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Driving Business Outcomes with the Second Wave of Cloud Adoption

Do you remember when cloud services first emerged? Driving operational efficiency was the name of the game – specifically reducing IT costs. Now, as organizations continue to innovate themselves, many are expecting their cloud services to be instrumental in digitization efforts that can improve business growth and drive innovation.

A Cisco-sponsored IDC survey revealed that a second wave of cloud adoption is emerging. Companies now have higher expectations and view cloud as a way to drive innovation and revenue growth. The first wave of cloud was primarily tied to operational efficiency and that is no longer the case. This next wave of Cloud adoption is driving more EFFICIENCY, it is increasing IT SPEED and it is enabling new and DISRUPTIVE applications.

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For those companies which have been able to optimize their cloud strategies the results are extremely positive across a number of key performance indicators (or KPIs.) But there is room for improvement since only 1% of organizations are getting the most out of their cloud strategies (or have in place optimized cloud strategies).

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As private and public cloud adoption continue to increase, the opportunities for Cisco to help our customers get the most out of their cloud deployments also will continue to grow. How can companies proceed in developing a cloud strategy that will help them take advantage of this second wave of cloud innovation? And what are the business benefits of doing so?

We worked with IDC to make all this research actionable for our customers and help organizations define their own cloud strategy. The Cisco Business Cloud Advisor (BCA) framework in addition (first and foremost) to our Cloud portfolio will allow us to help you derive more value from your cloud deployments. Cisco offers innovative private/hybrid cloud solutions (build your own or as a service) and with our partner ecosystem we can help organizations embrace the cloud with confidence while accelerating deployment times and business impact.

 

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In the quest for efficiency, IT organizations have already invested in consolidation and virtualization. They next area of focus to drive efficiencies now is automation, meaning the ability to simplify and bring consistency to provisioning, improve workflows, and accelerate IT services lifecycles.  And while automation’s sweet spot may start with efficiency, its function and impact needs to continually extend and evolve beyond the data center as we expand our playing field into cloud and to the edge of the network and IoT.

When it comes to speed, it’s a matter of delivering on the needs of stakeholders (such as LOB leaders and developers) in a timely fashion to help them stay ahead of market disruptions and capitalize on new opportunities faster. This requires support for flexible consumption models to deliver new IT and business services, whether sourced internally or externally via the cloud.

And when it comes to digital disruption, the next wave of market disruption is coming from IoT applications and goes well beyond big data and enabling M2M communication. It requires a radically different shift in what we consider the traditional boundaries of IT organizations. With the right IT capabilities, information from the IoT can be turned into actions quickly, creating new and disruptive capabilities, richer and innovative experiences, and unprecedented economic opportunities.

And finally, with the considerable complexity of today’s IT environment, especially when that environment includes public cloud resources, it’s critical to ensure security is pervasive across the extended network.

So at a minimum, you need automation, support for flexible consumption models, edge/IoT applications, and security to make this combination of efficiency, speed, and disruption a reality while extracting the most value out of your cloud services.

So the question now is … where are you in the journey? Take a quick assessment to preview the possibilities and engage with our Cisco Team and our Partners to begin a much deeper conversation during a BCA workshop.

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Shadow IT: Rampant, Pervasive, and Explosive!

When wireless for LAN burst onto the scene, companies were a lot slower than their employees to embrace it. Employees didn’t want to be tied to their desks.  So they brought in their own wireless access points, stashing them under desks and in conference rooms. Soon companies began realizing they had a big mess of unsecured Wi-Fi AP’s on their hands—a problem for any organization trying to keep their data and intellectual property secure.

Shadow IT isn’t new. As new technologies emerge, employees leap frog over IT in search of better ways to do their jobs. Cloud is no different.

What makes cloud stand out from past shadow IT situations is the magnitude of the challenge.
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To shed light on shadow IT cloud use, we analyzed actual network traffic data and statistics garnered from Cisco Cloud Consumption Service engagements with large enterprise customers six months ago and again at the end of 2015. The conclusion: the shadow IT challenge is rampant, pervasive, and growing explosively.

Shadow IT is indiscriminate. It is found in every industry, in every organization (even those who block internet traffic), and in organizations of all sizes. The average large enterprise now uses 1,220 individual cloud services, up from 730 six months ago. That’s up to 25 times more than recognized by IT—who estimate that they are using 91 public cloud services. The number of cloud services used by large organizations has grown an astonishing 67 percent over the past six months, and 112 percent over the past year.

