UNCLOUDING CLOUD COMPUTING CONCEPTS

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1 UNCLOUDING CLOUD COMPUTING CONCEPTS Confounded by cloud computing terminology and related concepts? Let Mikael Ekström be your guide to understanding the terminology, concepts, and the acronyms that permeate this topic. This is Mikael Ekström Mikael Ekström is ebuilder s senior vice president for Product Management and Marketing. He manages ebuilder s complete worldwide offering. He has more than 20 years of experience in product management, sales, development, operations and management within global software and technology companies offering enterprise-level solutions. Prior to joining ebuilder, Mikael was the Nordic services manager/senior product manager for Axway Nordic, the Nordic/Scandinavian branch of the global integration solutions/software supplier Axway. He held the position of senior product manager at Viewlocity Inc. and was in charge of global technical pre-sales at Frontec AMT, as well as working as a senior integration consultant for several years. Mikael is currently a board member of the Swedish organization Network for Electronic Business (NEA; Mikael earned a bachelor s degree in computer science before joining Frontec in the spring of ebuilder Magazine 1/2011

2 Bringing Cloud Computing Concepts into the Sunlight A GUIDE THROUGH SOME OF THE SALIENT POINTS OF CLOUD COMPUTING AND BEYOND ebuilder Magazine: Most people today have heard of cloud computing, but many have urgent questions about what this term really means. Mikael Ekström: Yes, that seems to be true. One reason is that there are many definitions in circulation and much that confuses. Lately I have heard many people ask for help in understanding what cloud computing is and how it can help them practically, for example: How can cloud computing be better than using our own IT department? Often those I talk with are looking for companies that offer cloud solutions, an area in which it can be difficult to get help. So I would like to try to explain some of the trends, concepts, and services that exist in the area of cloud computing today. Could you start by defining some of the basic cloud terminology? Sure, let me define our terms. The term cloud comes from the common representation of the Internet in computer network diagrams. The point of using the symbol of the cloud is that it depicts a network abstracted from its concrete infrastructure. In other words, it s a generalized symbol for a network without any details of the network s constituent parts like servers, cables, routers, firewalls, etc. The term cloud computing refers to processing (and its related data) that takes place in the cloud and is accessed via a network, but the location of the processing is not specified or necessarily static. This, for example, contrasts with cases in which the processing and data storage are on known servers. The National Institute of Standards and Technology (NIST) in the United States defines cloud computing as...a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. That is a good IT definition, and I would like to emphasize that today it is not only a model, but a reality. Let me also stress that it is a reality with a lot to offer. Why do you believe that there are so many cloud computing and cloud-related services available today? Part of the answer is that cloud computing offers, among other things, functionality that would be prohibitively expensive to invest in but which is made affordable because it is shared among many users. The functionality is more readily available than if it were requested from, and implemented by, your own data center. Additionally, it reduces your dependence on your data center and IT staff because someone else hosts and operates the service(s) you access in the cloud. Hosting the services in the cloud enables you to take advantage of the focused operations expertise that is otherwise difficult to hire and retain. And perhaps most important, cloud computing also provides functionality whose delivery is easily accessible, scalable, and flexible. My view is that these advantages cannot be easily dismissed. Accessible, scalable, and flexible? Could you elaborate? Of course. Advanced virtualization of networks, servers, storage, and applications; combined with standardization and automation, provide on-demand scalability and flexibility far beyond the capacity and capability of most IT departments. Cloud computing is a quantum step beyond what most organizations data centers can provide. This does not mean that securing these services and ensuring that they meet your requirements is without problems. But the brute facts are that massive, highly-available, scalable (up and down) and therefore very flexible technology is readily available at very advantageous rates. Cloud Processes for the Value Network 7

