Two Keys to Successful Cloud Computing

By Guy Currier  |  Posted 2011-06-14

Like a growing number of enterprises today, Kelly Services has made the cloud a key part of its corporate IT strategy. Based in Troy, Mich., the workforce services provider began its foray into cloud computing in 2004, when it adopted as its CRM platform.

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Four years later, the company launched Kelly IT 2.0, a program to help transform the company into a global business. Among the benefits the cloud provides to this program, according to Joe Drouin, senior vice president and CIO, is dramatically easier and more cost-effective deployment of applications to Kelly’s employees and customers around the world

What delivers this ease and economy is cloud computing’s essential characteristic: the disconnection of an application from the infrastructure that supports it. This has had transformative implications for how businesses work today.

However, it has also created a fair measure of chaos and confusion, including misunderstandings about what defines cloud computing. Meanwhile, managers and workers are making new demands—based on the cloud concept—for applications and capabilities, pursuing the opportunities they present for entering new markets, gaining share in current ones or increasing margins

To make sense of the cloud computing landscape, Baseline fielded an online survey in April 2011. The results point to two critical elements of a cloud strategy that are not commonly recognized: attention to service levels and focus on integration. To ensure your path to cloud success, you must incorporate both elements

First, though, our survey demonstrated the chief selling points of cloud computing: flexibility and versatility. Through this simple model of disconnecting the application from the infrastructure, cloud computing lets your organization add capabilities, scale initiatives or wind down unfruitful programs more easily than ever—in both public and private clouds.

Lionsgate Entertainment, a global entertainment company in Santa Monica, Calif., must be able to scale capacity, varying the amount of computing power based on specific project needs. So, in November 2010, it began moving its SAP ERP system into a cloud computing environment hosted by Amazon Web Services, with help from integration firm Freedom OSS. “It’s a lot more practical to make use of a cloud resource like Amazon than to build your own,” says Leo Collins, executive vice president and CIO

These benefits are not effortless to attain, however. Our survey revealed the challenges that organizations are experiencing with their cloud deployments. Chief among them is concern about data protection, which comes naturally with the multitenancy implied by the cloud computing model. But it’s interesting that, although multitenancy is mostly associated with public clouds, data protection is seen as just as great a challenge with private clouds

This leads to the first clear weak point in the cloud: service levels. Despite cloud computing’s bright future, survey respondents hold very low opinions of the service-level agreements they are getting from vendors. That’s why we believe that the first essential-but-unknown success factor in cloud implementations is a strong focus on SLAs: You can and should expect as much from a cloud vendor as from a non-cloud one.

Organizations are also hesitating because of the investments they have made in their current hardware. This was a reason given for avoiding the cloud by 35 percent of the 834 business and IT executives from 21 countries surveyed by the IT Governance Institute (ITGI), a Rolling Meadows, Ill., research entity, in its 2011 “Global Status Report on the Governance of Enterprise IT.”

“Cloud computing can deliver tremendous benefits,” says Ken Vander Wal, international vice president of ISACA, which owns ITGI, “but when companies think about moving a known quantity to a whole new computing model, they have reasonable concerns about integration, disruption to the business, and security and privacy issues.”


Despite these concerns, cloud adoption looks strong, according to our survey. A third of respondents say that their organizations have, or soon will have, software as a service (SaaS) deployments. In terms of private clouds, nearly as many are deploying platform as a service (PaaS) (28 percent), storage clouds (30 percent) and computing clouds (29 percent). The percentages for public clouds are somewhat lower: 24, 21 and 20 percent, respectively.

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Cloud computing’s speed and cost-efficiency have won it fast friends. Initially, it seemed that these benefits arose only from the cloud’s two main features: the easy “sign and drive” deployment that Web-based services allow, as well as lower capital expenditures.

