Increase Use of Managed, Hosted and Cloud Services to Boost Business Success

Success and Cloud Services

Use of cloud services is high and climbing: for example, nearly three quarters of organizations use cloud-based Software as a Service solutions (SaaS) to provide enterprise applications. More than 25% of companies will be using servers and/or storage in the cloud—Infrastructure as a Service (IaaS)—in 2013.

At the same time, fully 70% of organizations report flat or declining IT staff headcount. Given steadily increasing demand for IT services, many IT organizations will shift even more work to the cloud or some other form of managed services to compensate for a lack of staff resources.

The reason why companies shift work to managed, hosted or cloud (MHC) services is simple: doing so makes them more successful. Those saying yes, they are shifting more work to MHC report themselves to be nearly 10% more successful in hitting their companies’ defined success metrics for IT than those saying no, they are not shifting more to MHC.

(Please see Figure 1.)

Nemertes also looks at two objective metrics of success: productivity (revenue per employee overall) and IT efficiency (revenue per IT employee). Increasing use of MHC is a success strategy when measured either by productivity or by IT efficiency. (Please see Figures 3 and 4.)

Of course, success for IT builds on success for IT staff. Getting not just more done but more interesting and valuable things done without adding staff should be IT’s goal, and using MHC can help IT achieve it.

 

Why Cloud Services?

Organizations pick cloud services for a few primary reasons: to reduce or restructure costs, to leverage scale, and to accelerate innovation.

Reducing Costs - Cloud solution is simply cheaper, especially for smaller companies that do not have as many users across whom to spread the costs of acquisition, deployment, and ongoing maintenance and management of an in-house solution. For example, a 20-person company seeking a mobile device management (MDM) solution for staff mobile phones. An MDM platform may cost INR 5,45,600 to acquire, implement, and operate for the first year, and INR 55,000 a year for support thereafter, plus staff time to manage and maintain. In contrast, an enterprise-grade MDM solution delivered as SaaS might cost that company INR 66,000 per year, less than a third the cost over three years. The same ratio might obtain for buying and running the servers to support a content management solution vs. running them as virtual servers in a cloud environment. Moreover, the Cloud service provider (CSP) in either case can also provide a level of power, cooling, and connectivity redundancy far in excess of what the company can provide for itself.       

  

Leveraging Scale - one thing a cloud or other managed solution can offer is the advantages of the service provider’s enterprise grade solution without the investment in enterprise-size staff and enterprise-grade infrastructure. The small or midsize business gets the network operations staff of a high-end data center, and the server, storage, network, power, cooling, and connectivity built into high-end data centers. As importantly, cloud lets companies dive into complex systems without the need to develop the same level of expertise and operational maturity they would need to implement and maintain such systems themselves. Whether the focus is on operating systems, on middleware such as databases and application servers, or on applications, shifting the burden of deep systems expertise and delicate tuning and management to a provider lets the smaller organization focus its efforts on business logic and use cases.

Accelerating Innovation-  By lowering the barriers to entry in use of new services, cloud lets organizations of any size try out new solutions more frequently and more rapidly. For example, being able to try out a new email solution without having to acquire, provision for, install, and populate it in-house means being able to try it out the same day you decide to. Being able to do this with several services successively improves the chance of finding the best solution. Similarly, being able to try out new programming languages against a database back end is easier if the environment already supports them and the programmer can just start playing, rather than first having to negotiate for installation of the tools and supporting integration.

Conclusions and Recommendations:

In pursuit of cost controls, leverage on new challenges, and acceleration of IT services innovation, organizations of all sizes are turning to managed, hosted, and cloud services and that shift is paying off: making more use of MHC services makes IT more successful, whether measured by self reported success against company specific metrics, or in terms of productivity and IT efficiency.

 

• Well connected -It should have or provide services out of data centers with not just multiple connections to carriers, but multiple connections to multiple carriers in order to provide the optimum not just in reliability but also performance.

• Well architected for resilience- A CSP needs to be running or running in data centers that have redundant power and cooling systems, battery backup and backup generators and lots of fuel.

• Flexible - You should be able to achieve the level of privacy and segregation of your workloads and data from others that you require, ranging from basic public cloud shared tenancy of everything to a completely private cloud that shares no infrastructure with anyone (basically, traditional hosted infrastructure with a cloud interface for you).

• Well architected for you as a customer -  There should be a single point of contact for your role as a customer, and all billing for use and services should be transparently integrated so that you can always see what you have used and what you are paying.

• Well architected to work as a unit -  If the CSP offers multiple kinds of service –IaaS, PaaS, SaaS–they should be able to work together seamlessly and easily, via pre-built integrations and connectors or simple, open APIs internal staff and developers can use to tie things together to fit.

• Offering meaningful SLAs and proactive management - In buying services, one wants SLAs that make sense in terms of one’s ability to use the systems and accomplish the work of one’s own organization with them, not in terms of the CSPs component, server or network availability. Along with that, the CSP should be reaching out proactively when a performance problem is going to affect a customer.