Cloud Is Not a Silver Bullet

Transcription

1 30 special SAP SPECTRUM 1 /2011 Cloud Is Not a Silver Bullet Evolution or revolution? Or maybe both? In an interview with SAP Spectrum, Mark White, CTO Deloitte Consulting, and his deputy William Briggs discuss why cloud computing is the next giant step in IT and how it will revolutionize business models. Interview: Johannes Gillar Cloud is what you make of it. Cloud enables you to subscribe for one department of your business instead of all. If it goes well, then roll it out and scale it up. Mark White Experts say that the cloud represents a new chapter in how enterprises can better use IT. Why do they believe that? Chief Technology Officer for Deloitte Consulting and a lead IT Principal on the Department of Homeland Security account team. His professional focus is architecting, developing, and delivering critical business information solutions for clients. Prior to taking the CTO role, White was the national leader for Deloitte s Architecture & Infrastructure services in the U.S. He earned a B.S. in Computer Science with a concen tration in systems architecture, graduating magna cum laude from the University of Georgia. He also earned a Masters of Applied Mathematical Sciences with a concentration in operations research from the University of Georgia. There are three broad answers to the question what companies want to achieve by using the cloud. Number one: they want economic advantage. In fact, you might say they have a preference for operating expense over capital expense or they have a preference against a large upfront payment. So cloud, particularly public cloud, offers the opportunity for preferring operating over capital expense and for having a monthly subscription over a large upfront capital cost. The second answer is speed to solution or scale of solution. The head of HR

2 SAP SPECTRUM 1 /2011 special 31 might say I need the resumé screening site up next week, not three months from now. Doing that with the internal IT team can take weeks or months. But in the cloud, it only takes hours or maybe days to go from identifying the need to identifying a service provider. As for scale of solution, there are actually two parts. In one I can pilot, test, or try out my new HR resumé sourcing system in a limited fashion with the external cloud provider. If it goes well, I can scale it up to the full scale and scope of my business demand. The second part is the global perspective. For example, it could be that I have quite a sophisticated IT capability in Germany but need a working group to do business in the Czech Republic, where my company s IT capability just doesn t manifest well. So what you are finding in some companies is that they re going to a cloud to provide services for the remote, less developed, or emerging markets of their organization. The third answer is efficiency of resource. Let s use an SME example. SMEs are the most aggressive and complete adopters of public cloud services today because in the cloud they have access to solutions at a level of sophistication or capability that they can t afford to implement internally. People use the cloud to do things faster, cheaper, and better and then ultimately to do different things together, filling white spaces in the market. The cloud is potentially a business model revolution. William Briggs Those are examples of faster and cheaper. The third part of this impossible triangle is better. Better, cheaper, faster. What cloud allows is a democratization of services and so the small provider now can reach a much larger marketplace. Taking this one step further: three small providers could collaborate and go to the market as a single large provider. So our motto here is that cloud is technology evolution. People use the cloud to do things faster, cheaper, and better and then ultimately to do different things together, filling white spaces in the market. The cloud is potentially a business model revolution. Deputy Chief Technology Officer for Deloitte Consulting and a director in the U.S. technology practice. He specializes in helping organizations identify, architect, and implement innovative technologies to improve business performance. In addition, he is the lead for Deloitte s Technology Trends efforts. He earned a B.S. in Computer Engineering, graduating magna cum laude from the University of Notre Dame. He also earned a Masters of Business Administration from the Kellogg School of Management.