One example of this is HarperCollins Publishers, a book publishing company in New York that has been using a public cloud infrastructure since December 2010 for its Digital Technology Services. DTS supports multiple global divisions and is charged with managing the transformation of the company into a more digital entity.
“We can have an image up and running in just a few hours, and it costs less than 10 cents per hour to run,” says Greg Mucci, director of digital technology operations. “This allows our business users to experiment in a very forgiving way.”

The company can launch a program with no financial commitments, so if the initiative is not successful, it can stop spending money almost immediately. “Alternatively, if something takes off, we can scale to a much more robust environment very quickly and easily,” Mucci adds.

Another example is GWR Medical, a company based in Chadds Ford, Pa., which provides products to treat chronic wounds. It began using Verizon Computing as a Service less than two years ago to store medical data about customers and share the information as needed with physicians and insurers.

The cloud “is reliable relative to uptime,” says Sean Geary, vice president and chief operating officer, “and I don’t have to drop money on a server rack to run these different applications, so there’s cost containment.”

Nevertheless, at this point in the cloud revolution, we’re learning that its benefits run deeper than just low cost and fast deployment. One dimension to the flexibility of cloud computing is the ability to control where your application investment is concentrated—based on the importance of the benefits you seek—simply by picking your “style” of cloud computing.

How so? We’ve been defining cloud computing as the disconnection of application from infrastructure, but within the cloud model, you can choose where this disconnection takes place. If it’s at the user interface, then it’s a SaaS solution. If it’s between the software and the interface, it’s PaaS.

If the functionality you need is not mission-critical, then public SaaS is a good low-cost option. On the other hand, if what you need is fundamental to your business strategy, you may want to build your own application. With PaaS, you can do that without worrying about the underlying infrastructure it’s running on. In both cases, you’re focusing your investment on the area that will give you the best advantage.

“One of the fundamental components of Kelly IT 2.0 was that we would build and deploy applications in the cloud going forward,” says Drouin. Kelly is now using,’s PaaS offering, to develop and deploy internal and customer-facing applications. Additionally, the company has migrated about 9,000 users from an on-premises email system to a messaging and collaboration service hosted by Microsoft.

So flexibility in the cloud approach you take for a given application is another avenue for achieving cost efficiencies. You can also mix approaches within the application, such as using cloud-based storage to house data that’s processed by users of a SaaS system. 


That brings us to another dimension of cloud versatility, one that’s of great interest to corporate application architects: feature selection. The cloud model allows you to integrate the best capabilities that are relevant to your needs.
Cloud computing schemes—built on standards such as TCP/IP, XML, CORBA and XBRL—are oriented from the ground up toward integration with existing architectures. So you can splice together multiple cloud and non-cloud offerings to create your own custom suites.

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Imperial Sugar, a Sugar Land, Texas, company that’s one of the nation’s largest processors and marketers of refined sugar, uses Sterling Commerce’s B2B integration suite, which runs on a cloud hosted by IBM, to consolidate electronic data interchange (EDI) purchase orders across the enterprise to multiple back-end systems. This enables the company to conduct more than a dozen different transactions—including purchase orders, invoicing and shipment notification—over the cloud with its business partners, says George Muller, vice president and CIO.

What about the choice of public or private cloud computing? Here, too, the landscape has changed. Private cloud options bring the model in-house to address security, compliance and management issues. Originally, this was envisioned as using the in-house infrastructure: hardware, supporting software and middleware.

WhitePages, a Seattle-based company that provides online contact information for people and businesses, uses numerous SaaS offerings. But it has also built its own private cloud, which the engineering staff and outside contractors use to develop applications for the WhitePages Website. This provides greater flexibility and enables developers to create new software releases more frequently, says Hernan Alvarez, senior director of IT and operations.

Nevertheless, private cloud computing services are increasingly available, enabling applications to remain within the corporate firewall, while the infrastructure is hosted by the vendor. This reduces capital requirements while maintaining the control private clouds represent.

