Cloud Computing

Cloud and the future of business: L Willcocks, W Venters & E Whitley, LSE

This article is based on the key findings of new research from the London School of Economics and Accenture, based on a survey of 1,035 business and IT executives, as well as in-depth interviews with more than 35 service providers and other stakeholders. The study finds that the innovation trajectory of cloud will be cumulative. Beginning first with technology and operational changes, its effects will then be felt at the business process level, changing the way the business operates and serves customers. It will be capable of delivering market innovations that enhance existing products and services, create new ones, and enable entry into new markets. Finally, cloud will support new ways of designing corporations themselves. One of the key ways that cloud computing supports operational and technology innovation is by moving an organisation more briskly through the experimental or prototyping stages – as some of our interviewees put it, by ‘reducing the friction’ of development.

Security in the cloud: Cliff Mills, NCC Research

Irrespective of whether your IT systems are all inhouse, delivered by external service providers or, the most likely nowadays, a mixture of both, the security of those systems and the information they contain is of paramount importance. However information is stored and processed, you need to ensure that the correct controls and procedures are in place to minimise any potential risk. Once applications and processing is taken out of your own control then you are relying on a third party to provide the necessary security. Most organisations are familiar with using externally hosted applications, but the arrival of cloud computing has added a new dimension to external service provision. While the principle of cloud computing is a sound one and can offer many benefits to a company, it should not be entered into lightly, and the right questions need to be asked at the beginning, particularly about the security environment, to ensure that risk is managed effectively.

Cloud computing challenges: PA Consulting Group

In difficult economic times, a low-cost, low-hassle service is very attractive to executive boards, especially as the most wellknown providers of cloud services – such as IBM and Microsoft on the technology side, and Amazon and Google on the service side – are also trusted household names. Their products and services are already being used throughout their business by those very same senior managers. However, cloud services cost less for a reason. Usually they have been standardised and packaged to achieve benefits of scale. Anyone buying in the cloud, therefore, needs to ask questions about the services on offer – just as when buying in a supermarket they might ask whether a product contains nuts, for example. In fact, it may be necessary to ask further questions about how the supermarket bakes its products and ask for notification of any changes to its processes. Choosing the wrong product may not only give you something different to what you need; it can be fatal.

When ERP met the cloud: Jon Pyke, Andy Mulholland & Peter Fingar

Everyone’s talking about cloud computing. The benefits are well understood and the impact is real. The biggest buzz, however, is around enterprise cloud computing (or ECC). ECC is the special case of utilising cloud computing for competitive advantage through breakout opportunities for both cost savings and, more importantly, for business innovation in terms of unprecedented speed and agility and vastly improved collaboration with business partners and customers. So why does ECC matter? Here are three key points: 1. On the cost side of the equation, many – but not all – IT and data centre costs can be reduced and tied directly to usage, up or down as needs go up or down. 2. On the revenue side, risk and start-up expenses for innovation initiatives can be cut dramatically, enabling companies to take more small bets and test out more new ideas. With no upfront capital expense, new projects can be scaled up instantly if they take off, or shut down quickly if they fail.

DM in the cloud: Dave Pitt, Cimtech

The cloud is attractive, undoubtedly. The idea of releasing documents from your company’s server and giving someone else the headache of supplying the disk space, security and bandwidth is terrific. All this is a logical extension of the internet virtual private network (VPN)…as well as renting network infrastructure, you rent hardware and software too. The advantages include the fact that support costs are transferred to the provider and you gain instant scalability without maintaining unused disk space. But in the spirit of ‘There is no such thing as a free lunch’, what issues do document managers need to think about before entrusting their company’s documents to the wide blue yonder? These are the main issues.

Virtual cloud cover: Una Du Noyer, Capgemini

Infrastructure technologies are evolving at a faster rate than ever before. Among them, cloud computing and virtualisation are two key developments that are radically changing the way IT services are delivered, how they are managed, and the security and billing models that underpin them. Most senior IT people face the same challenges today: how to provide a massive increase in capacity for X, Y or Z service at very short notice? How to keep a diverse and heterogeneous infrastructure from running out of control? How to address the backlog of urgent priorities? How to address skills shortages and security issues? How to cope with the new budget pressures generated by the credit crunch? Cloud computing may be the answer to these questions for some organisations and for some services.

