Arun Gupta, Ci­pla 'Trust­ing cloud lords'

Should en­ter­prises bet on of­fer­ings from cloud providers? Is there a way to safe­guard the ad­verse im­pact if the com­pany went ka­put or even got ac­quired?

InformationWeek - - Front Page - Arun Gupta is CIO at Ci­pla. The ar­ti­cle first ap­peared in Arun Gupta's blog: http://bit.ly/1g4IF2m

Ev­ery­thing is mov­ing to the cloud; if not to­day it def­i­nitely will in the near fu­ture, so say al­most all the learned con­sul­tants and ev­ery­one who has an opin­ion on IT. Ev­ery large IT ven­dor has in­vested in cre­at­ing his own cloud of­fer­ing and ac­quired many star­tups who loved the dot­com like phenom­e­nal val­u­a­tions with their of­fer­ings. Pri­vate eq­uity, ven­ture funds and an­gel in­vestors have bet big on this new found par­a­digm that once again threat­ens to change the world (the last time was with dot­coms a long time back).

Dif­fer­ent mod­els have emerged with soft­ware, plat­form, in­fra­struc­ture and stor­age, be­ing avail­able “as a ser­vice” with en­ter­prises be­ing pushed to­wards per­ceived agility and budget shifts from cap­i­tal in­vest­ments to op­er­at­ing ex­penses.

Re­tal­ia­tory steps from big pack­aged soft­ware ven­dors did not de­ter the cloud providers who con­tin­ued to get fund­ing and mush­roomed all over. Un­able to beat them at the game, all of them have now joined the band­wagon with their own of­fer­ings in an at­tempt to re­tain the cus­tomers.

When I re­cently came across news that one of the prom­i­nent niche cloud play­ers was go­ing bust, it had my un­di­vided at­ten­tion. The provider had many part­ners, big and small, sell­ing their so­lu­tion and many ma­jor en­ter­prises us­ing it. The ser­vice of­fer­ing was good, the price at­trac­tive, and the growth me­te­oric. The provider had good fund­ing avail­able through the rounds. And then sud­denly the provider an­nounced that it had run out of cash and will be wind­ing up in two weeks’ time, ask­ing cus­tomers to find al­ter­na­tives.

Not too long ago, an­other cloud plat­form provider had shut shop with 30-day no­tice to its cus­tomers. The provider’s largest cus­tomer had pulled the plug; that im­plied more than 50 per­cent of its rev­enue dis­ap­peared. It was smaller and not highly vis­i­ble, thus its demise did not cre­ate many flut­ters. The busi­ness im­pact to many of its cus­tomers was se­vere as they were left scur­ry­ing to pro­tect their busi­ness and rev­enue; in a few cases sur­vival.

Can and should en­ter­prises bet on of­fer­ings from cloud providers? Is there a way to safe­guard the ad­verse im­pact if the com­pany went ka­put or even got ac­quired? Should com­pa­nies put their op­er­a­tions or for that mat­ter IT and in­for­ma­tion as­sets at risk with cloud lords? Le­gal con­tracts and SLAs rarely of­fer a so­lu­tion de­spite the lawyers de­bat­ing ev­ery clause and punc­tu­a­tion. The im­pact when­ever it hap­pens even with an out­age or a se­cu­rity com­pro­mise is real and threat­ens rep­u­ta­tion be­yond the rev­enue or prof­itabil­ity.

I do not be­lieve that any­one can ig­nore the clouds and con­tinue to work with the con­ven­tional mod­els of yes­ter­day while pre­par­ing for to­mor­row. Re­al­ity is that clouds will con­tinue to be dis­rup­tive, their value propo­si­tions worth eval­u­at­ing. The prag­ma­tism re­quired is to en­sure that the ad­van­tage it cre­ates to ei­ther busi­ness or IT is taken into con­sid­er­a­tion along with the risks and po­ten­tial im­pact, should there be a need to mi­grate across pub­lic clouds or tran­si­tion back to the pri­vate cloud.

It is ev­i­dent that there is no ubiq­ui­tous so­lu­tion that can be ap­plied to all cases. The CIO with end ac­count­abil­ity along with busi­ness stake­hold­ers should high­light the ben­e­fits along with the risks of the step to­wards clouds. The mit­i­ga­tion plan should be tested like all Busi­ness Con­ti­nu­ity Plans (BCP) and Dis­as­ter Re­cov­ery (DR) are ex­e­cuted pe­ri­od­i­cally. This is a nec­es­sary in­clu­sion now for ev­ery cloud ser­vice that an en­ter­prise sub­scribes to. Costs re­lated to such a plan should be fac­tored into the ini­tial bud­gets when cal­cu­lat­ing the ben­e­fit of the cloud so­lu­tion.

Go for it, you have noth­ing to lose and ev­ery­thing to lose depend­ing on how you ap­proach it; if you don’t, the busi­ness will al­ways find a way to get it leav­ing you to man­age the mess when things go wrong.

Arun Gupta

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