Cloud computing can help enterprises cut costs, innovate and make their businesses more agile – but only when implemented correctly. Many organisations are not thinking their cloud strategies through, warns Gary Barnett, chief analyst at Ovum.
“I am a huge fan of cloud but cloud is not magic,” Barnett told delegates attending the Westminster eForum seminar on cloud computing on 4 September.
“I know of instances where cloud can be more complicated, more costly and less secure,” he said.
Failure over IT complexity
Cloud applications exist in the infrastructure of most organisations. However, the organisations do not get rid of the existing legacy infrastructure and, as a result, "they are adding more layers to their IT and making it more complex", according to Barnett.
The analyst shared details of a major enterprise customer with a critical customer relationship management (CRM) system that had more than 250,000 CRM records. This company migrated the CRM system to the cloud to overcome challenges around inefficiencies and benefit from the cloud’s features.
“But the sales people using the CRM system on the cloud were very, very unhappy,” Barnett said. “Why? Because the data was rubbish. The company just dumped bad data on to the cloud. So they had cloudy rubbish.”
Barnett advised users to clean up their data before moving it to the cloud, rather than considering cloud as a magic pill that will solve their problems. “Don’t just transfer your on-site mess off-site,” he said. “Clean your data beforehand.”
Failure over cloud costs
“Cloud can be fabulously expensive,” he said. The analyst cited a Dublin-based enterprise that adopted infrastructure as a service (IaaS) offerings from Amazon Web Services (AWS). “They had heard all about the cost savings of public cloud services and estimated their AWS bill will be about $2,000.”
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The company’s first AWS bill was for $15,000. “They were shocked,” Barnett said. According to him, the company adopted IaaS to give its developers flexibility to buy instances on their own whenever they wanted.
It backfired because the developers kept buying instances without any restraints. “If you give someone a red button to press every time they want a candy, they will keep pressing it,” said Barnett. The company had predicted about 30 cloud instances, but ended up paying for 750.
Barnett emphasised the importance of governance, staff training and awareness, as well as having policies in place to make sure cloud strategies pay off.
“It is not just AWS. The same thing would have happened if they were with any other cloud service – Microsoft Azure or HP, for example.
“Public cloud providers don’t bend backwards to help enterprises educate cloud users or help place limits on the number of purchases that can be made.”
Another speaker at the seminar, Auriga technical director Jamal Elmellas, agreed. “Cloud cost savings is a misconception. Cloud is a long-term strategy that needs structured and disciplined execution," he said.
Failure associated with virtualisation and consolidation
“The idea of a software-defined datacentre is very attractive but doesn’t always work,” Barnett said.
He cited an example of one UK enterprise that wanted to consolidate its datacentre and reduce physical servers to migrate to the cloud.
“The IT team thought the company had 700 servers when they started the project,” he said. “But they actually discovered 1,100 physical servers when they began the consolidation process.”
After the 18-month consolidation project ended, the enterprise was left with more physical servers (1,300) than they started with and ended up with more than 2,000 virtual servers. “The CIO admitted that his IT infrastructure – or its productivity – was not hugely better,” Barnett said.
Lack of clear virtualisation strategy and over-provisioning resulted in the consolidation project overcomplicating the infrastructure, the analyst said.
It is not about technology, but about changing the business culture
Gary Barnett, Ovum
“Cloud is not a panacea,” warned David Hobson from Oracle, another speaker at the seminar.
Failure over cloud security
Barnett claimed he sourced a spreadsheet full with credit card data of 70,000 customers from his credit card provider using Google. “It did not have personally identifiable information such as my name, but it had credit card numbers,” he said.
“Back in the mainframe world, enterprises were more disciplined and encrypted, and randomised data after every access,” he said. “But today enterprises don’t make that effort because it takes time.”
Barnett also pointed out that user passwords are not very strong. “Around the time of the London 2012 Olympic Games, our research showed that the passwords of Olympic volunteers were very predictable. It would be teams such as "Chelsea", or just "Olympics".
“Cloud computing can be secure but enterprises must train their staff to stop using easy passwords,” he said. “It is not about technology, but about changing the business culture, having policies and checks in place, and outlining a strategy and sticking to it.
“Cloud greatness is achievable only if you do the boring stuff beforehand,” he concluded.