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O AWARD S 2010




BEST w. g
isp or
WEB HOST a a w ar d s.
Editor Maxwell Cooter
Managing Editor Marc Beishon
Design & Layout Heather Reeves
Contributors Adrian Bridgwater,

Dave Cartwright, Graham Jarvis, Billy
MacInnes, Lesley Meall
Licensing Hannah Heagney,,
+44 20 7907 6134 Welcome to the Ultimate Guide to
Syndication Anj Dosaj-Halai,, Cloud Computing your indispensable
+44 20 7907 6132 reference point to all things cloud
Advertising Manager
Ben Topp +44 20 7907 6625 YOUVE PROBABLY PICKED UP this book because
MagBook Account Manager
Katie Wood +44 20 7907 6689 youve come across the term cloud computing and
Digital Production Manager heard that its going to be the dominant platform
Nicky Baker +44 20 7907 6056 for delivering computing resources in the future.
Marketing & Editorial Executive
Emily Hodges +44 20 7907 6270 Research company IDC estimates that worldwide
MANAGEMENT +44 20 7907 6000 cloud market expenditure will be more than $70bn
MagBook Publisher Dharmesh Mistry by 2015 thats a 25% annual growth rate.
Publishing Director Jon Westnedge Over the following pages, you will read about what
Managing Director John Garewal
Deputy Managing Director Tim Danton cloud computing is, what applications can run in the
MD of Advertising Julian Lloyd-Evans cloud (and what cant), how it can streamline your
Newstrade Director David Barker costs and how it will change your organisation be
Chief Operating Ofcer Brett Reynolds
Group Finance Director Ian Leggett that a major enterprise or a small business. Youll
Chief Executive James Tye see how cloud will have an impact on all aspects of
Chairman Felix Dennis business life, from sales and marketing to managing
a supply chain. And youll read about the downsides
too: from handling security to managing contracts,
The MagBook brand is a trademark of licensing and breakdowns in service.
Dennis Publishing Ltd, 30 Cleveland St, Were set for a huge change in the way companies
London W1T 4JD. Company registered in
England. All material Dennis Publishing operate. The parallel that is often drawn is with the
Ltd, licensed by Felden 2011, and may not electricity supply and how we moved from a position
be reproduced in whole or part without the
consent of the publishers. where companies operated their own local power
stations to using a national grid. Its an apt parallel
While every care was taken during the but it doesnt go far enough changing the source of
preparation of this MagBook, the publishers the electricity supply didnt fundamentally change
cannot be held responsible for the accuracy
of the information or any consequence the way that businesses were run cloud will.
arising. All judgements are based on products The notion of ofces in various locations
available to us at the time. Dennis Publishing
takes no responsibility for the content of supported by a dedicated IT team is going to slowly
any external websites mentioned or for any disappear. What the ofce of the future will look like
advertising within the guide.
is anyones guess, but there is one guarantee it will
Printed by Stones be served by some form of cloud computing.
The Ultimate Guide To Cloud Computing The future starts here.
ISBN 9781907779831 Maxwell Cooter, Editor

TheUltimateGuidetoCloudComputing 03

The Ultimate Guide to



Cloud Computing
Ultimate Guide to

7.99 The

Gettingtogrips CLOUD
withthebasics Keepingcostslow

06 Whatiscloud?
A cloud denition, history and
the way the market is moving

14 Cloudconcerns
Any new technology throws up
worries about its impact so
what do you need to know?

22 Businesschange
Heres a strong case for cloud
as a business change enabler 12
26 Publicvsprivate
The differences between the
two main cloud models

30 Enterprisecloud
A brieng for board level
executives on cloud issues

38 JustforSMEs
Why cloud is a great match
for smaller organisations

43 Cloudcontracts
Businesses must be aware of
43 the small print in cloud services

04 TheUltimateGuidetoCloudComputing


50 Cloudstorage
Storage is the number one app
in the cloud with good reason

54 Financeandlicensing
Financial factors for the cloud;
cautions on software licences

63 Greencloud
Is cloud computing greener,
and can we prove it?
68 HRandcloud
How cloud applications could 76 Marketinginthecloud
transform the people factor A laggard normally in IT,
marketing now has power
72 Supplychain
Another key area for the cloud is 80 Whatnottodo
collaborating on moving goods Not everything is suitable for
the cloud, and heres why

84 Securityinmind
Data security is a top concern
and a degree of trust is needed

88 Leadingplayers/glossary
A whos who of major cloud
76 players plus a glossary of terms

TheUltimateGuidetoCloudComputing 05

Maxwell Cooter introduces the hot topic of cloud
computing: what is it and where did it come from?
ITS THE BUZZWORD on everybodys vagaries, the US National Institute of
lips but what does cloud computing Standards and Technology put forward a
actually mean? Its not been an easy denition that has now become widely
term to dene and there have been many accepted as the closest that the industry
different attempts to explain what the has to a denitive answer. The NIST
term means. Cloud companies have denition is as follows.
been prone, like Alices White Knight, to Cloud computing is a model for
dene the term in a way that they want it enabling, convenient, on-demand
to mean. network access to a shared pool of
In some ways its strange that the term congurable computing resources
has been so slippery. Millions of us are (eg. networks, servers, storage,
happy to use such cloud-based services applications, and services) that can be
as Facebook, Gmail and Twitter, thinking rapidly provisioned and released with
nothing of it, yet pinning down an exact minimal management effort or service
denition has been as elusive as provider interaction. This cloud model
grabbing a cloud itself. promotes availability and is composed
In an attempt to put a stop to these of ve essential characteristics, three

06 TheUltimateGuidetoCloudComputing

service models, and four deployment

models. Differencebetweenoutsourcing
The service models are types of andcloudcomputing
offering, such as software-as-a-service
(SaaS), and deployment choices include Outsourcing is widely known and used in
public and private clouds. But the key technology circles. Its when a third party performs
characteristics of cloud from a an IT function or other service on behalf of its
customers point of view are: customer. Outsourcing can be employed for a
Self-provisioning so a customer can variety of reasons lack of expertise in-house, lack
provision facilities without any human of personnel or because the resources are needed
interaction purely for an individual project.
Delivery of services over a network The key differences with cloud are dened by
Ability to be accessed by a variety of the underlying technology of the cloud provider.
devices, not just PCs but also by Essential to this is the use of virtualisation all
netbooks, tablet computers and cloud providers make use of virtualisation
smartphones technology and automation (the ideal cloud
Rapid elasticity the ability to scale service has little human intervention). The other
up or scale down computing resources. key element of cloud computing is the use of
From a cloud providers point of view, self-provisioning one of the major benets is the
a major element of the process is the ability to make a business more agile and exible
pooling of computing resources toserve because services can be turned up and down at will.
multiple consumers, using whats
called a multi-tenant model whereby
cloud services are provided to leading lights in cloud technology.
customers as and when theyre needed. Millions of us around the world are
One of the important factors for cloud willing to entrust our personal details and
service providers is to be able to credit cards to that company believing
measure usage accurately and, even theyll be held safely why should
more importantly, to bill accurately. trusting the companys cloud division,
Amazon Web Services, be any different?
Securityconcerns In many ways, a more important
The factor in cloud services that makes consideration than security is the
most users nervous is the level of location of the data. This is for two
security within a multi-tenant model. reasons. First, there is the inherent
This is a major concern. Customers are latency within the system: the further
entrusting some of their sensitive data away the data is stored the longer the lag
to a third party and there is, ofcourse, in accessing it. This is becoming less of a
nothing stopping one of their major problem as network connection get
competitors going to the same cloud faster but it still can be a factor.
provider for a service. The second problem is a more serious
Service providers believe that this one, particularly on this side of the
concern can be easily dealt with: theyve Atlantic. There are various EU
generally had a long history of keeping regulations on where data can be stored
customers data safe and have levels of personal data cannot be held outside
security that far exceed those of their the EU (within the EU itself, individual
customers. Take Amazon, one of the countries have stricter guidelines still). TheUltimateGuidetoCloudComputing 07

This has been a problem for some cloud Virtualworld

providers, as part of the appeal is that There are other elements within cloud
unused resources at one data centre can computing. Virtualisation is another key
be used by another. If data centres concept. It means what it says, the use
outside the EU cannot store European of virtual resources instead of physical
customers data, providers have to be ones. For example, a server within a data
careful in marshalling their resources. centre may be operating at just 15% of its
Allied to this is a secondary problem: capacity (this used to be a typical usage);
the US Patriot Act, which compels US virtualisation is a technique where the
companies to hand over personal data resources that arent being used by the
held on their servers if requested by US server for the application that its driving
authorities. As this applies to European (database, website or whatever) can be
data held on servers located in Europe, used for something else driving usage
this has made some European rates up. Virtualisation will often go
customers rather nervous. The hand-in-hand with server consolidation
implications of the Patriot Act are still so it helps to reduce the number of
being worked through. servers within a data centre.

08 TheUltimateGuidetoCloudComputing

Anyone hanging around cloud vendors for any Da Vincis notebooks are the blueprints for the
amount of time will hear one often repeated rst helicopter. Its one thing coming forward
mantra Cloud computing is not new you with the theory, its quite another delivering in
know, cloud has been around for some time practice. There have been plenty of false
generally from a veteran of the technology dawns before cloud computing became the
industry. Theres an element of truth in this beast it has become. Weve seen it described
but, at the same time, its spectacularly as grid computing, computing on-demand and
missing the point. utility
uti computing before the phrase cloud
Its possible to point to computing
com took hold. Its only been widely
a 1966 book by Douglas used
use since late 2007, although the term was
Parkhill, The Challenge off rst
r used in a lecture by computer scientist
the Computer Utility, for Ramnath
Ram Chellappa.
the origins of cloud For cloud computing to become a reality,
computing. In that book, there
the were other changes needed rst. Most
Parkhill detailed many of important
imp of these was the availability of fast
the elements of cloud and cheap broadband the early attempts at
computing elastic cloud
clo computing all foundered because of the
provision, online dearth
dea of such a service. Then virtualisation
delivery, perception of innite supply needed
nee to become more widespread, as this
its just taken a while for the theory to technology is the bedrock of cloud computing.
become reality. Other factors are the declining cost in
Saying that the theories espoused in storage, the availability of cheaper devices to
Parkhills book are the rst elements of cloud access cloud services and the development of
computing is a bit like saying that Leonardo automatic provisioning software.

Like cloud computing, its an old product but has since been adopted by
concept, originating from the mainframe countless other companies. SaaS
world and only becoming widely used delivery helps solve various problems
after VMware, a virtualisation specialist, within an enterprise: over-provisioning,
started applying it to servers. The security updates and licensing among
technology has now been adopted nearly them, and is widely seen now as the
universally within enterprises and the dominant method for providing software.
technique of re-allocating resources As a concept, cloud computing has
has made it vital for the development of grown quickly and is set to penetrate
the cloud. deeper into the market. According to an
Weve spoken a lot about cloud service oft-cited Gartner report, 20% of
providers but another important part enterprises will have no IT departments
of the cloud is the delivery of software by the end of 2012. While that looks to
the so-called software-as-a-service be a bit optimistic (or pessimistic
(SaaS) delivery mechanism. This is a depending on your view), the impetus is
technique that was really pioneered by clearly with cloud. Its a technology thats with its hosted CRM here to stay. TheUltimateGuidetoCloudComputing 09

Marc Beishon looks in detail at cloud models and where
the action is in the consumer and business sectors
IT IS CERTAINLY TRUE that many The NIST model has the benet of
people, particularly in business, would simplicity, but inevitably there are many
like a clear denition of cloud computing. more detailed attributes of cloud
As a report and survey from industry services that are confusing people, which
body CompTIA, Cloud computing: is not surprising at this early stage of the
pulling back the curtain, says, both the evolution of cloud computing. But users
industry and end user communities in organisations are starting to form a
crave a more authoritative, uniform consensus on what they strongly
denition of cloud computing to help associate the cloud with, says CompTIA,
them determine how best to exploit namely offsite, Internet centric,
it from a business and technology shared, scalable, software-as-a-
perspective. service and virtualised resource.
It too points to the denition from the What is not confusing is the sheer
National Institute of Standards and scale of the projections for the size of the
Technology (NIST), as discussed on cloud computing market, as the analysts
page 7, and it is worth adding the full list are all agreed that, denitions aside,
of characteristics and models in the users will be voting with their feet and
denition (see also the glossary, page 96 fuelling a global market worth more than
for explanations of most of these terms): 100bn by 2013 with a major component
Essential characteristics being the use of cloud software
On-demand self-service applications such as those from Google
Broad network access and, the customer
Resource pooling relationship management specialist.
Rapid elasticity One analyst, Gartner, has predicted that
Measured service 20% of all businesses will own no IT
Service models infrastructure by 2012, and will be
Software-as-a-service (SaaS) virtually total cloud users.
Platform-as-a-service (PaaS) Thats particularly true for smaller
Infrastructure-as-a-service (IaaS) companies and start-ups, as the kind of
Deployment models cloud services they can use to run
Public cloud operations are similar to those that have
Private cloud gained rapid ground in consumer
Hybrid cloud markets. Sole traders, small companies
Community cloud and also hobbyists and casual users are

10 TheUltimateGuidetoCloudComputing

all making great use of cloud platforms Mobility handset business by Google,
such as eBay, Amazon and PayPal to which points in one direction only that
conduct day-to-day business with of a near future where huge public cloud
nothing more than a laptop, Internet applications such as those of Google
connection and a bank account. will be seamlessly available on your
smartphone wherever you go.
Cloudforconsumers It is no surprise that Apple, meanwhile,
And even a smartphone or tablet will do planned to launch in autumn 2011 its
the cloud services that will dominate iCloud cloud service done right, as
in the consumer market are mobile the giant rm says. iCloud is a
applications, driven by the huge success replacement for Apples previous cloud
of products such as Apples iPhone and efforts, but clearly the company now
iPad, and the Android standard adopted feels condent to pitch its offering
by other handset players. News that badged as a cloud service (MobileMe
created much interest in August 2011 was the main earlier version for
was the proposed buy-up of Motorolas productivity applications). It has now TheUltimateGuidetoCloudComputing 11

brought together all its online services always-on and ubiquitous access to
productivity such as mail and contacts, data, entertainment and services, it
the iTunes media store, online backup says. Next, and as some may not be
and storage, and access to new surprised to hear, is online gaming,
applications in one cloud that services followed by voice over IP (ie Internet
users automatically as they move around telephony services such as Skype), and
(in a so-called push way). paid music content. In terms of revenues,
Its also free to Apple customers, in the services such as email and online
same way that people can already make storage barely gure, as they look set to
use of free mail and considerable remain free or very low cost.
amounts of storage with services such as
Hotmail, Yahoo and Google. Apple Cloudforbusiness
which briey became the worlds largest Patterns of use for companies and
company in August 2011 is great at organisations in the public and third
engineering an almost fanatical user sectors are also becoming apparent, with
experience, and it rarely gets its CompTIA, for example, noting that a
marketing wrong these days, so the sweet spot for cloud adoption is in the
ubiquity of a personal computing and medium sized company sector (say
media cloud is likely to be taken for between 10m and 100m in turnover).
granted by many in the next few years. This is because they have similar IT
What the company will have to rely on needs to large enterprises, but less cash
though is a large network of partners to for on-premise systems, and so can
deliver its experience, especially the deploy cloud computing instead as an
mobile phone operators and their many operational expense with a more
suppliers of base station equipment, predictable cost model.
transmission technology Reducing capital expenditure and
and customer provisioning other costs is often the number one
Mobile data and billing systems. reason for moving to cloud computing,
applications and Experience of the mobile but coming in second is the desire to add
services are set to cloud, in particular, can be new capabilities that just arent available
drive the growth easily scuppered if you otherwise, and this key factor must
cant get a signal at a vital surely rise to the top as more
of consumer
moment, or you get a organisations discover just how
cloud services massive unexpected bill, transformational the cloud can be for
and its no surprise that business processes. Indeed, in another
poor customer service is now to the fore survey of SMEs alone, the benet of
as people migrate into increasing use of expanding capabilities does come out
mobile data and cloud services. ahead of cost savings.
That mobility is the key consumer Other factors for deploying cloud are
cloud area is borne out by research rm the speed with which it can be rolled out,
Business Insights, which predicts that simplicity, subscription pricing, an end to
mobile applications will make up almost conventional software licensing, and
half of the market for revenues by 2018. lower energy use. Pertinently, cutting
Mobile applications and services are set internal IT staff, while a factor for some,
to drive the growth of consumer cloud is not a major reason for cloud,
services, as consumers demand suggesting that these workers may be

12 TheUltimateGuidetoCloudComputing

better deployed on IT activities that really SMBuseofcloud

help the business rather than traditional
IT pursuits such as reghting.
The type of service that companies are
mostly deploying are software-as-a-
service (SaaS) offerings in CompTIAs
survey, of those using the cloud 69%
have a SaaS product in use, 31% IaaS
and 22% PaaS, although the latter two
may well be part of a SaaS solution in a
managed service providers data centre.
Indeed, a majority of user
organisations plan to source their cloud
computing from a third party provider,
above self-service/direct from the SOURCE: SMB TECHNOLOGY ADOPTION TRENDS, COMPTIA JULY 2011

Internet, or direct from a technology

vendor, suggesting that there is plenty of ahead of the pack, in particular storage
scope still for skilled IT providers that and backup, and email (see also above
can add value, say, by packaging cloud from an SMB small and medium sized
software into private clouds for superior business survey). Storage is one of the
and more secure service. most widely offered cloud services,
As far as types of provider go, there which is not surprising given its relative
are various models that include: simplicity and value in providing offsite
Public cloud provider with own data peace of mind for data. Most rms will
centre have taken up cloud storage and backup
Private cloud specialist working with in some form in the next few years.
customers to build internal clouds Email too is pretty much standard as a
Hybrid provider of private and public cloud service now, and is often coupled
clouds hosted in own or third-party with value-added extras such as spam
data centre and virus management. Indeed, security
Reseller of cloud services (eg. SaaS). services on the Internet is a class of cloud
offering in its own right and one that has
Goingitalone been a big growth area for specialist
But of course there is nothing stopping providers. Extra security measures and
any organisation signing up direct with a policies are vital when moving to public
cloud software player such as Salesforce. cloud services, in particular.
com, although it may be wise to employ Other applications are less popular
a consultancy that can adapt the right now for the cloud CRM though,
companys business processes to work as pioneered by is a
with the cloud offering, as it will rarely be favourite, and others such as document
the case that it will go smoothly out of management and collaboration have
the box there will be set-up operations strong showings. Content management
that need to be carried out. generally as organisations do battle
As for the applications and services with growing disparate data mountains,
that companies are taking up in the and increasingly mobile workforces is
cloud, there are certain offerings that are clearly a winner for the cloud. TheUltimateGuidetoCloudComputing 13

14 TheUltimateGuidetoCloudComputing

Cloud computing offers clear benets to many
organisations, but like any new technology concept there
are reservations about being an early adopter.
Simon Brew nds out if these fears are real
CLOUD COMPUTING ISNT REALLY a organisations of all sizes so whats
new idea thats just sprung up over holding them back?
the past few months. Rather, its the Plenty, as it happens. Here, we
summation of a series of technologies take a look at ten of the main reasons
that have been converging for some people might be holding back on
time. Now, cloud computing has deploying cloud-based working, and
become a solid option for how valid they are.

