Category Archives: Cloud Computing

Cloudy Waves: first and second wave

The business drivers

As cloud adoption increased over the years, the following reasons to move the cloud became clearer and easier to understand.

  • Focus on accelerating innovation. Instead of spending years on large programs to move the whole company to the cloud, deploy solutions quickly and change frequently.
  • Learn from others who deployed the same business area. Do not reinvent the wheel and follow best practice.
  • Customer comes first. Do not invest where there is no business advantage. Focus on competitive advantage customer benefit.
  • Location Independent. Cloud applications can be used everywhere. It enables you to follow better your business instead business adapting to IT.
  • Cost Control. With clear SLA’s with your cloud vendors, segregation of duties and KPI’s in place, cost become more transparent and enables you to growth with your business.
  • Cloud adoption is a prerequisite to the digital transformation. If you go digital, you need to build the foundation of an integrated cloud environment.

The lessons learnt (2000 – 2020)

Companies who started with their cloud journey 20 years ago made the following experiences:

  • To move from a best of breed approach to cloud suites.
  • To start with SaaS cloud application and enhance with PaaS and IaaS application to achieve a full cloud environment.
  • To change from cost related management to an innovation engine. (Although we see a current focus on cost savings as an impact from the post pandemic actions, the shift will come back to innovation in the long run).
  • From a cloud too to a cloud first approach. Nowadays, it is from a cloud first to a cloud best approach.
  • From an IT driven to a business driven mindset.

First and second cloud waves

Every company has a different architecture model. However, the things they have in common are

  • Applications in the back office, such as an IT infrastructure, platforms, ICT systems, ERP systems (finance, administration, manufacturing, logistics, supply chain, procurement and human resources).
  • Multi-channel customer front end applications such as marketing, sales, services and reporting.
  • Core applications, which are unique for every company managing their main businesses such as manufacturing, sales, marketing and services related to the products and services the company is producing and interrelated with their ERP and CRM systems.

The first two areas can be managed by standard applications such as SAP, Oracle, Infor, Workday and Salesforce. The third area are mostly covered by best of breed or custom made and branch / vertical specific solutions.

The architectural components of a cloud provider model as shown in the following diagram contains the various cloud services and how they relate to each other based on the three constituents: cloud consumers, cloud service providers, and cloud brokers.

Since most companies are using a hybrid or multi cloud approach, they use legacy, in house applications and data on their premises and have additional cloud based data and applications deployed in the cloud. Companies therefore should understand and optimize the different types of cloud based IT systems.

An example where to put cloud first could look as followed.

  1. Platform as a Service (PaaS).
  2. Service Execution. Allow worldwide subsidiaries and affiliates to work independently from where they are based.
  3. Multi-channel customer front end applications such as marketing, sales, services, and reporting to enable customer collaboration.

This approach is in line with the initial cloud initiatives. Most companies started with SaaS and moved to PaaS as the next step to move to the cloud. Moving core applications such as services to the cloud follows the business driven approach, where you move applications used daily by subsidiaries and affiliates to a common cloud application. The last but no least area relates to customer collaboration which follows not only a cloud first but customer first approach.

The next wave looks at applications which are considered to move to the cloud. An example to consider cloud could look as followed.

  1. Infrastructure as a Service (IaaS)
  2. ERP systems such as Finance, Administration, Logistics, Procurement and Human Resources.
  3. Sales Management.

Where to consider cloud is dependent on where the company has additional business benefit and customer intimacy after the first wave.

Considerations for the next wave

Most companies are using cloud in some forms today and the most popular ones are a combination of on premises and public cloud solutions. Multi cloud and hybrid cloud models are in the majority.

So what are the cloud services used today?

Source: McAfee

With the increase of remote work, cloud adoption, Artificial Intelligence (AI), Machine Learning (ML) and analytics became a higher priority but not a top priority. Companies recognize digitalization and business related outcome as their top priorities. The shift to digital has reached a stage where more companies are already operating in a digital environment and fewer companies are making plans for a digital environment.

