10 Things Every Business Leader Needs to Know about Cloud Computing

Cloud Computing is a general term for anything that involves delivering hosted services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). With time, EaaS – Everything as a Service, is where the evolution is headed.

Business Leaders who don’t understand technology are challenged as much as IT leaders who don’t understand business. This has paved the way to technology disruptions that are merging in nature. Gartner has given birth to the Nexus of Forces where four hugely disruptive technology trends converge to transform the business landscape.  Let’s see if Cloud computing could be that potential savior in this regard!

1. Cloud is here to stay: The upward trend of cloud adoption justifies the rising popularity of cloud based solutions as opposed to its on-premise counterpart. The major reasons for the widespread adoption of cloud include pay per usage model, owing to conversion of capital expenditures to operating expenditures. While legacy applications do not offer much scope for scaling and expansion, cloud provides solutions to these problems.

According to Frost & Sullivan survey on drivers for cloud computing (2012) [1], the top reasons for cloud adoption are:

  • Minimal capital expenditure – low hardware costs
  • Maximize scalability
  • Lower lead time for deployment
  • Reduced errors and improved quality
  • Easier maintenance
  • Improved adaptability to changing market conditions

While few years back, the cloud technology was regarded as yet another fad but today it has been widely acknowledged by experts and is on its way to transform the IT landscape. According to forecasts by research giants like Gartner, the adoption of cloud is expected to hit $250 billion by 2017. Gartner also stated that software as a service (SaaS) would grow at a mammoth rate of 20.2 percent that is, from $18.2 billion in 2012 to $45.6 billion in 2017.

Most businesses today exhibit great dependency on technology and while most boardrooms witness strategic discussions about upcoming technologies, the real question that remains to be answered is “Is my business cloud ready?”. With the host of advantages that the cloud offers, one may easily get lured into adopting it immediately without considering some fundamental basics. Follow the simple guide below to help understand your readiness for cloud adoption:

2. Cloud is linked to nexus of forces: For all those who have kept themselves fairly abreast with latest developments in the technology sector, ‘SMAC’ is the buzzword doing the rounds on technological corridors. This concept developed by Gartner talks about the collective power of the individual Social, Mobile, Analytics & Cloud forces and their ability to disruptively transform the business canvas. As 2014 is long gone and we have stepped into a new year, it is certain that SMAC is mainstream business. Industries such as retail, media & entertainment and healthcare have shown greater willingness, readiness and they need to adopt the SMAC forces, owing to the need to deliver an omni-channel experience. While consumer facing industries are leading the crusade towards SMAC adoption, traditional industries are soon following suit. The B2B industries are on a spree to catch up else failing which  they run the risk of getting perished.

Experts have analysed that the size of the overall SMAC industry globally will be close to $1 trillion by 2020 [2]. Gartner estimates that India-centric IT services vendors will witness an 8-10% annual revenue growth from SMAC [3]. This growth will cause a sharp increase in demand of the rich talent pool required to maintain and deploy SMAC forces. Cloud leaders must assess this requirement, ranging from entry level data cleaners to specialist statisticians. SMAC is the driving force behind companies changing to ‘smart companies’ with a smarter talent pool to boast of.

Things a BPO can Do towards Adopting the SMAC Era

  • Encourage innovation – Innovation should be the call of the day and not a cornerstone looked upon as and when required. An entrepreneurial environment should be fostered in collaboration with new age digital thinking
  • Revise pricing strategy – Old traditional linear price models based on fixed components need to be replaced by non-linear pricing models to improve company margins
  • Change the delivery model –Develop centres of excellence (CoE) and build up a network of shared resources

3. Cloud enables Collaboration in the Ecosystem: One of the major advantages of cloud adoption is its ability to provide contextual collaboration. Cloud enables the breakdown of organizational silos to drive things collaboratively. With companies expanding geographically and terabytes of information waiting to be shared, seamless, efficient, and fast collaboration is a necessary requirement. The business ecosystem consisting of partners, employees and most importantly, customers, are key stakeholders of communication. While e-mail has been considered as the most convenient and widely used method of collaboration, other methodologies such as document sharing, voice interactions have also gained equal popularity.

Cloud collaboration offers a low risk and high ROI (return on investment) through services such as web conferencing, video and voice conferencing, meeting tools, etc. One of the primary drivers of cloud collaboration is the lowered cost associated with it. Companies are constantly striving to lower technology costs, without compromising on operational needs. Without spending too much on upfront costs, cloud collaboration enables you get an easy access to automatically updated software. Until a few years back, online cloud collaboration was restricted to Outlook and Exchange but today various other platforms ranging from Facebook to LinkedIn are communicating with one another. Power tools like SharePoint have facilitated better workflows and geographical dispersion is no longer a hindrance in facilitating seamless integration.

4. You are already on the Public cloud: Have you sent/received mail via Gmail? Do you have a Facebook or LinkedIn account? Have you used Dropbox for file sharing purposes?

If the answer to any of the questions above is a “YES”, then you are a public cloud user already. Needless to say, cloud computing has radically transformed our daily lives. Right from the way we communicate to the way information is shared, cloud has made its way to every sphere. YouTube and Google are testimony to the impact created by cloud on social interaction. Globalization has been made possible because of cloud services. You can easily conduct video conference with someone sitting across different continents miles away, owing to applications like Skype. The world is becoming a global cloud even before you know it.

