Mythbuster Monday (Part 5 of the Series): Private Cloud is a Good First Step to the Cloud

Balakrishna Narasimhan

Today’s myth centers on private clouds. Private clouds are among the most hotly debated topics in enterprise computing and have as many ardent fans as virulent skeptics.

We’ve written about private clouds quite a few times before. Our focus in the past has been around the first myth related to private clouds - that they provide the same types of benefits as public cloud solutions. We first refuted this myth in early 2009 when we predicted that private clouds would rise and fall in 2009 (guess we were wrong on that one!). Phil Wainewright chimed in earlier this year predicting that 2010 was the year when private clouds would finally be discredited. The discussion has continued unabated including this fantastic discussion we had on SandHill a few months ago. Our position remains the same, private cloud is really a fancy term for better ways to run your datacenter such as virtualization. And while virtualization has a clear ROI, it stops far short of what’s possible by moving to higher-level platform-as-a-service (PaaS) and software-as-a-service (SaaS) technologies. But we’re not here today to rehash that argument.

Instead, we’re going to focus on the second and less widely refuted myth around private clouds - that they’re a good first step to the public cloud. This myth perhaps has its origins in a June 2009 Gartner report entitled “Private Cloud Computing: The Steppingstone to the Cloud”. The author talks about private clouds being a good interim step for services not yet available externally or those that can’t yet be built on public cloud platforms, but the headline has taken on a life of its own, aided by the vendor marketing spin machines. The idea that moving to your own virtualized IT environment and delivering IT as a service to your internal customers may intuitively seem like a good first step before moving the services to someone else’s platforms. The problem is that while private clouds provide clear benefits, they don’t fundamentally alter your cost structure or activities, and your IT department is still locked into many of the same structural problems as before. To understand why, let’s examine what it takes to create a private cloud and IT’s activities in an enterprise with a private cloud.

Moving to and living in the private cloud
Chuck Hollis at EMC, who’s one of the most eloquent private cloud commentators, describes a three-stage adoption path for private cloud. It begins with transitioning IT’s own applications to virtualized infrastructure, followed by business applications and finally running IT “as a service”. Now, there’s no doubt that in the end state, IT is making much more efficient use of infrastructure and can provision capacity for compute and storage much more easily. But, is this fundamentally different than what IT does today? Not really, because you still have middleware, databases and applications, and all of the complexity you have today. In fact, you have the additional complexity of having to provide all of this to your end-users as a flexible, metered service.

So, in this world, IT has learned (the hard way) how to become a service provider and try to recreate internally what companies like Salesforce, Google and Workday do for a living. Learning how to do this and delivering this using today’s software stack, even on top of the best virtualized infrastructure, is no easy task.

And does all this prepare you any better for moving to the public cloud? Not really. It enables you to move easily to infrastructure-as-a-service such as Amazon but as we’ve argued before, this only gives you a fraction of the benefits of moving to higher levels of the stack such as PaaS or SaaS.

The fundamental issue is that virtualization (or even IaaS) doesn’t fundamentally alter where IT spends the majority of time and budget today, which is maintaining and enhancing a complex software stack built on a patchwork of applications, databases and lots of plumbing. So, unfortunately, virtualization or private clouds keep you running on the same old treadmill as before, just maybe with better shoes. So you may be able to run faster and in greater comfort than before but you’re still going in circles!

Why this is different than moving to public cloud platforms and applications
Now let’s contrast this with what happens when you migrate to public cloud platforms and applications. Cloud platforms (PaaS) and applications (SaaS) abstract away hardware and the lower layers of the software stack and automatically stay current. As a result, IT no longer needs to maintain infrastructure, patch or update software, or do many of the things that occupy time and budget today.

This enables IT to become a much closer partner to the business. And this isn’t just marketing. We’re in the process of concluding a survey with 150+ companies who have adopted cloud applications and platforms and 70%+ of respondents said that public cloud solutions had enabled them to change the role of IT within the business. Moving to the public cloud has significant benefits, but it does require IT to focus on some new areas that they may be less comfortable with, but in the end will have a greater impact on the business including:

• Optimizing business processes
• Navigating the public cloud ecoysystem
• Developing apps in an iterative way, collaboratively with the business
• Connecting and extending cloud platforms
• Creating a unified user and management experience across multiple cloud applications

Virtualizing your infrastructure may help a bit with the first but not with any of the others.

Implications
We’re not saying that virtualization or private clouds don’t have a place in your strategy. For many large enterprises, they make good sense. But, it’s not a replacement nor a first step to building a public cloud strategy. They’re different. Public cloud platforms enable you to focus your scarce resources on driving business results rather than running data centers or patching software. Companies who take advantage of public cloud platforms will be able innovate faster and respond much more quickly to business challenges, in addition to reducing costs. That’s why we urge every one of our customers to build a cloud adoption plan, moving at least 10% of their IT to the cloud every year.