Companies who moved their applications and IT infrastructure to the cloud in staged waves have following learnings and conclusions in common. Ask yourself where are you in your cloud adoption and transition?

  • Translating the IT strategy by finding the best balance between on premises and cloud solutions. This is different for every company and situation.
  • Make the cloud clearer and easier to understand. People became much smarter about the cloud and take advantage of their cloud expertise.
  • Cloud is not only about cost savings, it is about an innovation engine.
  • Constantly change and innovate. Approach in staged waves, i.e. cloud first wave, consider now a cloud best approach instead of cloud first.
  • Adjust your IT translation – stay flexible and agile. Fail fast – learn fast.
  • Pay attention to integration instead perfection.
  • Put an overall IT governance in place. How you control information and data are usually the root cause of failures in cloud transformation projects.
  • Avoid single business units and subsidiaries to sign up for cloud services independently as integration efforts into existing systems, data exchange and security risks are underestimated.
  • Avoid cloud silos, think about cloud suites first.
  • Reduce your vendors and select a few trusted key cloud vendors.
  • Vendors are growing in influence since they can now bridge the cloud with digital transformation programs.
  • Expand the set of use cases for the next generation cloud using analytics, AI, edge computing and cloud usage patterns.
  • Focus on vendors that can deliver transformative outcomes.
  • Establish good vendor relationships to avoid vendor locks. Ensure your vendor provides enough information about what is being changed and upgraded.
  • Put a vendor communication control framework in place. For example, if you use multi cloud, set up uniform reporting with common definitions to avoid different notifications and alerts for the same problem but coming from different vendors.
  • Build a good architecture and Dev Ops Team who understand and challenge the vendor’s ecosystem.
  • Your cloud vendor provider is not only a service provider, your vendor runs your business. Does your vendor take the same caution with your data as closely and carefully as you as the data owner? Challenge them.
  • Use standards from ISO, ITIL and the open source communities to have a common baseline with your IT, business and vendors.
  • Include input from the compliance experts to reduce time for audits.
  • Focus on a win-win approach since less vendors mean bigger lump risks.

These considerations are based on the first and second cloud wave and should help you to move forward during your next cloud journey. More companies are using cloud services for business critical functions.

Companies considering the next cloud wave want to eliminate the complexity of orchestrating end-to-end integration flows. Using different enterprise systems, whether cloud and API based ERP, CRM, HR and other systems on premises, in the public or private cloud – companies need to ensure their systems are integrated with customers (B2C), market places (B2B) and suppliers (P2P).

Since the multi cloud model is the most popular one, companies will move to cloud applications built from containers, use of micro services and multi cloud orchestration tools. This will enable companies to manage their workloads in the cloud and stay flexible for deployment in their private and public clouds from different cloud service providers to achieve better performance, cost control and other KPI’s.

In future, companies will use the cloud to enhance their digital business with Internet of Things (IoT), Quantum Computing, Artificial Intelligence (AI), Machine Learning (ML), Big Data, Augmented Reality and API’s.

Cloudy Waves: starting point and cloud concerns

Cloud strategies are moving now from a comprehensive business case to real transition projects which must align with business outcomes. We can see different waves of cloud adoption during the last 20 years.

A single cloud strategy such as moving all IT systems to the cloud does not exist. Moreover, views of what cloud really is vary too. Before moving to the cloud, companies need to address three questions.

  1. Where do we stand and where do we want to go in our cloud journey?
  2. What does cloud mean for us? How do we define it, considering our situation towards applications already in the cloud, moving onsite applications towards to a private, hybrid, public or multi cloud approach?
  3. What is a realistic end state?

For companies having a cloud strategy in place, the corresponding actions and steps are case by case depending on the unique company’s situation.

Most companies have a multi cloud strategy and that is the main challenge of the cloud strategy on how to handle it the best way.

