Category Archives: Education

ROI (Return on Investment) From Cloud Computing

ROI (Return on Investment) from Cloud Computing

A business organization often measures the value of investments or any move that requires money in terms of the return on investment (ROI). Perhaps it is the only reason that top management will agree to any proposal, especially bold ones like adapting the relatively new and untested cloud computing paradigm. Businesses have a habit of only embracing what is proven and tested while disregarding the possibilities and rewards of embracing new systems and methods. Though, I have to admit that more and more organizations are becoming bolder and starting to embrace new technology, especially the relatively new and smaller ones who are just getting into the business. These are the ones that have less to lose because they have not invested in older systems which are considered as lost investment when abandoned, and they can start fresh with new systems not weighted down with the familiarity of old ones.

Though it is quite difficult to calculate ROI from using cloud computing, we can start by finding returns in the three major benefits area for adapting cloud computing: Productivity enhancement, cost reduction and revenue transformation.

  • Cost savings from using cloud services – after doing categorization on the organization’s applications, they can estimate potential savings by shifting to cloud services. One way is migrating ERP resources into a public/private cloud infrastructure. Through virtualization and consolidation, they can reduce the number of servers running in-house and reduce the number of racks used significantly. This can generate up to 70% ROI for a Tier 3 workload and about 50% for Tier 1.
  • Cost Savings from Labor and software – Huge savings can be had through the labor reduction brought by reducing hardware infrastructure. This includes savings from the development and maintenance of applications and hardware. There is also a highly reduced need for installed software as cloud-hosted software can be made available to any workstation with an internet connection, which significantly lowers the required budget for software.
  • Cost savings from hosting – the spending budget for hosting infrastructure is made evident quickly. Hosting in-premises means acquiring your own hardware which is considered as a capital expenditure and could be quite large. While availing of cloud hosting is considered as an operational expenditure because of its subscription or pay-per-use model.

But often, the ROI is not simply measured through the savings in terms of monetary value. The best measurement of the ROI of cloud computing is simply in its VALUE. ROI doesn’t always look very enticing especially when cloud computing is concerned. That is why administrators and CIOs should be looking at the apparent values that come in many forms when employing cloud computing. What they should be asking is “What do I expect to get if I use this service?” and similar value related questions, not monetary related ones. You can set up metrics to determine the apparent value that cloud computing services are able to provide.

Take for example the following:

  • The speed of adaptation and deployment of the cloud service versus the maintenance and upgrade costs and downtimes of the old system.
  • The general ease of use and dynamic usage afforded by the new system. How flexible will the new system be in terms of coping with the ever changing business needs and goals?
  • What are the risks involved with processing and storing data offsite and not having to worry about the back end of the systems?
  • The support and other value added services offered by the provider. Are there any at all?
  • What are the environmental impacts of sourcing our IT services from the cloud? Is there a positive outcome to more and more organizations having co-location of infrastructure?
  • What about the apparent savings and the hassle in paying utility bills?

It is true that ROI is important, but the monetary side should not be the only basis for ROI. The value add offered by cloud services should also be highly considered when contemplating the use of cloud computing, even if it is sometimes intangible.

By Abdul Salam

Forrester Says Cloud May Not Be the Future of IT: Really?

Forrester Says Cloud May Not Be the Future of IT: Really?

I apologize for the attention-grabbing nature of the headline, but that is pretty much what some of the news reports covering Forrester Research’s latest paper on cloud computing said. Delving further, it seems there is a bit of exaggeration at play here.

The aforementioned news items (See: Forrester: Cloud is not the future of IT  and Cloud is not the future of IT, claims Forrester) were looking at Forrester’s Make the Cloud Enterprise Ready report, itself a part of the research firm’s Playbook on Cloud Computing, a framework for going on the cloud. James Staten, an analyst at Forrester, has been quoted as saying, “Not everything will move to the cloud as there are many business processes, data sets and workflows that require specific hardware or proprietary solutions that can’t take advantage of cloud economics. For this reason we’ll likely still have mainframes 20 years from now.”

At this point, I would like to point out a few things. One, saying “not everything will move to the cloud” is not the same as “most things won’t move to the cloud.” In other words, nowhere is mainframe’s or other legacy technologies’ dominance over cloud computing implied.

Two, the best thing (or perhaps the worst) about the future is that it’s impossible to predict accurately. For example, the negative issues plaguing cloud computing today may well have been overcome in a few years. To give an example, consider a trading platform that requires computational processing without delays beyond a minimum threshold, because as we all know, stock prices change within fractions of a second. While current cloud computing technology may not able to satisfy these specifications necessitating the deployment of in-house computers, available bandwidth may increase manifold in future to allow delivery of the same level of service in a distributed environment, as in cloud computing.

