Introduction There s a lot of hype around something called the cloud. This hype can be confusing for smart leaders of businesses who have other things to do besides keep track of the latest goings-on in information technology. But the cloud matters. So YJT has put together this concise guide to help you better understand what the cloud is and how it will affect the technology decisions you re likely to face today and in the future.
1 How Technology Works People board planes every day without studying aircraft design. They also buy insurance without studying actuarial science. So they shouldn t have to invest their time and effort into studying information technology just because they want to use it. To understand the cloud, however, it helps to review some basics about how information technology works. One good way to think about this subject is to break IT down into seven segments: Applications are what people actually use to get their work done. These applications include software such as Microsoft Word, customer relationship management (CRM) systems and video editing tools. Content is what people create and share using those applications: Word documents, the customer data in a CRM system, videos from a website, etc. Middleware is specialized software, such as Microsoft SQL server, that helps different components in the IT environment (an application and a database, for example) work together seamlessly. Infrastructure is the hardware that runs applications and stores content. It includes the servers that process the programming logic of applications and the storage that houses content. Networks are what connect everything. Most organizations have their own internal networks. Most also utilize the global set of interconnected networks known as the Internet.
End-user devices are what people use to interact with technology. These include desktop PCs, laptops, smartphones and tablets. We also interact with technology every day through regular phones, ATMs, TVs, cars and just about any other device that has a digital component. Management is how technology is kept functional and secure. It includes the monitoring of technology components to avoid or discover problems and the operations that prevent and fix those problems. End-user support can also be considered part of technology management. These terms make it easier to differentiate the cloud from what isn t the cloud which, in turn, makes it easier to understand the implications of the cloud for businesspeople.
A Brief History of Information Technology 1 BC (Before Cloud) Again, you don t need to know everything there is to know about information technology to make sense of the cloud. But a brief review of IT history can help clarify what makes the cloud different. IT began on mainframes. In the mainframe model, all of a company s applications and content resided on a single centralized piece of infrastructure which employees accessed from dumb terminals that were basically just a screen and keyboard. Mainframe computing: Enabled companies to first gain the benefits of IT. Didn t respond quickly to business needs, because it was entirely controlled by technologists. Limited innovation, because the market was tightly controlled by just a few vendors. PCs arrived in the 1980 s. These small, inexpensive computers could run applications like Word and store content. Desktop PCs enabled people to use personal applications, while PC servers acted like mini-mainframes running applications and storing content that users could share. Companies could thus distribute their applications and content anywhere: on desktop PCs, on nearby servers, on servers in other locations, or even on a mainframe. Distributed computing: Enabled companies to buy IT capabilities in smaller, less expensive increments. Empowered businesspeople to make IT decisions, because they could buy and install applications on their own desktops and servers. Dramatically accelerated innovation by opening up the IT market to more vendors.
The Internet is a shared network that lets any two authorized endpoints communicate with each other. Technically, its existence dates back to the 1960 s. But its impact on business really began in the 1990 s, when people first began connecting to Internet servers that hosted simple web pages and email. From there, use of the Internet rapidly expanded to online databases, streaming video and more. The Internet: Enables companies and people to interact with each other digitally. Gave businesspeople even more control of IT by making it easy for them to shop for and implement IT solutions themselves often without assistance from in-house technical staff. Further accelerated innovation by making it much easier for those with good ideas and those who could benefit from those good ideas to find each other. Virtualization began taking off in the early 2000 s. It is a technically sophisticated concept that involves uncoupling the logical attributes of an IT resource (such as a server) from underlying physical infrastructure. So instead of an application having to run on one particular physical server (as was the case with distributed computing), it runs on a virtual server that can reside on any appropriate physical server. Also, one physical server can host multiple virtual servers each running a different application. Virtualization: Reduces costs by enabling companies to more efficiently pool and allocate the overall physical capacity of their IT infrastructure. Gives companies flexibility to host their applications and content anywhere on their own IT infrastructure or on the IT infrastructure of an outside service provider. Drives innovation by making service providers compete with each other for customers hosting needs. It s worth noting that previous generations of technology don t entirely disappear as new ones emerge. Mainframes are still central to IT at many large corporations. And many applications still run on distributed infrastructure without virtualization. So cloud does not make all other forms of computing inherently obsolete. It simply offers a new set of capabilities that may be very suitable for certain business requirements.
