the cio's dilemma: maximising the benefits of cloud services

8/7/2019 The CIO's Dilemma: Maximising the Benefits of Cloud Services

1/13

WHITE PAPER

The CIO's Dilemma: Maximising the Benefits of CloudServicesIn association with: HCL Technologies Infrastructure Services Division (HCL ISD)

Raj MudaliarDoc # AU29011T- March 2011

EXECUTIVE SUMMARYRecent volatility in the global economic environment has created operationalchallenges for businesses.. Additionally, emerging technologies coupled with theproliferation of devices such as smart phones, media tablets, for example the iPAD,better Internet connectivity, and the fast growing influence of social networkingplatforms are challenging CIO's to constantly innovate and think afresh their ITstrategies.

Cloud computing has emerged as one of the most disruptive service delivery modelsthat will alter the consumption ofinformation security services. Cloud services genuinely offerflexibility,ease of use and faster delivery of services at a significant lower cost of entry. Interesthas moved from the 'why' to the 'how?'. How can cloud services be operationalised?What type of cloud solutions should be adopted public / private / hybrid? Whatworkloads can be shifted into the cloud? What should the migration plan look like?How can the virtual infrastructure be managed?.

IDC's Asia/Pacific (Excluding Japan) Cloud Computing Survey 2010 indicates,Australia is one of the leading countries in the region for the adoption of cloudservices. The survey reveals around 35% of Australian respondents currently usecloud services, 7% are actively researching or testing cloud computing now, andanother 15% have plans to use it in the next 6 to 12 months. On the whole,organisations in the Asia/Pacific (excluding Japan) region currently believe that aprivate cloud environment is more suitable for almost all applications, with the

exceptions being VOIP and collaborative applications.

Asia/PacificHeadquarters: 80 AnsonRoad,#38-00Singapore079907

P.65.6226.03

30www.idc.com

IN THIS WHITE PAPERThis IDC white paper discusses the adoption of cloud services across Australia andNew Zealand. Based on IDC's current research, the paper provides an overview ofcloud computing; key drivers for adoption; major inhibitors; current usage status ofcloud services; potential workloads that could be migrated into the cloud; and, a roadmap for cloud deployment.

SITUATION OVERVIEWIn general, business confidence is bullish this year. However, with ever-increasingcompetition and the need to leverage competitive advantage to grow market share,organisations must look to improve current business processes, enhance productivity,while simultaneously lower costs.

Based on IDC's Forecast for Management Survey 2010 (please refer to the Appendixfor detailed information on the survey methodology), Figure 1 provides an aggregatedview of ANZ respondents' top CIO challenges for 2010 vis--vis previous years. Notsurprisingly the ranking of 2009 and 2010 priorities are similar particularly the top 4.

2011 IDC
http://www.hclisd.com/Information-Security-Services.aspxhttp://www.hclisd.com/Information-Security-Services.aspxhttp://www.hclisd.com/Information-Security-Services.aspxhttp://www.hclisd.com/Information-Security-Services.aspx


2/13

FIGURE 1

Top CIO Challenges in ANZ

Source: IDC Forecast for Management Survey, 2006-2010Reducing costs: Successful CIOs were those who managed to control or

reduce spending, whilst making the most of existing assets through balancingbusiness demand and maximising ICT for efficiency and productivity gains.

Recruiting and retaining staff: This is partly related to the retirement of thebaby boomers, who carry many mainframe skills, and the specialised type of

network and virtualisation, IP skills in demand today.

Meeting user expectations: Users expect enhanced functionality and betterease of use from their IT assets. This is being driven by the proliferation ofdevices such as smart phones, media tablets (the iPAD) and the growinginfluence of social networking sites. Customers today demand a similarexperience in their day to day business transactions.

It is imperative for organisations to reconsider the design of their underlying ITarchitectures in order to enable customers and growing communities to access theirservices any time anywhere. As a response, organisations are upgrading theirinfrastructure and networks, whilst continuously improving business processesknowing that the customer can always churn to an alternative provider.

Interestingly, from a business point of view, the number one priority for organisationsis to improve infrastructure to increase productivity (Figure 2). Other considerations,like exploiting market conditions efficiently and speed to market have also gainedgreater importance. Cost cutting is ranked lower in organisational priorities versus thistime last year; however it is a still a key concern. .

