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Exploring the road to cloud(AND AVOIDING THE POTHOLES )

CIO BREAKFAST SPONSORED BY MICROSOFT

Custom Solutions Group

EXPLORING THE ROAD TO CLOUD | CIO BREAKFAST SPONSORED BY MICROSOFT CIO BREAKFAST SPONSORED BY MICROSOFT | EXPLORING THE ROAD TO CLOUD

CIO BREAKFAST

SPONSORED BY MICROSOFT

Cloud must sit among the list of top priorities for CIOs, if not at the very top of the list. The number of articles written, conferences and meetings organised on the topic, and time spent by management, IT departments and consultancies working out approaches and solutions should indicate without doubt that this is a technology whose time has well and truly come.

Perhaps, though, its ‘time’ has taken some time to come, for cloud bears a lot of similarities with earlier operations, and in particular application service providers.

For those who can remember ASPs, they will know that, as Wikipedia tells us, an ASP is “a business that provides computer-based services to customers over a network”. Sound familiar? They came into prominence in the 1990s, though even then they owed a lot of credit to centralised hosting of applications, which itself hit the ground in the 1960s.

ASPs had a problem of course. For a start, they often required a dedicated connection (virtual private networks). The ASP also usually only offered non-customisable versions of applications – it was theirs, after all, and they were selling you access. With only the biggest clients could they afford to turn vanilla into tutti frutti.

ASPs still exist, with variation, through software as a service (SaaS). Add to this infrastructure as a service (IaaS) and platform as a service (PaaS), and you pretty well have cloud.

Cloud has been described as a ‘paradigm shift’, a term that has too often been thrown around loosely and carelessly. Cloud is more evolutionary than revolutionary. It has been said, for example, that cloud is actually ASP + broadband. That’s pretty much correct, as far as it goes, although cloud offers much more than vanilla applications, or perhaps something different. Its role as a deliverer of computing and storage capacity means that it can play a more interactive role in the IT operations of an organisation. Some have even suggested, as speakers did at the Perth cloud conference organised by CIO and sponsored by Microsoft, and as described in these pages, that it has more than an interactive role, it has a transformative role; it helps and encourages organisations to step outside of their comfort zone, take a leap of faith, and to do so without the huge spend and pain of implementing major IT hardware and software investments.

Overhyped? Perhaps in many cases, where it’s still just a way that they can store data so you don’t have to. But there are a growing number of examples of companies who have stretched their wings thanks to cloud, even if they existed before with their feet and their infrastructure firmly fixed to the ground. Some have moved into allied areas of business; some have stretched into competitors’ territory; and some have moved completely off the map and struck out into lands unknown. Hopefully these latter aren’t as far-fetched as some of the dotcom ventures. But even if they are, they at least can do so without, as above, the investment previously required.

In-house processing and storage is by no means dead, as the concept of private cloud proves. Much of this rests on the organisation’s need for reassurance of security (as opposed, perhaps, to actual security).

But by balancing security with risk, and with the addition of agility and innovation, all seasoned with a touch of judicious decision-making on what to put where, then public, private and hybrid cloud will continue to play an important role, and probably an increasingly central one, in organisational development. And even if the name changes and there are a few tweaks here and there, there will probably be no going back. We are doomed or blessed to live under the cloud from here on in. That is, until the next bit of revolutionary technology comes along.

Clouded historyTIM MENDHAM LOOKS INTO THE CLOUD, AND SEES THE FUTURE ... AND THE PAST.


“Cloud is a given,” says Phil Goldie. “It’s no longer a ‘whether-or-not’ question, but becoming one of deployment or delivery choice.”

Goldie is director of Microsoft’s Server Business Group, and speaking at an event sponsored by his company and organised by CIO covering the transformational opportunities offered by cloud, he said that there are three distinct “lenses” that should be applied to cloud deployment decisions.

The first is the cost (or even cost savings) associated with the technology, and particularly through public cloud.

“That’s the sort of thing which is continually interesting but in most instances not particularly a path to competitive advantage. It’s very difficult for most businesses to cost-save their way to being different to the competition.”

The second lens is agility – the ability to just get things done a lot faster. This means the IT department can help an organisation be in a market quicker, and to be there ahead of the competition.

The third is innovation. “You look at what we can do, once we have this capability, to be more innovative as a company. If we’re not spending time and effort building operations and infrastructure, we can spend that time and effort doing things which are better for the business.”

Particularly with public cloud, he says the mass scale offered of hundreds of thousands of units of compute means you can ask what you can do with that if you could use it for just an hour or a day or a week, and not have to pay for it in anything but usage terms.

“Cost, agility and innovation; those are the key aspects. There’s probably not much differentiation on cost, but agility and innovation are very important.”

But is there a downside? Is the oft quoted security issue really an issue?