1 What is the Cloud? The preceding historical perspective helps define the cloud. Essentially, the cloud combines distributed computing s economical infrastructure, the Internet s ability to connect companies with IT infrastructure anywhere, and virtualization s run anything anywhere model. To these capabilities, the cloud adds some rules-based automation that makes it even easier for companies and their service providers to situate applications and content wherever it makes the most sense to do so at any given time. As a result, service providers can offer businesses new ways of buying and operating technology that share three common attributes: The ability of companies to use service provider infrastructure instead having to rely exclusively on their own on-premise infrastructure Secure access to that service provider infrastructure from anywhere via an Internet connection A pay-as-you-go subscription cost model as opposed to capital investment While cloud offerings share these basic attributes, they can differ substantially in other ways. In fact, the cloud enables service providers to offer all kinds of choices when it comes to IT, including: Software as a service (SaaS) Historically, companies had to pay up front for their software licenses and then install the software on their own infrastructure. With SaaS, a company rents software running on a service provider s infrastructure that users access via the Internet. Examples of SaaS include Microsoft Office365 and Salesforce. Platform as a Service (PaaS) PaaS uses a packed set of service provider IT resources that includes everything except the software i.e. servers, storage, networking, middleware and management tools. This kind of solution is useful for running software a company already owns, has developed itself, or that is simply not available under a SaaS model. Infrastructure as a Service (IaaS) IaaS is over-the-internet rental of server, storage and/or networking hardware alone with none of the trimmings. These offerings are especially suitable for companies that simply want economical access to additional infrastructure capacity on an on-needed basis and that have sufficient technical staff or a high-quality IT Managed Services partner to handle all the associated operational details.
The aas offerings outlined above constitute what may be termed the public cloud. That is, they make cloud-based services available to the general business public. However, the cloud model can also be implemented by individual companies exclusively for their own private needs in their own datacenters. This so-called private cloud model simply requires that the company utilize virtualization and some basic automation/ management tools so to flexibly allocate the physical capacity of its onpremise physical IT infrastructure to whatever applications and content require it at any given time much as a cloud service provider would. A company can also locate some or all of its own cloud-enabled infrastructure at a service provider s hosting facility. This would be a private hosted cloud, in contrast to a private on-premise cloud. Given that companies have so many cloud-based IT provisioning options at their disposal, it is unlikely any company will use the exact same option for all of its applications and content. Nor is it likely that they will only do business with a single cloud service provider. Thus, most companies will likely adopt a hybrid cloud model that mixes and matches different cloud options. Some people also use the term hybrid to describe a company s use of multiple cloud and non-cloud provisioning options. It is helpful to differentiate between conventional hosting and another technical aspect of the cloud known as multi-tenancy. Companies have always been able to use service providers for hosting when, for whatever reasons, they did not want to add more hardware to their own onpremise data centers. These hosting service have, however, historically been single-tenant. That is, if you had a server at your service provider s hosting facility, it would be an actual physical server of your very own. Virtualization and the cloud, on the other hand, enable service providers to take multi-tenant approach to meeting their customers needs. With multi-tenancy, a service provider can rent you virtual server capacity on a physical server that you share with other customers (hence multitenancy ). Your virtual and those of other customers are protected by logical partitioning.
Why the Cloud Matters to You and to Your 1 Business Every business out there today is 1) under increasing pressure to reduce operational costs, and 2) requiring more and more data storage and data consumption. Therefore, the cloud matters because technology matters and the cloud dramatically transforms the way your business can leverage technology to achieve essential objectives. In particular, the cloud enables you to: Avoid capital outlays Most business leaders want to avoid large capital investments in technology. That s because there are usually other places they would rather invest their cash. And they re never sure whether big investments in technology will really pay off. With the cloud, you can avoid making those big cash outlays, because you can pay as you go much as you would with an equipment rental or car lease. Minimize ownership headaches Conventional technology can be a real headache. You have to hire and retain people with the right skills. And if they can t solve a problem, you still have to spend money on outside help to get your systems back up and running. Cloud-based models offload some or all of these burdens to service providers reducing costs and headaches. Achieve faster time-to-benefit Deploying new systems and software can take a lot of time and effort. You have to wait while the solution is installed, configured, integrated and tested. In fact, it can take months from the time you green-light a technology decision until you start reaping real benefits from it. With the Cloud, on the other hand, you can put the power of new technologies in the hands of your people in just days, hours or even minutes. Reduce business risk When you make large capital outlays and wait a long time to see results, you risk discovering too late that you made a bad investment. By letting you avoid upfront capital spending and enabling you to use new technology sooner, the Cloud significantly reduces your exposure to this financial/business risk. Maintain greater business agility When you buy and implement technology in a conventional manner, you typically wind up either underestimating your needs or buying more than you need at the moment in order to accommodate future growth. Cloud gives you the flexibility to always keep your costs aligned with your current needs. If you need more capacity, you access it on-demand. If you need less, you can scale back and scale back your costs accordingly. This flexibility can be very valuable given how quickly and unpredictably business needs can change these days.
