If you've ever taken a high-level look at enterprise IT, you'll notice that the vast majority of money is spent making the infrastructure do pretty much what it did last year.  In fact, most IT Departments spend about 73% of their budget just keeping the lights on; far less is spent on creating new business value or innovation.

For those in charge of IT departments the job has now been made just that little bit harder as businesses look to squeeze as many costs out of the business as possible. At the same time the demands being put on IT by the business - to improve business agility and increase flexibility - require innovation. 

So what is needed is a better investment strategy for the IT infrastructure. This will help decrease the amount spent on delivery and increase the dollars available to drive business value and innovation. And this is where the Private Cloud model comes in.

Simply put you are transforming Enterprise IT to be able to deliver IT services to their own users and business units in much the same way a public provider would deliver services to their customer base. Essentially this is through a combination of virtualisation (effectively removing the direct link between function and resource), converged infrastructure and automation, which combine to deliver IT as a service.

Most organisations are progressing along the Journey to Private Cloud in 3 phases:

1.            IT Production Phase - lowering costs

2.            Business Production Phase- improving quality of service

3.            IT as a Service Phase - increasing agility

Typical areas of focus are on things like storage consolidation, backup and accelerating virtualisation. It's an infrastructure focus, and the payoff is inherently lower IT costs.  

Phase one is about the IT owned applications - particularly those functions which are typically out of sight and out of mind to the business such as file and print, test and development, web environments.  You can expect to see significant OpEx and CapEx savings achieved by creating a simple and more efficient storage infrastructure that's well protected.

In the second phase, the focus shifts towards extending the value of Private Cloud to your business-owned, mission-critical applications. These are applications which are critical in keeping your business running smoothly such as ERP systems, e-mail, CRM, and business intelligence applications. What phase two delivers is improved quality of service, efficiency and flexibility to do more with your data.

Here you are not only introducing new technology to better protect, and manage applications, you're also fundamentally changing the operational processes you use to run IT. The payoff goes beyond capex and opex savings.  You have the potential for IT that significantly operates better - better availability, better protection, better security, efficiency, and so on.

The third phase is focused on transforming IT from a technology supplier into a provider of services to the business.  This means changing the way in which IT relates to the business, providing transparency into costs and management of service levels.

This centres on delivering IT as a service, creating a catalog of services for the business - whether that be infrastructure as a service, applications as a service, desktop as a service or other variations of the model. At this point virtualisation is pervasive.  Everything new is deployed virtually.   Thus the value can more easily be measured in tangible benefits such as faster time to market, process automation, and real IT agility.

In this phase, IT is fully policy driven.  Your operationalised infrastructure allows you to allocate dollars spent more accurately and achieve true cost transparency for the level of service you're providing to your users and business units. Just as importantly, they can easily shift from asking for the technology they want to making a justified business decision on the requirements of the organisation.

If you think about it, this phase is really about establishing a new relationship between the business as a broker and IT as a trusted partner. IT becomes the internal service provider and business users become intelligent users of these services. Here you are providing what the business needs when it needs it with the agility to move with the business as it evolves. In fact, if done well the IT department itself should be in a position to drive a partnership with the business and define the portfolio of services to support business growth and agility.

The key thing is to determine which bits of IT are important to the business. This can't just be approached from a technology point of view because that's not how the business sees it. The value could be, for example, in the information that the business has about its customers - not the CRM system that captures it.

Essentially what this boils down to is viewing everything from a pure business standpoint rather than a technical perspective.  This should to be at the heart of your Private Cloud strategy. If you can imagine cloud as an actionable catalogue of services that the business is choosing from (to help them be more productive and efficient), that will greatly help you in your approach.

For example the business may be expanding into new markets which could require new sales people.  The Sales Director wants to be able to come to IT and say 'we are hiring four new salespeople and they start on July 1st'. In a perfect world, IT wants you to say 'great - leave it with us' rather than 'how many PC's do you want? How many smartphones? What level of security do they need?'. Part of this is about transforming organisational processes in a way that puts the business at the centre of IT and understands how a business decision directly translates to the IT department.

So how does this relate to determining the shape of your Private Cloud? To gain maximum agility to compose new services and combine infrastructure and applications to respond to rapid business shifts, you'll want to take full advantage of the flexibility of virtualisation technology. 

Virtualisation makes it much easier to pool infrastructure resources, and utilise new tools for virtual environments, simplifying the development, migration and operation of applications and infrastructure.  In a similar way, you'll also want to simplify the way in which the business requests and manages services. An online service portal presents your portfolio of services to the business, and integrates into your IT environment. If properly orchestrated, the business should be able to easily identify and monitor costs and service levels. 

