Demand for Cloud Infrastructure as a Service

Some market studies continue to identify confusion regarding the true meaning of cloud-based services, and the apparent benefits derived by the early-adopters. One recent example comes from a survey of financial professionals in the UK.

However, there is already growing demand from informed executive business and IT decision makers that are eager to move forward with various forms of cloud service deployments.

In fact, Forrester Research has embarked on a new "Cloud and Virtualization Survey Data" series that offers key insights on where the market demand is developing, and they also debunk several stereotypes.

According to Forrester's assessment, Infrastructure-as-a-service (IaaS) offerings, one of the three types of cloud services, is an area of cloud computing that currently receives the most market attention. It centers on two forms of capability: 1) pay-per-use hosting of virtual servers at an external cloud service provider, and 2) operating an internal cloud, where your IT department offers virtual servers-as-a-service.

Enterprise Will Lead the Momentum
Forrester reviewed their latest survey data and uncovered the following indicators of likely buyer interest in, and adoption of, these two forms of IaaS:

• About 25% of all enterprises plan to adopt IaaS via an external service provider.
• Firms are slightly less interested in internal clouds than they are in external IaaS.
• Large business respondents report more awareness, interest, and adoption of external IaaS than small business -- they also report the same for internal clouds.
  

Forrester defines the three layers of the cloud services stack as follows:

Software-as-a-Service (SaaS) - End user applications, delivered as a service rather than as on-premise software.
Platform-as-a-Service (PaaS) - Application platform or middleware-as-a-service on which developers can build and operate custom applications.
Infrastructure-as-a-Service (IaaS) - Compute-, storage-, or other IT infrastructure-as-a-service, rather than as dedicated capability.

Once again, pay-per-use hosting of virtual servers and internal cloud are part of infrastructure-as-a-service.

Cloud Service Adoption Drivers
Forrester reached an interesting conclusion from their market assessment -- that's contrary to conventional wisdom regarding the initial demand for cloud services. Enterprises are leading the adoption, not small and medium sized businesses (SMBs). Moreover, they have different technology preferences and comfort levels with virtualization.

Forrester also believes that early adopters of IaaS service offerings are driven by the instant provisioning of servers and the pay-per-use pricing model. Furthermore, the enterprise IT operations buyers, unlike developer buyers, may want to integrate their on-premise infrastructure with anything they deploy to a service provider, either temporarily or permanently.

Hosted Phone System Saves Time, Money and Hassles

If you've ever had to add or move employees, you know that one of the biggest hassles is dealing with the telephone system. While many companies are deploying IP-based phone systems to ease their PBX hassles, still others are turning to hosted phone systems to eliminate their ongoing operation and management responsibly altogether.

Hosted phone systems work especially well for companies that have highly mobile employees. With a hosted system, employees can just log into the system to automatically forward calls to another designated number.

One big advantage: employees need only give their clients one phone number. This eliminates the complexity of dealing with multiple phone numbers and voice mail systems.

Helios Realty, part of Real Living, the Midwest's largest independent real estate firm, has taken advantage of this concept. Helios relies on Cisco-Powered partner Geckotech to provide a scalable voice and data infrastructure for its highly mobile workforce of real estate agents, while still providing the highest level of professional service.

How Hosting Saves Time
Helios Realty has no assigned desks. When agents arrive in the office, they sit down at any open desk and type in a 3-digit code. This reprograms that phone as their office line while they're there. When agents leave the office, they can log in again and automatically forward calls over to their cell phone or voice mail.

Without ever investing in a new phone system, Helios can add agents simply by adding phone numbers. The company never has to worry about having enough "lines," because VoIP is based on bandwidth, not phone lines. The real estate firm also has itemized billing through Geckotech, so it can budget based on the number of agents.

How Hosting Saves Money
The Geckotech system saves Helios money in two ways. "Geckotech's mobility saves us money each month on rent and infrastructure," says Andrew Magliochetti, a principal with Helios Realty. "When employees are in the office they are instantly connected. We never have to pay for onsite maintenance to move a phone around, and we only need room for one-third of our workforce."

By using an outsourced IP phone system, Helios has said, its employees are completely mobile and free to communicate at will with their customers. Access to voicemail, intercoms, conference bridges, and 4-digit company-wide dialing is easier as well.

