By Mark Everett Hall
Large organizations have lagged behind small and medium users in adopting cloud computing services. But at this week’s Management World Americas conference in Orlando, three major enterprises discussed significant and successful cloud computing initiatives inside their companies.
An established computing architecture of application silos with low server utilization rates and over-allocated storage systems running inside corporate data centers is a well-understood and politically safe approach to deliver IT operations to the business. So shifting to an architecture that redefines IT as a set of internal or external cloud-based services requires a radical change for both IT professionals and end users.
It takes a while for end users to understand the change to cloud services, said Jon Waldron, executive architect at the Commonwealth Bank of Australia. He described how corporate end users, trained to consume and pay for internal computing resources that include specific CPU counts and defined storage allotments, struggle with such concepts as flexible on-demand CPU utilization and fungible storage consumption.
However, Waldron agreed that once the new services get off the white board and onto the corporate network, everyone’s eyes light up when they see the advantages of cloud computing.
Deutsche Bank and Commonwealth Bank of Australia are founding members of TM Forum’s Enterprise Cloud Buyer Council (ECBC). The ECBC is a TM Forum initiative designed to spur enterprise adoption of cloud computing by helping create industry standards, best practices and an ecosystem for vendors and buyers to identify and break down barriers to the technology.
Some of those barriers exist among skeptics within IT departments. The way to get IT professionals on board is to give them a technical edge they did not have before.
One such advantage is to provision systems for them much faster than previously, said Frederico Geonese-Zerbi, vice president of IT business partners at Boeing. He said Boeing offers an array of cloud-based services. One that appeals to Boeing’s IT users is self-service that allows an application tester to select a pre-defined system from a template and have it ready that day instead of weeks later, for example.
Waldron echoed the advantages of quick provisioning. He said at his bank it once took up to three months for IT to deliver a fully-configured Oracle database server ready for an application. Since the shift to a standardized, self-service cloud-based model, the time-to-provision dropped to “literally two minutes.”
When you have that kind of dramatic change in offering compute power to users, you alter time-to-market scenarios that give a business significant advantages over competitors, he said.
But the cost savings are definitely there as well: at Commonwealth Bank of Australia, Waldron estimates the ROI for the Oracle database cloud service at 149 percent in less than two years.
Plus, he said, end users get significant cost savings as well, noting that end users now pay 40 percent less in operating costs for the same Oracle services. Part of those savings comes from vastly improved server utilization rates possible in the multi-tenant architecture that jacked up utilization rates from 15 percent to 80 percent per server. Plus, the company enjoys impressive cost-avoidance conditions by paying for fewer software licenses and third-party support packages, not to mention servers.
And there are additional business benefits. Because of the way Commonwealth Bank of Australia deploys its cloud-based Oracle systems users also automatically get load balancing, high availability and disaster recovery services as part of the package. And in the two years that the systems have been running, Waldron said there has been zero downtime.
Cloud computing is a significant step toward the holy grail of utility computing. Boeing’s Geonese-Zerbi said that the first step to achieving utility computing is “to hide the complexity of the data center.”
Cloud computing remains a fantasy for most large enterprises. But these three companies have embraced it as a strategic IT choice to achieve business goals faster and at lower costs. It’s only a matter of time before other big organizations decide play catch-up.