Fundamental Truths of Enterprise Cloud Strategy
July 29th, 2011 By: Industry Perspectives
Bob Deutsche joined Intel in 2004 and has more than 25 years of business and IT experience in positions that ranged from data center operations to software development to CIO. He can be found online at Bob Deutsche on the Intel Server Room.BOB DEUTSCHE
First, sincere thanks to the folks who responded to my last post (Cloud Lessons and Le Mans Racing), either directly on Data Center Knowledge or via my LinkedIn account. It’s a genuinely rewarding feeling when you become aware that others value your ideas and opinions. I’ll try to continue to earn your interest as we talk more about cloud computing in future posts.
In my last post, I identified and defined eight cloud solution-based framework (CSBF) considerations that, when viewed from a pure IT/data center perspective, might be outside your comfort zone. While it’s true that these considerations are not generally about technology, ignoring them as you implement any type of cloud architecture (private, public, or hybrid) is not an option—and doing so will result in failure. Given the expansive nature of these CSBF considerations, and the way they vary by geography, industry vertical and the particulars of your organization, it’s not practical to try to describe and address them all here. However, I’ll be happy to discuss your specific situation with you, if you contact me on LinkedIn.
I plan to focus my next few posts on corporate strategy. As time and your interest dictates, we can also find much to discuss on ecosystem awareness and standardization (policy, data, and process).
Previously, I discussed Ford’s campaign to win Le Mans. Although flawed, the strategy was simple: match a powerful engine with a reliable drive train mounted on a strong chassis, and piloted by an accomplished driver. Ford’s linking of engine to drive train to chassis to driver is an example of a fundamental truth about what it takes to win at Le Mans.
Boil It Down to the Core Truths
As you consider the basis for your workable corporate cloud strategy, you must also consider fundamental truths. In terms of the cloud, I consider a fundamental truth a principal rule (or series of rules) that serve as the foundation for the entire framework. Fundamental truths are inviolable.
What are the Fundamental Truths of Corporate Cloud Strategy?
Let’s identify them now and discuss the first one. I’ll keep the others for subsequent posts because it’s important to provide enough detail so that you can understand why each fundamental truth made it onto our list.
Here are the fundamental truths that form the cornerstone of a cloud corporate strategy:
1.) Large-scale transformation to cloud computing, including your critical business systems, is a journey that will take you from 8 to 10 years.
2.) Cloud is a top-down architectural framework that binds strategy with solutions development.
3.) Your cloud ecosystem is only as robust and adaptable as the sum of its parts.
4.) A services-oriented enterprise taxonomy is not optional.
5.) Cloud is a verb, not a noun.
6.) Technology-driven business practices often circumvent government regulations, but legal/government policy standards will dictate cloud’s success.
7.) Bandwidth and data transmission may not always be as inexpensive and unencumbered as they are today (geo-sensitive considerations).
8.) Altruistic motives do not generally keep the lights on.
Fundamental Truth No. 1
Large-scale transformation to cloud computing, including your critical business systems, is a journey that will take you from eight to 10 years.
Why does it take such a long time? Because by its nature, cloud computing is disruptive. This disruption impacts your business, the way business units work with each other, your technology stacks (hardware and software), and most importantly, your people and their skill sets.
For your cloud strategy to work at an enterprise (not just an IT/data center) level, you must be able to understand and prioritize your business’s capabilities, and repurpose or eliminate formally discrete and separate functions. This means your data center(s), networks (LAN, WAN, wireless), application portfolios, end-user devices, and related business processes must all be able to co-exist and work together in a way that they were never designed for (at least since the days of big iron). Also, it’s very likely that the way you determine direction in this evolving environment will also change, which can essentially shift your corporate power structure.
To gain value from the cloud, you must completely redefine your enterprise. This means:
- You must take an entirely new approach to success metrics, including new definitions and measurements. To do this, you’ll need to identify a baseline for comparison to give the changes meaning.
- Radically change your business ecosystems (skills, grade levels, responsibilities, and likely physical numbers) to adapt to the new normal.
