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Cloudy Issues Explained
update on 2012-05-12

Anubhav Saxena and Stanimira Koleva dispel some misconceptions on cloud computing. By Joson Ng

IAA: HCL and Cisco have launched a joint Customer Experience Management (CEM) Lab. Tell us how the venture came about?
Stanimira Koleva (SK) MD, partner business group, Asia Pacific, Japan and Greater China, Cisco Systems: We have partnered with HCL for 16 years, so we see this as a new chapter in our partnership. If you look at us, we are a technology vendor that has been supplying network infrastructures and servers in the horizontal market. But now with IT increasingly running businesses, we have to be much more business-relevant. I need to have a way to stay in touch with the business process. Being an infrastructure provider, you do not have many options to do that unless you go into much tighter integration with applications with a player who has knowledge of that vertical domain.

Anubhav Saxena (AS) VP and global head, Marketing and Alliance, HCL Technologies: We are getting more proactive. Instead of waiting for the customers, we are proactively identifying the need for changes that are happening in the market, ie: pre-integrating of solutions (eg: routers, smart grids and switches). We go to customers who are going through changes and ask if they want solutions from us. We are pre-integrating solutions in our labs so that the customers do not have to go through the pain of the integration happening over on their side.
Once you set this solution up, you have a reference architecture that works. As a result, you can replicate it, and you can become more successful as partners in the industry.

IAA: Cloud computing — some might say the name is quite superficial. What is your opinion on this and how would you define cloud computing in your organisation? SK: Cloud is a combination of existing technologies, not necessarily a new technology. Cloud computing became possible because of advancements in the telecommunications sector allowing customers to consume services remotely in a virtualised manner, and with much more flexibility.

To that end, we view cloud computing more as a new business model rather than a new technology. However, there are new capabilities we need to build within the technology in line with that model of delivery.

Now there is a business model on how IT gets consumed. Therefore, it starts presenting a completely different set of problems on the consumer side, to the extent that instead of integrating technologies, customers are looking at how to integrate services that are delivered through various vendors or from cloud to private, hybrid cloud. It is really how we are changing the way we deliver technologies and services in line with the evolution of the business model, and the evolution of the process the customers are going through.
There is a lot of attractiveness in cloud. There is the availability and the flexibility. It is a great environment for us to make solutions widely available. We hope this is an environment that is going to underpin greater business efficiency.

AS: It is a new service delivery model. It impacts business services and SLAs (Service Level Agreements). Cloud computing on its own would not be the answer to CIOs (Chief Information Officers), but only a part of the answer.

I think the adoption of cloud will come in waves. The first wave will include the infrastructure applications, eg: e-mail, DNS (Domain Name System) and active directories. The reason why it (cloud) is cost competitive is because it leverages heavily on shared services; the basic foundation is that it can be shared across users, and has got all levels of security built in.
The second wave will be brought on by applications like CRM (Customer Relationship Management) for example. Salesforce (a global enterprise software company) is doing well in this respect compared to its competitors because it has got cloud and APIs (Application Programming Interfaces) for easy integration.

However, there are some systems that would not work in a cloud. Enterprise Resource Planning (ERP) is one example because of the level of customisation required. The level of localisation and centralisation is also very different. So if someone tries to make ERP available as a service on a cloud platform, they would not be able to make it cost competitive. The level of customisation would not allow the sharing to take place.

IAA: One of the advantages of cloud computing is widely believed to be cost savings. However, the skeptics are saying no, citing expensive monthly subscription fees. What are your thoughts on this?
SK: One of the characteristics of cloud is its economy of scale. You can see for example customers who are more cost-conscious adopting cloud services more readily. SMEs kicked off that trend three to four years ago and you can see the market penetration today.

With the larger organisation, the picture is not so straightforward in terms of cost implications because what you need to keep in mind is the risk to the business, various regulations and governance that come into play. So it is probably dependent on each individual case, on how the services got implemented.

Also, the savings stem from the fact that you are minimising and managing the risk to the business in terms of much more availability during disaster recovery. Another point is the security you get around the data. All these have to be taken into account.

AS: Ultimately, it comes down to the ability to put cash on the table. Would you want to build a data centre, or would you want to use existing technologies? This has become more of a financial decision today. The kind of rate of return you can get, based on other investments, versus putting the money into a data centre, will kill the business case of the data centre completely.
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CIO Show
The CIO Show took place between March 20 – 21, 2012 in Singapore where CIOs from various industries came for a session of knowledge exchange and information sharing. The show focused on:

• Disruptive and New Technologies
• IT and network security
• Business process management
• Business continuity

Grand Copthorne Waterfront
Singapore
March 20 – 21, 2012