January 31, 2014 | Written by: Arun Anandasivam
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During this past holiday season, we saw a lot of candies in various colors distributed by Santa Clauses to excited children in the streets. When I went shopping, I identified one kid who was carefully selecting which candies she wanted to put in her pocket. Looking at the beard of the Santa Claus, it reminded me of a cloud and I started daydreaming. I thought to myself: what are my criteria for selecting candies in the cloud?
Back at home, I typed in “cloud and benefits” in a well-known search engine and had a close look at five links on the first page. The following cloud benefits were listed there, which I categorized:
Economics and business
• CAPEX free/ reduced capital cost
• Lower power cost
• Lower people cost
• Economies of scale
• Minimize licensing new software
• Lower risk with subscription-based cost model
• Utilized hardware
Backup and security
• Quick disaster recovery
• Less theft risk of hardware (notebooks and more)
• Work from anywhere and access from anywhere
Maintenance, integration and rollout
• Automatic latest and greatest software updates
• Scale as needed
• Resiliency without redundancy
• Fast deployment of new services
• Increased collaboration
• Streamline processes
• Monitor projects more efficiently
• Distributed document control and versioning/sync
• Less personnel training needed
• Environmentally friendly
At first glance, these benefits seem promising. Lower cost, more flexibility, ease of management and better information processing are very important for continuous business improvement. And these are good terms to use for management to see the impact of a transformation to the cloud. The challenges appear when you have a closer look at how the benefits can be realized. How do you explain to your top management what you will do in the cloud to realize these benefits? Is it an infrastructure as a service (IaaS), platform as a service (PaaS) or software as a service (SaaS) project you should start with?
The benefits sound nice, but you need to scrutinize on what to improve. For example, if you implement a customer relationship management (CRM) SaaS, you do not want to utilize hardware or make a fast deployment of services (remember, if you are not a start-up you will have CRM and you have to migrate your current data to the new CRM services). A PaaS is not about document control. If you use an IaaS, you do not want to increase collaboration.
Furthermore, the role your company will play in the future has an impact on the benefits realization. Do you want to be a provider of new digital services, such as for your current products? Do you want to be a broker of cloud services? Are you a pure cloud consumer?
Differentiate by service levels and applications
Obviously, it depends on the process you are focusing on improving with a cloud service and the service you want to buy. Some companies might already have very efficient data centers and the move to an IaaS provider will have minimal effect. Others will focus on building up expertise as a service provider. An example is the automotive industry that is getting ready to provide enhanced IT services in cars like Audi’s recently announced cooperation with Google for the Android platform.
So let’s think about the benefits of each service model.
What do you want to achieve with IaaS?
This seems straight-forward:
• Reduce hardware in the data center and reduce CAPEX
• Reduce maintenance effort (personnel and sourcing/replacement)
• Ease of access to computing resources
• Almost unlimited resources
What do you want to achieve with PaaS?
Here it gets more complicated. PaaS can have several occurrences such as metadata PaaS, framework PaaS or instance PaaS (see this nice article for more details). Every company has to analyze which of these advantages apply for their use case and which model is suitable. For example, while an application deployed on metadata PaaS cannot be migrated easily to another PaaS, the application running on instance PaaS has fewer obstacles.
In general for all PaaS:
• Lower cost since there is no hardware/server to buy (usually included in the pay as you go (PAYG) price)
• No maintenance of hardware or operating system
• No installation of development framework
Metadata PaaS: Rapid application development platform with an easy to use UI targeted for non-developers (like Force.com)
• Ease of development of applications
• Quick development of small applications
Framework PaaS: Deployment frameworks (like Google AppEngine)
• Quick deployment of web-based application
• Multiple standard development framework provided
Instance PaaS: Comprehensive development framework for bigger application development projects (like Cloud Foundry)
• Quick access to complex development and deployment environments
• Various tooling and library access
What do you want to achieve with SaaS?
This highly depends on the applications you want to replace or the business processes you want to improve. Think of a new application you want to introduce to your company. For simplicity, let’s focus on CRM SaaS. The goal of using a CRM can be manifold.
For non CRM-users
• Streamline processes for customer management
• Centrally manage information about customers among the sales team
• Get fast access to a CRM service without a big IT project rollout
For companies replacing a current on-premises CRM
• Use a better application addressing their needs
• Change processes and use a better suiting application (from the cloud, if applicable)
• Make collaboration with business partners easier to share customer data
• Reduce IT department for maintenance of hardware and software
• Reduce long-term license dependency
• Facilitate integration in different countries
As you can see, benefits vary on the different service levels compared to the first list above and not all of them might apply for everyone. Now you should know why a thorough analysis of cloud services is essential to understand the benefits of the cloud project in detail, to communicate the right message to the top management and to avoid pressing the emergency button when the project fails due to incorrect expectations.
The next time you think of a cloud service, also think about which color of the candy you want and which flavor you prefer. Do not expect the green candy to taste like green apple. It could have a kiwi flavor. I am curious about the benefits you see. Feel free to share with me on Twitter @BizArun or comment below.