We’re essentially witnessing a democratization of IT. The business groups have spoken and they want the flexibility and innovation cloud services can deliver. There’s no turning back the clock here. In fact, a recent IDC study commissioned by Cisco clearly shows an optimized cloud strategy delivers dramatic business benefits. But only 10 percent of organizations have a proactive cloud strategy, with only 1 percent fully optimized. This means that 90% of the market has reactive, fragmented strategies.

Risks Hiding in the Shadows

The uncoordinated use of public cloud can leave the business open to a wide range of risks. Our customer engagements helped us identify the top five business risks:

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#1—Business Continuity

As cloud services are increasingly used to support business operations, service disruptions can have a significant impact. Service disruptions can result from planned and unplanned outages, disasters, or from inability of a cloud provider to meet acceptable recovery times.

There is also a potential for a cloud provider to cease operations due to financially-based shut-down, acquisition, or other operational failure. Based on financial viability scores provided by Dunn and Bradstreet, we have found that 26% of cloud providers used by Cloud Consumption customers are ranked very high or high risk of ceasing operations in 12 months. That is one out of every four vendors! If a vendor you were using ceased operations, could you replace them quickly or retrieve your data in a timely manner?

#2—Data Protection

With more critical data residing in the cloud, it is vital for organizations to ensure that business data (customer, employee, partner) is being protected from malicious acts. The first step is to ensure you are using vendors with a strong track-record of data protection and adequate policies. Could you identify vendors who might pose a risk to your data protection policies? The cloud can be extremely secure, but all cloud services aren’t created equal. You’d be surprised at how many high-risk vendors you might be using. Cloud Consumption customers discover they are using an average of 44 high-risk services.

#3—Regulatory Compliance

CIOs are responsible for ensuring that cloud services being used by their organization follow policies that would keep the organization compliant with regulations as well as understand what services they are using might be included in an audit. Of the top 100 cloud services used by Cloud Consumption customers, 60% are subject to major regulatory compliance issues and contain data that would be subject to an audit. (The four major regalatory complaince issues are financial reporting/SOX, Protected Health Information/HIPPA, Payment Card Industry, and FedRAMP) If you have an audit coming up, would you understand what services might be included?

#4—Costs

Increasingly, lines of business are making purchasing decisions often without oversight for IT. As every company becomes a technology company and budgets shifts to line of business, organizations are faced with runaway cloud spend. Why? They are spending money on redundant services and are facing hidden costs.

Do you know how much your organization is actually spending on cloud? Are you negotiating discounts on behalf of the entire business?

One of the quick wins our customer have found is around redundant cloud services.  Organizations are often using multiple service providers that offer similar functionality. We have found that customers on average use:

  • 92 hosting services to gain internet access
  • 84 marketing and sales services
  • 71 financial services such as banking and tax cloud applications and hosted insurance
  • 61 compute services for running cloud-based systems
  • 51 collaboration services like video & web conferencing, on-line training, education, and desktop sharing (not including social media)
  • 46 cloud storage services to store unstructured data (not including backup and recovery)
  • 37 office productivity services to produce documentation or manage projects
  • 36 business intelligence services such as dashboards, reporting systems, scenario modelling, and data analysis

#5—Service Performance

Organizations have ineffective capabilities to monitor performance against service level agreements and are challenged to determine if they are receiving what they paid for. This problem is magnified when lines of business rather than IT are overseeing negotiations and might not be aware of contract pitfalls. Do you know if your providers are meeting their SLAs?

You Can’t Manage What You Can’t See

If you answered no to any of my questions above, you may need our help!

To help CIO’s manage their shadow IT issues,we   last week. The new software-as-a-service product can help you to:

  • Discover and continually monitor public cloud use
  • Reduce your financial and security exposure by identifying cloud business risks and compliance issues.
  • Cut cloud costs by finding ways to consolidate or discontinue services.
  • Strategically manage cloud use by understanding needs of employees and internal groups and benchmarking cloud usage data against your peers.
  • Improve business agility by finding the right cloud services to meet your business, risk, and compliance requirements.