A 2018 survey by analyst firm Forrester on behalf of Virtustream found that 86% of respondents (727 cloud strategy and application management decision makers in the US, EMEA and APAC) characterized their organizations’ cloud strategy as ‘multi cloud’, identifying most with the description ‘Using multiple public and private clouds for different application workloads’:

Respondents to the Forrester/Virtustream survey defined multi cloud in several ways, including:

  • Leveraging multiple cloud technologies at once (32%);
  • Using public cloud in parallel with traditional non-cloud systems (23%);
  • Using multiple public clouds simultaneously for different workloads (14%).

The following guidance gives you an overview of different starting points and a way forward using the best options to move to the cloud.

The starting point and cloud concerns

A couple of years ago, cloud was mostly not an option when it came to evaluation of new application and IT services. Companies more or less accepted high capital expenditures on their own on premises IT infrastructure such as servers, hardware, software, network, storage and additional costs on maintaining and upgrading the infrastructure. The resistance towards the cloud disappeared slowly due to the benefit of reduction of costs on IT infrastructure but also due to the increased security and improved services from the cloud providers. The idea of renting and paying on scalable subscription and fee basis became more popular also because vendors could provide a real benefit of economy of scale, IT expertise and a worldwide access through the internet. So we can see that the starting point was more IT driven and some business felt forced to the cloud or rushed ahead with their own cloud initiatives, which increased the “silo” thinking gap between IT and business. Later, hybrid cloud was being driven by IT and operations, whereas the public cloud was driven more by developers and business requirements.

Both IT and business understand the corporate goals, however, they have a different points of view because they have different roles. Nevertheless, it is crucial if both can incorporate the overall goals and achieve both IT and business benefits:

Business View – Focus: IT View – Focus:
Revenue growth Improved business continuity
Profitability increase Ensure availability, reliability and resiliency
Customer comes first Cost Savings
Faster time to market deployment for new products and services Increase transparency and transfer pricing of the IT costs
Support new business initiatives Faster response to scalability requirements
Increase productivity Benefit from new technology immediately without depending on rigid release cycles
Expand operations into new markets and regions across the world Move IT staff faster to where they are more needed

Many companies are struggling to match service delivery with the increased pressure for cloud use.

When looking at your IT landscape, IT must think like a business and go beyond traditional business partnerships. It is all about linking business to IT and IT to business. Without this cultural alignment, cloud projects will fail.

IT – Business alignment means finding the best solutions for a business transformation using different technologies and sourcing strategies. Not every application is worth moving to the cloud.

The question is: where do IT related capabilities provide the most business value when run “as a service”?

Business value amongst cost, flexibility, reassurance and volume is one thing. However, going to the cloud needs to consider the concerns about cloud computing such as

  • security and privacy of company data
  • quality and reliability of the cloud service provided
  • doubts about true cost savings or overseen hidden costs
  • cloud pricing structures must be simple and easy to understand
  • performance and insufficient responsiveness over network such as internet reliability, bandwidth and latency risks
  • difficulty integrating the cloud with on premises and the in house IT environment
  • software compatibility
  • overcome internal resistance
  • handle compliance in regulated industries, i.e. finance and pharmaceutical companies
  • managing legal and location risks, i.e. where is personal data stored?
  • lack of cloud skills

From an IT perspective and taking for example a large international organization, you are driving the evolution of global IT infrastructure, managing data center modernization by executing consolidation programs with the target to have the right combination of cloud services and regional infrastructure. Projects for example can include deployment of collaboration platforms, workplace programs and a global network strategy including global IT security aspects.

The majority of large international organizations started their cloud journey some 20 years ago. A typical journey could look like in the following table.

Year Business Area Cloud Adoption Example
2001 ERP – single instance ERP outsourced. Vendor managed cloud Oracle Managed Cloud
2006 Middleware Middleware outsourced. Vendor managed cloud Oracle Managed Cloud
2008 Procure to Pay Global procurement single SaaS instance Ariba
2009 CRM Global SaaS CRM Salesforce (Service Cloud & Marketing Cloud)
2012 HRM Global SaaS HR System, SaaS Talent Management Workday, Taleo
2015 Core Systems Global core system solutions as SaaS Company specific
2016 Office Office 365 SaaS Microsoft
2017 Datacenters Data center transformation program Oracle Cloud Services

One key thing in common is that cloud utilization increased over the years exponentially. This means that in the beginning of the journey, cloud usage was low whereas nowadays and in the future, cloud adoption will increase much stronger.