Three, what is worth mention here is Forrester’s earlier assessment of the future cloud computing market (See: Cloud Computing Market Will Top $241 Billion in 2020). As is evident, Forrester does consider cloud computing to be the future of IT. And finally, mainframes and cloud computing, though of totally different eras, are not incompatible (See: Mainframes in the Age of Cloud Computing).

In conclusion, I would like to reiterate my long-held belief (“long” relatively speaking, since cloud computing itself is only about a decade old) that cloud computing IS the future of IT. However, as every prediction of the future goes, conditions apply.

By Sourya Biswas

4 Things To Know About Virtual Private Clouds

Virtual Private Clouds

What is a private cloud?

A virtual private cloud (referred to as simply private cloud from here on) is a happy marriage between traditional enterprise IT and cloud computing. Unlike public cloud implementations, the hosted services in a private cloud are behind a corporate firewall. The enterprise has more control over its data and applications in this kind of setup.

For the past couple of years, private clouds have emerged as the hottest subcategory under cloud computing, as it expands the power of the cloud to new industries such as finance and health care, which have high levels of regulatory compliance requirements.

What are the advantages of private clouds?

  • Private clouds offer a higher level of security and regulatory compliance than most public cloud implementations. If you are storing critical data (such as patient health records or the financial transaction data of your customers), you might want to consider private cloud implementations that provide you with more tools to keep your data from ending up in the wrong hands.
  • Since your virtual servers don’t need to share data buses or processor time with the “noisy” servers of other companies, you can get higher levels of performance on a private cloud.
  • You have a higher level of control over your data.
  • You can avoid “vendor locks” – where you are tied to your CSP (cloud service provider) because it is quite hard to migrate elsewhere.
  • Greater scope for customizing the service to suit your enterprise needs.
  • The advantages of a private cloud over enterprise IT include more cost-effective datacenter management and higher levels of scalability.

What’s the catch?

The disadvantages of a private cloud include higher initial investment, less flexibility and higher cost of maintenance compared to a public cloud. In a public cloud implementation you have very little CapEx (capital expenditure) and most of the spending is OpEx (operating expenses). This leads to a low-friction initial adoption. Private clouds are also more complicated to setup and more expensive to maintain than public clouds. Thus, these might not be suitable for smaller enterprises that don’t have a very high data security requirement.

Who offers private cloud installations?

Most of the major cloud vendors offer private cloud implementations alongside their public clouds. Amazon VPC, Rackspace Managed Private Clouds and Microsoft Managed Private Cloud are among the leaders, though this market is not surprisingly more scattered than the public cloud market.

By Balaji Viswanathan

Gauging Your Organization’s Cloud Aptitude

Gauging Your Organization’s Cloud Aptitude

Cloud computing: is it a cure-all for every technical vice that vexes how an organization manages its data? We at CloudTweaks obviously only answer this question in the affirmative. Though slightly marred by several wrinkles in its ease of use and trustworthiness, the cloud remains an indisputably worthwhile component of any IT-heavy operation. Nevertheless, conducting a thorough aptitude assessment can provide an organization with unique reassurance that cloud computing can dovetail attractively with their aims. Launch such an assessment by considering some of the following questions on cloud’s potential for you.

Is a complete relocation to the cloud worth the hassle and initial financial expense to start?

There’s no other way around it — transitioning from a traditional data management system to one run via the cloud primarily will feel like a discombobulation at first. You can expect the most difficulty in transitioning those hardware and software components that are the most complex and the most integral to your data’s foundation. Yet this hassle is validated by reduced costs to how you manage your data and OS. You can expect to see substantially lessened cost in software and hardware, naturally, but also in costs of labor as well. The monetary advantage of the switch ultimately overshadows the interruption required to make a successful switch.

What needs for quickness and space would your organization face in the cloud?

Unfortunately, creating virtual versions of several applications for use via the cloud remains impossible, as their hardware makeup (and operating speed requirements) prevents such a transition. Transferring these applications to cloud would not be feasible, and it might actually be worth considering remaining localized should managing your organization’s latency be a priority. Instead of endeavoring to relocate an entire operating system to the cloud, you may instead consider cherry-pick cloud services to accent the system, such as selecting your least-risk applications as candidates for a virtualization switch.

Should security concerns halt an effort to enter the cloud?

