Quite simply, Cloud computing is a different way of getting technology services. There are two basic types of Cloud Computing, Public Cloud and Private Cloud. With the Private Cloud, all systems are owned by the same company receiving the cloud services. With a Public Cloud, the Cloud provider owns all the systems.

So with this background let’s get back to the question. What is the difference between Cloud Computing and Hosting? There are three major differences.

1) Hosting provides an infrastructure that typically does not scale easily. A company can run out of capacity (cpu, storage) and it would take several weeks to procure and install additional capacity. With cloud computing, the infrastructure scales to meet demands dynamically. (Yes Cloud computing does have limits to how much it can scale but it scales much easier than legacy hosting environments).

2) Cloud applications can be accessed from anywhere an internet connection is available. Legacy hosting applications typically are not Internet friendly and perform poorly over the internet.

3) As mentioned by others on this thread, applications are provided as a service. You pay for what you use. If you have 100 users, you only pay for 100 users. You don’t pay for any extra storage or extra servers in the data center that are not being used. You also don’t pay for staff to keep your data secure, you don’t pay to keep the servers patched and updated. You don’t pay for system monitoring or backups. All this is included in your base rate.

The three major advantages for using cloud services are scalability. If you need 20 development and QA servers for 3 months, the cloud can provide those to you within hours. Pay for them while you use them and when you are done, shut them down and you stop paying for them.

The second advantage is convenience. Users can access the applications from anywhere, from home, the office or while traveling.

The third advantage is financial. Companies don’t have to invest the financial capital to host their systems and pay for a large technical staff to maintain them. They could use that capital to invest in their core business to grow their core competencies instead. Additionally, their Technology budget is far more predictable. They know what their monthly charge will be and they won’t be hit with unexpected and unbudgeted costs.

I have seen this go both ways. If one leader who fully supports a project is replaced with a leader who has no interest in the project, you know your project is destined for problems and delays. Leaders who are not fully committed to a project are less likely to address obstacles or respond to escalations in a timely manner.

On the other hand, when an existing leader who is not fully committed to a project is replaced, I’ve seen where the leadership change put new life into a struggling project.

The key is to communicate (sell) the benefits of the project to the stakeholder and get their backing. Whether you are working with a leadership change or desiring one, you’ve got to sell the value of the project so that it becomes a high priority for them. Projects that have full leadership support are most likely to succeed.

First, let’s recognize that an outsourcing provider coordinates many diverse teams who work in a cooperative manner. Additionally many of these teams operate from different countries, time zones and languages. That being said we can start to understand the importance of this question. We must also recognize the business impact if the outsourcing arrangement fails. One doesn’t easily switch providers.

So how do you know which provider you can trust?  Here are my thoughts;

1) How long has the provider been providing outsourcing services? Is this a relatively new company or are they well established in the industry?

2) How many clients do they support and what is their contract renewal rate? (Do you have offices overseas that need support? If so, how many global clients does the outsourcing provider support?)

3) What is the process for your leadership team to engage the provider? Will there be a person assigned to respond to you or do you call an “escalation” number? How many clients is this person responsible for?

4) Do you have access to the providers Executive Leaders?

When it comes to trusting an outsourcing provider it boils down to two things.  First, there will be delivery problems. In many cases the low-cost providers that are so attractive will have staff located around the globe. Coordination and communication among these teams will affect the quality of service you get. The reality is that the lower cost provider will result in support problems down the road. Depending on the reduced cost to your company the support issues may be worth the savings.

Secondly, the trust issue will be determined by the people you interface with when problems arise. How responsive are they and how quickly can they deliver results?

If you have selected a provider who is well established and has a large client base with high renewal rates, and you have access to individuals including Executive Leadership, you should get speedy resolution to problems.  It’s through quick resolutions to issues where their trustworthiness will be determined.

I’m sure the Network Guru’s will cry foul at my comments here but basically both Ethernet and Leased Lines provide the same functionality. They both move data and voice from one site to another.
There are two serious considerations when choosing one over the other. Ethernet is a layer 2 network and for it to run across a WAN Transport Network additional integration is required. Nortel has products to do this. I’m not sure who else does.
The second consideration is availability of Ethernet. Ethernet is not readily available like Leased Lines are.
Your best bet is to get quotes for both. Each option has a sweet spot where one provides the better value over the other.
One final thing to consider when sizing circuits is WAN Optimization appliances. These devices compress the data before it gets transmitted across the WAN which means you may be able to get a smaller circuit. Wan optimization appliances can pay for themselves in less than a year by reducing the amount you pay for monthly circuit fees. This is something you should take a look at.

Part 2: The technology

Technology is what enables IT to flex and adapt to ever changing business needs. Flexibility or agility, as it is often referred to, is the ability for IT to adapt quickly to changes. For example, if a company needs to add more functionality to an existing enterprise environment, the upgrade may exceed the capacity of existing hardware; you may need additional servers, storage and possibly additional tape backup capacity. There would be major technology purchases to support the uplifted systems. Plus there may be migration costs to migrate the existing application to the new hardware. Your company could spend thousands of dollars in systems, implementation and migration costs. And it would take months to implement between hardware delivery times, migration timelines, new application install/configuration and then turn over to operations.