Though phone systems are crucial to most businesses, it is not crucial that they own them, as Helios has discovered.

If the responsibilities of owning, operating, managing and updating a phone system are an unwelcome hassle, then perhaps you should consider a hosted solution for your business.

Redefining Vendor/Customer Relationships

My colleague, Joe Panettieri, reports that Dell has won its largest managed services agreement ever with the state of Georgia.

This contract illustrates how Dell, and other technology vendors, are shifting their go-to-market strategies to respond to customers' changing IT management needs.

Anyone who follows the technology industry knows that Dell has been struggling to keep pace with HP when it comes to computer sales. What few casual observers have recognized is how Dell has amassed a new set of remote management capabilities via a series of acquistions over the past year and a half.

Why Managed Services Matter
During that time, Dell has acquired SilverBack Technologies, Everdream, EqualLogic and MessageOne to serve as the foundation for a new portfolio of Software-as-a-Service (SaaS) and managed service capabilities.

Dell understands that it will have a difficult time outpacing HP and other technology vendors on the strength of its products alone as laptops, desktops and servers become more commoditized.

Instead, Dell and other vendors must differentiate themselves on their ability to help customers generate the greatest value from their systems. This means redefining their services to help customers, and their channel partners, better manage these assets to optimize their performance.

Redefining the Meaning of Support
The most cost-effective way for vendors to monitor these devices and proactively administer them is via managed services. The best way for them to offer these capabilities to their channel partners or customers is via SaaS solutions.

These 'on-demand' services redefine the nature of vendor/customer relationships. Customers no longer have to assume the responsibility for managing their systems and software, and wait for their vendors to respond to their problems when something goes wrong.

Now, they can shift the burden on their vendor to ensure the uptime and performance of their systems and software. By the same token, vendors can no longer boast about their customer support response times. Instead, they must demonstrate their willingness to take on this greater responsibility.

Overcoming the Psychological Barriers to On-Demand Services

It is time for IT and business decision-makers to get over their fears of 'out-tasking' various aspects of their daily operations to specialized service providers.

Today's turbulent economic climate, intensifying competitive landscape and changing workplace requirements demand that organizations of all sizes re-think their business technology sourcing strategies.

What I believe is still inhibiting many IT or business decision-makers from adopting Software-as-a-Service (SaaS) and managed services are a few common misconceptions and interrelated fears.

Gain New Perspective, with Sharp Focus
For instance, too many IT and business decision-makers continue to resist a growing assortment of SaaS and managed services which can address their business application and IT management needs because they are concerned about losing control, sacrificing performance and/or dealing with additional security risks.

While all of these are legitimate concerns, THINKstrategies has found that they are not real issues when it comes to today's SaaS and managed service offerings.

Instead, most of these services have achieved better performance and higher security levels than many in-house application and IT operations. They also have achieved these service levels with lower upfront costs, quicker deployment cycles and less ongoing management requirements.

As a result, most SaaS and managed service users gain greater ROI on their IT/applications at a lower total cost of ownership (TCO), by focusing their efforts on overall business impact.

An Adaptable Coexistence Strategy
Many IT/business decision-makers also believe that SaaS and managed services are only appropriate for small organizations with limited financial resources or internal skills, and relatively simple functional requirements. Said another way, they think SaaS and managed services aren't sophisticated enough to address the complex needs of mid- to large-scale enterprises.

The reality is that there are a wide array of SaaS and managed service offerings which can address organizations of various sizes. Small businesses can fill voids which they couldn't afford to address with traditional applications or management products with many SaaS and managed service offerings. Mid-size and large-scale enterprises are also finding plenty of SaaS and managed services to fill unmet needs, or augment and extend the value of their existing software and systems.

The Fearless Agents of Change
Too many IT managers view SaaS and managed services as outsourcing solutions that could ultimately make them replaceable.

While this is possible, it is more likely that SaaS and managed services can help IT managers overcome the day-to-day challenges of deploying and administering software and systems, so they can refocus their time and energy on better supporting the more strategic needs of their business units and end-users.

