Some Cloud services providers are finding that firms aren’t running to them at full-speed to migrate their infrastructure to the ‘new cloud world’ and for some reason, they are delaying decisions. Why might that be?

There are many articles written that suggest security and supplier stability is the biggest barrier, but I think there is another factor  to consider.

Many firms have already invested in their in-house technical infrastructure, often running a virtualised server and storage (SAN)  environment (referred to as a ‘private cloud’). These firms will need a ‘step change’ to help ‘push’ them to a cloud service.  What could a step change be?

• Current data centre runs out of space or requires significant investment. For example, air conditioning replacement, new UPS or a new fire suppression system.
• Current technical infrastructure requires a significant upgrade or replacement due to age, capacity or performance.  For example, if a firm is still operating separate physical servers with no virtualization, migrating to a cloud service would be a good opportunity to reap the benefits of virtualization.
• Premises relocation, which would require an in-house hosted data centre to be rebuilt in a new location.
• Additional premises capacity required by the business, forcing the data centre to move out of the firm’s premises to a hosted service.
• Segregated infrastructure. For example, suppose a firm only hosts and operates systems that are used in-house with no external client access. If a new requirement was to offer Internet facing services, there would be a strong argument to physically separate the different infrastructure.
• Introduction of disaster recovery services.

So that is some of the step changes that would make it the right time to consider cloud services. However, there are situations when a cloud service might be unattractive.

• When the computing capability can be sourced by simply upgrading the current infrastructure.  For example, if additional storage and processing capacity is required, it could be achieved by a relatively low incremental investment in additional disk for a current SAN and an additional virtual server host.
• When the infrastructure that would be replaced by the cloud service was purchased and not fully depreciated. For example: Let’s assume that the firm’s depreciation policy is five years, that the infrastructure cost £100,000 when purchased and has been used for two years. A financial ‘write-down’ of £60,000 would be incurred (the remaining depreciation amount). In many  companies this would be added to the project cost – making it an unattractive proposition financially.
• When the infrastructure that would be replaced by the cloud service is leased and not at the end of the lease period. As with  the previous point regarding depreciation, the remaining lease costs and sometimes an early termination penalty could be added to the project cost – making it an unattractive proposition financially.

I’m not arguing against cloud services – far from it – I am a cloud advocate.  I am suggesting some reasons why firms haven’t rushed to migrate everything to the cloud.

For some Cloud providers, the best marketing strategy could be to ensure prospective clients understand your service capability, then wait until the time is right.

With Cloud based services becoming commoditised, will the smaller players will be able to compete against the likes of Salesforce.com, ProofPoint, Microsoft’s Azure, Office365 and Amazon’s EC2 ?

Last week, we saw the launch of a new and powerful IaaS service (vCloud) from Foreshore (Jersey).  Why would you choose to host your Cloud based services with a supplier who will undoubtedly charge more than a big player such as Microsoft?  It may seem a bizarre question, so here are my thoughts on things to consider before shipping your data to a different location in order to reduce (immediate) costs.

What’s a jurisdiction?

• A jurisdiction is more than just a location. For example, knowing that your Internet transaction processing system is hosted in the USA isn’t enough – you need to know which state(s) it is in and understand the legal and tax implications of those states.
• You need to look at the legal and tax implications of all the relevant jurisdictions, including where you and your business are located, where the hosted servers physically are (including any disaster recovery facility) and also where your hosting provider’s headquarters are.

Client perception

• Where do your clients think their data physically is?
• Do your clients actually care where their data is ? For example, a Trust client may take a keen interest in data jurisdiction, whereas a client of an online shop probably takes no interest as long as their data is secure and their goods are delivered.
• How would your clients react if their data was hosted in a different location to where they thought it was?

Client agreements

• Do any of your client agreements specify the physical location or jurisdiction of their data?
• If you haven’t repapered clients recently and sought their agreement to the changes (if required), you may be bound by legacy client agreements.
• If you have ‘click-wrap’ agreements, this may be easy for you. In other words, if you have the ability to change your agreements and simply republish online for them to become effective.

