In my previous blogs we talked about why you would need a business case when moving to the Cloud and how you could allocate your budget. Today, in the final blog within this series I will talk about whether buying on-demand resources and capacity to run your IT has the potential to be less expensive.

3 reasons why Cloud should save you money

Every conversation on cloud I have with CIO and sourcing decision makers eventually turns to a discussion of cost and the assertion that cloud computing is less expensive. From a technology perspective, there are at least three key reasons why a well-run third-party public Infrastructure as a Services (IaaS) provider should be able to deliver compute resources less expensively than a typical internal IT organization:

• Load aggregation. By combining the highly variable compute loads from a pool of organizations, it should be possible to achieve better utilization levels.
  
• Cost of power and electricity. By locating datacentres in areas with low-cost power, hosting and IaaS providers can lower their cost of compute resources. Given that power can often represent 35% of operating costs, this advantage is significant.
  
• Labor utilization. Compared with a typical IT organization operating a Public IaaS platform that is standard and heterogeneous IT infrastructure and delivered in a one-to-many model is much more streamlined, efficient and cost-effective.
  

The key issue however is not the cost of delivering IT compute services as such. For IT buyers, the issue is comparing the price of acquiring a public IT cloud service versus the cost of providing it internally. Pricing is a function of market conditions, seller motivation, and buyer requirements. In mature industries, cost and price are usually highly correlated. The cloud computing market is in a period of rapid expansion, affecting both providers and their service offerings. Pricing varies from very short-term contracts, literally minutes of usage, to multiyear contracts with associated discounts. The scope of the public IT cloud service offerings varies even more widely.

The long-term outlook is that public IaaS has the potential to reduce the cost of IT delivery. However, there is no guarantee, even likelihood that any particular project or application will certainly be hosted more effectively with hosted or IaaS resources. As with most complex technical questions, the answer is a function of many variables. Nevertheless, IDC believes that public IT cloud services will evolve rapidly into a major IT platform, and for that reason, IT organizations should continue to explore new options and applications.

For midsize and larger projects, IDC recommends IT leaders and other business executives rely on the proven business case methodology factoring the relevant components, including direct resource costs (equipment, software, and services), assurance costs (such as monitoring, patching, and maintenance), and indirect costs (including buildings, energy consumption, taxes, and IT management), and comparing them with external options (also fully encumbered with all relevant costs including assurance and IT management).

This is the final blog in a 3 part series on the business case for Cloud.    In addition to the blogs, IDC in partnership with TELUS developed a Cloud workbook based on a 2011 IDC survey with Canadian businesses to determine how they can take advantage of the flexible, on-demand way to access infrastructure and applications via Cloud.  Highlights from the workbook include:

• Use cases detailing how companies of varying sizes across verticals are deploying Cloud
  
• Types of Canadian Cloud providers and their offerings
  
• Key consideration questions to assess infrastructure-based Cloud services as part of your IT strategy
  

You can get full access to the workbook here

Mark Schrutt

IDC Canada

Not all cloud services and the providers who deliver them are equal. In the conclusion of our series Send in the Cloud: A limited series to help you develop a Cloud storage strategy, we thought it useful to present some final guidance when considering suitable cloud storage providers.

We’ll walk through four areas to look out for:

• The Cloud Storage Provider
  
• The Cloud Storage Service
  
• Your Data – Portability, Security
  
• Implementation and Support
  

Cloud Storage Provider

• The Organization
  

As with any decision involving the sourcing of a business service, it is important to determine whether the organization delivering it has the expertise and track record to demonstrate seriousness in the particular domain. Usually, a solid provider includes a long reputation of delivering similar or identical services.

• Trust
  

Consider a service provider with whom you feel you can entrust some of your most valuable assets, your data backup, intellectual property or the content that fuels your business. Just like you would treat holding your organization's cash with an established financial institution, consider a cloud service provider that is in good financial standing, engages in ethical business practices and presents fair and equitable terms and conditions for the service.