In an Agile environment, additional hardware (processing, memory and storage) can easily be added to Blades/Virtual server environments. Additional storage can easily be added to storage arrays. This additional hardware would be significantly less than a full system upgrade and can be accomplished much quicker than with a legacy IT Infrastructure.

For IT to adapt quickly to changing business needs, IT must have an infrastructure that supports agility.

Today there are many IT options for new businesses. They can build their own IT systems in-house, they can Outsource and buy IT services from service providers or they can get services through cloud computing providers… Or they can do any combination of the three.

It all starts with defining business requirements and understanding the options available. Once this is done, it’s a matter of matching requirements to the available options.

One of the biggest factors to consider is the startup costs. Building your own IT systems require proper staffing (System designers/consultants, installers, System Administrators, etc) plus infrastructure costs such as hardware, software, maintenance, networking, security, redundancy, etc. By outsourcing to 3^rd party service providers you pay a monthly fee for the services provided. There is minimal capital investment…which can be very appealing to new companies.

Part 1:

The biggest challenge for IT to adapt to business changes is to change the IT culture in that company.  Too many IT organizations are “stuck” in a legacy mindset of providing traditional IT services. These services are rigid and in many cases unable to flex as business needs change.

For those who are open to adapting their IT to an Agile IT organization, it all starts with a plan. To be an Agile IT business partner you have to build an IT infrastructure that supports agility. That means you stop spending money upgrading legacy systems and redirect IT spending toward technologies that enable flexibility (agility).  Some key technologies that companies should be investing in are virtualization, blade server technology, SAN/NAS storage, Cloud Computing and I’ll even include Wan Optimization as key agility technologies.

But before you spend any money on new technologies, start with a plan.  Determine what technology your company can most benefit from and put together a plan that would take you there. It will take a few years to transform into an “agile” IT so a plan is absolutely necessary. Get that Agility Roadmap defined before you spend any more IT dollars.

Most Consultants will tell you that business drives technology. They’ll say IT must change and adapt to business needs.  Although there is an element of truth here it is not the complete truth.

There must be two-way direct communication between business and IT. Business must communicate their upcoming needs to IT. Notice I say upcoming needs and not immediate needs. Business has to realize it takes time to develop the right solution for the business and time to design, test and build the solution to support the business needs.

However, IT must also communicate to business the capabilities of new technologies. Some technologies of the past were cost prohibitive for small and mid-sized companies. Today they are quite affordable and should be presented as options for business.

One example would be site replication or simple clustering of virtual servers. These redundant systems that once were unaffordable with older technology, is now easily justified. Unless IT communicates what technology is available (and affordable) to business the business will not adapt to utilize the new, affordable capabilities.

The best way I have found for business and IT to communicate is through Steering Committees. These committees can meet monthly or quarterly to review upcoming business needs. At these meetings, IT should present new technologies available to support the business. Together they can define priorities and work together to support common business goals.

Today we see that IT has formalized around common services that are required for all system platforms. Additionally IT is standardizing on common terms and definitions by way of the ITIL framework. But just as we see a level of standardization across the IT industry I am seeing some fragmentation occurring as well.

I’m seeing that standardizing IT and IT Operations isn’t enough for businesses today. I’m seeing two major focuses emerge from corporations around the globe. The first is to reduce the cost of running IT departments. Companies are re-thinking what services are being provided by IT and which of those services are required for all servers? Tape backup’s are an example of this. In the past, everything was put on tape and sent off-site for storage. Today, at many companies, short term backup is made to disk while tape backups are used for archival purposes.

The second focus I’m seeing is to engage IT as a true business partner. More and more, IT is being engaged to understanding business needs and business goals and identifying technologies to help achieve those goals. IT is being sought out to help architect the future of their companies.

I’ve written a Feature Article called “IT Strategies: Past, Present and Future”. In this article I go into greater detail on where we are today as an industry and were I see us going in the future. It is located in the Featured Articles category of this site. I think you will find this article quite interesting.

IT scope creep has nothing to do with technology but rather poor project management. If the scope of your project keeps growing every time you show up for work then you have a fundamental problem in one of two areas.

1)      The project manager is incapable of “managing” the project. They lack “change management” skills. Change management is a fundamental project management discipline. If this discipline is not followed then you are at risk of making a career out of your project because it will never end. The scope will continue to grow and grow and if you ever get to the point of winding things down there will be another addition to your project scope. Change management disciplines must be followed by the project manager.

2)      The second reason for IT creep is lack of strong leadership. Leaders have to be willing to tell their peers and clients “No”…in a professional way of course.  They have to be willing to uphold the Project Management disciplines and the Project Manager. Too often an appeaser instead of a leader overrides his Project Manager. An appeaser is a leader who is unwilling to make hard choices that are in the best interest of the organization, project, and client. A strong leader will tell his client (internal or external) that the project scope cannot be changed but a new project may be initiated to address the additional work.  If a leader doesn’t stand behind his Project Manager and Project Management disciplines there is little a Project Manager can do. One suggestion would be to engage a neutral third party leader to assist in a non-threatening way. A PM can engage this neutral leader as a project coach with a goal of helping the project team stay on track. This Leader then can reason with the “appeaser” to make the right decisions.

Without project management disciplines, it is impossible to manage an IT project effectively. Engaging project “coaches” to help project managers and/or “appeasers” will bring a project back under the project management disciplines. But it requires a strong and respected leader to be the coach. A weak coach will accomplish nothing.