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New book explains how to reap business benefits of cloud computing

A new book from The Open Group tells how to reap cloud computing's business benefits. Listen to a podcast with two contributors, and read an excerpt.

It seems that every time a new technology appears, so do the promises suggesting that it's the panacea for everything that plagues a business. Certainly, the hype around cloud computing gives that impression. The claimed benefits of cloud computing range from greater agility, lower costs and better security to less risk, easier compliance, better IT support and improved business continuity.

Mark Skilton
Mark Skilton

A new book, Cloud Computing for Business, supports these claims by providing readers with a detailed analysis of what the cloud can do for a company and ways to reap the benefits of cloud computing. The contributors to the book are members of the cloud computing work section of The Open Group LLC, a San Francisco-based not-for-profit consortium of IT-associated companies. In this podcast, SearchCIO.com interviews two contributors -- Mark Skilton, director for global infrastructure services in Capgemini's CTO Group, and Pamela K. Isom, senior certified executive architect for IBM Global Business Services -- about some of the challenges the book examines.

Pamela Isom
Pamela Isom

"With each new technology trend that emerges, the resulting hype-cycle often obscures how companies can actually take advantage of the new phenomenon and share in its growth and benefits," said Chris Harding, forum director for SOA and semantic interoperability at The Open Group. The goal of Cloud Computing for Business is to demystify the cloud by explaining that this new territory is actually a combination of separate technology innovations and improvements that allow it to be implemented in many ways.

Its contributors focus on three service models: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). They also describe cloud's four main deployment models: public, private, community and hybrid. They take pains to be specific about how to realize the benefits of cloud computing. The seven chapters cover what cloud is, why businesses use the cloud, establishing a cloud vision for your company, purchasing cloud services, understanding cloud computing's risks, building ROI, and final thoughts on the challenges that cloud computing presents to business executives.

Read an excerpt from Cloud Computing for Business.

Read the full transcript from this podcast below:

Linda Tucci: Hi, I'm Linda Tucci, senior news writer for SearchCIO.com. A new book about cloud computing aims to get beyond the hype and provide IT departments and business people with practical advice on how to derive the greatest business benefit from cloud computing services and cloud computing's various delivery models. The book is called Cloud Computing for Business and it comes from The Open Group, a vendor of neutral and technology neutral industry consortium with over 300 members. Some of the themes covered include establishing your cloud vision, buying cloud services, understanding cloud riskand building return on investment from cloud computing.

I recently caught up with two of the contributors to Cloud Computing for Business, Mark Skilton and Pamela Isom. Mark is Director of Global Infrastructure Services CTO Group at Capgemini, the consulting firm and Pam is a Senior Certified Executive Architect with IBM Global Business Services. In this SearchCIO.com podcast, Pam and Mark talk about some of the challenges of cloud computing for the business in IT that are examined in the book.

Can you go through some of the areas where you think cloud computing might not be appropriate for a company at this time?

Mark Skilton: In the book, what we do is we cover a requirements decision tree, a decision process, the cloud, adoption and cloud running in cloud use and your question is companies that may not be ready yet for cloud computing. Could be ones where a lot of the investments in their current IT is based on old proprietary technology and there may be a significant cost of migration away from that existing investment, but what we find is that typically because of the awareness of the internet, the use of social networks particularly of the rise of Google and Amazon and other famous poster-childs of cloud, the public cloud.

We've seen a lot of companies now sort of expecting to move to a pay as you go model and a lot of companies now although they look at the problem as a big area of their investment and big companies invest a lot into IT these days. What you can do is you can eat the problem in small bite sized chunks. So, I think it's companies that perhaps don't have a process yet which may need to go through some internal planning first. Part of the reason that we wrote this book is to try and help companies figure out where best to play using the cloud or delivering the cloud.

My answer to your question is don't jump to the cloud without doing some planning first.

Linda Tucci: What part of internal IT stands to benefit most or might be most positively impacted by the cloud? Where are you finding the biggest ROI for the greatest number of companies right now?

Pamela Isom: This is Pam Isom. Companies are leveraging cloud for cost take out, number one and that is throughout the organization but the IT organizations are truly taking advantage of cloud from a cost take out perspective. The business units are taking advantage of cloud. They're applying the use cases for instance, to address business problems and to stream line business processes. So, in the use case examples for instance, we've got Telco providers as well as communication companies that are taking advantage of cloud computing.