2 2011 IDC


3/13

FIGURE 2

Key Business or Organisational Priorities in ANZ

Source: IDC Forecast for Management Survey, 2010

Cloud Computing: Key drivers / inhibitorsOrganisations are now realising the value of cloud services. Cloud computing holdsthe potential to substantially improve IT productivity and over the next five years, IDCexpects strong investments in the cloud as a result.

At a high level, cloud services can be described simply as consumer and businessproducts, services and solutions delivered and consumed in real-time over theInternet. Some of the main drivers for cloud computing include:

Continued shift in funding of IT from a capex to an opex basis: The pay-as-you-use functionality built in cloud based services helps better align withfluctuating business requirements, without necessitating major capital ITinvestments. Organisations are reviewing their current IT infrastructure with an

intent to identify opportunities where they can leverage advantages of a cloudbased offering as well as move to an opex model to consume these services.

Growth: Organisations need to be nimble and fast, exploiting growthopportunities as they arise in the market, while having the operations andinfrastructure resources at the back end to take advantage of any existingsituation. Cloud-based services enable this. Cloud services scale easily, providethe latest technology available (with upgrades) and allow more manageable

3 2011 IDC


4/13

version control across the organisation resulting in faster deployment of Go-To-Market strategies.

Trend towards outsourcing: A shortage of skilled IT workers in ANZ and thehigh costs of managing an internal IT workforce is leading organisations toconsider outsourcing. Cloud-based services allow an organisation to outsourceinternal IT operations and infrastructure to a competent third party. The serviceprovider brings in the required skills, technical competencies and expertise todeliver the services, relieving to a great extent the staffing pressures on the clientorganisation.

The major inhibitors to cloud services include:Security: Business critical and sensitive information that sits outside of the

company remains a sticking point for many organisations. That said, this issue iswell known in the vendor community, and they are releasing solutions andservices with increased security measures to assuage these concerns.

Performance and availability: Organisations are likewise concerned about theability to access information in the cloud when it is needed. Linked to this, is theability of the cloud service vendor to provide for any necessary 'surges' indemand, increasing capacity to the organisation without impacting performance.

Adopting Cloud Services: Where are we onthe journey?IDC's Asia Pacific (Excluding Japan) Cloud Computing Survey, 2010 indicated thatthe overall trend in the region to adopt cloud services is positive. The survey wasconducted across six countries that included Australia, China, India, Korea,Singapore and Hong Kong. Based on the responses, 24% of organisations in theregion are currently using cloud and 6% are actively researching or testing cloudservices.

FIGURE 3

Usage of cloud Services and Technologies

n=600Source: IDC Asia Pacific (Excluding Japan) Cloud Computing Survey, 2010

4 2011 IDC


5/13


6/13

collaborative), while using the private cloud more for infrastructure. The workloadwithin the private cloud will be more heavily utilised for Web infrastructure, ITinfrastructure outsourcingand storage/storage management.

Types of External Vendor Used for PrivateCloud ImplementationThere are a number of service-level issues related to cloud services, which requirecareful consideration. For example, Business Continuity, Disaster Recovery (BCDR),data security, vendor continuity, among others. The management said services, eachwith different commercial terms, service levels and pricing models, can be a complexmatter. This requires mature vendor-management capabilities in-house.

For Australia, the most common cited external vendor for implementing a privatecloud within the organisation (see Figure 5) is an ISP or Telco provider (32%),followed by an infrastructure technology vendor (29%), and systems Integrator orprofessional services provider (25%).

FIGURE 5

Type of External Vendor Used for Privat e Clou dImplementation in Australia

n=28Source: IDC Asia Pacific (Excluding Japan) Cloud Computing Survey, 2010

Road Map for Deploying Cloud ServicesAssessing the suitability of an application for cloud deployment has dimensionsbeyond technology. Rather than delivering the project with the traditional waterfallapproach of Design, Build, Deploy and Run - Cloud Services require a more iterativedelivery model, which follows:. (See Figure 6):

Readiness AssessmentWhat business benefit are you looking to achieve by using a cloud-computing model?

What are the application characteristics and its demands for elasticity?What set of cloud capabilities are required to achieve the objectives forwhich the solution is designed?