• Legacy of data centre expertise
  

Not only is the history of delivering IT services an indicator of trustworthiness, but also one of technical and organizational competency. Hiring, training, and managing experienced data centre professionals provides distinct skills and capabilities that are the foundation of a trust and stable cloud service.

The Cloud Storage Service

• Quality Commitment
  

The quality of the provided service should include a commitment for service quality. Enterprise class services entail a well-defined service-level agreement (SLA) with specified provisions should service quality not be met. Note that some services providers describe service objectives that the provider has no vested in reaching, in particular with value-oriented or free services.

• Flexibility
  

As with service providers, client organizations are not created equal. Good service providers will be able to adapt their services and work with you to address your specific needs. Modular services allow for more flexibility whereas integrated solutions can provide advanced capabilities. It is also helpful to consider whether the provided service offers room for future growth that aligns with your organization’s changing business requirements.

• Technical Capabilities
  

Some services are more capable than others, with some offering far more access and connection options, different back-up solutions, compatibility with existing IT systems and services or powerful management tools. It is up to you to decide whether these are essential for your organization or “nice to have”s.

• Subscription Commitment
  

Commitment from you, as the client, is a key deciding factor as well. Certain services providers offer service in a flexible manner, whereas some require term contracts. The level of incremental service or tier can also be large or small. Being able to try the service before committing is invaluable in choosing the appropriate provider for you.

• Fees
  

Obtain a clear breakdown of what is included in the service and find out the cost of any optional add-on services. Be well-informed of all overage charges, surcharges, or hidden fees. In the case of cloud storage specifically consider things such as bandwidth charges and the cost of performing bulk migration of data either to or from the service.

Data, data portability, data security

• Data Protection
  

Your data needs to be protected with the most modern IT and physical security practices from malicious activities and natural disasters. Fully-secured data centres with built-in redundancies are expensive investments that not all organizations are capable of making. Some cloud services offer multiple tiers of protection which you may find suitable for your needs even for additional fees.

• Data Security
  

Ensuring data security in a multi-tenant cloud is a key consideration and a known barrier to cloud adoption. A cloud storage service that obscures user account information from the stored data helps eliminates unlawful access to by both outsiders and the service provider’s staff. Some service providers perform background checks on all employees to prevent such occurrences.

• Jurisdiction
  

As your business data resides in your service provider’s facilities, consider the physical location of the infrastructure and the ensuing jurisdiction issues. An end-to-end Canadian service provider (incorporation, data centre facilities and network connections) is not subject to the US Patriot Act, which allows the US government access to data stored with the service.

• Data Portability
  

As a client, provider lock-in is both irritable and expensive. To minimize this concern, consider a service that uses industry-standard software and protocols that allows your data to be transferred at your convenience, and will not retain your data beyond your service commitment. Don’t forget to check for the existence and cost of optional services to perform bulk migration to the cloud storage service or from it when you choose to.

Implementation and Support

• Assistance
  

What levels of assistance and support will you receive when you subscribe to the service and on an ongoing manner, even round the clock support. Phone, e-mail, online (self-support) mechanisms and the languages in which these are provided vary between providers. Some providers will also provide integration or development support for cloud storage services that are accessible for application development.

• Ease of use
  

The level of complexity of the service can determine whether your organization is receiving the solution’s full value.  Those that are simple to integrate with your existing IT environment and easy to implement will reduce your operating costs and will also lower switching costs significantly. You will be delivering value to your organization much quicker as well.

I hope you found this blog series on Cloud Storage valuable and welcome your questions or comments.

Shawn Myron is the director of products and services for TELUS' hosting and data centres.

As we said in last week's Send in the Clouds: Helping you develop a cloud storage strategy, growth of electronic data is due to a myriad of factors and encompasses the creation of documents and records generated through the collaboration and communications of all stakeholders of an organization. Businesses across industries rely on the availability and accessibility of these systems and the information stored in and delivered through them.

While only part of the data is important at any given moment during business-as-usual activity, greater amounts (arguably many times over) of the data generated needs to be backed-up for situations in which information systems are compromised due to an unplanned event.