TheUltimateGuidetoCloudComputing 15

A clear requirement for effective cloud
working is fast, reliable Internet access,
especially for smaller organisations that
are using public cloud providers. You
need enough bandwidth so that those
who need to collaborate and work across
cloud technologies are able to do so.
Thats something thats quite easy to
manage when the bulk of workers are
in an ofce provided the Internet

connection is up but it gets trickier with
remote workers and those who travel.
Regular travellers will be aware of the
difculty of nding a workable, secure
web connection. And given that one of
the main benets of cloud working is to
have access to les and applications
wherever you happen to be, variable web Losingcontrolofdata
access quality has to be a concern. Its not just an emotional attachment to a
This of course applies equally to computer room that keeps companies
people accessing in-house computers from outsourcing data. Its the fact that
over the Internet. But when everyone in theres an inherent feeling of security
an organisation is dependent on a cloud in having data under close control
platform, there is an understandable (assuming theres some kind of remote
concern that there is no fall-back position backup for disaster recovery, of course).
for a vital part of a companys Removing the need for local storage
infrastructure and one that underpins clearly has some cost benets, but for a
most other operations now. generation of system administrators and
support staff brought up on a different
way of working, its a change that rings
some alarm bells.
One in particular is trusting an external
source for working data what happens
if access drops or if someone loses the
data? Even appreciating the security that
cloud computing offers, theres a leap of
faith and an element of uncertainty
(along with a loss of transparency), that
creeps in when data management is
moved out of the immediate control of an
IT department.

16 TheUltimateGuidetoCloudComputing

People do fear any sort of change, even
in a fast moving industry such as IT. They

dont tend to fear upgrades too much
although a jump say to the latest Security
Microsoft Ofce can mean some When data is being looked after by
reghting but a wholesale alteration in another party, its right and proper that
the way systems are supposed to work is security issues are raised. Every
a challenge. business has condential information
Its hard not to have some sympathy that it likes to keep behind closed
with this. In many organisations, IT is a doors, and the fear that cloud
tool, a means to do a job, and nothing computing could make such material
more than that. Theres a strong more vulnerable isnt one that can
argument that the software industry, in simply be ignored.
particular, has become adept at selling Yet recent times have seen that the
upgrades and alterations that we dont biggest source of condential
actually need, or that dont make a document leaks is more likely to have
difference to daily life. So when a change been a misplaced USB stick, using
comes along that does, reticence is unsecured Internet connections and
hardly surprising. less than honest employees.
Persuading people to alter the way Reputable cloud service providers
that theyve done things for years, view security as pivotal to what they
whether attempted via carrot or stick, offer and, with the added help of a bit of
is rarely a straightforward battle. common sense, theres a strong
So persuading key decision makers argument that most businesses would
and their staff to embrace cloud benet from more robust security if
computing can be a heck of a job in and they do migrate to a cloud service.
of itself. Even the best-deployed cloud
solution might therefore still be a bit of a
bumpy ride (see also number 10 the
human factor).

TheUltimateGuidetoCloudComputing 17

Clearly, this is a very real and sensible
concern. Theres no computer network
in the world that doesnt have the risk

of downtime at some point in its life.
However, theres still the comfort Payingthebill
blanket of being able to yell at an IT There are some obvious economic
department and get up-to-the-minute benets to adopting cloud services, from
information when its a self-hosted a reduction in dependency on in-house
computer network thats at the heart of IT, to the outsourcing of data
the problem. management and security, and the
What happens, though, when thats saving, potentially, on expensive
taken out into a cloud environment? software licences, and battling to keeping
Who gets the ear-bashing then? And, hardware performance up to date.
more to the point, what happens when Yet the future is uncertain. Technology
a cloud service a business is relying on is littered with examples of new
goes down, even for a short period? innovations and developments that were
With localised working, even without a initially designed to reduce costs, and yet
network, having some machines with many business are still investing heavily
working productivity software installed in their IT budgets.
at least means things can get done. Some valid questions arise about
Whats often forgotten in this cloud computing, then. Is it offering value
argument, though, is that a cloud for money? What guarantees are in place
service stands a good chance of having that pricing wont slide upwards as
a working, operational backup called businesses become more and more
into action quickly. Furthermore, one dependant on cloud services? Is this just
by-product of cloud adoption is that the software companies trying to get us to
maintenance and repair of problems is switch to a subscription system for
also outsourced, so it may well be that licences, and so the longer term cost
any problems are resolved faster than may actually be higher?
an in-house team can act. These are appropriate questions, often
Service providers should and do with no immediate answer. Theres an
also have incentives to ensure element of leap of faith, and a need to
maximum uptime. down a good service contract. But cast
iron guarantees? Theyre lacking at
present, and for rms with razor-tight
balance sheets that has to be an issue.

18 TheUltimateGuidetoCloudComputing

7 8
Much of the discussion surrounding
cloud computing has implicit
assumptions built into it. That its the
right thing to do. That its the logical
next step in business technology. That
Itstooearly its a question of when, rather than if, a
Even accepting the comparable maturity company should take advantage of
of some elements of cloud-based what cloud computing offers. In much
working (many, for instance, trust their the same way that it was once assumed
email to a webmail service with little that everybody would upgrade their
worry), there remains a feeling, rightly or copy of Windows within a couple of
wrongly, that this is still an area of years of Microsoft releasing a new
computing thats in its infancy. Lets not version, theres an impression
forget, too, that lots of next big things sometimes put across that cloud
have gone on to be anything but. As computing will become compulsory.
such, many businesses are holding back But, of course, it isnt. There is doubt
from adopting cloud services as they that the argument that cloud is the
wait to see how the assorted offerings future has been convincingly made.
develop, and as they let others do the Because, while there are potentially
pathnding for them. huge benets to whats being offered,
Theres always some sense to not theres no one-size-ts-all mentality
moving business-critical operations to here. Is cloud computing really the
areas where youd be an early adopter right option for a small business of
(although cloud adoption can, and two or three people? Is it the right
should, be done piecemeal), and theres way forward for a large organisation,
a feeling that the wrinkles need to be with hundreds of employees in many
resolved in cloud services before more different locations?
rms embrace the potential on offer. There are strong cases to be made in
Yet, theres a degree of obvious myth both instances that the answer is yes
to the argument that the services are (again, down to the fact that you can
immature after all, has choose what works for you, with public,
been around since 1999, an eternity in private and hybrid cloud approaches
IT terms. Rather, we are more likely on offer). But that doesnt mean that
reacting to changes in the way services the case doesnt have to be made.
are packaged and sold, although there The benets of the cloud have to be
are clear reasons to be cautious if, say, dened, be tangible, and be presented
the local Internet infrastructure is rather properly. Its the users who tumble over
poor and you want to invest in a public the cliff to follow the crowd who will,
cloud system. inevitably, hit problems, and fail to reap
the intended benets of what the cloud
can offer.

TheUltimateGuidetoCloudComputing 19

9 10
Arguably one of the biggest challenges
facing cloud computing is this: how,
exactly, do you dene it? Because
already, different service providers
describe cloud products in very different
ways. There doesnt appear to be one Thehumanfactor
widely accepted denition of what At the heart of every signicant
cloud computing is, and without that, problem to do with technology lies the
packaging and selling the benets same factor: people. We have seen
to organisations is made that bit time and time again that you can have
more difcult. an IT infrastructure thats seemingly
Furthermore, part and parcel of the tight and secure, but its a simple
uncertainties surrounding cloud human slip thats opened up an
computing is the argument over element of risk. Furthermore, someone
standards. Theres no solid, common who doesnt fully understand, or
and obvious foundation for cloud doesnt want to understand, what it is
services to build on. Like it or lump it, that theyre being presented with, will
people know where they are with a always cause some degree of problem.
Windows operating system, a copy of It may be straightforward to get the
Lotus Notes and some variant of an MD and nance director to sign off on
ofce suite. But what such common, the nancial benets, but just look at
unifying tools exist in the cloud? There how hard it is to get buy-in for end
are not, at this stage, obvious, dominant users to use systems such as CRM
players in the market although (customer relationship management).
Amazon, Google and New web-based systems in the cloud
would stake claims and for companies may pose similar problems.
looking for a big brand name to trust, that Realistically, of course, every issue
does have to come into their thinking. weve discussed here has a person at
Until cloud computing can be dened the heart of it, or a fear of what
in a manner thats as understandable as someone can and inevitably will do
an operating system or an ofce suite when given the keys to something new
(and arguably, it can be dened as both), and different (and thats just one
its going to create some uncertainty individual: the potential dangers
within rms as to what exactly theyre multiply exponentially when people
being sold, and how it allows them to hunt in packs).
work with others. Its a big problem, and why many
businesses are keen to retain the
technological status quo, in that it
keeps the humantechnology balance
in a position that its migrated to over a
period of time.
Its important never to forget the
people factor when bringing in any
new technology

20 TheUltimateGuidetoCloudComputing
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This talk of technology is all very
well, but the clouds true potential
is in transforming your business
with speed and collaboration, as
Marc Beishon nds out

HANDS UP WHO remembers

timesharing computers in universities?
Or value-added networks (VANs) and
electronic data interchange (EDI) in Clouds are about ecosystems, about
business trading networks? Or large collections of interacting services
Prudential salespeople armed with including partners and third parties,
Psion palmtop computers? about inter-cloud communication and
Many proponents of cloud computing sharing of information through such
act as though theyve just discovered the semantic frameworks as social graphs.
kind of cloud-type business processes
that organisations have, in fact, been Transformationvsutility
tackling with various degrees of success This, he adds, is clearly business
for many years. These advocates also transformational, whereas computing
maintain that cloud is a technology- services that are delivered as a utility
driven new wave that, while bringing new from a remote data centre are not. The
business opportunities, is mainly about pioneers in VANS/EDI methods which
scaling up infrastructure in data centres, are now migrating into modern cloud
with the obvious advantages of access to systems in offerings from software rm
latest technology, elimination of in-house SAP and its partners, for example were
servers and so on. able to set up basic trading data
But the technology itself, while exchange networks, but the cloud
obviously vital, is really a sideshow to transformation now is integrating, in
realising the business transformation real-time, the procurement, catalogue,
efforts that enlightened organisations invoicing and other systems across
have been striving for over the last possibly overlapping and much wider
20 years or so. As Walter Adamson, an business communities.
Australian-based consultant, comments: Likewise, companies struggled for a

22 TheUltimateGuidetoCloudComputing

But is that offering business agility

beyond the IT side? A recent Business
Week article, The cloud: battle of the
tech titans, looks at Amazon vs the rest
and focuses pretty much on the scale
argument, with users renting server time
to analyse sales data, for example. But
it does note that time to market is a
major pull.
The city of Miami, for example, has
quickly built a service that monitors
non-emergency calls. Local residents
can go to a website that pulls up a map of
the city and place pins in every spot tied
to a complaint. Before the cloud, the city
would have needed three months to
develop a concept, buy new computing
systems (including extras in case of a
hurricane), get a team to install all the
necessary software, and then build the
service. Such systems are unlikely to be
built in the conventional way in these
long time with mobile and remote access cash-strapped days.
to sales and marketing systems, as
enterprise integration was often very Sandwichcourse
difcult and expensive. Now the Good use of a private cloud this time on
transformation brought about by cloud Google Apps is by food chain EAT,
ecosystems such as the which is improving business processes
community is enabling far more than a by using Google Talk for instant
mobile quotation system with data that a messages between stores when one run
rep had to download using a modem outs of a popular sandwich, for instance;
before he or she set out for the day. Google Forms for head ofce to survey
And clearly, there are many individuals shop managers to capture issues and
and companies, especially small rms, ideas; and integration with smartphones,
that have happily taken to one of the for managers to access documents and
worlds most complete cloud order stocks on the move, and to oversee
experiences, Amazon Web Services, a number of restaurants while being
which is enabling many to move from a stationed at one.
static website to a fully-edged online The received wisdom about such
global shop, with everything from business cloud applications is that
database management to micropayment vendors are approaching business
handling. And Amazon is also a department heads, not IT managers, to
frontrunner in the enterprise private make sales, although not much
cloud, with major software vendors enterprise software of any type has been
including Oracle and SAP now on its sold this way since the dot-com crash.
infrastructure offering. It certainly makes sense in one of the TheUltimateGuidetoCloudComputing 23

hardest functions to crack, the of reps is more than useful and its hard
salesforce, which has long put up to underestimate what this can do for a
resistance to clunky CRM (customer company Larry Ellison, the colourful
relationship management) systems boss of software giant Oracle and now a
foisted on them. Just because cloud convert, famously cracked the
Salesforce.coms CRM system is whip a few years ago when he realised he
cloud-based does not mean it does not had no dashboard to see what his
have the adoption problems that CRM business units were doing in a timely
has suffered from incentives and good fashion round the world and got it
management tend to x that. But a cloud done, of course.
system can greatly help with business
change in hard to reach parts of a rm. In-housenotanoption
In many companies there is a black Trying to build an in-house systems to do
hole of forecasting and pipeline data on this is obviously counter-productive in
sales, and it doesnt help that most major time and money for most companies that
enterprises certainly in the FTSE 100 are not of the likes of Oracle. And where
are led by CEOs with no sales also scores is in its
experience. Its an area tailor-made for brilliant decision to create the
the cloud since so much knowledge is in AppExchange platform where users can
silos around departments and in the integrate and use many more functions,
heads of salespeople and best practice from an 800 long list, and thats apart
is not shared. from Salesforces own extras.
Another function thats beneting
Fastforwardforsales from cloud agility is logistics, where
Phil Codd, chief markets ofcer for provider Deltion is gaining a good deal of
northern Europe at software testing rm success for its CarrierNet platform.
SQS, chose to solve a Managing director Denis OSullivan,
major sales reporting problem in the himself a logistics expert brought in to
past, reporting was on an individual run this UK rm a year ago, says
country basis with a complex mix of logisticians have been crying out for a
spreadsheets, emails and word of mouth long time for real-time visibility across
which placed a lot of pressure on the supply chain to iron out customer
accurate and timely sales forecasting. service problems, which he says
Codd took advantage of Salesforce. Cadbury (now part of Kraft) is doing with
coms 30 day free trial of its Sales Cloud CarrierNet, a cloud system.
2, and then worked with consultancy Keith Newton, customer logistics
SaasPoint to implement it in just 40 director at Cadbury says: The
working days and the company now implementation has enabled us to move
has a central repository of sales pipeline from a series of unlinked systems to a
throughout the region in real-time, and web based interfaced solution that has
all sorts of new opportunities for sharing totally eliminated a number of areas of
sales best practice and leads by using failure. It links all internal logistics and
tools such as Salesforce.coms Chatter, planning teams at Cadbury, all tier one
an internal social media system. third party logistics service providers, all
Anything that produces more than the second tier hauliers subcontracted to
sum of a notoriously self-sufcient group them, and customers via alerts, SMS

24 TheUltimateGuidetoCloudComputing

Human resources (HR) systems are not systems. Finally we have a central system
obvious targets for the cloud but vendors for storing les, working on them and
such as SuccessFactors are proving that retrieving them, always in real-time. Any
properly managing the entire workforce in project member can access it, and most
terms of skills, knowledge and structure can importantly, the latest version is always
have a big impact on business performance. available, says Alexander Gottschlich,
European users such as construction global programme manager at Vodafone.
supplier Hilti are big fans.
The Green House, a small Northampton-
The public sector has much to gain from the based business specialising in environmental
cloud in the NHS, County Durham and services, manages around 500,000
Darlington Foundation Trust, a consortium of scheduled collections a year through its
ten organisations, is using Wax Digitals recycling division alone. In the past, all of
web3 procurement system to make it easier these transactions would have been carried
for staff across the consortium to select out manually. Issues were typically sorted
goods and services for purchase and place out over the telephone with multiple calls
orders quickly and simply, enable routinely taking place between the company,
streamlined nancial control and its suppliers and clients. This was a
authorisation, and accelerate the supply time-consuming, resource-intensive and
process to nearly always next day. expensive process. Today, the company
manages all of these collections through
Project management is a shoo-in for the Salesforce.coms Service Cloud, into which it
cloud, as Vodafone is discovering with the has integrated a large number of workows
Projectplace web-based communication and approval procedures.

and emails. It is no coincidence that despatch. If there is a potential problem,

since implementation we have recorded an exception alert is raised and the
a number of 100% customer service problem managed with the customer.
days, which is a signicant achievement Logistics examples are signicant
for a large FMCG rm such as Cadbury. because they often involve the
For which read if the truck breaks ecosystems that promote more business
down and no one knows, the kids dont transformation across partners adding
get their chocolate. OSullivan adds that real-time bidding systems to take on
large retailers are also in the market for jobs, for example, is another feature
his system which again would be OSullivan mentions that a client is doing.
prohibitive now to try and build in-house An ecosystem also becomes apparent
and also mentions a client called Rigid within companies as they use cloud
Plastic Containers (RPC) which uses systems for human resources.
CarrierNet to check warehouse stock and In some cases, it is certainly the case
production schedules before processing that cloud technology creates a new
transport orders. If there is no warehouse business agility opportunity. In others,
stock, the system checks if the ordered its enabling better a known need. Donald
items will be produced in time for Rumsfeld had a good take on this TheUltimateGuidetoCloudComputing 25

MUCH OF THE DEBATE about cloud
computing has focused on two distinct
types of operation: the public and
private clouds. But although they are
bundled under the convenient term of
cloud computing, they are very different
operational models.