Moving to the cloud – what are the priorities?

Cloud based IT systems were part of the IT strategies already some years ago. With the recent global agenda caused by lockdown and working from home, cloud strategies were even more pushed by CIO’s.

However, there is a conflict in addressing the new situation. On one hand, companies were busy to set up business continuity management, ensuring that companies suffer minimum impact from the lockdown. Public cloud solutions became the most popular one because companies could switch fast and enable employees to work remotely from home.

On the other hand, budgets become frozen and working from home orders postponed new projects in the pipeline in a “wait and see” mode. As a consequence, growth and innovation projects are cut and projects dedicated to run the business are impacted from budget cuts.

Nevertheless, companies still plan to move workloads to the cloud also as a response to push above all the digital transformation agenda and increase the pace. The question is whether cloud resistant back end and core applications are ready to move to the cloud. Companies evaluate on top the advantages of cloud services such as machine learning, artificial intelligence and data analytics.

Public cloud has the highest priority and is the preferred model and becoming omnipresent. It is followed by Artificial Intelligence and Machine Learning initiatives, then followed by private cloud and multi cloud. Nevertheless, most companies follow a multi cloud strategy since they are using multiple public and private clouds for different application workloads.

Companies already decided to move the cloud a couple of years ago and more than two third of all organizations are using the cloud today, however, the priorities changed as seen above and the plan is to shift in parts. Focus is on a modernization approach of the IT landscape.

Where there was a general reluctance regarding security, data protection and risks of dependency towards cloud vendor providers, management buy-in became easier because cloud value propositions are now driven as cost savings initiatives, which reflects the current situation of focusing more on cost savings instead revenue growth.

The game has changed because business needs to provide a reason now why not to migrate to the cloud. Technology is overruling business priority. Even if there is “only” a lift and shift approach for an IT Information System to move to the public cloud, as long as it could save costs, the project is sponsored.

Another driver is the experience of towards remote work. The lockdown has proved that remote work is possible without large impacts despite the earlier doubts before the lockdown. This is another argument to move to the cloud.

Still, business continuity is top priority, but the mind shift from seeing cloud as a cost saving and strategic value only has moved to see cloud as the new standard to work in the future.

It is today easier to argue that business transformation is easier using cloud technologies and add customer value. Once the quick wins become visible, businesses will continue to move more applications to the cloud. The pandemic situation is only a trigger to pull technology forward.

For many companies that rushed into the cloud at the height of the pandemic, the primary goal was enabling employees to work from home, so business could still function. That does not mean that the shift was perfect.

The focus is more related to business continuity, process adaption to the new situation and working from home. Therefore, it is not a black or white approach towards the cloud. Companies will increase cloud adoption where necessary and not just because of a cloud dogma. Since the focus is on cost control, cloud business cases and prove of concepts will provide more value to move forward.

Existing cloud solutions will be optimized and restructured towards cost savings, the way forward is not only addressing new cloud initiatives but both. Every spending is on the radar, including technology.

Companies continue their journey to the cloud and we are now in the stage of translating the cloud strategy into real actions and steps.

The times of theoretical cloud school lessons are over.

Companies are now recognizing the opportunities for platform based innovation across the entire spectrum of cloud services including data center infrastructure management. Vendors respond with project pre-financing and security disaster recovery checks to make it easier for customers to continue with their cloud engagements.

According to Spiceworks, the top priorities where large companies expect support from cloud vendors are:

  • Maintaining data security: 47%
  • Complying with data regulations: 34%
  • Migrating workloads to the cloud: 28%
  • Managing multiple cloud solutions: 15%
  • Optimizing cloud workloads: 11%
  • Managing cloud spend: 11%
  • Modernizing cloud infrastructure: 11%

For cloud service providers, it is very important to respond to risks of data security, risks of vendor lock-in by focusing on solutions which keep organizations top priorities to remain flexible in uncertain times. With the increased emphasis on remote work, cloud has become more important than ever. Not only to support remote and mobile access, but also to improve collaboration.