Almost every organization performs some form of data backup to protect itself against events ranging from accidental deletion of data, a system malfunction or a more significant event such as a fire. The techniques used for backup, and the rigour implemented to secure and test backups, vary greatly between organizations and depends on their size, budget, IT governance and in some cases external demands and regulations.

Data growth presents complexity and challenges traditional approaches to data backup

Last week I mentioned a few resources that illustrate how much data humanity is creating in this “information age”. Another interesting phenomena, some even dub it as a “technological wonder”, is the amazing decrease in the cost of disk storage.

According to this blog http://www.dailymarkets.com/economy/2011/06/10/infomation-age-2-0-the-cost-of-hard-disk-space-has-decreased-by-almost-1-5m-times-since-1980/article, the cost of disk decreased over the last 30 years by 1.5 million times! Unfortunately however, while the increase of information generated may be offset by the shrinking cost of disk, it does not result in a “zero-sum-game.”

Data growth comes with a hefty hidden cost that is beyond the sheer cost of disk or the technology that supports your backup solution. Ask any IT administrator that deals with the challenges that come with managing a backup system. They will tell you about the complexity involved in backing up huge amounts of user data, the unbearable difficulty of being able to classify data that is important for safe keeping or the daunting task of trying to recover data that spans over numerous instances of daily or weekly data copies.

They will probably not share with you that the above-mentiond and other challenges are actually preventing them from doing what is considered a vital IT task - the routine testing of backups to ensure that your corporate data is recoverable just-in-case...

Online backup has taken over

A number of technologies have evolved over the years to provide organizations with a plethora of backup options ranging in cost and reliability. Traditional approaches to backup have used tape-based solutions, often combining the ability to periodically transfer these tapes for off-site safe keeping thus providing an extra level of insurance to address the most damaging events impacting ones facilities and systems.

Many organizations have realized the operational challenges and mounting costs tape back-ups create and are opting for other solutions such as disk based approaches or dedicated backup appliances.

High speed connections and the intelligence of backup software that distinguishes between stale data and the “fresher“ incremental data led to the development of numerous online backup services. As you can see from this story from Google http://www.google.com/trends?q=tape+backup%252C+online+backup&ctab=0&geo=all&date=all&sort=0Trend that tracks search term popularity, “tape backup” has been steadily giving way to online backup.

Cloud storage, by virtue of being a remote and scalable storage tier, can provide an effective online backup target for many organizations, especially small and medium businesses, who seek a cost effective and secure backup target for their production data.

What about long term data retention?

While the backup of everyday production data is important for most businesses, some organizations need to store certain information assets for several years, not expecting (or hoping) to ever use it again. Such requirements may be guided by the business of the organization, corporate law governing the company, industry regulations or in some cases customer specific obligations.

Data archiving (and discovery, which is a whole advanced subject of its own) doesn’t always need to be a complex or costly undertaking. However. adequate thought has to be given to developing an archiving policy and a solution that supports the compliance needs of the business. The compounding volumes of data and the requirement for off-premise safekeeping can make the case for including cloud-based digital archiving in an organization’s data archiving strategy, either in addition to or as an alternative to physical retention of tapes, disks or document hard-copies.

How does Cloud Storage for data backup work?

Fundamentally, there are two key components required to perform data back-up (and archiving) to a cloud storage service - a back-up process and a back-up destination.

1. First in order for back-up to work, irrespective of the particular destination in use, some form of back-up process, whether a back-up agent or software is required to scan source data in the existing information (or file) system and transport it back and from a back-up repository.
   
2. Second, the cloud storage should be defined as a valid back-up destination the back-up process could use to store new data in, replace existing data with newer versions and retrieve data from.
   

One of the compelling reasons for cloud services, cloud storage included, is the accessibility of these services on a multi-tenant basis by a large number of organizations. As such, the most compelling cloud storage services would be those that would be easily configured as a destination for the back-up process in use by the organization today or for any of the mainstream online back-up software solutions available in the marketplace.

