By Samuel Greengard
Over the last few years, IT and business executives have witnessed a profound shift in enterprise computing. While organizations continue to rely on internal data centers to manage an array of tasks, clouds have drifted into the mainstream of IT and business.
“Clouds are becoming the foundation for a new IT platform,” says Mike Pearl, U.S. cloud computing leader for PwC consulting. “Organizations are combining IT assets in order to create far greater value. In many cases, they’re able to react to market dynamics faster and more effectively.”
Of course, combining existing IT infrastructure—usually legacy systems—with cloud offerings, including infrastructure as a service (IaaS) and software as a-Service (SaaS), is no simple task. As organizations plug in a growing assortment of cloud services, a number of practical and technical challenges emerge. Among them: how best to break down silos and integrate processes? How to manage data across systems and software? How to address shadow IT? And how to establish adequate governance and security measures?
There are no simple answers. However, organizations that successfully integrate clouds and existing IT infrastructure frequently achieve a level of agility, flexibility and transformation that would have been unimaginable only a few years ago, notes Massimo Pezzini, vice president and research fellow for Gartner. “Clouds should be used to deliver services and manage processes that would be impossible or unaffordable through traditional approaches. They should be used to transform the business … not just to make it more efficient.”
As organizations adopt clouds and integrate them into the fabric of the business, profound changes are taking place. “In the past, IT delivered services based on the needs of the business and the strategy it was attempting to execute,” says Daniel Benton, managing director of the IT Strategy Practice at Accenture. “Today, business leaders aren’t necessarily looking to the CIO and IT department to define and install information technology. They’re making their own decisions and turning to cloud providers to deliver the capabilities they desire.”
It’s no small shift. In many cases, it’s possible for an executive in marketing, human resources, finance or legal to switch on a service in a matter of minutes—typically with no more than a credit card. Within this new order of business, “Agility is often defined by the ability of IT to stay out of the way so that a business unit or department can react to extremely volatile business conditions in a more immediate way,” Benton says.
However, the incremental gains that result from discreet cloud services don’t necessarily measure up to what a well-integrated environment can deliver. “Innovation isn’t about having the most bleeding-edge piece technology,” he adds. “It’s about IT creating a level of integration that generates maximum value.”
Developing a cohesive strategy is paramount. “Organizations must recognize that a hybrid portfolio of cloud-based and on-premises applications will be the norm,” Gartner’s Pezzini explains. “They should set up agile governance processes, methods and integration platforms to address the challenge.” Gartner refers to this as “cloud-services integration,” or CSI.
Effective integration, PwC’s Pearl says, means building links and connections between systems. A well-designed infrastructure also helps an enterprise avoid cloud sprawl, while eliminating redundancies and workflow inefficiencies.
Powering Up Clouds
At EnergyPlus, a Philadelphia, Pa.-based Fortune 250 firm that sells electricity and natural gas to more than 350,000 customers scattered across the Northeast United States, cloud-based infrastructure plays an increasingly prominent role in business operations.
Tying cloud services into the existing IT platform is vital, notes CIO Hugh Scott. Because the company relies on the Web to serve existing customers and sign up new ones (nearly 90 percent of new customers sign up online), “It’s essential that the Website and our contact center application are available 24 hours a day, 7 days a week,” he says. “If the site is down, it directly impacts our growth.”
In the past, the six-year-old company relied on its own Web servers and internal hardware to manage key infrastructure and applications. However, it soon found itself shackled by a lack of scalability. In some instances, site demand can spike by a factor of 5x to 10x.
“It became apparent that without virtualization and a cloud infrastructure, it was impossible to scale appropriately,” Scott says. “We could not provide the level of performance and availability necessary.”
As a result, the IT department began exploring ways to move its entire production environment into the cloud. Other tasks followed. Today, EnergyPlus, which uses a virtual private cloud that’s managed by SunGard Availability Services, can dial up and down capacity on demand.
The company also placed software development tools in the cloud and adopted cloud-based email. Along the way, a 40-person IT staff has worked closely with business executives to develop a strategy; seamlessly tie together systems, data and workflow; and build a road map for future migrations.
At this point, Scott says, “We’re not looking to justify what we put in the cloud. We’re attempting to justify what we’re not putting in the cloud. … We are a more strategic IT department and a better company as a result of cloud computing.”