions”. After all, I have spent some hard money to sponsor the event.

Over the last year or so, many CIOs have started excusing themselves from these excursions and invitations, in many cases at the last minute, citing business exigencies. This number is growing, and such opportunities will just wither away unless the model changes to encompass “Engagement, Listening, and Empathy”.

Is anyone listening?

Holy Grail of IT, Operating Expense vs Capital Investment

IT budgets were never a great discussion; the CIO struggled to find the right balance between “Business As Usual”, or keeping the lights on, IT infrastructure, incremental innovation, new projects that business wanted, initiatives that IT wanted, and some that the CIO believed will have a transformational impact on the company. Over a period of time, the operating expense ran out of control to reach almost 90% of the total. Across the industry, this required a conscious effort to bring back the innovation budgets with BAU settling around 70%.

In the recent past (at least the last two years that is vivid in my memory), almost every IT solution, vendor, consultant, and CIO has promoted the idea of shifting capital investment to operating expense. Capital investments almost withered away, as the economic challenges dictated cash flow controls. Large initiatives found it difficult to get initial funding. IT companies turned around models to offer almost everything as a service, thus obviating the need for capital expenses. New business models liked payments to outcomes spread over a period.

The operating expense model helped forward movement; in success based engagements, everyone was a winner. For the CFO or the CIO, in the absence of success, it was easy to pull the plug, and stop loss. Yes, there was, and is, an inherent risk of the project or initiative not working, but we have not heard of any such anecdotes as yet — as if success rates now equaled the past’s failure rates. Is this due to the fact that the financial risk is now shared in a different proportion between the stakeholders? Or is there another angle to it?

The answer is probably affirmative when it comes to the shared financial risk. However, I also believe that the vendors now prefer the OPEX model, as it helps their profitability over the long term with continued revenues and the ability to spread their capital investments over a set of customers. The customer is probably paying more over the useful life of the product.

There is another angle as well. Once any process operates over a shared IT infrastructure, application, or solution, with the data too being stored in the service providers premises (sounds like the Cloud?), the ability to get out of such an arrangement into an independent model will be a huge, if not insurmountable, challenge. Everyone recognizes it, and believes that the changeover is executable, but I would be worried to be in a situation where I could be held to ransom — despite what the lawyers tell me.

I am not propagating the message that we all need to move back to the good/bad old days of big capital expenses. The CIO should be wary of the “too good to be true” deals, and safeguard the enterprise’s interests by reviewing alternatives to disruption of services, or the possibility of a shift should the service levels fall below acceptable limits; and in the worst case scenario, the service provider increasing the fee to abnormal levels. The time and cost of any change in this situation can be very high indeed.

Weather predictions and the CIO: enough of Cloud Computing

Last month, I was part of a two day gathering (attended by a little less than 100 CIOs) at a great beach resort in the wonderful locales of Goa. It had stopped raining after 20 days of incessant rain, said the lady at the Reception while welcoming us. The next few days were expected to be cloudy, with some sunshine bringing smiles—the CIOs were looking forward to rewind, relax, and network while exploring some serious thoughts on IT during the day. Weather stayed faithful to the prediction—apart from the occasional showers, the sun played hide and seek with the clouds. I could recognize cirrus, nimbostratus and cumulus.

As the conference progressed, it was evident that every IT services and product company (irrespective of what they had to offer), created some connect with cloud computing. We had power management, data center hosting services, servers, virtualization, software, telecom services and some of the global top five IT companies—all talking about cloud computing as the essence of IT. This herd behavior had resonance with hype seen in the late ‘90s around the Web and Internet. Words from the past echoed, “Any company who does not have a Web strategy will be dead in the next decade”. We all know that most of the companies which had only a Web strategy fell off the cliff into the chasm of oblivion. Predictions and promises of the cloudy set mirror the irrational exuberance that was pervasive in the dotcom era.

