Tag Archives: survey

Counting the Cost of Cloud

By Chris Harding, The Open Group

IT costs were always a worry, but only an occasional one. Cloud computing has changed that.

Here’s how it used to be. The New System was proposed. Costs were estimated, more or less accurately, for computing resources, staff increases, maintenance contracts, consultants and outsourcing. The battle was fought, the New System was approved, the checks were signed, and everyone could forget about costs for a while and concentrate on other issues, such as making the New System actually work.

One of the essential characteristics of cloud computing is “measured service.” Resource usage is measured by the byte transmitted, the byte stored, and the millisecond of processing time. Charges are broken down by the hour, and billed by the month. This can change the way people take decisions.

“The New System is really popular. It’s being used much more than expected.”

“Hey, that’s great!”

Then, you might then have heard,

“But this means we are running out of capacity. Performance is degrading. Users are starting to complain.” 

“There’s no budget for an upgrade. The users will have to lump it.”

Now the conversation goes down a slightly different path.

“Our monthly compute costs are twice what we budgeted.”

“We can’t afford that. You must do something!”

And something will be done, either to tune the running of the system, or to pass the costs on to the users. Cloud computing is making professional day-to-day cost control of IT resource use both possible and necessary.

This starts at the planning stage. For a new cloud system, estimates should include models of how costs and revenue relate to usage. Approval is then based on an understanding of the returns on investment in likely usage scenarios. And the models form the basis of day-to-day cost control during the system’s life.

Last year’s Open Group “State of the Industry” cloud survey found that 55% of respondents thought that cloud ROI addressing business requirements in their organizations would be easy to evaluate and justify, but only 35% of respondents’ organizations had mechanisms in place to do this. Clearly, the need for cost control based on an understanding of the return was not widely appreciated in the industry at that time.

We are repeating the survey this year. It will be very interesting to see whether the picture has changed.

Participation in the survey is open until August 15. To add your experience and help improve industry understanding of the use of cloud computing, visit: http://www.surveymonkey.com/s/TheOpenGroup_2012CloudROI

Dr. Chris Harding is Director for Interoperability and SOA at The Open Group. He has been with The Open Group for more than ten years, and is currently responsible for managing and supporting its work on interoperability, including SOA and interoperability aspects of Cloud Computing. He is a member of the BCS, the IEEE and the AEA, and is a certified TOGAF practitioner.

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New Open Group Survey Aims to Understand Cloud Computing ROI and Business Drivers

By Chris Harding, The Open Group

What are the real business benefits from using the Cloud that enterprises see today?

To help answer this question, The Open Group has launched its second annual study to gather information about the evolving business requirements for Cloud Computing and examine the measurable business drivers and ROI to be gained.

We are specifically looking for input from end-user organizations about their business requirements, concerns with implementing Cloud initiatives, and tools for measuring Cloud ROI. We would greatly appreciate your insight and encourage you to spend a few minutes completing the survey: http://www.surveymonkey.com/s/TheOpenGroup_2012CloudROI

The Open Group Cloud Computing Work Group exists to create a common understanding among buyers and suppliers of how enterprises of all sizes and scales of operation can include Cloud Computing technology in a safe and secure way in their architectures to realize its significant cost, scalability and agility benefits. It includes some of the industry’s leading Cloud providers and end-user organizations, collaborating on standard models and frameworks aimed at eliminating vendor lock-in for enterprises looking to benefit from Cloud products and services. It has created a series of whitepapers, guides and standards to help business approach and implement Cloud Computing initiatives, which are available from download from The Open Group bookstore. The Open Group book, Cloud Computing for Business, gives managers reliable and independent guidance that will help to support decisions and actions.

The results of the survey will contribute to our future work and will be publicly available for the benefit of the industry as a whole.

Dr. Chris Harding is Director for Interoperability and SOA at The Open Group. He has been with The Open Group for more than ten years, and is currently responsible for managing and supporting its work on interoperability, including SOA and interoperability aspects of Cloud Computing. Before joining The Open Group, he was a consultant, and a designer and development manager of communications software. With a PhD in mathematical logic, he welcomes the current upsurge of interest in semantic technology, and the opportunity to apply logical theory to practical use. He has presented at Open Group and other conferences on a range of topics, and contributes articles to on-line journals. He is a member of the BCS, the IEEE, and the AOGEA, and is a certified TOGAF practitioner.

