This post was originally published on the CloudSource blog in January 2012
As stated, Raf Los and I teamed up for this blog post. When we spotted an article titled 10 ways to sell your CEO on Cloud Computing, we could not believe what was being said in the slideshow. If your CEO is a little smart, and he/she is or they would not be in that position, they will blow holes through your arguments quickly. We both want to help you avoid the career-limiting embarrassment, so here are our suggestions:
Explain how it works
That is definitely a must. But before you dive in to explain the cloud to your CEO make sure you understand it yourself. Start by making sure you are extremely clear on what type of cloud you are talking about. Are you talking about a private cloud, public cloud or virtual private cloud? Do you understand that cloud computing is about utility, elasticity and service-based use? We would advise to be simple and straightforward in the words you use. Don’t be afraid to make analogies, but understand the dangers of over-simplification and promising more than the cloud can deliver. But above all explain the true benefits of cloud, from responsiveness/agility, to innovation, to the financial benefits perspective. Let’s not forget the implications for security here! Security in the cloud is a scary business if you’re not prepared so make sure you understand exactly what context you’re speaking about.
Explain the savings
Well, now it is getting dodgy when we talk about savings. First, depending on which cloud you choose, you get a very different financial picture. If you take a private cloud, savings can be found in virtualization, automation, standardization and self-provisioning. Take a look at the 5 areas of return and calculate how that would benefit your enterprise. Public cloud services tend to be less expensive for low utilization according to Xuropa, but David Floyer points out the private cloud is less expensive for large enterprises (above 1B$), so do your homework as it is not that simple. As a rule, you may assume the analysis of cost comparison of private cloud and public cloud suggest that private cloud is 40% less expensive than public cloud for enterprises with significant IT resources already in place. But I would add the exception is for short term needs (and my rule of thumb is less than 2 months/year). Security doesn’t necessarily make cloud an automatic cost-savings …although it could! Getting good security is never cheap, and migrating to an elastic environment can exacerbate those security costs – but the bottom line is to say that migrating to the use of cloud computing is somehow magically and automatically going to save you money – that’s silly.
It makes employees more productive
That’s another oxymoron. Let’s get real. Software developers that no longer need to set-up the different development and test environments will be more productive. R&D engineers that no longer need to hassle IT to obtain the compute power they need to run advanced mathematical models will be more productive, but what about the sales rep, the HR professional and the financial person? Not sure. Here again, be extremely precise in what you say.
In elastic compute environments where IT is a service rather than a complicated process, productivity increases will come from not having to wait for your IT department to procure, set up and fully deliver a functioning compute environment for your project. What once took potentially a month can now take hours …but let’s remember that there has to be a trade-off, and getting instant access to IT resources can lead to costs getting out of control.
It can reduce cost elsewhere
And it gets even better. Frankly, we cannot relate to this in any way, form or shape. In our belief cloud can create new opportunities to grow the business for the enterprise by adding value in three areas.
- First, through a better understanding of the customer needs and their perception of the enterprise brand, products and services, through social media analysis, the company will be able to develop products and services that better respond to the customer needs.
- Second, by complementing their products and services with tools that are located in the cloud, the enterprise may be able to improve user experience. The Ford Evos concept car is an example of such an approach.
- And thirdly, integrating the company with its eco-system, allowing more visibility about what happens in the “supply chain,” being able to address issues earlier and understanding how to improve operations. Addressing those three areas will allow the company to grow, which definitely interests the CEO.
Reduce vendor leverage
Well, that’s a flat out NO. It has to be said right from the start that cloud standards are non-existent today – this gets even worse when you try and talk security. So, when you make a decision for a cloud vendor, being it for a private or public cloud, you take some options for the long run. Moving from one cloud service to another is far from easy. One of the core fears of cloud adoption is vendor lock-in, and with a clear lack of interoperability, defined standards, and openness this is a very real fear. For example if you use Salesforce.com and intend to migrate to Microsoft Dynamics CRM, you will be forced to download a CSV file (comma separated value) that will then have to be entered in the appropriate fields – from one system to the other. Another example is migrating workloads between two public clouds – think about what happens when one is based on OpenStack and one is based on VMWare or something else – standards? What about migrating security policies across providers? And that can cost quite some money and time. So, in the current situation, cloud does not reduce your vendor lock-in, actually, in many situations it increases it until the market starts to mature which will take a few more years.
