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NigelS

Cloud Services: Matching service propositions to buyer preferences

by Juniper Employee ‎08-31-2011 10:00 AM - edited ‎08-31-2011 10:00 AM

What a difference a year makes! If the Cloud World Forum1in London earlier this summer was anything to go by, CIOs have completed their first phase of cloud deployment and now looking to expand and enhance  their services to deliver a greater contribution to the business. In effect, transforming  the IT department as we know it today into a business innovation center. Indeed, some would argue that the IT department will dissapear as a result of cloud adoption2.

 

So how should cloud providers align with the evolving needs of the CIO as the very role of IT departments changes?

 

When the cloud concept burst onto the scene, propositions seemed to be all cost-based; faster return on investment and lower total cost of ownership. I still see cost stated as a primary benefit: “With Prices From Only 1p/Hour” one well know provider states on their homepage.

 

But business agility, not cost, is the motivation according to the CIOs I spoke to and some recent research;

 

 

The message seems clear - agility and not cost is the lead motivator for cloud.

 

According to Microsoft, there are four agility scenarios5 where cloud can help; on-off demand, fast growth, predictable bursting and unpredictable bursting. This is a very technology-centric definition. However, confining the service offers in this way may be too limiting. Some commentators6 have warned that the inflexibility and cookie cutter approach of some providers limits agility. For example, organisations need to be able to have transferable workloads that can go from one provider to another, rather than contractual lock in. Most enterprises already aspire to using hybrid clouds as the next step - this will require even more openness in cloud computing platforms and service level agreements.

 

Dig deeper though and cost savings and cost control are still big drivers. More importantly, cost issues may well remain as the gating factor in longer term cloud decisions. The subtlety is that cost may be a second phase driver. In other words, the initial motivation may be agility-driven, but when the project gets to a broad deployment phase, cost drivers are likely to become the dominant factor. Especially for larger enterprises.

 

The final component is ease of adoption. Many enterprise customers have expressed a desire to move to cloud-based services but struggle to understand how to achieve this and are concerned about related challenges that, typically, fall outside of the current service offers; such as securing access to hybrid clouds.

 

Today the need is for a blended cloud service proposition comprising of 3 parts:

 

  1. 1.       Business Agility

Which means: - minimized risk of lock in, flexible service feature mixes, adaptable service contracts and service level agreements.

 

  1. 2.       Cost Benefit

For some customers cost will still be the lead motivation, for many it will be a secondary motivator until phase II deployments when a strong cost benefit will need to be demonstrated.

 

  1. 3.       Cloud enabling services

Customers need help adopting cloud. Service providers should look to deliver stand alone service components that aid the adoption of cloud services by the enterprise. For example, secure hybrid cloud access services.

 

The challenge for service providers is to align with buyer preferences while maintaining viable service economics. Is delivering agility for the customer and achieving economy of scale mutually exclusive?

 

The challenge for enterprises is how to measure the benefit of cloud when success criteria may alter at different stages of deployment.

 

References:      

1 Cloud World Forum: Nigel Stephenson presents on Cloud Security 2011.

 

2 Silicon.com: The Future of the IT department. 2011

 

IDG research/VMWare market pulse report : Global Cloud Computing Adoption: Transformation is in the Air. 2011.

 

4 ecademay :UK Cloud Adoption Trends: Current Landscape & Future Outlook.  2011

 

5 Microsoft: Business_Agility_and_the_Cloud. 2011

  

6 Christina Torode, news director for SearchCIO.com: Blog. 2011

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