Many enterprise leaders have similar questions when considering a move to the cloud: How should I optimize my cloud strategy to support the business? How do I help the organization become faster, better and cheaper? How do I increase business agility and drive more and better business analytics and insight?
Here are two key considerations for optimizing cloud strategy to support business efforts:
- The cloud is an enabler of business agility — How can you go to market faster with more scale and redundancy?
- Cost optimization — Are you optimizing for cost in the right way?
Let’s first talk about business agility, a key consideration for IT leaders that want to optimize their businesses to move forward faster and more efficiently. Being agile is more than having your developers organized into Scrum teams; it is about beating the business team to the finish line.
I spoke with a client a few months ago, and one of the things about which he was very proud of his team was that since leveraging cloud computing resources, the team had provisioned, deployed and tested IT environments ahead of his marketing counterpart. This was not the case with on-premises infrastructure; as a result, the marketing team was almost always waiting on IT to finish. In addition to deploying infrastructure faster, the environment itself was more redundant and scalable at significant cost savings over existing infrastructure — a huge win for our client.
Another outcome of increased agility from migrating to the cloud typically comes in the form of “If I can use this agility to do an extra marketing campaign this year, what will that mean?”
Most businesses know what an extra marketing campaign is worth to their bottom line. If the business has technology restraints around marketing campaign initiation, then they might use the cloud to optimize the marketing component of the overall business strategy, among other areas. Because cloud computing allows for automation of the entire data center, businesses should leverage providers like AWS to ensure they can deploy things like marketing campaigns faster and more efficiently than before, with the added benefit of their being extremely elastic.
As an example of this highly valuable agility, let’s say a company has a three-month process for deploying marketing campaigns. It has a large group of folks that must be involved including IT security, who may get involved three or four times during the process. The teams march through an existing process to procure, deploy and test their campaigns, and they would love to be able to shrink that process down so they can fit more marketing campaigns into the year. One current constraint for this company is the time it takes to build and deploy IT infrastructure because their existing on-premises provider can take days or weeks to procure new servers or storage capacity. By leveraging the cloud, this company can create templates of their marketing campaigns and use them to deploy the required infrastructure in minutes instead of days or weeks. Faster deployments lead to more marketing campaigns in a year, which leads to an increase in sales — something IT leaders will love to talk about in their monthly executive reviews.
This same agility applies to other components of a business. Today’s leading companies can’t wait months to procure goods or begin processes. Today’s successful business leaders and their companies must be able to move much faster. They want to become more agile. The cloud supports flexible efforts and activities, helping businesses to shrink much larger processes like the marketing example given, from months down to days or even hours. We’re talking about enabling a radical shift that positively affects multiple parts of the business. A CEO recently told me he expects the cloud to make his business run faster and at lower cost — expectations that are certainly high, and in our experience, very achievable.
Looking now at cost, another component closely related to business agility, we hear the following comment from executives in nearly any industry:
“If I didn’t have to spend as much money on my infrastructure, that would free up dollars for other aspects of the business like R&D or lead-generation activities.”
By migrating to the cloud, businesses on average see a 70 percent five-year TCO savings (IDC Whitepaper) and can use those savings around leveraging the cloud to fuel their own R&D, and give back to other aspects of the business.
One interesting process we see regularly is that enterprises recognize and take action based on benefits they can see today with their existing infrastructure. They know it’s cheaper, better and faster in the cloud. These businesses do a “lift and shift,” moving their current infrastructure into the cloud. Once the initial move has taken place, businesses can assess cost-optimization ideas now that their business is running in the cloud.
Migrating data and infrastructure into the cloud is the first step. Some companies don’t realize this, but they must take that next step and optimize, not just for technology’s sake but for the real savings that can result. Businesses still have to think through ongoing cost impacts, and it’s critical to have tools to be able to do that.
You need to get tactical around the specific question of how to optimize. One common way to optimize is to improve application uptime. In most businesses, the value of uptime is clear, especially if you’re with a transaction-based business.
When I was CIO with my former company, if servers were down during our critical marketing season, that translated to upwards of $300,000 per hour of lost revenue — not something anyone wanted. Building redundant systems and planning for failure can be an expensive task. What if you need a backup telecommunications provider or even an entire backup data center? These are expenses that help ensure uptime but drive up costs and IT management complexity. Cloud infrastructure solves these problems at a fraction of the cost with less complexity — a win-win for IT.
Experience tells us that all devices fail at some rate: hard drives, memory, motherboards, power supplies, UPS, PDUs, etc. But entire data centers? Surely a facility that is designed for production-grade data-center hosting is not capable of large outages. In July 2009, Fisher Plaza in Seattle, Wash., had an electrical fire that took thousands of racks of equipment down for over 36 hours. This was a building designed specifically for uptime with huge UPS systems, backup generators and tanks of diesel fuel to outlast any power outage; and yet from a network perspective, customers had no access in or out for more than a day. In this case the data center itself was a single point of failure and pointed out the need to think about redundancy differently to those affected.
Going to the cloud enables businesses to add redundancy in a positive way, and you can upgrade from one data center to a multi-data center solution, depending on which provider you use. Either way, you are taking steps that mitigate costs associated with downtime. Interestingly, with cloud provider AWS, businesses can choose to use a multi-data center set-up for little more expense than a single data center scenario. With this route you save money and get a more redundant footprint.
Another consideration is the need to scale up and scale down. With a hardware solution, you’ll need to buy more of it over the life of the application. Related expenses can run into the thousands or tens of thousands of dollars. If that elasticity is needed only for a couple of hours, then an even bigger dilemma is created.
The cloud offers a scalable solution, and streamlined businesses are making the cloud work for them to handle spikes seamlessly. With the cloud, businesses can easily add 25, 30 or 50 servers for a couple of hours for less than a monthly latte bill.
Using the cloud for agility and cost savings is an incredibly rewarding journey. Use the cloud to solve real business problems. Select a website or application that requires a hardware refresh or is going through an upgrade; these are great times to reassess infrastructure needs and start making the cloud work for you!
Kris Bliesner is CEO and co-founder of 2nd Watch, Inc. In his position, Kris is responsible for the company’s growth and sustainability. Kris oversees strategic development of 2nd Watch’s cloud-based software solutions, the technology development and customer technology solutions, the technology group and the technology trends for the company. Follow him on Twitter: @ThaBliez.