2010 was truly the year of the Cloud. Whilst analysts are predicting 2011-12 IT budgets will have modest growth over 2010 levels, the impact of economic conditions, the need for greater flexibility and lower capital costs is continuing to increase demand for cloud based services.

The surge in cloud computing interest has also been put down to the fact that the traditional computing model has evolved. Both information and the consumption of that information are distributed, and because users have distributed both the computing power and the information storage, they have in essence distributed the data centre.

David Silke, EMEA Marketing Director at Brocade, expands this point: “The old guard of computing has been reversed. With increasing adoption of high-powered mobile devices and applications, more and more information is being created outside of centralised data centres and at ever increasing, rapidity. According to research conducted in Summer 2010, there will be 15 billion mobile devices in use by 2015 and by 2020 over 35Zb (Zettabytes) of data will be generated by users.

“Building an architecture that has the elasticity to cope with these modern demands might seem simple enough, requiring a forward-thinking strategy to embrace different ideas and solutions; however, achieving this is easier said than done. The answer to this has long been, Cloud Computing, and over the last six months it has finally started to emerge from the hype, as a viable entity and an alternative model to in-house systems.

“Despite the increased public awareness of the Cloud, the majority of the public still find themselves asking; “how does this work?”

“The cloud is a simple idea, but a more complex entity. It can be broken down into three broad areas; Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS). These on-demand services can be delivered over public infrastructures (a public cloud) or be provided as bespoke services to the enterprise over private networks (a private cloud), or as a combination of the two (a hybrid cloud). In other words, there are multiple clouds, and so the cloud refers to the concept rather than the delivery system.

“Such services offer multiple business and financial benefits to the enterprise. For example, access to a highly scalable infrastructure, meaning the customer incurs costs as operational expenditure. It also means that the upgrade path for the underlying technology is both seamless and invisible. It becomes part of an on demand service.”

Impact on Technology

Although Apollo Research shows that Cloud was the number one ‘hot topic’ last year, with a total share of 61%, many organisations still do not have a strategy in place.

Considering the above points and the inevitable evolution of this technology, TP suggest five reasons why organisations need to develop a strategy now to take advantage of Cloud Computing’s upcoming disruptive impact on technology:

1. The iPad Effect on Business: The enormous popularity of the iPad has not only been lucrative for Apple, it has also shown the world how the rapid adoption of Cloud Computing by consumers is putting enterprises on the spot. As executives and employees have grown enamored of the iPad and its ability to access services from the Cloud with ease, they are increasingly attempting to use them for work. To avoid the risk and confusion created by individuals going around the IT department with their own ad-hoc implementations, organisations need a plan for supporting Cloud Computing widely.

2. Need for Cost Control: While the “Great Recession” may have subsided, uncertainty about the speed and timing of an economic recovery is keeping the pressure on organisations to reduce costs and limit investments until business demand returns. TPI Research has found that the ability to more tightly manage IT spending is the number one reason clients are interested in Cloud Computing. As budgeting for 2011 begins, organisations should be preparing to leverage this disruptive technology to reduce costs and capital expenditures and align future spending with value.

3. Pricing Confusion: In theory, the Cloud Computing market is pay-as-you-go. But in practice, it can be hard to discern just what you will pay and just what you will get. Pricing and terms vary widely, and there is no standard methodology for service level agreements. The business models for public, private, hosted and hybrid solutions are all different, and figuring out the best deal for your organization will require enterprise-wide planning, research and testing, all of which takes time.

4. Changing Landscape: There has been a flood of new Cloud-based offerings coming on the market recently, while intensification in merger-and-acquisition activity has caused major shifts in the service provider community. Organisations should be thinking of their Cloud Computing strategy as a roadmap that will help them navigate this increasingly cluttered landscape and arrive at the right set of vendors and solutions for their needs.

5. Only the Beginning: Cloud Computing only works as well as an organization manages it. The key to achieving the benefits it promises is with an integrated, centralized IT Service Management (ITSM) system dedicated to demand management, capacity management and service integration. The only path to such a system is through proactive strategic thinking well in advance of implementation. Migrating a service to the Cloud is only just the beginning.

Be Prepared

The hype surrounding cloud computing is expected to reach unprecedented levels over the next few years. Despite being lured by the prospect of achieving significant cost savings and efficiency gains, not all organisations are ready to embrace cloud computing and some lack an adequate contingency plan in the event of it all going wrong.