Firstly, you must remember that data protection begins with human surveillance; the choice of what data to place in the cloud, or anywhere online for that matter, must be carefully weighed. Moving into the cloud requires a tacit agreement with a relinquishing of 100%, watertight control over your data, as cloud computing (like almost every computing option) is by no means foolproof. If you consider your data to be especially sensitive, perhaps a complete transition into cloud should be conducted with baby steps and deliberation before each move.

By Jeff Norman

How To Handle The Shock When You Receive Your Cloud Computing Bill

How To Handle The Shock When You Receive Your Cloud Computing Bill

It is common knowledge that there are hidden costs when your cloud-computing bill is delivered each month. There are, however, tried and tested practices you can adopt to avoid surprises. According to Dave Zabrowski,CEO and founder of CloudCruiser, it is really difficult for cloud computing providers to be completely transparent, especially for public clouds, but the hidden costs can be eradicated if only these providers would make an effort to be more transparent.

Over-allocation is a basic problem being faced by cloud computing customers. When a company taps the public cloud for its storage or computing power, it usually assumes that its workload will be at a certain level and, as such, it usually over-provisions and buys a higher-priced cloud computing plan to ensure coverage. However, experience shows that the real workload is not generally as demanding as the company has assumed. A cloud computing provider must be transparent with regards to a company’s allocation and usage so that the entity can downgrade to a less pricey plan.

Firstly, so that a company can save on its cloud computing plan, it can make use of cloud cost management and cloud management tools. There are various tools available that can assist a company in fine tuning their requirements in order to maximize usage of its cloud computing power and optimize cost. Different applications can recommend proper provisioning, tradeoffs between performance and cost, and alternative pricing models. Some tools also allow setting of alerts so that a company can be notified automatically if usage exceeds certain thresholds. In essence, a company must be able to monitor its instances real-time so that the monthly cloud computing bill will not be a shock.

Secondly, create clear cost-management procedures. In traditional IT deployments, IT had clear processes and control in place when it came to provisioning and approval. However, with cloud computing there is no particular policy in place. Therefore, an organization which makes use of the cloud must have clear governance policies in place.

Thirdly, create a management role which is dedicated to cloud computing alone. If a company is moving to the cloud, it is of utmost importance that they have dedicated management personnel to monitor and manage cost efficiency. The company must also search for the appropriate cloud computing provider to be able to negotiate.  Streamlined processes must also be created to support cloud computing provisioning.

Finally, there must be checks and balances in place through automated monitoring and cost management tools. However, human intervention is still required in order to provide the rules of engagement and proper governance.

By Florence de Borja

Cloud Security: Public Or Private, It’s Getting Better

Cloud Security: Public or Private, It’s Getting Better

It’s the tale as old as time: manifold businesses and organizations hesitate to relocate their most important cloud programs from their private data centers into the more spacious public cloud sphere, out of fear that they’ll jeopardize security and protection in the move. Oftentimes articles will endeavor to rewire these professionals’ thinking about the public cloud, enlighten them to the advantages of making that switch and its potential assets to an enterprise. Yet this article seeks to — gasp! — work with private cloud stalwarts, as well as public cloud champions, on their own terms. For no matter which you feel more comfortable with, security measures have been vastly ameliorated and made more flexible by innovations in one important cloud process: automated functionality.

The majority of security issues in the cloud are understandably generated by some human foible. If cloud systems simply employed a much larger array of automated capacities, such as in regards to the orientation and structure of servers, security would therefore be mightily improved as a consequence. Such a focus on automating the system streamlines operational costs, preempts abnormalities that may encourage a security issue, and heightens enterprises’ practical nimbleness. Obviously not every cloud enterprise will gel seamlessly with every automated server available. However, investing work into locating the ideal match could result in an optimal realignment and maintenance of the operating system, database, and myriad other essential components.

And such meticulous attention to the state of one’s cloud system, with a focus on economizing, can translate into improved data protection. Conducting a full scale assessment of the cloud applications run in an operating system and ensuring that what is on the computers matches what is on the official bookkeeping records can improve a cloud-savvy enterprise at least twofold. Not only would this exercise (greatly facilitated by an asset discovery program or tool) will either prevent or forestall duplication and obsolescence of applications, but it would also provide security personnel with a tighter grasp on the applications and services that require attention to protection measures.

No panacea yet exists to cure every cloud enterprise’s concern with security. Admittedly, keeping track of the latest in protection possibilities in cloud is an almost-full time endeavor. (Read PC World’s dynamic article on the subject here.) However, our rightful fixation on the security conversation continues to inspire companies to take a chance and enter the fray. The more organizations who trust their applications to run in the cloud, the sooner concern over protection will be match with smoother cloud management tools and services.