Out of sight?: Ted Webb & Paul Morrison, Alsbridge

Perhaps not surprisingly, finance & accounting was the first area most companies thought about when they came to consider outsourcing their business processes – after all, large parts of F&A are by definition rules-based, and in many industries financial processes are still labour-intensive yet provide little opportunity for strategic differentiation. In fact, it is a well-accepted proposition that 70% of a traditional finance function’s role, largely associated with transaction processing, adds little real value to the business. Yet it can, unless it is efficiently organised, distract finance’s focus and resource away from those areas where it can really provide value. Organisations have therefore sought to firstly share and then outsource such activities.

Virtual revolution: Michael Haid, Right Management

The workplace is going virtual. In our latest poll, 45% of employers will soon be doing more work virtually – and 17% are planning to ‘significantly’ increase the number of virtual workers in their organisation over the next 12 months. One reason for this shift is that, while possibilities for working outside of traditional centralised offices have been around at least since the advent of the post office, dizzying innovations in technology are making working virtually a new opportunity and a new reality. Employees are spending more and more time working from home or on the road, at the airport or in the back of a cab. New, more effective ways of communicating, exchanging information and collaborating mean that you no longer need to get work done by sharing the same physical space with other members of your team. Three questions present themselves: why should organisations encourage working virtually? What are the challenges involved? And how do you create an effective virtual workplace?

Putting a lock on the cloud: Alf Pilgrim, Clearswift

Cloud-based IT services – such as on-demand data storage and email outsourcing – offer huge cost and efficiency savings to UK organisations. But arguably the greatest barrier to businesses taking full advantage of cloud computing is the issue of security. Recent high-profile breaches of the cloud (an attack on Twitter being perhaps the most publicised) have only served to heighten concerns. It’s true that the potential consequences of a breach of cloud security are catastrophic, and this knowledge has served to make the debate rage even more fiercely. A cloud security issue within an organisation has the potential to be a major business crisis, and against a backdrop of heightened public awareness of data loss and privacy issues such as ID theft, it’s understandable. Yet there’s no denying that cloud computing is gaining momentum and will continue to become more and more mainstream.

When worlds collide: SOA and legacy: Martin Rice, Erudine

In this fast-changing business world, one of the main areas of concern is the strain on the services delivered by existing legacy IT systems. Moving from a batch to a web services world, particularly as the shift to cloud-based services accelerates, poses many challenges. In particular, the traditional end-to-end systems that still dominate the IT infrastructure of many established businesses are the antithesis to re-use, with individual functions lost and interfaces obscured within millions of lines of code. While creating new interfaces between the underlying legacy system and the end user through a new architectural approach may address the short-term business need, an SOA-led approach doesn’t tackle the underlying challenge that when systems are written, they become legacy. Yet if this underlying challenge is not overcome, then the promised efficiencies and flexibility of cloud computing will not materialise and the shift to re-usable services will be extremely painful.

Pay as you grow: Haseet Sanghrajka, ST Consulting

Software as a Service (SaaS) is being touted as the ‘pay-as-you-grow’ solution to companies’ current economic problems. But this market is in its infancy. Few organisations really understand the implications of hosting – from security to data ownership, and service level agreements to loss of control. So while UK companies from SMEs upwards are understandably keen to embrace a method of software acquisition that removes capital expenditure and promises consistent monthly bills – just how can organisations ensure they are getting the service they are paying for? And are these solutions really mature enough to support critical business functions such as finance? With apparently perfect timing, the maturity of communications and web-based technology has created flexible, cost-effective application delivery just at a time of unprecedented economic crisis.

Fresh look at CRM: Graham Binns, Atos Origin

As the UK exits recession and consumer confidence begins to return, organisations need to revisit their CRM strategy. During the downturn, many companies reacted by cutting their marketing expenditure, focusing sales efforts on current customers and cutting costs. Now, organisations need to take stock and consider how customers have changed and how technology presents new challenges and opportunities. A number of factors support the need to re-evaluate CRM: social networking has grown rapidly. Facebook is now the most visited site on the internet; smartphone adoption has increased dramatically as a result of the success of the iPhone, Android and the BlackBerry which finally make location-based services possible; customers are more comfortable with making purchases using their phone and the internet.