Archive for December, 2012

Two Cloud Views: CIO and Business Manager

It shouldn’t be a surprise that CIOs and business managers have a different take on cloud computing.  Research conducted by Dimensional Research, for example, found that the overwhelming majority of business managers (80% of survey respondents) focused on the business value. CIOs focused on how the cloud enabled them to address issues like compliance requirements (58%) and competitive advantage (51%)

Compared to CIOs, business managers were more than five times more likely to chose business value over any other factor including compliance (14%) or competitive advantage (13%). And in what could be interpreted as a bad sign for IT, the most frequent “other” reason given by business executives for choosing the cloud was that IT did not need to be involved in the purchase.

The survey, sponsored by HostAnalytics, can be found here.  Where business managers focused on the business value enabled by the cloud, the CIO was also interested in how the cloud helped the business solve tricky problems, such as an aging and increasingly obsolete software portfolio. For example:

  • 61% of survey respondents say that critical applications have not been updated recently
  • 14% report that they have business-critical software that has not been updated in over four years
  • 28% of CIOs responsible for that business-critical software say they lack confidence in being compliant

Apparently business managers do not see the quality of business-critical software as an important issue. But why should they since IT already is worrying about it.

The cloud, through SaaS, is an ideal way to quickly update business critical software and ensure it remains up to date without business disruption.  The cloud has matured to the point where a CIO can find almost any type and category of business software.

A directory, The Cloud Showplace, boasts over 2000 companies listing products across 90 software categories. In this case the cloud is changing the way organizations acquire and utilize business applications and other computing resources. It also is changing the go-to-market strategies of hardware and software vendors and how they develop, deliver, package, price, sell, and support their products.

The survey also touched on the issue of customizing software.  Software customization has long been regarded as a dangerous pitfall when organizations were licensing enterprise on-premise ERP and CRM systems only to initiate lengthy customization projects. With SaaS, however, that seems less of an issue.

The researchers, however, looked at the potential difficulty finding available expertise for customizing SaaS applications. This apparently is not a problem reported by the survey respondents. The majority of CIOs (83%) reported that they can easily find employees or contractors to manage and customize their cloud applications.

Customization in this case is vastly different than what organizations meant when they customized on-premise licensed packaged apps. Then, they might have actually been changing the underlying code base. With SaaS, customization really means configuring the app, and the SaaS vendors build in numerous points where users can configure the app to their taste with point-and-click ease. The underlying code is never changed. The same goes when the code is updated; the vendor updates the code while the users’ customizations are preserved.

It is this promise of transparently up dated business-critical apps that makes the cloud, in part, so appealing.  Over half (61%) of respondents reported they have business-critical software that has not been upgraded recently. As that software falls further behind, the cost, risk, and disruption of upgrades becomes much greater.  For some (14%) the problem can only be classified as severe; their organizations rely on software that has not been upgraded in four or more years!

If for nothing else, the cloud should be appealing as a way to deliver the latest, highly configurable software transparently. Add to that the pay-per-use economics of the cloud and every manager, business or IT, should be thinking cloud.


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PaaS Gains Cloud Momentum

Guess you could say Gartner is bullish on Platform-as-a-Service (PaaS). The research firm declares: PaaS is a fast-growing core layer of the cloud computing architecture, but the market for PaaS offerings is changing rapidly.

The other layers include Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (IaaS) but before the industry build-out of cloud computing is finished (if ever), expect to see many more X-as-a-Service offerings. Already you can find Backup-as-a-Service (BaaS). Symantec, for instance, offers BaaS to service providers, who will turn around and offer it to their clients.

But the big cloud action is around PaaS. Late in November Red Hat introduced OpenShift Enterprise, an enterprise-ready PaaS product designed to be run as a private, public or hybrid cloud. OpenShift, an open source product, enables organizations to streamline and standardize developer workflows, effectively speeding the delivery of new software to the business.

Previously cloud strategies focused on SaaS, in which organizations access and run software from the cloud. is probably the most familiar SaaS provider. There also has been strong interest in IaaS, through which organizations augment or even replace their in-house server and storage infrastructure with compute and storage resources from a cloud provider. Here Amazon Web Services is the best known player although it faces considerable competition that is driving down IaaS resource costs to pennies per instance.

PaaS, essentially, is an app dev/deployment and middleware play. It provides a platform (hence the name) to be used by developers in building and deploying applications to the cloud. OpenShift Enterprise does exactly that by giving developers access to a cloud-based application platform on which they can build applications to run in a cloud environment. It automates much of the provisioning and systems management of the application platform stack in a way that frees the IT team to focus on building and deploying new application functionality and not on platform housekeeping and support services. Instead, the PaaS tool takes care of it.

OpenShift Enterprise, for instance, delivers a scalable and fully configured application development, testing and hosting environment. In addition, it uses Security-Enhanced Linux (SELinux) for reliable security and multi-tenancy. It also is built on the full Red Hat open source technology stack including Red Hat Enterprise Linux, JBoss Enterprise Application Platform, and OpenShift Origin, the initial free open source PaaS offering. JBoss Enterprise Application Platform 6, a middleware tool, gives OpenShift Enterprise a Java EE 6-certified on-premise PaaS capability.  As a multi-language PaaS product, OpenShift Enterprise supports Java, Ruby, Python, PHP, and Perl. It also includes what it calls a cartridge capability to enable organizations to include their own middleware service plug-ins as Red Hat cartridges.