Finally, your Private Cloud architecture should easily expand to incorporate Public Cloud capabilities as the business requires.  It's not just the circumstances surrounding or affecting the business today - you need to make room for change and plan for tomorrow. And that's the subject I'll come on to in my next post as we start to look at leveraging the benefits of the Hybrid Cloud model......

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In a recent survey by Gartner the top barriers to businesses adopting Cloud centred on trust. This should hardly be surprising. The perception that Cloud is inherently insecure still colours the perspective of many business decision makers. This holds them back from embracing Cloud because of their (quite understandable) concerns about the security of information and systems once they are taken outside the enterprise. In fact, I firmly believe that Cloud can actually be more secure than its given credit for if the right governance, controls, policies and infrastructure is correctly in place.

As is often the case, the issue is not  so much with the technology itself but rather  the persistence of serious questions and concerns about how the business ultimately uses cloud, as well as the people and processes that are built around it. Therefore, having the right governance in place is essential. As part of that endeavour, you must ensure that the appropriate checks and balances are soundly in place from an architectural and administrative perspective. No system is secure if it doesn't address such fundamental governance aspects as monitoring and reporting, enforcing policies, procedures and controls, and establishing roles and responsibilities for who is using the environment.

While governance is vitally important, a stout approach towards trust in the cloud should also consider business requirements for compliance, risk management, availability, integrity, confidentiality and privacy.  Establishing such a trust framework may sound like a mammoth project, but such a methodology assures the organization's leaders that business requirements for trust can be consistently met, whether provided by the enterprise's own private cloud, or by service providers offering public cloud services to the business.

The irony over concerns around cloud security is that these days, businesses already have very little control over what their employees access and where and how. Gone are the days when the physical walls of a business held the same fortification and protection as the virtual ones. Tablets, smart phones and laptops mean that most employees are already freely accessing applications like email and CRM remotely and they have been for quite some time.

The crux of the problem  with the term 'Cloud' is that it creates a sense of something fluffy, hard to navigate and difficult to control. In actuality, today's Cloud environments are anything but that. From a security perspective, private Clouds are often more secure than the current on-premise infrastructure because security can be built into the virtual environment form the ground up - starting from scratch. This means not having to bolt extra bits onto an already complicated structure. Therefore cloud can be easier to manage, much more scalable and more flexible.

You may recall the discussion in my last blog about mapping application workloads to the optimal cloud model based on economics, trust and functionality requirements. For a trusted computing environment, whether cloud-based or not, there are six sets of requirements you need to satisfy: compliance, governance, risk management, availability, integrity, and confidentiality/privacy.

For many organizations, trust requirements will vary by application, and the sensitivity of the information handled by those applications.  For example, e-mail and collaboration applications typically contain less sensitive information than applications containing customer information or company financial data and thus should be treated differently.  The nearby chart shows illustrates how trust criteria can vary by applications.

A recent CIO Market Pulse survey by IDG found that nearly three-quarters of IT organizations are running business applications in Cloud computing environments now or are planning to do so in the next 12 months. In a McKinsey survey, nearly half of the responding companies are already running collaboration applications in the Cloud, over a third are running customer relationship management applications, over a third are running finance or human resource systems, and a fifth are running supply chain or resource planning systems.

McKinsey also revealed that 75% of executives believe there is value to be gained from the Cloud. The question is where and how. Some applications lend themselves very well to an Internet based application. Salesforce has built a very successful business on servicing the needs of the sales organisation.

So how do you approach where each application, or set of related applications, belong? In the public cloud, a private cloud, a hybrid cloud, or the organisation's legacy computing environment? Let's start with defining the types of cloud and which cloud offer application "workloads" the best combination of performance, cost, and flexibility.

Public Cloud - the type offered by the likes of Google and Amazon as well as a growing range of service providers essentially provide IT infrastructure or applications over the Web. Valuable especially when it comes to applications that the IT department can add little value to. Commodity services like email and collaborative workspaces can be provisioned at a lower cost thanks to the scale economies of the public cloud.

Private Cloud - the type that you build in your own back yard. It gives you greater flexibility but also allows you to retain more control. This is for the 'crown jewels' - the mission critical and perhaps highly complex applications that cannot fail. The major benefits of the private cloud platform, is that an organization utilizes its technology more efficiently and that services are presented to the business with transparent costs and service levels, similar to the public cloud.

Hybrid Cloud - A mix of the two. This basically allows you to add flexibility to the Private Cloud. Often this is used for applications that are highly critical one minute and less so the next. Financial apps for example are highly used and very critical during some parts of the financial year and less so at other times. The hybrid Cloud gives you the ability to ensure they are available quickly when needed without that capacity sitting idle the rest of the time

What makes this interesting is that by optimising the distribution and management of application workloads across public, private, and hybrid clouds, an organisation can lower its total infrastructure and personnel IT spend by 25-30 percent *in addition* to delivering better services *and* being more responsive to the business. 

