'Think cloud computing will save you money? Forget it'

INTERVIEW

Cloud computing is often sold as a way for companies to cut their tech bill by only paying for the IT they use.

Veteran IT chief Ian Cohen has other ideas - telling silicon.com that any company looking at moving to cloud computing purely as a way of saving money should "forget it".

JLT CIO Ian Cohen says any company looking at cloud purely as a way of saving money should "forget it"Photo: Jardine Lloyd Thompson

Cohen is speaking from experience. As group CIO of Jardine Lloyd Thompson (JLT) he is helping the global risk management and insurance broker to make greater use of cloud-based services, such as Salesforce.com's CRM platform.

When businesses shift to cloud services, the oft-talked-about savings won't last, Cohen said, as any reduction in cost or overheads is quickly swallowed up by fresh demand for IT services.

"If you go into cloud thinking you will save money, forget it. What invariably happens is that you create more efficiency and headroom. However, demand that previously could not be met can now be enacted and thus your activities simply increase to fill the available resources - be that time, people or infrastructure," he told silicon.com at Salesforce's recent Cloudforce conference in London.

"People will be using your systems to do more. That's the killer sell as to why people should be looking at cloud: the ability to flex your enterprise into a more extensible model at light speed."

Cohen cautioned that shifting operations to the cloud is not straightforward for any business - there will always be resistance and challenges, particularly for a heavily regulated business such as JLT.

"It's early days. We are working around some of the issues with some of the naysayers and a lot of it is around security and audit, all the usual cloud stuff," Cohen said. "A lot of concerns are still around data location, traceability and auditability. It's still a challenge if an auditor comes in and simply asks, 'Where is the data? Let me see it'.

"We are a regulated business so we have to be more prudent than some other organisations but that doesn't mean we can ignore cloud technologies and the opportunities they offer."

One of JLT's largest cloud computing projects involves the integration of Salesforce.com's cloud-based CRM system with a contact centre operation. Contact centre systems will record information on each interaction that JLT has with its clients, irrespective of the channel they use, and this information will help JLT staff to determine what went right and wrong with each interaction.

"By capturing information about each interaction in a consistent fashion, JLT staff can better understand the complete client relationship - even those interactions that did not result in successful new or incremental business - and understand why," Cohen said.
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APAC public cloud revenues to hit $12B

Public cloud services in the Asia-Pacific region are set to generate US$12 billion by 2016, growing five-fold over the next five years--the fastest among all regions amid rapid adoption in small and midsize business (SMB) segment, according to new projections unveiled Thursday by Ovum.

Market revenues will clock a compound annual growth rate of 34 percent from almost US$2.9 billion by end-2011, the research firm said. The region will also account for 18.8 percent of the global market by 2016, up from 16 percent this year.

The Europe, Middle East and Africa region will remain the second-largest market, after the United States, over the forecast period, increasing its share to 29 percent in 2016 from 27 percent in 2011.

"Asia-Pacific public cloud services market will grow at the fastest rate among all the regions, [where] growth will be driven by the rapid uptake in SMB segment as these enterprises continue to realize the strategic gains associated with the shift to cloud," said Saurabh Sharma, Ovum's senior analyst for market intelligence.

Favorable economic conditions and the fast-improving infrastructure environment will also serve drive the adoption of cloud services in the region, the report noted.

It added that Asia-Pacific, Australia, New Zealand, China and India will grow at faster rates, while Japan will remain the top contributor to the region's cloud services market.

Hyderbad, India-based Sharma said: "Recent moves by major cloud service providers to set updata centers in Asia-Pacific further underline the increasing strategic importance of the region in the global cloud services market."

According to Ovum, software-as-a-service (SaaS) will see its share of the market fall from 87 percent in 2011 to 62 percent in 2016. This contraction will be the result of rising demand for infrastructure-as-a-service and platform-as-service which will grow 9 percent and 5 percent, respectively, to 23 percent and 16 percent by 2016.

Laurent Lachal, the research firm's cloud computing senior analyst, noted that the market was growing at a fast pace and players such as Amazon and Google were seeing much progress, but demand for public clouds would not render IT departments obsolete. Rather, it would change their focus, he said.

"Shifts will include taking a more holistic approach to connecting networks, hardware and software," Lachal explained, adding that IT departments will also reduce their emphasis on maintenance and increase their innovation. They would also be encouraged to take more risks by giving employees the ability to tackle high-reward ventures, he said.www.facebook.com/pages/TechadvancesbyTechnology/293331837349083!

3 Service Models of cloud environment:

Software as a Service: Often geared toward the end

user who needs access through a web browser or other

thin client interface, SaaS provides access to applications

hosted on a service provider’s cloud infrastructure.

A business can find just about any general office

application available via the SaaS model. Customer

relationship management (CRM), calendaring, e-mail

and human resources management are among

some of the more common applications delivered

as services from the cloud infrastructure.