“I wouldn’t isolate it to a matter of security; I would say it is a matter of managing risk. Things like data security, data sovereignty, uptime, SLAs, those things become components of how companies assess security risk.”

In any case, he questions whether there is any greater risk of security problems with public cloud providers than there is with internalised operations. The reputation of large scale operators, with huge investment in data centres spread across the globe, is something they hold close to their hearts as a key component of branding, and to lose it is not something they would treat lightly. That’s not to say it doesn’t happen. The hacking of eight million user passwords from LinkedIn and e-Harmony earlier this year have resulted in a multimillion dollar lawsuit, at

least against the former.

In that case it then behoves the client companies to manage their use of cloud, and what specific data they position there as opposed to keeping internal.

“When you take a portfolio view,” Goldie says, “you have to say that no company pragmatically of any size is going to move everything to the public cloud, and it wouldn’t make sense in the long run for anyone to keep everything under their own operation, so they’ll move to public, private or more likely a hybrid solution.”

The classic example of what to move to the cloud is email, but even here there are discretionary choices to be made, depending on the user and the associated risk. Typical kiosk workers, he says, such as a teller in a bank, just need web access but they don’t need full Outlook, mail client, calendar, etc. But senior management would insist on tighter control over how and where their emails are kept. To many, their email system doubles as a filing system, and to potentially put that at risk of hacking or data loss by using the cloud is a more complex decision to make.

The other decision that must be made is about people.

“You don’t need the same people tomorrow as you have today. You need to continue to evolve skills sets around delivery and things like service levels within the organisation and having people who understand how to build and negotiate those things. Essentially, I guess in the future, most IT departments will be judged on the services they provide versus publicly available cloud solutions.”

In that case, cloud becomes a commodity operation, and it’s the value added by IT departments in terms of cost, agility and enabling innovation, rather than the technology, where the true advantage in cloud will lie.

Cloud controlPHIL GOLDIE HAS HIS FEET ON THE GROUND BUT HIS HEAD FIRMLY IN THE CLOUD. TIM MENDHAM REPORTS.

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CIO BREAKFAST


A word of warning: your IT department might be just about to get smaller in size.

Andrew Milroy, VP of the ICT Practice for management strategy consultants Frost & Sullivan, says that cloud has the ability to turn the relationship between IT and the business around through 180 degrees, while at the same time shrinking the IT team and making some of its members redundant.

That might not be quite the transformation you had in mind when you launched yourself and your organisation into the cloud.

Milroy pointed out to the audience at a Perth conference on cloud organised by CIO and sponsored by Microsoft, that we already have a starting point for the IT department’s miniaturisation. Current economic and political uncertainty, especially in Europe, might have a serious effect on business activity and profitability here, thus impacting on the various departmental units within them. In hard times, marketing and research have often taken a hit, and employee entitlements might be cut back or dropped. So why should the IT department be immune?

Because everything relies on IT. Which is perhaps why we have witnessed significant adoption of cloud in Australia to reduce infrastructure, reduce work and reduce labour.

Forty-three per cent of organisations surveyed by Frost & Sullivan have adopted the cloud; the remaining 57 per cent, Milroy adds, are probably looking at it. In other words, cloud is more than on the horizon – it is universally a consideration. Of those who have already taken up cloud, more than half are using public cloud exclusively, less than a tenth use private alone, and the remaining 40 per cent use a hybrid.

More than 40 per cent of all survey respondents agreed (more or less) that cloud was their number one priority for the current fiscal year. The same figure (though likely not the same individuals) felt that the risks of cloud far outweighed the benefits.

But only a third of respondents agreed that cloud might shrink their IT teams and make some jobs redundant.

Milroy thinks this move is almost inevitable.

He cites the airline Jetstar, an organisation with close to $3 billion in turnover which has an IT department of only five people. To be true, it outsources much of its IT operations, so there is a notionally larger IT team. But the implication here is that in-house IT people will be more involved with strategy development and building and monitoring relationships with suppliers than they are with doing the grunt work that normally occupies the majority of

the time of IT staff and their CIOs. Cloud, and a bunch of contracted people, will do that for you.

Jetstar is targeting 100 per cent self service check-in. This means IT will totally run and be responsible for this operation. But the IT department will still shrink.

Infrastructure management will likewise shrink as BYO and consumerisation replace the traditional desktop environment.

“What we’re seeing now is that the role is changing. There’s less and less need for the kind of support and updates and maintenance and training that IT departments have previously offered. Instead, process management, compliance and enforcement of company policy will be the kind of activities that IT departments will focus on more and more.

“We’re also now finding the average person is much more technology savvy than they were 10 or 20 years ago. A lot of the support is just no longer necessary.”

Milroy includes senior management in that “technology savvy” group. CEOs are taking an interest in cloud computing, he says, asking questions like “How come our competitors can launch new services, are more agile, avoid peaks and troughs better than us. Can we do cloud, as well?” Management, he says, is insisting IT considers, if not implements, cloud.