Conventional physical app dev is a cumbersome process entailing as many as 20 steps from idea to deployment. Make it a virtual process and you can cut the number of steps down to 14; a small improvement. As Red Hat sees it, the combination of virtualization and PaaS can cut that number of steps to six; idea, budget, code, test, launch, and scale. PaaS, in effect, shifts app dev from a craft undertaking to an automated, cloud-ready assembly line. As such, it enables faster time to market and saves money.

Although Red Hat is well along in the PaaS market and the leader in open source PaaS other vendors already are jumping in and more will be joining them. IBM has SmartCloud Application Services as its PaaS offering.  Oracle offers a PaaS product as part of the Oracle Cloud Platform. EMC offers PaaS consulting and education but not a specific technology product.  When HP identifies PaaS solutions it directs you to its partners. A recent list of the top 20 PaaS vendors identifies mainly smaller players, CA, Google, Microsoft, and being the exceptions.

A recent study by IDC projects the public cloud services market to hit $98 billion by 2016. The PaaS segment, the fastest growing part, will reach about $10 billion, up from barely $1 billion in 2009. There is a lot of action in the PaaS segment, but if you are looking for the winners, according to IDC, focus on PaaS vendors that provide a comprehensive, consistent, and cost effective platform across all cloud segments (public, private, hybrid). Red Hat OpenShift clearly is one; IBM SmartCloud Application Services and Microsoft Azure certainly will make the cut. Expect others.

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5 Paths to IT Business Value

Earlier this year, Constellation Research identified four personas of the next- generation CIO, a CIO charged to deliver business value, not just keep the systems running. The four personas are: Chief Infrastructure Officer, Chief Integration Officer, Chief Intelligence Officer, and Chief Innovation Officer. Each delivers value in its own way.

The researchers also identified the top technologies that would create business value going forward. Topping the list was mobile, followed by cloud and data analytics/big data.  Rounding out their top five list were unified communications/collaboration and software enablement.

A similar Gartner survey asked CFOs which areas of technology they would like to see more investment and effort.  The top CFO choices: information and financial analysis followed by information management and knowledge sharing.  These were not much different than what Constellation found.

This shouldn’t be surprising. “IT provides a new source of opportunities for significant cost efficiency and organizational effectiveness that every business should exploit and leverage,” says Harry Wallaesa, CEO, WGroup, an IT management consulting firm. He goes on to cite 5 paths CIOs and IT managers should follow in pursuit of business value from IT.

First up, Wallaesa notes, is the convergence of ITO and BPO.  Technology and business process, long closely associated, finally are coming together in fact. From a business standpoint this translates into the simplification and standardization of sourcing deals and deal structure.  Standardization of contract components reduces cost of negotiating the contract, fewer staff needed to run the services because of similar contract structures, and easier control and analysis of cost since the contracts are done in like fashion. The payback: lower cost and better control.

Next comes the commoditization of IT and business services.  In fact, IT should position itself as a valuable service on par with other business services such as marketing and finance. This also, Wallaesa adds, can result in standardization and lower cost. A potential downside of the commoditization, however, may be loss of control. If IT cannot retain control of what systems and IT processes are used and the users can acquire systems their own the result may be the higher cost and loss of standardization,” he warns. In addition, the fact that technology has become so accessible has another downside, he notes—business units may go directly to the market, bypassing IT and controls altogether.

Similarly, the consumerization of IT may be a cost and control concern for the CIO. BottomlineIT first covered it here over a year ago. As previously noted, workers are bringing in their own smartphones and tablets, often paying for it out of their own pocket and downloading apps as they see fit. If workers can buy and bring in whatever they want to perform their work there arise both cost and control issues. At a minimum, it drives up the cost of IT support and governance as well as raising potential compliance and security issues.  In addition, the CIO should be concerned if people are not using consistent data systems and sources with consistent tools, which can result in apples-to-oranges comparisons.

Big data and analytics, Wallaesa’s fourth path, has emerged as so important to the business that CEOs are asking about it. The need for analysis of external and internal data to support the company is central to the success of the organization from a C-level perspective. Most CEOs view this as a specific part of their value-add. The CIO, then, is charged with ensuring valid, verifiable data is available for analytics. But again, the race to big data analytics using widely available tools any worker can access may lead them to bypass IT’s validation and governance role.  The CIO wants to ensure that the data is used consistently and controlled from a security standpoint.  This will be a big challenge for the CIO.

The growing interest in data analytics, big data, and mobility are clear signs of the overall convergence of IT and business, Wallaesa’s fifth path to business value, and maybe the one with the biggest impact on the CIO. The CIO has long struggled to earn a place as a peer among C-level execs. Yet, for too long many businesses have kept IT at arm’s length. No longer; astute business managers now realize that proactive use of IT can advance critical business objectives in terms of revenue, growth, and other strategic metrics, not just system uptime. Overall, this is a good thing, Wallaesa observes, because the business is taking ownership and responsibility for the use of IT. The CIO’s life may never be the same.

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