Contributed by
Vikas Verma
Shared Services Centres (SSCs) (internal as well as third party) have revolutionized internal support in the past decade. SSCs have emerged as an effective vehicle to transform less critical functions into value-generating, cost-saving models, providing world class services. Key benefits were simplification, consolidation, standardization, service orientation, floor space reduction, co-location and resources rationalization.
Over a period of time SSCs matured and incorporated sophisticated measurable management tools, improved productivity, and started integrating external business tools to drive performance service levels. Optimization became key, and focus shifted to cost improvisation, service performance, governance, benchmarking and cycle time. Importantly, SSCs started running like a high performance team or a customer facing store, positively moving towards the next level of enterprise maturity: ‘virtualization’.
Global organizations have always viewed virtualization as a key technology element that could deliver real business value to their IT infrastructures by catalyzing efficiency, flexibility and availability; this was a revolutionary change from the traditional silos. This new approach created shared and dynamic pools of virtualized server, storage and network resources. Virtualization lead the expansion of services, technology innovation, improvement in supply chain, optimization of processes and efficient use of external business partners to drive further improvements in cost and service performance, giving way to external profit centre approach.
Reducing IT budgets have forced organisations to introspect and plan differently, but IT continues to be an enabler for achieving cost efficiencies and cost savings. As a result, many organizations are accelerating their plans for data centre consolidation, virtualization and optimization projects, recognizing these investments as longer-term savings, and reaping the benefits, in tandem with an effort to reduce the physical data centres’ footprints and associated management costs. The concepts of resource pooling, virtualization, dynamic provisioning, utility computing, SaaS and SoA are reaching their maturity, and creating public or private clouds that meet these needs. Today, world-class data centres are being formed that can provide this Infrastructure-as-a-Service (IaaS) in a highly efficient manner.
Virtualization being the foundation technology for cloud computing, the convergence of several concepts of virtualization, distributed application design, grid, SoA and enterprise IT management enable a more flexible approach to deploying and scaling applications. By making resource management easier and significantly lowering the cost of operations, virtualization is driving the growth of cloud computing with three kinds of networks: private networks, similar to what we have today, that control all the resources on the network; semi-private networks, where data centre resources are shared with trusted partners; and public networks.
Now customers can decide whether to develop their own applications to run on their own internal private clouds, or leverage SaaS applications that run on public clouds. Integration and federation of services across both the public and private cloud, so-called “hybrid clouds,” is an emerging area of interest. The public cloud concept allows customers to develop and deploy applications with tremendous speed and without the procurement hassles of dealing with potentially slow moving and costly IT departments. This also allows customers to shift traditional CAPEX into OPEX, along with the technology that recognizes inspection boundaries for compliance, and isolation boundaries for a virtual infrastructure.
Though driven by concerns over security, regulatory compliance, control over QoS, vendor lock-in and long-term costs, many larger customers who have the economies of scale and strong IT competency will continue to build internal private clouds. These private clouds can provide the same cost and agility benefits as public clouds, while mitigating enterprise concerns.
Undoubtedly, cloud computing offers real alternatives to IT departments for improved flexibility and lower costs. With the markets maturing for the delivery of software applications, platforms, and IaaS to IT departments over the “cloud”, these services are readily accessible on a pay-per-use basis and offer great alternatives to businesses that need the flexibility to rent infrastructure on a temporary basis, or to reduce capital costs.
Sounds Great!! but all this has its own pitfalls. A classic case in point was Oracle BI, a very scalable, powerful and easy to use service architecture, meant for sharing. When installed as shared model for SaaS, it ended up giving plenty of sleepless nights during implementation, and the organization had real issues around security and privacy. Apparently, the IT department’s onus and responsibility to ensure the seamless working of their existing architecture/setup in relation to the cloud has been seriously challenged.
Ironically, today the hardware that makes cloud computing possible is more affordable than traditional shared services or data centre systems. This is in contrast with the recent past, when shared services organizations emerged to enable enterprises to take advantage of complex and costly technologies they didn’t have the budget to deploy or the skills to manage on their own. Private cloud technology adoption has few takers in the current scenario as it demands a newer set of skills to put together the high-performance and highly scalable infrastructure that clouds rely upon. Moving a particular service into the cloud is a major undertaking that is dissuading organisations from building their own private clouds. Rewriting applications to work on a proprietary cloud platform requires significant effort and expense and has also created the problem of lock-in, where it becomes too difficult or disruptive for IT departments to change provider.
In spite of all these roadblocks, organizations are taking cloud computing very seriously. For example: Companies like General Electric, are fully focused on testing processes for leveraging private as well as public clouds for their data centres and office applications. In fact, GE’s patented “Support Central” is a perfect example of how a company can take full advantage of SaaS and beyond.
Call it Cumulonimbus or Stratocumulus; issues like encryption, SLA management, scalability, data privacy, policy and compliance need an expert to redress, as benefits completely outweigh cloud adoption resistance.