It’s important to consider the move to cloud computing very carefully and ensure that your organisation is practically and culturally ready to gain the most from what the cloud has to offer.

Neil Cross, Managing Director of leading managing services and cloud computing provider, Advanced 365, says that businesses should consider the following key factors before seeking to introduce cloud computing as part of their IT strategy.

Determine what you want to achieve and why

IT is about delivering improved business services, not just on ensuring the smooth-running of technology, so make sure you understand what you want to achieve as an organisation and why. Both public and private cloud options should be thoroughly reviewed alongside non-cloud alternatives with the benefits and drawbacks of each being given fair consideration. Moving to cloud computing just because it’s the latest buzz in IT isn’t a good enough reason and your project is likely to fail.

Understand your business drivers as well as the IT drivers

The pressure to achieve efficiency savings may encourage more IT teams to look at moving to a cloud computing model. However, it’s essential that any changes made to IT infrastructure are suited to the needs of the business first rather than being modified to fit the IT department’s preferred cloud platform.

Fail to prepare, prepare to fail

It might seem obvious, but make sure you plan thoroughly and decide how your chosen cloud solution is going to be integrated, managed and monitored. Although it’s possible to access ‘on demand’ cloud services in a matter of minutes with the aid of a credit card, you should not become complacent about the level of planning that is required to ensure that your project is a success.

Reducing complexity is as important as reducing cost

Compared with managing your IT systems exclusively in-house, cloud computing may not be a cheaper option due to the additional costs of accessing cloud services on-demand and having to retrain your staff. Introducing a new cloud supplier to your business could also create more management complexity into your IT infrastructure if you’re uncertain as to how this supplier will be managed and how you are going to link your various applications together.

Think about the risks

Though cloud computing brings undoubted business benefits, organisations also need to consider carefully the potential risks. Is your data going to be held safely and securely on the cloud and are you satisfied that your cloud supplier is reliable and experienced enough to provide your business with the necessary service-level provision you require?

Choose the right partner

It is essential to work with specialist cloud partners that can manage their services in line with your organisation’s requirements. Check that your partner can provide you with an end-to-end service combining service level management, service desk facilities, remote monitoring, advanced reporting capabilities and complete data transparency to help minimise the risk of integrating your systems into the cloud. You should pay particular attention to whether your cloud provider’s service desks run 24/7 so that they can react quickly to keep downtime to a minimum.

Ensure your service level agreement is appropriate for your business

In the event of a business-critical application going down, you need to be reassured that your cloud provider has the expertise and skills to get it up-and-running again as quickly as possible. Ensure that your provider offers service level agreements (SLA’s) that are appropriate for your business which cover almost any eventuality. The most effective cloud partners can offer multiple SLA’s for a single customer giving the business peace-of-mind at all times.

The Growth of Cloud Services

Many more development projects are now being trailed on the cloud - demonstrating an increased confidence in enterprise-ready cloud services for business use including critical applications, test and development and batch processing/data analytics.

Neil Cresswell, Managing Director for EMEA, Savvis, comments: “As these projects grow in size and the adoption of cloud becomes pervasive, we have seen concerns on important issues such as security, policy and governance.

“Rightly so, these are all issues that must be well understood if the cloud is to provide the benefits it promises. Not all clouds are created equal and all providers are not the same- security, reliability and risk mitigation can vary across cloud providers. Enterprises evaluating cloud services have started to get into policy implementation mode for the cloud services they are buying into. This is resulting in a shift from ad hoc deployment on ‘credit card cloud’ to formalised processes for cloud development and deployment within the corporate compliance framework.”

Looking forward, cloud will continue to dominate in 2011. It does not seem unreasonable to state that the explosion in cloud services will only continue with the big players laying the foundations. With the unveiling of the Government’s G-Cloud, Microsoft’s Azure offering along with Salesforce bringing the Java and Ruby developer communities together – the future of cloud looks bright.

Venkat Narayan, Senior Vice President, Mahindra Satyam, states: “Cloud is now poised for widespread adoption and will continue to be, a core part of Mahindra Satyam’s strategy going forward, and one in which we expect to see significant growth.

“As a model for buying services, the cloud will be transformational, but organisations have to take a pragmatic approach when considering how the transition can benefit the client base. Customers are at varying stages of cloud ‘maturity’- there are still concerns about privacy and security from some sectors.”

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