Public cloud, which is simply using the
Internet to access computer services
of one sort or another, has its roots
in the decision by Amazon in 2002
to use its vast infrastructure to offer
computer facilities to customers. The
company launched a range of services
to developers, including storage and a
development platform.
Amazons initiative, which preceded
the phrase cloud computing itself, has
been followed by the likes of Google
and a selection of hosting companies
as they seek to capture the interest in
this approach.
As if to demonstrate that theres
nothing new under the sun, this is
a throwback to the concept of the
computer bureau, where companies
paid a monthly fee to buy time on a
mainframe. Its a business that had
seemed to die a death when PCs and the
client-server model came into play.
Like the computer bureaux, public
cloud providers charge their customers
on a monthly basis generally according
to gigabytes transmitted and bandwidth.
The crucial aspect is that the cloud

26 TheUltimateGuidetoCloudComputing

Its not just a question of moving to

the cloud; do you opt for a public or
private system? Maxwell Cooter
weighs up the options

provider bears the entire cost of running

the infrastructure, meaning that as a
customer you do not have to worry about
maintenance or stafng help desks. Nor
do you have to worry about investing in
storage hardware, a growing budgetary
strain on organisations as data storage
volumes move ever upwards.
Crucially, it also means that you
do not have to worry about capacity
planning. This can be a big headache for
companies with seasonal uctuations,
where they might have over-provisioned
for peak trafc. Thats a headache that
the new breed of cloud providers can
deal with.
So, public cloud offers a number of
advantages to organisations, particularly
small businesses and start-ups, both
of which may have no IT department
and which may be reluctant to tie up
capital on an IT infrastructure. There are,
however, downsides too.
The main disadvantage with public
cloud is that there are some security
issues. Companies will have to hand
over condential data over to a third
party and for many rms this is a move
too far. There will be worries about
customer data being released into
the public domain, concerns about
companies being held legally responsible
for breaches of privacy legislation and
worries about sensitive data being held
on a server, particularly where two
competitors might be hosted.
But if youre starting small, public TheUltimateGuidetoCloudComputing 27

In the private
cloud, you have
for buying
the hardware
and software,
maintaining it and
managing storage

cloud will almost certainly be the way to infrastructure as a centralised pool of

go as it will be able to handle something computing resources.
as small as say a basic client contact Other features of the private cloud
database for a couple of salespeople. are automation, meaning that many
And many providers offer simple storage of these tasks are handled without the
services for single users. intervention of an IT department, and
the ability to measure and monitor
Incontrolwithprivatecloud what resources have been allocated
The genesis of the private cloud was very to different departments, which could
different. Theres no public operator and also means companies are able to
everything hardware and software is introduce chargeback for resources
provided by you, the user. It sounds that have been consumed.
little different from a more conventional In the private cloud set-up, you have
data centre, where your servers and responsibility for buying the hardware
applications are hosted by a specialist and software, maintaining it and
provider. Indeed there are some managing storage. As such, private
commentators who claim that the cloud doesnt offer so many advantages
idea of a private cloud is an oxymoron, when it comes to managing cash ow.
and really we should be talking about But there are other advantages. You
data centres. connect to public cloud providers by
Proponents of private clouds maintain using Internet connections these are,
there is a difference: the main features by their very nature, slow. This means
of a private cloud are a virtualised that anyone trying to shift large les
infrastructure coupled with software around would nd the experience a lot
that allows IT users to treat that of slower. On the other hand, private

28 TheUltimateGuidetoCloudComputing

Less expensive than private clouds Can be secured to meet compliance
More accessible than private clouds at almost every level
Short-term or temporary Single tenant environments eliminate
commitments the possibility of other companies
Faster to deploy a single user than affecting performance
private clouds Private data centres usually
accessible to IT auditors
Customisable to meet an individual
organisations needs, rather than the
mass approach of public clouds


Fewer user management controls More expensive to deploy and
One-size-ts all approach (not maintain than public clouds
tailored to a single organisations or May have longer-term commitments
users needs) than public clouds
Impersonal support, often via email, May have less exibility since
chat, or FAQs only hardware is dedicated to a single
Security and uptime might not meet organisation
enterprise compliance standards SOURCE: WWW.FOGODATACENTERS.COM

cloud infrastructures often use private Whynotgohybrid?

connections, offering a much speedier Theres no need to choose between
experience, although there are issues for private or public, as organisations with
branch ofces that may need to use a more than basic needs for cloud IT
slower wide area network to get access can opt for both in a hybrid approach,
to the main corporate link. with some services in a private cloud,
In addition, the private cloud doesnt others in a public one. This could still
have the security issues that could cause be managed by one provider and can
problems for public cloud users. All data address concerns such as holding
is retained by your company and you sensitive data such as customer credit
control all access over a private rewall. card details only on a private basis.
Whats important here is that not only But you may be quite happy for staff
do you keep tabs on data but you also to use say Twitter or Facebook which
know exactly where, geographically are public cloud applications, after all
speaking, its being held. This not an for customer communication, or any
academic principle, as there are of the Google apps, such as Calendar
important legal restraints on where data and Docs, or say, for
can or cannot be held and companies communications among groups of
have to be wary of their statutory duty for staff, where ease of use is the foremost
protecting customer information. consideration. TheUltimateGuidetoCloudComputing 29


30 TheUltimateGuidetoCloudComputing


history. It was unheard of as a term
before 2007 and in just four years it has
risen from marketing shorthand to
become the symbol of a massive change
in technology.
What makes cloud computing
different is that its a technological
change that touches on every part of the
business. For the nance director there
are changes in the way IT services are
bought; sales managers have a new way
to communicate and interact with their
teams and customers; the IT director will
nd his or her budget, strategy and team
transformed. Above all, the CEO will have
to think about the way his or her entire
organisation is structured.
In the future, we could be talking about
a complete overhaul of the way
companies are constructed, about how
they consume IT, about how their
accounting works and, indeed, where
theyre located (see also section on
business change, page 22).
But those changes mean different
things to different parts of the business.
If we look at the way cloud services
impact on different job roles, we can see
that theyre going to approach these
changes in very different ways.

Perhaps the biggest driver for the move
to cloud is the need to save costs, but
that move works on many levels.
The change that has garnered most
publicity is the move from counting IT as
a capital expenditure to an operational
Maxwell Cooter takes a tour one. Although often cited as a reason to
through the top board jobs move from on-premise hosting to cloud,
this is somewhat misleading. Whats
affected by what for many really at stake is cash ow; by going
will be a major business down the cloud route, customers no
change in the years ahead longer have to commit to large costs
upfront. It isnt necessarily true to say TheUltimateGuidetoCloudComputing 31

that its always going to be cheaper, but

there are other advantages.
There may even be a price premium in
opting for cloud, but that needs to be set
aside for other considerations. The price
of renting a server could initially appear
to cost more than purchasing, but the
nance director has to consider the cost
of power and cooling, the cost of staff,
the maintenance costs, accounting for
backup and disaster recovery and
various other costs.
Theres also the fact theres no longer
the need to be so rigorous about capacity
planning that becomes a headache for
the cloud provider, not your
IT director and companies You no longer
will be more exible about
installing new services and
need to be so
scaling up and down. rigorous about
This is an important capacity planning
aspect. Previously the IT that becomes a
department would have headache for the
installed an infrastructure
that would be able to handle
cloud provider,
the peaks of the business. not your IT
This was always a grossly director
inefcient way of organising
IT services. It could be an infrastructure deciding which costs are set against
that is geared up to handle peaks of which department. This is a fundamental
trafc perhaps around the end of shake-up: even companies that have
nancial quarters, or around Christmas chargeback to separate departments
for retailers. have often found this is little more than
But those brief periods of intense an estimate of a share of the costs.
activity would have an effect on IT Managers have few tools to assess a
provision for the entire year rather as real cost and have derived a gure from
if a family of four opted for a minibus a combination of real gures and
purely to cope with the yearly visit of informed guesses.
the cousins who lived abroad. Cloud Now theres a real way of measuring
computing changes all that: for the rst just now much computing time the
time, organisations will no longer have to marketing department has used, how
plan for the periods of greatest demand. much storage the graphics department
Coupled with this will be a change of has grabbed and the bandwidth needs
practice when it comes to allocating of nance.
departmental costs. Finance directors That capability, however, could lead to
will now have an accurate way of some nely tuned judgment. When

32 TheUltimateGuidetoCloudComputing

vendors have not yet grasped the

transformational nature of cloud
computing and their licensing models
are not able to cope with this new
paradigm. The nance director, in
conjunction with the IT head, needs to
assess the state of licensing within the
organisation, making sure that the
company isnt overpaying.
The thorniest problem of all will be the
negotiation and monitoring of the service
level agreements (SLAs) with cloud
providers. While the IT director will
probably remain the best person to
check on service delivery, the nance
director will need some understanding
of the potential level of nancial loss
suffered and the possible levels of
compensation. This is a crucial area for
the move to cloud computing: delivery to
this sort of model will never work if the
cloud provider cant provide the desired
level of service and if the customer is
Ever since cloud computing emerged
as a new catchphrase for the IT world,
there have been several vendors leaping
on to the cloud bandwagon and cloud
departments real costs are assessed washing existing products to suggest
accurately there could be some a strong commitment to the cloud.
resentment from those that have been There are some nance directors or IT
undercharged in earlier years and now directors who may be tempted to follow
nd their costs increasing (or the same path and cloud wash their IT
resentment from departments that have department. These instances will
been overcharged for probably be rare but theres certainly
several years). Either way, been some resistance to the idea of
The stakes the nance director is cloud computing from some IT
are high for likely to act as the diplomat department chiefs and the nance
businesses. smoothing over territorial director may nd himself as some sort
It will be a rare disputes, ensuring the of cloud arbiter.
winners dont get The stakes are high for businesses.
company that triumphant and the losers It will be a rare company that relies
relies entirely dont become embittered. entirely on in-house IT in future. Some
on in-house IT Another key area the companies will move entirely to the
in future nance director must keep cloud, some will move part of the
tabs on is licensing. Many infrastructure, some will move none. Its TheUltimateGuidetoCloudComputing 33

a decision thats going to require some

careful assessment of the pros and cons
and the nance director will play a vital
role in assessing the nancial rationale.

IT directors have a different path to
cloud. They have been aware of the
debate and some of the buzzwords:
public cloud; private cloud;
software-as-a-service; outsourcing;
cloud-sourcing; crowd-sourcing.
But, unusually, these terms are just as
likely to have come from the board as
from the IT side.
For once, the majority of hardcore
techies and their sources have
underplayed the signicance of cloud.
This is partly because its perceived as a
threat outsource services and youll
surely lose part of your team, is the
thinking but also because for them
its an emergent set of trends in
virtualisation and hosting: a confection,
made out of pre-existing components
with the key innovations happening
several years ago. talking about private clouds, which is the
This makes the balance of emails data centre, virtualised and shrunk, and
hitting inboxes of IT directors all the made mobile (in the sense that it can
stranger; a vast number of people, with move from one compute host to another,
salespeople in the vanguard, are and nothing at all to do with the iPhone).
attaching the word cloud to their sales IT directors who get drawn into an
pitches as if its their road to personal early-adopter, single-purpose
salvation. In this new world the cloud is cloud-badged project, could nd
the outsourcing industrys wholehearted themselves in great difculty if they dont
attack on the massive budgets and check details carefully. This is because
imposing empires of corporate IT. Thats the momentum of the optimistic,
why less tech-savvy board colleagues ignorant and misguided can be an
love it so much. It isnt easy for an IT astonishing thing, and because the
director to reject all these overtures. hosting business has very little in the way
Among the ambitious Powerpoint of verication, standards, agreed
presentations therell be a quiet voice procedures, or compensation packages
from a clever guy who promises to chop for the day when something goes rather
your re-investment costs by 75%, amiss. Hosting underpins cloud, and also
without moving a corporate dataset wage packets if the IT director bets the
outside your building. That last guy is companys operations on it.

34 TheUltimateGuidetoCloudComputing

Cloud companies that dont present be a lot of pressure on them from

rational means of running their services less techie board members and its
when their own platforms are ofine important that the cloud option has been
are scarcely credible to seasoned thoroughly investigated.
technologists so you have to be able
to say, What happens when it does Forthechiefexecutive
not work? The modern CEO isnt going to be
The answer lies with a private cloud. short of advice in his attempt to get
If sales teams are expected to do up-to-speed with cloud computing. But
thousands of deals a day on an externally many of the opinions will be proffered by
hosted service, then replicating that data a host of vendors, cloud providers and
internally on a compatible virtualisation channel partners all of which will have
platform is an insurance policy against their own agenda.
not just kit failure at the software-as-a- So, where does the CEO look to get
service provider but also the sudden loss the best advice on a move to the cloud?
of your own Internet connection, perhaps There are some things to focus on at
traced to a telcos engineering works in the highest level, which lower-level
the street outside. managers and direct reports wont
In all likelihood, the eventual impact necessarily have at the forefront of their
of cloud concepts will be somewhat less minds. Terminology is one of those
than the hopeful CEO dreaming of things. Your irritation at technical types
losing his entire IT department babbling away using terms they dont
currently thinks. But it will also be a lot dene, no matter how well-intended you
greater than the scornful nerd, looking at can see they are, gets some real teeth
the toolbox cloud uses for delivery and when it comes to cloud topics. There are
nding nothing new or a multitude of denitions out there, so
Cloud companies clever about it, is currently how do you sort out which is best?
that dont present able to foresee.
Its also possible for
The top priority for any CEO
contemplating a move to the cloud is
rational means of an IT director to be in a to check the small print as if your life
running services business so secure, or so depends on it because it could be that
when their closely tied to physical your business will come to depend on it.
own platforms processes, or so hugely If youre unsure, consult with lawyers.
dependent on a specic Cloud is about delivery of services
are ofine are and ancient software and ensuring that cloud providers meet
scarcely credible suite, that theres no with their responsibilities. Research
to technologists chance of making use of from Queen Mary College in 2010
the high-prole parts of revealed a wide disparity of wording
cloud computing. Companies running a within cloud computing contracts. This
factory oor of milling machines, or a is one area where the small print is not
metro line full of ticket readers, will nd it to be ignored as the contract will be the
difcult to run an on-demand capacity basis for the way that the company runs
expansion project. indeed it could be crucial to whether
What the IT director does nd difcult the company survives or not if things
is to show that cloud computing has dont go quite to plan.
been assessed as a possibility. Therell What happens when a cloud provider TheUltimateGuidetoCloudComputing 35

PricewaterhouseCoopers (PwC) recommends the following:

1 Start by knowing where the organisation ever-greater levels of business efciency

stands on the cloud computing continuum. and agility
Use benchmarking and gap analysis to 5 Progress systematically through the ve
understand where you are today levels* of cloud computing components,
2 Conceptualise and communicate a realising that not all components are
compelling vision for using cloud appropriate in all situations
computing to advance business objectives 6 Balance the use of private and public
3 Develop a cloud strategy and execution clouds to form a hybrid cloud that draws
plan that incorporates any ad hoc on both private and public cloud resources
components implemented already and as needed
lays out a systematic approach to 7 Focus on automation, which is the key to
moving forward efciency, agility and scalability
4 Understand the goal, which is not to get * SET OUT IN PWCS PAPER, CLOUDS IN THE ENTERPRISE: NAVIGATING

is hit by a denial-of-service attack? strategy. Cloud is meant to be all about

What stops a provider from moving data steering work to an available resource,
to another jurisdiction for cost or legal not watching it vanish behind someone
reasons? Is the provider the denitive elses security gates.
provider-of-last-resort, or is it just Cloud computing presents the CEO
reselling someone elses package? with a major opportunity to reshape and
What happens if a customer wants reorganise their business. Its not just
to move providers or go back to about IT, its about how to use, analyse
in-premise? Due diligence isnt just a tick and improve company data and its
box in taking up services in the cloud, its about using IT to have an impact on
a major component of the project time. business processes. Many companies
The next question for an organisation have operated on the weve always done
to consider is how closely it wants to things this way principle cloud
work with its cloud provider. Some will computing will offer the opportunity to
be hands-off and see themselves as a do away with this thinking.
facility for handling peak demands. Cloud computing may not be for every
Some will be more personal and try to be business or every CEO but every one
intimately involved in their customers should be looking at the technology.
business. Be wary though: the dream The best companies will be those where
of many of the upsellers in the current the board looks at the direction the
wave of cloud hype is to pretend to be organisation is headed over the next ve
removable, when in fact they fully intend years and the best means for getting
to hook customers for the foreseeable there. If that involves cloud, now is the
future. Keeping independence is very best time to be thinking about it. If not,
much a CEO-level question, as is the exit your competitors will be.

36 TheUltimateGuidetoCloudComputing
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Small organisations are obvious candidates for cloud
computing but theres still an awareness issue and
SMEs should tread carefully, says Maxwell Cooter

CLOUD COMPUTING IS an unusual cloud and SMEs. There have been some
phenomenon in the IT world as it is being very enterprising small businesses who
used equally by small businesses and have been happy to adopt cloud as the
enterprises. Indeed, its the smaller backbone of their IT set-up but theres
businesses that should benet most as also a good deal of scepticism.
they are the companies that tend not to A survey in 2011 revealed some of this
have large IT departments. Some small hesitancy. According to VMware, a
companies have no IT departments at all provider of virtualisation software, only
and are serviced by someone doing the 48% of British SMEs had begun using
job in his spare time, or by a local cloud technology. While this looks
services company. encouraging, the same survey found that
This is not the norm when it comes to 60% of small businesses across Europe
technology. The natural order of things were going down this path. Other surveys
is for IT advances to start off in large have found even larger gaps in adoption
businesses and work their way and one reported that 43% of SME
downwards: mobile phones started as an respondents didnt even know what the
executive toy, now everyone has one; term meant.
routers were part of the arcane global There are two problems with this: for a
telecoms world, now people are start, there are millions of people who
connected at home. are happily using consumer cloud
Cloud computing has been different services, such as Facebook and Google
there are many instances of SMEs Mail, not to mention commercial cloud
adopting cloud-based delivery applications such as Google Apps and
wholeheartedly, while larger enterprises various smartphone apps. Second,
have hesitated. Indeed, Andy Burton gures from analyst IDC have shown
of the UKs Cloud Industry Forum that small businesses do not appear to
believes that cloud computing is the be miserly when it comes to cloud
rst case of a technology that started in 9.8 billion was spent on cloud
small businesses and has moved to technologies in 2009 and half the gure
larger ones. came from SME budgets, it reports.
The seeming gap between the
IstheUKlaggingbehind? perception of cloud and expenditure can
But thats not the complete picture. In almost certainly be explained by a lack of
reality things are not entirely rosy for the understanding of what cloud is. Theres a

38 TheUltimateGuidetoCloudComputing

Cloud computing
is thought to be
the rst case of a
technology that
started in small
businesses and
has moved to
larger ones

good chance that business people are

using cloud services even if they dont
actually know it.