The entry point is usually infrastructure as a service. Infrastructure is the predominant area where organizations are starting with cloud, they're moving to the platform as a service because usually when you have infrastructure you need some type of environment to support your infrastructure so there comes the desktops and virtual environments to support the capability and then back up the stack is SaaS. SaaS is very prevalent amongst some of the industry specific type of solutions which leads to the business processes as a service. So, I walk down and then back up.

Mark Skilton: One of the problems of the moment is the lack of, probably, industry standards around the particular APIs and what I call the integration problem, do we build a high bridge of my existing technology with cloud or do we move everything to the cloud either private or public? I think one of the things, Linda, around the challenge of using a platform as a service is really defining your own industry standards and this is something that The Open Group and particularly this book is it's starting to ask questions in the chapters, the Risk Management chapter, the Business Requirements chapter, how do you operate and run the service in the cloud?

I think the problem PaaS or the opportunity with PaaS is you can build customized cloud offerings faster and host them and manage them hopefully more cost effectively, but it's knowing whether you should invest more than one type of power or whether you need to since the integration problem become more complex because you've got multi-tenancy. We don't control the total environment and I think it's an architectural best practice problem rather than a technology problem. The technology's there. We're starting to see it with large vendors starting to offer this to glue things together. I think it's the evolution of standardswhich are playing catch up at the moment.

Linda Tucci: When do you think that the standards will be firm enough for companies to go ahead and adopt platform as a service?

Mark Skilton: I'll quickly say one of the areas we're working on in The Open Group is the interoperability and portability of the cloud and so we talk about data portability. There are open standards now around storage standards, better data standards that is semantic problem of understanding how your data is being held in the system which is still not being resolved fully. I do believe now, I think we're starting to see in the next probably two years I would expect some formal industry standards around API interfaces too. As Pam was saying infrastructure as a service and software as a service.

So I think probably another two to three years before we've got what I call API integration for the cloud so that it's sorted out, but the business process as a service is still maturing. If you think of it as the stack, I think the bottom up side of it the structure is about there now. Software as a service is starting to glue things together, but it still is those interfacing standards, I think and the catalog of services you know, putting your customers and your products into a catalog online. I think people are getting used to that, but it's still an evolving journey to be able to compare and contrast the cost of service, the reliability, and of course the security aspects, the privacy laws and the viability of keeping your data in a cloud which you may not have total control over.

Pamela Isom: The types of services that are not tightly coupled across the organization for my provider prospective are the services that are making it into the catalogs. The challenges are around charge back and how do you charge for the services from a provider's point of view, how do you charge for these services and if it's within the organization how do you make sure that the charges are accurate for consumers within the organizations and that you're charging the right business units. If the data that is to go into the cloud is classified then it presents all kinds of challenges and then that is one of the influencers as to should this be in the catalog or should this be a standard protected offering.

Linda Tucci: Mm-hmm.

Pamela Isom: Then one other one is if it is conducive to self-service provisioning. If that is something that can be enabled and something that is conducive to the organization or to customers then those fall within the cloud services portfolio.

Mark Skilton: I'd like to add to that as well is that there are probably three other areas that in terms of running a cloud, you're saying what are the challenges. I think what I'm seeing is this idea you have to adopt this fix before fail rather than just expecting things will just work. I think a lot of companies are sort of assuming that because I'm using a cloud service, or I'm providing a cloud service, is all going to work because it's just a black box and you can just operate and use it assuming it's just like a volt or electricity. I think a lot of companies are shocked too a little bit in terms of they don't have disaster recovery plans. This is something that I'm seeing that they need to have disaster recovery plans to make sure that they do have a fallback position if they need to get their data to another system.

A couple other quickie ones is version management. A lot of new learning lessons about the Paas, Platform as a Service. is understanding how this software development life cycle changed if you're hosting it in a cloud. How do you maintain the same version or disinversions of a service in the cloud for different customers and you need to understand what are your rights to change that service, what is the impact of different versions. If the cloud provider then changes to a new version, do you automatically have to go and upgrade to that version. Do you have any control over that?

