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August 8, 2013

Is there a market for the Cloud in the world of Corporates?

(Disclaimer: This is by no means a "definitive guide")

Abstract

I really think that most corporates are on an enterprise level not ready or even suitable to embrace the Cloud. It's the SMB that should embrace the Cloud as it would benefit significantly from Cloud offerings. Why? Because the cloud cannot be part of a policy, it should not be a strategy. Furthermore, corporates tend to only centralize infrastructure architecture and decentralize application architecture and the Cloud is driven by application architecture and business architecture and not (so much) by infrastructure architecture. In fact, it requires you to abandon control over your infrastructure and hand it over to your legal department.

Okay, I admit it, I've been an Amazon fan since I was ordering books and CD's for the whole department from Amazon.com, had them shipped to the office in the Netherlands at least on a weekly basis.
My hero in the corporate market? Jeff Bezos, the man behind Amazon.com. My biggest complaint on Amazon? That they haven't yet opened an amazon.nl store so I can purchase a Kindle Paperwhite for my wife and two sons and save some trees by getting them books in Dutch all digital. I sooooo badly want a Paperwhite myself, to replace my Kindle-with-keyboard, I sent my kids to English class so they could read books in English and I could give them my Kindle and buy the Paperwhite, with 3G of course.
Amazon has always been this very customer centric for-profit company, disrupting the market, any market by a single strategy: improve the ways consumers can spend their money at Amazon.

But this post is not about how awesome Amazon is, it is about whether or not the Cloud is for corporates.

First of all, depending on who you are, your response by now could be a whole heartedly and fully sincere "YES!". In which case you're probably a sales manager or similar person of one of the many companies that sell cloud for the enterprise services.

Second of all, well let me first cover the SMB market;
The SMB market is probably the single one market that benefits most of SaaS, Software as a Service, which is sort of a rebranding of the almost complete failure ASP offerings were. Being a company in the SMB market, you're too small to host many of the software you can get as a service yourself and by choosing the SaaS offering you can benefit from their economy of scale. It totally makes sense.
The interesting part of SaaS is that it is way less a matter of elasticity, which is commonly associated with the cloud (and rightfully so), but the emphasis is on self provisioning. As an SMB you would get services like Office365, Salesforce.com or the Google Apps offerings. All SaaS offerings. Things like IaaS and PaaS are not for you, unless your raison d'etre is a service based on online accessible services. Something called in the early days as a dotcom.
The Cloud is, for an SMB, interesting because the cost model is one based on use and not ownership. Your cloud provider meters your consumption and you pay what you consume. Your costs increase when your use increases and typically that means when you're growing as a business. The model is very fair.
So back to the second of all...

Second of all, the cloud doesn't really exist, it's a substitute word for different offerings, so actually the cloud might be there for corporates but what is the cloud anyway. Generally acceptable as a definition is the one provided by NIST. It also has a nice definition on IaaS, PaaS and SaaS.

SaaS

First SaaS as I already covered some SaaS when discussing SMB's just a few sentences earlier. SaaS is more about economies of scales to reduce costs related to the use of standard(izable) software offerings. For SMB's this is usually a small step as their processes are not that formalized, or at least they're typically rather flexible when it comes to their processes. Because in many ways, SaaS offerings are based on usage based on a best-practice.
Corporates are notorious when it comes to processes and adherence to them. From experience I know that the larger the corporate the more effort it takes to change a process and more importantly, the smaller the chance that their processes are according to best practices. So in this perspective, SaaS can be very cumbersome to implement because it would require a change in the processes of the corporate. Something about teaching old dogs new tricks springs to mind. Although it can be done, read "Who Says Elephants Can't Dance?" by Louis V. Gerstner, not dogs but elephants.

IaaS

So let's continue at the bottom, IaaS, Infrastructure as a Service. Basically what you get is a server, nothing on it, or maybe an OS. You deal with it. There's not a lot more to it and as a corporate you should already be familiar with this. It's what you've done for millennia, you bought new hardware with or without an OS installed and you took it from there. Whole IT departments are in place and ready to support this server. Typically the server is one of a really lot and over time your IT Operations staff has a number of very smart system admins.
The big benefit of IaaS is that you don't have to wait for the delivery of the hardware provided you drink sufficient glasses of water as the server can and should be provisioned during the period that you get up from behind your desk, walk over to the water cooler and get yourself a glass of water. From experience I know that it can take slightly longer when you're not yet a customer with the Cloud provider because you'll need to sign up as a customer. This is not a joke, with the current leading Cloud Service providers, this is the process and the timeframe during which the new server is provided. Will it be a physical or a virtual server? Well you don't know and you shouldn't care. It is the server that you want, with as many CPU cores and memory and bandwidth as you need. It's all provisioned from a seemingly unlimited pool of servers and CPU's and memory and bandwidth. Yup, there's some real magic going on, because the Cloud provider just keeps on providing servers to you, never asking you to stop asking for more.

