Lean IT Manager's Cloud Computing Blog

The spring of 2013 is off to a cool start

2013-04-30T11:41:00.000-07:00

Even though today’s crowning ceremony in Amsterdam enjoyed some modest sunshine, the temperatures across Europe are at an all time low. A more reliable indication that spring has started, are the annual Cool Vendor reports being published.

For the first time this series includes a note dedicated to cloud activity in Europe. The “Cool Vendors in the European Cloud Computing Market, 2013” note describes four European vendor making a difference in the local and global cloud market. The report also points to several other European cool vendors featured in other notes. Such as in the “Cool Vendors in Cloud Services Brokerage Enablers, 2013“, “Cool Vendors in Cloud Services Brokerages, 2013” and “Cool Vendors in Cloud Management, 2013“.

One of the featured cool vendors is directly involved in the Amsterdam crowning ceremony by hosting the social crowd control app that gives the many visitors real-time insight into movements and current volumes of people at the different venues. A nice example of a nexus application that gathers social information from mobile devices, performs real-time analysis of that big data type information in the cloud and makes it available again to the crowd via a mobile app.

Three Makes a Cloud

2013-03-24T02:10:00.000-07:00

The 'third' in this cloud menage a trois is the network, which is joining Storage and Compute as a Software Defined Resources that can be allocated on demand through a self-service API or portal. As a term “Software Defined” is in race to catch up with established but equally vague terms such as “on demand” and “as a Service” and surfacing in all kinds of combinations.

The current frontrunner - Software Defined Networking (SDN) – might very well already be the most hyped term of 2013. All network technology providers are busy either building or acquiring SDN capabilities but the largest acquisition to date (for more than one billion dollars) was done by a virtualization platform provider. Meanwhile most network providers are looking to leverage SDN to increase the agility and reduce the cost of the services they provide.

An important reason for the interest in SDN is the size of the market it is promising to disrupt. The total revenue for Network and Communication services makes up a large part total worldwide IT spending. Of the total 3.7 trillion IT spending in 2013 46 percent will be spent on Telecom Services (next to 8 percent on software, 22 percent on hardware and 25 percent on IT Services). Any development that such a large proportion of the total cost influences can count on great interest, also from the telecom industry itself. At the SDN World Congress in Darmstadt no less than 13 of the largest telecommunications companies announced a joint initiative to promote 'Network Function Virtualization. This initiative encourages network technology providers to enable their network functions to run on (clouds of) industry standard servers instead of on proprietary hardware appliances.

The main advantage of a software defined network - just like any other kind of software defined infrastructure construct - is that it no longer consists of dedicated and proprietary boxes with names like: firewall, load balancer, router, etc. If an organization tomorrow suddenly two times more firewalls than load balancers needs (or vice versa), they can just provision other software on their existing hardware. In addition everything that is controlled by software can be much easier automated than something that is based on hardware. And this offers benefits not just to providers but also to end users as it can reduce the time needed to reconfigure en network to changing needs from several days or weeks to a few hours, or even shorter. And as a result the network can become as dynamic a cloud resource as compute and storage already were.

But let’s not forget that for many organizations the transition to 'as a Service' and “on demand” began in the network area. Back in the 80-ties companies started to give up their own in-house controlled and managed wide area networks in exchange for the use of shared packet-switched networks, often based of X.25 and commonly called the “public data network”. Maybe something to remember for those currently afraid of “public clouds”?

PS Gartner press release : Software Defined Networking Creates a New Approach to Delivering Business Agility

Will CPR significantly increase cloud survival rates?

2013-02-09T01:35:00.000-08:00

IT is an acronym crazed world. So crazy that sometimes - when running out of three letter ones - we simply recycle them or add sequence numbers. Remember MRP, which used to mean Material Requirements Planning, but then became Manufacturing Resource Planning (called MRP II to avoid confusion), to only a couple of years - and a few trillion of investments - later, resurface as ERP.

In that era the term BPR also became popular. BPR stood for Business Process Re-engineering (see for example Hammer, M. and Champy, J. A.: (1993) Reengineering the Corporation: A Manifesto for Business Revolution), a movement that in my perspective*really gained steam from the realization that throwing new technology (ERP) at existing processes, only offered limited improvement potential. As Business Process Re-engineering often resulted in massive redundancies and layoffs, BPR got kind of a bad rap, especially among employees and unions (remember those?).

Today the term Business Process Redesign is a more socially acceptable reincarnation, and even though that could fly under the same acronym (eg. BPR II), people seem to prefer to call it by its full name.Nowadays all the buzz is around cloud. And also here people are finding that just throwing this new idea at existing processes is not bringing the benefits expected, not to mention that the cost of absorbing it into our existing ways of working is very high (remember how much we spend on trying to force fit ERP packages into our existing processes by modifying them beyond recognition, only to reimplement these packages a few years and a few releases later in a more off the shelf manner?).

And increasingly the topic of adapting processes to the cloud is becoming popular. Last month my note "Cloud Solution Providers Ignore Customer Processes at Their own Peril" published, and this month KPMG published a study called "the cloud takes shape". In that study KPMG uses the term Business Process Redesign and states "One of the most important lessons uncovered by this year’s research is that business process redesign must occur in tandem with cloud adoption if organizations hope to achieve the full potential of their cloud investments." In my note I describe the need to challenge the status quo on processes using the term Cloud Process Re-engineering (the cloud generation is likely to have a less emotional response to re-engineering, while some of its disruptiveness still rings through).

Some IT departments I speak to seem to think of cloud computing largely as a way to move their applications to the cloud. But if an enterprise organization with thousands of applications running in their datacenter, moves these apps to the cloud, they will still have thousands of apps. And more importantly those apps will do the same they did before, just running somewhere else (so you might ask "why bother?" as the savings on hardware, housing and electricity are small compared to the overall cost and today's management is much more interested in new (revenue) possibilities and agility than in efficiencies that in the end form a mere rounding error in the companies overall bottom line). If organizations however look at each process and decide how the cloud can optimally support or even completely eliminate that process (for example through Business Process as a Service (BPaaS) or by participating in multienterprise applications) the potential impact can become much more significant.

The idea of optimizing processes to new realities - for example through Business Process Management (BPM) - is not new and covered broadly in Gartner's existing body of research. Cloud practioners - both consumers and providers of cloud services - should take an interest in this softer, more human, side of the cloud.*

PS. Whether CPR will turn out to become the acronym that replaces BPR is debatable, also as it seems to be already firmly taken by the medical profession (for both the life saving CardioPulmonary Resuscitation and for Computer-based Patient Records).

Dear Apps, why can we not just all get along?

2012-12-24T04:05:00.000-08:00

Ecosystem could be "the word" of 2013, if only vendors, providers, ISVs and other technology conglomerates stop acting in a “This Town ain’t big enough for the both of us“ way.

As an App user* I am increasingly amazed, affected and annoyed by what in my view can only be described as turf wars between various technology providers. Increasingly cooperation - that originated by a desire to have a quick time to market - is being replaced by outright competition driven by a desire to own the full stack. Some recent examples:

Phone manufacturers replacing perfectly good map applications with in-house brews*
Search engines wanting to become social networks*
Social networks* and web retailers* wanting to become advertising specialists
Photo filtering apps opting out of 140 char event timelines* and v.v. event timeline apps adding photo filtering*
Email providers abandoning the use of third party sync to enterprise messaging apps*
Providers replacing third party music and movie services with in-house variants limited to their stack*
Just about everyone adding their own inline chat and messaging functionality*
Not to mention the various patent wars companies are waging, trying to block each other out of their home markets*

Now I am not against healthy competition (on the contrary) but as a consumer I fail to see how these developments are benefiting me. It seems many companies are answering the markets desire for integration by forcing consumers into their own, closed, single stack shops.

With cloud computing rapidly breaking down the walls between traditional industry segments, times are confusing for providers. Where we used to buy hardware and software form different vendors and solicited help - to get these two to work together - from yet a third category of providers, these demarcation lines are now rapidly blurring. Hardware and software are merging into services, while at the same time we see phones behaving like camera’s, tablets behaving like PCs and TVs behaving like tablets. Naturally companies are worried about where in that blurring supply chain the largest profits will fall and as a result everyone seems determined to own the whole chain, wall to wall and soup to nuts.

But increasingly the limiting factor in market success is no longer the ability of providers to supply functionality, it is the capability of consumers to absorb functionality. Aan - at least at my age - once I mastered the science how to color my pictures, how to create a playlist, how to interact socially, how to access my email, etc., etc., I just want to be able to continue to do so, but in a seamlessly integrated fashion. I don’t want to replace it with a new app, that does virtually the same, but in a different way.

Just a couple of years ago there was a lot of talk and enthusiasm about “Open Innovation”, where companies could make the market pie bigger by working together (instead of fighting over who got what piece of the existing pie). To some extend it is the old “single vendor” versus “best of breed” dilemma, do I concentrate on having a good enough homogeneous product that does it all, or do I focus on building the best product for my functional area and work/integrate closely with others (at the risk their area turns out to be more profitable (in market speak: has a better business model)). In other words do I go integrated/closed/proprietary or more interoperable/open/standard.

My believe (or at least my hope) is that companies that act more from the perspective of consumers/customers, than from their own financial/shareholder perspective, will eventually come out better. Note however that in this context it is very important to understand exactly who the customer is: is it the user buying access to the service or the advertiser buying access to the user (in which case the user is merely the product being sold). If the app economy is to continue to grow, it will need to increasingly address the primary customer (the users). And if (granted, a big if) the market is a bit like me , it will prefer ecosystems of leading open apps over fully integrated closed stacks.

Traditionally, before the current trend towards exclusion instead of collaboration took hold, the silicon valley pressure cooker was the center of such collaboration. Maybe Europe - being a collaborative environment by nature - can step into its place and use this as much needed differentiator against the increasingly mega-large, mega-integrated and mega-closed conglomerates from Asia and North America.

Lean and Low in Las Vegas

2012-12-02T12:11:00.004-08:00

Those of you who followed my blog for a while know that the idea of applying manufacturing best practices to cloud computing is a favorite topic of mine*. This week the topic popped up in a fireside chat (the popular term for keynotes delivered from a set of armchairs, often with no fire in sight) between Amazon’s CTO Werner Vogel and CEO Jeff Bezos at re:Invent, the first Amazon Web Services customer conference.

