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?
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.