The other issue is that small companies
tend not to be burdened with large legacy
systems or have equipment that need to
integrated in a cloud service. Thats not
to say that some do not have bespoke
applications and specialist computer kit
that may take time to phase out.
But if youre operating a start-up, there
is little need to run any sort of IT facilities
at all. By opting for Google Apps or
Microsofts new Ofce 365 cloud suite, a
business could have all its productivity
software (word processing, calendar,
email and so on) working in the cloud.
The business could also use accountancy
software such as KashFlow to run its
nancials, to handle its
customer relationships and any number
of software packages to look after its HR,
marketing and procurement.
Higher up the scale, NetSuite offers
cloud ERP (enterprise resource
planning) software the type of package
thats normally the preserve of large
businesses. In fact, just about every
aspect of a modern day business could
be run on cloud-based software.
And its not just new cloud vendors
that are providing options for these TheUltimateGuidetoCloudComputing 39

companies: plenty of long-established not quite managed to divorce itself from

software rms are now in on the act. its roots and Ofce 365 does require
Accountancy software specialist, Sage, some access to elements such as
has released its own cloud-based Exchange, SharePoint and Lync. Google
software, ERP specialist SAP has taken does offer a 100% cloud-based,
its rst steps down the cloud route and standalone product with Google Apps,
Oracle is embracing the technology, which many companies are turning to
despite CEO Larry Ellisons initially although the company did lose some
dismissive remarks about cloud. popularity when it reduced the number
The most remarkable transformation of users supported in its free version
of all has been Microsoft, which is a from 50 to 10.
mainstay for so many small A picture of what smaller companies
organisations in all sectors of the are adopting when it comes to the cloud
economy. The companys reputation has comes from US industry association
been built on boxed products and its CompTIA, which in a 2011 survey reports
licensing methodology had been geared that storage and backup
towards this. But in 2010, Microsofts
CEO, Steve Ballmer, said that the
Microsofts CEO, solutions are the most
heavily used cloud
company was betting its future on the Steve Ballmer, applications (71% of SMEs
cloud and since then it has looked to turn said that the using the cloud), followed
that vision into reality. company was by email (62%), document
Ofce 365 is its step in that direction betting its future management (59%),
although Microsoft, unlike Google, its collaboration (56%) and
rival in the productivity suite stakes, has
on the cloud customer relationship
management (53%).
About a third of SMEs, it adds, are using
cloud services, and an overwhelming
majority 92% say their experience
has been positive or very positive.

But its not just the availability of heaps
of software thats attractive to small
business. There are also nancial
benets. One of the biggest problems
facing start-ups is cashow, and the
onset of cloud has reduced the cost of
getting off the ground signicantly in the
last decade. The arrival of cloud has also
made it easier to plan nancial
forecasting becomes easier and
paying for services is now more simple.
There are no more visits to the bank
manager trying to argue about credit
arrangements: a whole IT infrastructure
can be arranged by the judicious use

40 TheUltimateGuidetoCloudComputing

range of cloud products but its main

Keyissuesforsmallbusinesses ones are EC2 (Elastic Compute Cloud)
and S3 (Simple Storage Service), both
Start small and build up dont overprovision of which are widely used by small
The pay-as-you-go ethos is helpful but keep an eye businesses around the world.
on costs, PAYG can work out more expensive than
on-premise; be sensible in your planning Bewarethesmallprint
Have a proper back-up and disaster recovery However, while it sounds like it could be
process in place if something can go wrong, it will a perfect match, there are still issues for
Make sure that youre buying services from a SMEs to consider. Regardless of the size
reputable supplier there is a lot of cloud washing of the contract, its still essential to get a
(ie. deceptive marketing) out there contract checked to ensure that it covers
Youre still responsible for compliance dont pass all possibilities.
the buck to your provider when it comes to Companies would have more piece of
conforming to regulations mind if vendors had some form of
certication: the UKs Cloud Industry
Forum offers a self-certied code of
of the company credit card. practice that several companies
But not only that, theres no longer a (including Microsoft) have signed up to.
need to guess what computer resources Alternatively, theres a more rigorous
are needed: a company owner can now offering in the pipeline under the banner
afford to start small and build up after of another industry organisation,
the revenue has come in. Eurocloud. This accreditation scheme,
Having made the decision to go with the Eurocloud Star Assessment, is not
cloud, the next stage is to work out the self-certied and costs the vendor a lot
hardware: if youre not going to run with more to attain.
a server under your desk or tucked away After checking the provenance of a
in a corner somewhere, youre going to cloud supplier, the details of its contract,
need a cloud service provider. Again, formulating a disaster recovery plan and
there are a host of providers to choose provisioning the initial services, then a
from, ranging from those who will company is ready to go. Many SMEs will
provide you with your own remote server have used a reseller to handle this part of
or a virtual server (that is, one dedicated the business, in which case its important
to you or shared with other companies in to know what after-sales plans are in
a public cloud). place. Many resellers have been
The company that really kick-started suspicious of cloud but the good ones
the cloud ethos for small organisations is know that it presents a new opportunity
Amazon. The company realised that it and are ready to meet the challenge
had a large amount of under-used IT a helpful reseller will be invaluable in
resources and it started selling some of this process.
its spare computing and storage Small businesses and cloud
capacity. Amazon Web Services now has computing make a natural t even if
a massive share of the market in they dont always realise it. There may be
August 2011, the company announced some hesitancy out there but were going
that its cloud division was now a billion to see most small organisations turn to
dollar business in its own right. It offers a the cloud in the future. TheUltimateGuidetoCloudComputing 41

If you rely on a public cloud service you could be in for a shock if the
service goes down, as Lesley Meall describes
ITS ALL VERY WELL being charged only attention many had paid to the small
for the computing power you use as print before they signed up. As Martyn
long as it is there when you want it. So Hart, chairman of the National
the outage of Amazons Elastic Cloud Outsourcing Association (NOA), says:
Compute (EC2) service in April 2011 Cloud computing is not like normal
when some users were ofine for several outsourcing, meaning that contracts
days, an eternity in todays trading world can be far less rigorous than when
made a lot of people understandably signing up with say a payroll supplier.
very unhappy. It brought a wry smile to That said, private cloud contracts, at
the faces of observers who said it was least, can look a lot like traditional
only a matter of time before something managed services, which in turn can be
like this happened, although not because much like outsourcing as we know it.
cloud computing is inherently risky. But public cloud services, which many
The incredulous cries of unhappy smaller organisations are now using for
Amazon users showed just how little vital parts of their business such as email TheUltimateGuidetoCloudComputing 43

and payments, can leave a lot to be

desired when it comes to service level
agreements (SLAs), which are one of
the mainstays in outsourcing and
services contracts.
Some providers of public cloud
services dont offer a formal SLA,
observes Craig West, a sales director at
NetSuite, one of the leading business
software players with cloud offerings.
This is particularly so in the one contract
size ts all world of software-as-a-
service. I think that we may be unique
among software providers in offering an
SLA with an uptime guarantee, he
suggests, adding that if his company
doesnt maintain its promised 99.5%
uptime in any given month, then
customers will have their monthly
subscription returned.
West freely admits that the form this
takes is a credit to your account (and
if youve lost money because of these types of relationship there is a level
system downtime, this will be small of knowledge and expertise that enables
recompense), but this particular remedy them to appreciate the challenge.
tends to be the norm The trouble is that cloud computing
among software-as-a- has put the power to select, commission
Cloud computing
service providers. The and pay for IT services into the hands of
has put the power balance of power sits with people who do not always appreciate the
to select IT into the service provider, need for thorough (and ongoing) due
the hands of observes Hart, and you diligence. According to Gartner, it is
people who do not dont have to wade very far essential that those planning to contract
always appreciate into most public cloud for cloud services do a deep analysis on
providers carefully the impact and probability of the risks,
the need for due worded terms of service mitigate for the issues that they consider
diligence to see how little they most critical, and then revisit them at
resemble a formal SLA. frequent intervals during the lifetime of
This lack of formality is present in the contract though understanding
most public cloud services, and its these risks calls for more than a passing
something that looms large on the radar acquaintance with contract law.
of any specialist solicitor (or experienced So, what can buyers of cloud services
buyer of managed services). Some do to protect themselves? Well that
organisations really understand the depends on who you ask, which type
nature of what theyre entering into, of cloud service you are using or
reports Ian Marriott, at analyst Gartner. planning to use, and the size and type
If they have been involved in lots of of organisation that is both buying them

44 TheUltimateGuidetoCloudComputing

Heres a quick checklist when it
comes to contracts:

Evaluate how much youre willing

to pay to ensure your move to the
cloud doesnt end up losing you
money, or your business
Review the level of service from the
provider. Does it provide adequate
Take appropriate steps through
your provider or otherwise to
ensure you have a disaster recovery
plan that works
Consider what the provider is liable
for and what has been excluded.
Is this an acceptable level of risk?

and providing them. At a recent recommendations. But the latter

conference on cloud computing, lawyer means expending time, money and
Marc Lindsey, a partner with the other resources on a risk analysis, and
Washington DC law rm LB3, rmly then devoting more time, money and
advised enterprises to protect resources to building resilience into
themselves by demanding that cloud their own systems, or factoring the
service providers put their own money cost of not doing so into the cloud
at risk and offer liquid damages for computing cost-benet analysis they
SLA violations. should have done, but probably didnt.
In practice, this is only possible if All of which makes public clouds seem
the relationship between the service a lot less appealing.
provider and the buyer is an equitable Then again, maybe theres another
one, where the balance of power and option. Despite his disinclination
the balance of risk are not so clearly to consider cloud computing as
one-sided as is the case with most outsourcing, Hart at the NOA has some
public cloud service providers and advice on contracts and relationships
smaller rms that is typical of their that could stand future SME buyers of
customer bases. An SME user of a public public cloud services in good stead.
cloud service that is unhappy with whats Think about the balance of power when
being provided (or not provided) has you choose your supplier, he suggests,
little ammunition. and try to match the size of their
With little negotiating power, they business to the size of your business.
appear to have a choice between voting You dont want to be a small sh in a
with their feet or following Gartners giant pond. TheUltimateGuidetoCloudComputing 45

ONCE YOUVE MADE the decision to On the other hand, cloud companies
move away from computer systems that may point out that having an IT
are physically located within your infrastructure in-house does not
organisation, theres another problem to necessarily mean that your servers or
solve, and thats the contract you need network are more reliable. They will say
to have with a provider. that managing data centres is their core
The type of contract that you have business and will claim that theyre
with the cloud provider (or a reseller of much better at managing this
the cloud providers service) is crucial. infrastructure than user organisations.
Get this part wrong and your business However, while its true that cloud
could be looking at some serious providers will tend to have more robust
nancial consequences. and better managed infrastructures, you
There are three main areas to need more reassurance than that. Its
concentrate on: reliability, security and vital that all the ne details are built into
liability, and you should be paying keen the service. And the type of cloud
attention to a cloud providers policy on provider is important here one factor
all of them. to bear in mind is that buying a standard
package from a larger operator will
Is it reliable? leave very little room to manoeuvre,
Reliability is about the technical while customising an offering from a
performance of the cloud providers smaller reseller could offer a more
service. Do their servers go down? What exible experience.
mirroring options do they have in place?
What monitoring systems do they have
in place? You should be prepared to
carry out due diligence on the cloud
companies and assess their
performance. Look at the companys
past performance does it have a
good reputation?

Frank Jennings, a senior partner at
DMH Stallard, gives an overview
of the main areas to look at when
entering into a cloud computing deal

46 TheUltimateGuidetoCloudComputing

Besecure legally necessary but it does give added

There are a couple of factors to consider peace of mind.
when it comes to security. If you are in Although you as the customer are
nancial services you have to conform ultimately liable, there are steps that can
with the Financial Services Act and all be taken. You must include in the
companies will have to consider the contract where the data is
Data Protection Act and the scrutiny of held and who it can be
the Information Commissioner. And Liability for released to. There should
offending organisations can be hit by big any breaches also be an indemnity
nes: the FSA ned HSBC 3m for losing of security lies clause that stipulates that
data, for example. with you. Be the cloud provider has
To be blunt, the liability for any taken all possible
breaches of security or privacy lies with
concerned about precautions to avoid
you so you need to be concerned with the consequences security breaches and
the consequences of handing over of handing data takes legal responsibility
information to a third party. Its very to a third party for any losses.
important to ensure that cloud providers Ultimately, however,
are taking proper steps to protect data. market forces will come
Are they keeping it in the EU, as theyre into play. If a company loses data, then
legally obliged to do, rather than sending its reputation will suffer cloud
it over to India? Some insist that UK companies are going to stand or fall by
data is housed in the UK thats not their reliability and a few security
breaches will quickly destroy that.

Who is liable?
The third factor to look at is liability
what happens when things go wrong
with the day to day service? Again, levels
of compensation need to be placed in
the contract but money will be of little
satisfaction to a customer that has
gone bust.
Some cloud providers try to exclude
liability, rather in the same way that
insurance companies will look not to pay
out on their policies although you
could get around this by taking out your
own insurance.
Another option is that cloud providers
will offer some sort of protection but this
will involve paying a higher fee for a gold
or platinum service. This could mean
that the cloud company is offering a
more robust service, say at a high
quality data centre with better
monitoring facilities. Or it could be TheUltimateGuidetoCloudComputing 47

Analyst rm Gartner suggests the following contract issues to consider when signing up with a
cloud computing provider:

1 Uptime guarantees Gartner says it has customer data. You should ensure there is
seen many contracts that have no uptime access to your own back-up measures
or performance service-level guarantees where necessary
2 Service-level agreement (SLA) penalties 6 Data privacy conditions no personal data
these should be nancial and ideally sharing should take place but contracts
money-back and not credits can be complex where there are multiple
3 SLA penalty exclusion look carefully at suppliers (eg. both a software and platform
exclusions to penalties, such as ensuring a provider is used)
downtime calculation starts exactly when 7 Suspension of service best to have an
the downtime starts agreement that payments in any current
4 Security Gartner says the providers legitimate dispute should not lead to a
security practices should be at the same suspension of service, says Gartner
level as, or exceed, your own practices, 8 Termination provider contracts often
especially for national privacy-related have 30 day termination clauses look to
regulations. It recommends negotiating extend this where possible
SLAs for security breaches 9 Liability Gartner recommends aiming for
5 Business continuity and disaster recovery better liability protection than just a return
contracts rarely contain any provisions of yearly fees.
for disaster recovery, says Gartner, and SOURCE: IT PROCUREMENT BEST PRACTICE: NINE CONTRACTUAL
some providers take no action to back-up TERMS TO REDUCE RISK IN CLOUD CONTRACTS GARTNER

based on the fact that the cloud by signing a pass-through contract

company is prepared to pay more if where the reseller supplies a service
things go wrong. from a named supplier such as Amazon
Bear in mind too that you may sign or Microsoft.
up not with the cloud service provider Theres no doubt that the market will
but with a reseller, which could consolidate over the next few years as
introduce another level of complication. the poorer providers are found out and
You will be signing on the smaller cloud companies will be taken
resellers terms but there over. While thats happening, look to
could well be a clash with Due diligence sign up with an accredited cloud
the cloud hosting work needs to provider, a company that has been
company the cloud endorsed by the Cloud Industry Forum
company could be
be carried out or ISO, for example.
providing a bronze level up-front there is But one thing is certain: the due
of service while the little opportunity diligence work needs to be carried out
reseller could be offering for comeback up-front there is little opportunity for
a gold one. after a problem comeback after a problem, whether its a
One way round this is security breach or a service issue.

48 TheUltimateGuidetoCloudComputing

Offsite data backup has long been multiple, geographically distributed
servers. Not only does this signicantly
a staple of enterprise disaster cut the chances of all your data being
recovery strategy but has been too lost, it also brings the same disaster
recovery strategies used by large
expensive or complex for smaller enterprises within reach of much
organisations. Thats all changed smaller companies.
now, as Davey Winder explains Complexity costs money, both in
terms of infrastructure (such as tape
drives, virtual machines, offsite storage
Thebenefitsaresignificant and technical staff to maintain it all) and
It doesnt take a genius to work out also business downtime (if you have
that multiple copies of your data, stored data on tape drives at offsite storage and
across disparate servers, is much safer need to restore servers, the time to
than having all your data eggs in one recovery becomes stretched). Keeping
basket. But that can cost a lot of money it simple in the cloud allows smaller
if its your own hardware, so look to the organisations to budget for business
cloud where a service provider will be continuity, with the added value of
able to duplicate your data across virtually instant data recovery.

50 TheUltimateGuidetoCloudComputing

The biggest pitfall of a cloud-based cloud storage provider. No matter how
disaster recovery strategy is that you contractually watertight your SLA is, if
may be at risk with a single supplier. things go wrong all it actually provides is
While the ability of the cloud to provide legal leverage. Ensure, therefore, that
data redundancy across multiple and your SLA explicitly details an agreed
disparate servers gives a huge amount of remediation process in event of failure so
condence, you also have to allow for the that your business does not suffer unduly
worse case scenario: your cloud provider while waiting for compensation to arrive.
going out of business and taking timely
access to your data with it. So to Gettheprioritiesright
guarantee business continuity, retaining Asking the right questions of a cloud
a full backup on your own servers or storage provider is essential if both the
contracting a secondary cloud service transition to a cloud-based disaster
might be wise. recovery process and its effectiveness
Service level agreements (SLAs) are a once in place are to be trouble free.
vital part of any cloud contract, but they Proper investigation is vital when it
are not a magic bullet that can save your comes to determining if a provider can
business if things go pear shaped at your meet the needs of your business in terms TheUltimateGuidetoCloudComputing 51

If a cloud
provider falls at
any of the other
due diligence
hurdles then it is
unsuitable to be
trusted with
your data

of compliance, security, data handling

and recovery.
In fact, the specics of the data
recovery aspects of the service are
probably the last things that you should
investigate and for good reason: if a
cloud provider falls at any of the other
due diligence hurdles then it is
unsuitable to be trusted with your data.
Remember that cloud-based storage
services are still relatively immature, and
with companies keen to jump on the
bandwagon before the wheels start
wobbling it is vital to ensure that any
service provider you contract with has an
established track record. You will want to
know how long they have been trading
and how nancially stable they are.
Its not that start-up companies are
denitely off the radar, but be sure to
take into account the impact on your
data should a small company be bought cannot, or is unsure, then its not worth
out by a larger one that you may have asking any more questions. If it can, then
already discounted for whatever reason. move on to matters of security. Ask
So be sure to properly investigate how obvious question such as how your data
easy it is to move your data to another is encrypted, and less obvious ones such
provider should you want to terminate as who holds the encryption keys.
your contract at any point. Ask about who has access to your data
and what controls are in place to prevent
Securityandcompliance both accidental and intentional abuse,
If your industry is covered by specic but also ask about physical security at
regulatory requirements then your next the data centres. If your service provider
question must be whether the provider is unable or unwilling to answer your
can adhere to them. Obviously, if it security questions, nd one that is.

