The growing influence of cloud

The growth and popularity of cloud with the consumer in recent months has meant companies are finding the need to respond to an ever-increasing demand for their services.

July 5, 2013

by Ashton Steyn, CTO and Cloud Ambassador, HP Enterprise Services, South Africa

The growth and popularity of cloud with the consumer in recent months has meant companies are finding the need to respond to an ever-increasing demand for their services. These new service offerings, therefore, need to be a priority for those particular companies, as customers look to take advantage of all the benefits that the platform has to offer.

This also has a knock-on effect with regards to the current break-through trend of ‘outsourcing as a service’ whereby Business Process Outsourcing (BPO) service providers are incorporating cloud technologies into their everyday delivery infrastructure. By doing so, they are able to deliver more technology intensive solutions within their current business transaction priced service. This intertwines with increasing the need to be a good cloud customer, as to not actively and equally benefit from consumer targeted services would be a waste of resources to any business.

Before this mutual agreement can take place, enterprises need to ask themselves what they actually mean by the term “cloud”. Essentially there are two different factors to consider: “Utility cloud” and “Grid cloud”. Utility cloud is largely commercial, whereas Grid cloud is comprised of web services and large data analysis systems. Instead of scaling up within the Grid cloud, companies need to scale out and produce multiple copies, ultimately leading to cost-reduction and the move to Utility cloud.

This links in well with another process that has grown off the back of the cloud infrastructure’s recent popularity: the move towards a more ‘automated and tuned’ process within businesses. Cloud is polarising BPO providers into those that languish in the staff supplementation model and those that are selling productivity through automation, intellectual capital and highly tuned business processes in addition to optimal staffing and facilities strategies.

What about the smaller BPO provider?

Increased, easy access to cloud-based technology and automation levels the playing field for smaller players in the field. They are able to now bridge the gap through leveraging these cloud services without the previous capital investment that would be necessary or the licensing challenges and long lead times that some enterprises currently face.

This vast adaptation to the cloud has already been fairly smooth as the converged platform is not based on a fixed model; various pieces communicate with one another by moving between the enterprise and the supplier.

The question as to whether a smaller provider can offer the right level of orchestration lies within the ability to move workloads and take up and remove services as required. The business may start slow and simple, such as Office365, but as it matures its needs may grow and the provider needs to be able to grow with them.

What are the benefits of being a good cloud customer?

Before companies sign up to the cloud it is vital to ensure they are first and foremost a good cloud customer. The cloud offers many advantages to companies yet if they are not set up to equally benefit from them it is simply a waste. Therefore, being a good cloud customer is just as crucial as picking the correct cloud provider for your business.

This is partly why the role and skills of the CIO are changing in order for businesses to accommodate the requirements needed to make cloud as successful as it can be. The CIO’s role is crucial in bringing governance under control with some IT departments and more often than not, most CIOs are likely to deny they have any cloud services at all.

However, with the rapid penetration of pay-as-you-go cloud services from the likes of Google and Amazon, business functions are often more able to circumnavigate the IT department and procure these services. Current governance and policies simply do not take account of cloud meaning and they can be procured without the CIO’s knowledge. This shows that CIOs need to update governance and policies within their own corporation to combat this.

Do the current procurement models reflect the flexibility of the customer?

Currently the ITO procurement model is simply not structured correctly in order to capitalise on the benefits of agility and flexibility, which of course cloud prides itself on delivering. This is because ITO has been the predominant model for companies in procuring cloud services, usually working in monthly time periods and so cannot handle the cloud’s ability to deliver in hours and days. This inevitably has to change if companies are going to begin to receive the rewards.

In order to aid this process of change, the CIO needs to attempt to evolve the IT department’s attitude. They must approach the mind-set that they are delivering services to various business functions. For too long IT has been treated like the ‘black box’; enterprises must learn to recognise the IT department as a procurer of services.

Ultimately, it is important that a company is able to deliver cloud services throughout various areas of the business. The challenge that remains for the CIO in particular is the attempt to get people to understand the advantages that cloud services have, and how they can be plugged into easily to benefit the consumer and the business simultaneously.