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Laying the groundwork for cloud computing services adoption in 6 steps

The CIO of a growing business explains how he selected applications for outsourcing to the cloud then prepared the organization for change.

SAN DIEGO -- Why did Amylin Pharmaceuticals Inc. become an early adopter of cloud computing services, and how did it lay the groundwork for the move?

For almost two decades Amylin had no drugs to sell, but in 2004 that all changed with two FDA-approved drugs for diabetes and obesity. Company executives predicted that the company would become a $3 to $5 billion entity in five years and would need huge IT infrastructure scalability to support that growth.

The company already needed to refresh its 5-year-old hardware and had reached capacity and power limitations in its two data centers. It was running out of space and execs had to decide if it was time to build a new data center.

CIO Steve Phillpott addressed all these challenges by deciding to go with cloud computing services. But it took a lot of preparation before the business as a whole warmed to the idea.

Amylin ultimately adopted Amazon Elastic Compute Cloud (Amazon EC2) for targeted applications in the cloud like sales targeting and human resources (HR)/benefits; Inc.'s for application development work; and storage in the cloud through network-attached storage cloud provider Nirvanix Inc.

During a session at Burton Group Inc.'s Catalyst Conference, Phillpott explained how he laid the groundwork for cloud computing services, both in IT and beyond. We present it here in a to-do list format along with his experience.

Steps to adopting cloud computing services

Assess IT software assets, then consider putting commodity and standalone applications in the cloud. The IT team built a chart that showed business users which applications they thought were differentiators and which ones they thought were commoditized and explained why applications they viewed as commodities were better suited for cloud services like email for LiveOffice. Standalone applications like HR/benefits and sales analytics were also better suited for the cloud.

"We explained that these were applications and systems that did not have a lot of interaction with other ones and were more suitable to the cloud," he said.

Reorganize IT teams according to application functionality rather than brand. To prepare for a virtualized/cloud environment, Phillpott eliminated application silos such as those for Oracle or Siebel applications. "IT thinks their value is associated with an application rather than a skill, so we changed the mind-set to skills that we wanted in this new paradigm, like data management, business intelligence and analytics and the ability to do end-to-end business processing rather than skills tied to a particular application," Phillpott said.

Get a handle on your internal IT costs. What does email, ERP and clustered storage cost you internally? You need to know this before you can validate what it costs you in the cloud. Phillpott engaged the finance department from the get-go to validate these costs internally compared with a services model.

IT thinks their value is associated with an application rather than a skill, so we changed the mind-set to skills that we wanted in this new paradigm.

Steve Phillpott, CIO, Amylin Pharmaceuticals Inc.

To socialize the cloud computing concept around the business, figure out the terminology that business executives and users are familiar with. When Phillpott heard that business users were reading The New Age of Innovation and using terms such as R=G for Resources are Global, he started to adopt the same terminology to explain the benefits of the cloud. "You need to sync up the vocabulary around the cloud and virtualization with what the business users are hearing about it."

Engage IT staff members by giving them a role in the process. Phillpott made testing cloud services a game for IT. He picked several cloud applications for IT to test like sales analytics and HR/employee performance management and had no ground rules. Test whatever service on whatever provider you like.

However, at Amylin, it wasn't until he himself built an Amylin Web image on Amazon EC2 and played with it that IT started to pay attention. "I can tell you that there is no better motivation for IT than to see the CIO doing it himself, after that IT scrambled to test things out," said Todd Stewart, IT director at Amylin.

Engage stakeholders throughout the organization. Information security, legal and finance are just a few of the groups that need to be involved. It took Amylin two months to figure out security issues in the cloud -- with a lot of trial an error. The consensus in general is that security is ultimately up to you -- most cloud providers leave security parameters up to the customer, whether they be a need for encryption or beyond.

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

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