52 TheUltimateGuidetoCloudComputing

Cloud storage can address many
challenges that physical storage

You are not dependent on a single

There is no direct dependency on
any hardware
You dont have to buy more disk
space than you initially need to
accommodate future data growth
Business continuity is provided in
the event of a site disaster
A virtual storage container can be
provisioned that is larger than the
physical space available
You can drastically reduce
over-provisioning in a
pay-as-you-go model
You can access your entire storage
pool from a single point.

SLA, be sure also to ask the provider for

full details of its own data protection,
recovery and auditing procedures, and
dont be afraid to prod them all with your
Whatabouttheworsecase due diligence stick.
Weve already mentioned SLAs, but even What,whereandhowmany?
though an agreement will not save your This is data storage and disaster
data if everything goes wrong, a properly recovery we are talking about, so be sure
negotiated one could save your business. to ask appropriate questions of any
Ask about business critical issues provider such as how many copies of
such as availability, security and your data sets are kept, where they are
compensation from the start. Deal only located geographically and how far back
with a service provider that is willing to your archive stretches. Dont be afraid
enter into detailed negotiations about to get technical and ask about the
the SLA. frequency of data verication tests and
To mitigate any need to resort to the availability of verication reports. TheUltimateGuidetoCloudComputing 53

Would you weigh up the nancial benets of the cloud?
Or is it a no brainer? Lesley Meall asks the right questions
WE ARE ALL AWARE of the need to
factor nancial considerations into any
technology-related decision-making
process but this doesnt make it easy to
do. So although accounting concepts
such as net present value (NPV), return
on investment (ROI) and total cost of
ownership (TCO) are routinely used to
estimate and compare IT costs, as Chas
Roy-Chowdhury, head of taxation at the
Association of Chartered Certied
Accountants points out, there is plenty of
room for interpretation, and you could
have a situation where two accountants
end up with different gures.
Its not hard to understand why.
Whether you are considering using
software-as-a-service (SaaS), or
comparing alternatives such as public
clouds and private clouds, or totting up
the bill for maintaining the status quo, Its difcult to work out the cost
there are many cost-related factors to associated with any technology
consider. These range from set-up, purchasing decision, but cloud
service and training, to overheads such computing is more challenging, says
as oor space and electricity, to less Roy-Chowdhury, citing barriers such as
tangible costs such as those associated not being able to compare like with like.
with security breaches and their impact You pay forever to use cloud services,
on reputation. he observes, which adds up to some
Then there are the implications of pretty big TCO numbers. But as he adds:
cloud computing for tax and nancial Being able to access information and
reporting, and the great CAPEX vs infrastructure any time and from
OPEX debate. anywhere is very advantageous, and the

54 TheUltimateGuidetoCloudComputing
CloudFinances TheUltimateGuidetoCloudComputing 55

short-term benets of cloud computing

may outweigh the long-term cost.
All of which helps to explain why
some cost-related decisions on cloud
computing seem to have more to do with
gut feeling than hard numbers. We
didnt do any detailed analysis nancially
before deciding to run the business in the
cloud, says Gary White, chief executive
of White Springs, which is both a
provider and user of cloud computing
services. But even though the nancial
analysis was done only at a high level
he says the decision was a no-brainer,
because the benets of subscribing to [the customer
relationship management provider]
versus buying and owning the hardware
and software were absolutely clear, and
the gains werent just to do with cost.

White Springs is a fast-growing UK
company with operations in Europe and
the US, so it was obvious to White that may draw a line around public clouds
putting in his own infrastructure would (such as Amazon Web Services) and
require huge resources, and impede the decry private clouds and hybrid clouds
development of the business. I wanted as oxymorons, but once these terms
my staff to focus on growing the rm, not entered the marketing-speak of vendors
on running the infrastructure, he says, such as Cisco and IBM, cloud computing
White Springs did start with a PC was further redened, so businesses
accounts system, but as soon as may as well acknowledge this and (accounting that consider the relative costs of all the
runs on was available, it available options.
switched. Gaining greater functionality The decision-making process is not
and visibility of customer and nancial necessarily a private data centre and an
information across the company was on-demand data centre (ie. IaaS). Its a
more important than the long-term cost more complex choice that also includes
of doing it, he adds. all sorts of hosted and managed services
While the benets of SaaS may be so (many of which you will nd described as
great that the long-term nancial costs types of cloud). Its not an all or nothing
seem like an irrelevance, things are less choice either, because there is the
straightforward in the world of virtual possibility of combining on-demand
data centres and infrastructure-as-a- public resources with those provided by
service (IaaS), from the point of view of your own data centre (whether thats
technology and nance. Cloud purists software applications, computing power,

56 TheUltimateGuidetoCloudComputing

Somebody has to be responsible for

monitoring, managing and patching your
on-demand infrastructure. There are
software tools designed specically to
help you do all of this, and with minimal
technical knowledge and no
programming skills, but while some
One of the big organisations are comfortable doing this
benets of SaaS themselves, others prefer to hand it over
is its capacity to to a third party. Thats one of the reasons
why a variety of hosted, managed service
relieve the user of
and outsourced solutions are being
all of the burdens labelled and marketed as private clouds,
associated and one of the reasons why there are so
with software many possible approaches to nancing
maintenance all of these different types of cloud.
For example, in a private cloud where
and upgrades
you pay for the software licences and you
own the computer servers, there are
various ways to avoid taking the hit up
front. Financing options include contract
hire, hire purchase, loans and various
types of lease.
A private cloud cant exploit the buying
or le storage which may or may not be power of the public cloud, so the costs
managed in-house, or hosted or may be higher, and unless you invest in
outsourced, if you want to split hairs), in some very big servers, you arent going
whats often described as a hybrid to have the elasticity of the public cloud
cloud solution. (though you may think youre never
going to need it). But you can exploit
UpsanddownsofIaaS virtualisation to better use the computing
The decision on which to opt for may not resources you do have in a private cloud.
be as much of a no brainer as choosing
SaaS over the on-premise alternative. NoroomforinternalIT
Although IaaS can provide you with Silverdell, an asbestos removal and
elastic access to computing power, management contractor, considered all
memory and storage, and is charged on these factors when it was contemplating
a pay-as-you-go basis only for the the sorry state of its IT infrastructure.
resources used (without installing new After a series of acquisitions we had
equipment or waiting out the hardware three operating divisions at 25 locations
procurement process), there is a and a hotchpotch of systems, explains
downside. One of the big benets of chief nancial ofcer, Ian Johnson.
SaaS is its capacity to relieve the user of When we reviewed the IT infrastructure
all of the burdens associated with and support we quickly realised we
software maintenance and upgrades; werent big enough to support our own
IaaS requires a little more attention. internal IT team, he says, and after TheUltimateGuidetoCloudComputing 57

Factor On-premise Cloud computing

Expenditure type Capital expenditure (capex) Operating expense (opex)

Operating expense (opex)

Cash ow Servers and software are Payments are made as the

purchased upfront service is provided

Financial risk Entire nancial risk Financial risk is taken monthly

is taken upfront, and is matched to return
with uncertain return

Income statement Maintenance and Maintenance expense only

depreciated capital expense

Balance sheet Software and hardware Nothing appears on the

are carried as a long-term balance sheet
capital asset

considering various options, Silverdell support, in an arrangement that is

decided that a private cloud and virtual backed up by a custom service level
desktops were the most cost-effective agreement (SLA).
solution. These are rare among providers of
Silverdell owns its own servers and public cloud services, but if you dont
pays for traditional software licences, but factor the terms of your SLA into your
Johnson says: For what one competent cost-benet analyses, you could end up
IT head would have cost us, we were able paying for services you cant use, or have
to get a hosted solution. This provides no intention of using.
web-based access to processing power Which is what happened to one
and applications, and the desktops have software engineer who didnt read his
been virtualised for the three Silverdell Amazon Web Services contract well
operating divisions also using the most enough to know what he would be billed
cost-effective solution. for; when the meter would be running;
We considered Citrix and Microsoft and when it would stop. I put some test
desktop virtualisation, but 2X [another virtual machines on the servers of AWS,
virtual desktop player] offered the best and for a while my bills were just a few
price-performance ratio, says John pennies each, so when I got a monthly
Abrahams, technical director with IT bill for $40 I was a bit surprised, says
Managed Services, which manages Adam Ramsay. Turns out, when I
Silverdells software licences, nished the tests, I forgot to turn off the
infrastructure maintenance and staff network.

58 TheUltimateGuidetoCloudComputing

Its been hard to enough making sense

of traditional software licenses now
the cloud means things may get more
complicated, warns Lesley Meall

FREEDOM OF CHOICE can sometimes lose the will to live trying to work out how
feel like a mixed blessing. Take the to license all of this or estimate how
recently released Microsoft Ofce 365, much it is eventually going to cost you.
the software giants new cloud service In the time-honoured tradition of the
that combines its productivity offerings software industry, licensing for Microsoft
such as Word and Powerpoint. On the Ofce can be rather opaque, particularly
one hand, you can now choose from for enterprise users. You may be able to
numerous variants of Microsoft-hosted gure out which variant you would need
Ofces (P1, K1, K2, E1, E2, E3, E4, and so if you were radical enough to want to
on), and you can use them instead of, or access Ofce 365 from somewhere such
mixed with, other approaches to as an airport kiosk or an Internet caf
providing remote and local access to MS (not all subscriptions allow this). But if
Ofce tools; on the other hand, you could you already have a traditional Ofce TheUltimateGuidetoCloudComputing 59

deployment, and you want to understand cases, the vendor wont have given their
the differences between licensing Ofce position this much thought. Konarys
as a software product and as a research indicates that many are
subscription service you face a currently deciding their policies on the
challenge of a different order. y, and that very few have yet to come
According to Microsoft, the volume up with cloud-friendly licensing.
licensing of software makes it easier and Software vendor CCH, an accounting
more affordable to run software on specialist, is not untypical in being in a
multiple computers within a single state of ux. In the US we are moving
purchasing organisation. Yes, well. very strongly towards on-demand
The enterprise volume licensing cloud-based offerings, says Simon
arrangements for MS Ofce Professional Crompton, executive director of CCH UK.
But in the UK, some of its software
products are available only via traditional
Working through software on-premise installations, despite being
licensing issues requires a available as both on-premise and
lot of upfront planning and on-demand offerings in the US. We are
moving to the cloud doesnt very open minded and pragmatic about
the cloud, he adds. If clients ask for
necessarily make this easier
something we look at it and consider the
commercial implications.
Plus for Ofce 365 are so complex that So what happens if a UK client wants
explaining them requires a seven page to build their own private cloud and
document, which is not an easy read. virtualise some CCH applications? Well,
This level of complexity is not unique the software licensing is based on the
to Microsoft. Working through software traditional concurrent users model and
licensing issues requires a lot of upfront the minimum contract term remains one
planning, warns Amy Konary, an analyst year, which isnt very exible. We have
at IDC, and moving to the cloud doesnt used temporary licences to support
necessarily make this easier. Licences clients during peak processing periods in
for subscription-based public cloud the past, recalls Crompton, but hes
services are relatively uncomplicated, talking about years ago, when a change
but when organisations are trying to in legislation created some one-time
migrate some or all of their applications seasonal spikes that affected lots of
or infrastructure into hybrid or private CCH users. At the moment, he says:
clouds (hosted by the enterprise or by There isnt a demand for this.
third parties), licensing is more complex.
Negotiating with software vendors Hybridlicensing
that have varying degrees of interest Meanwhile Unit4, a business software
in cooperating with you can be player, has gone further, as Ton Dobbe,
excruciating, says Konary, and not just vice president of product management
because you may have to go through explains. We have put in place
the negotiation process on multiple integration between Agresso Business
occasions. Attitudes may depend on World and, he says,
your companys monetary and strategic adding that these are both owned by
value, she suggests, though in some Unit4, and provide customers with mixed

60 TheUltimateGuidetoCloudComputing

access to on-premise and on-demand

versions of products. We already have Softwarelicensingfactfind
some organisations doing this with
Agresso, says Dobbe, where most of the Few organisations know what software they
system is licensed and accessed in the are using
traditional manner, but applications such The vast majority of organisations have only partial
as expenses and payroll are licensed on knowledge of the software that they have deployed.
a subscription basis. A signicant proportion have no monitoring tools in
Unit 4 also supports other approaches place capable of auditing what software is deployed,
to software licensing and subscription. and even fewer have accurate information on
This reects the needs of the public and what is actively in use. The result is signicant
private sector, vertical markets, and operational risk and overspend.
different countries, says Dobbe. So
pricing may be based on the number of The proliferation of licensing mechanisms is
citizens in a city, active users, or levels of aggravating the problem
functionality. Facilities have also been User, server, processor, site, enterprise and a
built into Agresso so that users can see number of other commercial licensing schemes are
what their active consumption of in common use, with organisations large and small
software licences is, whether they have often managing a complex mix of arrangements.
an on-premise installation and are Open source licences may or may not be used under
mixing this with on-demand (hosted by subscription/support contracts.
Unit4), or have their own private cloud
(hosted internally or externally). Use of software-as-a-service (SaaS) is rising, but
beware contract inexibility
Benefitsofatrue-upmodel While utility SaaS offerings such as hosted email
But in general, licence management is are used the most, there is evidence of SaaS starting
one of the biggest challenges of creating to be adopted for both core and departmental
hybrid or private clouds. In the absence application needs. While this delivery option is still
of cloud-ready software licensing in the early stages of market acceptance, it looks set
models, a negotiated approach with a to take its place in the mainstream. Many, however,
true-up model is generally preferred, report that SaaS is not always as exible as
reports Konary, with IT departments providers would have us believe.
opting for an annual true-up approach
over quarterly or monthly comparisons Many licences and subscriptions are based on the
though more automation may change ratchet principle of commitment
this. (A true-up model is moving up to a On site or in the cloud, most commercial software
usage band with, say, a higher set fee if arrangements appear to scale only one way up.
you are consistently going over a limit Reducing commitment is too often costly, difcult
and incurring extra costs.) or even impossible. This articial restriction on
Tools that help monitor licence use to exibility is perceived to exist to the benet of
make the true-up process less onerous suppliers, and potentially stands in the way of
are desired, she adds, as is a more dynamic cloud based models being used to deal
cloud-friendly approach from many with uctuating demands.
vendors. Meanwhile, freedom of choice
mixed blessing. TheUltimateGuidetoCloudComputing 61

Is cloud computing a greener way to go with IT? Yes, says
Maxwell Cooter, but its a complex calculation to prove it in detail

SOMETHING STRANGE HAS happened discussion on whether the technology is

in the last decade: green issues which energy efcient or not. So how does a
used to be the preserve of hippies and company interested in maintaining its
environmentalists have quietly invaded green credentials go about deciding
the mainstream. One can scarcely look at whether to go the cloud route or not?
a new service for anything these days After all, you may need to show what
without being reminded of its green your IT is consuming as part of a
credentials. New car? Fewer emissions. statutory carbon audit, especially in
New boiler? Energy efcient. New larger companies. Regulation on energy
lightbulb? Eco-friendly. use can only increase in the future.
Needless to say, this philosophy has Its not an easy question to answer. On
permeated the IT industry too with much one hand, we have a school of thought
more attention being paid to the energy that says because cloud computing data
rating of servers and PCs than there has centres are not adding to the actual
been in previous years. computing power, but are using servers
Cloud computing has been a key part more efciently, then they are, by
of this debate and theres a long-running denition, the greener option. There are

TheUltimateGuidetoCloudComputing 63

opponents, however, who say that there
are some big questions to be answered
rst and that the blanket statement that
cloud computing is greener is a
misleading one. Its getting to be a
heated debate with both sides
brandishing the gures to support
their case.
The latest entrant in this form of
climate war is research company,
Verdantix, which released
a report in 2011 claiming A move to the
that American companies
could drastically cut CO2
cloud in the US
emissions by turning would deliver
to cloud computing. CO2 reductions
According to the report, a of 85.7m tonnes
wholesale move to cloud each year, the
delivery would deliver CO2
emission reductions of
equivalent of
85.7m tonnes each year, nearly 200m
the equivalent of nearly barrels of oil
200m barrels of oil.
That translates into energy savings for organisation with a vested interest in
US businesses of $12.3bn in the next ten promoting green measures. And it wasnt
years if they adopt cloud services. The long before dissenters were rounding on
Verdantix research predicts that the the research ndings and nding aws in
nancial benets from energy reduction the argument.
and increased IT efciency in 2011 alone
would reach $824m by the end of the Whatstheenergysource?
year in the US. One of the main critics of the survey,
Meanwhile market research rm GreenMonk analyst Tom Raftery, pointed
Pike Research has predicted that cloud that there had been some rather dubious
computing will lead to a 38% reduction assumptions. The mistake here is
in worldwide data centre energy presuming a direct relationship between
expenditures by 2020. Microsoft too has energy and carbon emissions. While this
said that the cloud can cut energy might seem like a logical assumption, it
consumption and carbon emissions by is not necessarily valid, he wrote.
30% or more, as the scale and use of If I have a company whose energy
virtualisation in the cloud just makes retailer is selling me power generated
computing more efcient, while primarily by nuclear or renewable
computer makers are busy making sources for example, and I move my
components such as memory and applications to a cloud provider whose
processes more efcient too. power comes mostly from coal, then the
The Verdantix survey was sponsored move to cloud computing will increase,
by the Carbon Disclosure Project an not decrease, my carbon emissions.

64 TheUltimateGuidetoCloudComputing

providers have indeed been rather

secretive about their operations, and to
try to get an idea of how energy efcient
their servers are would prove to be
impossible. But data centre specialists
themselves those that host many
clients are currently vying with each
other for the accolade of running the
worlds greenest facilities, with all sorts
of design and supply innovations in the
way they are built, located and fuelled.
The problem is that even with an
overall rating for the efciency of data
centres, the actual usage of a set of
servers by a client is much more difcult
to assess, and detailed breakdown of the
rating by factors such as the energy type
can make comparisons less valid.

