Cloud // Cloud Storage
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11/15/2013
08:00 AM
Judith Hurwitz
Judith Hurwitz
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How To Break Down The New Cloud Silos

Business units are creating silos by bypassing IT and using public cloud services. Here's how CIOs can create order.

Many of the CIOs and technology leaders who I speak with are embracing the cloud as a core element of their IT strategy. At first, many of these leaders were hesitant about the implications of cloud because of security and accountability issues. However, today many have come to terms with the inevitability of the cloud.

More than anyone else, business leaders are forcing the rapid movement to the cloud because they perceive that traditional IT structures are simply not in step with the fast pace of business change. They have been using public cloud services for development and storage for years as a way to bypass IT and get new business initiatives off the ground. At the same time, organizations are using software-as-a-service (SaaS) applications instead of on-premises software. Systems such as Salesforce.com and Workday are becoming commonplace in companies across industries.

The end result is that we are entering a new era dominated by cloud silos. Business units have found it easy to create new and often experimental applications in the cloud. They implement a SaaS application to quickly support a new business function and these quick solutions often become essential corporate resources. Now IT is being asked to take control and establish a unified hybrid cloud environment.

[ Cloud service providers provide valuable infrastructure and apps, but don't forget who manages the customer experience. Read Your Cloud Provider Is Not The Boss. ]

In a perfect world, the CIO would start from scratch, and build a clear long-term roadmap and a staged implementation plan. However, reality is never perfect. As CIOs set out to plan for hybrid cloud environments, they should start by getting answers to three fundamental questions.

Question One: What are all of the cloud services being used across the company?

This may be more complicated than it appears. It will require some digging to find which business units are using services such as Amazon Web Services (AWS) to create applications or store data. For example, some business units may be using Amazon's storage services as an alternative to disaster recovery. There may be hundreds of different SaaS applications.

While some of these applications are used in a limited and isolated way, other applications are becoming mission critical. Before you do anything else, you need to know the scope of cloud services in use across your company. It may take a while to unearth all of them. It's equally important to calculate how much money the company is spending on all of these services. Cloud services are purchased in small increments that seem inexpensive, but they add up.

Question Two: How do the existing cloud services need to interact with your systems of record?

Since your organization already has cloud silos, you need a way to make them work for the business. Therefore, part of your plan moving forward is creating a way to link cloud-based services with on-premises IT environments. This will include data integration and business process management. The cloud services often need to access data from datacenter-based systems such as accounting and customer service. To do this you will need to create business processes between existing datacenter applications and cloud services. Your constituents are becoming more dependent on cloud services, which will need the same attention to reliability, predictability, and accuracy as systems that are controlled internally.

Question Three: Do you have a well-articulated set of policies on which cloud services are used based on business requirements?

There is no turning back. Cloud services are the new reality of how IT will be delivered, so it's important to establish policies and guidelines. Which public cloud service providers meet your compliance and security requirements? Do cloud providers adhere to important standards? Can you move important data between public and private environments?

Most organizations will opt for a hybrid cloud environment that combines an internal cloud with public cloud services. You should determine if it is acceptable to use a public cloud provider based on the level of security and accountability the provider offers. For example, if you are storing private regulated customer data, you may need to keep that within your own private cloud because of compliance. On the other hand, there are SaaS applications that are highly commercial and provide a high level of compliance. IT needs to protect the integrity of the company by working with business units to set pragmatic but safe policies.

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Jamescon
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Jamescon,
User Rank: Moderator
11/18/2013 | 8:22:07 AM
Shift the mindset
Judith. Great points about how IT has to take a lead role in breaking down a lot of the siloes that are popping up in business units (or at least establishing an understanding of where they are and what is in them in case an enterprise app needs to access that data down the road).

I'm sure that some smart companies are already approaching this problem. However, I think that for a lot of companies there remains a problem with the IT mindset that presents its own barrier to an enterprise cloud strategy. For many years the attitude toward business units contracting with their own cloud services has been for IT to just say "no". Of course, the result has been the rogue IT groups that have popped up in the business units.

