Questions executives need to ask about cloud computing

If you’re like most executives, you’re part of a technology purchasing committee. Making computer technology decisions has never been easy. You have to slog through the marketing hype and computer jargon to separate the sales-copy promises from the software reality.

I remember an old saw from my software-selling days: “The difference between a used-car salesman and a software salesman is that the car salesman knows when he’s lying.”

If you’re going to make smart decisions, you need to get answers to these questions:

If you’re a CEO, COO, President, or Owner

How is cloud computing good for your operation?

What does it mean to your operation and your customers?

If it’s going to give you an edge in the market, exactly how is that going to happen?

How do you direct the people who will lead the project?

What risks do you need to consider?

If you’re a CFO or VP of Finance

Is cloud computing good for corporate compliance and your cash flow?

Where does it fit into current regulations?

If you’re a CIO, CTO, or IT Manager

Is cloud computing good for your computing infrastructure?

How do you evaluate cloud computing?

What should you look for in a cloud computing vendor?

What about security?

Where does cloud not make sense?

This blog is written with the non-technical manager in mind; it won’t dig very deep into the technology. There are plenty of other sites that do that very well. So, even if you’re an executive with limited technical background, this blog will guide you on the questions to ask and the issues to examine when your technology team considers cloud computing for your company.

 

Why executives want to get into the cloud, now

A lot of executives have heard about cloud computing and are curious about how will help them achieve their business goals. After all, cloud vendors are now advertising in airports and in business magazines.

Frequently executives are calling IT managers into the executive suite and asking them, “When are we going into the cloud?” 

It’s not that easy for the CIO to answer, both psychologically and technically. They are tasked with keeping the IT systems up, running well, and secure. Their key performance indicator is up time and they get fired for system down time.

Any new technology is risky because they’ve been burned before trying to implement new systems. So they will be reluctant to change what they know works unless there is no alternative or until they feel that they can manage the risk of moving to cloud-based IT.

When I talk with business executives, they would love to fire their entire IT department and outsource the whole operation. There are many reasons why: inflexible IT, not knowing what IT really costs, getting more “No’s” than “Yes’s” from IT. In summary: the CEO is frustrated and generally views IT as a cost center and not a business enabler. While that’s rarely true, that’s their perception. And part of the blame for that goes to the IT director not being business savvy. More on how to fix this later.

What’s holding them back from outsourcing IT is they don’t now how to do it. And yet the cloud holds the promise of an outsourced IT model. That’s why they’re interested in the cloud.

Here are some attractive cloud executive value propositions:

  • Rapidly deploy business functions without needing to know how and where 
  • Only pay for what you use, not for what you might need
  • All the IT you want, when you want it, without technical knowledge, without hassle
  • You don’t have to:
    • Design it
    • Buy hardware
    • Install it
    • Power it
    • Cool it
    • Manage it
    • Back it up
    • Keep it running
    • Upgrade it
    • Just use it!

What do you think?

So what is cloud computing, in executive language?

The definition of cloud computing is about as hazy as the name itself and different people try to give different meanings to cloud computing. I’ve found that any definition I come up with is countered by someone else’s definition.

So let me put it this way: cloud is about consuming I.T. services in ways other than traditional on-premises infrastructure. It involves connecting users to business applications through the internet, and there are a wide variety of usage models ranging from system ownership to utility-like on-demand delivery.

You can think about cloud with a car metaphor. You can own your car and be fully responsible for its operation and maintenance—that’s like traditional I.T. or private cloud.

Or you can lease a car, letting someone else maintain it for a fixed fee and you return it at the end of the lease—that’s like managed services.

Or you can take a taxi, paying for only for the mileage and time that you use, and when you’re done, someone else uses the taxi. And if you have a lot of people to transport, you take multiple taxis—that’s like cloud services.

Or you can take a public bus for a flat fee, going where it’s headed, along with everyone else riding along—that’s like software-as-a-service.

From a business sense, cloud is about moving from an I.T. systems-centric information technology to a services-centric business system where you enjoy flexible and agile I.T. services.

Let’s quickly review the fundamental cloud business models: public cloud, private cloud, software as a service, and hybrid cloud.

With a public cloud, you are renting compute and storage capacity from a large I.T. infrastructure services provider who share infrastructure with other customers through the Internet. With public cloud, you’ll buy the cloud services and your team will take responsibility for implementing business application and networking from the cloud to your customers.

A private cloud could be on-premises or off, but you are the only tenant on the infrastructure. This is like traditional I.T. and typically adds overarching deployment and management tools to rapidly delivery new I.T. services or management changes. Your team will be responsible for architecting the infrastructure, implementing the hardware and software and supporting it.

Software-as-a-service is where a provider offers specific applications running on their I.T. infrastructure and delivered via the Internet. A common example of this is salesforce.com. In this case, you’ll purchase the services and your team will provide value-add with services like implementation, training, customization, security policies, etc.

A hybrid cloud will probably become the most common deployment. This is some combination of public cloud, private cloud, and software-as-a-service. Your team will deliver customization, integration, management, training, for a complete business I.T. system.

Fed CIO Vivek Kundra says Yes to Cloud

The federal government is giving thumbs up to agencies buying cloud services. Worth a read.
Posted by Vivek Kundra on September 15, 2009 at 12:09 PM EDT
Today, I am excited to announce that we have launched Apps.gov to help continue the President’s initiative to lower the cost of government operations while driving innovation within government. I’ll be discussing this in a speech at the NASA Ames Research Center at 1:00 EDT – watch the speech live here [UPDATE: This event has now concluded].
Apps.gov is an online storefront for federal agencies to quickly browse and purchase cloud-based IT services, for productivity, collaboration, and efficiency. Cloud computing is the next generation of IT in which data and applications will be housed centrally and accessible anywhere and anytime by a various devices (this is opposed to the current model where applications and most data is housed on individual devices). By consolidating available services, Apps.gov is a one-stop source for cloud services – an innovation that not only can change how IT operates, but also save taxpayer dollars in the process.
The federal government spends over $75 billion annually on information technology (IT). This technology supports every mission our government performs— from defending our borders to protecting the environment. IT is essential for the government to do its work, and it is essential that we have access to the latest and most innovative technologies.