10 Nov

Why “the cloud” doesn’t matter

When I read this blog article I knew I had to share it with our readers and PM/FM followers. I thought it would really hit home with our industry. -Linda

Guest Author Blog Article with permission from Toni Bowers and Patrick Gray from TechRepublic.com
Date: November 4th, 2010 Author: Patrick Gray

Surprisingly, a couple years after “the cloud” first arrived on the IT scene I am still hearing IT leaders speak about it with breathless reverence. Even non-IT executives will proudly announce “Oh, we’ll just put that in the cloud” when any technology-related topic appears in a staff meeting. The fact of the matter is that the cloud is just another boring make vs. buy decision, and the sooner those in IT management realize this, the less likely they are to build potentially career-ending plans based on clouds and rainbows.

So, what is “the cloud”?

Definitions of cloud computing abound, but they overly complicate thing. Essentially, the cloud is little more than “stuff outside your company.” That “stuff” could be processing power, storage, networks, applications or any other bit of technical wizardry. When the CIO says she’ll “put that in the cloud,” all she is really saying is she will take something that was done in-house, and do it with someone else’s “stuff.” You might put any aspect of your internal “stuff” into the cloud, from raw data that you store on another party’s storage systems, to an internal application you run on someone else’s’ hardware. Often, the cloud refers to a third party’s applications, analogous to the enterprise equivalent of gmail or hotmail to employees.

The non-IT reader who is now thinking “Hey, this sounds exactly like what companies have been doing for over 100 years” gets a gold star. Conceptually, all the fancy cloud talk could be applied to anything a company does outside its walls. The toilet paper you purchase from an outside vendor effectively comes “from the cloud,” and the same decision making process that you would use to choose that vendor applies to cloud computing.

Going into the cloud is nothing more than a make vs. buy decision

A frightening part of the over-hyping of the cloud is that it has obfuscated the decision-making process for determining if the cloud is appropriate for a particular IT function. Mysticism seems to creep into any cloud-related discussion, obscuring the fact that deciding to move something into the cloud is a simple make vs. buy calculation. If you are considering moving email into the cloud, tally up the costs of the various servers, software and support, divide by the number of users, and compare that to the per-seat fees from various cloud vendors. If you want to get fancy, include factors that denote reliability, security and support of the vendor.

Unsurprisingly, this process sounds very similar to the process that your COO and his or her staff go through when selecting vendors for critical components and parts. Assuming your company produces physical products, the supply chain and purchasing groups are likely loaded with people that can help you make an exceptionally thorough analysis of the various cloud vendors, and apply appropriate rigor to the process. While those in IT may quip that those buying physical commodities could never understand the subtle nuances of the cloud. However, the supply chain deals with production and design secrets all the time, and reliability is obviously a central concern since a critical vendor could hamper the company’s ability to actually produce products.

If you can present the cloud in these terms, not only can you get internal purchasing expertise onboard to help you make better decisions, but you can have more realistic discussions with your peers. Rather than the cloud offering a voodoo-like panacea to every internal problem, other executives can approach it as a way to cut maintenance and administrative costs, or a way to allow IT to focus on more valuable activities than maintaining email servers or commodity functions and applications.

While the cloud currently has near-magical properties with many, like most emerging technologies these will soon wear thin, and will only serve to build mistrust and skepticism of IT and the CIO if they are sold as magical cure-alls. When you can take a rational look at cloud-based services, and analyze the decision to utilize them just as you would any other third party vendor, the cloud becomes far less hazy and much more practical.

Patrick Gray is the founder and president of Prevoyance Group, and author of Breakthrough IT: Supercharging Organizational Value through Technology. Prevoyance Group provides strategic IT consulting services to Fortune 500 and 1000 companies. Patrick can be reached at patrick.gray@prevoyancegroup.com

  • jodie_microsoft_smb

    If you’re considering Cloud options at your organization, talk with your consultant or Partner about the Microsoft offerings. There are options to keep some services in-house as a hybrid environment, depending on your needs. This link will help: http://smb.ms/Outreach96WYQ8

    Regards,
    Jodi E.
    Microsoft SMB Outreach Team
    msftoft@microsoft.com

    • Linda

      Jodi,
      First of all, thank you so much. Our industry is in need of ideas and we appreciate the Microsoft help. The issue is that nobody has money today. The solutions need to be low cost and/or almost no cost to consider. With vacancy high and our loss of commercial tenants, we are facing tough times!
      Thanks,
      Linda@ManagerLabs.com

    • pcholakis

      The Cloud is far more than “stuff outside your company”. It sound as if you haven’t built an application for the Cloud. The Cloud, combined with BIM will indeed change the way the AECOM (Architectural, Engineering, Construction, Operations, and Management) sector does business…. and it’s about time.
      Our industry lags others in both technology and business “best practices” with the result being extremely low relative productivity and unusually high levels of customer frustration.

      The Cloud, in addition to “stuff outside your company”, provides an agnostic layer of communication and collaboration that will enable data reuse and higher levels of transparency… both desparately needed.
      Monolithic silo-based applications will give way to domain specific apps that feed BIM.
      Oh, and by the way, the value of BIM has little to do with 3D visualization, as it does INFORMATION.

      • Linda

        Hi Peter,

        I completely agree with you, however, the reality is folks are still not ready, nor are they even doing the homework this article suggests. I thought the article was an interesting play, with the sensational title and the actual analogy of evaluating change and the simplistic way it described those basic processes. The article was not trying to give a detailed roadmap, but it was trying to make the reader realize it is not earth shattering, just do the math! If we can just get folks to ‘do the math’ we would be in a better place. And boy, do we need to be in a better place!

        Thanks,
        Linda

  • Why "the #cloud" doesn't matter – http://is.gd/gYE5F #tech #IT

  • sativo

    Linda,

    I would be careful in endorsing this position given your mission. SCM is carries risk across product vendors and service vendors, and your supply chain is always as strong as your weakest link.

    As for cloud (or on-demand solutions — which is slightly different) solutions, the benefits are simple economies of scale. Think of it in these terms: would you purchase a web hosting plan through a hosting provider, or would you rather build out your own server farm, hire a few admins, and manage the daily support issue, upgrades, performance benchmarks and tweaks, etc?

    The answer is simply, most just lease space online through a web hosting partner.

    So why not do the same for other IT functions? Most new applications that are emerging today are web-based, highly scalable through API integrations, and served up at a far lower marginal price due to scales of economy. If you feel you’ve chosen the wrong solution, no big deal, just switch to another.

    Of course, you could always take the time to research the offline solutions, invest in the hardware and installation, manage your own integrations… but what happens if you feel you’ve chosen the wrong solution then? A bit harder to chalk those costs up to sunk costs.

    Just my 2 cents.

    Sativo

    • admin

      The entire premise of this was not against outsourcing your servers or applications, but to understand how you can evaluate it, just as you evaluate any other process or purchase you make. In our industry, everything is a “cost benefit analysis” and this articles simply points out, “why the cloud doesn’t matter” but it is the concept of making your building or company more efficient. In other words, look at the benefit and simply weigh the benefits. I am the biggest supporter of outsourcing technology. Most companies do not have the depth to do a good job of in-house technology very well.
      Merry Christmas,
      Linda