‘Selling’ Cloud Within the Organization – Choose Your Words Carefully

 

I’ve participated in cloud events in four different countries over the past two weeks. Attendees were primarily senior and mid-level IT decision-makers seeking guidance and best practices for implementing private clouds within their organizations. Regardless of the country of origin, industry focus or level of cloud-related experience, one common theme stood out above all others during both formal and informal discussions – the importance of effective communication.

The key takeaway – don’t get dogmatic about terminology. In fact, when it comes to cloud-related initiatives, choose your words carefully and be prepared for the reaction you’re likely to get.

‘Cloud computing’ as a term remains over-hyped, over-used, and still often poorly understood – because of this, typical reactions to the term are likely to range from cynicism and doubt to defensiveness and derision and all the way to outright hostility. Ironically, the fact that it’s not a technical term actually creates more confusion in many instances since its meaning is so general as to apply to practically anything (or nothing, depending on your point of view or perhaps your level of cynicism).

At all four events over the past two weeks – and in fact in nearly all discussions of IT priorities I’ve had over the past six months – CIOs and other senior IT decision-makers have consistently made clear that ‘cloud computing’ as a general objective or direction isn’t a top priority per se. However, they are unanimous in their belief that data center transformation is essential to supporting business requirements and expectations.

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Working On A Hosted Private Cloud Wave

Last year, my colleague, James Staten, and I published evaluations of the (internal) private cloud and public cloud markets — this year we’re going to fill in the remaining gap in the IaaS space, by publishing a Forrester Wave evaluation on Hosted Private Cloud Solutions. Vendors participating in this report will be evaluated on key criteria, a demo following a mandatory script, and customer references for validation of the solution. Throughout the research process I’ll be providing some updates and interesting findings before it goes live in early Q4 2012.

So, what is hosted private cloud? Like almost every product in the cloud space, there’s a lot of ambiguity about what you’ll be getting if you sign on to use a hosted private cloud solution. Today, NIST defines private cloud as:

The cloud infrastructure is provisioned for exclusive use by a single organization comprising multiple consumers (e.g., business units). It may be owned, managed, and operated by the organization, a third party, or some combination of them, and it may exist on or off premises.

Hosted private cloud refers to a variation of this where the solution lives off-premises in a hosted environment while still incorporating NIST's IaaS service definition, particularly where “[t]he consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, and deployed applications.” But there’s a great deal of variation in today’s hosted private cloud arena. Usually solutions differ in the following ways:

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A Peek Into Capgemini's Future Global Offerings Strategy

During a recent global analyst event in Paris, Capgemini presented its strategy to a panel of market and financial analysts. It hinges on two main objectives: improving the resilience of the organization in an uncertain economic environment — especially in Europe — and finding new levers for margin improvements.

From an operations point of view, Capgemini intends to continue leveraging the usual suspects: industrialization, cost cutting, and accelerating the development of its offshore talent pool. It also aiming to optimize its human resource pool via a pyramid management program aimed at, among other things, allocating the right experience level to the right type of work.

More interestingly, the company showcased some of the global offerings it has put together or refined over the past 12 months. Capgemini’s strategic intent is to develop offerings addressing three major client-relevant themes – customer experience, operational processes, and new business models. The offerings will be enabled by a combination of cloud, mobile, analytics, and social technologies. Among the set of offerings managed globally, I found the following of particular interest due to their emerging nature and Capgemini’s interesting approach to developing them:

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Tech Distributors Versus Telcos: Competing When They Should Be Collaborating

While working on my recently published report, The Cloud-Driven Evolution Of Asian Tech Distributors, the tech vendors and distributors I interviewed drew parallels between telcos and tech distributors, both of which sell cloud-based solutions. However, during further discussion, the friction and competitiveness between the two quickly became apparent. So why should they compete when they can exploit each other’s resources and pursue joint go-to-market initiatives? By partnering, each can focus on doing what it does best to meet customer needs.

Telcos’ reach, ready infrastructure and existing customer bases provide a solid cloud foundation:

  • Back-end infrastructure. Telcos’ robust network and data center infrastructure is critical to setting up and delivering cloud-based services swiftly and without massive additional investment. Moreover, their businesses are well-suited to annuity models.
  • An existing base of enterprise customers. Although telcos aren’t considered a strategic enterprise provider in most instances, their access to a large base of qualified enterprise accounts and existing relationships potentially provides a very good foundation for cloud solution sales.
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Optimize Your IT Services Planning, Sourcing & Management

Services budgets represent 10% of annual IT operating and capital budgets[i], but Forrester sees considerable evidence that the influence of these IT Services vendors is proportionally higher — and growing dramatically. While there are several reasons for the rising importance of your services partners, at the most fundamental level Forrester sees that:

  • Business professionals need immediate access to tech-enabled innovation. Most strategic business initiatives now have an underlying technology component. Service providers come to the table with the tech savvy, vertical market expertise, and best practices to make these initiatives work.
  • IT professionals can’t keep pace with business demand. The volume and complexity of technology demands from business professionals means that traditional IT organizations have difficulty keeping pace. They too need to work with the best mix of IT service providers to meet the demands of their business. Effective supplier management is quickly becoming the most essential skill in IT organizations.
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Are you opportunistic or strategic with your cloud investments?

Our latest survey on IT budgets and priorities shows that 35 percent of enterprises have a big focus on cloud computing (calling it a high or critical priority), but do we really know how best to apply that investment? 

We continue to see a large disconnect between what the business wants from cloud services and what the IT department wants to offer and support. The short story is the business wants public cloud services (or something very, very close to this value proposition) for delivering new services and capabilities to market. Yet IT wants to offer private cloud solutions that improve operational efficiency and drive down overall IT costs. IT doesn't have its head in the sand about business' demands, they just have to balance these desires against what IT is measured on - the cost and security of services provided. And frankly they don't trust the public cloud.

Knowing the psychology above, how best can an enterprise set a winning cloud strategy? if it invests purely against the business care-abouts it may win time to market but risks investing ahead of its ability to support and protect the business. If it invests against the IT priorities it risks alienating the business, increasing circumvention and being a laggard competitively. The answer lies in striking an appropriate balance between these conflicting priorities and choosing a strategy that encourages the most collaboration between business and IT and accelerating everyone's experience level with these new technologies. And that balance will be different for every firm based on their competitive market, regulatory environment and geography. But in general, most enterprises are being far more conservative than they should.

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SingTel Launches PowerON Compute In Hong Kong — A Sign Of Things To Come

On July 11, 2012, SingTel launched its PowerON Compute cloud service in Hong Kong. While certainly interesting on its own, I believe this announcement is particularly noteworthy as a harbinger of things to come.

Some key points to consider:

  • As a hybrid offering, PowerON Compute is a dynamic infrastructure services solution hosted in SingTel’s data centers in Singapore, Australia, and now Hong Kong. The computing resources (e.g., CPU, memory, storage) can be accessed either via a public Internet connection or a private secured network.
  • This announcement confirms the findings of my February 2012 report, “Sizing the Cloud Markets in Asia Pacific”: that market demand for cloud-based computing resources in Asia Pacific (AP) will rapidly shift from infrastructure-as-a-service (IaaS) to dynamic infrastructure services.
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