Strategize in the cloud


What is Cloud computing?

Cloud computing enables convenient and on-demand provisioning of compute resources through the internet using utility based pricing. It is not a new concept or technology. Though the underlying Information Technology (IT) infrastructure makes use of latest hardware, software, functions, features and patches etc. In fact, the basic principles of cloud computing date back to the mainframe era of circa 1950s and 1960s. It is however a new business model that is disrupting the traditional data center model. The data center is a dedicated space, constructed as a large room with adequate floor space for grouping all the IT equipment together in near vicinity. It houses the business most critical information and ensures data is secure and accessible. Cloud service providers manages data centers in different geographical locations. They strive to provide stable, cost effective, secure and available IT services. Cloud computing enable agile delivery of services. Cloud adoption best practice and governance is maturing with technology innovation. There needs to be a balancing act between agile, innovation and control, governance & regulation to enable successful cloud adoption strategy.

According to the National Institute of Standards and Technology (NIST), cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. NIST list five essential characteristics of cloud computing:

  1. On-demand self-service,

  2. Broad network access,

  3. Resource pooling,

  4. Rapid elasticity or expansion, and

  5. Measured service.

NIST also list three cloud "service model", (software, platform and infrastructure) and four cloud "deployment models" (private, community, public and hybrid) that together categorize ways to deliver cloud services.

Businesses needs to consider a cloud strategy to succeed in the digital era. It is much easier for small and new businesses to leverage cloud technology and take full advantage of economies of scale, compared to established organizations. Keeping in mind, most established companies still need to support legacy or traditional IT systems. This makes it difficult for them to adopt cloud technology quicker, as they need to adapt the organization culture to new ways of working, structures and processes. New companies are able to save cost of setting up, managing and maintaining a data center by using cloud computing. They are more lean, agile, flexible and not bound by legacy challenges. Established Organizations may need to consider a Hybrid IT strategy, for example use a bit of both worlds. They can use cloud computing to on-board new applications and migrate existing applications that are cloud ready from legacy infrastructure. This will enable them to leverage economies of scale and reduce the total cost of ownership (TCO). Hybrid IT is essentially managing legacy or traditional IT data center and cloud computing to deliver differentiated value to customers and business.

Cloud strategy

According to Ribeiro (2011) digital era is characterized by technology which increases the breadth and spread of knowledge turnover. Changes in IT have radically altered entire industries, thereby making original business models obsolete. Cloud introduces a new business model and ways of working hence it is seen as disruptive technology. Gartner (2017) research argue that cloud has evolved from a disruption to an expected approach to traditional as well as next-generation IT. Cloud strategy should be aligned and synchronized with IT (digital) and overall business strategy. Based on our 4 step strategy management process to leverage digital technologies. The best way to start defining your cloud strategy is to identify your business requirements, goals, drivers for cloud. What needs to improve? How it can be improved? and what are the cloud benefits for your business? For example reliability, speed to market, cost optimization etc. Prior to cloud adoption, it is critical to understand the TCO for your IT infrastructure and build a strong business case. This will ensure the expected Return on Investment (ROI) is measured and achieved. The table below highlights some of the business drivers, challenges, opportunities and cloud benefits.

Table 1: Strategize in the Cloud

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A key advantage of a cloud-based infrastructure is how quickly you can respond to changes in resource needs (business demand and supply). The cloud may not benefit all workloads equally. In this case a Hybrid solution will be appropriate. Therefore it is best to look at cloud decisions on a workload-by workload basis, rather than taking an “All-In” cloud approach. It is also crucial to assess the implications of moving from capital expenditure (CAPEX) to operating expenditure (OPEX).

One would argue if the IT Support and Service Management function is still relevant in the cloud scenario. In my view, yes it still adds value to the business. Utilizing cloud ease or reduce your management overhead. It will enable you to free some of your resources from repetitive, manual tasks and focus your team on strategic issues and opportunities.

Cloud strategies examples

To recap a cloud strategy begins by identifying business requirements, drivers or goals and mapping potential benefits of the cloud (IaaS, PaaS & SaaS) to them, while mitigating the potential drawbacks. It should be based on aligning business goals with potential benefits.

Digital learning strategy

  • The objective of organization 1 is to provide students with best information and services they need, for example relevant study material, case studies, past exam questions, enable them to write exams online and view results online. Improve overall learning experience.

  • The students needs to access the data or information anywhere across the region or international. To give the student the best information and services, the use of the cloud and mobile technology is essential.

  • The digital strategy is customer/student oriented and addresses the needs of the students. It focuses on using technological innovation to enhance students experience by developing a mobile app such as Blackboard to provide students with better access and flexibility to services and information.

Hospital digital strategy

  • Organization 2 (hospital) needs to make use of technological advancement to improve its internal systems, processes and provide excellent service to patients.

  • The use of digital strategy (cloud, big data and mobile platform) is expected to improve efficiency and access for the hospital information system and electronic records.

Security, governance and regulation in the cloud are essential. Stay tuned for more insights on cloud strategy.

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