If your organisation's total IT budget is seven, eight, nine or (gasp!) ten digits -- well, that's a matter of potential interest, isn't it?

We just completed an analysis for one organisation where they could save over $30m over a three year period. Imagine if you could go back to your board and offer a similar saving, I'm sure they would be interested in supporting your cloud transformation programme.

The next phase of the discussion gets to the core of the matter: what IT tasks are better performed with internal resources and infrastructure, and which ones are ultimately better done externally?

At EMC we believe that businesses should evaluate specifically what applications and information are appropriate for Cloud computing, and what type of Cloud is the best destination for each. This involves looking at each asset and its potential migration to the Cloud through three filters--economics, trust, and functionality.

Economics: This isn't just a cost issue. It is about whether a particular application is really just a utility. Something that internally the IT team can add very little, if any, value to. If so then it makes sense to outsource it. Finding the right supplier is also not just about cost. For each application there is a priority. Sometimes it is speed - employees need immediate access. Sometimes it is about integration - the ability to move data quickly and easily between that application and another. And sometimes it is about cost. You have to have it but you really don't want to have to pay a lot for it

Trust: For many organisations this is the number one issue. Is my stuff secure? I am not going to spend too much time on this because I shall be going into more depth on my next blog tomorrow, but suffice to say organisations hold a considerable amount of personal data these days and they cannot risk that data being leaked, stolen or lost. One thing I will say is that security is not just a consideration per application but also within it. For example, there is only a very small percentage of email content within most areas of an organisation that would be considered sensitive but if you took HR or the senior executives as a group - the percentage would be considerably higher. You might want to consider a public Cloud solution for general email but not within these two groups.

Functionality: Last but by no means least. The Cloud is a relatively new phenomenon and what it is actually able to deliver is changing all the time. A big question to ask is not just whether an application should be moved into the Cloud but whether current cloud suppliers offer the necessary functions for your business requirements.

The last area to think about when it comes to workload is your timeline. Where are your priorities? Have you given yourself time to test out a few of your ideas locally before unleashing them on the whole organisation? Being able to identify and showcase early successes will be critical, so where are the quick wins? An impatient board will want to see what their investment is delivering. You need to make sure your timeline is realistic and you have given yourself the best opportunity for success.

As I said in my first post on this subject - I believe passionately that Cloud is a big opportunity for the CIO so you need to make sure your plan makes the most of it...

Part two... and you are still here! I hope some of the thoughts and the ideas that I shared in my previous post proved useful.

My second instalment is for all the CIOs out there that clearly recognize what Cloud can deliver and are now trying to figure out how, in an uncertain economic world, you are going to persuade the business and the CFO to invest in it. Economic uncertainty creates two major problems for anyone looking to implement something new. Firstly, it leads a business to be far more focused on the short term. Even if you can capably demonstrate long term returns - if funding is required in the short term the business is wary to give approval. Secondly there is a far greater aversion to risk and thus anything new or different is usually approached with extreme caution.

One way to break down some of these barriers is to divide and conquer. The simple fact is most businesses are not a single entity, but instead a series of independent fiefdoms whose overlords are focused on their own domain rather than the business as a whole. Therefore it is paramount to demonstrate a multitude of carefully conceived benefits to a critical mass of these constituent parts.

When the CEO asks his team for their opinion on whether he should make the funds available for a major investment in IT you want the head of HR saying 'yes - because it will reduce the average cost of recruiting a new employee by 20% and help me get to new talent faster' or the Sales Director saying 'yes - it will give my sales team access to more customer intelligence while they're out on the road so their client meetings will have more impact.'

At the heart of the matter, it's basically about treating individual departments like clients. You need to understand what they need, what (ideas) they are at least willing to buy into, and clearly demonstrate how the new model can deliver it better and faster.
It is also about education. As I mentioned in my previous post there are plenty of business decision-makers out there who think the public cloud model offered by the likes of Google and Amazon could be the definitive answer to all their problems. While it could certainly be the answer to some, if you ask an HR director whether he or she really wants to put sensitive employee data out into the public cloud the answer is most likely "no". Given time to think about the serious implications of such a move, most will realise it is a lot more complicated than that and fraught with innumerable risk - but we will come on to the issue of security and the role that it plays in defining Cloud strategy later in the series.

What we are addressing here is the balance of power when it comes to making IT decisions. A recent report by Gartner predicted that 60% of IT decisions will be made at line of business level by 2016. Finding out what these people want and demonstrating how you can help them will be critical. If the pressure is on costs (which it almost always is) you need to point out that a bunch of disconnected public cloud efforts will not necessarily be cheaper or more effective than a coherent enterprise strategy. Public cloud can deliver cost savings, but are the application functionality and service levels of these providers adequately aligned with diverse business expectations? Does the cloud provider provide the security controls, policies, metrics and transparency you require for effective risk management? Maybe - for some elements of IT - but I would say certainly not for all.