Mythbuster Monday (Part 4 of the Series): Most of My World is Still On-Premise

Balakrishna Narasimhan

When people talk about the myths of cloud computing, you often run across issues like security, availability, integration and trust. One myth that isn’t so blatant, but is often used to refute the idea of broad enterprise cloud adoption is the idea that most enterprise IT is and will continue to be on-premise. This is also the main argument used to make the case for companies investing in hybrid cloud environments vs. public (another myth which we’ll address in our next blog). We want to tackle this myth head-on today.

While a majority of enterprise systems and data may still be on-premise today, we would argue that most of the business processes and interactions that differentiate a company already lie outside their firewall. We live in a connected world where customers, prospects, partners, suppliers, developers and employees are scattered across the globe, interacting with you on devices that you probably don’t own, and on public forums and portals that you might not completely control. Consider the following:

• More marketing campaigns are being built around and run on community sites and online marketplaces, search engines like Google, and social networking sites like Facebook, Yelp, etc.
• Most customers and employees start their relationship with a search on a site such as Google, followed by a visit to a company’s website, a property that many enterprises outsource in some way
• An increasing number of customer support conversations (and complaints) are moving online to forums like Twitter and Facebook
• Hosted or outsourced customer and partner portals are taking off in a time when more efficient, cost-effective self service options are becoming the norm rather than the exception

There are three major trends that are driving the shift to a predominantly off-premise world.

1) Your business operates as part of a global network
As the global economy becomes increasingly inter-dependent, companies are fostering their business relationships as a competitive advantage. Connectivity of people, processes and information beyond corporate and country boundaries is driving the formation and management of global business networks. These networks can be collaborative or coordinated but both approaches are increasingly dependent on IT to manage and monitor the operations.

No longer can businesses operate on the castle and moat model. Partners, suppliers and developers are connecting and sharing information across your network — and that’s a good thing for your business. Businesses that are changing their shape, structure and boundaries through processes of decentralization, empowerment, alliances and outsourcing are the ones that are becoming more nimble and flexible.

2) Even your own employees and your data are often off-premise
Unless they are in a very “unique” business, employees do not live 24-hours a day in the confines of their employer’s walls and systems. And when they are at work, they are bringing their personal habits, tools and preferences with them (whether you like it or not). According to AT&T, four out of 10 iPhone sales are to business users. These devices are being used to access corporate email and systems, and you can be sure they aren’t locked up in a desk once the employee leaves the office.

Even when an employee is physically on-premise, their interactions reach externally. Network Box reports that almost 7% of all URLs accessed by businesses go to Facebook and 10% of Internet bandwidth goes to YouTube. They tap into dozens of public sites to do their job - Skype, Wikipedia, LinkedIn, search engines, and even their personal emails which often end up as a workaround for the storage limits of Exchange. They store (and leave with) information on laptops, USB storage devices and mobile phones.

3) Everything is going mobile
Morgan Stanley’s frequently quoted report on the “Mobile Internet” from late 2009 predicts that “if past is prologue, the impact of the mobile Internet will be bigger than the impact of desktop Internet...and personal computer...and minicomputers...and mainframe.”

They use some numbers to illustrate this point:

• 57MM Apple mobile devices sold between July 2008 and Dec 2009 (and this was before the iPad!)
• 2B iPhone applications downloaded between July 2008 and Dec 2009
• 490M 3G subscribers in 2008

This obsession with mobility, and the ecosystem that surrounds it, is dramatically changing how consumers and customers access information - and very little of that information is on-premise. If enterprises remain focused on the status quo and don’t embrace a cloud-optimized IT architecture, they’ll miss the mobile movement. This means they won’t be adequately prepared for how customers, partners and employees want to interact, and unfortunately, many of their competitors will.

What this means for CIOs
Before enterprises bet their future on traditional on-premise or even hybrid systems optimized to reinforce or protect the physical boundaries they THINK they have today, they should ask themselves if that’s the world they’re really living in. It’s certainly not the one they’ll be living in five years from now.

Unlike traditional on-premise applications that were designed for the physical boundaries of yesterday’s business models, cloud applications and platforms are optimized for today’s networked, mobile workforce. Better yet, these applications and platforms are constantly evolving and enable you to take advantage of new features, new delivery channels and more, without costly upgrades.

To close with a metaphor my colleague used in previous mythbuster blog on security, stop trying to build up the moat that’s blocking access to the castle and start building a bridge between the castle and the people around it!