When the Open Cloud Manifesto was unveiled last week by IBM et al I wrote "The (Cloud) Bastards say, Welcome"
And I invited several cloud pioneers who have been at it - delivering cloud based products and services or helping evaluate and nurture them for several years - to discuss the manifesto and what they have learned in Cloud Computing over the last few years.
This time it is Chris Barbin, CEO of appirio since 2006. His firm not only helps clients with salesforce, Google, amazon cloud services, but runs its own internal operations completely in the cloud. Chris also did a stint as a CIO and additionally speaks from that POV ...
"As the economy worsens companies are looking to new ways to reduce costs while maintaining innovation, which has caused the interest in cloud computing to reach fever pitch. This has caused most of the large software and technology vendors - IBM, HP, Microsoft, Oracle, SAS - to get into the game, even re-branding their offerings to be cloud-based. This has created a general sense of confusion about what cloud computing is. And unfortunately, what's getting lost in all this is that cloud computing more than delivers on its promises.
As a company on the front line of this industry shift, Appirio has helped more than 150 enterprises (including some of salesforce.com and Google's largest customers) begin their transition to the cloud. We even have built our own company on the cloud, running our entire business (over 120 employees globally) on infrastructure from Amazon, salesforce.com, Google and Intaact without needing a single server. From this vantage point, we've seen first-hand the promise of SaaS and cloud computing and have learned some interesting things along the way.
1) The business case for cloud computing is already compelling,
but the benefits go far beyond what people initially think We have
found both among our clients, as well as within our business that cloud
computing delivers significant cost savings, accelerates time-to-market by a
factor of at least 2-3x and enables innovation without huge capital
investments. At Appirio, we spend less than 2% of our revenues on IT, compared
to benchmarks of ~7% for companies our size. But the benefits go far beyond
cost savings. Because we run our business on platforms like salesforce.com and
Google, we did not have to do a single thing as we scaled from <10 employees
two years ago to 120+ employees across the globe. We get access to the
security, performance, mobility and multi-currency capabilities inherent in
these platforms, without a huge up-front investment. We also enjoy a
higher-level of IT infrastructure than most of us experienced when we worked at
our previous companies. For example, salesforce.com enables us to seamlessly
tie our sales processes into our project management/planning application,
something we've struggled to do in the past. In addition, our employees get
instant access to the latest collaboration technology, such as the new voice
chat and video conferencing features of Gmail. It seems Google is rolling out
new features by the day. The amazing thing for us is that our infrastructure
keeps getting better, all for no additional cost. As the salesforce.com
platform evolves or as Google adds new features, we just get them. No upgrades,
no new hardware, nothing!
2) Cloud computing is not a fad - CIO
increasingly view it as the future of IT SaaS and cloud computing were
initially branded as an SMB phenomenon and then a fad. But, over the past 2
years, we've seen that neither of those assertions is true. We started our
business two years ago, focusing specifically on the needs of enterprises and
helping them migrate their complex processes and IT environments to the cloud.
Since then we're seeing more and more interest from large companies like Japan
Post, Flextronics, Starbucks and Avago around how to successfully apply
on-demand solutions. In this economy, enterprise IT departments are under
intense budget pressures and need to balance right-sizing their infrastructure
for reduced demand while still supporting strategic initiatives. This is next
to impossible when they have to spend 70-80% of their budgets and resources just
keeping the lights on. Many CIOs are using this time as an opportunity to
re-evaluate their internal processes and infrastructure. This has caused many
to think not just of moving CRM, SFA or mail to the cloud, but to look across
their application portfolios and re-architect their IT organizations to take
greater advantage of the economic and productivity benefits of cloud
computing.
3) Not every service provider is created equal, the shift to cloud
computing requires significant changes in delivery models Cloud computing
requires different skill sets and delivery models than the old way, and some
companies are more willing and more able to take advantage of this new model
than others. For example, the traditional model of requirements gathering for
months, followed by year-long or multi-year development cycles aren't required
in on-demand world. Since development is on top of platforms that abstract away
the infrastructure, applications can be built in weeks instead of months. You
can create a working prototype to demonstrate the business value of a new
system, instead of just describing it on paper. Platforms like Force.com and
AppEngine make agile development a reality and require a complete shift in
project models. From a service provider perspective, this is a huge shift.
Projects no longer require armies of consultants to gather requirements for
months before building applications. Applications can be built iteratively
working closely with client teams in weeks. The situation is no different for
outsourcers, who have built their businesses around repeatability and process
quality for managing datacenters and networks. Mirroring the shift within IT
departments away from managing infrastructure, toward closer partnerships with
the business and agile development, the outsourcer of the future will be part
business analyst/part agile developer. Again a huge shift.
These are all things that CIOs and their teams should consider as they investigate what cloud computing can mean to their business. As more and more companies see the value of moving from an on-premise to an on-demand model, the hype will get even stronger and the voice of both advocates and detractors will get stronger.
Cloud computing isn't a miracle cure, but from what we've seen and learned over the last few years, it has the potential to heal a lot of IT's ills. You just need to be wary of witch doctors!