3 MAIN TYPES OF CLOUD-BASED OFFERINGS ebuilder Cloud Processes Business Processes Software as a Service Applications Platform as a service Dev. Environment Infrastructure as a Service Computing BUSINESS OK, there is much new technology available, and with that comes numerous acronyms. Can you provide some explanations? Let s start with IaaS, PaaS, and SaaS, which I am sure most ebuilder Magazine readers have encountered. I ll use my own condensed versions of NIST s definitions. First, is Infrastructure as a Service (IaaS). IaaS is the providing of processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. Think of how quickly you might access fundamental computing resources such as processing capacity or storage over the Internet in contrast to the lead time required to obtain these resources in-house via your IT department. And that is one of the basic points: in purchasing, for example, computing services in the cloud, you are not concerned about the hardware and software and their configurations behind the service; your main concern is getting the computing services you require on a pay-for-usage model. I should add that it is important to ensure that you understand how you are charged, and that you are charged in a way that facilitates distributing the cost to your various users. But I am getting ahead of myself now. Second, is Platform as a Service (PaaS). PaaS refers to providing customers with the capability to deploy onto the cloud IT infrastructure consumer-created or acquired applications created using programming languages and tools supported by the PaaS provider. Thus the PaaS provider is making a software development environment available to developers, and the PaaS provider hosts the applications, which are made available to customers via the cloud. Third, and most closely related to ebuilder s Cloud Processes, is Software as a Service (SaaS). SaaS refers to applications that run on a cloud infrastructure and are provided over the Internet to consumers in an accessible way from various client devices through a thin client interface such as a web browser. The take home lesson here is that SaaS services are not installed on an organization s own computers, but rather in the cloud; and they can easily be accessed via a browser by individual employees who, for example, can have the usage charges debited to their credit cards for later reimbursement. The charges are pay as you go. The IT department need not be involved and normally does not manage these applications as it does in-house applications. The IT department might not even know they are being used. But these applications can be business-critical, for example, a customer relationship management (CRM) application, such as Salesforce. These descriptions are cursory, but they highlight the advances in accessibility and flexibility that cloud-computing technology delivers at different levels to customers. Can you explain the term Cloud Processes? Cloud Processes are most important in a business context, so that s where I ll start my explanation. The term process refers to a systematic series of actions directed to some end (Random House Dictionary) or a series of actions that produce a change or development (Collins English Dictionary). And a business process is a series of activities structured to achieve a specific management, operational, or related business objective. For example, procurement, stock management, and reverse logistics are all business processes. It is important to note that business processes are richer in content than IT systems, that is, business processes include considerable amounts of business-relevant information, business rules and logic, reports, etc. And even more significant, many critical business processes today span multiple businesses to create a value network. The content is spread among, and needs to be shared among, the collaborating partners in the value network. ebuilder uses the term Cloud Processes for its software to avoid confusion with the term cloud computing. Many people, when talking about what we call Cloud Processes, call them cloud services. For most people, cloud computing is IT operations that are run as a service over the Internet, as opposed to being run by a company s own IT department. But as we have seen above, the reality of cloud computing is more varied and complex than that. I should add that this combination of IT and business expertise is one of the most important next steps forward in the cloud arena. I like to say that ebuilder s combination of cloud computing with business processes is like: 1+1=3. 8 ebuilder Magazine 1/2011

4 Mikael Ekström working late at ebuilder Headquarters on the 30th floor of the Kista Science Tower. What characterizes a Cloud Process? ebuilder Cloud Processes combine the technological advances and advantages of cloud computing with the power of their own integrations, automation, optimization, and control of business processes that are executed in a value network, that is, among multiple, collaborating businesses. This type of collaborative business processes is often called multienterprise of business processes, if you have come across that term. But it is the content of Cloud Processes that is defining, not the cloud delivery model, which is very similar to that of SaaS, which is, as I have mentioned, pay as you go. So let s look at some of the contents. ebuilder Cloud Processes all contain certain core functionality. I would like to cover it briefly, although I don t want to get too far off the track. I ll describe some items at a high level, and I can assure you that I will return to many of these topics in future issues of ebuilder Magazine. So, stay tuned! First, our Cloud Processes contain integration functionality that enables all the participants in the relevant business process to exchange business-critical information in real time, regardless of the message format or communications protocol used. Integrated participants are electronically connected to exchange the businessto-business data required to optimize the process they jointly participate in. Secondly, they contain master data management functionality, which collects, aggregates, matches, quality-assures, and persists background information required for the operation of the business process. Related information monitoring functionality ensures that incoming data is in the correct format. This eliminates the garbage in, garbage out problem that can plague highly interconnected business environments. Thirdly, Cloud Processes contain highly configurable rules, decision logic, and management functions that automate the flow of the business process and ensure that the configured logic is followed or that exceptions are flagged for manual intervention. So you are in control of both the automatic functions and the manual interventions. Finally, Cloud Processes all contain performance management functionality that monitors the technical basis of the operation and ensures that the networks of computers, telecommunications, databases, integrations, etc. all function correctly. Errors are logged and alerts are issued to technical and operative personnel. There is a host of other functions such as Business Intelligence (BI), Business Activity Management (BAM), and Business Process Management (BPM), etc. But let s save them for next time and return to how organizations use Cloud Processes. What actual marketplace needs do Cloud Processes fulfill? While benefitting from the technological excellence of cloud computing, ebuilder Cloud Processes focus on the business activities related to the following specific process domains: travel and expense management, procurement, order fulfillment, after sales, and financial transactions. Today the business activities that make up various business processes are becoming increasingly complex as organizations operations are driven more and more within elaborate value networks of collaborating partners. The more complex the value network, the more complex the processes. Thus the importance of a company like ebuilder that provides Cloud Processes that integrate your collaborating partners and automate, optimize, and control the business processes throughout your value networks. The automation of business processes by ebuilder Cloud Processes will save you money by substantially reducing costs. They provide sophisticated functionality embodying years of business process and IT experience, but they require no investment in IT staff, software, or hardware. Rather you use it and gain its benefits while charging the cost to operating expenses. Cloud Processes for the Value Network 9