A good case in point has been an
argument made by Greenpeace about a
data centre run by Facebook in Oregon,
This is the key to many of the which takes much of its power from
arguments: what is the source of the coal-red sources. But in fact it is said to
power that is driving those data centres? be one of the worlds more efcient
It was a question raised by Greenpeace facilities, because the cool climate in the
in 2010 when it published a report, How state allows it to run without mechanical
dirty is your data?, pointing out that chillers, one the biggest energy hogs in a
there were serious concerns about some data centre.
of the big players in cloud computing. One organisation that is trying to
Gary Cook, the lead author of that improve the way in which sustainable
report, said that the problem was the lack computing is reported is the Green Grid,
of transparency from some of the cloud a non-prot consortium of end-users,
companies the secretive nature of policy makers, technology providers,
rms such as Google and Microsoft has facility architects and utility companies
made it difcult to assess the claims they looking to improve the efciency of
make. He agreed, however, that data data centres.
centre and server design innovation can Ali Moinuddin at data centre player,
greatly improve efciency and reduce Interxion, is also the European
overheads in energy demand and that communications committee co-chair of
more in the sector were comfortable with the Green Grid and is aware that there
sharing best-practice data, but that needs to be a better standard of
without more transparency, such efforts assessment. The green data centre is
were not worth much. at the heart of the whole movement
Cook has a point and some cloud towards sustainable computing. We need

TheUltimateGuidetoCloudComputing 65

The ultimate in green data centres could be reducing carbon dioxide emissions. We need
Icelandic cloud provider, GreenQloud, which to change the energy sources to renewables;
uses geothermal energy to power its data its that simple.
centre, with a lot of hydroelectric power And in a lesson to other providers, the
thrown in for good measure. company records all energy use and carbon
Of course, there arent many cloud emissions made by each customer and makes
providers that are sitting in a geographic the data freely available to them.
region with millions of litres of naturally There are certainly other providers that
heated water on tap. The company uses would claim equal credentials with
100% renewable energy drawn from the GreenQloud. In the UK, Capgeminis Merlin
Icelandic grid, which is 30% geothermal data centre, in Swindon, is said to be setting a
and 70% hydro. global standard for energy efciency, with a
CEO Eirikur Hrafnsson says that data power usage effectiveness (PUE) rating of just
centres that claim to be green base the claim 1.08 (1 would be perfect). Next Generation
on spurious reasoning. When big players talk Data (NGD) Europe, based in Newport, Wales,
about their greenness all they are saying is is claiming to be the rst in Europe to run on
that their data centres are now more efcient 100% renewable energy. And Telehouse takes
in cooling IT equipment. Energy efciency of waste heat from a centre in Londons East End
data centres and servers cannot keep up with to pipe hot water to 1,000 local homes, free
future energy needs and be effective in of charge.

to move beyond just What metrics does it use to measure

considering power usage The Green Grid energy efciency?
effectiveness [PUE a has developed a What measures has it taken to reduce
standard metric for data power consumption?
centres], to carbon usage
model that has What temperature does it run its data
effectiveness (CUE) and clear goals for centre at?
water usage effectiveness improving energy If the cloud provider describes itself as
(WUE), he says (water is efciency green, what criteria has it deployed
often used for cooling). (planting a few trees outside isnt going
It makes environmental to cut it)?
and business sense to evaluate these What information does it provide to its
metrics. Now the Green Grid has own customers when it comes to
developed the Data Center Maturity energy consumption?
Model that sets goals for improving Energy consumption has really only
energy efciency and sustainability been debated for a few years now, so its
across all aspects of the data centre. not surprising that theres confusion
Meanwhile, there is a range of around. But its not an issue thats going
questions for a company interested in to go away a lot of companies are
cloud and green issues to ask a provider: interested in energy saving measures and
Whats the energy source of the data cloud providers are going to have to get
centre? used to the idea of being more open.

66 TheUltimateGuidetoCloudComputing

Human resources could be one of the most important cloud
applications, thanks to its key organisational role, says Billy MacInnes

68 TheUltimateGuidetoCloudComputing

ADOPTING CLOUD SYSTEMS holds the between what they wanted to do for the
promise of giving HR executives access business and what they could do with the
to systems that enable them to improve systems. A more recent survey returned
their roles by applying a more analytical to the same issues and found, if anything,
and strategic approach to their work. It that the gap is getting worse in some
also gives them a new way meet changes areas, such as acquiring and retaining
in the business. The increasing adoption key talent, developing key talent and
of mobile technology and mobile working building leadership capabilities.
practices in many companies, for All of which suggests HR professionals
example, is putting an emphasis on would like systems that do a better job of
employee self-service and accessibility supporting them in fullling their
that is often easier to deliver from a objectives for the business. Cloud
cloud-based system than an onsite one. software could help to bridge the gap.
Businesses are evolving and adopting If the cloud means they are no longer
new working practices and styles, putting hamstrung by the performance
pressure on HR to meet and support constraints that affect their in-house IT
those changes. With budgetary resources, HR professionals should be
limitations on IT expenditure, cloud better placed to concentrate on strategic
software can be an attractive way of issues such as talent management,
keeping pace with such changes without building leadership capabilities and
being constrained by in-house IT. supporting organisational innovation
Theres no doubt this is a welcome and change.
development. A global survey of more
than 200 HR executives by Saugatuck Thesecurityobjection
Technology, a cloud consultancy, But one big objection is of course
identied signicant limitations in the security. A specialist provider of
effectiveness of their existing systems to cloud-based human resources (HR)
meet their priorities for the organisation. software, HR Locker, recently noted how
The survey identied a number of areas the issue of hosting HR data was raised
HR executives were most concerned as a security concern during a customer
about their ability to full: meeting. So the customer was asked
where the companys existing HR
Acquiring and retaining key talent software was installed and was shown
Developing key talent a server in the corner of the ofce: It
Aligning employee performance with was accessible to everybody and there
business results and compensation were four USB ports staring invitingly
Building leadership capabilities out at us.
Supporting organisational innovation The HR Locker team asked whether
and change. the customer felt this was secure and
the reply came back that he wasnt sure
When they were asked to rank the because the IT guy looked after it.
ability of their HR systems to deliver It then emerged that the company had
these priorities, it became clear the employed three of these IT guys in as
systems did not measure up as well as many years.
they would like. In most cases, there was While this anecdote concerns one
a difference of 30 points or more company, its probably indicative of HR TheUltimateGuidetoCloudComputing 69

operations in many organisations. How

or why should anyone in HR know where
the HR data is stored and how secure
or not it is? Thats the responsibility of
the IT guy.
This level of ignorance about the
security of data internally is not conned
to HR but very likely applies to most, if
not all, functions of the business. But
data security is a major concern when
it comes to the adoption of cloud
computing, most particularly when it
applies to employee information.
A recent Cloud Industry Forum survey
found that when it came to using cloud
services, respondents were most
reluctant about moving employee
information to the cloud, ahead even of
accounts and nancial data services.
The survey also revealed that data
security (64% of respondents) and data
privacy (62%) were the most signicant
concerns about the adoption of cloud in
their business.

This highlights what could be an
intriguing contradiction in the shift to
cloud computing, namely that one of the Centre. Why? Initially, we tried to host
most prominent causes of anxiety in any Cintra iQ ourselves, says CEO Carsten
potential adoption of cloud-based Staehr, but our on-premise solution
software may also be one of the demanded huge upfront costs to
strongest benets it can deliver. HR purchase the required equipment, build
Locker, for example, uses Microsofts the infrastructure, add the necessary
$500m data centre outside Dublin to disaster recovery capabilities and
host its service, which provides much maintain the necessary high levels of
greater resilience and data security than data security to store our clients
anything its customers might have sitting sensitive HR and payroll data.
in a corner. All of the reasons cited by Staehr for
But if suppliers are condent enough opting to use the Cloud Computing
to use hosted providers to deliver their Centre as a host apply equally to HR and
products and services, shouldnt IT departments. Removing or assuaging
customers feel the same? HR and payroll concerns about security is one of the
services provider, Cintra, recently ways in which the cloud can help HR
announced that its Cintra iQ offering professionals to concentrate more on the
would be hosted by the Cloud Computing core functions of their job. And as we

70 TheUltimateGuidetoCloudComputing

personal development objectives onto a

single system. But rather than going for
one of the larger, well-known enterprise
suppliers, it opted for a cloud approach
with US provider SuccessFactors. The
system covers more than 400,000
employees in 190 countries so the size
claim is well justied.
SuccessFactors published research
last year that claimed businesses that
took a strategic approach to HR, using
systems that capture, measure and
present information for analysis about
the workforce, outperformed the
average. It found companies that
beneted from this better
business intelligence
The largest increased the time they
cloud computing spent on strategic
deployment in priorities by 40% and
project completion rose
the world is at by 67% through better
Siemens its understanding of their
human capital talent and putting the
management right people on the right
system projects.
The larger operators
are starting to get in on
have seen, despite professed concerns the act too. In a recent interview with
about security, most parts of the, Gretchen Alarcon, vice
business are completely unaware of the president of Oracle Fusion HCM strategy,
level of security (or lack thereof) revealed that HCM (human capital
currently being provided in-house. management) and CRM (customer
relationship management) have
HRhasthebiggestcloud been drawing the most interest from
And if HR executives want reassurance customers looking for cloud apps. She
that cloud is not just pie in the sky, they also highlighted the better business
can look to the fact that the largest cloud intelligence provided by these types of
computing deployment in the world is at systems, which could be used to
Siemens its human capital enhance the work of the HR department.
management system. That, surely, is the heart of the matter:
When the company set out to align if they can use systems to deliver better
its human resources operations more intelligence about the business, HR
closely with the strategic objectives departments can strengthen their role
of the business, Siemens decided to within an organisation and enhance
standardise all its global recruitment and their effectiveness. TheUltimateGuidetoCloudComputing 71


Because the supply chain involves manufacturing has been outsourced to

different partners, often in the Far East,
a lot of fast moving complexity it bringing added complexity to transport
will benet greatly from the cloud, and logistics.
In turn, with so many companies being
as Billy MacInnes explains called on to provide different links in the
overall supply chain for a product or
ONE OF THE MOST important processes service and engaging with it at different
in business and one tailor-made for the points, the pressure has grown on
cloud is the supply chain, which has systems to be able to handle and
become more complex and turbulent in interact with a diversity of suppliers or
recent years. Manufacturers have been sub-suppliers.
among the rst sectors to act to make IT solutions have typically been
their businesses more agile in the face deployed to make the supply chain more
of difculties in forecasting demand and dynamic and to make engagement with
avoiding stockpiling products that arent the different links in the chain less
selling, while pressures on the supply complex. In 2010, analyst rm Gartner
chain itself have intensied as published a survey entitled Signicant

72 TheUltimateGuidetoCloudComputing

benets realised with supply chain extended to the trading partner

management in the cloud, which found ecosystem. Gartner suggests this is not
that 95% of those surveyed were either surprising because companies have
using or considering using cloud-based spent billions on nancial ERP systems
supply chain applications. It found 52% that were designed mainly
were using cloud or software-as-a- Pressure has to provide visibility
service for CRM, 44% for supply chain grown on systems internally. One company
execution, 43% for supply chain told Gartner it was
to handle and
planning, 43% for B2B/B2C attracted to the
e-commerce, 42% for ERP (enterprise interact with cloud-based approach
resource planning) and 39% for sourcing a diversity of because it was tired of the
and procurement. suppliers or long installations of ERP
In all those areas, another third or so sub-suppliers and upgrades when other
of respondents were evaluating using businesses are reaping
cloud technology. The major focus was value such as quicker time to
on partner applications that addressed productivity, greater return on
the connectivity and collaboration investment and lower costs.
requirements when processes are This comment highlights the TheUltimateGuidetoCloudComputing 73

Cloud computing
systems could
lead to a
revolution in the
way supply chain
services are

disruptive force cloud computing is Of course, cloud computing makes it

expected to unleash on many areas of easier for other companies involved in
the business landscape, including the the supply chain to engage with different
supply chain. For example, start-up links in the chain and access systems
companies could disrupt the established without major upheaval to their own
landscape without signicant investment processes or additional costs to make
in infrastructure, and new competitive them compatible. Sharing a common
threats will emerge to existing players. platform means there are no concerns
Product and service lifecycles will be that a supplier may be providing access
shortened further, forcing companies to its internal IT to a partner that could be
with infrastructure-intensive supply a competitor tomorrow. Standardised
chains, such as the company quoted by applications and processes should also
Gartner, to add cloud-based supply strip away much of the technical support
chain solutions to enhance their and maintenance requirements
competitiveness. associated with bespoke systems.
Potential problem areas in using cloud Again there are potential pitfalls as not
computing in supply chain management many companies own or operate their
are pretty much the same as they are for entire supply chain internally, so any
any area of the business. In a recent decision about using cloud technology is
article, supply chain experts at Accenture likely to involve multiple partners. The
suggest companies may have Accenture experts believe this could
established sophisticated supply chain create complexities and sensitivities
management systems to give them a between the participating organisations.
competitive edge against competitors, But it may also help remove some of the
but cloud computing relies on existing complexities in their current
applications and processes that are not supply chain.
customised. Its up to companies to Additionally, if those organisations
decide how those cloud applications and engage with other businesses, it would
processes can deliver. make life a lot simpler and more exible

74 TheUltimateGuidetoCloudComputing

if those engagements could take place

using cloud-based systems. According to Preparingforthecloud
Accenture, adoption of cloud computing
systems could lead to a revolution in the Decide which processes can be provided by a
way more supply chain services are cloud-based supplier and which need to be
provided by supplanting the current retained in-house
contracted outsourcing model with more Work to a detailed return on investment and risk
exible, transaction-based models. analysis with prospective suppliers to quantify
This should lead to a model based on anticipated benets based on total cost of
exible collaboration rather than a more ownership
formal, rigid, top-down approach. The Agree denitions for success: in addition to cost,
issue at the moment is how willing include areas such as exibility, scalability and
companies are to take this route and how speed to market
quickly they do it. Michael Higgins, senior Keep up to speed with developments in the cloud
vice president for IT at Advanced computing market
Innovations, an electronics supply chain Collaborate with supply chain partners and
specialist, is someone who has already involve them in decision making
made the shift to the cloud. He believes Evaluate frequently to ensure the hoped for
anybody can do it if they are willing to benets are being achieved
put the effort in and to overcome the
typical fear, uncertainty and doubt. Hotspots for thesupply chain
And Advanced Innovations didnt Planning and forecasting capturing spend
change its ERP system: it simply data, performing basic analytics, planning
deployed it in Amazons cloud platform. manufacturing runs and executing statistical
This has made access to the rms demand forecasts
systems more robust and available to Logistics applications such as network
our partners, enhancing ability to sit strategy, inventory management, warehousing
between customers and the supply and transportation are appearing; global trade
chain. The company uses the Oracle compliance, replenishment planning, order
E-Business Suite but has written its own processing, transportation load building, eet
web services platform, which has made it management and transportation route planning
easier, for example, for a small transistor are likely candidates
maker in China with a laptop to deal with Sourcing and procurement the cloud gives a
the company through a browser. Our great opportunity to cut the total cost of
philosophy is if you can buy a book from ownership, as cloud tools are inherently, you can manage your collaborative and accessible
supply chain with us, Higgins adds. Service and spare parts management many
He argues the cloud is a brilliant companies underperform in this area, despite
platform on which to build standards, their often high contribution to the bottom line.
adding that the days of bespoke Tools such as warranty validation are available
business processes are hopefully now, and applications for returns processing,
drawing to an end. He believes the cloud inventory pooling and distribution are on their
could be a big advantage for tier two way, says Accenture
players. Players like us are leading
supply chain, he comments. TheUltimateGuidetoCloudComputing 75

Cloud-based systems for marketing protability, with particular attention to
company priorities, which are likely to
functions are booming but marketers include customer retention in current
have much to do still in integrating tough trading conditions.
data, nds Graham Jarvis Analyst rm Gartner has a good
picture of the most popular cloud-based
and on-premise marketing solutions. It
ALTHOUGH MARKETING (and its regularly produces magic quadrants to
counterpart, sales) have traditionally analyse where certain vendors and their
been among the last functions to receive
the full attention of the IT department,
the rise of the multichannel world, in
which customers are much more in the
driving seat, has elevated marketers in
the pecking order. Not only do they have
more budget to spend, but its an area
where they often have a good deal of
autonomy on buying decisions,
especially now the cloud is opening up
applications to non-technical audiences.
Applications that are on the agenda
include marketing automation solutions
to track marketing campaigns, webinar
and web conferencing services such as
WebEx, as well as the various array of
social media and direct mail and email
management tools. A key driver is that
todays online world allows marketers to
track almost everything a customer
does, because so much is now done on
the Internet.
But it is not so easy to nd out what
applications are likely to be the best t
for an organisation. Its important to
think about which cloud and on-premise
solutions will improve a marketers
ability to increase an organisations
sales, customer loyalty, revenue and

76 TheUltimateGuidetoCloudComputing

best of breed products are positioned solutions are best of breed for
in the market, including quadrants multi-channel campaign management,
for CRM multichannel campaign and so you would look at systems from
management and social CRM companies such as Unica, SAS and
(CRM being customer relationship Teradata, says Laurence Buchanan,
management, of course). head of CRM at Cap Gemini. These top
There is a huge choice of CRM systems are though mainly aimed at
software and the term can mean many enterprise customers, and there is now a
things to different marketers, but great choice of cloud systems that cater
marketing does need a wide range of for many niche marketing functions and
tools to full many activities, such as also integrated solutions but
email marketing, social CRM, search integration does remain a big challenge.
engine marketing, mobile marketing,
social media, e-commerce, customer Whythecloudisvital
services and lead generation. According to Arthur Sweetzer, chief
If you look at Gartners Magic marketing ofcer at 89 Degrees, a US
Quadrants, you will see that on-premise marketing agency, many marketing
executives are struggling to gather and
leverage marketing intelligence across
disparate addressable marketing
channels, and only a third of marketers
have integrated their CRM systems into
operational marketing systems such as
prole- and behaviour-driven email.
He gives four reasons why cloud
systems can accelerate time to market,
promote relevance to prospects, and
improve marketing revenue by as much
as a third over a year. First, as few have
integrated the marketing data
warehouse with email marketing
applications, he suggests using a cloud
marketing intelligence database instead,
and second, the sheer speed of getting
such a cloud system running means that
disparate data silos can quickly be
brought together.
Then Sweetzer notes that marketers
can pick and choose the functions they
need much more easily from cloud
providers than from traditional managed
services companies, and nally that a
key goal is to look at the insight that
centralising multichannel marketing data
can give.
Cloud based marketing can help you