I won't cover the conference here - many blogs and media sites already did - but in the chat Bezos made a number of interesting points on how principles of lean manufacturing are guiding Amazon’s overall endeavors and how cloud computing both supports and benefits from this approach. He discussed how – for developers- this approach turns the cost of infrastructure operations from an abstract overhead-like concept into a very visible direct cost they can directly influence. And how the cost of quality is always lower than the cost of non-quality, as fixing problems later - after it has shipped to the customer – is many times more expensive than doing things first time right. But also how cloud computing allows to continuously improve products and processes (similar to how factory workers at Toyota were empowered to stop the production line and jointly improve the process). He also stressed the importance of focusing on customers and their requirements (by continuously measuring and providing feedback loops) instead of focusing on competitors or winning.

A 70/30 rule
In the chat Bezos also discussed his assertion from an earlier interview that- with customers being more connected through social media and through the transparency that internet and big data is bringing to all markets – the effective way of doing business is flipping from spending 30% on creating a product and 70% on "shouting about it" (making sure - through marketing and sales activities - that people know about it and buy it) to the reverse. A new reality, where it makes more sense to spend the majority of energy, effort and cost on building the best possible product and a significantly smaller effort on communication and delivery. In other words, the more transparent markets are becoming, the more product quality (being fit for purpose) will rule success.

This in turn makes working on product quality (though principles such as Lean) more important, but - taking this beyond was what was said on stage – is also likely to drive total costs down and result in lower overall prices. For the enterprise IT industry - where a lot of the product costs stem from the lengthy sales & implementation cycles that traditional complex enterprise products require – this may turn out to be a very disruptive development. In fact, earlier in the week Amazon had a panel of their partners discuss their experiences and - although they all created some impressive new cloud successes for their customers - you could sense they all realized that going forward the world was no longer going to be what it was before.

A valid question to ask is whether the whole Enterprise IT industry will follow this trend. In other words: what percentage of large enterprise organizations will be interested (and able!) to adopt the self service, super market model of the cloud (see also A Cloud That Cares? Or About Eating Your Cloud And Having it too). Will there be a large percentage that prefers ready made meals (instead of home cooking using super market ingredients - One could think of SaaS solutions in this context) or will there be a significant number of organizations that - voluntarily or forced by a lack of in house capabilities - continues to prefer a full service restaurant model, where the provider does not just supply the ingredients, but also does most of the day to day work?

Let's end with a question you may want to ask yourself: When looking at your markets and customers, how fast are they moving from a 30/70 to a 70/30 model and how prepared is your organization for that?

* In one of my first Gartner blog posts I wrote about the Rise of IT-dustrialization , earlier publications include “LEAN and the Art of Cloud Computing Management (2010)” and my LeanITmanager blog.

What happens in Barcelona…. can now be seen here

2012-11-10T08:20:00.002-08:00

Also this year cloud computing was a large topic at Gartner’s annual symposium in Barcelona. It shared the limelight with the other three forces of the Nexus (Social, Mobile and Information) but managed to pop into most conversations and presentations.

For those who missed it - and for attendees that did not manage to be in all parallel sessions at once - video recordings can now be accessed at gartnereventsondemand.com (highlights available after registration of email, full sessions for registered attendees).

Personally I did a couple of dozen 1on1’s, seven larger sessions (presentations, roundtable's and clinics) and met with several more people over breakfast and dinner. With breakfasts at the time most Americans are accustomed to and dinners taking place according to local tradition, you can imagine these were pretty lengthy days. Not that we noticed, because the 1on1 rooms (unlike last year) had no daylight. Luckily we managed to get some fresh air as we popped over to the special CSP (Communication Service Provider) track that was running across the street.

Of course this special track also touched upon cloud computing as an opportunity for CSPs using the recently published (and now publically available) high level overview of Gartner's Advice for CSPs Becoming Cloud Service Providers.

On day two I popped into the IT Expo to present the new MQ for Cloud Infrastructure as a Service, the first Gartner MQ I got to participate in creating (Note: this is not a public doc, but there was some press coverage and a number of providers are offering access via their websites). Presenting at the expo is different as the audience is sitting in a kind of fishbowl while wearing headsets as the noise from the surrounding stands, raffles and demoes is at times deafening.

My conclusion from four days (where I managed to speak to maybe 1% of the total attendees and a slightly larger percentage of the participating providers) is that participants are increasingly aware of the slower pace of cloud in Europe. Providers are pushing the cloud envelope harder than (most) end-users, who –as we saw in the outsourcing and cloud clinics that we ran throughout the event – are often still more looking for a restaurant with cloud views than for self-service cloud supermarkets.

Is the way to the European Cloud paved mainly with good intentions?

2012-10-28T04:32:00.000-07:00

At the end of last month the EU released its plans for “Unleashing the Potential of Cloud Computing in Europe”. But although the document (s) - just like EU commissioner Kroes in this video - do a good job describing in non-technical terms what cloud is and why Europe should care about having a competitive cloud position, it kind of stops there.

Even though it defines three key actions – around Standards, Terms and Public Sector taking a lead role - most described actions consist of softer items such as “promoting trust by coordinating with stakeholders”, “identifying best practices”, ”promoting partnerships” and “investigating how to make use of other available instruments”. Now of course European cloud computing can benefit from funding reserved for other EU initiatives such as the Connecting Europe Facility and from side initiatives such as the “Opinion on Cloud Computing” published by the Article 29 working party that gives privacy-related contracting guidance, but in general the recent published plan seems to be more about what could and should be, than about what is or will be.

Meanwhile, both regular and social media seem to be increasingly negative regarding the progress that Europe is making. With the North American continent clearly being the biggest cloud geo and ASIAPAC – also thanks to its many emerging economies – claiming the position of fastest growing cloud geo, it only leaves less desirable labels – such as slowest or most fragmented - for describing the state of cloud activities in Europe.

Continuing to look at why things are harder and slower in Europe will just further reinforce negative sentiments, better to focus on European examples that are showing success. And in “Switch: How to Change Things When Change Is Hard” the brothers Dan and Chip Heath offer an engaging recipe for doing just that. In their book they describe how by identifying “Bright Spots” (small pockets of positive exceptions) potential future success scenarios can be discovered. Next, they encourage promoting very specific actions instead of giving broad directions. For example: Instead of asking people to eat healthier (too vague, too hard), they suggest healthcare activists promote a specific action such as "buying skimmed instead of full fat milk" (simpler, easier, more actionable, more effective).

So in Europe, instead of pushing cloud as a concept (too vague, too hard), why not focus on identifying a few very specific and very simple scenarios including their specific benefits. Next Europe can concentrate on removing any (legal, fiscal, economic, cultural) barriers to these specific scenarios and promote these few clearly and broadly. And in doing so best to follow the Heath brothers advice to promote this both on a rational and on an emotional level (or as the brothers put it eloquently: both "Direct the Rider and Motivate the Elephant" ).

PS What potential European cloud Bright Spots would you suggest (using the comment field on this blog)?

A Cloud That Cares? Or About Eating Your Cloud And Having it too.

2012-10-03T13:35:00.000-07:00

Although self-service -together with elasticity, pooling/sharing, etc. - is a defining attribute of cloud computing, many of the companies expressing an interest in cloud computing do not seem to be aware of that.

In fact, when asked: who do you expect to provision your services to the cloud?; who will monitor your services' performance and availability? and; who do you expect to take action if something goes wrong?, a majority of the companies asked look to be somewhat surprised by the question, as they simply assumed that their service provider would do so.

This is a bit like going to a supermarket (a typical self-service facility), pointing to the ingredients you like and expecting the cashier to clean, cook and serve them for you. The name we generally use for such a service however is "restaurant" and it comes with significant different expectations and pricing, as demonstrated by the price of a bottle of the wine in a restaurant versus that same bottle at a supermarket (which is one reason restaurants prefer to buy from exclusive wine merchants and not to put bottles or their wine list that are available in retail).

The supermarket versus restaurant analogy may sound like a silly comparison, but is useful to further illustrate the difference between cloud computing and more traditional IT services. It is not just that the product is vastly different: a raw steak on styroform and a brown bag with vegetables versus a prepared steak - cooked to our liking - on a nice plate, brought to our table with a smile.

The much more telling difference lies in what we would reasonable expect to happen if something goes wrong. For example: if a supermarket burns down, we would expect the supermarket to - first and foremost - concentrate on building a new facility so it can restore its service. We would not expect the supermarket to call us and help us plan tonight’s meal or offer any alternatives on an individual basis. Likewise expect cloud providers to focus primarily on getting their cloud back up in case of problems.

However, if a restaurant burns down we would find it reasonable they would call people that have made reservations. And if we booked a wedding there for next weekend, we would expect the restaurant to help us find a new facility, help us agree the new menu with the new chef and reimburse any additional cost (unless we change the menu from steak to lobster).

Self-service in most cases means the provider is not aware of what the individual customer is using its product or service for. As a result it is not getting involved with individual outcomes (as it simply does not know those). This separation is also not uncommon in self-service infrastructure and even used as line of defense in case that infrastructure turned out to be used in “less than legal” ways.

Hybrids

Self-service supermarket have a lot of benefits that restaurant customers may also be interested in: choice, speed, price, no need to make a reservation, ample parking, to name just a few. So is there a way to eat our cake and have it to?

One option are self-service restaurants, like the ones you may find along most European highways. Service tends to be fast, no need to make a reservation and if the restaurant happens to be full, we just drive to the next one. Here self-service is the overriding attribute. It’s a supermarket with cooked foods, in most cases without the price advantage. And we probably would not plan having something important, like a wedding (or another mission critical event) there.

An option closer to the desired experience may be eating at a full service restaurant that sources from a supermarket. Such a restaurant could source it ingredients on demand (by simply walking across the street), it could offer enormous choice and would in most cases not run out of ingredients. It would however likely have to pay retail prices for these ingredients (supermarkets margins are thin and they do not have a lot of room for additional discounts, especially if you don't buy in bulk). But retail prices might conceivably still be lower than what a restaurant would normally pay from it traditional channels (like the exclusive wine merchant).