By Jeff Norman

Rumors In Cloud: What A Tangled Web We’ve Woven

Rumors in Cloud: What a Tangled Web We’ve Woven

As our community has witnessed cloud’s rise to headliner, we have also failed to dispel certain rumors that could hinder its acceptance. Incorrect information merely hampers the progress cloud computing could make as the IT phenomenon it is. A couple ideas in particular stand out to me right now, hackneyed and trotted out too often.

The first misconception: “private cloud is too pricey for rookies.” The rhetoric of public versus private colors many sectors of society: education, class, government, and onward. It holds that “public” connotes less of something provided for more, and “private” the exact opposite: more of it for less of us. This diction does not necessarily hold water in the cloud computing conversation. True, public cloud and its “pay-as-you-go” construction does appear to cost less. Yet delivery from a private cloud can actually beat the public option in spendthrift efficiency, in the same way that buying groceries and eating in costs less, in the long run, than eating out nightly. Newbies to the cloud will need to take into serious account such details as business size, data protection, and compliance concerns, beyond just pricing of service, to determine and strategize between public and private cloud.

Another contentious thought: “In the pool of cloud computing, you ought first to dip in your toes.” My recommendation: cannonball instead. The mere consideration of cloud computing is an essential gesture toward rendering a business more efficient, flexible, and technologically empowered. But the consideration remains just that — an opening gesture — and cloud’s true assets will remain untapped until the business leaps into the fray wholeheartedly. 2010s-era IT is unprecedentedly demanding: today’s enterprises must contend with data consumption that can explode or slim down by the day, the costs of addressing such techy heave-ho, and similar iterations of a faster-paced landscape. Cloud, when bravely, completely embraced, can equip a company with a full array of applications required to truncate demand for human employees (liberating them to be of greater use elsewhere) within mere hours. And managing these applications is made a cinch these days with enormous progress in OS systems. In short, going the whole hog on cloud can have you saying “hooray” much more quickly.

We all have a stake in clarifying cloud. Without transparency, such myths will distract attention away from the deeper concerns that deserve bigger recognition: namely, the global failure to address redundancy in all clouds, public and private alike. (More on this issue to come, next week.)

By Jeff Norman

Gussy Up Your Employment With Cloud Computing

Gussy Up Your Employment with Cloud Computing

With reports of 50,000 new jobs being launched in cloud computing/IT in Los Angeles alone, it’s official: the employment iron is hot. Strike into the fray with a sophisticated grasp of how cloud computing can improve your approach and your potential company.

Chasing versus cultivating. The sphere of cloud computing’s involvement with the hunt for a great job is populated with two contingents: those who seek to “chase” literal cloud computing positions, and those who opt to “cultivate” a reputation for their own cloud expertise. The former group, the “chasers,” are currently enjoying a bumper crop of positions as consultants and providers of cloud. However, the well of such posts may run dry as the demand for them begins to slow. To best incorporate the cloud into your work life, emulating the “cultivators” — nurturing your reputation as a cloud professional, even at your current workplace — is vital. Doing so positions you at the vanguard of the cloud in your own occupational backyard, a sage move toward solidifying your value and enhancing your cachet.

Earn cloud skills that pay the bills. You will require more than a well-stocked DropBox and regular reading of CloudTweaks (which remains highly recommended, nevertheless) to claim cloud computing proficiency at your workplace. Consider your genius in relevant, related skill sets that can support your protestations of cloud excellence. How smoothly can you cajole your co-workers (heck, even your own family) into taking up the cloud along with you? Can you rattle off the five most essential new cloud applications on demand? Can you demonstrate to your boss how participation in cloud can boost the business, offset risk and encourage reward? And can you serve as a cloud architect, proposing a structure that safely yet profitably involves your company in cloud? Until you can answer such questions with ease, hold back on tooting your cloud computing horn too loudly.

Before you head up to cloud, get grounded. Many employers will grow annoyed with staff or applicants that tout reams of information on cloud computing without a mastery of the business itself. Ground your excellence in cloud know-how with equally specific respect for the industry or enterprise at hand. Going for a position in healthcare, for example? Research the business vein of that hospital or facility, then base what you can offer via the cloud on that information. Tailoring your genius to a particular gig is doubly impresses: it educates and inspires confidence all at once.

By Jeff Norman

CloudTweaks Comics
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