Legal and regulatory

• Have you ensured that the jurisdiction you are considering for hosting has data protection, regulatory and legal standards at least as high as your current location? For example, would you want to be associated with a non-white listed OECD country by hosting your data there?
• For example, Singapore does not have one unified data protection law. Instead, it is subject to over 140 disparate and  sector epecific statutes that regulate the use and disclosure of personal data.
• Some jurisdictions could have more stringent laws than your current jurisdiction. For example, Germany currently has some of the most onerous data protection laws in Europe. This may place more demands on your organisation.
• How will you maintain compliance across multiple jurisdictions? For example, the storage and processing of payment card data.
• If the relationship between you and the hosting provider turns sour, are you comfortable with the legal process in their jurisdiction? You may need to use it.
• Does your regulatory regime require you to physically inspect the data centre used?
• Microsoft, being a USA company, have confirmed that their European data centres are subject to the USA Patriot act. Are you comfortable with this?

Tax

• Have you taken taxation advice about the jurisdictions, to determine if you will need to pay tax there? You need to think about where you are, where your company’s operations are, where your clicnts are and where you are hosting.
• If you host a transactional website in the USA, it can create a taxable presence for USA federal income tax purposes. Just storing data would not usually be deemed to be conducting business for USA tax purposes, however the activity can be treated as the conduct of business if the non-USA person stores data for the account of others or allows clients or other third parties access to the data. Click here to read an interesting document regarding the USA tax implications - it’s written for Australians but the principle is the same.
• If you are considering hosting in the USA, don’t forget that the USA has fifty states (hence it’s name!), each with it’s own laws and taxation regime. Make sure you know which state(s) your data will be in and how that state’s laws and taxation will impact you. Click here to read about the Amazon challenge on a new California tax as an example.
• If you host a transactional website in Singapore, you could be liable for Singapore tax if it is deemed that your Singapore presence is deemed a permanent establishment – ie you have a fixed place of business in Singapore and you carry-out your business activities wholly or partly through that place. You can start to see that a hosted Internet transaction website could be deemed as taxable in a jurisdiction other than where you may be located. Click here to read an interesting document regarding Singapore tax implications – it’s written for Australians but the principle is the same.
• Is there a double taxation agreement in place between your business jurisdiction and the hosting jurisdiction? You don’t want to pay tax twice !

And finally ….

The message here is that all that glitters is not necessarily the most appropriate for you and your business. An apparently low cost solution may not be the best solution for your business. If all you need is e-mail and Microsoft Office type functionality, then Office 365 could be good for you and your organisation. If you need transaction processing capability, look before you leap to an apparently lower cost supplier and different jurisdiction.

Also read this

• Clouds and data jurisdiction
• Cloud service provider due-diligence
• Real-life advice for adopting private Cloud technology

There’s no denying that Cloud Computing is the latest buzzword, but is it just another way of selling outsourced services?

Firstly, some definitions….

• Outsourcing – this is the contracting out of a business function, normally one previously performed inhouse, to an external provider.
• Cloud Computing service – for this article. I am not referring to a ‘Private cloud’ hosted in a firm’s building. I am referring to a Cloud type service that is hosted outside a firm’s premises – whether that be a Public Cloud or an externally hosted Private Cloud.

There’s no getting away from the fact that if you are using a service provided by a supplier, it is either an outsourced service or very close to being so. However, a Cloud service is so much more than that.

Why would you outsource?

Outsourcing occurs for a number of reasons, typically:

• Supplier can provide a better quality of service
• Supplier can provide service for lower cost.
• The function isn’t the outsourcing company’s core focus. I.e., don’t try and be the best at everything.

Why would you use a Cloud service?

Firstly, it depends on what type of Cloud service you use. Let’s look at two examples.

IaaS (Infrastructure-as-a-Service) services include Microsoft’s Azure platform. and Jersey Telecom’s OneSource. Typical benefits include:

• Avoid upfront investing capital into hardware and software.
• Avoid building Data Centre(s) in your firm’s premises.
• Access to computing resources when your need it – e.g., you may have very spikey/seasonal traffic, such as ticket sales.
• Ability to reduce total computing power, as the multi-tenanted servers will be better utilised than the traditional model of one server=one role.

AaaS (Application-as-a-Service) services include Google Docs, Gmail, Google Calendar, Xero Accounting, Microsoft’s Cloud-based Office365 and Dynamics CRM. Typical benefits include:

• Avoid an upfront investment of capital into hardware and application software.
• Avoid installing bespoke technology for just one system and avoid training technical staff.
• Geographic coverage due to the providers coverage.