The starting point for CIOs to build an actionable and sustainable plan should be plainly obvious -- establish the case for cloud transformation, paint a vision for the end-state, and secure a critical mass of sponsorship within the organization among the key business stakeholders.

Next time I will be looking a little deeper at the different types of cloud delivery models since getting the mix right for your organisation and IT infrastructure will be critical. By helping the different bits of the business understand what they actually need, you are in a far better position to get this mix right - both in a way that supports them but also in a way that successfully supports you.

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EMC has developed a number of valuable and useful assets that can assist you on the journey to your cloud. For more information go to:

http://www.emc.com/microsites/cloud/index.htm

I hope to touch on a range of topics during my tenure but my chosen specialised subject is Cloud Computing. Not because it's the next big thing or because everyone seems to be  talking about it, but because I passionately believe that it can make a huge difference to the value and impact afforded to a CIO by the organisation that he or she works for.

"Cloud" -- however you choose to define it -- is undoubtedly one of those big transformational waves that sweep through our industry every so often. Regardless of what kind of IT organization you're running, if you're an IT leader, cloud concepts will undoubtedly impact your role and the business  going forward. For most of you, and for many different reasons, Cloud ranks very high on the 2011 priority list.  In fact, Gartner has indicated cloud computing is the top priority for CIOs this year. 

I don't doubt that many of you have already figured out what the potential benefits of cloud could be in many areas. Going further, I suspect a few of you may also have had it foisted upon you by the CEO who has read a few articles and thinks everything (and by everything they really mean their bottom line) could be solved by putting IT into the Cloud.  Or perhaps innovative application developers or business stakeholders have been piloting new applications in the public cloud, and you're concerned that you'd better rein these horses in before it's too late.

So how do you start this important journey - and perhaps taking a step back from that - what do you need to consider before you do so?

One of the most common mistakes regarding Cloud is that it is often addressed purely from a technological point of view. The tendency is to start with the basic question 'how am I going to move from this complicated legacy jigsaw puzzle to a simple converged architecture?'.  While that is a very valid question it is not, in my humble opinion, where the process should begin.

Rather the first question should be 'what business benefits can Cloud deliver to my business?' Is it simply about IT efficiency or is it about decreasing time to market, or staying ahead of the curve when it comes to innovation or expanding out into new markets?

Let us take a moment to consider the subject of "efficiency" which covers a lot of conceptual ground but basically means getting more value back for every dollar you spend.  That can be CAPEX, OPEX, fixed vs. variable expenditures, cost transparency, service delivery, etc. etc.  Lots of different sub-cases under the broad concept -- the goal here is to find a critical mass of efficiency potential that resonates to a particular situation.

Investing in IT transformation to get meaningfully more efficient IT spend ought to be enough to make the case for cloud, but there's a more compelling reason.

Having more agile IT to improve the responsiveness of the business to new market drivers, competitive threats, opportunities and economic conditions is fundamental to developing a competitive advantage. Therefore understanding business requirements and the ability to do new things very quickly, is critical for the success of your cloud initiative. It is important for you to understand what success looks like for your business (and how it is measured) so that 'the business' is engaged in the early stages.

The second key question to address is 'what can the Cloud help me to deliver that I wasn't able to before?' A simple concept yes, but also an area that many organizations must carefully consider in terms of associated cost, architecture, and productivity factors.

If you have a twelve-month waiting list for new application development, will Cloud help you shorten it? Will it give you and your team more time to spend investigating what tools are out there to help you support the business better? Remember - Cloud isn't a threat, it's an opportunity. The tendency amongst some will be to see it as an excuse for the business to cut IT costs, reduce headcount and effectively outsource more. In fact, it gives you as the CIO, the ability to add real value by giving you the capacity to focus on what is important and more importantly, to actually do something about it.

There are two other priorities when it comes to figuring out your Cloud roadmap. The first is metrics. How are you going to measure it? Once you know what success looks like to the business - how do ensure that you demonstrate the value that you are delivering?

The second - and this is the final point in this first chapter - is the roadmap itself. How long is this process going to take? What are the near and longer-term priorities? Where's the best place for an early success? It is also going to be important that you trial a few things first so you need to factor that in. Whether it's testing out solutions in the relative comfort of the IT department or within the wider business, it is going to be important that you don't jump right in at the deep end.

So what I am really saying is before you even think about the technical implications of a move to the Cloud you need to put the business first. With the business successfully engaged you should find the process a lot easier and that greater levels of support exist for what you are doing. You may also find it makes them a lot more inclined to listen to you!

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EMC has developed a number of valuable and useful assets that can assist you on the journey to your cloud. For more information go to:

http://www.emc.com/microsites/cloud/index.htm