But whether CEOs realise it or not, cloud means a change for the whole organisation – great opportunities, greater flexibility, greater agility, and a different way of doing business.

“We’re seeing a shift from business driving IT – “we need better accounting tools, we need better productivity” – to IT ‘ambushing’ the business and creating a completely different way of operating the business.

“The barriers to entry to certain industries drop with cloud computing, allowing non-traditional companies to move into areas that have been closed to them in the past.”

He mentions Amazon, Google and Apple as examples. Google is even moving into the development of driverless cars – a long way from search engine optimisation. UK supermarket chain Tesco and clothing retailer Marks & Spencer have gone beyond offering credit and are now fully-fledged banks. Apple is as much into content as it was once into hardware.

If these organisations can change, then so can the IT department. And, according to Milroy, it will.

Degrees of disruptionANDREW MILROY TALKS WITH TIM MENDHAM ABOUT CHANGE, DISRUPTION AND TRANSFORMATION IN THE CLOUD.



Spending 30 years in the resources and engineering industry has allowed Vito Forte to see many changes over the years, but none more so than what has happened in the industry during the recent, and ongoing, minerals boom.

Speaking at a Perth event on cloud computing as a transformational force (organised by CIO and sponsored by Microsoft), Forte has seen nothing but transformation, and he quoted statistics that are frankly mind-boggling, both for the industry and specifically for Fortescue Metals Group where he has been CIO for the last 18 months.

Fortescue was founded in 2004, and started production of iron ore in the Pilbara region of Western Australia in 2008. In the first full year of operations, Fortescue mined, railed and shipped more than 27 million tonnes of iron ore to customers in China. This rose to 40 million tonnes over the 2011 financial year and the expansion plan is targeting a run rate of 155 million tonnes per annum over 2013/14. Five 3km trains transport ore to the coast every day, and that will soon grow to 13 trains. And the logistics to feed the thousands of workers who are currently working and those required for future growth is equally stunning – the shipment of steaks alone for the employees requires container loads. Not quite your local butcher’s operation.

While they might not be consuming quite that number of steaks, Forte’s IT department is facing real challenges keeping up with that sort of growth. But he needs to do so on static budgets, the classic case of doing more with, if not less, than at least with what he currently has.

“We take advantage of whatever is out there to deliver much more quickly and to be more agile about it. We continually ask what we shouldn’t be doing because this provides focus on what we actually should be doing.”

This means that his team’s focus is on what delivers quality ore on ship to customers. Everything else is secondary.

“As an [IT service] industry, we tend to want to do everything. We want to control everything. And it hasn’t worked in 30 years so I’m not going to bang my head against that wall anymore.”

Which is why Forte has turned to the cloud for some relief in “doing everything”.

That’s not to say that he is an entirely unabashed proselytiser of cloud, but he is aware of the need for change, and where there’s change there is (or should be) risk.

“We’re an [IT] industry that changes every day, yet we seem to be very conservative about change. We don’t accept it very easily. Even the topic of cloud, which is steeped in a lot of hype, continues to really confound people.

“I talk about the ability to take risks and the concept of successful failure. If you don’t fail at something, how do you learn? And this is wrapped up around change and conservatism. I think that conservatism [in the IT department] comes from many years of being ‘beaten up’. If everything around you has changed but you haven’t, then you run the risk of ending up becoming irrelevant.

“You are successful either because you are trying to strive to meet the challenges and become a better service provider, or you don’t. You can’t be half-pregnant. Different organisations have different cultures which either assist that process or they do not.”

At Fortescue, he feels that he has been assisted, though he admits that he came into the job at a time when the IT organisation had gone through a substantial amount of turmoil.

“It really needed to be lifted out of what we would classify as the irrelevant bucket. It had been marginalised, it really wasn’t delivering and it really needed to be shaped up. What’s interesting for me is that the majority of the people are still there and they’ve come on board.

“For me, the role of CIO is really a facilitator, a broker; to a certain extent you’re a counsellor trying to bring disenfranchised factions together. You’ve got a lot of pressures around, not only because the business is growing but also because of historical and legacy types of issues. Your team is paramount and your success is based on everyone else being successful.

“You really need to talk to a lot of people to try to understand where they’re at, and what it is that you and your team can do to really help them out.”

If that facilitation means that they get a great outcome by using technological solutions such as cloud computing, then that can only help his team, and its customers, to be responsive and agile in the massively growing business that they all work within.

A mine of informationTIM MENDHAM TALKS WITH VITO FORTE, A DYNAMIC CIO IN A DYNAMIC INDUSTRY.



CIO BREAKFAST


Whenever experts line up for their conference presentations, and then sit down for a subsequent panel session, it’s always interesting for the audience not only how they react to questions from the floor, but also how they react to comments from each other.