You can see from just these two short examples that there are far more benefits to be had from Cloud computing services, than the traditional outsourcing of IT services.

So, getting back to the question….

…. is Cloud Computing just another selling opportunity dreamt-up by the marketing team in a bid to repackage and sell outsourcing services?  The answer is ‘no’ – Cloud computing is far more than that.

There is no doubt that utilising Cloud services is a form of outsourcing, however Cloud computing is a paradigm shift from the traditional hosting model. Don’t dismiss Cloud computing as ‘the latest fad’ or just a ‘passing trend’. Whichever Cloud model is used, there can be many benefits derived when compared with the more traditional outsourcing of IT services.

Application-as-a-service (AaaS)

This is typically a specific and often specialised business system that is delivered over the Internet to a user, typically accessing the application through a browser. While many people associate Application-as-a-service with ‘vertical’ enterprise applications such as Salesforce, office automation applications are also Applications-as-a-service, such as Google Docs, Gmail, Google Calendar and Microsoft’s Cloud-based Office365 or Dynamics CRM.

Also read this article.

Data as a service

It could be argued that this service has been with us for some time now – for example Interactive Data’s pricing services.  Data/Information-as-a-service provides data on-demand using well defined interfaces such as an API.

Data-as-a-service is typically provided to a company by an external service provider. However, large corporations can benefit from scales of economy by aggregating data and disseminating it within it’s ‘child’ companies.

There are two types of Data-as-a-Service; private data and public data.

• Private data is typically paid-for access to valuable data that isn’t readily available in the public domain. Examples include live stock price information, address and post code/zip code validation, and credit reporting. This type of service is not new and has been provided for years by companies such as Interactive Data.
• Public data is a newer service and is typically formatted data in the public domain. For example, the Google Public Data Explorer allows you to incorporate demographic data with your company’s sales figures to perform powerful statistical analysis.

Data Centre-as-a-service

Refer to Infrastructure-as-a-service.

Database-as-a-service

This provides the ability to use the services of a remotely hosted database, sharing it with other users, and having it logically function as if the database were local. Different providers have different models, but the advantage of this service is to be able to use database technology that would typically be a significant cost in hardware and software licenses if hosted in-house.

Desktop-as-a-service (DaaS)

Also referred to as ‘virtualized desktops’. A large cost for firms is the purchase, deployment and subsequent management of desktop PC devices – especially in remote offices. Desktop-as-a-service can help alleviate these costs and headaches, by offering a virtualized desktop that runs ‘in the Cloud’.

There are operational considerations, such as the fact that the users need physical devices to access the Cloud-delivered desktop. However, these can be low-cost, low-maintenance locked-down thin clients.

Also read this article.

Governance-as-a-service

Refer to Management-as-a-service.

Hardware-as-a-Service

This term seems to have faded out of use now. It referred to the ability for companies to avoid purchasing hardware when they could ‘rent’ services from cloud platforms such as Amazon’s EC2.

Identity-Management-as-a-service (IMaaS)

This is an area that has the potential to grow significantly. It covers the identification of users and ensuring they receive only the access levels that they should have. That sounds easy, but how do you know that a remote user is really who they say they are?

This service  provides access control and audit capability for multiple SaaS, Public Clouds and Private Clouds, whilst at the same time giving users the benefit of single-sign-on (SSO).

An example of a service in this area is Symplified.

Information-as-a-service

Refer to Data-as-a-service.

Infrastructure-as-a-service (IaaS)

This is also referred to as Data Centre-as-a-service, this is the ability to remotely access computing resources. In essence, you lease a physical server that’s yours to do with as you will, and for all practical purposes it is your data centre, or at least part of a data centre. The difference with this approach versus more mainstream cloud computing is that instead of using an interface and a metered service, you’re getting access to the entire machine and the software on that machine.

In short, it’s less a packaged solution and more akin to ‘traditional’  hosting.

Also read this article.

Management-as-a-service and Governance-as-a-service

This is an on-demand service from a Cloud service provider that allows the management of one or more Cloud services.  Typically, these are simple things such as systems topology, resource utilisation, virtualization management and up-time management.

management/governance systems are now becoming available, such as the ability to enforce defined policies on data and services and report on SLA and service metric compliance.