6 2011 IDC
http://www.hclisd.com/Our-Sourcing-Model.aspxhttp://www.hclisd.com/Our-Sourcing-Model.aspxhttp://www.hclisd.com/Our-Sourcing-Model.aspxhttp://www.hclisd.com/Our-Sourcing-Model.aspxhttp://www.hclisd.com/Our-Sourcing-Model.aspxhttp://www.hclisd.com/Our-Sourcing-Model.aspxhttp://www.hclisd.com/Our-Sourcing-Model.aspx


7/13

Cloud Strategy DevelopmentWhat does a risk analysis reveal?Can you source the service from the Public Cloud or build a Private Cloud?

Implementation and TransformationHow will you design, develop, and test the solution?What operational mechanisms are needed to support either public or privatesolutions?

Change ManagementHow will you manage the governance of the solution?How will you pay for it, and are costs satisfactorily predictable?

Ongoing ManagementWhat will be the ongoing service level management / IT servicemanagement criteria for evaluation?

What type/nature of structure would be required for Internal Support?

FIGURE 6

Deployment Road Map for Cloud Services

Source: IDC, 2010

HCL ISD's Role in the CloudHCL Technologies Infrastructure Service Division (HCL ISD) is the fastest growingline of business of HCL Technologies and is part of a $5.7 billion HCL Enterprise. Itsscale of Infrastructure operations involves centralised management of globallydistributed assets of over $1 million devices across 31 countries resolving over 10million helpdesk calls per annum. HCL ISD's team of over 15,000 professionals service more than 250 infrastructure services customers, including 17 Fortune 100companies across 9 industries.

HCL has a strong belief in its 'advise to execute' philosophy, where it looks at longterm and mature partnerships with its customers. Hence, HCL looks at a cloudjourney in an integrated and cohesive fashion whereby the complete life cycle

7 2011 IDC


8/13

(assessment, implementation and migration operations) is delivered in an integratedfashion to yield maximum benefits for customers.

Cloud management being a major area of focus, HCL has been able to driveinnovation across LOBs and develop intellectual property around infrastructuremonitoring and management, SaaS (Software as a Service) enablement, privatecloud deployment and provisioning, metering and billing and cloud gateways forpublic clouds.

HCL's strategy focuses on providing two types of cloud services that will assist CIO'sto maximise the full benefits from the cloud, primarily in the role of Cloud Enabler andCloud Provider:

Cloud Enabler: As a service integrator through its broad range of offeringsincluding: Cloud Consulting & Assessment services, Cloud implementation &migration and Cloud Management and Operations.

Cloud consulting and assessment: HCLs Cloud Assessment Frameworkhelps customer in mapping their IT landscape, business and cloudrequirements into a single perspective. In other words, it helps customersidentify the applications or specific IT environment, which can be moved tocloud and to what type of cloud to move to (public / private / hybrid); as wellas develop a business case (TCO & ROI plans).

Implementation example: Client is a large product development company.HCL has closely worked with their IT division and has undertaken feasibilityanalysis for a large set of applications to migrate them on Windows AzurePlatform.

Cloud implementation and migration: HCL leverages its expertise andexperience in areas such as infrastructure virtualisation, data center hostingand migration services to provide implementation and migration ofcustomers from their existing environments to Public / Private / Hybrid cloud.Leveraging its SI strengths, HCL collaborates with its strong partnerecosystem, which includes VMware, Cisco, EMC, HP, BMC, and CA to offerbest of breed solutions to its customers.

Implementation example: An international bank employing more than 80,000people in 72 countries and with presence across multiple geographies. HCLhas provided deployment and testing as a service on a Public Cloud(Amazon) for the bank's applications both in production and a non-production environment. This has resulted in several advantages, including a90% reduction in deployment time, higher f lexibility, and significant TCOreduction.

Cloud management and operations: For customers who adopt cloudcomputing models, HCL offers cloud service aggregation services where itprovides single throat to choke to ensure 24X7 monitoring and managementservices for the hybrid and private cloud computing environments. HCL hasdeveloped its own IP tools and processes such as MTaaSTM MyCloud formanaging cloud environments.