Once you've got your sever, you're left at your own devices. The Cloud provider will not maintain that server at all. He will just ensure that the server is provided to you at all times and when it crashes that it will be available to you within the time you agreed in the SLA.
Did I mention that you need to take care of everything yourself and that the Cloud provider will not manage your server? It's not the service he provides when talking about IaaS, you are getting Infrastructure as a Service.

So why would you go for IaaS? Why would you go for infrastructure as a service? Well, just like you would go for any other technology; it solves your problem or it can sufficiently contribute to the solution to your problem. Most of the time you don't want to go for IaaS if there's a PaaS solution for you. Read on for the stuff about PaaS.

Onwards, with the things you can get as a service. PaaS, Platform as a Service, takes you up the software stack.

PaaS

So on top of the infrastructure, there is an Operating System and then some. Basically the 'Platform' in PaaS refers to the software layer on top of which an application runs. A lot of people I know are thinking 'Application Server' or 'Middleware' when talking about Platforms, but actually some applications run on the Operating System itself, so the OS might be the platform in PaaS.
Here's a rule of thumb that can help you: a Platform as meant in PaaS is any piece of software that is not a business application (take the term very broad) and is managed by the Cloud provider. Please take not of that last bit!
So in PaaS, the platform is managed by the Cloud provider, just like in IaaS the infrastructure is managed by the Cloud provider. Infrastructure is (virtualized) hardware, Platform is software. Is this arguably the correct definition? Yes, we can argue about it, but it fits the NIST definition, which is convenient.

Oh yeah, don't forget that the Platform in PaaS is a software layer on top of which an application runs. Typically it provides technical services to the business application. This means that typically a DBMS is not a Platform.
An Application Server like a JavaEE container, is a Platform.

Interestingly, the application server in the previous paragraph can be part of the PaaS service, so it is managed by the Cloud provider, or the OS on which it is running is the Platform and managed by the Cloud provider but the application server is not. The key here is what is and what is not managed and it always moves up the stack. So you can't have a PaaS contract where the Platform is an application server that is managed, but the OS is not managed by the Cloud provider. Anyone tells you this is possible, well question their expertise on Cloud, like really hard.

Typically you would want to go for PaaS, because that means that there's a lot managed by the Cloud provider and you only need to manage the contract with him including the SLA's you agreed upon. The Cloud provider will ensure that you've got your Platform and that it complies with the capacity you agreed upon, that it stays available and in case it becomes unavailable, that it will become available within the timeframe agreed upon in the relevant SLA.
You also want to move to PaaS if possible because it means that you'll be drawing on the fact that the Cloud provider has staff that can actually support the platform 24x7 so you won't need that expertise in your organization in the amounts of being able to support it 24x7.

Like with IaaS, a PaaS environment is provisioned quickly. A matter of minutes more likely than days or even weeks and months. And with a shear unlimited amount of resources at your disposal, so click away and get provisioned.

IaaS instead of PaaS

So why would you go for IaaS instead of PaaS, or maybe go for PaaS but only for the OS and not the application server, say? Well that is because you need something that's not standard.
Especially with PaaS, you will have to comply with standards. And these are not your standards at all, these are the Cloud provider's standards. And you're required to stick with them and not deviate from them because that's just not possible because you have nothing to say about the service except for the quality you're getting. The platform is managed by the Cloud provider and not you, remember.
So when you're in need, let's say, for a clustered WebSphere Application Server environment, you're likely out of luck getting that as a Platform, because it's too cumbersome to maintain such an environment. You're likely going to get the OS as a Platform and install you're own cluster of application servers on top of it.
The Cloud provider will provide you with separate, independent servers, or instances. All perfectly managed. This means that you'll need to ensure that the applications running on it support this. That they can deliver the availability requirements by themselves, not relying on the infrastructure.