Then finally, the knowledge. A lot of the companies I am dealing with, all of us are dealing with is sort of using multiple cloud solutions, many, many SaaS offerings, many, many potential infrastructure service offerings and desktop hosting services and things like this. The problem is actually knowledge. Being able to be an expert in all of these things is very difficult and a lot of companies particularly are looking at multiple SaaS or cloud solutions then need to look at how am I going to maintain the knowledge to keep track of all of these different solutions. So, I'm seeing, certainly we're seeing and it's covered in the book, this idea of portfolio management in the cloud. How can you manage that total knowledge that you need to do particularly in large implementations not so much small to medium sized companies but certainly large company implementations that are trying to deal with the knowledge problem.

Linda Tucci: Yeah. I wanted to talk to you a little bit about how cloud affects personnel. It obviously replaces some jobs that were done by people, but it also as you suggest requires a lot of new expertise that CIO's might need to hire for or contract for. So, can you talk a little bit about the sorts of jobs that might need to be added in order to take full advantage of cloud computing?

Mark Skilton: One thing that we've seen is this idea of how do you negotiate the purchasing contracts for pay as you go. They're quite different. They're almost as if licensing or rental agreements and what we're seeing is the new skills in purchasing need to be taken on board. How do you buy cloud services from a legal point of view? Certainly the CFO's which this book is aimed at, Chief Financial Officers as well as Chief Operating Officers and CIO's as well is what are the financial risks involved and I think that does need to be improved.

The second of the two points I'd like to add is what I would say is monitoring skills. A lot of the automation technology became complex cloud implementations, does need some kind of performance monitoring going on and there are new tools and new skills that need additional of what I call ITIL. ITIL, best practices are there. They need to evolve into "How do I do ITIL for a cloud?" because some of the responsibilities have been moved from to you to a third party in a different way. So again, that's an area of skills as service management needs to be cloud service management.

Pamela Isom: I'd like to add to that and particularly in the one skill that is essential is going to be managing these providers. So you need to know how to manage these providers that are providing this cloud capability for you and even if you are a provider yourself, you typically are working with some type of third party provider. So that whole managing the provider aspect is critical and it's an opportunity to take capabilities that are going away through to cloud consumption and then turn right around and add that capability within the organization and build up that skill space.

The other one is service integration. I think that is a great opportunity for people within organizations to look at services integration from a business as well as technology point of view. So, it's not just about linking the cloud solutions together which is key but it's also about linking the business processes and the end to end capability of making sure that you can do that and govern these cloud solutions. I think that that's a gap and it's a great opportunity to take those skills, rebuild that capability within the organization and have at it when it comes to adopting cloud.

Mark Skilton: One other thing I have seen is this on the down side is this potential for cloud to dumb down, dumb down the expectation of IT departments to know how the cloud is running and I think there's a risk. I've seen a number of large clients where they're seeing individual departments going out and buying clouds not involving the IT departments and there's this expectation that the service will maintain the same level of performance, but I think there is a risk certainly at the board level about of how do you manage distributed cloud risk across the organization of which may have multiple purchasing departments. That, I think, is a problem, is an interesting non-IT problem of purchasing management.

Linda Tucci: Mm-hmm.

Pamela Isom: Yeah and I was kind of getting at that as well. You got to look at it end to end and build up that skill within the company.

Linda Tucci: How much of these challenges do you think are going to be taken up by the IT department and how much by the business or is that really not even relevant anymore?

Mark Skilton: It has shifted to areas from my point of view. Probably three areas, but the two areas, the two main ones is I think there is a definitely a shift towards more of the general purchasing business of IT. Could be moving to business and not IT.

Linda Tucci: Mm-hmm.

Mark Skilton: So, general storage or software could potentially be bought by business people or professional buyers. As I said, second to the skill shift might be that there'll be more of what I call strategic enterprise planning going on in the IT department and the need to build things internally. You don't have to build it and that you can purchase Software as a Service for your storage service externally. So the role of the IT department changes from a design and build to assemble and manage and strategically plan. So there's a potential shift there in terms of in IT and purchasing, the shift towards a different type of purchasing arrangement.

Pamela Isom: One other would be that both business and IT would look at the integration from managing the providers and addressing integration. Typically is associated with IT and we kind of talked of this in the book. You'll see that integration is a responsibility not just of the IT organization. It is the overall portfolio management and business and IT capability.

Linda Tucci: I'm talking to Pam Isom, a Senior Certified Executive Architect at IBM and Mark Skilton, Global Director for the consulting firm Capgemini. Thank you very much for joining me.

Mark Skilton: Thank you very much.

Pamela Isom: Thank you.

Let us know what you think about the story; email Linda Tucci, Senior News Writer.

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