After Two Years in the Cloud, New Paradigms Prevail

April 16, 2012 - 5 Comments

Co-written by Bryan Mobley, Director, IBSG Service Provider

The business world’s rise to the cloud has been dramatic and increasingly rapid. From an initial attitude of vague interest mixed with trepidation, organizations have begun to embrace the transition in a big way. Some are already realizing the expansive benefits in costs, efficiency, and innovation that come with this game-changing technology.

To keep with the pulse of cloud migration, Cisco initiated a series of roundtable discussions two years ago. The philosophy of each meeting was to bring together 10 to 20 decision makers from a variety of enterprises, midsized businesses, and government agencies. So far, we’ve held 15 of these discussions across North America. In addition to providing a unique opportunity to share our thought leadership, these sessions provide an ideal forum for hearing our customers’ thoughts on cloud: the benefits, the inhibitors, and even a few war stories. In the end, however, it is the advantages of cloud that spark the most contagious conversations.

Here are some of the key trends that have emerged from two years of discussions:

1.      “Costs” to “Catalyst.” Two years ago, organizations considering cloud were focused primarily on costs and IT resources. If they were already in the midst of a replatforming or redevelopment effort, they reasoned, there might also be an open window to adopt a few cost-saving measures courtesy of cloud. Since then, this mind-set has undergone a dramatic transition. Increasingly, cloud is viewed as a catalyst to actually transform business processes, bringing the organization greater agility and velocity in the marketplace while compressing time to market and customer response time.

2.     Going Virtual. Another major shift has been the rise of virtual desktop infrastructure (VDI). Two years ago, VDI was still an obscure concept. But in many companies today, this first step on the road to further cloud deployment is not only being piloted, but enterprises are already planning wider-scale deployments.

3.     SaaS. Software as a service has become a force to be reckoned with. In the early days of our roundtable discussions, the idea of migrating any business functions to the public cloud met with great resistance. Now, cloud services like and Cisco Webex are widely accepted, particularly when the SaaS function is contextual to the business. Additionally, the increasing ease with which SaaS supports mobility is a key driver.

4.     Security. While still a concern for cloud gazers, security is much less of an inhibitor for cloud adoption in general.

On the enterprise front, security remains a primary inhibitor to the adoption of public cloud and is a key reason organizations are using private clouds to achieve the benefits offered from cloud architectures. Still, in some cases, there is a growing sense that security issues can be managed and in some cases enhanced by cloud. Meanwhile, enterprises are dividing their business processes into core vs. context. Core business processes involving crucial intellectual property (an automobile company’s car designs, for instance) might remain in the company’s own data center, possibly within a private cloud infrastructure. But many contextual functions – for example, call centers, human resource application, and payroll – are being handled much more cheaply by public cloud service providers, while also lessening spikes in the company’s own systems.

As for small and medium-sized businesses (SMBs), all indications are that while security concerns are seen as important, the benefits of public cloud outweigh them. SMBs are expected to continue to adopt public cloud, particularly SaaS.

5.     Organizational & Process Impacts. Adoption of cloud, particularly private cloud, has had impacts across the IT organization. In the past, IT organizations would receive specific requests, but now, with the implementation of automated IT, the organization must choose from a set of limited cloud choices that can be provisioned instantly, but may not be as customized. This trade-off has affected how organizations interact with IT. Additionally, organizations have had to deal with letting go. In the past, IT resources would be “owned” in different organizations across the company; now the assets have been pooled, and are under centralized control — forcing internal organizations to give up control to gain the benefits of cloud.  This has had organizational, cultural, and political impacts as the transition has taken place.

The journey to cloud is an ongoing process, and so too are our roundtable discussions. In future blog entries, we intend to expand on some of these core points, offering further insights into the challenges, promise, and ultimate rewards of this crucial technology.

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  1. What changes does Cisco anticipate in the Management arena. Clearly, we cannot continue to monitor element availability. Users will want to know service availability and SLA health. Of course, this can be another application on top of current management infrastructure.

    Any pointers within or outside would be much appreciated!

    • Thanks for the question – it’s a good one. As enterprises adopt cloud models many facets of cloud interactions have to adjust. As consolidation occurs in the IT department (on the way to automation) organizations have to let go of previously owned local resources to allow them to be consolidated, virtualized and eventually automated. Charging mechanisms must adjust to support the new virtualized resources. One enterprise we spoke to indicated that even though they had implemented auto provisioning Cloud services that it still took 90 days to turn around a VM – 89 days to get the billing setup and 1 day to provision. As for SLAs – they need to occur at the application (and therefore service) level. What we hear from Enterprises today is that in many cases the enterprise applications have not been enabled to take advantage of virtualized resources – and this can cause a problem with application level availability. As cloud evolves, the management and awareness of applications will need to be tied to the cloud infrastructure. Doing so will continue to accelerate adoption.

      • Thanks Chris. Your answer alludes to some of the complexities. Application SLAs are relevant where the users consume an application. However, if a dev team consumes a virtualized deployment environment (i.e. server with 64 cores, 4TB RAM, SAN of 1 PB) – the SLAs will have to be for provision/availability times. The SLA becomes a combination of the elements. We will at some stage see management environments evolve to monitor end user SLAs, but it doesn’t look like we have anything close to this right now.

  2. Thanks for your comments. These are all very good questions and are concerns that are often brought up by IT decision makers within businesses. The reality is that the answers to these questions will differ somewhat depending whether you are buying cloud based infrastructure as a service (IaaS) versus software as a service (SaaS) and whether you are even a private versus public cloud. In either case, it is rare for the cloud provider to assume ownership of a customer’s data. This is very unlikely within IaaS model. In cases of SaaS, there may be circumstances where the cloud provider requires the business user to continue software licensing arrangement to have access to representations of your data that have been enhanced as a result of the application and frankly this could happen in cases of non-cloud versions of that software as well. In terms of the location of your data, this too varies depending on whether the cloud model is private or public. In cases of a private cloud, it could reside in your own facilities or even dedicated facilities within the data center of the cloud provider. There is a third variety called virtual private, but I will hold that aside to avoid confusion. There are many models that have emerged her given privacy, security and even regulatory requirements of select businesses. In public cloud (e.g., Amazon EC2), your data resides in the Amazon data center and is optimized for the greatest level of operational and cost efficiency. In terms of the flexibility of data representation, this is more often a function of the application rather than the policy of the cloud provider. One your point regarding the cloud provider going out of business, the likely scenario is that provider will offer multiple options for migration, including having their customers move the application and data back into their own data centers.

    The clear priority for the cloud provider is to enhance flexibility, not inhibit it. In fact we continuously test the overall needs attitudes and behaviors of business customers through roundtables and direct primary research approaches and what we find is a positive trend with the overall embracing of cloud based formats, particularly for how them enhance business agility.

  3. Perhaps I am living in the past, but I still worry about the cloud and, a business owner, where is my data and who owns it. With cloud solutions I have to ask the cloud provider for access to my data. If I want to see my data in a different way, my cloud provider has to change their systems to allow this, which costs me.

    If my cloud provider goes out of business, what happens to my data, is it safe, secure and easily accessible and transferable?