What? I can't rely on the infrastructure for ensuring I meet my availability targets and RPO and RTO and stuff like that? That's correct. You cannot.
The separate, individual servers will be available and when not, they'll be available shortly. It's the managed part that will be made and kept available by the Cloud provider. The Cloud provider is not going to do whatever he can to keep the application available. Not at all.
So there's a strict divide between what the Cloud provider will take care of and what you'll have to take care of and there's little collaboration to be expected.
So if you need that business service to be available at all times so your customers can get access to critical information at all times, your application needs to be robust and resilient in a way that it does not rely in any way on the infrastructure it's running on, it cannot make any assumptions as to how the infrastructure works and whether or not there's anything specific running to keep the infrastructure resilient.
Well, that's a lie, there is something you can assume. Something you actually have to assume: The Infrastructure is a piece of crap and it will crash over and over and over and you have no control over it.

Why are IaaS and PaaS tricky for the corporates?

That's a good question, because they are actually very well suited to move to the cloud, the problem is in perception. The cloud is a technology, it's a means, it's a tool to solve a problem. It's a tool that has an impact on the organization of the corporate when employed. It also significantly changes the way a corporate will deal with it's IT resources. Control is achieved by means of contracts because the handson option is gone to the extent of the service provided to the corporate. So all of a sudden the legal department is the one that does Systems Operations, those men and women that have no clue what IT is, are required to draw up contracts and SLA's that are the equivalent of what the IT department used to do by means of actually doing stuff. This is for many corporates a huge paradigm shift, that requires a significant amount of maturity not only in its IT department but across the board. Something that is kind of not existent in traditional corporates.

Another issue is that from an (enterprise) architecture level, the Cloud is a strategy. It's something that should be used across the enterprise, but never put as dogma(*). It's not a generally applicable tool and it requires a very thorough understanding about what Cloud is, when it is to be applied and what the restrictions are. Interestingly it is quite different from for example stating that all systems should be on either Linux or Windows, or that all in-house developed applications are to be developed in C# using Visual Studio. Using the Cloud or however you want to call it, should never be considered an architecture principle. Because it isn't. This is very weird for large companies. I haven't seen many companies that understand this.

Something to take with you

One important aspect of IaaS and PaaS is that both are revolving around infrastructure, almost solely around infrastructure. But the decision to go for IaaS or PaaS or actually going cloud has nothing, well hardly nothing, to do with infrastructure, it is an application driven decision. There is absolutely no point in considering the cloud when your application is not ready. When it is not designed in a way that it can assume that the infrastructure is a piece of junk, when it is not designed in a way that it takes care of its own resilience instead of relying on the infrastructure you shouldn't consider the cloud.
The Cloud provider will not go beyond the service he provides, so he will not take care of your applications that are running in the cloud. He will simply just not do it. This is a good thing, because its not his area of expertise. In fact, application support is very labor intensive, it needs humans to do proper. And the Cloud provider is always looking for eliminating the human factor and do as much in an automated manner as possible. So the humans you would need for support are eliminated by the Cloud provider, in a non-felony way of course, in most cases.

Hope you enjoyed this post,

Iwan

*: Dogma is typically for those that have no clue what they're doing and just do because it's dogma. As most people are happy if decisions are made by others, because it would mean they don't have to think and they don't have to assume responsibility, dogma as easily embraced.

2 comments:

  1. Very good reading.
    Understand I correctly that your main reasons for regarding corporates not well suited for Cloud are:
    (1) Their lack of adaptability, having well established processes en procedures that they are unable to change, and
    (2) their lack of understandig what the Cloud actually is and means.

    Regards
    Pieter vd Ploeg

    ReplyDelete
    Replies
    1. Pieter,

      There's a 3rd reason, being that corporates typically have decentralized governance or ownership of application architecture and business architecture. Often this is on a business unit level, where as infrastructure is centralized, because it is perceived that that is more cost efficient.

      Since going to Cloud is not so much a matter of infrastructure architecture decision but an application
      architecture decision, it hardly makes sense to have a corporate wide strategy to go to the cloud while application architecture is still decentralized.

      On a side note and probably worth another post is that although business units are part of the same enterprise, their business goals, objectives, strategies and roadmaps are quite (too) often conflicting. Which makes it harder to centralize application architecture. One of the reasons why I think that a Chief Enterprise Architect should report to the chairman of the board directly or the overal CEO. Btw, that highlights the fact that I don't consider Enterprise Architecture to be an IT responsibility.

      Iwan

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