Pricing

As the prices of the underlying ingredients are now transparent, end-user pricing becomes an issue. Do we pay for an all in price a cooked meal (including seat and cutlery) or do we pay separate for cooking, serving and use of the facilities. In North America paying separate for service is still customary, and although not too long ago - in the southern parts of Europe - you would be charged separately for the couvert and the service, European restaurants now largely evolved to all-in-pricing. The drawback of such fully inclusive prices is that people compare it to the publicly known ingredient prices (a problem not unfamiliar to many an IT manages, who tried to explain the difference between the TCO based price of the fully managed PC their department offered and the price of that same PC in the local mall or - even more pronounced - from an on-line retailer).

Resilience

But -just like cloud computing is not all about cost - eating out is not just about price, it is also about agility, productivity and resilience. By not having to spend time cooking, people can have more quality time or -more likely - spend more time at work: finishing that last assignment, winning that additional customer. This does however mean we are now dependent on the restaurant for a pretty essential part of our life: eating. So what happens if our restaurant - that now sources from a third party self-service supermarket- runs into problems?

As we are not buying this as self-service, we would expect the restaurant to care about the outcome (us being hungry or fed) and take DR measures in case something goes wrong. But in how far is it fair to expect that the restaurant can reasonably do this, as they are now dependent on the supermarket? Can the restaurant stay open if the supermarket closes for a holiday or if I order something after supermarket closing hours. Or is it relegated to being a middle man no longer able to control its own SLAs.

Having the supermarket and the restaurant under the same management (meaning the restaurant guys have keys to the supermarkets’ back door) can help. But only if the supermarket manager allows his restaurant colleagues to interfere in his operations and impact his targets and quality (something not very common in larger organizations).

Smart restaurant would likely source from two or more supermarkets - preferably from separate chains, located in different streets. So it will be able to serve its customers even if one of them closes or burns down. And maybe that should also be the conclusion if you are looking (even though the definition would argue there is no such thing) for a non self-service cloud. In other words if we want to eat your cloud and have it too.

Disclosure: Before getting caught up in IT & Clouds, the author worked as a manager at the largest restaurant in the Netherlands, which indeed did burn down during that period but managed to restore it services within a week and keep it running throughout the reconstruction.

On Dog Years, Cloud Years, and A-years

2012-08-27T06:05:00.000-07:00

Innovations are commonly judged by how fast they reached 50 million users (Radio, 38 years; TV, 13 years; Internet, 4 years; iPod, 3 years, etc.). Another way to look at this is by time equivalents: If one Dog Year equals 7 human years than how many years of traditional IT do we travel in one Cloud Year?

This cloud year we saw quit a lot of change - also from existing mega vendors entering the cloud market - but did it match 7 years of progress in traditional IT (taking us roughly from SOA till today)? And do we really expect the next three years to bring as much change as we saw since the days of client-server or the next seven years to be the equivalent of the journey from the days of the mainframe to today?

Now Einstein pointed out that speed is relative to the point of view of the beholder. In that spirit one of my former employers handed out gold watches after 10 years, instead of after the customary 20 years, because he felt “It all moves a little faster here”. I never made the 10 year mark there (not would that have mattered as they changed the policy in my seventh year), but I did make my first A-year last month (A as in Analyst). No watch here either, just some musings on time.

Talking about musings on time, several dog years (and a few employers) earlier, I wrote a small time perspective on the ERP market, called “the Best Years” (named after the little rural town called Best, where we had kept office till then). I did not keep a copy of that internal note but the main theme was that in just a few years the way customers procured ERP had completely changed. From vendors leading the sales process, often doing custom demoes that wowed prospects with fancy features (features that BTW seldom got to be implemented post sale), to cookie cutter selection cycles where third party consultants fed vendor profiles and offerings through standardized spreadsheets generating normalized scores. Vendor offerings became more and more comparable and our RFP responses were demoted to becoming column fodder for the Lotus123 sheet (Yes, was some time ago, when there was still a market and not an oligopoly).

Question is whether the cloud market - or more specifically the Infrastructure as a Service market - has started on a comparable journey and at what speed. At Gartner we are currently working in full swing on the next iteration of the Cloud IaaS Magic Quadrant giving us an upfront view of convergence and comparability (or even compatibility) of various offerings. For those of you interested in the MQ process, I suggest reading the recent blogs of my colleague Lydia Leong, who shares some useful background and pointers.

Closing out my first A-year I also got to write technology profiles for a few of the Hype Cycle reports (such as the ones on PaaS, on CSP infrastructure, on the Telecommunications Industry and for the brand new Hype Cycle dedicated to Cloud Service Brokerage , an increasingly popular topic, also for European CSPs). These Hype Cycle reports reflect our official take on speed (years to mainstream adoption) and impact (low, moderate, high or even transformational) of such new developments. More on these later.

First however putting some focus on increasing my personal speed, as some deadlines (like for the upcoming Barcelona Symposium) are approaching rapidly.

On Plate Tectonics, Glacier Shifts and Cloud Forecasts

2012-07-05T01:14:00.000-07:00

Not all major changes are visible to the naked eye. Standing next to a glacier it is difficult to determine direction (does it grow or shrink across seasons) and watching continents move takes even some stamina for the casual observer. Luckily this is not the case for cloud computing.

Apart from the very noticeable cloud hype (more on the cycle of that soon) there is also very noticeable growth. At the end of a deep and wide group effort, Gartner published its "Forecast: Public Cloud Services, Worldwide, 2010-2016, 2Q12 Update" accompanied by Market Definitions and Methodology: Public Cloud Services. As I highlighted several years ago in Can the Real Cloud Market Size Please Stand Up? definitions are all important when trying to compare various cloud forecasts and especially cloud forecast categories.

This year I was on the creating side of a cloud forecast, working on “Compute” services, which together with “Storage” and “Print” makes up the section “Cloud System Infrastructure Services (IaaS)”. Other sections in today’s published forecast are “Cloud Business Process Services”, “Cloud Application Services (SaaS)”, “Cloud Application Infrastructure Services (PaaS)” and the new “Cloud Management and Security Services”. I am sure there will be some public press announcements with numbers, percentages and stats later today, so I won’t go into that here.

Most publications picking up on this will likely focus on the overall biggest number ( the total of all cloud services in the furthest away year). Not sure that overall total has the granularity that makes it useful to anyone in particular - as it includes many different markets (IT and non IT) and areas (from IaaS all the way to BPaaS ). But at that level of granularity you could say that the size of the public cloud service market is developing from being roughly the size of Luxembourg’s GDP only a few years ago, via sizes comparable to countries like Oman, Angola, Vietnam, Hungary, New Zealand and Romania, into a size being roughly equal to the current size of the Irish economy by 2016. For reference, today’s overall Enterprise IT spend of 3.7 trillion per year is roughly equivalent to the size of the economy of Germany, so still plenty of room for growth. But that growth has to come from somewhere. One of the more interesting questions –more interesting than absolute size - is which traditional market glaciers are melting (or at least slowing down their progress) as a result of the global warming caused by cloud computing. A lot of the cloud growth comes from enabling stuff (technical term for new services, new markets) that simply was not possible before.

But - with global growth stagnating in some regions - some of the cloud growth will come from cannibalizing traditional markets. Scientists have not yet decided (at least the last time I looked) what actually killed the dinosaur and how long it took for them to become extinct, but for traditional IT it is safe to say it won’t be as sudden as a meteor hit, but it could happen significantly faster than global warming. And just like with these phenomena’ s, some people will be in denial (adapting too late) and others will be adapting too early . Guess –as always- timing is everything, and - as usual - timing is the hardest to get right, something our forecast efforts aim to help with.

Are SLA’s like wedding vows?

2012-06-20T13:02:00.002-07:00

It seems like every time a major cloud provider runs into an outage (like yesterday), the topic of cloud SLAs rises to the surface. But in many cases the benefit of an SLA may be limited to using it as a paper handkerchief to dry the tears of frustration of the user, while he waits for his provider to come back online?

At the risk of simultaneously offending two groups (people who believe in wedding vows XOR people with trust in SLA’s) lets compare the two a bit further. In both cases (you would hope) participants start with the best intentions. And although few will consult the agreed paperwork before making daily operational decisions, you would expect they follow policies in line with the original intentions (for example refrain from ...fill in the blanks ... and/or from buying old, refurbished hardware). But once we have a breach, hitting the partner over the head with a copy of the agreement only gives some emotional reprieve.

While discussing SLAs with a colleague we -only partly in jest - concluded that most SLAs are not worth the paper they are printed on, and consequently, on-line SLAs – which are generally not printed – are worth even less. But – you may ask – is that not what penalty clauses on SLA breaches are for? Strangely enough, not many people are using penalty clauses in their wedding vows. Vows are about trust, and having a financial or other compensation clauses seems to contradict this trust. Of course Ronald Reagan popularized the idea of “Trust but Verify” but that was in the context of the cold war, and if your partnering situation is comparable to that, no amount of SLAs or vows will help you.

Not to mention that verifying anything in the cloud is still severely hampered by lack of provider transparency. In many cases success is more about monitoring input and behavior than about monitoring output. Just like a good sales manager should not routinely ask his reps “How much have you sold today!”, but rather “How many new prospects did you call, how many demo’s did you agree and how many proposals did you send?” Likewise, SLAs (and vows) are best monitored by checking policies and behavior upfront. That is also the only way to do some verification of how realistic the given SLAs are. We have all seen the calculation that five components with 95% availability give an overall availability of barely 78% (95%⁵ or (1-5%)⁵), however having a spare for each of these five, increases availability to 98.7% ( (1-(5%)²)⁵) , which by the way is still about 7 days of unplanned, unexpected and undesired downtime per year.

If a provider does not offer the transparency needed to verify the numbers (the input), you may conclude that all you can ask for are penalties. But such penalties are known to invite calculative behavior, with partners evaluating – in a rational but not very partner-like way: “What is more expensive? Paying the penalty of addressing the issue?” Which quickly leeds to aforementioned cold war feelings.