Platform-as-a-service (PaaS)

This is a complete platform that is delivered through a remotely hosted (Cloud) platform to subscribers. It can include application development, interface development, database development, storage and testing.  It is based on the traditional timesharing model and modern Cloud Platform-as-service providers provide the ability to create enterprise-class applications for use locally or on-demand for a subscription price or free that is typically less than hosting it in-house yourself. An example of this is Microsoft’s Azure platform.

Also read this article.

Process-as-a-service

This refers to a remote resource that can aggregate many resources together, such as services and data, whether hosted within the same cloud computing resource or from separate providers, to create business processes.

You can think of a business process as a Meta application that spans different systems, leveraging key services and information that are combined into the correct business sequence to form a process. These processes are usually easier to change than applications, and thus provide agility to those who use these process engines that are delivered on-demand.

Security-as-a-service

As the incidence of viruses, malware, attacks and email phishing increases day-by-day, the job for the IT team to protect a firm gets more and more complex. Security-as-a-service is starting to become an attractive proposition, as it’s a method of outsourcing a headache for management by experts.

For this to work, all Internet connectivity for the firm needs to be routed through the service provider. Failure to do this could result in an unmanaged ‘unlocked back door’ into your firm.

Examples of Security-as-a-Service providers are McAfee, Zscaler and Symantec’s MessageLabs who have been providing this service for some years.  Click here for a high-level review of service offerings.

Software-as-a-service (SaaS)

Refer to Application-as-a-service.

Also read this article.

Storage-as-a-service

Also known as ‘storage on demand’ or ‘disk space on demand’.

This is the ability to use storage that physically exists at the remote Cloud service provider but logically appears as local storage resource to any application that requires storage. Apple’s MobileMe iDisk service is an example of Storage-as-a-service..

Testing-as-a-service

This is a service that allows the testing of local or Cloud-delivered systems using testing software and services that are remotely hosted by the Cloud services provider. Note that while a Cloud service requires testing itself, Testing-as-a-service services can test other Cloud applications, Web sites and even internal enterprise systems.  They do not require a capital investment  in hardware or software within the enterprise, for something that may only be used for a limited period of time.

IaaS is an outsourced service offering in which a service provider hosts the base infrastructure and storage. Using these base infrastructure services, you can install the servers and services you need to run for your business although many providers will also provide this as a service.

Typically, the infrastructure will be delivered using virtual infrastructure which allows the service provider to better utilise hardware and hence offer the service at a lower cost than the traditional ‘host your own servers’ method.

IaaS services are usually accessed by the Internet or in some cases, by a private network.

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What is the relationship between Cloud Computing and IaaS ?

Cloud Computing is a generic term that describes shared computing resources that can be dynamically scaled according to business requirements, faster than traditional computing environments.

IaaS is one delivery model of Cloud Computing. Refer to these articles for information about other delivery models: DaaS (Desktop as a Service), PaaS (Platform as a Service) and SaaS (Software as a Service).

Service delivery options

SaaS is offered through a number of different delivery options, such as Public cloud service, Private cloud, Hybrid cloud and managed cloud.

Refer to this article about Cloud Computing for further information.

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What are the benefits of using IaaS ?

• The up-front cost of introducing infrastructure is reduced, as the usual capital investment in hardware is replaced by a monthly ‘usage’ charge. The economic benefit of this should be verified to account for the services used and data volumes.
• The cost of using the system (should be) less than the cost of hosting it yourself, when taking into account all the infrastructure costs such as hardware, software, backups, contingency provision and ongoing upgrades and maintenance.
• Improves the agility of IT services, by being able to quickly obtain additional computing processing power and storage capacity. Many companies use IaaS as a testing environment where they need additional computing facilities for a short period of time.

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What should I be aware of before using IaaS ?

• Perform due-diligence on the supplier to ensure they are financially stable and have security and operational policies and procedures in place that are at least as comprehensive as those of your company.
• Ensure you know where your data is. Many companies have a legal and regulatory obligation to know exactly where their data is.
• Ensure you know who has access to your data at the service provider. You don’t want a disgruntled employee of the service provider taking a copy of your client database.
• Ensure the data is encrypted on the service provider’s servers and on their backups.
• Ensure the backed-up data is available for you to recover from as a result of an issue caused by your company. For example, many Cloud service providers perform regular backups, but will only restore if they suffer a problem. This won’t help you if you accidentally delete some of your data.
• Ensure you understand the legal and regulatory requirements that you must comply with. For example the retention of month-end backups.
• Ensure the infrastructure is configurable to meet your needs ‘out of the box’. For example, make sure you have the ability to restart servers and install software as you need to.
• Understand how upgrades to the operating system software are applied and whether you have the opportunity to test your business systems on the new version before it is implemented for live use.
• Understand how the system and its security will be integrated into your company’s existing infrastructure.
• Delivery of the service is totally dependent on the performance and stability of the network. Make sure that both the company premises and the hosting provider have sufficient capacity and diverse routing to cope in the event of a failure.

