As the cloud service provider space matures, it has become apparent to organizations of every size and industry that building and managing a data center is best left up to the experts. Despite concerns about security, data loss, availability, and response time, companies are increasingly adopting cloud solutions of various forms and for a variety of reasons including cost and freeing up valuable IT resources to focus on higher value projects for their organization.
During Wikibon’s April 23, 2013 Peer Incite, Jason Mendenhall, EVP of Cloud for Switch Communications spoke about how Switch’s 400,000 square foot – and rapidly growing – SuperNAP colocation center in Las Vegas is transforming the IT industry’s perception of cloud services. “Today, the question is ‘which cloud?’ not ‘if’ a company should adopt a cloud strategy. Customers tell us ‘I need an alternative to Amazon Web Services (AWS)’. They come to Switch because we offer them more transparent and competitive pricing, better security and scale, live customer service, flexibility of service, and control in the form of tools that monitor application performance or support compliance requirements.' Switch has hundreds of clients from large government agencies and Fortune 100 companies, hospitals and Internet start-ups to dozens of cloud service providers.
Mendenhall believes cloud service providers need to differentiate themselves and in doing so provide their customers with the means to transform their own internal IT organizations. “The IT executives of the future will be much more business focused, with skills for managing multiple vendor relationships and development environments, not technologies. These new IT leaders will manage strategy and direct a service oriented organization, and the cloud will help them get there.”
Goodbye Non-Differentiated Tasks and Services
The move to cloud involves “moving up the value stack” – getting rid of mundane infrastructure management that adds little or no business value. Unless your organization is selling IT services, managing infrastructure is often not a value generator. Indeed, many cloud-based application service providers themselves leverage Switch, AWS and other cloud services as part of their value proposition.
Benefits of moving to the cloud include:
- Resource Re-allocation: Moving lower value-creation tasks such as infrastructure management to the cloud frees up key resources to place on mission critical or other projects that help an organization innovate or grow its business.
- Recruitment and Retention Improvement: Moving IT away from non-differentiated tasks to projects that drive revenue or help transform the business provides incentive for existing IT employees and helps recruit additional talent.
- Expense Redirection: Moving to the cloud moves capital expenditures to operational expenses – an advantage for many companies – allowing organizations additional free cash to spend on higher value projects.
- Technology Refresh Avoidance: Moving to the cloud avoids investing in soon-to-be obsolete hardware and network infrastructure as well as the task of updating system software and maintenance contracts.
- Instantaneous Scalability: The cloud allows a company to add additional storage or compute power at will. An organization can also carve out temporary cloud space for testing applications, managing projects or for seasonal requirements.
- IT Simplification: Moving to the cloud reduces IT infrastructure complexity and most likely the number of vendors an organization needs to manage. Older systems can be retired and the data from those systems hosted in the cloud.
The benefits of cloud are clear and compelling for just about every IT shop. But as the cloud space matures, IT leaders need to determine which cloud services will best suit their unique requirements and decide whether to simplify their IT infrastructure or get rid of it altogether.
Action Item: CIOs and other IT leaders need to take a portfolio approach and decide which processes and skills to keep, what technology or services to invest in, what to re-write, and what portion of their existing portfolio is either too costly or time consuming to continue to support in-house. CIOs should also consider conducting a value analysis, preferably with existing internal tools (ROI, TCO, workflow, etc.), to determine where to put resources and to assess the go-forward scenario for using cloud services to transform their business.