PS As I am writing this blog, the Dutch papers are filled with in-depth analysis of –no, not of a cloud outage – but of the latest soccer celebrity divorce. Somehow this seems to be more newsworthy than the EU cup predicament of the Dutch Soccer team, which has somehow managed to miss all its SLAs (to the large frustration of its customers/fans). And just like with today’s cloud outages, the debate about what went wrong (and who is to blame) happens mainly through public interviews, blogs and articles. It seems that when something goes really wrong, transparency quickly becomes the norm again.

Disclaimer: blogs are not research, they are not peer reviewed (except maybe through heated comments below) and yes, I agree some (but not all) SLAs and/or vows may make (some) sense.

Are Conference Calls the New Coffeehouses of Idea Enlightenment?

2012-05-28T00:30:00.000-07:00

Edison is believed to have said “Genius is 1% inspiration and 99% perspiration”, and 9 out of 10 times “implementation trumps innovation” when it comes to achieving commercial success, but is it just me, or has the well of new ideas around cloud computing run a bit dry recently?

Big Data is rapid gaining ground on cloud computing when it comes to search popularity on gartner.com. And SDN (Software Defined Networking) may be flavor of the month in cloud blogs, but although there is a succinct impact on cloud computing, this is really more a networking idea. Now off course, cloud computing is only one force – and mainly an enabling one - in the nexus of cloud, information, social and mobile, but when monitoring the various publicly available industry news feeds, I get a bit of a groundhog day (the movie) feeling. You might even say we have taken a step back in some cases, with enterprises implementing older concepts - such as managed hosting - under the moniker of cloud, as my colleague David Mitchel Smith described in a recent post on reverse cloudwashing.

Is it because everyone is so busy hammering out existing cloud ideas into products, that there seems to be less new ideas around? Back in 2009 I wrote about the 4P’s of Innovation (Problem, Ponder, Publish, Pilot), and although there still are a lot of publications, many of them revisit ideas first seen in various cloud industry blogs. Now I understand that blogs are supposed to be about things that haven’t been built yet (otherwise we would call them brochures), and that today’s publication also cover implementations, references and even failures, but it did make me stop and think about the process of idea creation.

Nowadays any thinking starts with browsing, and that led me almost straight to a TED talk on “Where good ideas come from?” TED evolves around “ideas worth sharing” and possibly an even more effective way to share ideas is to animate them in the way the RSAnimate project of the Royal Society of Arts been doing. What the video clip did to music, these short animations are doing to ideas, visionary speeches and pitches (=put them on YouTube). Here the 4 minute animation of “Where good ideas come from” (ending with a book plug).

In Gartner we have what I would call “institutionalized idea mechanisms”, that include the creation of regular publications such as hype cycle reports, predicts and - a bit down the implementation road - cool vendor reports. Over the past months I have had the pleasure of participating in some of these, and all serve towards rating, categorizing and vetting ideas and concepts.

In addition we have our Research Communities (RCs). The form factor of most of these RCs are conference calls, and although these in general are more productive (although less funny) than the classic ”the Conference Call” by David Grady, I am glad we complement “the days we work with Sparky” with in-person and off-site meetings.

As Steven Johnson discusses, most ground breaking ideas were not epiphanies or eureka moments and like good wine, ideas do get better when shared, regardless of whether they are shared in a meeting, a conference call or a nineteenth century coffeehouse. Look forward to sharing some of the ideas I’m currently socializing here, but meanwhile let me know if you think I missed some recent cool new cloud ideas.

Truth in (round) numbers?

2012-02-15T01:43:00.000-08:00

Statistics matter, not only in business, but increasingly also in our social life – well, at least in our social media life. Some of the statistics I noticed this week were round numbers, like 1000. With 1000 representing both the number now showing under “followers” in Twitter and the revenue number for research (that’s excluding events, consulting and other items) we grew to in 2011.

And on my blog I saw – a bit to my surprise - it has been of full 10 weeks since my last post! That’s however more a case of bloggers block than writers block, as I did (co-)author the round number of 10 research notes since joining this summer. To catch up, I am including below a short overview of the topics these research notes covered (Gartner clients only) and that I likely will explore further in the future - both in research and using (social) media.

So what topics did these 10 research notes address? First to mention are the Predicts 2012. I participated in two this year, one called Predicts 2012: Cloud Computing Is Becoming a Reality in which we revisited an earlier prediction on cloud lock-in and explored the idea of a Maslov type hierarchy of needs for cloud computing customers. In this needs hierarchy fear of lock-in will be gaining ground as more basic needs like security are better understood.

In the second Predicts 2012: CSPs Need to Redefine Their Business Scope we focused on the expected penetration of Cloud Service Brokering among leading Communication (and increasingly Cloud) Service Providers or CSPs. Cloud Service Brokerage (CSB) was also the topic of an Emerging Services Analysis note. As discussed during the 2011 symposium keynotes brokerage of individual solutions into more whole, aggregated and integrated solutions is increasingly becoming a necessity in the world full of cloud specialists typically offering one thing at enormous scale and lowest possible price points.

But the emerging cloud computing discipline also has distinct touch points with IT markets and disciplines that have been around for many years, like outsourcing (particularly in Europe) and with the IT operations management (ITOM) discipline. With regard to the first I contributed to work from our colleagues in the outsourcing & IT services team on a Market Map and Compass, aiming to give some guidance on when to choose which approach. Meanwhile in the ITOM area a note was published called Cloud Management Platforms: A Step toward ‘ERP for IT’. I did not participate in this one personally, but given my earlier writings like "Lean, and the art of Cloud Computing Management”, you will understand I welcome this approach whole-heartedly.

A foundational element and quantitative bearing point for all these types of research notes are the industry Forecasts and Forecast Analysis notes, such as the one for Enterprise Network Services (which includes hosting, colocation and cloud IaaS services) that our team publishes in a quarterly cadence. In these we expanded the forecast horizon to 2016, which somehow feels a lot less round that the previous horizon of 2015.

A less broadly known but very interesting part of our research are the Marketing Essentials notes aimed at technology and service providers. I worked on ”Four Strategic Options for CSPs to Explore Cloud Computing Opportunities which came out shortly after this Competitive Landscape on the approaches of two European CSPs (Telecom Italia and Orange Business Services) and the earlier mentioned Emerging Technology Analysis regarding the use of self-service portals and APIs in cloud computing. APIs are becoming an increasingly important part of cloud computing and my latest research on Market Trends explores further how dynamic allocation of network capacity through use of an API (enabled by emerging software defined networking standards such as Openflow) could become the third foundational element of infrastructure as a service (next to compute and storage as a service). In this note we explore how enterprises may want to command a business class of networking services - similar to how enterprises (in the good old days) commanded a business class of airline services – but all using the same underlying infrastructure as consumer offerings.

So what’s next?
First of all lots of the day to day analyst activities I described in my (talking of round numbers) cloud in a hundred days post and more recently by my colleague Lydia Leong in a post called Five reasons you should work here. First upcoming item on the publication calendar in an overview of the research agenda our team will be writing against in 2012 and of course the annual 2012 cool vendor reports for which the nominations now are all in.

With regard to the momentum of cloud computing, I guess it is fair to say that even when one might believe we had seen the top of the hype(cycle), the amount of buzz and excitement around cloud computing continues to grow. In some cases resembling the mad rush of the days of Open Systems (where boards with no particular insight or interest in technology would a mandate a move to "open systems" (what ever that meant), sometimes even despite what business cases and common sense would suggest). And if we wanted, we could fill every week here by attending briefings from provider- and vendor-organizations on their new cloud computing plans and offerings.

But as with any new technology the proof of the pudding lies not in cooking it (or even in writing about it), it lies in eating it. And that is the next step. Moving from specific use cases (such as test-dev, customer facing web applications and high performance computing) to the generic - deploying, more and more parts of enterprise’s vast application portfolio’s using cloud based datacenter services. It’s this crossing of the chasm that has consistently proven to be the most difficult step for both vendors and technologies to take. It’s the numbers (round or not) that will eventually be the judge of how successful the transition will be.
PS. Almost all of the above notes were written in cooperation with other Gartner analysts, for a who's who see the detailed listing of lead- and co-authors by document here.

The rise of IT-industrialization

2011-11-23T02:57:00.001-08:00

A few days ago I attended the analyst summit of one of Europe’s large service providers and the theme of industrialization rang through very clearly in many of the presentation and interview sessions. Those of you who followed my earlier writings know that applying the lessons of modern manufacturing to today’s IT, is a topic near to my heart. Back in 2004, long before joining Gartner, I wrote an article on IT-dustrialization in CFO magazine , followed by many blogs, later bundled in “Lean and the art of cloud computing management”. At Gartner IT services industrialization is covered in my area under the topic of IUS (Infrastructure Utility Services) and I am currently working with two of my European colleagues - who have been covering IUS for several years - on a market map and compass for this IT industry area.

But, as mentioned earlier publishing in many cases precedes (best) practices, so it was refreshing to see how the ideas of industrialization were very much present during the mentioned analyst day. It would go too far (also given our blog policy) to list the whole story here, but let’s look at some of the more interesting bits and sound bites.

In a very open welcome talk, the CEO acknowledged that maintaining quality is one of the hardest things when moving to a more industrialized production method. To me this sounded a lot like the problems that the Japanese car industry faced when first importing into Europe. The cost of their cars was significantly lower, but they came with a quality level to match. Now we all know that in those years Dr. W. Edwards Deming made his first visits to Japan, introducing statistical analysis and simple tools to apply quality control at all stages, and the rest is history, with Japanese quality for many years matching or even exceeding global quality (Later the Deming circle formed an important foundation of other best practice movements in both manufacturing and IT).

The several ten thousand strong production department of this provider went through a similar transition. All staff was immersed in (on-line, multi-media and in person) training programs and processes were defined and orchestrated to an extent comparable with the ballet-like orchestration you see in modern factories. Comparing itself with internal and external benchmarks was made a way of life and statistical measurement tools were applied widely. Inspiration for much of this came from conversations the head of production of this provider had with his customers: large manufacturing organizations employing several hundred thousands of factory workers with a high focus on product and process quality. (Note: Don’t mistake the term factory worker we use here for the traditional blue collar versus white collar division of labor. Today’s factory workers are often higher educated, better trained and in many cases even better paid than most clerical white collar jobs, while the production activities they are responsible for are more automated and supported by more robot technology than most regular office - or IT - work).

