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"\r\n\r\n\r\nThis\u00A0post\u00A0is\u00A0brought\u00A0to\u00A0you\u00A0by\u00A0Comcast\u00A0Business.\u00A0Follow\u00A0us\u00A0@comcastbusiness.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\nIt seems like the whole world is moving to the cloud for all IT applications. Whilst this is not true, there is a danger of the herd mentality. This article considers the different aspects that should be taken into account before launching into the clouds.\r\n\r\nMuch of the material is taken from a book by the author of this article called Thinking of\u2026 Buying Cloud Computing? Ask the Smart Questions. \u00A0The book offers 90 pages of questions that act as a comprehensive list of all the issues that need to be considered. Sadly, it provides no answers - it cannot, as every client situation is different. It is never what may be described as a \u201Cfun read\u201D. But what is does do is make sure that all the questions that should be answered are asked. It also gives insights into the impact of every question guiding the reader to the right answer.\r\n\r\nThis article has identified the more strategic questions that need to be addressed when considering a cloud based application over an on-premise implementation.\r\n\r\nWhile you would expect the questions to be technical in nature, a surprising number are business-related. These questions have been grouped into Strategic, Financial, Operational, Technical and Vendor.\r\nStrategic: Why are you considering cloud?\r\nCost savings;\u00A0\r\n\r\nWhat is the total cost of ownership \u2013 have you considered the full infrastructure, network, comms, software license, support and upgrades? In the long run cloud will probably be more expensive, so cost savings should not be the primary driver. If it is, then you are missing a huge opportunity.\r\n\r\nFlexibility / expansion;\u00A0\r\n\r\nCloud gives you the ability to rapidly scale when there is peak load and can be used to quickly expand into new regions with limited upfront investment. On-premise would require significant infrastructure investment that then spends time under-utilized.\r\n\r\nInnovation;\u00A0\r\n\r\nYou will be able to drive new and innovative ways of working. But is there a desire and demand inside the company to make it happen? On-premise applications can lock you into existing patterns and practices.\r\nFinancial: Where is ROI?\r\nMove from CapEx to OpEx;\r\n\r\nCloud computing allows a different funding model: OpEx. That can unlock investment that can be used to transform the business. But it is a wheel you cannot get off. That OpEx funding needs to be in the budget every year.\r\n\r\nInfrastructure investments / upgrades;\r\n\r\nYou already have the infrastructure in place. A move to cloud means that you may need to invest to upgrade devices, browsers and comms to be able to access the services effectively. However, the cloud provider will normally have the most up to date, patched server operating system and database to provide optimum performance and security. Can that really be said of your internal IT?\r\n\r\nGreen credentials;\u00A0\r\n\r\nThere is a strong case to be made for cloud being greener. Companies typically having multiple servers and network rooms with all the associated air conditioning. Instead, the cloud provider has a huge and therefore more efficient server farm where cooling and electricity is cheap. Being able to tout this as part of a wider company program may be useful.\r\n\r\nCost to implement and migrate;\u00A0\r\n\r\nJust because it is cloud, that doesn\u2019t mean there are no implementation costs - unless you are adding \u201Csoftware installation and upgrades,\u201D which is a small part of the overall costs. \u00A0This is the ONLY difference between a cloud and on-premise implementation.\r\n\r\nVendor pricing model;\u00A0\r\n\r\nWhile many cloud vendors advertise a monthly fee rate, upon closer inspection it is often annual or quarterly up front. But this is still less than the perpetual license fee for on-premise, although now some on-premise vendors will offer a rental approach, giving you the same financial profile as a cloud application.\r\nOperational: How can cloud enable operational efficiencies?\r\nMore flexible working;\r\n\r\nAny systems implementation \u2013 cloud or on-premise \u2013 should be driven by a desire to improve efficiencies or open up new opportunities. But with a cloud application, the ability to access it from any browser anywhere in the world may allow far more flexible work patterns. No longer are staff tied to an office or VPN.\r\n\r\nOutsource activities;\r\n\r\nWith a cloud application and data hosted externally, it is much easier to open up access to 3rd parties. This paves the way to outsourcing non-core operations or even parts of operations more easily. With an on-premise application this approach often requires a more sophisticated set of security profiles than is currently in place.\r\n\r\nGeographical expansion;\u00A0\r\n\r\nOpportunistic expansion through new offices or partners can be limited by the extent of the on-premise network or VPN access. A cloud application makes this very straightforward. But this is only a benefit, if there are growth aspirations.\r\n\r\nGeographical standardization;\r\n\r\nThe holy grail for the COO is to get consistent operational processes across the organization. Oftentimes, different legacy systems hamper this, or can be used as an excuse to maintain the status quo. With a new cloud application, there can be a more rapid push for standardization and the resulting benefits.\r\n\r\nExecutive support;\r\n\r\nJust like any change initiative, whether supported by a new systems implementation or otherwise, there needs to be educated executive support. The sponsors need to have a clear understanding of the business benefits and not be taken in by the \u201Ccloud is new and therefore better\u201D hype.