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Blogs > Banks Statement

Beating the fears about the Cloud
Martin Banks By: Martin Banks, Proprietor, Lian-James Consultancy
Published: 18th February 2009
Copyright Lian-James Consultancy © 2009

Not so long ago a friend emailed me asking a question, though I thought he should know the answer better than I. He works for a company selling outsourcing services that enable businesses to operate in The Cloud, and his question was fundamental in nature: how would I sell Cloud-based outsourcing services to a bank that has put a block on expenditure, but still needs the capability?

Some immediate and obvious answers came to mind, of course, but the question also got me thinking about the less obvious issues that can get in the way of selling The Cloud, particularly for the evangelists or simply curious within a company. Increasingly, these issues are psychological in nature and have little to do with the efficacy or effectiveness of the technologies in play. Because The Cloud is a concept, as much as anything, its success or failure is likely to be driven by how potential users feel about it, regardless of any substantive evidence one way or the other.

The obvious answers are based around financial arguments as much as anything else: so, would probably start by identifying a department or process that can be mirrored as an image on a hosted service that runs it for a month as a pilot project. The objective would to generate sufficient metrics to do constructive cost and performance comparisons. Then map the cost metrics against the shortest business accounting period—presumably one quarter-year. If this indicates there are no performance issues and no budget hits to show up in the quarterly returns, you should be set to defeat the financial arguments, for the cost advantages should get better over time.

The metrics will include easy tangibles like operating costs or reduced capital expenditure, but there is also a need to cover less tangible things like what can be really gained from the added business agility. For the brave, one solution here is to point to company history where past unagilities have led to definable lost opportunities.

These are still tangibles, however, and the growing problem now is confronting the psychological fears about lost data and other security issues. In practice, there is a simplistic answer to the 'lost data' fear which revolves around the fact that getting this piece right is absolutely core to the service providers' businesses. If they can't organise better security and more reliable customer access to their data than the customers themselves, they probably deserve to fade away. And when it does go wrong, the service providers should also have far better disaster recovery solutions in place.

There is one area where there is a legitimate fear—what happens if the service provider fails as a business, for then the question is: who owns the data? This is a potential problem area, particularly in these still early days, and so the wise answer might well be to start with non-critical applications, as this can still give financial savings while not putting the business at risk. The other answer is to make sure this is covered in contract negotiations before you start.

Another psychological issue can be the perceived loss of status for, or value of, IT managements because the systems are now somewhere 'out there'. This is where the idea of an Information Exostructure model is important. What is that? Well, it started life as a backlash against the Cloud. That moniker is a marketing suit's dream, because it can mean just about anything. But the key thing about the Cloud is that whatever services are provided that way have to be used as an extension of the information infrastructure a business uses.

So an Information Exostructure is defined as an externally sourced, seamless extension of an internal IT systems infrastructure that uses IT resources from third party outsourcing service providers to either extend or, in some cases replace, a user's own IT infrastructure. So in practice, IT managements are not diminished in stature but rather elevated to a global resource management' role, architecting the overall information structure (infra- and exo-) as a holistic domain. Managing that is likely to be a valuable job.


Published by: IT Analysis Communications Ltd.
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