To Cloud, or not to Cloud 

One of the early selling points about the cloud was the apparent correlation between the reduction in immediate Capital and Operating Expenditures and a consequent increase in profits for user companies. In practice that has not happened, for a number of reasons.

For a start, over the long haul there is not much difference in paying the Capex for new systems and the subscription or per-use charges over a period of time. Then again, a large number of businesses have followed the private cloud route – assuming it brings the advantages of cloud utilisation – only to find that it costs the same, if not more, than a traditional on-premise installation.

So simply moving an existing environment to the cloud on the basis of a cost saving is arguably a dumb move for any business to make without serious consideration of what is being moved to the cloud, and why. It is also behind the findings of analysis firm Forrester, which claims in a recent report into business agility that the cloud `really doesn’t matter’ when it comes to increasing revenues.

According to the analysts, there is no clear dividing line between high- and low-performing organisations in terms of knowledge and use of cloud technologies. This is not surprising, says Claranet’s UK Managing Director, Michel Robert. In his view, rather than boosting performance of existing applications or environments directly, the true ROI of cloud services lies in their power to enable new applications and ways of working.

The Forrester report reveals that `Infrastructure Elasticity’, the company’s measure of agility afforded by cloud computing, accounted for almost no difference in enterprise performance. Robert believes that organisations need to understand what workloads they are moving to the cloud and why, as well as what benefits to expect from doing so.

“Jumping headlong into a wholesale migration of IT infrastructure simply because the cloud is the ‘next big thing’ is not likely to get an organisation very far,” he suggested. “For example, Claranet’s own research  shows that while 87 percent of organisations cite increasing flexibility and scalability as a key objective for migrating to cloud, a large majority (75 percent) indicate that their actual requirement for scalability is ‘average to entirely predictable’.

“This disparity suggests that many organisations are investing in the cloud without properly understanding their requirements and the level of investment needed for their needs. After all, if they are not experiencing frequent or extreme variance in demand, they may be wasting time and money chasing the scalability that cloud computing offers.”

He went on to point out that there is no such thing as ‘one size fits all’ when it comes to the cloud. Instead, it becomes important for organisations to honestly assess their needs at the outset, make improvements to their IT systems gradually, and mix on-premises infrastructure with migrating elements to the cloud in a hybrid approach that reflects their changing priorities and needs.

“It is a case of ‘evolution, not revolution’,” he said.

Despite the potential cost-savings inherent in moving to the cloud, Robert believes that its true value lies not in the infrastructure itself but in how organisations use the cloud to improve the development and use of applications.

“Increasingly, it is the ability of a cloud provider to both host applications and manage their development that enables innovation within organisations,” he said. “Claranet’s latest research found that many organisations are capitalising on their cloud adoption to launch ‘cloud-native’ applications that they would not otherwise have been able to run.  

“This is especially the case with communications services, where unified communications deployments are 58 percent cloud-native, VoIP services 59 percent, and video conferencing facilities 66 percent.”

As might be expected with the managing director of a hosting service, he suggested that part of the decision making process for any business is choosing the right provider to help unlock the full potential of the cloud. But the wider issue is for the business to be able to see where the cloud can add new value by adding new services that can take the business into new markets, or at least service existing markets in new and different ways that can extend their life and profitability, rather than simply adopting ‘cloud for cloud’s sake’.