Better support mobility and location-independence When you implement technology in your own facility, you typically have to take a variety of measures to allow people to access that technology from home and on the road. Cloud-based services, on the other hand, are inherently designed for secure remote access. This means that your people can be productive any time from anyplace whether they simply want to get a little extra work done over the weekend or actually can t come into the office because of Chicago s ubiquitous extreme weather. Better ensure business continuity The anytime/anywhere access that cloud solutions provide can also be extremely useful for maintaining business continuity, since people can still get their work done regardless of where they are. Also, many cloud service providers have redundant infrastructure in multiple sites. This further protects your business which, with conventional on-premise technology, is vulnerable to equipment failures, local power outages, building fires, and other types of disasters. More easily leverage contractors and freelancers Many businesses are trying to avoid fixed HR costs and improve their access to a wide pool of high-quality talent by making greater use of freelancers. The same remote access capabilities that make the cloud so suitable for remote work and business continuity can also be applied to give these resources employee-like access to your company s applications and databases. This access can make your engagements with select non-employees even more productive and efficient. Out-innovate and out-perform the competition Technology continues to play an increasingly crucial role in everything a business does from serving its customers to designing its services and products. So the more quickly and effectively you can adopt new technologies, the more likely you are to be able to out-perform your competitors. The cloud can therefore not just impact the economics of your IT spending. It can dramatically improve your ability to compete in an increasingly tech-centric world. The bottom line: Cloud adoption makes sense from a tactical financial perspective and from a strategic business perspective. So the sooner you make the cloud part of your company s technology portfolio, the sooner you can gain all of the above advantages.
1 What to Know About Security Many business leaders are adamantly opposed to the cloud for one reason: Security of data.. I no longer know for sure where my clients trusted data is stored. What happens to the servers where my data is stored if a cloud provider goes out of business? Those assets could be seized and suddenly, I am not in control of this highly sensitive data. What happens if there is a security breach at the cloud vendor s facility? Being concerned -- if not obsessed -- with security is warranted. However, current IT architectures may have more security concerns than a cloudbased solution. We regularly spot security holes in businesses that have an on-premises solution. The topic of security is much broader than the scope of this paper. However, the short answer is that security can be effectively addressed by following a standard set of best practices. Here is a condensed list of the most important steps to take to ensure that clients data never is exposed, regardless of whether that data is in the cloud or in a server room down the hall: 1. Encrypt all data. End to end encryption, when done properly, secures all data during transit and in storage. Shredded documents in a trashcan are less secure than encrypted files. The key is to insist that this practice is followed for all data, including O365 emails, Word documents, spreadsheets, and pdf files. 2. Avoid public cloud options for highly sensitive documents. Although encryption works, we recommend avoiding the large public cloud vendors, such as Amazon Web Services (AWS) or Rackspace, for storing highly sensitive data. Although these vendors offer a compelling product where data can be secured through encryption, the control customers have over their architecture is limited by design. In other words, their lawyers will win. 3. Require contractual language specifying that in the event of a business default by the cloud provider, there is an immediate right to reclaim data and to purge that data from their location. (By definition cloud customers have this right always, but we recommend putting it into contracts to address a case where assets could be frozen.) For hosted private cloud solutions, we recommend writing language into the contract where customers servers can be immediately purchased for the remaining depreciated price and shipped to the customers in the event of a business default. 4. On premise security Still the biggest security holes are the ones right down the hallway! This topic is a whitepaper unto itself, and many smart people are making entire careers out of this one subject alone. Make sure that there is a well-authored security policy from your IT department (regardless of whether your IT department is outsourced or insourced) and that it is enforced! We find that many of these policies are written but not followed. Subjects to consider: On-premise security, unencrypted laptops and mobile devices, unattended unlocked workstations, permissions, removable device use, guest wifi access, and many more that having nothing to do with whether you are on the cloud or not.
1 Getting Started with the Cloud Most companies already have existing IT resource in place, so it usually doesn t make sense for them to simply replace everything with cloud-based solutions.* Instead, firms need to long-term plan to migrate from a purely conventional IT approach to a hybrid one that leverages the cloud where and when it makes sense to do so. That long-term plan typically begins with the following steps: 1. Target existing low-hanging fruit for initial migration. Most companies already have IT resources that readily lend themselves to re-provisioning on the cloud. Microsoft Office365 is a prime example of this, since is much more economical and mobility-friendly than conventional Microsoft Office but doesn t require much new learning on the part of users. So is the re-hosting of an existing CRM application from an on-premise server to a cloud hosting service. 2. Evaluate new cloud solutions with the right business impact. In addition to targeting the right existing systems for initial migration, it s a good idea to select some entirely new cloud solutions that offer high-impact functionality. These can include cloud-based disaster recovery or a cloudbased HR solution like Workday. 3. Find the right cloud partner. The cloud market is growing and changing rapidly. There are big differences, often nuanced in marketing material, in how cloud service providers price, deliver and secure their offerings. So to make the most of the cloud in the long term, it makes sense to start off with a trusted advisor who can help you navigate a growing range of choices and make sure you put together a cloud portfolio that makes the most sense for your business. The most important thing about getting started with the cloud is to get started with the cloud. Given how important IT excellence has become for businesses to succeed and given how intensely competitive businesses have become no business can afford to pass on the benefits the cloud has to offer. The key is to look past the hype about the cloud as a panacea and to instead focus on the opportunities that make the most sense for your firm today. YJT is changing the rules of the IT game for Chicagoland businesses by providing them with the superior skills, solutions and services they need to succeed in an increasingly technology-centric world and by supporting its customers more responsively, reliably and resource-efficiently than any other local managed services provider. For more information, please visit www.yjtsolutions.com.