TheUltimateGuidetoCloudComputing 77

navigate successfully through the sea company that is rst suggested is

of data smarter, faster, and at a lower There are many others
cost than ever before, he says. now, such as Microsoft Dynamics CRM,
and NetSuite, RightNow and
Cloud-basedcategories SugarCRM offer alternatives to the
Heres a listing of current cloud larger CRM players.
marketing categories and a brief has a huge range of add-on
selection of providers. applications from third parties that can
CRM solutions: Whenever one meet almost any marketing need.
mentions cloud-based CRM, the Email marketing: Two of the leaders in
this eld are ExactTarget and
Responsys, and most of these solutions
Topmarketingbuyingtips are now cloud-based. ExactTarget has
grown on the back of,
Before marketers rush out to buy any of these offering high-volume email
solutions, and considering that there are so many management solutions.
different cloud software offerings on the market, Data quality and marketing
take note of these tips: automation: Marketo, Eloqua, Aprimo
and Informatica are all recommended.
Dont be blinded by the features of any given Web and data analytics: SAS is often
solution, but make sure that it meets your key the rst to be mentioned in most
business requirements conversations about analytics, but
Be clear about how you are going to measure the marketers might also wish to look at
success of implementing cloud-based marketing the cloud-based solutions of QlikView,
solutions Google, Microsoft, Yahoo and others.
Ensure that each solution is integrated to capture Google tends to lead the market
customer data and track online behaviour for CRM whenever it comes to cloud-based web
purposes analytics. Omniture is a company said
Recognise that the market has changed, and how to offer a strong web analytics, testing
people buy has altered too: solutions that were and targeting tool.
effective in the past might not be today Business information: Hoover and
Look for cloud-based solutions that are affordable, OneSource are commended as being
easy to use and adopt best of breed by Fergus Gloster,
Invest in quality training and make sure that you try managing director of the EMEA region
out and test the cloud-based applications before at Marketo.
you are committed to them Social media management: Radian6
Do it because it will drive benets like being able was recently acquired by Salesforce.
to react more quickly to changes in the market, com, and so has a strong position in the
reduce the time-to-market of a campaign, and lead market. If you have a look at the role of
to revenue growth managing social interaction to nd out
Get going now. Theres no point in waiting as the whats happening in the social media
technologies to make marketing more efcient and sphere, it probably has the best
effective are there, and wasting six months testing platform for doing that, says Gloster.
each application wont help anyone, so learn by The key task is to be able to integrate
trial and error CRM solutions, for example, with
Facebook, Twitter, Linkedin and other

78 TheUltimateGuidetoCloudComputing

What do people use CRM for? Add-ons that companies are using (in order):
Overwhelmingly, of course, its for contact Customer record lists/data cleaning service
management (94% in a recent survey). Customer reference system
The top applications/areas are (in order): Customer satisfaction surveys/monitoring
Contact management Extra reporting/analytics
Opportunity management Business intelligence services/
Sales analytics/forecasting market research
Telesales/inside sales Call centre systems
Customer service Relationship mapping tools
Lead generation Web analytics.
Territory management. ONESOURCE CRM SURVEY 2011

social media platforms to create be used by marketers to hold webinars

meaningful online conversations and and meetings with colleagues and
relationships with customers. customers from any location in the
Multichannel campaign management: world. These tools are available in the
Eloqua, Marketo, Responsys, Alterian cloud. Another big player is Citrix.
and ExactTarget can also be found Customer reference management:
within Gartners magic quadrant. Cap This is a growing area that aims to
Gemini, for example, is working with standardise customer success
Royal Mail, which has decided to use stories and related material to help
Eloqua. The reasons behind the choice salespeople with replicable sales
include speed of deployment, ease of processes. Providers include a US rm
use, its range and mix of capabilities called Boulder Logic.
and ability to drive consumer and By considering also the top tips (see
business-to-business campaigns. box), and working collaboratively with IT,
Another driver was the ability to marketers should be able better to prove
integrate Eloqua with their value to their organisations it has
Inbound marketing: Laurence long been difcult to show return on
Buchanan suggests that HubSpot is a investment from marketing, but cloud
solution thats worth examining here. tools should improve this aim.
Marketing research: Clive Longbottom, Certainly, with the cloud, marketers
services director at analyst research can achieve many of their objectives
rm, Quocirca, suggests Survey today without waiting for a suitable
Monkey and Google Forms as options solution to be developed for them by
here. Another offering is Conrmit. their IT departments.
Web-based audio and Start with a budget in mind, but dont
videoconferencing: Two big offerings overly focus on cost; the cloud is
are Cisco WebEx and Microsoft Live scalable, and even small organisations
Meeting. Both allow companies to can gain access to secure and scalable
reduce the need to travel, and they can enterprise level applications. TheUltimateGuidetoCloudComputing 79

There is a lot of industry hype on what we should do
with the new powers offered by public cloud computing.
Adrian Bridgwater provides a reality check

IF WE CAN AGREE on what not to do simply by keeping the data in question

inside the cloud computing model of IT on a private server.
delivery we should be steered towards
areas where the cloud does excel. So
here are ten issues to consider in your
cloud computing strategy as exceptions
If an application workload is at and
to the rule of the new order in IT. unchanging, then public cloud
computing is hardly a best practice


Lets start with a good solid truism.

choice for maximising nancial benets.
According to Nigel Beighton, chief
technology ofcer at cloud infrastructure
Software systems such as databases player, Rackspace: Public cloud
that require high performance in terms computing, with utility PAYG [pay as you
of communications trafc are, generally go] charging offers immense exibility,
speaking, not best suited to shared but if your workload is constant and
public clouds. There is always the unvarying then the usage charge model
potential with any shared infrastructure is unlikely to be advantageous.
that you will be competing for the same He adds: A at and unchanging IT
hardware performance. requirement logically means that you
can buy the appropriate amount of

A software application that is built
on-premise hardware to t the bill.
Using the cloud in this instance is not
necessarily a problem, but it is really not
around the need to collate and manage prudent or efcient. For example, if you
sensitive data is not best suited to shared know you need a car seven days a week,
multi-tenancy cloud computing. Yes the you dont go out and hire one every
public cloud is very safe and there are morning now do you?
security controls and rewalls that will It is the same concept. The cloud is
provide customers with adequate levels there to help cope with unpredictability
of protection, but you will be introducing and changeability, not computing
additional risk that could be mitigated scenarios characterised by stability.

80 TheUltimateGuidetoCloudComputing


Some data regulations and compliancy

Its a plain and simple fact that far too
rulings require the auditing of where a many software licences have still not
customers data and processes actually evolved to accommodate cloud
sit. By this we really mean where computing. Nathan Marke, chief
street address, oor, server room technology ofcer of 2e2, an IT services
number, blade rack and disk partition. provider, suggests that existing
But the public cloud is a virtual world, maintenance, support and managed
where it is often not possible to identify service contracts can act as a barrier to
(or the public cloud provider cannot moving IT services into the cloud. He
disclose) which physical server or disk cites recent research that found that
that hosts processes and data. 57% of organisations said such contracts TheUltimateGuidetoCloudComputing 81

would lead to delays in deploying some on-premise or in the cloud.

cloud services and Marke says that this He adds: But scalability is not the only
isnt surprising considering that often benet of cloud. There are other good
organisations will have three to ve year reasons, such as rapid provisioning or
xed-term contracts. agility, for moving something into the
Organisations do need to be wary of cloud even if the application itself does
migrating to the cloud when they may not scale linearly.
still be committed to legacy contracts
that they wont now use, he says.

Evangelists of open source IT argue that
the core issue of escalating expenses
associated with any vendor is inherently
Applications that can only scale from caused by lock-in to that provider. If we
increasing the performance of the server accept this as true, then there are
they are running on are not really able to ramications for the cloud, says Aram
exploit the fundamental benet of cloud, Kananov, a product marketing manager
which is horizontal scale we need the at open source specialist, Red Hat.
right vehicle for the job in hand. Dont We see such tactics adopted by a
use a helicopter when you need a majority of vendors that base their
Hercules, says Stephen Eveleigh, technology on closed proprietary
product marketing manager at Star, software and proprietary standards, he
an on-demand computing and says. This is why all major players in the
communications company. emerging cloud space often base their
Multi-tenanted/public cloud has its stacks on open source software and
place, but will not meet all business open standards to prevent any particular
requirements, he says. Some vendor dictating their future technology
applications need to be integrated and decisions. This is also the reason why the
tailored to company needs with a vast majority of public cloud service
dedicated, private cloud you can achieve providers run their infrastructures on the
this. The new breed of cloud-savvy IT Linux operating system. Indeed, the new
directors understand business emerging cloud applications are
requirements and make business- extensively using open source software.
focused decisions on whether public,
private or hybrid are the right choice for
each application.
Michael Newberry, Windows Azure
Just as application performance needs to
lead at Microsoft UK, points out that exploit the inherent cloud feature of
since multicore computer processor scale through replication, so does
became mainstream, performance application resiliency. A single instance
growth has generally come from the on any public cloud can be vulnerable to
adoption of concurrency. Applications all the aspects of a shared public service,
that cannot scale concurrently, those as Stars Steve Eveleigh comments. A
that are single-threaded for example, cloud-savvy IT director will work with
will not run faster with more cores cloud services providers who get this
regardless of whether those cores are and will work to mitigate this risk.

82 TheUltimateGuidetoCloudComputing


Cloud computing does not necessarily

strong, but we still need to have strong IT
foundations on the ground if we are to
look skywards. This means that its not a
suit a computing environment where a great idea to move to the cloud if your
customer has an extremely complex underlying network is a aky, archaic
custom-build job for certain software collection of resources built around
applications. Cloud computing legacy applications that are closely
environments have much lower running tied to obsolete equipment and
costs in part because they are disentangling them might be a tough ask.
standardised, says Microsofts Michael If youve got a Roman ruin here on
Newberry. So applications that require Earth, then not even Jupiter, Zeus and
non-standard hardware will not Apollo can get you into the cloud.
necessarily benet from the same Equally, if your legal team has not been
economies of scale. able to ratify the holy scriptures of your
Software designers need to consider cloud agreements small print, then you
extensibility and congurability when may well nd that your IT department
they design applications so software quickly becomes a bunch of
can service individual customer non-believers.
requirements without necessarily Analogies aside, the small print
needing to be a custom build. This governs the precision-engineered
enables them to take advantage of elements of whether a cloud migration
standardised infrastructures. with enjoy uid portability and at this
time, we are still in need of hard and

fast standards. From portability of
cloud-to-cloud applications, to bringing
cloud-based workloads back into the
The cloud may be up there and the new enterprise data centre if circumstances
computing resources it offers may be change, portability is paramount. TheUltimateGuidetoCloudComputing 83

Cloud security is the number one concern for most users, and as
Adrian Bridgwater discusses, we may have to wait for trust to build

WE CURRENTLY APPEAR to be at a really the application itself that needs to

stage where condence in cloud be locked down? The greatest data risks
computing security is (if you believe the to any organisation come from within;
surveys) still very much in question. This susceptibility to data damage from
perception appears to be driven at least employees own use of a network,
in part by the distance between the whether via premeditated or accidental
customer and the cloud provider action, remains the biggest security
inevitably, having much of your vital IT issue of all.
applications and data not under your This insider threats message is
own roof does raise concerns. But this repeated by anti-virus vendors again and
does not inherently mean that cloud again; enterprise-level applications may
application security risks are more be inherently insecure, whether they sit
difcult to curtail than running all your on the corporate network, in a private
systems in-house. cloud data repository of some making, or
So where should we draw the lines ultimately, out in the public cloud. The
around cloud applications and data cloud itself is not insecure: what you put
security? A good starting point is a in the cloud may well be insecure. If you
Ponemon Institute cloud security survey, accept this basic truism, then we can
which found that only 36% of the 925 move on.
respondents questioned believed their And if we have been this worried about
organisations are vigilant in conducting cloud security, then surely there should
audits or assessments of cloud have been some kind of governing body
computing resources prior to established to oversee cloud security
deployment. More specically, the fundamentals? This is of course what the
survey found that IT practitioners Cloud Security Alliance (CSA) sets out to
(at all levels) lack condence in their do. The CSAs Certicate of Cloud
employers ability to secure data and Security Knowledge (CCSK) aims to set
applications deployed in cloud a professional bar for what we tend to
computing environments (especially call practitioners, but we should
public clouds). perhaps just call users, software
developers and IT managers.
Therootoftheproblem The Cloud Security Alliance describes
So it is important to stand back at this itself as a not-for-prot organisation with
point and question whether it is the cloud a mission to promote the use of best
that is at risk of being insecure, or is it practices for providing security

84 TheUltimateGuidetoCloudComputing

assurance within cloud computing. should approach the deployment of any

The organisation is clearly having some application (from a simple email client
inuence on the industry; its corporate application to a mission-critical
member list doubles as a handy whos database) without security software
who of the cloud industry, and this years controls in place.
CSA Summit drew in Vivek Kundra, chief Encryption layers, rewalls,
information ofcer at the White House, anti-malware suites and spam lters all
as a keynote speaker. have a purpose but this is not the place
for a complete list of security controls.
Whatcancompaniesdoto So take it as read that if these protection
staysecure? mechanisms are needed on the ground
But at a lower level than industry body in your organisation, then they are
edicts and infrastructure standards, what needed in the cloud in equal measure.
kind of thing can companies to do At a deeper level still, ne-grained
address security issues in the cloud? access controls can help. This is the level
First, no right-minded commercial entity at which users should only be able to TheUltimateGuidetoCloudComputing 85

access the rows or table values in (for application layer to provide real-time
instance) a cloud application database visibility of clients most important
that they are authorised to have access websites and applications.
to. For example, a sales rep using a What this means is that customers
cloud-based application and its will get performance management tools
corresponding data store may only be and a web-scale engineering team on
able to view their own sales and not the a ve-minute notication of events
gures of their colleagues or their service level agreement (SLA) to
department or company as a whole. address sensitivities. When cloud users
want security analysis reviews for
Thevendorsviewpoint applications, infrastructure and
Cloud providers themselves are of architecture, with this service they can
course best placed to handle customers have it. As the cloud computing evolves,
security concerns because they this kind of SLA is likely to become
themselves sit closest to the data. In an increasingly prevalent.
effort to share some of Echoing this proximity message is
this proximity, cloud Michael Newberry, product manager
People have infrastructure provider for Windows Azure at Microsoft UK.
trusted their Rackspace recently Cloud providers uniquely understand
money to banks launched its so-called their platform and are best placed to
for years, but may extreme mission critical describe the controls customers can
only have had cloud offering, known as use to achieve their required level of
Critical Sites. This service security, so customers can then
cloud for months is said to drill into the determine if the capabilities and controls

86 TheUltimateGuidetoCloudComputing

are suitable for their own requirements,

he explains. Topfivecloudsecuritytips
Again resonating with the assertion
that the cloud is only as good as the 1 Encryption equality Application encryption on
application, Newberry continues: While the ground should equal application encryption
responsibility for compliance with laws, in the cloud. Firms need to initiate this process
regulations and industry requirements by rst performing an inventory analysis of all
remains with Windows Azure customers, cloud resources to be managed, and then
Microsofts commitment to providing assessing the business risk associated with each
fundamental security capabilities is key element of the IT stack. Appropriate levels of
to our customers success with the encryption can then be applied.
offering. So the word trust is key.
2 Mission-critical omissions All applications are
Takenontrust not the same. So-termed extreme (or high risk)
We often use the analogy of banking mission-critical cloud-based applications are
when it comes to cloud security. As different, so there will always be some data that
individuals, we entrust our money to our you dont host in the cloud. This could be data
bank on the understanding that other relating to national security, business intellectual
customers dont get to see our details property or sensitive customer account data.
and transactions. This is not dissimilar
to the cloud model in some ways; we 3 SSL and VPN is the ABC Look to see that your
place our data and applications with cloud provider has basic secure sockets layer
reputable cloud provider brands, safe (SSL) and virtual private network (VPN) layers
in the knowledge that these companies in place. This should be among the ABC rst
will honour the sanctity of the SLA and principles of cloud security best practice, so
data privacy agreements that we that information in transit has a core level of
customers sign. encryption.
Whether this trust ever needs to be
brought into question is still a moot 4 Policing policy practice Formalised security
point for many IT directors who are and access control policies are a prerequisite to
considering cloud migrations. But as Jon using the cloud securely. Whether your rm
Honeyball, who writes for Cloud Pro, has produces a one-page document or conducts
said, people have trusted their money to formal in-house training, policy controls are the
banks for many years, but may have only bedrock of cloud security best practice.
had cloud for months in some cases.
As we now move forward, we may 5 Transparency, clarity and visibility Constantly
need to endure the natural passage of auditing your cloud providers service for true
time before we collectively assign the visibility is crucial. The Ponemon study found
same levels of trust to cloud computing that half of all respondents recognise that many
as we might do today to say corporate cloud resources are not evaluated for security
banking. From this point we may then prior to deployment. In practice, the process
experience a level where the cloud of pre-evaluation, re-evaluation and audit
actually makes data more secure analysis with a view to achieving application
than if left unmanaged. Will this and data transparency, clarity and visibility
ultimately happen? It can and it will, is essential.
is Honeybulls prophecy. TheUltimateGuidetoCloudComputing 87

There are hundreds of companies
active in the cloud computing
space we pick the top movers
and shakers in the industry

ITS IMPOSSIBLE TO LIST all the many Akamai

companies active in cloud computing so Akamai is a Hawaiian word meaning
heres a list that includes most of the big intelligent or wise. The company
players plus a selection of smaller rms. provides a distributed computing
Cloud providers come in all shapes and platform that mirrors content from
sizes, but key categories are: customer servers on its global platform
Infrastructure players, which provide the of servers. Web Application Accelerator
data centres and management tools to is Akamais infrastructure-as-a-service
host public, private and hybrid clouds offering, designed to speed up the
Platform players, which allow many performance of web applications
different application vendors to supply without the client requiring additional
a service infrastructure.
Application software rms, which have
cloud-based systems such as sales, AmazonWebServices
accounts and so on Amazon Web Services was established
Operation management providers, which in 2006 and yes, its part of the
offer services such as remote storage. multi-billion dollar online bookseller. In
Some companies are active in several fact, AWS uses Amazon.coms global
categories and the lines are blurred in any computing infrastructure which is the
case this is one of the fastest ever moving backbone of the retail business and
sectors in IT. transactional enterprise to provide

88 TheUltimateGuidetoCloudComputing

scalable and secure cloud on and makes them

computing infrastructure available as if they were
to clients. Amazon is one stored locally.
of the giants in the cloud
and its offerings are billed BeyondTrust
on usage. BeyondTrust is an
EC2 is an American company
infrastructure-as-a- specialising in privilege
service offering that authorisation
stands for Elastic management, access
Compute Cloud. It operates on a simple Telcos control and security solutions for
web service interface, which allows like BT virtualisation and cloud computing
are natural
clients to obtain and congure capacity cloud environments. The companys offerings
readily, and provides developers with players are designed to strengthen security,
tools to build resilient applications. drive compliance and eliminate the
S3, or Simple Storage Service, is risk of intentional, accidental and
Amazons storage offering, and indirect misuse of privileges on desktops
provides a simple web services and servers.
interface that can be used to store
and retrieve any amount of data at any BT
time, from anywhere on the web, using BT, the major British telecoms company
the cloud. of course, now provides cloud computing
Elastic Beanstalk is Amazons services including products such as
deployment and management service. and NetSuite. BTs
It allows users to quickly deploy and Virtual Data Centre offers a range of
manage applications in Amazons cloud capabilities, including both public
cloud. Users upload applications and and private cloud systems.
Elastic Beanstalk automatically handles
capacity provisioning, load balancing, CATechnologies
auto-scaling and application health CA Technologies is an IT management
monitoring. and software solutions company
AWS CloudFormation gives developers operating across all IT environments
and systems administrators an easy from mainframe to the cloud, including
way to create a collection of related both public and private cloud computing
Amazon cloud resources and provision solutions. In 2010, CA Technologies
them in an orderly and predictable acquired Nimsoft, a provider of IT
fashion. performance and availability monitoring
solutions that can be used in cloud
Apple applications.
Apple has enjoyed extraordinary success
in recent years with the iPhone, iPad and Canonical
the Mac computer range, and has Canonical is a UK software rm that
recently trialled a new cloud offering, not offers cloud computing services through
surprisingly named iCloud, which is its Ubuntu software, which allows users
aimed at consumers and stores music, to create a private cloud within their own
photos, applications, documents and so IT infrastructure or to deploy a cloud with TheUltimateGuidetoCloudComputing 89

one of Canonicals partners, including

Amazon, Microsoft and RedHat. It is
exible enabling customers to switch
between clouds and features frequently
updated security procedures.

