While cloud computing offers a wide range of potential benefits related to cost reduction, scalability and flexibility, businesses have struggled to effectively select, implement and manage cloud-based services. Quantitative discipline and analytical rigor commonly characterize traditional IT service management, but that maturity has yet to develop for the cloud. Indeed, the very idea of "measuring" a cloud feels oxymoronic.
The word "cloud" connotes an amorphous, asymmetrical, constantly moving thing that comes in a variety of different shapes, hues and densities. Measuring a natural cloud in a single dimension and deciding "this cloud is 0.5 miles long" would be misleading in the extreme, as every other dimension might give a completely different result. This is also true for cloud computing services.
Despite this complexity, businesses must find better ways to measure and select cloud-based services in order to ensure that potential benefits are actually achieved. In 2014, we anticipate that clients and service providers will make significant progress in defining their objectives for cloud services, applying consistent metrics to quantify their return on investment and navigate a rapidly evolving contracting environment to more effectively evaluate alternative solutions.
Cloud services represent a fundamental departure from traditional sourcing models, both in how services are delivered and under what terms. Historically, the customer controlled the contracting process and defined a unique set of requirements in a highly detailed and prescriptive RFP that bidders responded to. The result was that service providers had to support each customer in ways unique to that customer, thus constraining the ability of both client and provider to benefit from standardization and economies of scale.
The cloud model turns that situation on its head, offering potentially dramatic improvements in standardization and economies of scale. In return, the customer has to accept a solution that is more generic across all of the service provider's customers. Put differently, a dramatic shift in control takes place, from the customer to the service provider, regarding the terms of the agreement and the nature of the solution. The degree to which that shift occurs depends on which delivery model is chosen, with physically dedicated, on-premises cloud implementations being most similar to the traditional model and public cloud being the most different.
Organizations adopting cloud services today need to go into that trade-off with their eyes wide open, rather than sleepwalking their way into a new sourcing model where they give up control and customization and get very little in return.
Many customers are currently signing contracts for services that include the word "cloud." Unfortunately that term has lost more of its meaning more quickly than perhaps any other in the history of technology. "Cloud" should indicate services which are highly elastic, scalable and flexible, with costs to match, but the word may now only indicate something that runs on the internet. In many cases, these so-called cloud services do not deliver what customers have been led to expect.
In other cases customers sign up for services and give away benefits that they had previously with more traditional solutions. They eliminate their up-front costs in exchange for monthly service fees, only to find out later that those monthly fees are growing exponentially because they have no way to effectively manage demand.
Or they scale up the traffic being handled by their applications only to find that they can't scale down their bill when those volumes drop off. Or they find that their cloud-enabled applications must now be rewritten if they want to host them in a different provider's data center. Or they find that their security requirements are not being met. Or they find that the generic SLAs they received do not really motivate their provider to deliver superior service.
All of these are real world examples happening today, and they are only a few of the things that clients will learn to measure and evaluate before the cloud services deal is signed.
The table below illustrates some potential gains and losses from the move to cloud services. While there's nothing wrong with making intelligent trade-offs, and indeed, cloud provides great opportunities to do that, obtaining very few of the gains in the first column, while giving up too many existing benefits from the second, is not a very good deal.
Read part 2-Reaping Benefits from Cloud Services
The Cloud Services Trade-off | |
| Sample Potential Gains | Sample potential Losses |
| Short contract duration or none at all | Customized SLAs |
| No minimum volumes | Auditability |
| Fully automated elasticity | Application portability |
| Virtually unlimited scalability | System response time |
| Short provisioning times | Security control |
| Charges only for what is being used | Predictability of the monthly invoice |
