Research suggests the cloud will account for almost half of all enterprise IT spending by 2026. Yet while interest in the cloud keeps increasing, some pockets of resistance remain. What are the key issues that matter to CIOs who are considering a move on-demand and how can they make the most of the cloud?
1. Be the cloud broker for the business
Matt Peers, CIO at Linklaters, says the bringing together of systems and services is still a concern for IT leaders considering a move to the cloud. "I think there's a temptation to draw on the services of many different providers but that can create a huge integration challenge," he says.
Peers says effective CIOs will create a balance, drawing on enough cloud providers to take advantage of the competitive tension, while at the same time avoiding the risk of having too many partners to manage. "You don't want to be forever chopping and changing between services," he says.
This need for cloud control could lead to a new trend, where expert providers help mop-up the management concerns associated to on-demand provision. Moves in this direction are being made. A number of major consultancies and IT providers already tout their expertise in regards to cloud ecosystem management. Yet Peers issues a word of caution to CIOs.
"I see that as the IT leader's role," he says. "It's up to me and my team to act as the broker for these in-house and cloud provided services. We work with the people in the business and help them decide the best place from which to source the solution to our IT challenges."
Linklaters is using the cloud, for example, across time recording, email filing, and internet and firm-wide security. These developments lead Peers to suggest on-demand can be a crucial tool for CIOs.
"The cloud providers have - in the last 18 months-or-so - realised that security is very important," he says. "These investments by providers mean we now feel comfortable using these services in certain circumstances. And I see us using more and more on-demand services as the comfort increases."
2. Think carefully about performance, cost and vendor lock-in
Rentalcars.com CIO Graham Benson says he sees a range of issues that business leaders should be wary about when it comes to using the cloud in the current environment. The first issue covers performance. Applications need to be optimised to run in the cloud and that can present challenges.
Executives, says Benson, should not assume applications automatically port from a fixed legacy environment to an on-demand platform. "You could get a performance hit," he says. "A lot of applications work fine on standalone servers. But the applications can suffer when you try and move them to the cloud."
Benson says there are reports that it can be painful to migrate fixed web servers to a cloud platform. He advises CIOs to proceed with caution. "Road test and performance manage your applications," says Benson. "Make no assumptions. In short, don't just believe the marketing hype and test the cloud yourself."
The second issue concerns the movement of data. "Never, ever migrate your crown jewels to the cloud," he says. "Examples might include payment systems and customer databases."
Benson's stance is in opposition to an increasing number of experts, who believe external cloud providers are often the specialists in security. "Lots of cloud providers will argue with me about this stance," he says. "But scaling back-end databases on-demand doesn't work very well and no CIO should be giving up the security of crucial information to a third party."
Another key concern when using the cloud, says Benson, is cost. He says the cloud works "really, really well" on a pay-as-you-go basis. However, CIOs must be aware that on-demand IT can get expensive when users want to store and use terabytes and terabytes of data every day.
"Small-scale transactional stuff is perfect for the cloud," says Benson. "When you start having huge databases on-demand, you start having to store information on multiple, distributed systems - and that can be difficult and costly to manage."
Finally, Benson offers a watchword to other CIOs in regards to vendor lock-in. "Be careful not to be seduced by too much proprietary technology," he says. "Nothing comes for free. Cloud providers offer give you great generic tools as part of the package but you need to be aware of being locked into the technology. Once you're locked in, it's very difficult to migrate away."
3. Remember the limitations and build a strong case
Toby Clarke, interim head of IT at Moorfields Eye Hospital NHS Foundation Trust, says cloud is, quite simply, just another IT procurement option. "For everything we do now, we consider the cloud," he says.
Clarke says that, for most organisations, the relationship with the cloud is just going to get bigger and better. However, there will always be important limitations. Moorfields, for example, is not a heavy user of the cloud.
CIOs, he says, must analyse the use of on-demand within the current business context. The hospital has already invested a lot of money in its internal storage array: a move to the cloud would mean the organisation needs to pay for two forms of storage - its existing array and on-demand infrastructure.
"Cost isn't relinquished when you move to the cloud for months or even years," he says. "That's not a strong business case to take to the board for supporting a move to on-demand IT. There's no cost justification for the cloud if you already have the infrastructure and you're simply creating an additional outgoing."
In addition, the focus on operational expenditure is not right for every CIO. Some executives actually prefer to have fixed costs.
"You might work for an organisation that only has capital in its budget for a particular year," he says. "Cloud, if it simply helps bring down operational costs, doesn't fit with that funding model. But the cloud has definitely become another platform from which to deliver a technology service in some form or another."