But in IT, even more than in manufacturing, changes are a major enemy of quality. And with the type industrialized scale we are talking about here that means that thousands or even tens of thousands of change requests are to be applied each night or weekend. In manufacturing it is nowadays best practice that any factory worker can stop the production line when he/she feels quality is somehow at risk. But - as availability is one of our primary definitions of quality - stopping the line, a.k.a an outage, is exactly what we don’t want to do in IT . So in this case a best practice from the airline industry was applied. Any change has to be checked by 4 eyes before being implemented into production. In other words, it has to be reviewed by at least two people, call it the pilot and the co-pilot. An intermediate step that at first may seem expensive - just like most people in the eighties felt it was crazy to have any worker be able to stop a multi-million dollar assembly line - but that in the end reduces overall cost. Also because doing things right the first time is - over time - always cheaper than incurring rework, penalties and other cost of non-quality.

But industrialization goes further, also for the customer who is at the receiving end of these industrialized services. In this case the CIO of one of the global customers of this provider gave his insigtfull perspectives on the changes the industry is going through. Again a couple of soundbites.

This CIO is driving his organization toward obtaining “anything as a service”, which eventually – as he put it - enables CIO’s to separate the I from the T (allows focus on the Information, not the Technology). For providers this means moving from delivering traditional system integration projects, to standardized products that are delivered as a service. This change does not only impact how it is delivered, but also how it is procured. Again a car analogy. When this CIO was to order a new car, he did not go shopping around; he did not even test drive his final choice. As he had a history of good experiences with this manufacturer, a rough idea of the type of model he wanted (eg. 4 door sedan, no MPV, no SUV), and a number of minimum requirements (think of automatic, diesel, navigation), he basically picked the car unseen, as he knew it would be “good enough” for his requirements. I would classify this as a mature buyer in a mature market. Where the immature buyer will shop around, go on test drives in many makes and models (including in two door models he is not even allowed to order as a company car) and from manufacturers he may have never heard of, the mature buyer knows what he wants and rather spends his valuable time on stuff that really matters (in business terms: on activities that differentiate the company).

At this stage the market has not many mature buyers yet (even for cars, I know because I just selected mine and that took me more than a couple of calls). But mature buying also requires a mature market. In the car industry, buyers know that most of the major brands now deliver high quality and reliability. While the brands that did not reach that trusted status yet, offer warranty periods that even Charles Deming could only have dreamed off. It is this kind of trusted quality level the industry will need to reach.
As for cost, also there the ambitions and expectations are high. As Adam Smith showed in his wealth of nations, a traditional craftsman might manufacture one pin a day. A pin factory, however, created 48,000 pins a day using ten men. In the light of what Taylorism and scientific management did in manufacturing, the voiced ambition of reducing IT cost by 90% seems a lot more feasible. Especially when realizing that in some of today’s on-line "factories" (i.e. consumer web shops) the cost of an IT item already might be 1/10 of the TCO based cost that IT departments charge in their internal catalogs of IT services (and when procuring things as a service there is no "ownership", so also no Total Cost of "Ownership", although there may be other governance related cost).

I’ll finish off with a last (car) anecdote from this CIO: When Karl Benz and Gottlieb Daimler originally estimated the size of the overall addressable car market, they came to about 1 million cars (which is about as accurate as the max of 5 computers that Thomas Watson once arrived at). But more interesting than the overall number is the way they arrived at it. As there were no available statistics on cars, they estimated the number of households that would be wealthy enough to afford a chauffeur. We now know that overwhelming majority of cars are bought by users who drive these cars themselves. When extending this to IT, the idea would be that future CIO’s would be like today’s chauffeurs, the people that drive IT in a very small set of special cases, while most of IT would be “bought and driven“ by users. An interesting idea, let’s hope IT-industrialization can drive the required maturing of the supply side fast enough to be ready for this scenario.

Any comments/questions send me a mail at gregor.petri at gartner.com.

The art of listening

2011-11-13T14:07:00.001-08:00

One of the first tips I got when entering the workforce was "You have two ears and only one mouth for a reason!", meaning that in conversations with customers you should spend twice as much time listening as you do talking. Point was to avoid becoming like a radio with only one button: "Send".

Over the years I learned that above also applies to "new media" such as email, blogging, tweeting and podcasting. You need to use the receive button at least twice as much as the send button. Although less obvious, I am trying to maintain this ratio also as an analyst. Maybe not in every single conversation - our type of analyst inquiries are not like psycho-analysts calls where the analyst just keeps asking the patient repeatedly "and how do you feel about this?" - but overall it still makes sense to allocate substantially more time to input (also from colleagues, peers and even competitors) than to output.

With modern management techniques increasingly focused on managing a workforce that is increasingly spread out and that maintains work hours outside the traditional nine to five, it may – across many industries - feel increasingly difficult for individuals to maintain this balance of input versus output (as only the latter seems to gets measured and formally acknowledged nowadays).

Luckily there is modern technology - like podcasts and RSS feed readers - to help streamline at least parts of the input process. Funny thing is that some of this technology is not that new at all. My first encounter with Gartner's "podcast avant la lettre" was with the "Talking Technology" series that back then came on “compact cassettes” (for young readers that may never have seen a cassette - not even in your "my first Sony" - there is now an iPhone app that emulates the experience). This "Talking Technologies" series still exists (feed here, subscription required), in fact our High Tech and Technology Providers team just participated in the November edition with a segment on the "4G, the Next frontier for Cellular Networks" special report that describes why 4G matters and what impact it will have on both providers and consumer (Personally I just hope we will use 4G at least as much to receive as to broadcast).

Just like the classic "Talking Technologies" cassette tapes and the subsequent CDs, these podcasts require a subscription. Fairly recently we added to this a series of almost daily Gartner webinars, which are open to all interested parties after a short registration process. You can register for these webinars here, but to make it even more convenient you can also subscribe to a feed with the upcoming webinars or to a feed with all replays. This Tuesday (November 15th) I will be doing my first contribution to this series. In this webinar, called "The Crowded Cloud", I will talk about how many different industry players, including Communication Service Providers, are trying to become the Cloud Service Provider (CSP) of choice for their enterprise customers. Would love to welcome you there.

As you gathered by now the above is part of the 1/3th of my activities focused on output/sending, but I look forward to balancing that out soon with more personal and more two way communications. Meanwhile please feel free to comment below.

Cloud in one hundred days (and nights)

2011-11-11T23:14:00.001-08:00

This week the Gartner Symposium visited an unexpectedly sunny Barcelona. This year’s theme for the Gartner Symposium is "Re-imagine IT" and how the forces of Cloud, Social, Information (incl. big data) and Mobile are forming a nexus (Websters: a connected group or series) of change, see the bottom of this post for a link to the on-line replays. While here I ran into a former colleague who reminded me that this is also around day 100 in my new role as analyst. And although I am all too aware that being an analysts is not even remotely like running a country, this seems as good a point in time as any to have short look back and forward.
Apart from the usual getting acquainted with some new and some familiar (not to say classic) systems, here are some of the things that kept me busy:

A core activity is off course writing research, in October an Emerging Technology Analysis on How Self-Service Portals for Cloud Infrastructure Services Impact the Customer Experience published, followed by a European focused Competitive Landscape on Two CSP Approaches to Cloud Computing in November.
Still in the process of peer reviews, fact reviews, editing etc. are a co-authored piece on Cloud Service Brokerage and a Marketing Essentials document describing four strategic options for Cloud Service Providers. Upcoming are also the annual Gartner Predicts for 2012, for which I got to submit a new SPA (Strategic Planning Assumption) and had a look back at an earlier one.
But analysts also get out on occasion, for example to host a forum during the press day of a cloud datacenter opening at Amsterdam’s Schiphol Airport (some coverage here). Or to participate in a cloud brainstorm with the lead architects and national CTO’s of a large European communication services provider. And on the end user side: to facilitate a global cloud strategy workshop for a leading European life sciences organization and to moderate a European vendor day for an international freedom and security alliance.
In addition there are the inquiries. I stopped counting at some point, but spoke with numerous banks, governments, manufacturers and many service providers in all shapes and forms (from gaming agencies to health care providers) and from all parts of the world, including Africa, Asia, Europe and the America’s about their cloud computing strategies. Also met in person with several members of our EXP program and had briefings with and/or visited several cloud and communication service providers (CSPs).
These cloud service providers included traditional (and not so traditional) hardware providers, software companies, hosters, co-locators and a surprisingly large number of cloud providers form other continents that are in the process of setting up European facilities in Amsterdam. Also managed to squeeze in a visit to the European edition of VMworld and spoke with their executives about the (European) market.
Given the fast growing number of cloud providers in Europe we also set up a continuous survey (see last month’s blog), so if you are providing (or planning to provide) cloud services in Europe it makes sense to have a look, also if you’re interested in the process of setting up a vendor briefing around your offering.
On the internal research front started to participate in the communities covering IaaS, PaaS, IUS (Infrastructure Utility Service) and ITOM (IT Operations Management incl. private cloud). Other internal activities included onboarding training, getting a phone, ordering a car and last week I was asked to become the second or backup agenda manager in our team (Our agenda management is not about scheduling or calendars, but about setting and managing the agenda storyline of key trends and key issues that we write to).
Looking forward: I am hosting a customer roundtable at symposium about “How private or public should your ideal infrastructure cloud be?” and next Tuesday (15 Nov) I am presenting a Gartner Tech Tuesday webinar called “The Crowded Cloud – Opportunities for CSPs” (open for viewing after registering here). Going forward I plan to find more time for blogging again and for writing more in depth research on the topics covered in this blog.

Meanwhile you may want watch highlights from this year’s Symposium, like in other years these are open for general viewing (after a short free registration process) at www.gartnereventsondemand.com. In addition to the Gartner keynotes, the special guest keynote interviews and other highlights, you can also watch sessions from the symposium sponsors there, some even adapted their session –like Google – to the keynote from earlier on the day.
Apart from the earlier mentioned nexus, my personal favorite sound bites from the opening keynote were: Spending on cloud currently is already far in the tens of Billions but still only a small percentage (around 3%) of total enterprise IT spend and growing much more rapidly than traditional spend. And: Cloud will do for IT what supply chain models did for manufacturing. Both topics I hope to touch upon further in upcoming research, talks, presentations and blogs.