5 Earlier you mentioned that Cloud Processes combination of IT and business expertise is one of the most important next steps forward in the cloud arena. Doesn t SaaS offer some of these same advantages? SaaS applications were a significant step forward in IT that had positive implications for business. But it is the introduction of Cloud Processes that shifts the focus from the application-centric to the business-process centric. While they exploit state-of-the-art technology, they are primarily business oriented; they solve business problems. They are only secondarily technology solutions. In this sense they bridge the business-it gap where it is difficult to reconcile the different dynamics of business strategy, the organization, and the underlying infrastructure. Cloud Processes embody specific business process expertise (logic/rules, etc.). Because they integrate specific value networks of collaborating businesses, they enable cross-organizational business processes, that is, they are multienterprise. Critical in this context, they are open to change, and they give you the agility to quickly make changes in a highly interconnected and rapidly changing business environment. They focus on optimizing the operations of entire end-to-end business processes. And the more efficiently your business processes are executed, the more value you derive from them. This last point can hardly be overemphasized; it is not hype, it is a simple fact of life that can often be forgotten in the clutter of the means to that end. As I hope you can see, Cloud Processes are a major step past technology fixations into the realm of achieving business excellence. What are the major differences between SaaS and Cloud Processes from an implementation and usage standpoint? I ll start with the similarities. Both SaaS applications and Cloud Processes are easily accessible anywhere via an internet connection; neither is installed on your own server, both provide flexible and swift scalability, both feature pay-as-you-go pricing models, both include regular maintenance/updates, and both reap the benefits of professional hosting and security. Now, the differences. Cross SaaS application integration is in its infancy. There are significant limits to what can be connected to what. To integrate, you will need an integration platform, and/or you may be required to begin a complex and expensive integration project (data integration, application integration, B2B data exchange, etc.) to get your SaaS applications communicating with each other. Basically, what you get with SaaS applications is specific functionality delivered over the Internet, individual pieces in the jigsaw puzzle of your organization s business process needs. More SaaS applications means more pieces, more functionality, effectively delivered; but the issue of integrating them remains. to be scaled in a value network, not merely more jigsaw pieces. They provide software that enables end-to-end integration, automation, optimization, and control of multiple business processes. Each Cloud Process integrates all the collaborating business partners in its business process s domain. The integrations are built on ebuilder s robust integration platform, and they are expedited by the large Business Process Networks already built into the platform and by the integration expertise of ebuilder personnel. Now we have all the collaborating business partners communicating with each other. How do the Cloud Processes relate to each other in a typical business environment? The Cloud Processes relate to each other in the way certain business processes relate to each other: imagine that you make a trip to negotiate the terms of a purchase (ebuilder Travel and Expense Management), you later buy goods and services and want to ensure that they are purchased and delivered according to valid agreements/contracts (ebuilder Procurement); your product is delivered to customers under control and visibility of all the participating business partners in your value network (ebuilder Order Fulfillment); you provide first-class service for your products and therefore have an excellent after sales/reverse logistics process (ebuilder After Sales). Fine, thanks for guiding us through some of the salient points of cloud computing and beyond. You re welcome. I hope you have enjoyed our journey and that you have found it valuable. In future issues of this magazine, I plan to expand on several of the topics I have mentioned in this interview. That is something I am looking forward to. OK, so what parts of this jigsaw puzzle do Cloud Processes deliver? If we continue with the jigsaw puzzle analogy, ebuilder Cloud Processes provide entire jigsaw puzzles that are particularly suited 10 ebuilder Magazine 1/2011

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