Again, what are we talking about? Are we talking about having a data recovery copy of our internal data in the cloud, or running the applications in the cloud? Yes, cloud service providers take care of disaster recovery and ensure multiple versions of your data are maintained. Well, they do if you ask them and pay them to. There is a cost to get the data to the cloud (networking cost), but that can be justified. But there are a couple other issues to take into account, particularly when using public clouds. How secure is your data? Public cloud service providers are typically not very forthcoming when talking about their security precautions. They tell you that you should trust them. Well, do you? Secondly, where are all the copies of your data located? Are you resilient across cloud platforms? What types of disasters can you recover from, with your shiny new cloud model? More important than anything else theoretical – can you prove it by testing and validating what your suppositions are? Are you still compliant with regulations? These are two important points to discuss with your CEO, although they may not go into the direction you wish. One way around this is to use virtual private cloud services as these are more forth coming as far as security and compliance is concerned.
It frees IT staff up for other tasks
Yes, both for public and private cloud. Finally something we can both get on board with! From a security perspective though, you need different skillsets when thinking about cloud models and use-cases… come to think of it, this does not only apply to security but to developers and other functions. Automation is the key that makes cloud-based computing effective for corporate use. The automation reduces the amount of operators needed. The question now is how you reskill them for the new tasks you have at hand. This is a good discussion to have with HR prior you go to the C-suite, so you have a plan in place by the time you talk to your CEO.
It offers more product options
The public cloud gives you many SaaS options, but once you have chosen one, you are typically locked in. This is not that different from deciding for a software package to run in your datacenter. It may seem you have more options, but many of those are coming from small start-ups with questionable financial viability. And in the public cloud, you do not have visibility of all the participants in the “supply chain” that delivers your service. These two can actually be concerns to the CEO, so here, once again, do your homework so you can reassure your CEO about the choice made.
It goes hand in hand with mobility
We would actually argue that most applications available on tablets and mobile phones are not cloud applications. They are just small functionality running on the tablet or mobile phone. While many organizations have rushed to label their products ‘cloud’ and it is starting to become acceptable to equate mobility with cloud in the applications space – this is not accurate. To us mobility is an application use-case, while cloud is a workload model. Equating these and saying they go hand-in-hand is simply stretching too far. It is true that cloud computing can enable more scalable mobile platforms, this is only a loose correlation, but that’s another debate. Nobility has been out there long time before cloud and many enterprises provided mobile access to their datacenters to their employees. So, you will need to articulate very clearly the difference if you want to use this argument. In particular think about the security aspects and the compliance needs.
Think about the competitive landscape
And here is the last one. What is the true value of cloud to a CEO? It improves the company’s responsiveness and agility by allowing it to get services more quickly so it can react to threats, opportunities and competitive moves. Cloud, whether public, private or a combination, gives him/her an environment that allows him/her to react faster. That’s a true differentiator. Illustrate some examples related to past activities where the enterprise was too slow to respond. It will help get the point across. Discuss the ability to cut project times drastically, deployment costs significantly, and reduce the number of under-utilized servers dramatically – this is all true. Bring up the pay-per-use benefit and even potentially the ability to increase security from your environment to a more robust one (assuming you’ve vetted your vendor well), and these are all great benefits which will help make your business more competitive in today’s marketplace.
So, in a nutshell, start by explaining to your CEO what cloud is all about and how it changes the role of IT. Demonstrate how, by IT becoming a “strategic service broker,” the company can gain in responsiveness and agility. Explain to him/her how:
- using social media analytics he can gain a better understanding of the current perception of his enterprise and the expectations of his customers
- combining cloud with company products/services he/she can improve user experience
- by collaborating closer with his eco-system he can respond to customer needs faster
Discuss security, compliance, resiliency and recoverability all in frank terms to steer the public or private cloud discussions. Then get to the financial discussion, showing him/her how through cloud enabling the existing IT environment he/she can save money, and how complementing this with public cloud services during high IT demand periods, he/she can ensure continuous operations. And last but not least give him/her a vision of how, appropriately integrating mobility and cloud would make the company “cool” and attract the millennial generation that is now entering the workforce. That’s what we would do. What do you think?
I hope you enjoyed this double act. Let us know, we might want to do a couple more.