Using a cloud service to … collect information on European cloud infrastructure services

2011-11-02T03:02:00.000-07:00

The public cloud infrastructure as a service market is developing quickly, also in Europe. Over the past months we saw the number of international IaaS providers setting up shop in Europe increase, while also several European based providers launched new or upgraded offerings.

To keep a finger on the pulse of developments we started, as part of the European Cloud IaaS coverage at Gartner, surveying pan-European providers of Public Cloud Infrastructure as a Service . We are now extending the invite to participate in that survey more widely (like we recently did for the CIO survey).

Especially in Europe we see cloud IaaS services being offered as an extension to existing services, this survey focuses therefore on how IaaS services fit with the overall service portfolios of providers, so it also includes short questions on adjacent offerings in areas such as PaaS, SaaS, Managed Desktops & VDI, DC Outsourcing, Infrastructure Utility Services, Managed Hosting, Co-location and IT Professional & Brokerage Services.

If you are providing IaaS services in at least two European regions, then please take some time to fill out this survey. The data received will be used to gauge the overall state of the pan-European Public Cloud IaaS landscape, not to describe individual providers (for these we use other information such as the regular vendor briefing process, see here how to apply for such briefings).

You can take the survey from the Gartner Blog Network (GBN) page here

If you have any questions please send a short email to gregor.petri at gartner.com

Of these 10 most hated jobs, how many did you have?

2011-09-18T10:08:00.000-07:00

Earlier this week Yahoo Finance ran an article on the 10 most hated jobs (based on a survey asking hundreds of thousands of employees at a major career site).

What amazed me most - apart from the large number of IT jobs, including the top one, making the list – was that I personally was employed in no less than five of these . Now you may think: “What a miserable career that must have been!”, but to be honest, it never felt like that. Sure I can relate to some of dissatisfiers that people listed, such as a lack of direction from upper management (actually described for one of these jobs - guess which one - as “employers are unable to communicate coherently, and lack an understanding of the technology”). But overall I had good fun doing most of my five.

In fact, some of my other jobs – although fun at the time - would have been more logical to make the list. As a student I was a part-time restaurant worker (even though my parents insisted the only job I was doing part-time was studying) and when that restaurant burned down I spend 3 months rebuilding it as a construction worker (hard hat and all). Both of which did not make the list.

Now this survey is not about IT and does not even mention cloud computing, so why discuss it here?
The reason is that with cloud computing lots of job roles will be changing and there is an opportunity for all of us to think about which aspects of our current roles we like best (and which we hate most). So we have these clear in our mind while venturing into this new world.

On changes at the macro and organizational level –beyond cloud - Mark McDonald just published a series around "Thinking Small" (It is time for IT to ‘THINK small’, Thinking Small — Creating value rather than controlling costs , Thinking Small — Thinking value) and a piece called Re-Imagine IT, Lead from the Front (a preview on the CIO experience at Orlando Symposium).

But also at the micro level we can do our share in re-imagining our job roles. Cloud computing - with its “as a service” delivery mechanism – may add some degrees of freedom to what can be imagined. Not that it will eliminate some of the less loved aspects of our jobs by having for example: EaaS for doing our Expenses as a Service, RaaS for doing our weekly Reporting as a Service and MaaS for attending mandatory Meetings as a Service (although the idea sounds pretty cool). But cloud may enable us - also as individuals -to focus on what we are best at and on where we add the most value (which often seems to equate to having the most fun – or at least to getting the most recognition).

Scale (and particularly large scale) is certainly an important aspect of cloud computing, but let’s hope for (and work hard on) keeping our jobs at a human scale. Just like the way we apply our laptops and tablets is not impacted by having 1 million or 1 trillion transistors inside, the scale of the cloud should not impact how closely we work with people. In fact, the efficiencies of scale that cloud computing brings, may allow us to be even more granular and differentiated (a.k.a. customer focused) at the local level.

Personally I recently did my evaluation and took the opportunity to make a switch (and yes, am having fun!). Meanwhile I am observing my kids’ early (part-time) exploits into working live. First conclusion they reached is that restaurant work definitely beats a paper route (better hours) and restocking super-market shelves (more degrees of freedom). I am still working on getting them enthusiastic for any jobs involving IT (or clouds, for that matter). Not sure this top 10 will help.

Travelling at the speed of cloud in Europe

2011-08-28T08:42:00.000-07:00

First post from my new base blogs.gartner.com. When looking at public cloud infrastructure as a service it is fair to say that, with some notable exceptions, most off the larger scale activities, initiatives and even the majority of excitement and buzz around this phenomena so far originated outside of Europe. Understandable, as both the largest and most visible users of public IaaS – think of organizations such as Facebook, Twitter and Netflix – and the most well known providers of Iaas started their cloud activities on the other site of the Atlantic. Even when looking at government activities it is the US government that seems to be most enthusiastic, both in intend and action, about cloud computing.

Over the last year there are however some encouraging signs that public cloud IaaS is also gaining interest in Europe, both among users, providers, government and the press. Users are asking more questions and starting pilots and projects; Local providers are bringing their first or even second generation offerings to market; Governments are investigating opportunities and the EU even stated it wants Europe to be not only “Cloud-Friendly” but “Cloud-Active”. And in typical European tradition we see market players joining forces in new European associations or adding new chapters to their (many) existing vehicles of national and international collaboration.

A telling sign of cloud IaaS becoming more mainstream in Europe was the press picking up on the recent power outage in Dublin, headlining with how it impacted the European services of cloud IaaS providers. Now this power outage – for which the jury is still out on whether it was caused by lightning or something else – did off course not only impact cloud providers. Also several more traditional datacenters and datacenters services struggled, but the fact the press picked the cloud angle as headlining topic was telling.

So it’s clear there is a lot going on around public cloud IaaS in Europe: places to see, things to do and stuff to write about. And that is exactly what I plan to do from here. After the summer vacation I have started as a Research Director at Gartner covering this area. My colleague Lydia Leong just published a short piece detailing the Gartner teams, people and roles covering public cloud IaaS on her blog. At Gartner all IT-related analysts’ blog posts are first published on the Gartner Blog Network (GBN) at blogs.gartner.com before posting to existing or personal blog pages. If you’re interested in what we write and not write about on these blogs have a look at the Gartner Blog Network Q&A. Although tempted I will not use this post to do a further introduction of myself – with all of today’s social media my history should be an open book anyhow – plus I now have a new profile page here on gartner.com. In a next post I will cover some of the topics we are currently looking at in Europe and ways to brief us on your activities in those areas if you are a provider.

I do want to end with a disclaimer. Although “European cloud” has a nice ring to it, reality is that the idea of a European Cloud is just as “virtual” a concept as European citizen, European market and European tax. If you speak to someone from Europe and you ask where they are from, they will say Germany or Italy or France or the UK. Very few will say “I am from Europe” (unless they expect you to have absolutely no idea where their home country is located). Same for the European market. Although we have free traffic of (most) goods and services, companies have to fight for each individual market and European market share is a construct of adding up shares in individual country markets. Even a European Tax we have (so far) managed to avoid. And despite many consumers using global solutions like Twitter and Facebook all the time, I don’t expect the European cloud IaaS market to be extremely uniform for the foreseeable future. Not just because some regulations still prevent this, but also because local cultures, habits and even things like labor relations, are vastly different across different parts of Europe. This makes Europe such an interesting place to be, also when looking at this area of cloud computing.

Did the global summer of cloud start in NYC?

2011-06-11T07:23:00.000-07:00

Having just returned a scorching hot New York (host of CloudExpo East 2011) to a definitely cooler Europe, it makes sense to see whether these differences in temperature also apply to the cloud market.

This 8^th Expo was the third cloud expo I was invited to speak at and it definitely was the biggest so far. If CloudExpo West in November signaled the entry of the large mainstream vendors like Oracle, Dell and Microsoft - not to mention several CA divisions - as major sponsors, then this edition was signified by the larger turn out of end user organizations and even some coverage on mainstream news channel such as CNN. A quick audience poll on the first day revealed that about 90% of the audience is in the orientation phase, getting ready to do some serious spending (you could almost hear the vendors sigh of relieve as it is starting to look their investments will indeed pay off).

Although many of the sessions were vendors explaining their approaches and offerings, there were some notable exceptions featuring real implementations, like the case study session where hamburgers (in fact plastic burger replica’s holding gift certificates) were passed out to the audience. The “how to get from here to there session by Andi Mann, where he showed two alternative paths to the cloud (an evolutionary and a revolutionary one) was also well received. In fact his subsequent book signing session generated a queue even longer than the one at the lunch buffet.

Looking at the event from a European angle it was refreshing to see several European solutions featured in the expo. I saw a next generation NAS solution from Belgium – addressing MSP’s interested in offering an S3 equivalent without requiring the traditional high NAS upfront investments; a solution from France to automatically build the innard’s of VM’s based on specific OS and middleware requirements. And a PaaS solution - originally from Holland - built in the KISS (Keep it Stupidly Simple) tradition of the great 4GLs, but with the scalability and usability that the cloud can bring to application development.

A special mention goes to the Holland Pavilion–located directly opposite the CA stand - featuring no less than 8 additional Dutch companies and start-up’s on their way to make it big. Now this is not the first time the Dutch picked New York as a good spot to start the move into America (remember New Amsterdam?), but it is refreshing to see a government investing to stimulate economic activities around cloud computing (They did not yet spend the US$ 20B the U.S. government is vowing to put into cloud computing this year, but it’s a start). The other interesting angle of the mission was to position Amsterdam (in this case old Amsterdam) as digital gateway to Europe. With broadband in almost every home and international bandwidth that matches the proverbial throughput and transit capacity of the Rotterdam harbor this seems a logical proposition.

In my session on Day two I covered several aspects of vendor Lock-In and more importantly, possible approaches to prevent it. We discussed standards, of which most are still too early to tell or too close to call, although the open datacenter alliance - as if on cue - published their first use case proposals on the same day. I also explored the benefits of a software based fabric approach for portability across (hybrid) clouds and revisited the earlier discussed 3D cloud strategy model.

