Journey into the cloud

Since 'Cloud Computing' emerged as one of IT's biggest buzzwords, industry commentators have been quick to debate its enterprise-readiness. Cautionary voices have raised concerns around security and integration which could well dissuade early adopters from making their first steps towards cloud computing. However it may have significant benefits in reducing costs of investment in IT structures for companies. And yet, amidst this hype, we seem to have missed one of the most important points here - that 'Cloud' is as much about the journey as the destination, and that there are significant benefits to be had in simply preparing for 'entry into the Cloud', and embracing it as part of a broader modernisation effort. Today's budget-constrained IT departments should ready themselves for 'Cloud computing' as a core part of their wider cost reduction and process improvements in 2009. To delay doing so is to ignore the huge potential that it offers, and fail to acknowledge the disruptive force it represents in the industry. Doing the same as we've always done is not an option; continuing to utilise exclusively traditional software delivery and licensing models will not drive significant reductions in IT spend, or satisfy the business or end-user's need for change in the way they pay for and consume business services. A December 2008 Gartner article, which rightly described Cloud computing as the "major inflection point in IT", carried in its title the observation that 'Cloud Application Infrastructure Technologies Need Seven Years to Mature'. It would be all too easy, as a potential consumer of Cloud-based services, to take this as a warning shot, and assume that investment in Cloud computing is not for the faint-hearted. However, read further into the article and you will find recommendations for end users to focus on cloud-centric projects that provide an ROI of "no more than 18 months"; advice which will sound remarkably familiar to anyone currently involved in project prioritisation of any kind, not just 'Cloud'. The economy is forcing our hand; making us ask the tough questions of IT that should have been asked before. Where is the value? Should we be doing this? Can we do it more efficiently? And, with an eye to some of the benefits of Cloud computing, do we really have to invest so much in technology that provides no competitive differentiation yet consumes so much of our budget? Take a look at Gartner's '2009 CIO Agenda' and you will see the knock-on effect of these questions in the expectations now being placed on IT by the business. 'Business process improvement' maintains its pole position since its debut in 2005, but has been joined in the top three by 'reducing enterprise costs' and 'improving enterprise workforce effectiveness'. Dealing with all three effectively is causing CIOs, according to the same Gartner report, to "concentrate on realizing value from existing assets". At a time when IT budgets are flat, this is no surprise. Any new investment must come from releasing budget from elsewhere, and platform modernisation is helping organisations do this in a big way. IT departments globally are already releasing millions of dollars in non-discretionary spend simply by breaking the bonds between the application and the platform, looking afresh at the choices they have historically made for both the development and deployment of their enterprise applications. One US logistics company has recently slashed $6 million from the annual running costs of its core product tracking system simply by shifting platform from z/OS to zLinux. Same application, same business process, but suddenly a whole lot more budget available to drive those improvements. Similarly, two years ago, a large UK retailer accelerated its global expansion by deploying the store's core replenishment system, the application upon which much of its competitive differentiation was based, on to a lower-cost Unix platform. Still sharing the same source code as its mainframe-based head office implementation, this application can now be rolled-out quickly and cost-effectively in support of all its stores worldwide, while maintaining that same competitive differentiation. If you are asking yourself what this has to do with Cloud computing, then consider that same retailer today. The company's critical step was in separating the assets that were adding value and competitive advantage from those, namely the hardware and software infrastructure, that were not. Once this was done, the company was free to choose the most appropriate platform to support the needs of the business. Cloud computing represents a natural evolution in this strategy, enabling rapid time to market, with new application and business service images created in a fraction of the time it takes to deploy even the most commoditised on-premise infrastructure - not to mention the shift in costs. Cloud computing pricing is still emerging but already is making a strong case for itself, both in terms of the dollar amounts being quoted, but perhaps more interestingly in providing a welcome departure from capital expenditure to operational expenditure. Both are guaranteed to sit more comfortably with the CFO's current goals. In a recent Forrester article on Platform-as-a-Service (PaaS), the research group identified 20 credible vendors already delivering solutions for application deployment in the Cloud. Interestingly, though, it remarked that most of these did not 'allow customers to migrate existing applications to the PaaS platform'. This is clearly not a good situation, and could easily trigger a rewrite frenzy the likes of which we've not seen since the early nineties' Client-Server onslaught. As a strategy, this is also at odds with the CIO's goal of realising more value from existing assets. However, the recent enablement of COBOL applications to run in the Cloud will go a long way towards addressing this. Globally, there are in excess of 200 billion lines of COBOL code in operation, growing annually, supporting some 30 billion transactions per day and representing 80% of the world's enterprise transactions. Consider the impact of moving even a fraction of this workload to more cost-effective platforms, from which modernisation efforts to extend business value through service-enablement, Web 2.0 integration and so on, can continue with renewed vigour. Put simply, this is too significant an opportunity to miss. Cultural inertia cannot be allowed to stand in the way of an innovation which promises to release billions of dollars of non-discretionary budget into the economy. We cannot afford to let this budget lie, locked away like some untapped fuel source. Whilst mainstream adoption of cloud computing may yet be some years away, the benefits of preparing for the Cloud are tangible and accessible to all organisations today. Assessing where value lies within your existing application portfolio and pursuing an effective modernisation strategy will lay the foundations for future moves towards the Cloud, but should also yield the cost savings demanded by today's economic climate.

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