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What is the financial impact of using IaaS ?

Financially, the significant difference of Cloud Computing to the traditional model of owning your own servers, is that Cloud Computing is typically charged on a pay-as-you-use operating expense instead of a capital investment. This may suit many companies, as they can very quickly get access to significant computing power and capacity for no capital outlay. However, tight control needs to be kept on the use of the services, as it is easy to expand and hence increase ongoing charges.

Charges are typically based on the number of virtualised servers, the amount of network traffic and the data storage space used.

Watch-out for the network traffic charge. Often this is capped at an amount per month. If your Cloud Computing has public access, the network usage could be out of your control and you could end-up paying an excess network usage cost.

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Examples of IaaS

An example of IaaS is the OneSource service from Jersey Telecom and Virtustream.

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Do I still need an IT capability in-house ?

The quick answer is ‘yes’. With an IaaS service, there is still the need to support all the IT infrastructure, the main change is that the server-side hardware is hosted elsewhere, so activities such as hardware maintenance and backups transfer to the service provider.

Also read ….

• Cloud Computing – what is everyone so excited ?
• Platform as a Service (PaaS)
• Software as a Service (SaaS)
• Desktop as a Service (DaaS)

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PaaS is an outsourced service offering in which a service provider hosts all the infrastructure services that you are likely to need, such as database management, application serving, development environment, workflow and security. Using these services, you can either develop your own business system or deploy a ready-built one.

Typically, the infrastructure will be delivered using virtual infrastructure which allows the service provider to better utilise hardware and hence offer the service at a lower cost than the traditional ‘host your own servers’ method.

PaaS services are usually accessed by the Internet or in some cases, by a private network.

.

What is the relationship between Cloud Computing and PaaS ?

Cloud Computing is a generic term that describes shared computing resources that can be dynamically scaled according to business requirements, faster than traditional computing environments.

PaaS is one delivery model of Cloud Computing. Refer to these articles for information about other delivery models: IaaS (Infrastructure as a Service), DaaS (Desktop as a Service) and SaaS (Software as a Service).

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What are the benefits of using PaaS ?

• The up-front cost of introducing infrastructure is reduced, as the usual capital investment in hardware and software is replaced by a monthly ‘usage’ charge. The economic benefit of this should be verified to account for the number of users, data volumes.
• The cost of using the system (should be) less than the cost of hosting it yourself, when taking into account all the infrastructure costs such as hardware, backups, contingency provision and ongoing upgrades and maintenance.
• Your company’s need for IT skills will reduce if your PaaS supplier provides a fully managed solution. The skill-set required will be less about technology and more focused on configuration of the PaaS service to fit the business needs and vendor management.

Service delivery options

SaaS is offered through a number of different delivery options, such as Public cloud service, Private cloud, Hybrid cloud and managed cloud.

Refer to this article about Cloud Computing for further information.

.

What should I be aware of before using PaaS ?

• Perform due-diligence on the supplier to ensure they are financially stable and have security and operational policies and procedures in place that are at least as comprehensive as those of your company.
• Ensure you know where your data is. Many companies have a legal and regulatory obligation to know exactly where their data is.
• Ensure you know who has access to your data at the service provider. You don’t want a disgruntled employee of the service provider taking a copy of your client database.
• Ensure the data is encrypted on the service provider’s servers and on their backups.
• Ensure the backed-up data is available for you to recover from as a result of an issue caused by your company. For example, many Cloud service providers perform regular backups, but will only restore if they suffer a problem. This won’t help you if you accidentally delete some of your data.
• Ensure you understand the legal and regulatory requirements that you must comply with. For example the retention of month-end backups.
• Understand how upgrades to the software are applied and whether you have the opportunity to test your business systems on the new version before it is implemented for live use.
• Understand how the system and its security will be integrated into your company’s existing infrastructure.
• Delivery of the service is totally dependent on the performance and stability of the network. Make sure that both the company premises and the hosting provider have sufficient capacity and diverse routing to cope in the event of a failure.