Overall the event showed that cloud is becoming red hot, almost as hot as the pavement outside the Javits convention center (a condition many an attendee sought refuge from at one of the rooftop reception's thrown by the various sponsors). With all this momentum we are likely to see a next edition with even more cloud use cases and success stories, also from Europe. This could be done by every provider session including a real-live implementation story or a separate track dedicated to sharing the experiences of cloud (end-) users. Maybe a bit like our recent cloud leaders initiative, which features online stories from cloud luminaries such as PGI and DonorsChoose and cloud accelerators like LayeredTech, ScaleMatrix and DNS Europe (now also available as free Cloud Leaders iPad app).

Don’t let the cloud creep up on you! (also not at Cloud Expo NYC next week)

2011-06-03T13:57:00.000-07:00

In IT we like to use fancy words like architecture, governance and strategy, but is our approach to IT innovations indeed as structured and planned as these terms imply or is IT in many cases just like real life: IT is what happens to you while you're busy making other plans? And if yes, does that also apply to cloud computing?

When I recently published my “to cloud or to compute” column, fellow columnist and IT service management expert Alee Roos submitted the following “confession”(at ITSM portal):

“… I'll make an embarrassing confession. I had not been much interested in the cloud-thing but finally went to listen to a presentation on cloud and cloud security. It was only then I realized that I had already put most of my business in the cloud without thinking much about it. The point was that I had bought services like web-site, Outlook Exchange, remote backups and a eSurveys, not cloud. I bought them because they solved some immediate business need at a very reasonable price.”

But Alee is not alone; I believe many organizations are in the same predicament and not only for SaaS solutions. When speaking to the European CTO of one of the largest IaaS providers (now part of a large Telco) he explained how many of their customers tend to move to the cloud. At some point a customer may have a need for temporary test or development capacity. Because it is a one-off need and not as strategic as production workloads, they “give it a try”. Often that first try is successful and they are surprised it was that easy. So a few weeks later – when a new need arises - they take the same route again. Often without a lot of due diligence, because by now this is an already used solution from an already accepted vendor. And before they know it they have several critical and/or production systems running in a cloud.

Now this is not the first time this is happening in IT. Many of us were taken by surprise by departmental servers (mini's), then we didn't notice PCs become important and costly (remember one of the first TCO surveys, the one that rocked our world and the one that caused us to run around trying to “implement” ITIL so we could make them as reliable, controlled and efficient as our mainframes had always been?). Next we managed to underestimate that at some point everyone - not just a few exceptions in higher management - needed mobile phones. And just recently some companies discovered that they had spreadsheets running core business logic that had become so large and so complex that to continue running them, they had to buy dedicated servers (yes these Excel-only servers now exist). I can’t imagine that any IT professional would plan for these things to work out like this. And finally how about the “structured and strategic way” we are introducing tablets into the organization? Yes, as mentioned, IT is what happens while you're busy making other plans. And now we risk letting the cloud creep up on us.

With SaaS most people have started to realize this, in fact our former CIO, David Hansen , now general manager of CA Technologies Enterprise Solutions and Cloud Management Business, explained to fellow CIOs at Evanta’s annual CIO Executive Summit how he – to get a feeling for what was being used sorted through the many authentication requests from inside the company to outside services. It was amazing to hear what employees were using, even back then, when cloud was not yet a household name and in a time when everything that was not approved by default was verboten (remember the days you had to leave the office to access Facebook, YouTube, Twitter etc.?).

And now as an industry, are we at risk for similar experiences with IaaS, too? Guess it's a case of l’histoire se répète (but a Dutch proverb involving a Donkey also comes to mind).

Of course you could ask: how bad is it if this happens? If users are happy, prices are reasonable and service is good. Why should we care? Well –beside the obvious one: risk management – avoiding vendor lock-in seems to be a pretty good reason. Just be sure it doesn’t creep up on you while you’re busy making other big plans.

By the way, I will be speaking more about this topic in my session at Cloud Expo on Tuesday afternoon at the Javits Center in New York: "Cloud Users of the World, Unite!, How to Remedy Cloud Lock-in.”

To cloud or to compute, that’s the question

2011-05-25T03:04:00.000-07:00

The ultimate dream of any marketer is to have its brand become a verb. “Let me quickly Xerox that”, “I Fedexed it to you yesterday”, “I just Googled it”. In cloud computing I do not see that happening any time soon. At least I haven’t heard anyone say they Amazoned their intranet or forced their custom apps yet. But it is also unlikely we will be calling it cloud computing forever.

Cloud computing is not the first new kind of computing. Previously we saw “interactive computing” - indicating that it was no longer processed in an overnight batch – and “client/server computing” –indicating it ran with a graphical user interface and not on a boring green screen terminal. But pretty soon the new way became the norm and we resorted back to simply calling it “computing”.

For cloud computing there are basically two options, we will either call it computing again – meaning it is perceived as a slightly improved version of the same old, slow and expensive service they used to get from the EDP or IT department. Or users may start to use a new name: “Since we cloud our email, the cost has gone down considerably”, “Our new CIO agreed with the CEO to cloud as much as possible, and the results have been amazing”.

Don’t get me wrong, I am not advocating to try and repeat the oldest trick in the IT book of putting a new name or label on old ideas. Like when we started calling everything e-something and we renamed our companies to Something.DOT.com. Some of that is already going on around as cloud washing (companies renaming their existing offerings to be perceived as cloud solutions, even if they have little to do with cloud).

Now it may take some time to get used to clouding as a verb - as I am sure it took some time to get used to texting as a verb. And what does not help is that - till now - the only things people clouded were issues.

For people that grew up in IT this idea of calling it cloud may sound silly. Why on earth would we use a new name for something that basically is computingas we invented it (or at least as we intended it). But it won’t be the IT people deciding what to call it; it will be the next generation of users. The same generation that – at least in Holland – massively adopted the verb computering. “What did you do last night?” “Oh not much, got pizza, watched a movie and computered a bit”. It’s the generation that came up with verbs like texting, computering and gaming. All not very results oriented activities, but that’s not the point.

The point is that if it feels like traditional computing – where you depended on an IT department to get service and decided what you were allowed to do - they will likely simply call it computing again. If it feels completely different, with more freedom, more possibilities and more speed and agility, it deserves to become a verb.

PS Anticipating the popularity of “to cloud” a Dutch vocabulary site is already showing the full conjugation here.

In cloud standards, it's all about survival of the fittest

2011-05-24T10:20:00.000-07:00

The Kuppinger Cole European Identity Conference 2011 (EIC), which was held in Munich earlier this month, truly represented a ‘Who's Who' of cloud initiatives and standards. Representatives from many influential, established and aspiring standards and industry bodies were on hand to showcase progress of the security initiatives currently in the works.

The number of initiatives is overwhelming. For years the joke was that any time two Dutch meet, they are likely to start an association or co-operative initiative, but apparently that is also true for security and cloud experts. I won't bore you with all the clever acronyms (it's a true alphabet soup), but I do want to highlight the more interesting overall findings.

In one of the first forum sessions - called "In Cloud We Trust" - Dr. Laurent Liscia of OASIS gave an interesting perspective on these competing standards. He compared the process of establishing an accepted standard to a Petri dish (no relation). Multiple cultures in a nutritious environment all trying to do a land grab. A process that is not orchestrated, it's ‘eat or be eaten' and it is hard to predict the outcome because the process takes time. No amount of pressure or additional heat can accelerate it and watching a Petri Dish real-time is about as useful and as interesting as watching grass grow. Meaning, it's better to wait for history to run its course.

Having said that, there one initiative from this forum - which had participants from ENISA, The World Economic Forum, TRUSTe and CA Technologies - that I do want to highlight, even though the implementation is still in an incubation phase.

Earlier this year the World Economic Forum IT partnership - in collaboration with Accenture and with input from a steering group including representation from CA Technologies - published "Advancing cloud computing: what to do now?" with eight recommended action areas.

The reason I mention this particular initiative is because of the enormous influence this organization has on governments. As associations all over the world realize that legislation and government stimulus may determine the success of their regional cloud industry - an industry that is likely to be the next economic engine of prosperity - they are rapidly publishing recommendations on what they feel their local governments should do to facilitate the success of cloud computing. So as not to be drowned out in the aforementioned alphabet soup of initiatives, it makes sense to anchor such local recommendations against the global guidance of the World Economic Forum.

The recommendations are not earth shattering, but if governments and the cloud ecosystem participants could streamline their efforts around these eight, it would further these efforts in a useful and pragmatic way. For more info read the (very readable) full report, but in a nutshell the recommendations are:

Explore and facilitate the realization of the benefits of cloud
Advance understanding and management of cloud related risks
Promote service transparency
Clarify and enhance accountability across all relevant parties
Ensure data portability
Facilitate interoperability
Accelerate adaptation and harmonization of regulatory frameworks
Provide sufficient network connectivity to cloud services

P.S. During the event I participated as a forum member in "Cloud Standardization: From Open Systems to Closed Clouds?," and "Identity and Access in the Cloud." I will be speaking more about the topic of lock-in at the upcoming International Cloud Expo in New York (June 6-9), and I will cover cloud computing and risk during the Middle East Financial Technology Conference (MEFTEC) in Abu Dhabi (May 30-31).

April 21, the day the cloud was out!

2011-04-25T15:21:00.000-07:00

Some blogs percolate for a while, waiting for a good day to be put to paper. For this one - about the cost of reliable cloud - that day was last Thursday, the day a network mishap caused an outage at Amazon Web Services taking down more than 100 customers, many of which cloud providers themselves, in its aftermath, while at the same time a similar mishap at Sony PlayStation´s network stopped about 70 million gamers from connecting.

A lot has been written about the outage, so I won't repeat that here (if you want to catch up suggest you read: TechCrunch for the PlayStation story, GigaOM for an overview of the Amazon issue, eWeek for some interesting analysis and the DotCloud blog for a very readable explanation of day to day use of a public cloud service like Amazon).
Instead, let's focus on the big picture of the cost of reliable cloud, comparing it - again - with the move from mainframe to distributed computing. History tends to repeat itself, especially in IT where generations of technology tend to be heavily siloed, and staffed with different generations of people who often do not even sit at the same table in the canteen.

