Top 5 FAQs



During my many interactions with the CXOs, technology partners & evangelists, senior business sponsors and industry-forum leads, I have come across various concerns, inhibitions, and perceptions about cloud adoption.

In this article I have focused on the most pertinent questions/clarifications that different stakeholders have/seek about cloud adoption. There are no ‘right’ or ‘wrong’ answers here but rather it is about having the right perspective to the query and getting the data points interpreted correctly.

While some of the statements will re-define the concept, some others will deep-dive into applicability, measurability of cloud in business.

Cloud transformation is still a ‘concept-ware’; does it make sense for me to invest in cloud?

The cloud, just like any other transformation theme, is a journey that provides opportunities for companies to be more ‘efficient’. A transformational initiative typically targets the following factors, based on the varying degree of its maturity level:

  • Change the game (Ideal State)
  • Change the players
  • Change how it is played

The cloud is no longer a ‘concept-ware’. It has significantly matured over the last 3 to 4 years to provide a clear roadmap for both business and technology.


Business:

  • Enhanced customer experience
  • Competitive pricing with lesser cash flow impact
  • Rapid expansion (Products/Geos)
  • Agility for regulatory compliance


Technology:

  • Optimized compute in all the OSI layers
  • Process huge volumes of data
  • Foster re-use and change
  • One stack – one architecture
  • Open source adoption
  • Share and re-use with ease

There are products, productized solutions and services (pre-fabricated and/or customized on-demand) in the market today that target these as an end-to-end service.

“Cloud and its adoption will in fact give CIOs the chance once again to pursue the innovation discussion and in the bargain help devise new ways to take costs out of IT operations by casting the spotlight on inefficiencies” – Quote from one of the very popular blogging forums. This is apt for not just the CIOs but also all C-level executives evaluating cloud from their perspective.

Is there a cloud maturity model? If yes, how does that apply to me?

Cloud transformation is a continuous journey characterized by the following distinct phases:

  • An initiation or kick-off phase
  • Early adoption phase
  • Institutionalizing phase
  • An evolving or continuous improvement phase
  • Your journey depends on the answers to the following questions:
  • Where are you? (present state of business/IT)
  • Why do you want to adopt the cloud? (This is a very important question!)
  • How do you plan to go about this?

# Big-bang/co-existence

# Architectural layer-wise

# Business function-wise or geo-wise


Once you have the answers to the above questions, your journey to the cloud can be plotted in form of a maturity curve.

Figure 1 represents the various stages of a typical trajectory. At every stage your returns are measurable and quantifiable.

But this is just one perspective – the Technology View. There is also a business view to this. For example, an insurance organization embracing the cloud business function-wise will have a maturity curve that might look something like Figure 1.

In this example, the organization progresses from optimizing channels to improved products by leveraging the appropriate cloud platform (be it infrastructure, application, or solutions or a mix of all three). It is important to define the ‘journey first’ and then derive a maturity-model out of it. This will help make the cloud adoption more meaningful, quantifiable and in-line with your present and target state.

Now that we have redefined cloud for the business and a possible journey for the same, let me address clarifications that the industry has/seeks about cloud.

The cloud is all about virtualization, but I spend more than 70% of my budget in my software applications and related components. Is there any play there?

Let me answer this by first referring to some industry data made available by leading analysts.

A study done for the insurance industry shows that about 50% of the IT spends goes directly into maintaining and evolving applications, while the DC cost is 18%.

67% of the typical CIO spends goes into managing labor or FTEs. However based on our experience we believe 80% of that is purely devoted to applications.

These facts emphasize that spend in the applications arena is too significant to be left un-impacted by a transformation theme like the cloud. In some cases, these initiatives may start with mere ‘virtualization’ but the actual benefits remain unrealized unless the applications undergo the changes as well and leverage the ‘new’ platform.

If we carefully study the various motivators of cloud adoption, we typically observe the following factors:

  • Capital cost optimization and controlled operating expenses
  • Direct revenue generation and/or profitability measures at same or lesser cost
  • IT platform efficiency leading to ‘optimized cost of IT’
  • Efficient and agile business change management
  • Software engineering lifecycle efficiency

We believe that the cloud is all about efficiency, which implies that it needs to impact the area where the maximum IT spends are made today’s applications. Once the applications undergo a meaningful transformation to run on cloud, it is only then we can expect to leverage the full potential of the cloud.

Is the cloud industry specific? If yes, what is in there for me?

For example, I manage an enterprise IT with strict security compliance, is that a deterrent for adopting cloud? Yes, the cloud is industry specific – not by its definition but by its means and ways of adoption. Let me take few examples here to explain this –

An automobile manufacturer may want to leverage the cloud for providing safety and productivity information to its customers. In the automobile segment, vehicle-heartbeat and route/traffic details are key customer experience levers and the cloud provides a platform (often referred to as ‘Community Cloud’) for these information to flow seamlessly.

What is important to note here is the variability of the use cases and their needs – and then the way it gets mapped to the various facets of the cloud to achieve the contextual goal. This makes the cloud analogous to the very popular ‘Lego building blocks’.

Individually the Lego pieces are designed to serve very distinct objectives, but when put together and depending on how they are joined they create different structures like bridges or even a house. The cloud platform provides these Lego pieces, all you need to do is integrate, re-assemble, and sometimes build on the top or re-use.

To answer the second part of the question, security is one such ‘Lego block’. It is inherent in every cloud offering today – be it infrastructure, platform, application, process or data. The cloud provides security even if you might not explicitly need it and has been internalized as part of the platform.

How do I measure my returns? Is it purely balance sheet?

No, it is not only ‘balance sheet’. While there were ways too many transformation initiatives in the last 2 decades that claimed cost reduction, the sale of the cloud happens in other benefits it comes with (as explained above in the ‘virtualization’ question).

The key is – How do you measure these? While you cannot measure all in the same yardstick, you can measure them in the following categories of scale (you can of course set your own scores), that include but not limited to:

  • Increased customer base due to cross-sell
  • Lesser SW license overhead
  • Lesser sourcing issues in terms of skill
  • Change cost (goes down) and speed to change (goes up)
  • Engineering process efficiency areas – deployment, provisioning, change control
  • Occurrence of share and re-use


Conclusion

Cloud has become mainstream today. It goes without saying that this has a powerful impact on business and it is important that business and IT take the right decision and positioning in terms of leveraging the cloud platform.

Dhiman Basu Ray
The author is director & global practice head,
cloud and application transformation business,
Happiest Minds Technologies
maildqindia@cybermedia.co.in

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