HCL's MTaaS MyCloud is a cloud-based offering that brings flexibility andscale for CIOs to orchestrate their physical, virtual and hybrid infrastructureenvironment. It helps them both to manage the operations of the cloud(MyCloud Control & Watch) and the service lifecycle. Its a one-stop solutionfor managing virtual infrastructure, especially capable of giving visibility intooperational and system performance. It is designed and built with features of

8 2011 IDC

TM


9/13

high orientation towards iTaaS, and gives quick turnaround on integrationwith enterprise products such as Remedy ITSM and SAP among others.

HCL MTaaS MyCloud is designed to help CIOs industrialise their ITmanagement by creating service management, governance, andperformance layers across their IT silos. The industrialisation can then helpthe CIOs offer services that are elastic and agile to the business needs oftheir companies.

Implementation example: A large regulated electric delivery business in theU.S. It supplies electricity to approximately 7.5 million consumers. HCLprovided a private cloud based enterprise management platform, helping theclient to better control, improved quality, have better visibility and unifiedreporting.

FIGURE 7

HCL MyCloud - Cloud Service Management and Aggregation

MyCloudGovern

Demand & ServicePortfolio MgmtCompliance and risk MgmtAgile Apps & Service DevBusiness Continuity & DR

MyCloudAssure

Service Level ManagementContract ManagementSupplier Management

Self -Service

MeterMyCloud

Control &Watch Monitor

Orchestrate

MyCloudService Ops

Change & ReleaseConfiguration & CMSIncident & Problem

MyCloudSecure

User access controlFederated identity mgmt.DLP

Source: HCL TechnologiesCloud Provider: HCL's cloud service offerings include:

9 2011 IDC


10/13

Infrastructure as a Service (IaaS) IaaS is for selected areas such ascomputer storage as well as back up and for providing IaaS to its clientsfrom HCL's datacenters across the globe.

Platform as a Service (PaaS) PaaS will include hosting, infrastructure, anintegrated development environment, software development kits, testingtools and frameworks and HCL's best practices frameworks and intellectualproperty (IP) for development and testing.

Software as a Service (SaaS) HCL will play the role of an integrator thatprovides true business applications in the cloud, which will largely be verticalapplications for specific functional areas.

FUTURE OUTLOOKCloud computing addresses key concerns for enterprise decision makers,

providing the ability to synthesise IT assets while sharing resources, loweringcosts, standardising IT processes across the enterprise, and providing a morestable pricing model. IDC believes thatcloud computingwill slowly, but surely,make a large impact on the server market. The outlook for both private andpublic cloud computing in Australia is positive.

Engineering of a private cloud will likely prove more complex, especially as earlyadopters realise that much more than virtualisation of resources is needed todeliver the expected ROI. IDC expects major challenges for users as theyattempt to standardise services across the enterprise, having to fight users thathave become used to custom processes for their own business functions.Without service standardisation, service automation is much more timeconsuming and thus expensive and makes the goal of self service difficult toachieve.

IDC predicts that in 2011, as enterprises embark on strategic reviews on how totake advantage of the cloud they would require advice around cloud assessment,planning, workload migration, security best practices, governance, and test caseprocedures. Being able to provide workable reference architecture coupled with

an appropriate solution has taken each of the cloud service providers somemonths to bring to market. It is just the beginning, because with solutions nowfalling into place, the next step for enterprises is evaluating costs andunderstanding total cost of ownership (TCO)/return on investment (ROI).

CONCLUSIONWith any new technology solution, including cloud services, there will be multiplechallenges. It's undoubtedly an exciting time. Organisations can select best of breedsolutions from a range of service providers. The compelling value proposition ofadopting cloud services is that it is easy, fast, flexible, and an organsiation can have ascalable usage at a lower cost. All of these factors make cloud a compelling valueproposition for any organisation.

For CIO's to maximise the benefits of cloud services requires careful planning,design, and testing of the appropriate solution. Understanding commercial terms andarrangements, total cost of ownership and physical locations of datacenters are otherimportant aspects that require consideration. All organisations have to adapt andchange to keep ahead of its competition. Leveraging technology is key to thisprocess.