\r\nTechnical: What is required to make it work?\r\nInfrastructure and comms upgrades;\r\n\r\nJust because the cloud vendor is providing the backend servers, database and application, it does not mean that there is no investment in your own infrastructure. Devices (mobile, tablet, laptops, desktops) may need browsers upgraded and security plug-ins. Internal comms and firewalls may need to be expanded to cope with the additional internet traffic.\r\n\r\nSingle sign-on;\r\n\r\nThe biggest barrier to new system adoption is single sign-on. It may seem like a small issue but it is another reason for end users to balk at the change. Single sign-on is often an issue with less sophisticated cloud solutions.\r\n\r\nGeo location of data;\r\n\r\nYour industry, business or clients may mandate where data can be held. Few cloud vendors have data centers outside mainland US, let alone across all the European countries. This could be a showstopper for cloud.\r\n\r\nOffline vs online;\r\n\r\nWe still live in a world where there reliable wi-fi access is not always available in the locations the staff may be working. A cloud application that is only available online may be a showstopper.\r\n\r\nDevice support;\r\n\r\nThe pressure for IT departments to support BYOD has meant a wide range of devices and browsers are now used by staff. Will the support terms of the cloud vendor force a standardization of browser, and therefore device, that compromises your BYOD initiative?\r\nVendor: Is their offering sophisticated enough?\r\nLong term viability;\r\n\r\nImplementing a cloud application is essentially outsourcing that part of the IT function. Therefore you need to understand the long-term viability of the vendor. Clearly you do not want them to go bust, but a huge success leading to rapid expansion can cause grief. Who controls the company \u2013 VC or privately held? And what are the owners\u2019 aspirations? An exit to a major software vendor may not necessarily be in your interest. This needs to be part of the negotiation.\r\n\r\nMulti-tenant;\r\n\r\nIs this a true multi-tenant application with the economies of scale associated with that? Or is every implementation tied to a customer with the associated implementation, upgrade and support costs? This may question the long-term viability of the vendor.\r\n\r\nCustomization;\r\n\r\nAn on-premise application can be tightly customized to fit the business. Unless the cloud application is extremely sophisticated, there will be limited configuration changes that can be implemented. This will require a change in internal work practices to fit with the way the application works. Is this acceptable, and at what cost?\r\n\r\nUpgrades / sandbox;\r\n\r\nWith any on-premise application you choose, what upgrades to take, and when to implement them, things may require changes to the business operations. Most cloud vendors implement upgrades or small patches daily, weekly, or monthly. This can be extremely disruptive. Is the cloud application sophisticated enough to enable you to be selective about upgrades? Do have a separate sandbox environment to test updates before they are implemented across the company?\r\n\r\nInterface / API with existing systems;\r\n\r\nThe interfaces to existing legacy systems from the cloud application could be a showstopper. That is why the cloud applications with the greatest success and penetration into major corporates are very isolated and standalone; email, office productivity, social networking, HR. Over time cloud to legacy integration will get easier through 3rd party adaptors.\r\n\r\nSecurity;\r\n\r\nDoes the cloud vendor\u2019s level of security meet your company standards? In many cases it is better than most internal IT, in spite of the fears of many CIOs. But with cloud vendors they may hand off the hosting to a 3rd party, who may in term be handing off some of their responsibilities. Security needs to be considered for every link in the chain.\r\n\r\nBackup, recovery and DR;\r\n\r\nExactly the same considerations need to be considered as were for security.\r\n\r\nSupport and SLA;\r\n\r\nWhat level of support for the cloud application is provided, over what time zones and in what languages? Can this meet or exceed what is provided in-house for your legacy on-premise systems? Are there penalties for missing support SLAs and how are they reported? Do the penalties drive the right behaviors in the cloud vendor and do they adequately recompensate you as the client?\r\nGood for the client, not so good for the vendors\r\nA move to cloud computing sounds like it is a win-win. You get a service with costs tied to consumption. The vendor enables the multi-tenant economies of scale to make the service cheaper to provide. But what we are seeing is very tight margins for the cloud software vendors who are constantly investing in new functionality or modules. Even the largest vendors dip in and out of profitability, which is worrying. Cloud computing is outsourcing a critical resource \u2013 your operational systems \u2013 to a 3rd party.\r\n\r\nYou need to have confidence that the vendor will stay in business. And above all, this needs to be the primary consideration. Think back to when there was a power cut at the office. Every computer shut down, all businesses stopped. If your cloud vendor goes bust or is acquired and the service is terminated, your business is at huge risk.\r\n\r\nThe challenges are more business-oriented than technical, even with the cloud.\r\n\r\nImage credit: John Doo\u00A0/ Shutterstock"^^<http://www.w3.org/2001/XMLSchema#string>
<http://thenextweb.com/insider/2013/11/25/cloud-vs-premises-software-need-consider-business/>