That’s why private clouds are just as versatile as public clouds. Again, based on the particular application, your organization’s needs and your overarching business goals, you can almost custom-design your private cloud approach.

There are also so-called hybrid approaches, which use the flexibility of the cloud model to house sensitive features, functions or data privately, while putting the rest of an application in a cost-efficient public cloud. This approach remains uncommon, with only 19 percent of organizations unifying public and private clouds in a single application. While 35 percent of respondents are not at all interested, 11 percent expect to start hybrid cloud initiatives within the next 12 months—a 56 percent growth rate.

Suncorp, a financial services firm in Sydney, is planning to implement a hybrid cloud model. The company uses its internal private cloud for storage and computing delivered as services, as well as for on-demand PaaS provisioning. This strategy gives Suncorp “the ability to rapidly onboard and orchestrate new internal or external automated services in any environment, providing true hybrid cloud capability,” says Jeff Smith, CEO of Suncorp Business Services.


If taking full advantage of the cloud model means picking and choosing the best features and platforms for your needs, then it’s clear that to succeed with a cloud strategy, you must focus on integration. Thus, the most thought-provoking trend uncovered by our research is the coming rise of public cloud PaaS, representing the second essential-but-unknown success factor for cloud strategies.

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As noted above, PaaS offerings are basically development platforms where the applications created run in the cloud (public or private). Typically, we’d think what’s being developed is an end-user application of some kind: a Website, inventory checker, manufacturing modeler, etc. Up to now, most use of PaaS has been along these lines.


But what if you use PaaS to create cloud-based middleware—an application that binds standards-compliant applications together? Now you have a solution to the cloud computing problem of integrating all those best-of-breed functions from disparate sources, and you can build the kinds of custom, high-performance applications usually associated with single-source solutions. This is such an attractive approach that many vendors provide an integration-as-a-service offering.

“Integration becomes a critical issue because it isn’t necessarily the focus up front,” says Julie Smith David, associate professor at the W.P. Carey School of Business, Arizona State University, and director of its Center for Advancing Business Through IT. David co-authored, along with Michael Lee, assistant
professor at Arizona State, “SaaS, IaaS and PaaS: Realities and Emerging Integration Issues,” a report released by the Society for Information Management’s Advanced Practices Council. “We’re thinking of PaaS vendors as giving the user the single-source experience, but with access to a world of developers.”

Based on our survey, organizations are recognizing this. Out of all the flavors of cloud computing we reviewed, PaaS shows a strong interest level over the next year, second only to private SaaS.

Cloud initiatives tend to start with deployment of a single public cloud application. This is usually SaaS, but for businesses founded on data storage and delivery, it might well be storage or computing clouds—popularly called infrastructure as a service (IaaS)—that lead the way.

Dubset, a New York-based provider of Internet radio entertainment content, began using Rackspace Cloud Servers and Cloud Files in October 2010. “The Rackspace Cloud allows us to stream music while accurately tracking what gets played,” says Dave Stein, founder and CEO. “We are continuing to evaluate cloud computing options, to not only create innovative services for our customers, but also to scale to meet the demands of our customer base.”

It’s clear, then, that as you go beyond your first cloud application to build complete cloud strategies, you need to focus on these two keys: service-level diligence and integration. These elements will allow you not just to speed your organization with the cloud, but also to speed it through the cloud. "

Guy Currier is the executive director of research at Ziff Davis Enterprise. Bob Violino, a freelance journalist, contributed to this article.

How We Conducted the Research

Ziff Davis Enterprise Research, a division of Baseline’s corporate parent Ziff Davis Enterprise, fielded the cloud computing study to a random selection from its database of technology and business managers and executives in North America.

In total, 757 respondents completed the survey between March 30 and May 2, 2011. Of these, 383 worked in organizations with at least 100 employees—the results shown in this report. Also, 131 worked in organizations with 100 to 749 employees; 121 worked in organizations with 750 to 9,999 employees, and 131 worked in firms with 10,000 or more employees.