For IT departments, IT service management, spam

filtering, intrusion prevention and other traditional

security software are among the application types

increasingly available via the SaaS model.

With SaaS, the user organization neither

owns the application nor the associated servers,

operating systems, storage, network or other IT

resources required for its support and delivery.

The applications essentially come as-is, with little

to no opportunity to tweak user preferences.

Because of this, the commitments between a

customer and service provider can be fairly weak,

and if one SaaS option doesn’t work out, moving to

another provider is an option for the enterprise.

SaaS evolved from application

service provider and managed services

technologies and is perhaps the best

known and most mature type of cloud

service available today. Small- and

medium-sized businesses, limited by

staff and budget constraints, often

find the most benefit in this model,

although organizations of any size will

find SaaS useful to some degree.

Note that one common misconception

of cloud computing is that SaaS

equals cloud — perhaps because of the

innumerable SaaS offerings being pitched

by cloud companies today. While SaaS can

be delivered over a cloud infrastructure,

it is not a cloud in and of itself.

Platform as a Service: Derived

from the SaaS model, PaaS caters to

developers’ needs. Rather than simply

delivering prepackaged applications

via the cloud infrastructure, as is the

case with SaaS, a PaaS provider offers

up the entire computing platform and

solutions stack needed for an application.

With PaaS, a company can deploy

acquired or custom applications without

incurring the associated upfront

provisioning and ongoing maintenance

and management costs of the underlying

infrastructure. The user organization

has application control, the caveat in

many cases being that the developers

must be comfortable with the PaaS

provider’s choices for programming

languages, interfaces, development

tools, database support and the like.

The types of PaaS offerings vary;

which option works best for a business

depends on its goals. For example, some

cloud companies offer a PaaS and SaaS

combo, providing organizations with

the ability to customize the packaged

application. Although being able to

tweak the application may make the

SaaS model more attractive, the catch

is that when combined with a PaaS

offering, SaaS becomes less portable.

The richest PaaS offerings enable

an organization to support the entire

application development lifecycle.

This means that the PaaS provider not only provides the

platform itself but also ensures source code and version

control, enables user testing (with rollbacks as needed)

and provides change-tracking functions. PaaS can also

facilitate collaboration among far-flung developers.

Infrastructure as a Service: This service model enables

user organizations to forgo deployment of new data

center equipment to handle growing operational needs.

Rather, the business obtains needed IT infrastructure —

servers, security, storage, networks, etc. — from a cloud

services provider, often via a self-service catalog.

While a user company can run applications, databases,

operating systems and other software on top of its selected

infrastructure, it has no direct control over or access to

those machines. The cloud service provider manages the

infrastructure, including any scaling up or down as needed.

Infrastructure as a service is similar in concept to a

traditional dedicated hosting service, with two major

differences: Organizations tap into a shared, highly scalable

pool of resources, and they pay for only what’s used on a utility

basis. In other words, organizations neither have to preorder

nor pay for dedicated gear sitting in an outsourced data center.

IT shops must keep in mind, however, that multitenancy

applies across the public cloud infrastructure. They have no

way of controlling the types of virtual resources running

atop the infrastructure they’ve provisioned from the cloud.

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So what is cloud computing?
A widely accepted definition of cloud computing
stems from early work done by the National
Institute of Standards and Technology (NIST), a U.S.
Department of Commerce agency that promotes
innovation and industrial competitiveness via
measurement science, standards and technology.
Cloud computing is a model for enabling convenient,
on-demand network access to a shared pool of
configurable computing resources that can be
rapidly provisioned and released with minimal
management effort or service provider interaction.
In other words, cloud computing allows organizations
to provide their staff with access to the applications,
infrastructure or platforms they need to do their jobs —
all via a simple front-end interface, such as a web
browser. They might need access to these resources
for a few minutes at a time or for a longer period.
Depending on the deployment model in use, companies
can pay on a utility basis only for what they use.
If a cloud computing model seems more amorphous than
is typical of IT initiatives, that’s because it is. It is a further
evolution of the strategic principles of virtualization,
which rid the organization of “this application runs on
this server” designations of legacy IT environments.
In a cloud infrastructure, computing resources are
pooled and ready for the taking by any application
as needed. These computing resources, typically
virtualized, are infinitely scalable on the fly. They can
scale upward to meet rising demand and then back
down once this application need subsides, creating
unprecedented levels of operational efficiency.
Any enterprise can benefit from this ability to handle
unpredictable demand spikes quickly and efficiently.
For example, a media company could access a large
amount of processing power for a one-off project to
reorganize a database. Retailers can turn to the cloud
to link networks of stores to ensure more perfectsupply chain management. Likewise, car dealers can
use the cloud to run financials, service, sales and
more, all consumed from a central data center.
Computing capacity is not the only pooled resource
within the cloud. Other resources include client, storage
and network capacity, which enable organizations
to acquire disk space and bandwidth as needed


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