- Take an evolutionary versus revolutionary approach. Revolutions tend to be good for creating martyrs but not so good for individual survival in the typical enterprise.
Simply stated, history shows that disruptive change of any type is adopted slowly. While small and medium businesses may have an advantage in their ability to adapt and respond quickly to a cloud strategy, the wild card is an organization’s ability to respond to change (with people as the biggest concern).
In the future, I’ll continue to detail these fundamental truths. As always, please join the discussion on this topic or anything I’ve said in my previous posts. If you’re shy about contributing in the public discussion, you can reach me via LinkedIn.
Until next time.
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Rick ParkerPosted July 31st, 2011
In my experience it took about a year, I expect a number of companies have already switched over to a cloud architecture and as this has only been around for about 4 years it has taken a lot less then this article states. I think a detailed break down of why it should take 8-10 years would be very helpful. As far as systems connecting in ways never designed for this is a logically false statement because they systems are not designed to not connect as a Cloud either. @parkercloud
Bob DeutschePosted August 1st, 2011
Rick, thank you for your response.
I think the key discussion here revolves around specifically what type of application you have moved to a cloud architecture. For example, many companies I am aware of have moved their e-mail systems to the cloud. Closer to home, we have an expense reimbursement system that is hosted in the cloud. While these two examples represent parts of a business, they are likely not considered critical business functions.
Also, and as mentioned in the column, the size of your company also plays into the timeline discussion. SMBs, by their nature, and depending on their age, will find it easier in the short term, to either begin in the cloud or migrate to the cloud. Their application portfolios are generally not as large or as complex as those of older, multinational corporations. There is also a vetting process of some nature regarding your application portfolios, that comes into play here as well I think. There will be a certain percentage of your portfolio, for various reasons, that will never be allowed to migrate beyond your firewall. So, once you get beyond the obvious candidates for cloud hosting (low hanging fruit), does your typical company have a handle (financial/CSF) on what these enterprise applications might be? Typically, while many have what I would class as a gut feel on this, from an auditors perspective the answer is usually no. As with everything, results may vary.
In regards to your second thought, good point and I need to be clearer.
It is important to remember that even though you may opt to support part of your business via the cloud, the need for components of that cloud business to still function with traditional, internal systems (not migrating to the cloud) does not go away (assumption being that as this plays out, most companies will have a mix of cloud/non-cloud based business). Unless you are able to functionally duplicate every aspect of how the application runs on the cloud (business/data/application/technology) with those of your internal systems, you will be obliged to somehow force a fit. This is what I was thinking about regarding co-existence. Did not make that clear enough though and thanks for obliging me to think about it a bit more.
Great article. Cloud is a action word, as you point out, and tighly integrated with the core business model. Companies need to re-engineer their business strategies. Changing business models impacts the fundamental culture of a company and that is why the migrating to the cloud ultimately can take 8 to 10 years.
Bob DeutschePosted August 3rd, 2011
Juha, thank you for your comments.
As you suggest, Cloud is a composite of many disciplines. The challenge being faced today by the typical enterprise is that the tech vertical, seems to be in a perpetual overdrive scenario thinking of ways to define the problem (opportunity) in a way that is favorable to their solution. Absolutely nothing wrong with this as it is Marketing 101.
It seems to me though that once you are able to cut through what Gartner in their latest research paper titled “Hype Cycle for Cloud Computing, 2011″ calls “cloudwashing”, you begin to realize that moving your mission critical business functions to the Cloud, is a bit more difficult than pulling something out of a box. Again to your point regarding re-engineering of your business strategies and more difficult, the people and groups who perform these functions today.
Charles MoPosted February 14th, 2012
Cloud take up is rather slow in the financial world. Speaking to the a number of the
banks in the Tier 1, there is too much perception, not enough facts, but more
importantly the business context or justifications is at best unclear.
For example, security is considered the problem. Ask what is the problem, and
often they cannot answer. This is why I am looking forward to the blog you will be
writing about this aspect of cloud.
Part of the problem I think is the Cloud standard, or the lack of one.