The bottom-line is that IT managers can no longer justify doing business as usual. The sooner they put their fears of SaaS and managed services aside, the sooner they will be able to leverage these services to better serve their organizations and safeguard their positions in an uncertain world.

Top Ten Business Technology Trends

Gartner analysts recently identified the top ten key technologies -- and related trends -- that they believe will be strategic for mainstream organizations. The analysts presented their findings during Gartner's Symposium and ITxpo.

Gartner defines a strategic technology as having the potential for significant impact on the enterprise -- within the next three years. Factors for significant impact include a high potential for disruption to IT or the business, the need for a major financial investment, or the risk of being late to adopt.

The technologies were chosen because they could affect an organization's long-term plans, programs and initiatives. They are deemed strategic because they’ve matured to broad market use, or because they enable strategic advantage from early adoption.

Gartner's top 10 strategic technologies for 2009 include:
Virtualization; Cloud Computing; Servers (beyond blades); Web-Oriented Architectures; Enterprise Mash-ups; Specialized Systems; Social Software and Social Networking; Unified Communications; Business Intelligence and Green IT.

As you consider each of these technologies in turn, and the associated applications within your own business environment, it would be wise to reconsider the notion that embracing a new technology always must equate to a financial investment in infrastructure.

In this context, is the purchase of an on-demand managed service an investment, or is it more accurate to characterize it as an expense? Let's consider the Gartner description of Cloud Computing, as an example.

"Cloud computing is a style of computing that characterizes a model in which providers deliver a variety of IT-enabled capabilities to consumers. The key characteristics of cloud computing are 1) delivery of capabilities 'as a service,' 2) delivery of services in a highly scalable and elastic fashion, 3) using Internet technologies and techniques to develop and deliver the services, and 4) designing for delivery to external customers.

Although cost is a potential benefit for small companies, the biggest benefits are the built-in elasticity and scalability, which not only reduce barriers to entry, but also enable these companies to grow quickly. As certain IT functions are industrializing and becoming less customized, there are more possibilities for larger organizations to benefit from cloud computing."

According to Carl Claunch, vice president and distinguished analyst at Gartner, "Companies should evaluate these technologies and adjust based on their industry need, unique business needs, technology adoption model and other factors."

Lowering the Barriers to Progress
Perhaps one of those other factors would be an candid assessment of what advantages are being gained by competitors who have already chosen to take action. Meaning, can you make a determination of the direct and indirect cost of your potential inaction?

Moreover, by utilizing a selective out-tasking model, it's now possible to minimize the financial impact on new technology pilots and full deployments, while at the same time creating the environment to maximize the strategic impact.

The perceived barriers that may inhibit you from taking action have essentially been lowered.

Survival Strategies in Tough Times

Growing concerns about the business implications of the turbulent economic climate and intensifying credit crunch are driving companies and non-profit institutions of all sizes to thoroughly reevaluate their corporate priorities, capital expenditures, operating budgets and sourcing strategies.

In addition to the "Four High-Tech Steps SMBs Should Consider Now," here are two more technology trends companies and non-profit institutions of all sizes should seriously consider and capitalize on:

Software-as-a-Service (SaaS): Web-based, subscription-priced, 'on-demand' services are experiencing significant growth because they can be deployed easily and quickly without the risks and added costs associated with traditional, on-premise, 'legacy' software products. End-users and business executives alike are recognizing the business benefits of SaaS solutions which range from Google Apps and WebEx for collaboration to Salesforce.com customer relationship management (CRM) solutions.

While these solutions are still far from perfect, they have proven to be a viable alternative to the headaches of dealing with legacy applications. IT/network professionals are also discovering a growing array of SaaS applications which can help them with their day-to-day management needs.

Cloud Computing: These are a wider array of web-based development tools and services that are enabling start-ups and enterprise software architects to leverage virtual data processing and development environments without the upfront capital expenditure and at a fraction of the ongoing cost of traditional data centers.

These cloud computing services are fulfilling some of the promise of the utility computing concept that was popularized at the start of this decade. While cloud computing services have experienced some outages, they are evolving quickly and will become more reliable over time.

The bottomline is that IT and business decision-makers have a growing array of technology alternatives with attractive pricing and packaging features at their disposal to help them contend with the serious challenges of today's economic environment.