This series looks at what skills future business leaders need to have to tackle the challenges of an ever-shifting marketplace.
As businesses look increasingly at cloud computing as a must-have, experts in the field, even those who praise the cloud’s benefits and nimbleness, advise a certain clear-headed caution.
Types of cloud structures and services
Cloud computing is an array of different kinds of services provided by different companies, from Amazon and Microsoft to IBM and Google, and many others.
Here is a cheat sheet on some of the basic kinds of cloud computing services on offer:
Public clouds
Networks managed and secured typically by third-party service providers. Customers using the service can include every group from government departments and large enterprises down to individuals. The draw is that the cloud provider is in charge of both maintaining the service and security, leaving customers the benefit of being able to change how much cloud computing they need.
Private clouds
A cloud with typically only one user, such as a government organization or company with its own internal cloud. They can be on-premise or built and operated by a third party, but it is an exclusive cloud not connected to others.
Hybrid clouds
These are a mix of private, third-party or on-premise infrastructures, with ability to access other services that are open to other cloud customers.
Community clouds
A shared cloud structure, often with a few organizations within a particular region, industry or sector using it jointly.
SaaS (software as a service)
A cloud service provided as a software application and can be accessed simply on the Web so it typically does not require buying new computer systems or data centres.
PaaS (platform as a service)
A little more hands-on than SaaS. Here the cloud service company provides the underlying hardware and software platform on which the client can build applications and more customized operations.
IaaS (infrastructure as a service)
This is the most customizable of the three. The service provider gives access to the hardware, software, servers and other components, and basically just maintains the system and backup planning as the client uses whatever parts of the infrastructure it needs. The advantage here is to test new software programs or develop new systems without having to buy the entire infrastructure.
Sources: Government of Canada and IBM (Photo of International Business Machines Corp.’s racks being prepared for use inside the company’s Softlayer data center in Dallas, Tex., in 2014: Ben Torres/Bloomberg)
There are risks and limitations in what is suited to the cloud and what isn’t. And if not managed correctly, the cost of being in the cloud can be higher than not being there.
“Some organizations have legacy applications that aren’t really meant to be off-prem [off company premises], in the sense that the cloud doesn’t give the response time that the client may need or want,” said Susan Follis, managing director at the professional services consultancy Accenture in Canada.
Accenture is itself heavily in the cloud, with 60 per cent of its data there now, with the goal of 90 per cent by the time the migration is complete in 2018.
“In general, somewhere between 50 to 90 per cent of applications existing in a client’s environment would function as well, if not better, in a cloud, once you surround them with the right infrastructure, tools and processes, in order to operate efficiently in the cloud,” she said.
Those applications that work less well, for instance, tend to be those that are heavily integrated with other back-end systems, particularly older applications and older systems. It may not make sense to migrate them to the cloud. Or the size of a particular application and its interaction with other apps may conceivably make it difficult to place it in the cloud – depending on what kind of cloud package a company is using. It’s all about weighing costs and performance.
“Very few organizations in Canada, especially at the enterprise-class scale [that is, large institutions], will in the short to medium term ever be 100 per cent in the cloud. They will still require systems on premise, because they may not be suitable for the cloud,” said David Brassor, director and national leader, cloud and infrastructure advisory at consultancy Deloitte in Canada.
“The challenge has been to date: How do I take those workloads that sit on my servers and storage environments in my existing data centres and then move them to the cloud?” he said.
Still, some companies are almost entirely cloud-based, such as Netflix Inc. And while Coca-Cola Co. is one of the world’s largest consumers of cloud technology globally, there is one thing the company does not keep in the cloud: the ever-closely-guarded formula for Coke.
“There are a number of reasons why organizations move various capacities to the cloud. One of the big reasons is around … time-to-market, the ability to rapidly scale up and scale down capacity,” said Mr. Brassor. In other words, this is the ability to get access to more data capacity when needed, and to decrease just as quickly when not needed, rather than buying and maintaining that kind of tech infrastructure within your own company.
So, “one of the big tenets of cloud is elasticity. I can go to the cloud market. I can provision capacity, use it, and when I don’t need it, I can turn it off. It’s what’s called metered pay-per-use. I’m paying only for what I use,” Mr. Brassor said.
The selling point is that using the cloud allows for greater flexibility. “For instance,” Ms. Follis said, “if you wanted to do some testing on some development work, instead of having to buy new servers and new software and everything to support that test, which might only be three months, you can actually do that in the cloud and only pay the operational dollars you need to execute the test.”
This helps turn a company’s IT budget from more of a capital expense to an operating expense. It can also affect payroll, because moving to the cloud will inevitably require new skills within a company’s IT staff, which result in new hires or a staff reorganization.
Another complication companies face is the question of compatibility when they are choosing between different products. Much as individuals find an app may not run on an incompatible device, different companies providing different cloud services and different platforms make portability and cross-cloud compatibility a concern for businesses.
“There are technologies out there that are helping to manage that, including some recent announcements from Amazon around their support for VMware,” Mr. Brassor said. “VMware is a virtualization technology that is probably prevalent in every single large enterprise organization. It’s a virtualization technology that allows you to easily move workloads around within an organization.”
David Brassor, director and national leader, cloud and infrastructure advisory at consultancy Deloitte in Canada: “The challenge has been to date: How do I take those workloads that sit on my servers and storage environments in my existing data centres and then move them to the cloud?” (Courtesy of Deloitte)
All of this leads to the question of security and privacy.
There are various regulations on what personal identification information is not allowed to leave the country. As more major cloud providers set up shop in Canada, that may become less of an issue if their servers are physically within the country. There are also ways in which the data can be tagged so it cannot leave the country.
Still, experts caution businesses planning a cloud migration to pay close attention to the varied regulations across the country.
“You’ve got certain provinces like B.C. and Nova Scotia that have specific requirements about personally identifiable information, that it can’t reside outside of Canada. You have other provinces that are working through their regulatory processes,” and potentially making changes.
And “you’ve got the federal government, which recently announced its first cut at cloud policy, that is still in its very early stages,” Mr. Brassor said, noting that one concern for Canadian companies, particularly when storing data in the United States, is the U.S. Patriot Act, which could be used to cull cloud data. It’s an obvious privacy issue and a legal one for Canada as it grapples with privacy law in the digital age.
Susan Follis, managing director at the professional services consultancy Accenture in Canada: “In general, somewhere between 50 to 90 per cent of applications existing in a client’s environment would function as well, if not better, in a cloud, once you surround them with the right infrastructure, tools and processes, in order to operate efficiently in the cloud.” (Courtesy of Accenture)
All of these factors – whether some applications are suited to the cloud, what should go into the cloud and what shouldn’t, cross-cloud portability, regulations – require a detailed strategy. It’s more than just turning on a switch.
Still, more and more companies are turning to some version of cloud services or infrastructure. In September, a global study by research firm IDC, sponsored by Cisco Systems Inc., suggested nearly 68 per cent of organizations are using cloud services to help drive business outcomes, a 61-per-cent increase from last year’s study.
“That’s part of the reason why I’m calling you right now from Tel Aviv,” Mr. Brassor said over the phone. “I’m over here working with one of the largest software companies in the world, to help them with their cloud migration strategy. This is a company with significant revenue, significant IT organization. But they’ve looked at moving in the cloud, and their comment was, ‘We need to accelerate this.’”