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What is the financial impact of using PAAS ?

Financially, the significant difference of Cloud Computing is that it is typically charged on a pay-as-you-use basis. The cost of is therefore an operating expense instead of a capital investment. This may suit many companies, as they can very quickly get access to a business system for no capital outlay and the cost is charged monthly.. However, tight control needs to be kept on the use of the services, as it is easy to expand and hence increase ongoing charges.

Charges are typically based on the number of virtualised servers, the amount of network traffic and the data storage space used.

Watch-out for the network traffic charge. Often this is capped at an amount per month. If your Cloud Computing has public access, the network usage could be out of your control and you could end-up paying an excess network usage cost.

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Examples of PAAS

Examples of PaaS are Google’s App Engine and Amazon’s Web Services Elastic Compute Cloud.

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Do I still need an IT capability in-house ?

It depends on whether all of your company’s infrastructure will run on the Cloud platform. If the answer to that is no, then you will still need an IT capability.

If your PaaS supplier provides a fully managed solution. The skill-set required will be less about technology and more focused on configuration of the PaaS service to fit the business needs and vendor management.

Also read ….

• Cloud Computing – what is everyone so excited ?
• Infrastructure as a Service (IaaS)
• Software as a Service (SaaS)
• Desktop as a Service (DaaS)

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SaaS is an outsourced service offering in which a service provider hosts one or more software applications that can licensed to and used by many different clients with their data securely partitioned.

Traditionally if you need to use software, it is installed on your desktop PC and/or on your company’s servers. With SaaS, the software is installed and run on the service provider’s infrastructure.  This not only avoids the need for the infrastructure to run and support the system, it also takes on responsibility for upgrades, backups and data storage.

SaaS service providers can provide just one application through to complete application suites.

SaaS services are usually browser based and accessed by the Internet or in some cases, by a private network.

.

What is the relationship between Cloud Computing and SaaS ?

Cloud Computing is a generic term that describes shared computing resources that can be dynamically scaled according to business requirements, faster than traditional computing environments.

SaaS is one delivery model of Cloud Computing. Refer to these articles for information about other delivery models: IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and DaaS (Desktop as a Service).

Service delivery options

SaaS is offered through a number of different delivery options, such as Public cloud service, Private cloud, Hybrid cloud and managed cloud.

Refer to this article about Cloud Computing for further information.

.

What are the benefits of using SaaS ?

• The up-front cost of introducing the business system into your company is reduced, because the usual capital investment in hardware and software is replaced by a monthly ‘usage’ charge. The economic benefit of this should be verified, taking into account the number of users, data volumes and expected period of time that the system will be used for.
• The cost of using the system (should be) less than the cost of hosting it yourself, when taking into account all the infrastructure costs such as hardware, backups, contingency provision and ongoing upgrades and maintenance.
• If you have a requirement for mobile users to access the business system from anywhere in the world.

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What should I be aware of before using SaaS ?

• Perform due-diligence on the supplier to ensure they are financially stable and have security and operational policies and procedures in place that are at least as comprehensive as those of your company.
• Ensure you know where your data is. Many companies have a legal and regulatory obligation to know exactly where their data is.
• Ensure you know who has access to your data at the service provider. You don’t want a disgruntled employee of the service provider taking a copy of your client database.
• Ensure the data is encrypted on the service provider’s servers and on their backups.
• Ensure the backed-up data is available for you to recover from as a result of an issue caused by your company. For example, many cloud service providers perform regular backups, but will only restore if they suffer a problem. This won’t help you if you accidentally delete some of your data.
• Ensure you understand the legal and regulatory requirements that you must comply with. For example the retention of month-end backups.
• Ensure the application is configurable to meet your needs ‘out of the box’. It is unlikely that you will be able to have a bespoke development just for your own use.
• Understand how upgrades to the software are applied and whether you have the opportunity to train on the new version before it is implemented for live use.
• Understand how the system and its security will be integrated into your company’s existing infrastructure.
• Delivery of the service is totally dependent on the performance and stability of the network. Make sure that both the company premises and the hosting provider have sufficient capacity and diverse routing to cope in the event of a failure.

.

What is the financial impact of using SaaS ?