Characteristics of data back-up and archiving on the cloud

For a cloud storage service to be used for data back-up and archiving there are several characteristics worth considering. These are: interoperability, security, redundancy, on-boarding and recoverability.

1. Interoperability. Unless it is part of a holistic online back-up solution, the service should complement an organization’s existing backup toolset and policy such that it acts as a backup or archiving destination in and of itself. The simplest form of interoperability is when the service is presentable to the company’s network as a logical disk drive or server.
   
2. Security. Comprehensive security covering the security layers used for the link connecting the organizations network with the service and logical security that ensures segregation of different customer data sets.
   
3. Redundancy.A service that is architected with redundancy significantly reduces the risk of failure and business exposure for subscribers. Some organizations may also benefit from varying degrees of data protection of backups, including mirror copies and geographic replication across different nodes of the cloud service.
   
4. Onboarding. Performing the first backup through the network may not be feasible. The service should allow organizations to provide a physical device containing the first full backup of their data through a bulk load service.
   
5. Recoverability. Restoring files from backup should be as straightforward as drag-and-drop. When the amount of data to be recovered is too large to transmit over the network the service should allow for the shipment of a device to the client.
   

From our perspective, cloud storage lends itself very well for data backup and archiving. In coming weeks we will discuss additional applications for cloud storage and cover other important considerations as we try to sum up the associated benefits and risks. If you have any specific questions about the cloud or what you're reading here, please leave a comment.

Shawn Myron is the director of products and services for TELUS hosting and data centres.

With the growing acceptance and adoption of cloud based applications, traditionally called SaaS (Software as a Service), the risk profile of business improvement technology projects are now very different. Cloud based applications have almost eliminated the risks around the configuration, deployment and management of systems themselves and now bring a much higher value problem – organizational change management.

As leaders, this is a very important shift to understand.  We are really no longer talking about our success being tied to a technology risk, but instead to a people risk.  In reality this has always been the key risk in the success of a change initiative, but Cloud-based applications have given us the opportunity to almost exclusively focus our energies in this area.

To understand the problem it’s important that we look at the data around change.  Studies have shown that 20% of employees will embrace the change (Achievers), 20% will seek to avoid the change at all costs (Abstainers), and the remaining 60% will only be accepting of the change if it is done well (Adopters).  Authors in this area ominously warn managers and leaders to avoid the “squeaky wheel syndrome”.  This is where leaders give too much attention to the Abstainers and inadvertently ignore the Achievers who are ultimately the ones who will influence the Adopters to make the change a success.  But how do you best arm the Achievers to help with the change?

With the technology projects I’ve worked on for the past 20 years, I’ve seen this come down to just two simple things; clarity of message, and quality of the solution.

In order to create lasting change, and really arm those Achievers well, the best projects I’ve worked on started with a really clear message.  In every case this message addressed two really key questions of employees.  The first is what is the point of the project?  The second is why does is matter to them?  Being clear on these two points really shifts the discussion away from the little day to day challenges of change, and way up toward the big picture.  It may seem like a simple thing, but it’s the little things that make the difference.

The second element is the quality of the solution, and here it’s important that we evaluate “quality” on three criteria.  Any technology will result in lasting change if it is, more convenient, cheaper and better than what is currently in place today.  Technology projects don’t have to hit it out of the park, and you don’t necessarily have to make the most technologically advanced decision from the pack of products you’re evaluating, you just need to start with a “better” choice.  The absolute key though is that you are putting in something that is more convenient for the people who will be using the product.

Here is a simple example to illustrate my point - re-usable shopping bags.  These bags are better.  They hold more stuff, aren’t detrimental to the environment, and they won’t break when you’re trying to carry them home.  Since they are re-usable they are, over time, cheaper than the plastic alternative in particular now that most grocery stores are charging you for bags.  Yet we still see lots and lots of plastic shopping bags.  How could this possibly be when there is a cheaper and better alternative?  Simple, the convenience factor of the re-usable bag is lower than the plastic bag.  I have to remember to bring my bag with me, guess how many bags I’m going to need, and quite simply that is less convenient than just paying the premium for the old plastic standby.   This single factor means that the likelihood of the re-usable shopping bag becoming, and remaining, the standard is very low.  It will fail to stick.