3 32 special SAP SPECTRUM 1 /2011 There are different types of clouds (infrastructure, platform, software, etc.), cloud services (public, private, etc.), and cloud business models. Which cloud adoption model would you recommend for a midterm IT strategy? Let me start answering that by using the quintessence of consultants answers, which is it depends. It depends on the size of the company, the industry, the marketplaces, and the purpose of IT within the company. It depends on whether we re talking to the CIO about being a cloud service provider or a cloud service subscriber. But in terms of roadmap, there are a few things I would say that are uniform across all of those things. The first is that if you look at midterm IT strategy and ask yourself what the impact of cloud is or what opportunity it represents, we at Deloitte would say, think of yourself as an IT services shop. So if a CIO is interested in cloud services, the first thing he or she might do is look at their current IT services catalog. And then they should evaluate the various workloads within this service catalog and which of those workloads can benefit from the cloud. Then they should build a business case because cloud is not a silver bullet. Cloud is what you make of it. The next step would be to pilot, to take a small step first. Cloud, particularly the public cloud, enables you to subscribe for one department of your business instead of all. If it goes well, then roll it out and scale it up. When CIOs look at midterm strategies, most of them think of the cloud as a source of capacity, or what we call the capacity cloud. But what we re seeing clearly is a continuing maturation of looking at cloud services for capability reasons, too. Examples of that might be subscribing to Collaboration as a Service, Analytics as a Service, or Security Operations as a Service. These are capabilities that are more finished business services. So that s the capability cloud, and we re seeing it becoming the dominant mode now. So CIOs are moving from the capacity cloud to the capability cloud? Let me tell you where we think it s going, and this is slightly speculative. We started with the capacity cloud; we re now in the capability cloud. We believe the third generation of this is what we re calling a composite cloud, where capabilities are composed for more complete end-to-end business services, functions, or lines of business support. In the The challenges for information security and privacy in the cloud are the same as those within my four walls. Only the scale is different. Mark White composite cloud, everything is a service and can be composed and orchestrated. So as CIOs work on their midterm IT strategy, we would suggest that they think about the composite cloud. SAP s cloud strategy is to offer SMEs on-demand solutions such as SAP Business ByDesign that are in the cloud while staying on premise with SAP Business Suite when it comes to large enterprises. How do you assess this strategy? With SAP Business ByDesign and on demand, SAP has a very compelling offering for small and midsize businesses and for the subsidiaries of global companies doing business in emerging markets. There it never made sense to do a full SAP ERP deployment. Smaller businesses have a more rapid adoption pattern period and are looking for all kinds of business processes and hirable services. With large enterprises, you see experimentation on the edge and things like service management and customer management. It s no surprise, but the leading software-as-a-service vendors are emerging into true cloud players. And that s going to continue. So could there be new offerings that would come in and fill that void? Maybe SAP could be a provider of that, and I think they d have more credibility with the true enterprise customers. But it s going to take time. The enterprise customers will be watching with interest because they ll be investing on the edge. SAP is doing some really interesting things here. Well, at a higher level, I would say two things, and we have said this in fact to SAP before. First, I think there is an opportunity to get a crystal-clear message to the marketplace about SAP s core assets and the implications for on premise and private cloud versus public cloud and so on. Second, there are places where SAP ERP and the fully launched Suite are required and desirable and then there are other places where it would be good to have an entry-level solution, such as SAP Business ByDesign. You say that the importance of cloud computing rests upon its clear value proposition. What exactly does this mean? If I think of cloud as technology enablement, then I m looking for efficiency and effectiveness. We have examples where clients had computing and storage capacity inside their shops that they only needed once in a while on a subcyclical basis it was essentially nonproductive capacity in the intermediate times. That s an example where being able to take the idle capacity out of your shop and subscribe on demand from the cloud can have a significant positive ROI. In one case, the client s costper-machine image went down more than 50%, and better than that, they eliminated about 20% carrying cost for just in case capacity.

4 ] SAP SPECTRUM 1 /2011 special 33 Does it ever cost a company more to subscribe to the cloud than to rely on its internal IT infrastructure? Yes, we ve had examples of that. And you may wonder why a company would even go with the cloud solution. Basically, it s because they want to get started. So while costs are slightly higher, it s a great bridge activity. The business value is inherent in the opportunity cost. Most cloud computing activities are non-mission-critical applications such as sales force automation or CRM. What issues must be resolved to accelerate the use of cloud computing for critical business applications? There are a couple of objections that we hear about consistently for example, the issues of data security, privacy, or data locality. So they have to be worked out. The enterprise needs to feel that they re safe, compliant to regulatory constraints, accessible, and protected. The answer to that, I believe, is that the most complex pieces are locality and regulatory, not security and privacy. In fact, the CTO of NASA was recently quoted in an article, saying that he finds the security implementation of many large, sophisticated cloud providers better than those of certain enterprises. Why? Because they do it on such a large scale for such a large audience that their sophistication is high and their resources quite substantial. Nevertheless, the challenges for information security and privacy in the cloud are the same as those within my four walls. Only the scale is different. So I need to make sure that the challenges I want to solve in the cloud are solved within my four walls. And they can be and will be solved in the cloud. Now, data locality regulatory issues are slightly more subtle and a little more risky. They are still being addressed on a one-by-one basis. The good news is that we re working with our clients to help solve these issues. Deloitte Research Link list: Advertisement the asug demo service Exclusively available to ASUG Installation members: The ASUG Demo Service is designed to deliver On Demand access to quality SAP trial systems via your Web browser. Current applications include SAP BusinessObjects, CRM, HCM and SPP; with more on the horizon. already a member? visit aspx or contact affiliates@asug.com to learn more about participation in the asug demo service. Not a member yet? contact memberservices@asug.com or call today to start taking advantage of opportunities like the asug demo service.

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