Financially, the significant difference of Cloud Computing is that it is typically charged on a pay-as-you-use basis. The cost of is therefore an operating expense instead of a capital investment. This may suit many companies, as they can very quickly get access to a business system for no capital outlay and the cost is charged monthly.. However, tight control needs to be kept on the use of the services, as it is easy to expand and hence increase ongoing charges.

Charges are typically based on a monthly fee and the number of users or transactions processed.

Before committing to the service, ensure you understand how you would be charged if usage increased within your company, such as more users or an acquisition.

Watch-out for a network traffic charge. Often this is capped at an amount per month. If your Cloud Computing has public access, the network usage could be out of your control and you could end-up paying an excess network usage cost.

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Examples of SAAS

Examples of SaaS are Google Mail, Salesforce.com CRM and ProofPoint e-mail archiving.

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Do I still need an IT capability in-house ?

The quick answer is yes. Most SAAS offerings are for a single business system and it is unlikely that all your needs will be met by one SAAS service provider.

It is possible to ‘mix and match’ (mash-up) different applications from different SaaS providers, which would reduce, but not remove the need for a company’s server-side infrastructure. The role of IT changes to be less engineering focused and being closer to the business.

Also read ….

• Cloud Computing – what is everyone so excited ?
• Infrastructure as a Service (IaaS)
• Platform as a Service (PaaS)
• Desktop as a Service (DaaS)

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“Shared computing resources that can be dynamically scaled according to business requirements, faster than traditional computing environments.”

It’s easy to come-up with a one line description, but what does it mean and why is there so much hype about cloud computing?  The term ‘cloud computing’ has been in use for some years now, but is now getting increased publicity as it enters the mainstream. There are many hyped-up technologies that promise to change the world, however, Cloud Computing is an exciting way to deliver solutions with reduced cost and increased agility. Generally, when people refer to ‘Cloud Computing’, they are referring to rented computing services  from a service provider, accessed across the internet. Using this service means the client needs less IT infrastructure on their own premises and reduced costs because the underlying infrastructure is shared between many clients.

Generally, when people refer to ‘Cloud Computing’, they are referring to rented computing services  from a service provider, accessed across the internet. Using this service means the client needs less IT infrastructure on their own premises and reduced costs because the underlying infrastructure is shared between many clients.

Cloud computing comprises of the following features:

• Provision of computer processing and  data storage capability.
• Shared resources that are dynamically scalable and typically, virtualised.
• Service is provided over a network, which can be the Internet of a private network.
• Service is usually charged as an operating expense instead of a capital investment.

What are the benefits of using Cloud Computing ?

• The up-front cost of introducing infrastructure is reduced, as the usual capital investment in hardware is replaced by a monthly ‘usage’ charge. The economic benefit of this should be verified to account for the services used and data volumes.
• The cost of using the system (should be) less than the cost of hosting it yourself, when taking into account all the infrastructure costs such as hardware, software, backups, contingency provision and ongoing upgrades and maintenance.
• Can prevent valuable real-estate being occupied by IT infrastructure equipment that requires additional security, cooling and UPS power and (sometimes) generator power.

What should I be aware of before using Cloud Computing ?

• Depending on the Cloud service used, the service may be less flexible than your company is used to. You must ensure that the service offering will work for your company.
• Deploying a non-standard application may not be possible or may incur charges from the supplier.
• Perform due-diligence on the supplier to ensure they are financially stable and have security and operational policies and procedures in place that are at least as comprehensive as those of your company.
• Ensure you know where your data is. Many companies have a legal and regulatory obligation to know exactly where their data is.
• Ensure you know who has access to your data at the service provider. You don’t want a disgruntled employee of the service provider taking a copy of your client database.
• Ensure the data is encrypted on the service provider’s servers and on their backups.
• Ensure the backed-up data is available for you to recover from as a result of an issue caused by your company. For example, many Cloud service providers perform regular backups, but will only restore if they suffer a problem. This won’t help you if you accidentally delete some of your data.
• Ensure you understand the legal and regulatory requirements that you and your cloud service provider must comply with. For example the retention of month-end backups.
• Ensure the infrastructure is configurable to meet your needs ‘out of the box’. For example, make sure you have the ability to restart servers and install software as you need to.
• Understand how upgrades to the operating system software are applied and whether you have the opportunity to test your business systems on the new version before it is implemented for live use.
• Delivery of the service is totally dependent on the performance and stability of the network. Make sure that both the company premises and the hosting provider have sufficient capacity and diverse routing to cope in the event of a failure.