Next Level Information Management: Changing a tanker into speed boats

Changing a tanker into speed boats

As a leader you may think that “yeah, I heard about all this agile, flexibility, empowerment and all these buzzwords. But how to change an IT landscape which is like a “tanker” to “speed boats” in times of uncertainty and faster changes?

Assuming replacing your ERP backbone system is not an option, you need to address opportunities, risks and challenges in your strategy of enhancing your ERP and IT landscape.

Which technology is the best solution? Consider best of breed or adding new modules of existing ERP providers through software evaluation. More than 20 years ago, the best of breed approach was “en vogue” whereas during the recent years, adding products from the existing ERP providers became more standard approach.

When considering the “speed boat” approach, ask yourself the following questions:

  • What data streams do I need to consider?
  • What data volume should be processed?
  • Is data distribution important?
  • What are the compliance, GDPR and security considerations?
  • Where does the data occur?
  • Which data is about write or read?

Once the appropriate technology and the business requirements are aligned, you can start focusing on the required skills to address the differences between the existing IT landscape against the underlying paradigms and technologies of the enhancements or new software required.

You will achieve this better by letting your IT people experiment, fail, learn fast and experiment again until you can continue on the benefits gained.

Typical projects consider prove of concepts and pilots to validate the readiness, functionality and utility of advanced technologies such as Artificial Intelligence and Machine Learning.

For example, if your team helps to shape the future of your IT strategy, you need to ensure the solutions always consider the whole company and community worldwide.

If we allow the experimental mode, we should not do it isolated but with consideration of benefits for the whole company, subsidiaries, business stakeholders and affiliates.

The next consideration is to ensure that the new solution fits to the existing landscape requirements and the end to end processes and systems, including interfaces and platforms. Collaboration is required between the IT solution streams, functional streams, business, service providers and off-shore teams in order to guarantee the deliverables with full transparency on status and risk management. The new solution needs to take the existing enterprise architecture into consideration. Transition from the existing and the new processes and systems is a key part of these new kind of projects.

Moving to collaboration means working with both internal IT and external IT (service provider) and business counterparts.

For low risk and high volume services, companies tend to give full control to their cloud service providers for hosting and processing the data inclusive managing security. For critical applications and multinational companies with a larger IT expertise, the internal IT staff does not only manage the on premises and in house applications but also manage parts of what is hosted outside with the cloud service provider. They collaborate on agreements for several topics such as data maintenance, security and governance and manage together applications and data to deploy on the service provider’s cloud environment.

At least one IT team member represents the IT point of view to the business and a member of the different business streams represents business to the IT teams. This is mainly required when it comes to BI, analytics and reporting. The same applies to testing such as test strategies, test plans and test execution.

The security and governance policies inside the data centers should be periodically reviewed and based on lessons learnt with the cloud service providers extended or changed. Companies do not need to reinvent these security policies and governance as vendors do provide tools to manage and configure them. It is more about taking the existing policies and adapt them to the SLA’s with the vendors, taking the new cloud part into consideration. At the end of the day, the security policies and governance applies for the whole hybrid cloud infrastructure and governance is all about how you control information and data.

That is why it is so important to first understand, agree and configure security and governance before moving applications and data to the cloud.

Especially in the SaaS area, where businesses independently sign up for cloud services, they end up being totally exposed to the security and governance service level dictated by the cloud service provider and internal IT face integration issues when data needs to be moved between legacy, on premises and cloud applications.

Your change manager will support both IT and business and aligns with the program manager regarding the program change management process, the PMO in progress reporting and in other project management activities such as RAID (Risks, Assumptions, Issues and Dependencies) and project plans. This also includes managing the engagement of stakeholders and senior management.

As a summary, we are moving away from large and inflexible IT projects to more constantly looking for improvements in the new ways of working by taking processes, people, tools and organizations into consideration when elaborating and implementing digital and operational transformation, strategy adoption and alignment.