Most common daily applications of cloud include:

5. Security concerns around the Cloud are genuine – The cloud services are deployed across organizations in a variety of service models, namely SaaS, IaaS, and PaaS but security remains a common concern across all service models and cloud types (public, private, and hybrid). Security concerns are primarily of two types: one that is faced by the cloud service provider and the other faced by the customer or the cloud user. Gone are the days when passwords would enable secure protection. Today, a 12 year old holds the capability of decoding and cracking your password based on your past password trends. Therefore, biometrics are the only way to protect yourself from privacy violation.

When an organization chooses to store confidential and important data in the public vault, it apparently runs the potential risk of insider attack on the same due to loss of physical access. Therefore, the following checks must be performed by the cloud service provider:

  • Authentication and examination system must be put in place for employees who have access to the information stored at data centres
  • Regular monitoring of data centres should be done
  • Data isolation must be ensured so that the owner only has access to it, without leading to any spurious sharing
  • Develop a strong and secure identity management system
  • Secure and smart encryption techniques must be employed towards masking sensitive and confidential data

As per Gartner, on the customer/user front, the following precautions must be taken to safeguard against vendors [4]:

  • Demand user access when required
  • Ensure the cloud service provider has completed all audits and holds required certifications
  • Ask for evidence of encryption deployment
  • Check for readiness to deal with failure and ability to recover data in times of breakdown

6. Musts on the Cloud: The features mentioned below should find an automatic route on the cloud.

CISO – Cloud adoption requires two primary decision points: types of cloud and cost implication of the same. It is imperative that the Chief Information Security Officer is involved in the decision making process right from the inception stage to ensure judicious thinking. With the increased cloud adoption and its associated threats, CISO is gaining more influence and power over technology strategies.

Master Data Management Strategy – Data consistency has always been a burning issue for all the technology based firms. The higher the number of sources of data, greater is the probability of inconsistency. Therefore, it is essential to design a master data management strategy at the very outset, keeping in mind the business objectives. Effective resource allocation, both human and financial, coupled with good governance practices are starting points of an effective MDM Strategy.

Software Architecture – Machine based architecture is ideal to support traditional data and the failure usually is either hardware or resource based. Software architecture on the other hand are designed to support a large degree of multi tenancy and scalability.

 BYOD  –  “Bring Your Own Device” is the smartest way to warrant maximum utilization of the cloud. The device era has drastically impacted the cloud landscape and forms the backbone of mobile technology. Cell phone users change their devices at a very rapid rate these days, so relying on a storage card and the device memory may not be a wise option any longer.

7. High expectations , identified migration plan, rapid experimentation – Minimum Viable Cloud for Private, Public and Hybrid: One should have high expectations from the Cloud plan. A thought through implementation can have a transformational impact on your business in terms of speed, agility, and responsiveness to all stakeholders. In order to achieve the same, you need to be the exclusive owner of the Cloud program, preserving a well thought through migration plan. The Cloud space is still evolving and following a SCRUM/Agile methodology is highly recommended. Typically, 20% of the features lead to more than 80% of the benefits and hence small steps with user inputs are essential before full blown implementation. There are Rip & Replace tools available on the cloud which is a major benefit of such a program.

Importantly, the cloud should characteristically be deployed on Minimum Viable Cloud for Private, Public, and Hybrid, taking into account the maturity, business requirements, strategy and stage of development in the organization.

8. Cloud is not about costs: Moving to the cloud makes perfect business sense, how? One of the major reasons for cloud adoption is the negligible capital expenditure incurred and the low cost operating model deployed. But cloud is not about costs. The kind of business agility and the rapid go-to-market that the cloud offers makes it a win-win for the user.  Even though the cloud giants like Amazon Web Services, Microsoft, and Google continue to cut prices, yet analysts say that price is second to agility and speed.

A rich user experience is no longer considered as an add-on feature. A simple, user friendly interface enhances the user experience which in turn provides greater user satisfaction.

 9. API road map – Application Programming Interface (Middleware – Interoperability – Culture around it) – [think collaboration before transformation] : The Cloud is all about collaboration. No transformation of any nature is ever successful without people who are committed and collaborating. The cloud allows for real time on the move collaboration via contextual collaboration. The Cloud also introduces a lot of bespoke tools and interfaces that make data available here and now, hence nicley responding to your needs. In order for the seamless integration to happen you need to have defined the Application programming Interface. Broken interface normally derails the entire cloud. A sharing culture is what that is often defined by the cloud.

10.Insight begins where data & Intuition intersect, Culture change begins when business and cloud intersect and business and cloud intersection can drive culture change – It isn’t just semantics. The cloud refers to a set of incredibly complex infrastructure technology. At a fundamental level, it is a collection of computers, servers, and databases that are connected together in a way that users can lease access to share their combined power. The computing power is scalable so that buyers can dynamically increase or decrease the amount of computing power they lease.

The cloud can refer to anything that is hosted remotely and delivered via the Internet. While all cloud programs are run by underlying software, SaaS refers specifically to business software applications that are delivered via the cloud. Given the widespread growth of cloud accessibility, it has been easier, faster, and less expensive for SaaS developers to roll out applications as compared to traditional on-premise software development. The user does not have to constantly worry about software security patches and anti-virus protection of data and applications – it’s built into the SaaS. That also reduces risk, and eliminates the cost of an army of software warriors on personnel rolls. Today, nearly every type of core business function right from the human resources to enterprise resource planning, everything is available via SaaS.

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