It makes for a lively event.

The event itself was a breakfast conference held in Perth, organised by CIO and sponsored by Microsoft, that looked at the “transformational opportunities” offered by cloud.

The presentations by Andrew Milroy (Frost & Sullivan), Phil Goldie (Microsoft) and Vito Forte (CIO, Fortescue Mines) – covered elsewhere in this publication – raised many issues that the audience were keen to follow up, as were the panellists themselves.

For a start, when the audience was asked how many were currently using cloud, the show of hands was impressive, but not unanimous.

This was an indication which supported a study by Frost & Sullivan that showed about half of respondents had implemented cloud. And while therefore while the survey implied that more than half had not or would not, Milroy suggested that the remainder would, in fact, be currently investigating or at least considering the technology.

Who the influencers were on that move to cloud was one area where the presenters differed. Milroy had said that CEOs were a major driver, regularly questioning their CIOs on the technology and what it could do for their organisations. Forte strongly disagreed (as in, strongly disagreed), suggesting that he had never come across any CEO with that sense of technological follow-up, at least as far as cloud was concerned.

He did say, however, that there were other influencers, including ‘management by magazine’, where coverage of the issues tinged with a certain ‘enthusiasm’ for new technology may itself influence non-technical management to at least raise their interest levels. This is despite the realisation that there may be an element of hype in media coverage and supplier promotion.

About half of the questions were addressed to Forte, drawing on his real world experience, especially in a West Australian context where his years of experience in the mining and resources industry was naturally of great interest. (It was made clear in later comments that the audience appreciated this state-based focus from both Forte and Milroy.) One member said that Forte’s presentation was a “refreshing approach”: “Good to be reminded why we’re actually here, and that we’re actually in business with the business.”

Perhaps surprisingly, considering two of the three speakers had

Cloud consciousnessTHE AUDIENCE VIEW OF THE PERTH CONFERENCE ON CLOUD AND TRANSFORMATION


concentrated on management issues and that this tack had received such approval, the questions were largely on technical matters. If this was an indication that West Australian CIOs were still dealing with these as a matter of course, rather than selling the benefits to management, was not clear, but it did mean that the presenters, at least in part, had to put their technology management hats on for a second to deal with issues of implementation and integration. Goldie’s description of the size of ‘mega’ data centres had the audience impressed almost as much as Forte’s description of the size of Fortescue’s growth. The image of container-sized data storage (literally in self-contained containers) and the implication that there was enough global capacity available and increasingly so to cater for all users gave some reassurance to those still concerned about the ability of service providers to manage the data load required.

There was much discussion on the various merits (or demerits, though frankly less so) of cloud in general, and specifically the choices CIO and management must make between public, private and hybrid cloud. Security was the main issue raised.

The question was asked about the nature and role of IT staff moving into a cloud environment. Milroy had already said that staff sizes would inevitably shrink as key process and operations ‘grunt’ work was minimised thanks to outsourcing to the cloud. No CIO would miss work of that nature, but it might be a concern to them on the HR level. Certainly systems admin people would be under pressure, not to mention the type of activity of CIOs and similar senior IT staff whose role would move away from that tactical technology management activity raised by the audience and increasingly into strategy and relationship-building.

One aud9ence member commented that the emphasis on people, especially by Forte, was (again) refreshing, and another strongly pointed out that “People make the business! People provide the service! Motivation! Technology is second to people. Brilliant!”

Finally there was the future, and not just of the technology itself but its impact in various respects on the organisation and its structure.

Milroy had suggested that cloud could be used to totally remake an organisation, from slow-and-steady to agile and entrepreneurial, as risk-laden as that might sound. Cloud not only allows such venturing – lower cost than traditional in-house infrastructure, lower cost of staff, savings through the ability to only use processing power and capability as required, etc – but it almost encouraged speculation through the opportunity for organisations to explore new areas of competition or novel developments because, presumably, the risk of total organisational disaster through over-investment in assets was lessened.

And despite the comment about a shrinking IT department, there is the influence and prospects of the current and coming staff themselves.

Inevitably, employees will be drawn from younger generations - Gen X, Gen Y and later. And their familiarity and preference for ‘light-weight’ technology has already exposed them to cloud through the ready availability of music and film downloads, smart phone and mobile connectivity and the like. Except for the few, most just want it to work. (Much as senior non-IT executives do – they don’t want to be bothered with technological explanations or, worse, excuses. They simply want to make sure their IT operations are efficient and effective, and get on with the job.) In their work as in their private lives, these new employees require this sort of invisible power. Cloud promises to address and fulfil these expectations.

Something to think about over the audience’s morning egg, toast and coffee. And judging by the number of people who approached the panellists with their questions and comments after the event, then it was obviously something they had successfully digested.

Custom Solutions Group

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