Somewhere during the 1980s, IT pros started to realize they could get the same processing power for significantly less money, when selecting distributed servers - till that time used mainly for scientific work - instead of traditional mainframes. Soon after, companies began porting existing applications to the new platforms, focusing initially on applications that were more compute than I/O or data intensive (sounds familiar?). And indeed, initially the new departmental platform, not requiring all the resource intensive water cooling, air-conditioning or a heightened floor did seem a lot more cost effective. But, it didn't take long after initial proofs-of-concept to find that for some applications we needed more processors or to set up clusters, or uninterruptable power supplies and other redundant features. On the storage front, we started to use the same - not so cheap - storage solutions as we did on the mainframe. And shortly thereafter, the distributed boxes started to look and cost about the same as the systems they were replacing. Let's not forget that at the same time, smart mainframe developers - pushed by the competition from distributed systems - found ways to abandon water cooling, leverage off the shelf standard components like NICs and RISC processors and even re-examined their licensing cost for specific (Linux) workloads.

What does this all have to do with cloud computing? Likewise, we see that running a certain "compute intensive" workload can be done much faster and cheaper in the new environment. But when replacing these one-off batch jobs with services that have higher availability and reliability needs, the picture changes. We need to have redundant copies and failover machines in the data center, and in many cases a backup data center in another part of the country, preferably located on an alternate power grid and connected to multiple network backbone providers. All of a sudden it sounds a lot like the typical set-up a bank would have - and likely with a similar cost profile. So far cloud seems to offer cost benefits, but will this cost advantage still exist if we need to replicate our whole cloud setup at a second vendor - worst case scenario, doubling the cost. Now cloud has many other advantages beyond cost (elasticity, scalability, ubiquitous access, pay per use, etc.), so many specific use cases are still ideally suited for the cloud, but if a certain application has no need for these, then it may be worth (re-)considering the business case for a move to the cloud.

Regarding redundancy, the cloud business case actually has two opposing vectors. On one hand, there is the fact that as a user you have less control (you can't fly there and ‘kick' the server) leads to requiring a secondary backup installation. On the other hand, the cloud - with its pay-as- you-go model - offers much more efficient ways to arrange for a backup configuration for running your applications, than finding your own second location and filling it with shiny new kit.

At the same time you have to take into account the likelihood of the cloud having capacity available at the moment you need it. If your own data center fails, I am sure you could find another cloud provider with some capacity. But in this case, where one of the largest (cloud) data centers in North America had issues, all customers, in principle, could be looking to move their workloads elsewhere, it is not certain that enough excess capacity would be available at alternate providers.

In this specific case there seemed to have been technical issues inside Amazon and Sony's data centers that caused a series of events impacting the services running within, but what if there had been a major physical problem, such as a large fire or accident? With more mission critical applications moving to the cloud, companies need to make contingency planning a top priority.

As a result of last week's incidents, enterprises should take stock to assess what services are truly vital to their customers and/or to their own continuity. Organizations (and the world) seem to be more resilient than you might expect. In the Netherlands we saw Telcos ceasing mobile service in a large part of the country for periods of up to half a day, with ISPs unable to offer Internet services for as long as a week in certain regions. And yet, these companies did not go under. Each industry, government and organization will have to assess its own priorities and success metrics/criteria and standards. As I mentioned in a past blog post, aiming to continue your on-demand video services after a mayor flood, hurricane or nuclear disaster may be over-shooting what is necessary under those circumstances - survival will be the only concern in a case like that.

Looking at the reactions in the market so far, the responses of the vendors impacted by the Amazon mishap seem to be a lot more benign that the reactions of impacted PlayStation gamers. Maybe because these vendors feel they have a good thing going and the last thing they won't to do is kill it by too much honesty. What is refreshing is that not too many vendors crawled out of the woodwork saying "private cloud, private cloud, private cloud" -- not even my colleagues who recently published a book on the topic. Good! Nobody loves "I told you so" types and there's no point in kicking your opponent when he is down. But the case for private cloud did get a bit better, or is it just me thinking that?

5 Simple Rules for Creating a Cloud Strategy

2011-04-21T00:34:00.000-07:00

Over the last 18 months, the media, technologists, analysts, CIOs and CEOs have all been talking about the cloud. Now, most organizations are embarking on some form of cloud computing, but as always, technology is the relatively easy part. For those of you wanting to keep your feet firmly on the ground, and looking to set your direction and strategy, here are some simple guidelines to help you along the way.

1. Start your cloud strategy (and any cloud project) with an exit strategy

Now this may seem like contradictory advice, but there is a great risk of vendor lock-in with cloud computing than there is with traditional on premise software, and I'm sure that you will be aware of the downside of vendor monopolies such as high cost, low responsiveness and inflexible vendor business practices, which result in vendor lock-in and prohibitive switching costs.
A second important reason to avoid vendor lock-in to any cloud computing services is that unlike today, where software is purchased and then used to deliver services to customers, in the cloud era organizations are directly dependent on external providers to deliver those services. The impact of a breakdown or contract termination of as a service delivery is much more immediate to the business, it is therefore imperative to have a plan B.
Ideally you will architect your cloud services and contracts in such a way, that you can move to an alternative (Plan B) within a reasonable timeframe. A definition of reasonable depends on the type of business and may vary be between six months and six seconds. Standards, although currently just emerging, will play a crucial role and I recommend that you consider any implementations that are not based on such standards as temporary. Meanwhile the automation capabilities of vendor neutral management tools can help enable such exit strategies in a cost effective manner.

2. Design IT as a supply chain
Although deceivably simple, this analogy will help to change both the way the IT organization thinks and acts and, how other departments perceive IT. Supply chain thinking allows you to both buy and build; it allows you to make all your decisions in the context of what your company needs in order to deliver services to its customers. It allows you to look at what your IT department owns in-house but also all the services you sourced externally too. A good rule of thumb in setting your IT supply chain strategy is the lean mantra: Only do what adds value to your customers and remove any steps/activities/processes that don't add value or aren't legally required.
A supply chain approach means dynamically balancing resources (both internal and external) against rapidly changing goals and constraints towards an optimal end result. This is a very different game from traditional IT where IT operations avoided changing anything that was not broken to "keep the lights on" in the most reliable and stable manner possible. Just as in a car factory the product mix changes constantly, new products are introduced while others are phased out, the supply chain will enable IT to switch services on and off as and when required.

3. Use a portfolio approach for deciding WHAT to move to the cloud

A good cloud strategy is as much about WHAT to do as about HOW to do it. A portfolio approach helps you identify which services could be moved to the cloud and deliver cost savings and agility to the business, versus the more business critical services which - at this time - are less desirable to move to the cloud.
A portfolio approach needs to begin with the strategic goals of your organization in mind. These goals may vary from becoming customer focused to launching products in emerging markets or; reducing cost within the business.
Once the strategic goals are identified, these need to be matched to business or market constraints for example legislation, resources, geography or finance. The final step would be to map the goals and constraints to existing IT services and your cloud based opportunities.
From this exercise you will produce a roadmap of what you need to do; how you allocate human, financial and technical resources to deliver the most critical services and, monitor progress against your plan.
IT portfolio planning is not a one-off exercise and not something that can implemented overnight. It will constantly evolve as the business evolves and as IT gains maturity and experience in consuming and deploying cloud services. It is a good starting point to determine your "low hanging cloud fruit" which could add considerable value in terms of benefits or cost savings quickly and, those services which are too business critical to be put into the cloud.

4) Make service costing a core competency
If cloud computing it going to achieve one of the goals it is heralded for, then it needs to remove unnecessary cost - not just move CAPex to OPex.
Regardless of whether a service is completely rendered in house, composed from various sourced components or procured completely as a service, it is essential to understand the exact cost characteristics and the impact on the overall cost of doing business.
IT needs to be able to determine the cost of each service delivered rather than just the cost of individual IT functions. For example, services may include payment processing, issuing tickets, sending invoices, creating an order, facilitating video conference calls and delivering online training courses.
In electronics manufacturing the heads of production are not interested in how much the company spends in total on plastic versus aluminum or copper, but they want to know whether they can offer their new product at a competitive price compared to their competitors. In the same way, IT needs to prepare itself for such discussions, can they deliver services at an optimal cost, and if not, can they suggest a viable alternative?
Cost reduction is not the only reason or benefit when adopting cloud computing, increased accountability and agility and reliability are a few other areas which cloud computing can really impact positively. So whilst increasing transparency in the cost of IT services will give you insight into areas to optimize from a cost perspective, you may need to balance this view with potentially needing to increase investment in the short term for greater business agility.

5. Treat security as a service
Security or to be precise "fear of a lack of security" is consistently cited as the biggest barrier to cloud computing. However, a recent study conducted by Management Insight and sponsored by CA Technologies showed that 80 percent of mid-sized and large enterprise organizations have implemented at least one cloud service, with nearly half saying they have implemented more than six cloud services. This adoption is happening even though 68 percent of respondents cite security as a barrier to cloud adoption. These survey results indicate that for now cost and speed of deployment are leading reasons for cloud adoption and are strong enough to offset the perceived risks associated with deploying cloud services. This may be a sufficient for now, but as increasingly sensitive data and applications are selected to migrate to the cloud, organizations will quickly reach an impasse.
The security challenge with the "supply chain" model is an organization's ability to dynamically control access of a variety of users across a changing portfolio of applications running internally and externally from multiple suppliers.
The cloud computing model demands a rethink about how security is approached- making it an enabler instead of an inhibitor. The challenge is, not denying access to everyone, but letting the right people access the data they need to have access to (and no more than that) and to actively control the usage to prevent any out-of-the-ordinary activities.

Now having shared some advice and suggested first steps to start planning, I'd like to add one last thought.
The appropriate speed for deploying cloud computing depends on the culture and current state of your organization and realistically you aren't going to be in the cloud tomorrow. The US Federal government issued a directive called "Cloud First." This is basically a type of "Comply or Explain policy" which states that cloud options should be evaluated first (comply) unless there are significant reasons not to do so (in which case departments should explain). Pushing the accelerator that hard might not be everyone's cup of tea, but whatever you do: don't rush in, but also make sure you do not get left behind!