Cisco is a multinational systems
company providing communications
and networking technology. Its cloud
offerings include:
Secure MultiTenancy owned
collectively by Cisco, VMware and
NetApp, this cloud-hosting
infrastructure-as-a-service offering
uses pre-tested and validated CloudShare concept and IT training and certication.
computer stacks and fault-tolerant enables you CloudShare Enterprise is the main
to create
architecture virtual data infrastructure-as-a-service offering, and
WebEx Ciscos collaborative suite centres other products include CloudShare Pro,
that combines real-time desktop using a a free, individual version of the platform
sharing and phone conferencing, and platform that enables individuals and small
allows the sharing of documents, teams to manage complex virtual IT
presentations and applications across environments in the cloud.
PCs, Macs and mobile devices. Up to
six webcams can be streamed at once. Commensus
A UK provider of a cloud platform known
Citrix as C-VIP, which operates across ve data
Citrix provides cloud services such as centres, three in London, and one each in
server and desktop virtualisation, Paris and Frankfurt. It backs its service
software-as-a-service, conferencing, with a 99.999% uptime service-level
open source products and networking. agreement.
The company has data centres around
the world including the UK, India and Dell
Australia. It acquired XenSource in Dell is known mainly as a PC maker,
October 2007. Citrix OpenCloud is the but it also provides cloud computing,
main cloud computing platform. consulting and data storage services.
Offerings include infrastructure
CloudShare management, virtual integration and
Previously known as IT Structures, mobile management services.
CloudShare is a California-based cloud
provider founded in Israel. It offers a ElasticHosts
self-service platform that enables ElasticHosts is a London-based cloud
organisations to create virtual data provider. The company stands out
centres for a range of business functions mainly because it charges by the
including application development and resources required, such as memory,
testing, demonstrations, proofs of disk, processor and network, as separate

90 TheUltimateGuidetoCloudComputing

entities, allowing customers to create GoGrid

virtual machines with any congurations GoGrid is a California-based cloud
they choose. Its scalable infrastructure- infrastructure service provider that rst
as-a-service offerings can run on any OS. began offering cloud solutions in 2008.
The company offer cloud solutions
EMC hosted by Linux and Windows virtual
EMC is a long-standing data management machines. GoGrid Cloud Storage is a
giant that delivers cloud services such as le-level back-up service for Windows
Atmos, a large-scale storage system. It and Linux servers.
recently announced ProSphere, a storage
resource management offering designed Google
from the ground up specically to address California-based multinational Google is
the rapidly evolving needs of enterprises best-known for its leading search engine
as they migrate to highly virtualised, but also provides cloud computing
cloud-based computing models. solutions and other Internet-based
services and products. It was founded
Fasthosts in 1998 to organise the worlds
Fasthosts is a leading UK web hosting and information and runs more than a
cloud solutions provider. As well as million servers in its data centres. It
offering a comprehensive range of web operates the well-known Gmail email
hosting, email and server products, service, web browser Google Chrome,
Fasthosts is at the forefront of developing the Google Talk messaging application
innovative cloud solutions for the SME and even produces operating systems
market including virtual servers, for mobile telephones.
software-as-a-service, secure online Google Apps is the companys
storage and back-up. Fasthosts developed software-as-a-service offering,
its own virtual server platform, called providing customisable versions of
DataCenter on Demand, as the foundation Googles own products, including
of its virtual solutions. This year the Gmail, Docs, Talk, Google Groups, Sites
company has won the Microsoft Hyper-V and Google Calendar. It provides
Cloud Partner Award 2011 and Microsofts services for business and education
Hosting Partner of the Year Award. (the latter is free).
Google Cloud Storage enables
Fujitsu developers to store and access data
Fujitsu is a major provider of IT systems, on the companys data centre
services and products in the UK. Its infrastructure. All data is replicated to
infrastructure-as-a-service offering uses
Google: a
secure data centres with the resilience rm thats
and performance levels required for organised
business systems hosting. Client data to work in a
is hosted in the original country,
maintaining data privacy and legal
jurisdiction for business information.
Fujitsus platform-as-a-service offering
enables software vendors to reach
markets on a pay-per-use basis. TheUltimateGuidetoCloudComputing 91

multiple US-based data centres, has Intuit

individual and group-based access The company produces nancial and
controls and key-based authentication. taxation software to service the small
business and the accountancy industry.
HP Its agship products are Quicken,
HP, or Hewlett-Packard, is the worlds QuickBooks and TurboTax. Intuit now
largest computer maker, producing offers cloud-based versions of its
servers, laptops, mobile phones, printers applications.
and scanners, and has entered the cloud
market. Iomart
Enterprise Cloud Services-Compute UK rm Iomart has gured highly in
offers computational services using global rankings of cloud providers. It
HPs data centres. The service is a offers managed hosting and private/
pre-built, off-premise cloud designed to hybrid cloud computing based on its
run core applications with scalability. data centre estate in the UK, and runs
CloudService Automation is HPs data centres in London, Maidenhead,
software-as-a-service offering, and Glasgow, Nottingham and Leicester.
offers a package of cloud-building
hardware, software and services. It Joyent
allows systems to be integrated with Founded in 2004 and headquartered in
Enterprise Cloud Service-Compute so San Francisco, Joyent is a software,
users can jump between their private virtualisation and IT services company
cloud and HPs. specialising in the cloud. It offers cloud
services for large online clients, including
IBM social networking site LinkedIn (it was
IBM has joined other well-known IT also the original host of Twitter). The
brands in offering cloud services, such company is also active in the online
as LotusLive, a cloud-based enterprise gaming industry.
networking and collaboration tool
integrating email, social networking Microsoft
for business, le sharing, instant Microsoft has dominated many aspects
messaging and data visualisation, of computing and has now entered the
integrated with Skype, LinkedIn and cloud with Microsoft Cloud Power, and has a number of software and platform
Computing offerings that use familiar Microsoft
giant IBM interfaces:
has recently Ofce 365 is an evolution of Microsoft
LotusLive Online Services and combines
Microsoft Ofce with the advantages
of the cloud. Users can access email,
documents, contacts and calendars
from anywhere with an Internet
Windows Azure is both a software and
platform service provided on a
pay-for-use model. It offers multiple

92 TheUltimateGuidetoCloudComputing

application development tools, multi-subsidiary operations

automated service management and a SuiteAnalytics, which provides
global data centre presence real-time business intelligence using
Microsofts Business Productivity Suite real-time dashboards. It uses the cloud
delivers the companys familiar suite of to give real-time views of company
services from the cloud, including 25 performance, nance, sales, marketing
gigabytes of mailbox storage, and and service fullment.
access through a variety of mobile
devices to key services such as email, Nimbus
calendar and shared content Nimbus offers business process
SharePoint is Microsofts collaboration management software to help its clients
platform, bringing together familiar capture, manage and deploy their
Microsoft interfaces and using the operational processes and supporting
cloud to provide a single, integrated information to their workforce, wherever
location where employees can work they are, using the cloud. The company
with their team members, share is a Microsoft Gold Certied Partner
knowledge and nd organisational and a partner with SAP, Oracle and
resources and information.
Ofce apps Novell
are now Novell is a US multinational software and
making a services company that offers platform
cloud move
cloud services, including Cloud Manager,
which automates complex provisioning
workows, from requests and approvals
to creating and employing new business
services, and Cloud Security Service,
which improves security if a company
uses more than one cloud application,
through a secure, single password log-in.

NetSuite Software giant Oracle delivers both
NetSuite is a provider of cloud private and public cloud computing
computing business management solutions. Clients pay for what they use
software. Key offerings include: and have a choice of deployment models
NetSuites business software using Oracles scalable cloud
incorporates everything from infrastructure. Offerings include:
accounting and nancial resource Oracle Exalogic Elastic Cloud a
planning (ERP) to customer platform for enterprise-wide data
relationship management (CRM) centre consolidation on any scale, from
NetSuite OneWorld, a cloud-based small departmental applications to
on-demand system to deliver real-time large and demanding mainframe
global business management and applications
nancial consolidation to mid-sized Oracle On Demand a exible
companies with multinational and deployment model for applications. TheUltimateGuidetoCloudComputing 93

Parallels provides virtualisation and
automation software across all of the
main operating systems. The company
is working with a group of independent
software vendors and service providers
to expand their cloud products for
customers of all sizes, including helping
large companies to develop in-house

Plan B is a specialist IT disaster recovery
business based in the UK. It says it
provides near instant recovery of
working systems on its Rescue Cloud of Red Hats variety of vendors. Its philosophy is that
remote virtual servers. Enterprise you should be allowed to use and
platform manage those assets as one cloud rather
Rackspace is ideal than being locked into one vendor and it
Rackspace has been hosting website, for heavy delivers a number of cloud solutions
applications, email servers, security and including its Enterprise Virtualisation
storage since 2001. It makes a big deal of platform for businesses with heavy cloud
what it calls the fanatical support it demands.
offers to customers and has several
levels of hosting services in both the RightScale
public and private clouds. Offerings RightScale is a cloud computing
include: management company that offers an
Cloud Files, which provides unlimited automated platform for on-demand
online storage with easy upload and cloud services. Products include the
speedy le transfer Cloud Management Platform for
Cloud Servers, which allow you to reducing administration and the
choose your own operating system, complexity of managing cloud
choose a server size and only pay for deployments, while still giving exibility,
what you use control and portability.
Cloud Sites, which spreads your trafc
across a cluster of servers
Jungle Disk and Cloud Drive, which specialises in CRM
allow small business and personal (customer relationship management)
users to securely store, back-up and applications. It started as a CRM
share les in the cloud at low cost. software-as-a-service provider, and has
now expanded into the wider cloud and
RedHat social enterprise arena. Services include:
Red Hat is an open source and cloud Sales Cloud 2, the main CRM cloud
provider which recognises that each application
clients IT infrastructure is likely to Service Cloud 2, a customer service
comprise hardware and software from a platform

94 TheUltimateGuidetoCloudComputing

Chatter, a private social network, like 2e2

Facebook, which can be used internally 2e2 describes itself as an IT lifecycle
in a company services provider, and the UK rm is, a cloud platform for active in cloud infrastructure
business applications, allowing deployment. It says: We believe that
developers to create applications that various hybrid strategies marrying
are hosted on Salesforce.coms existing dedicated IT investments
infrastructure. with either public or private cloud
technologies are the inevitable answer
Savvis for at least the next ve years as the
Savvis offers a exible, scalable and cloud market evolves and stabilises.
easy-to-use cloud interface. It provides Cloud should mean reduced costs and
public and private network connectivity rapid deployment of innovative
and has 31 data centres across the applications, but never at the expense of
world, including in Europe, the US procurement difculties or piecemeal,
and Asia. indifferent support levels.

Star Unisys
UK-based Star was founded in 1995 and The company has focused on what it
pioneered a cloud-based spam and virus considers to be the three challenges
scanning system for business email that that need to be addressed for cloud
eventually evolved into MessageLabs, a computing to be viable, namely security,
messaging and web security specialist. compliance and application rewrites,
An IT and communications services and migration. It offers solutions across
provider, Star offers email, telephony, many business areas including nance,
hosting and networking, and now budget planning, HR, payroll, email,
delivers a range of cloud computing collaboration, analytics and data
solutions, including WorkLife, which storage. Offerings include Virtual
brings together email, telephony, instant Ofce-as-a-Service, which provides
messaging, document management, hosted desktops using Unisyss secure
conferencing and collaboration cloud infrastructure on a subscription
technology. basis. It is designed to simplify desktop
maintenance, reduce support costs and
SunGardAvailabilityServices improve security compared with
The company provides IT operations traditional desktop PCs.
support including integrated disaster
recovery, managed services, IT VMware
consulting and business continuity VMware offers virtualisation systems
management software. It offers an and cloud infrastructure from the
enterprise-class private cloud service, a desktop to the data centre. The company
back-up service called Replication-as-a- provides private cloud and public/hybrid
Service, Electronic Vaulting, for cloud solutions with safeguards and
encrypted and secure storage of data governance compliance, and clients can
that links directly to a recovery system, build applications that are portable
and a cloud-based continuity between the clouds within a common
management solution. management framework. TheUltimateGuidetoCloudComputing 95

Agility Cloud bursting
Can refer to faster, simpler steps for Cloud bursting is a common practice
provisioning IT and also wider business within hybrid clouds to provide additional
processes. resources to private clouds as and when
theyre needed
Capital expenditure the traditional way Cloud infrastructure
to purchase IT equipment. Large Consists of servers, storage area
investments are made in one nancial networks (SANs), networking
year to benet the business over the components and virtualisation software
lifetime of the hardware which would that combine to provide a fault tolerant,
typically be three to ve years. This is in exible and scalable system. Cloud
contrast to OPEX. infrastructures are housed in data
Simply the global internet, the network Cloud pyramid
beyond your own building. A picture of cloud computing layers by
functionality, such as infrastructure,
Cloud backup platform and application.
Backing up data to internet-based
storage systems. As well as being a Cloud service provider
simple way to backup data it has the A company that provides cloud services
added benet of keeping a copy of data over the Internet. Large data centres are
offsite. Disadvantages can potentially used to run applications and store data in
include the amount of time to backup fault tolerant congurations. The long list
and restore les, particularly where data of providers includes Amazon, Google,
changes frequently and internet Microsoft and
bandwidth is limited. Zmanda, Carbonite
and Mozy provide services in this area. Cloud storage
Storage of les on Internet based
Cloud broker systems. Cloud storage can be used as
An organisation that acts as a liaison part of a SaaS solution where the
between multiple cloud service providers application and storage are both located
and customers, by selecting the best on the cloud. Another option is to use it
provider for particular services. as a store for data that can be transferred

96 TheUltimateGuidetoCloudComputing

to or from the local network via a web Amazon and Rackspace both offer
browser or locally installed application. services in this area.
Companies offering cloud storage
solutions include Amazon, Rackspace Mash-up
and Microsoft. Combining input from multiple sources
in a web application.
Cloud washing
A tactic by vendors, especially software Multi-tenancy
companies, to rebrand their offerings as A single instance of an application used
cloud computing but without true cloud for many customers, with each customer
functionality. only able to access their own data.
Customers may be able to customise
Community cloud aspects of the software for their data, but
A cloud that is shared by a number of only within the limitations imposed by
organisations with some common the developers.
interests and aims.
Data centre Operational expenditure costs incurred
Buildings that house cloud for services within a nancial year.
infrastructures including servers, storage As cloud computing is charged on a
systems and networking equipment. subscription basis, it marks a shift from
Also known as cloud centres. CAPEX to OPEX, making budgeting for IT
a simpler process.
Cloud computing can scale up and down Platform-as-a-service (PaaS)
depending on demand. Service that provides a framework for
developers to run their own code and so
Hybrid cloud can be used for in-house applications.
A system that uses a combination of This service is particularly useful when
private and public clouds. SaaS solutions dont meet the particular
business needs. Publishing applications
Internal cloud can be greatly speeded up by using this
See Private cloud. type of service as the hardware and
required components are set up by the
Infrastructure-as-a-service (IaaS) provider. Services such as
A service that provides access to and Microsofts Windows Azure t into
virtual servers. In the case of a public this category.
cloud, this service would be hosted
by a third party and accessed over the Public cloud
internet. Its important to be aware of Cloud services provided across the
licensing implications when using this internet by third-party providers.
type of service. Services are normally Virtualisation technology is used to
billed on the consumption of resources provide fault tolerant, exible and
such as processor and memory. expandable systems that can be divided TheUltimateGuidetoCloudComputing 97

up to provide isolated services on a Service provider lock-in

subscription or usage basis. Companies The fear that organisatiions opting for
providing services include Amazon, cloud services will be stuck with their, Microsoft and Google. original provider and unable to move the
data to an alternative provider. Various
Private cloud organisations are looking to create
Uses virtualisation technology to provide common standards for cloud, the Open
similar functionality to a public cloud, Cloud Initiative is probably the best
but is owned and managed by a single known of these.
user company. Private clouds may be
more suitable than a public cloud when Storage service
highly sensitive information is stored. See Cloud storage.
The large manufacturers such as Cisco,
Dell, HP and IBM provide hardware Utility computing
tailored for private clouds. Providing computing services and
charging on a usage basis in much the
Storage area network (SAN) same way as utility bills. This is a shift
A fault tolerant storage system that can from traditional networks where servers
be accessed through fast network need to be purchased and then replaced
technologies to provide storage to according to a schedule schedule.
multiple servers. SANs work with
virtualisation technology, enabling virtual Virtual Private Cloud
servers to be moved between physical Similar to the long-familiar concept of
servers on the y. the Virtual Private Network (VPN).
Allows organisations to create clouds
Software-as-a-service (SaaS) that look private, from a security point of
A service that provides access to view.
software across the internet, including
ofce applications, email services and Virtualisation
customer relationship management Technology used for cloud computing
(CRM) systems. The hardware and that divides physical servers into
software is managed by the provider, so multiple smaller virtual servers that each
there is little requirement for local IT staff contains their own fully functioning
for this type of service. Providers include operating system. Virtual servers can be, NetSuite and Google. migrated between physical servers and
resources, such as processor and
Service level agreement (SLA) memory, and can be increased or
Denes the level of service that a decreased as required. VMware, Citrix
supplier will provide, normally including and Microsoft provide virtualisation
the percentage of uptime and levels of solutions.
compensation offered if the supplier
doesnt meet their stated gures.

98 TheUltimateGuidetoCloudComputing
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