What is the financial impact of using Cloud Computing ?

Financially, the significant difference of Cloud Computing to the traditional model of owning your own servers, is that it is typically charged on a pay-as-you-use operating expense instead of a capital investment. This may suit many companies, as they can very quickly get access to significant computing power and capacity for no capital outlay.

Tight control needs to be kept on the use of the services, as it is easy to expand and hence increase ongoing charges.

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Cloud Computing service delivery models

Desktop as a Service (DaaS)

DaaS is an outsourced service offering in which a service provider hosts the infrastructure and storage to deliver manage your company’s desktop devices. For many people, DaaS is more difficult to understand than IaaS, PaaS or SaaS. This is probably because IaaS, PaaS or SaaS are all server focused and it is easy to envisage a remote third-party hosted servers service, however it is not so easy to envisage how the ‘PC on my desk’ can be virtualised and run remotely.

DaaS uses desktop virtualisation or VDI (virtual desktop infrastructure) to deliver a standard desktop to the users in your company. The desktop (or laptop) device used to access the service can be a ‘thin client’ which means there is very little infrastructure required at the company premises.

Click here to read more about DaaS.

Infrastructure as a Service (IaaS)

IaaS is an outsourced service offering in which a service provider hosts the base infrastructure and storage. Using these base infrastructure services, you can install the servers and services you need to run for your business although many providers will also provide this as a service.

Typically, the infrastructure will be delivered using virtual infrastructure which allows the service provider to better utilise hardware and hence offer the service at a lower cost than the traditional ‘host your own servers’ method.

Click here to read more about IaaS.

Platform as a Service (PaaS)

PaaS is an outsourced service offering in which a service provider hosts all the infrastructure services that you are likely to need, such as database management, application serving, development environment, workflow and security. Using these services, you can either develop your own business system or deploy a ready-built one.

Typically, the infrastructure will be delivered using virtual infrastructure which allows the service provider to better utilise hardware and hence offer the service at a lower cost than the traditional ‘host your own servers’ method.

Click here to read more about PaaS.

Software as a Service (SaaS)

SaaS is an outsourced service offering in which a service provider hosts one or more software applications that can licensed to and used by many different clients with their data securely partitioned.

Traditionally if you need to use software, it is installed on your desktop PC and/or on your company’s servers. With SaaS, the software is installed and run on the service provider’s infrastructure.  This not only avoids the need for the infrastructure to run and support the system, it also takes on responsibility for upgrades, backups and data storage.

SaaS service providers can provide just one application through to complete application suites.

Click here to read more about SaaS.

Cloud Computing types

Public cloud

This is what most people understand to be Cloud Computing. This is computing resources charged on a pay-as-you-use basis.

Financially, this is usually the most cost effective option because the infrastructure is already established and is publicly shared. Therefore there is no capital investment needed by your company to get started.

There are drawbacks however. It is important to make sure that the service meets your needs, because it will be less flexible. Companies may be uncomfortable placing their most sensitive data in a public cloud, even though it will be logically secured.

Private cloud

A private cloud is technically very similar to a public cloud, except the technical infrastructure is dedicated to your company.

Financially, this can still be cost effective, although less-so than a public cloud because the economies of scale can’t be achieved. A company can still enjoy the benefits of financial and agility benefits from virtualisation.

Companies are more likely to be comfortable with this option for their most sensitive data.

A private cloud doesn’t have to be operated by an outsourced provider – it can be based on in-house infrastructure.

Hybrid cloud

This is a combination of a private and public cloud. It allows a company to obtain the benefits of cloud computing, whilst protecting their most sensitive data.

This is a common scenario for companies who are unwilling to place all their data in a public cloud.

Managed cloud

This is similar to the private cloud, except the cloud is managed by a third party hosting provider.

Also read ….

• Software as a Service (SaaS)
• Infrastructure as a Service (IaaS)
• Platform as a Service (PaaS)
• Desktop as a Service (DaaS)
• Clouds and data jurisdiction

…. and finally …. 

You may already be using a cloud computing service without realising it. Services such as Hotmail, Gmail, Google Docs, Flickr and even the website you are reading now are all forms of cloud services.