Sound interesting? I’m hosting a webinar on how to “Discover and Managing Your Shadow IT” on Wednesday January 20th at 9 am PDT. I encourage you to register HERE to learn more.

If you want to know more about your cloud please contact us for a demonstration of Cloud Consumption as a Service or learn more.

 

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The Digital Manufacturer: Differentiating with New Service-Oriented Revenue Models

I spend a lot of time with manufacturing leaders around the world and often our conversations focus on innovation. It used to be that innovation was simply about creating a great product. Now, in a climate of profound digital disruption and intense global market pressures, business model innovation is just as important. As a result, many manufacturers are exploring service-oriented revenue models to rise above the competition.

How Machine Builders Can Transcend the Service Dilemma from Cisco Business Insights

Shifting from a traditional focus on products to a service-oriented strategy can change the game by creating opportunities for new and significant revenue streams for your organization. It provides a pathway to expanding your portfolio to include value-added offerings that allow you to charge for business outcomes —such as performance or uptime — rather than physical assets. Read More »

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Beginning Your Hybrid Cloud Digital Transformation

Moving to cloud has compelling value to organizations of all types and sizes. With benefits such as lower CAPEX, flexible scalability, and global access to enterprise-class IT resources, many businesses are able to increase their agility with public cloud services. As a consequence, they can act upon market opportunities faster and with great efficiency.

The cloud, however, is evolving just as fast as the organizations taking advantage of it are. Traditional public cloud services provide businesses with applications that run outside their data center. New “hybrid” cloud technology actually extends the capacity of data centers without capital investment. With a hybrid cloud you’ll be able to seamlessly access IT resources and other services located in the cloud – even from different service providers – as if they are part of your on-premises data center.

What does this mean for your organization? For Holtzbrinck Publishing Group, moving to hybrid cloud has completely changed how they think about their network. Brent Olson, Director and Chief Architect at Holtzbrinck, says “Our strategic direction is not to buy infrastructure anymore.”

Olson shares more about Holtzbrinck’s hybrid cloud digital transformation in this video. His story begins with a need to expand the production environment for an e-learning platform to be launched in Europe. After teaming with cloud provider iland, Olson discovered that the hybrid cloud had so much more to offer than he realized.

“With Cisco’s Intercloud Fabric and iland as a partner, we were able to give the business units the agility and ability that they needed to spin up their own infrastructure. It’s great that we have more control. We also have choice on where we want to be able to move our workloads. It’s definitely more efficient to use a cloud provider than for us to provision hardware on our own.”

With hybrid cloud, Holtzbrinck can extend its data center across the world. They now have a diverse range of providers, environments and clouds to choose from. And with access to Intercloud Fabric and a broad portfolio of Cisco Powered services, Holtzbrinck has confidence that their hybrid cloud will provide enterprise-class performance, reliability, and security no matter where in the world they are located.

With hybrid cloud, Holtzbrinck has transformed from an old-world publisher into a digital company of the future.

 

Learn what Cisco Powered, Intercloud Fabric, and hybrid cloud technology can do for your organization.

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Cisco Partner Weekly Rewind – December 18, 2015

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Each week, we’ll highlight the most important Cisco Partner Ecosystem news and stories, as well as point you to important, Cisco-related partner content you may have missed along the way. Here’s what you might have missed this week:

Off the Top

New Executive Insight Series: Q & A with Wendy Bahr

We kicked off a new series this week here on the partner blog.  Our Executive Insight series will visit with Cisco execs from time to time to provide partners insight into Cisco’s key focus areas, themes, tech topics and more as they relate to our partners and the partner ecosystem.

We couldn’t have had a more appropriate first guest as Global Partner Organization lead and Cisco SVP, Wendy Bahr, sat down with me for a chat.  She fields questions on her first few months, conversations with partners, what she’s learned, partner summit 2016 updates and more.

And, be sure to check out the related channel press coverage:

Create an Attitude of Gratitude: Not Just for the Holiday Season

This month, Karin Surber wrapped up her 2015 blogging year with some words of wisdom fit for the holidays. However, her message was to keep that ‘attitude of gratitude’ alive beyond the holidays. How you say?

Well, luckily, Karin provided some tips on how to do just that and highlighted one of her favorite charities. Read her piece for some insightful end-of-the-year advice!

Good Reads

Read More »

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