10 2011 IDC
http://ezinepublish.com/2011/03/31/emergence-of-cloud-computing/http://ezinepublish.com/2011/03/31/emergence-of-cloud-computing/http://ezinepublish.com/2011/03/31/emergence-of-cloud-computing/http://ezinepublish.com/2011/03/31/emergence-of-cloud-computing/


11/13

APPENDIX

METHODOLOGYThe Forecast for Management Survey 2010 is an annual IDC study that providesvaluable research into the attitudes and intentions towards the use of IT inorganisations across Australia and New Zealand (ANZ) markets.

Research data for the Forecast for Management Survey 2010 was compiled fromwritten responses to a survey completed by CIOs and IT Managers from March andApril 2010. Responses were received from 400 organisations in the private and publicsectors across ANZ.

ScopeThe scope of this study encompasses the most important areas of responsibility forICT management:

ICT spending and the economy: including IT budget allocation and spending,the potential impact of the National Broadband Network (NBN) on business,business outlook, purchasing preferences, return on investment (ROI)expectations and more.

CIO challenges and priorities: Including CIO challenges,business/organisational priorities, and IT investment prioritiesfor ANZ enterprises.

The ICT department and application of IT: Including CIO reporting lines,composition of the IT department, spending on staffing, top skills in demand; aswell as the current and future use of different applications such as datacenterconsolidation, virtualisation and social networking software.

Geographic SegmentationThe Forecast for Management Survey 2010 was carried out for organisations in bothAustralia and New Zealand. For 2010, 60.8% of the respondents were employed byorganisations with headquarters located in Australia, with the remaining 39.2% based

in New Zealand.

Enterprise Size SegmentationThe executives responding to this Forecast for Management Survey were asked toindicate the size of their organisation by the number of staff they employed. To reflectindustry trends by company size, the responses were combined into three groupingrelating to the number of employees in the organisations. These groups are standardIDC definitions of enterprise size: small (1-99 employees), medium (100-499employees) and large (500+ employees) The ANZ totals for these enterprisecategories were: small at 46.5%, medium at 29.7% and large at 23.6%.

Vertical Market SegmentationThe executives responding to this Forecast for Management Survey were asked tocategorise their businesses by their vertical markets in which they primarily operate.The largest sectors nominated by survey respondents were business servicesmanufacturing, retail and wholesale and government (see Table 3).

11 2011 IDC


12/13

T ABLE 1

Responses by Vertical Market Segmentation

Vertical Market

Banking, financial markets and InsuranceBusiness services

Communications and media

Construction

Education

Government

Health

Manufacturing

Resources

Retail and wholesale

Transportation

Utilities

n=400Source: IDC Forecast for Management Survey, 2010

Response Rate (%)

7.89.8

8.0

7.8

7.3

8.8

7.5

11.0

7.0

10.3

7.4

7.3

Key Attributes of Cloud Computing

IDC attributes cloud services with the following characteristics to distinguish cloudservices from traditional on-demand services and online services. The keycharacteristics are as follows:

Shared or standard service: built for a market (public), not a single customerTurnkey solution: Integrates all required resourcesSelf-service: ongoing administration, provisioning; but may require some 'on-

boarding ' support

Elastic scaling: dynamic and fine grainedUsage-based pricing: supported by service metering

Accessible via the Internet/IP: ubiquitous (authorised) network accessStandard user interface (UI) technologies: browsers, rich Internet application

(RIA) clients and underlying technologies

Published service interface/application programming interface (API): forexample , Web services APIs

These attributes are crucial to maximise the value of cloud services which provideseasy, fast, flexible and scalable usage at a lower cost.

12 2011 IDC


13/13

About This PublicationThis publication was produced by IDC Go-to-Market Services. The opinion, analysis,and research results presented herein are drawn from more detailed research andanalysis independently conducted and published by IDC, unless specific vendorsponsorship is noted. IDC Go-to-Market Services makes IDC content available in awide range of formats for distribution by various companies. A license to distributeIDC content does not imply endorsement of or opinion about the licensee.

Copyright NoticeExternal Publication of IDC Information and Data Any IDC information that is to beused in advertising, press releases, or promotional materials requires prior writtenapproval from the appropriate IDC Vice President or Country Manager. A draft of theproposed document should accompany any such request. IDC reserves the right todeny approval of external usage for any reason.

Copyright 2010 IDC. Reproduction without written permission is completely forbidden.

13 2011 IDC

the cio's dilemma: maximising the benefits of cloud services

Documents