Now, KPMG has come out with study that shows not only how fast cloud computing is growing, but also what is compelling this change. According to the study conducted among 806 executives, many from the C-suite, 81% responded that their organizations had already moved at least some business activities to the cloud and 17% of them expect 2012 investment “to skyrocket, with some companies planning to spend more than a fifth of their IT budget on cloud next year”. 10% of the respondents said that their organizations were already running their entire core IT services on the cloud, while 13% responded that the process was underway.

The study also revealed the reasons companies were taking to the cloud. 80% cited process improvement as the reason; 79% of users and 76% of providers believed that the shift leads to technical benefits, and 76% said the use of cloud computing would have strategic benefits, possibly including transforming their business models to gain a competitive advantage.

The respondents stressed that a move to the cloud will have to deliver tangible cost reductions for organization-wide buy-in, with different proportions gunning for different percentages of required savings on IT spending. 45% said they would have to be between 1-10% of current levels, 34% proposed a range of 11-25%, while 10% had high expectations of 25%-plus reductions.

KPMG summarized the beneficial effects of cloud computing, as seen by companies, as follows: “Cloud is transformative in that it is creating new business opportunities as companies harness its power to efficiently facilitate new revenue, services and businesses. It is breaking down barriers in the supply chain, creating more effective and timely interaction between clients and suppliers. It is delivering speed, agility and cost reduction to IT and other functional areas within the enterprise. The transformative impact of cloud can readily be seen across the enterprise in areas from HR, CRM, and IT infrastructure.”

Steve Hasty, head of Global IT Advisory, Risk Consulting at KPMG, commented, “Cloud adoption is quickly shifting from a competitive advantage to an operational necessity, enabling innovation that can create new business models and opportunities. As this rapid adoption curve continues to gain momentum amid a struggling economy, it is important for corporate leadership, directors and boards to be informed and engaged in strategic discussions about Cloud’s impact on their long-term growth opportunities and competitiveness.”

Official Press Release at http://www.kpmg.com/global/en/issuesandinsights/articlespublications/press-releases/pages/cloud-is-now.aspx

The combination of mobile and cloud technologies seems a match made in heaven. The cloud is highly flexible and charges on usage, while the mobile technologies deliver the applications everywhere and anywhere the users might need them, really fast.

I have largely touched upon the subject when I wrote about the iCloud. In addition, in terms of mobile cloud, the mobile browsers and apps seem to be the most common used tools. Because both technologies are very flexible and can be delivered virtually anywhere, cloud and mobile are a natural fit. In addition, mobile customers are already accustomed to using the cloud.

This CISCO report identifies the latest trends in the development of these 2 technologies. You can read a very nice interpretation of the reports here. However, this is what I would like to add, in terms of how I believe these technologies should further evolve:

• Smartphone producers should give the user the possibility to switch between operating systems. I know we might have many argue about the iPhone which I use as well and believe it is close to perfection, but what about HTC or Samsung? What if one of them only had one smartphone, and they were able to give their users the possibility to upgrade to the OS of their choice – from the latest Android version to the latest Windows Mango? This would definitely expand their margins and allow them to concentrate on manufacturing a few superior phones.

• There is currently a trend to expand the traditional cloud services to the mobile world, adapting the cloud services for the mobile. However, new programs are being created just for the mobile technologies. In this aspect, I believe location-based cloud tools have a high potential for success – for example, a cloud locator was just released.

• The mobile security area has a lot of potential to develop. Classical antivirus programs do not adjust well to the mobile world. Therefore, enabling security preferences as you would deliver data to a smartphone, on a cloud basis – 24/7 delivery and utility pricing, as a cloud provider would.

Two of the most lucrative technology markets seem now to unite. Now it is the time to be creative and to differentiate. Whoever can rule the combination between mobile and cloud technologies can rule the IT world. I believe that mobile and cloud can lead to the development of completely new technologies and tools.

by Rick on September 13, 2011

Businesses looking to embrace the cloud sometimes try to find a solution that will allow them to make the transition from in-house services to the cloud as effortlessly as possible. Most of the successful examples that we witnessed in our practice, though, embrace the cloud as a driver of change, forcing the changes in the underlying IT processes and finding new sources of effectiveness and opportunity on the path of doing so. Acknowledging the necessity for change in order to get the most of the cloud is the first step that the organizations should make.

Identify business processes that can benefit from using the cloud.

