Enterprises should note that virtualization and consolidation only the first step in a long cloud journey
Many still grappling with IT sprawl, resources to deal with legacy systems; but IT and biz execs starting to align
ENTERPRISES that have begun to virtualize their IT infrastructure are on the right track in their journey towards cloud computing but they should not think that they have successfully made the transition into the cloud yet as virtualization is only the first step, say industry watchers.
Rajnish Arora, associate vice president for enterprise computing research, IDC Asia Pacific, argued that virtualization is good to reduce the upfront cost of IT acquisition but if enterprises just keep virtualizing their resources, they’re going to have a much bigger problem at hand.
“Virtualization is only the starting point of this journey into the cloud,” he told Digital News Asia (DNA) in an interview. “As we get into the discussion about cloud, [we must realize that] it’s a multi-year journey, not something organizations are going to achieve in under a year. It’s really a journey, and a lot of users are in the beginning stage of this journey.”
Rajnish (pic) said a lot of users that have consolidated and virtualized their IT infrastructure have the perception that they have already embraced the cloud but the reality is that they are far from having done so.
He noted that 10% of users that have consolidated and virtualized may, for example, use some form of application mobility, but of that 10%, only 20% are using some form of shared infrastructure to measure the resources being consumed by their lines of business and have a charge-back model.
Han Chung Heng, vice president of IBM Asean's system technology group, concurs, noting that cloud computing has many phases and virtualization is only part of the foundation.
Speaking to DNA, Han said, “There are other phases such as automation, where the resource pool is managed automatically; the provisioning phases, where users can self-provision resources based on demand, and the final stage, which is the charge-back mechanism – a metering system where resources are measured and charged back to those who use them.
Han noted that many companies may have the foundation of cloud computing – virtualization, consolidation and automation – but these companies are on a journey to get to the higher levels of cloud.
“Most of the discussion on cloud computing made by enterprises today, whether public or private, expresses a statement of direction,” he said. “Some may move into private or hybrid cloud but the key point is that they need to invest in the right infrastructure before getting there.”
IDC's Rajnish added, “It’s really when [enterprises] get into the [model] where they can manage self provision, resource provisioning and de-provisioning that are based on service level agreements and prioritization of business goals, and when a lot of human intervention can be taken out, that is really the stage where companies are ready to embark into the cloud.”
IT, biz alignment
According to Rajnish, more companies today are ready to discuss the cloud agenda not only from a cost- savings standpoint but also from a perspective of how cloud can make businesses more agile and flexible.
He said that in an IDC Cloud Computing Survey conducted recently, senior IT executives across the verticals are beginning to have a meeting of minds with their business counterparts over what cloud computing is and what it can do for their respective organizations.
“We keep hearing about how IT needs to align to businesses and how IT executives need to think alike with their business counterparts,” he explained. “The good thing is that they are starting to do this now as enterprises are being driven by the pressure of having to understand their customers better and how to grow the business further.”
Rajnish said that in today’s environment, which is highly competitive in nature, companies need to have a greater understanding of their business so that they can reduce churn and gain better customer acquisitions.
Acknowledging that cost reduction is certainly still a major concern for most executives, he said top-line growth is also a real driving force today.
“The whole theme of being smarter is about gaining more efficiency and greater productivity; in short, to do more with the same amount of resources, be they financial or human.
“If companies want to have top-line growth, market expansion, and have the ability to quickly introduce new products and better understand customer needs, they’ll need infrastructure that is agile, flexible and gives them the ability to build new apps and services quickly,” he said, adding that line of business (LOB) managers and IT execs are starting to align their objectives more closely.
Investing in IT budgets effectively
Besides these considerations, IBM’s Han noted that in order for any IT infrastructure to enable change, enterprises need to be extremely efficient with their resources.
“What this means is that an enterprise must be able to invest at least 50% of their budget on new projects rather than on existing legacy IT systems.
“But what we’re finding in our interviews is that only 20% of our clients can confidently say that they can do this and that most of the people are investing in maintenance rather than new projects."
Han also said that companies facing the new world must not only be cloud ready, but also be able to support large amounts of data and use this data effectively, and to do so as securely as possible.
“Smarter Computing is about developing an infrastructure that is cloud ready, data ready and security ready for tomorrow, and IBM’s Enterprises System is key to this.”
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