When we want any technology change to be lasting, we need to focus on clear messaging and a quality solution.  Following these rules will inspire the Achievers and win over the Adopters, and if you get can 80% of your organization onside for change, you’ll succeed almost 100% of the time.

Mike Gardner is CEO of Recombo Inc.

About Recombo
Recombo is a global leader in contract management software that helps organizations streamline business processes, improve productivity, and reduce operational costs by 75% annually by automating their contract workflows. For more information, please visit http://www.recombo.com/

Do you have an example of how your company successfully managed a change in technology? We’re always looking for ‘best practice’ stories at TELUS Talks Business.

Cloud computing is gaining broad recognition as being the way IT services are delivered going forward.  The key advantages that cloud computing offers compared to current IT approaches are flexibility and speed.

What is Cloud Computing?

“Cloud computing enables individuals and businesses to use computer programs and resources over the Internet."

While individuals and businesses have been using the Internet and visiting websites for well over a decade, cloud computing dramatically expands it to the point that users can run all their programs “in the cloud” and instead of buying and installing big computers in the home or business, they can simply rent computing power from a service provider, just like buying electricity from your local hydro company.

With the ability to deliver IT services in a way that organizations can add resources as needed, cloud computing allows for greater ability to support a growing user base, adapt to increasing or cyclical business activity, and react faster to market opportunities. All this with significantly higher efficient use of capital and a resulting lower cost per unit of IT.

There are three fundamental avenues for cloud computing to deliver these benefits.  These are described in the industry as three layers: Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).  Each one addresses a different aspect of IT and is geared towards a distinct set of users and their needs.

Software-as-a-Service (SaaS)

SaaS is predominantly geared towards the end-users - your employees.  It enables users to quickly access standardized business applications, from e-mail, word processing and spreadsheets to customer relationship management tools and enterprise accounting programs, from anywhere via a web browser.

Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS)

IaaS and PaaS layers are geared towards your technical staff.  IaaS enables IT departments to rent computing power and sub-system components such as storage capacity on an as-needed basis.  This capability is particularly useful when the demand for computing capacity is seasonal or needed for relatively short durations, such as projects (e.g., oil exploration or customer analysis projects), developing and testing new programs, or to function as backup systems in case of system failures or disasters.  IaaS provides effective alternatives for small and medium businesses to run their systems in a hosting company’s data center  rather than having to invest in their own infrastructure. This includes computers and the supporting capabilities such as redundant power supplies and cooling.

PaaS provides system and application developers an accelerated approach to write programs by enabling access to pre-built program libraries or functions such as databases through special commands called Application Program Interfaces (API), which in turn, automatically deploys the programs.

What it means for business

The common theme behind all three layers of cloud computing is that from the business buyer’s perspective, each layer of service can be accessed independently, so that the business can get just what it needs without having to become entangled in  all the other components.  This greatly simplifies and accelerates IT deployments, leading to lower cost and a concrete way of  aligning IT with business needs.

Underpinning cloud computing are cumulative technological advances over the past 10 years or more, including increased network speeds, robustness, multiple access methods from wireless to wireline, extensive use of virtualization techniques, and advances in computing hardware power.  The confluence of these technologies makes cloud computing possible in a cost-effective and pervasive manner that is transforming the IT industry today as is evident in many publications, from the leading daily press to the Costco member magazine.

Businesses need to plan now to embrace cloud computing to their advantage.  This is a broad topic that will be discussed further in upcoming articles.  As a starting point, the first step is for both business owners and IT leaders within the company to understand the potential of cloud computing to reduce their costs while allowing flexibility and growth. This is the opportune time for businesses of all sizes to review the different layers of service from SaaS to PaaS to IaaS, and examine  how the IT challenges – both current and future - can be addressed through the “cloud”.

Join the conversation!  Tell us what your thoughts are on cloud computing.