Do you know what cloud computing is? A rhetorical question; the speaker did not wait for the answer and began his 30 slide presentation starting with what is virtualization. The next speaker added to the misery with green data center and energy efficiency, while acknowledging that IT contributes to only 2% of the carbon emissions. If everyone did their bit, carbon emissions would come down by 0.4%. And, if all of us moved our entire infrastructure to the cloud, maybe that figure will go up to 0.7%. Save the world, move to the clouds. Over the next day, almost everything (from basic definitions to use case models and in between) was pushed down on the hapless audience, which braved the frontal attack while wistfully looking at the sunny sky outside.

Out of courtesy to the speakers and organizers, CIOs continued to field the inane presentations as well as panel discussions on clouds, clouds, clouds, and some more clouds. A resurgent CIO challenged the vendor’s wisdom (on stage) about treating the audience like kindergarten kids. They were challenged on solutions for the enterprise’s current ailments or help for the CIO’s real life problems; not just talk about irrelevant solutions. CIOs broke into spontaneous applause which would bring a politician pride, but evinced no answers from the speaker—again, like the politician. Sections of the audience wandered away after every break, leaving behind a thinning crowd for subsequent speakers. The sun too teasingly invited captives to come out, as the waves’ murmur tortured the spirit. The CIOs saw merit in discussing cloud formation in the skies—no connection with the conference room’s discussion.

With the ecosystem yet to evolve and create meaningful cloud transition strategies for enterprise users, the IT vendors will do a favor by not increasing the hype and aligning to reality. Privately, most vendors acknowledge the fact that clouds are as yet mature, since the concept is surrounded by a lot of questions that require hard answers like security, geographical data residency, privacy, licensing, and many more. Their organizational compulsions prevent them from being honest in a public forum—lest it be seen as them not toeing the party line. Thus, vendors and consultants will do well to listen to their customers before charging ahead on their favorite subject for now, cloud computing.

As the conference was coming to an end, a tweet escaped the room, “Cloud in the sky, cloud in the room, my mind is cloudy too after listening to so many speakers on cloud computing”. Personally, I enjoyed counting the clouds outside than the utterances inside.

It's monsoon time again and raining clouds

Yes, it’s raining, and the country is covered with rain clouds for which everyone is thankful; after a year when everyone was worried. It’s as if the economy’s slowdown and lower budgets had a link with the reduced rainfall. You must be now wondering about the relevance of monsoon for a CIO. Please have a bit of patience for the ‘Oh I See’.

Someone is launching a book on the support models and delivery on a specific cloud (amongst the oldest service offerings globally before the term ‘cloud computing’ was coined). This book is derived out of thousands of support threads from customers, analysis of response times, efficacy of the model, and the pitfalls in putting your business on the cloud. No, the book is not about cloud bashing, but more about the reality of what customers faced—either in their ignorance, or due to lack of definitions and omissions.

With enough being said about why everyone (CEO and CFO included) should go cloud watching or about CIOs being beaten to death about adoption of cloud computing, the proponents of this disruptive technology are growing. This often leaves the CIO wondering about why he doesn’t get it and looks up for insight from Almighty—only to see some more clouds!

Recently, I met up with a cloud evangelist from the world’s largest cloud company. He was patiently explaining to the CIOs in a step-by-step way—on how to get started, where to get started from, and what to realistically expect. Now that made everyone sit up and listen with attention! Following the discourse getting into a debate with selected CIOs, the reality dawned on everyone that various XaaS models (where X = application, platform, and infrastructure, for now) do have limitations and challenges for any large enterprise to function in a hybrid model using cloud and internal capability.

Almost everyone who has adopted the cloud has used it for non-critical applications, test and development environments. In many cases, organizations use the cloud on fringes to connect road warriors or partners. Concerns remain around security, manageability, data retention, geographical statutes, service levels, and the evolving experience around how clouds behave. One point that had me jumping out of the chair after reading the above mentioned book’s synopsis was the gap between perception (and reality) around turnaround times for issues, patching and security management in an IaaS model. With 20+ hours to resolve issues and no patch management service, I would not even bet my test or development environments to the cloud.

Every industry evolution goes through the hype curve, and for now, cloud is still on the rising edge. With the number of companies announcing cloud based services (which do require large investments), I wonder if the future will see a cloud burst akin to the dotcom bubble burst that we experienced a decade ago.

I would stay cautiously optimistic until then, and learn to live in the rain !