For each business process, one should keep in mind the reason to use the cloud in the first place. Possible reasons for using the cloud include:

• Cost: for the workloads where volume of processing varies significantly from month to month or even day by day, switching to pay-as-you-go model can provide significant cost savings over the TCO of an in-house infrastructure;
• Business agility: most of the cloud offerings provide a great degree of automation, greatly improving turnaround time of IT-related processes
• SLAs: even though cloud providers may provide weak SLAs in one area, it can be actually compensated by much more generous SLAs in others. For instance, time to provision virtual hardware on the cloud is usually orders of magnitude less than to provision physical hardware through in-house IT departments.

Break down the IT processes and applications that support your business processes identified in the previous steps into classes according to the benefits that you want to receive from transition to the cloud. Depending on what the goal is, the approach will also vary.

Analyze the following items to avoid potential road blocks.

• Identify the data that is touched by each IT process. Is there any data that has to stay in-house for security or compliance reasons? You may need to change IT processes so the sensitive data is not affected by the transition.
• Analyze data access patterns. Data-intensive applications are usually not the best fit for a cloud, unless you plan to put all of your data in the cloud.
• Identify security domains. As with any external provider, one should always treat the cloud as a separate security domain. What is less obvious is that there are different security domains within cloud itself. Do you need to satisfy PCI DSS requirements? Can your cloud provider give you guarantees on the data boundaries?
• Determine availability and reliability targets. Not all of the cloud providers provide strict SLAs on availability and even when they do, those can be misunderstood (as happened with the notorious Amazon outage earlier this year). However, applications that are more tolerant to weaker availability SLAs can be a good fit.

Calculate total cost.

For some applications, cloud can actually be more expensive than an in-house solution. Licensing models of the major cloud providers usually work well for smaller players, but can be prohibitively expensive when the business starts to scale.

With a fast-growing industry such as cloud services, the landscape is doomed to change every year. Our general recommendation for the businesses looking to embrace the cloud is to have a trusted partner. Whether it’s a consultancy, an SI or a VAR specializing on cloud services, having a party that can help businesses to define and implement multi-year roadmap is something that can immensely simplify transition to the cloud.

Contribution by Stan Klimoff, Director of Cloud Services for Grid Dynamics.

by cloudtweaks on September 14, 2011

On my blog, I have already said that Cloud Computing is a Safe Bet for the Future, defining and showing us the shape of things to come for the IT industry. I have discussed about advantages and disadvantages, about the hows, the whens and the whys, about dos and don’ts. And, in my opinion, sooner or later, most businesses will start their migration to the cloud and like any epic journey it is not without challenges.

I believe these are the most common challenges in the journey to the cloud:

• Lack of knowledge and understanding is the first obstacle to be conquered. Although cloud computing is on everyone’s mind and sometimes it feels like there is an overabundance of information on the topic, this does not translate into a proper understanding of the issue. There are many misunderstandings about what the cloud can and cannot do, about the differences between services, confusions about choices, like public, private or hybrid cloud. Presenting actual examples and case studies of completed work, relevant to businesses, would help improve knowledge and understanding. Learning from people that have actually been through these migrations is also helpful.

• Fear is another challenge to be overcome. First, the fear of the unknown and mistrust in new technologies that may have not been tested enough, and it is the cloud computing industry’s responsibility to educate the market. Secondly, there are fears related to security issues and the loss of control over data and systems.

• Security is probably the biggest issue. Will my data be secure? Who will have access to it? Where will it be stored? Is the data well protected in case the system is attacked? These are questions being asked, and beside technical provisions there are also legal and compliance issued to be solved. Policies and contracts are very important here and businesses are advised to look through them carefully.

• Standards are a challenge in the sense that there are no universally recognized standards, which does not help with the trust issues, but also the standardization process in itself is very complex. In my article Cloud Computing Standards – is it time? I have discussed how standardization would help the industry.

• Reliability and availability are the problems most present in the news, when a service is down it gets attention from the media. And I think in this respect it is important to have a pragmatic approach and put things in perspective. Applications can fail, whether they are hosted in the cloud, managed by a third party provider or in-house. And although the problems have been widely reported, most of the time the cloud has proved extremely reliable. But it is important to have a SLA with your provider in place, with clearly stated consequences in case something does go wrong.

• Integration and Migration are complex issues, but the IT industry is rising to the challenge and the process can be properly managed. And although the migration and integration process may be complicated, the end result will be easy to manage IT resources so in the long term it becomes easier and not more difficult.

I have chosen here what I believe are the 5 key challenges on the road to cloud computing and they may seem formidable, but solutions exist for each of them. In previous posts I have discussed in detail an actual cloud computing implementation and how various challenges were overcome. And I think we need to remember that nothing worth doing is not without challenges and the benefits are definitely worth it.

by Rick on September 27, 2011