I believe that the IT group of the future not only will embrace the cloud but will take a proactive approach to searching out cloud-based solutions for their business units, and serving as matchmaker, looking at the business challenges and leading the search for safe and effective cloud services to address those challenges. At the same time, they can integrate the resulting data into the enterprise data management plan. The IT groups that cling to their anti-cloud attitude will continue to be bypassed.
Li Tan
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Li Tan,
User Rank: Ninja
11/18/2013 | 12:28:31 AM
Re: The cloud creates new silos?
I do appreciate this post - it points out a new trend coming together with the adoption of cloud - the business unit creating the SaaS application over cloud becomes the owner of it and this resulted in new silos. They use public cloud service such as AWS and bypass company IT. I think we should neither be threatened nor ignorant about this trend - as cooperate IT, we should watch out and see how trend will go. I still prefer that the cooperate IT should have a kind of centralized control to business IT environment.
aditshar
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aditshar,
User Rank: Apprentice
11/16/2013 | 3:29:17 PM
Re: The cloud creates new silos?
I really appreciate author for helping me out to clear couple of my doubts through this blog, but one question being answered in this blog...What are all of the cloud services being used across the company?...I guess before this what comes is decision on application migration...i.e. what applications need to moved to cloud and what need to be retained...i have seen companies still holding themselves from migrating buissness crtical or revenue genarating applications...
jemison288
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jemison288,
User Rank: Moderator
11/16/2013 | 1:38:29 PM
Is it a new paradigm?
Why wouldn't we view the move to the cloud as the understanding that things are different today, and it is no longer appropriate to try to think about "centralized" systems in any way?  It seems to me that the major lesson of where we are today (software eating the world, cloud, BYOD, consumerization of IT, demand for 24/7 tailored services for all) is that we should be embracing our new distributed world.  Each department can select and own its SaaS, because service providers take control of what IT used to, and because employees are increasing tech-savvy. 


Isn't the real answer to the "silos" that are created by cloud the Enterprise Service Bus (ESB)?  Where our model is distributed systems, but that we build a bus that allows interaction?  Think of how SAML is so standard that AWS ultimately had to build support for it into their API (what other interoperability APIs has AWS built in?)


The IT department of the future is one that sets guidleines, not tries to regain command-and-control of everything that happens through the enterprise.  "Our email is hosted by X provider; as long as you pick a mail client that supports multi-factor authentication with X, you can use that mail client."  "You may select any payroll SaaS, as long as it supports SAML."
cbabcock
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cbabcock,
User Rank: Strategist
11/15/2013 | 1:49:13 PM
The cloud creates new silos?
Cloud computing was supposed to be the cure to silos in the legacy data center. Now Judith is one of the few people to point out, when we do things as we've done in the past, the use of the public cloud becomes a silo as well. "We are entering a new era dominated by cloud silos," she says. Well, I hope not, but IT weakness combined with renegade business use of the cloud will accomplish that.    
ChrisMurphy
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ChrisMurphy,
User Rank: Author
11/15/2013 | 10:15:53 AM
Hybrid Forever
I recently read some Accenture survey research ("High Performance IT Research")in which execs at high-performing companies predict that 59% of their apps still will be conventional IT in 2020. Now that's massive change, because it's 84% today. But it supports Judith's point that hybrid will be the common model. Since business units will want to pop up their neat standalone cloud app because it's fast and simple, IT's going to need some clout to force them toward enterprise standards if companies are going to get the most out of cloud systems. 
RobPreston
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RobPreston,
User Rank: Author
11/15/2013 | 9:19:00 AM
Inevitable
Judith hits the nail on the head when she states that IT management must "find ways to accept the inevitable but provide the guidance and tools to break down the silos." The answer isn't to fight or resist most of the inevitable cloud services that spring up. It's to manage them--proactively. 
Google in the Enterprise Survey
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