Posts Tagged business agility

The Data Center’s Hybrid Cloud Future

Nearly half of large enterprises will have hybrid cloud deployments by the end of 2017. Hybrid cloud computing is at the same place today that private cloud was three years ago; actual deployments are low, but aspirations are high, says Gartner in a published news note from Oct. 2013.

Almost every organization today utilizes some form of cloud computing, usually public clouds.  In its State of the Cloud survey RightScale found 94% of organizations are running applications or experimenting with infrastructure-as-a-service, 87% of organizations are using public cloud, and 74% of enterprises have a hybrid cloud strategy and more than half of those are already using both public and private cloud. RightScale estimates may be a bit more generous than Gartner but both come to the same conclusion in the end: Hybrid cloud is the approach of choice.

Executive management, however, prefers private clouds for the control and security they promise. That the actual control and security may not be much better than what the organization could achieve in the public cloud if it were rolled out properly, but executives don’t understand that. So private clouds are management’s darling for now.

Private clouds, however, fail to deliver the key benefits of cloud computing—cost efficiency and business agility. The organization still has to invest in all the IT resources, capacity, and capabilities of the private cloud. Unlike the public cloud, these are not shared resources. They may repurpose some of their existing IT investment for the private cloud but they invariably will again have to acquire additional IT resources and capacity as before. And, the demand for resources may increase as business units come to like IT-as-a-Service (ITaaS), the rationale for private clouds in the first place.

As for business agility with private clouds—forget it. If new capabilities are required to meet some new business requirement, the organization will have to build or acquire that capability as it did before. The backlogs for developing new capabilities do not magically go away with ITaaS and private clouds. If business agility requires the business to pivot on a moment’s notice to meet new challenges and opportunities there is only one way the private cloud can do it–develop it in-house, the old fashioned way.

Hybrid clouds provide the answer. Gartner, Inc. defines a hybrid cloud as a cloud computing service that is composed of some combination of private, public and community cloud services from different service providers. In the hybrid cloud scenario, the company can rely on its private cloud and happily cruise along until it needs a capability or resource it can’t deliver. Then the company reaches out through the hybrid cloud to the public cloud for the required capability. Rather than build it, the organization basically rents the capability, paying only for what it uses when it uses it. This is ideal when the organization needs to temporarily augment resources, capacity, or capabilities to meet an unanticipated need.

Hybrid clouds, unfortunately, don’t just pop up overnight. First you need to lay the groundwork for your hybrid cloud. That entails identifying the specific cloud resources and services in advance, making the necessary financial arrangements with appropriate public cloud vendors, and establishing and testing the connections. Also, check with your auditors who will want to be assured about security and governance and similar details.

While you are at it, make sure your networking and security teams are on board. Ports will need to be opened; the firewall gods will need to be appeased. You also will need to think about how these new capabilities and services will integrate with the capabilities and services you already have. This isn’t necessarily a major undertaking as IT projects go but will take some time—days or, more likely, a few weeks—to get the approvals, assemble all the pieces, and get them configured and tested and ready to deploy.

As RightScale notes: although the use of cloud is a given, enterprises often have different strategies that involve varying combinations of public, private, and hybrid cloud infrastructure. For most, however, the hybrid cloud provides the best of all cloud worlds, especially in terms of cost and agility. You can run ITaaS from your private cloud and pass through your hybrid cloud whenever you need public cloud resources you don’t have in house.  Just make sure you set it up in advance so it is ready to go whenyou need it.

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The ROI from Private Cloud Computing

In surveys executives repeatedly express their preference for private clouds due to the perceived greater control and better security. Still, a private cloud needs to generate a ROI justify the investment. Private clouds don’t come free.

Assessing the ROI of private cloud is possible but not straightforward. Additionally the recent economic recession has pressured corporate profits, leading organizations to cut technology spending and limit further investment in cloud, which makes an ROI analysis even more important, according to Cloudtweaks.

Leading researcher IDC notes that many of today’s private cloud business cases are being anchored by savings from application rationalization and IT staff productivity improvements in addition to expected optimization of hardware assets. And unlike the public cloud, which promises to shift IT spending from CAPEX to OPEX, private clouds can actually drive increases in CAPEX since sooner or later the organization is likely to invest in new servers and storage optimized for virtualized cloud service delivery and in management automation.

A private cloud is a virtualized pool of IT resources sitting behind the corporate firewall. Since these are your resources and reside within your security umbrella they offer the promise of greater control and security. The security and control, of course, is only as good as your IT security and control has been all along. Actually, it could get worse since the private cloud typically delivers IT capabilities as services to more of your workers who may use them more widely and more frequently and in new and different ways due to increased accessibility.

The private cloud changes the IT delivery model. IT truly becomes a services delivery operation deploying and delivering IT capabilities as services through the private cloud. Users will access these capabilities on demand as services, often through a browser or even a virtualized desktop.

The great value of the private cloud comes from the business agility it enables. The virtualized pool of IT resources that makes up the private cloud can be allocated and reallocated quickly and easily to meet changing business needs. Instead of requiring weeks if not months to develop and assemble the IT hardware and software resources necessary to support a new business initiative, those resources can be allocated from the pooled virtual resources, possibly with some configuration changes, in minutes or hours (provided, of course, sufficient resources are available). With a private cloud, in effect, you can change the business almost on-the-fly and with no additional investment other than a few clicks of the mouse.

As CIO, how are you going to put a value on this sudden agility? If it lets the organization effectively counter competitive challenges, seize new business opportunities, or satisfy new customer demands fast and easily it could deliver astounding value. It all depends on the business leadership. If top managers aren’t terribly agile thinkers, however, the value might be minimal.

Other benefits from a private cloud include increased IT productivity and efficiency, the ability of business users to self-provision the desired IT resources (with appropriate policy-based automation controlling the provisioning behind the scenes), and an increased ability to monitor and measure IT consumption for purposes of chargeback or, as is more likely, show back. For top management, show back may have big appeal, notes Jason Cowie, vice president, Embotics, a private cloud management software provider.

The private cloud, however, will likely entail additional investments. Although you can repurpose existing IT resources, soon you will want to invest in new resources with more capacity that has been optimized for the demands of what amounts to a new kind of delivery of IT capabilities. You also will want to invest in management automation to ensure efficient service delivery, monitoring, measurement, chargeback, and self-provisioning.

In the end, the value of private cloud agility when matched with agile thinking business leadership should more than offset the additional investments required.

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