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The Cloud “Through a Glass, Darkly”

Results of The Open Group “State of the Industry” Cloud Survey

By Dr. Chris Harding, The Open Group

Cloud Computing has been a major topic of interest and excitement in the world of Information Technology for a couple of years now. This is time enough for enterprises to understand its impact, or so you would think. So how exactly are they planning to make use of this phenomenon?

Obtaining a clear view of a current cloud such as Cloud Computing is notoriously difficult. It is like trying to see the world outside clearly through the dirty, distorted windows that were commonplace in England in the 17th century, when the simile “as through a glass, darkly” became established. But the “State of the Industry” Cloud survey, released today by The Open Group, sheds light on the topic, and provides some interesting insights.

The Open Group is a vendor- and technology-neutral consortium of IT customers and vendors, with a strong focus on Enterprise Architecture. The State of the Industry survey captures the views of its customer side, which is well representative of the global IT user community. It gives us a good understanding of how user enterprises currently perceive the Cloud.

Cloud certainly has the users’ attention. Only 8% of survey respondents said that Cloud was not currently on their IT roadmap. But substantial take-up is only just starting. Nearly half of those for whom Cloud is on the roadmap have not yet begun to use it, and half of the rest have only started recently.

The respondents have a clear idea of how they will use the Cloud. The majority expect to have some element of private Cloud, with 29% saying that private Cloud would best meet their organisations’ business requirements, and 45% saying that hybrid Cloud would do so, as opposed to 17% for public Cloud. Only 9% were unsure.

They also have a clear view of the advantages and drawbacks. Cost, agility, and resource optimisation came out as the three main reasons for using Cloud Computing, with business continuity also a significant factor. Security, integration issues, and governance were the three biggest concerns, with ability to cope with change, vendor lock-in, cost to deploy, and regulatory compliance also being significant worries.

Return on Investment (ROI) is probably the most commonly used measure of success of a technical change, and The Open Group has produced a landmark White Paper “Building Return on Investment from Cloud Computing”. The survey respondents felt on balance (by 55% to 45%) that Cloud ROI should be easy to evaluate and justify. Cost, quality of delivered result, utilisation, speed of operation, and scale of operation were felt to be the most useful Cloud ROI metrics. But only 35% had mechanisms in place to measure Cloud ROI as opposed to 45% that did not, with the other 20% being unsure.

The question on the impact of Cloud produced the most striking of the survey’s results. While 82% said that they expected their Cloud initiatives to have significant impact on one or more business processes, only 28% said that they were prepared for these changes.

Cloud Computing is primarily a technical phenomenon, but it has the ability to transform business. Its lower cost and increased agility and speed of operation can dramatically improve profitability of existing business processes. More than this, and perhaps more importantly, it enables new ways of collaborative working and can support new processes. It is therefore not surprising that people do not yet feel fully prepared — but it is interesting that the survey should bring this point out quite so clearly.

The ability to transform business is the most exciting feature of the Cloud phenomenon. But users currently see it “through a glass darkly,” and perhaps with a measure of faith and hope. There is a lesson in this for industry consortia such as The Open Group. More needs to be done to develop understanding of the business impact of Cloud Computing, and we should focus on this, as well as on the technical possibilities.

To obtain a copy of the survey, download it here, or media may email us a request at opengrouppr@opengroup.org.

Cloud Computing is a major topic of discussion at The Open Group Conference, London, which is currently underway.

Dr. Chris Harding is Director for Interoperability and SOA at The Open Group. He has been with The Open Group for more than ten years, and is currently responsible for managing and supporting its work on interoperability, including SOA and interoperability aspects of Cloud Computing. Before joining The Open Group, he was a consultant, and a designer and development manager of communications software. With a PhD in mathematical logic, he welcomes the current upsurge of interest in semantic technology, and the opportunity to apply logical theory to practical use. He has presented at The Open Group and other conferences on a range of topics, and contributes articles to online journals. He is a member of the BCS, the IEEE, and AOGEA, and is a certified TOGAF® practitioner. Chris is based in the U.K.

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