Why Some Companies Succeed in their Cloud Migration and Why

I was at a conference last week and got to talking with my friend Michael Keefe, who is the National Director for Latisys. I have known Mike for about a dozen years and he has been a reliable source of information for me as technology changes. I asked Mike a very straight forward question. Why do some companies succeed in their migration to the cloud- and what makes a successful business case?

Mike provided me with some answers- and he continues to be a great resource.

Here are the basics:

How: Identify Strategic Goals- which is another way of saying, plan, assess and provide a realistic workload.

Why: Improve Business Functions- cost control, speed and agility, and elasticity.

Identifying Strategic Goals

Smart companies use the cloud as part of an IT strategy. Although the phrase “IT strategy” can have many different meanings, in this context we’re referring to the high-level plan to meet increasing demand for IT resources. Most companies must provide users with complex systems that achieve high performance in secure and scalable environments. These companies must manage mission-critical applications and increasing workloads across multiple platforms while transforming legacy applications and processes. They must accommodate ever-increasing storage and network capacity—and do it all at a reasonable cost. The particulars of these decisions vary by company, but for each of them, the long-term vision of how to meet these challenges comprises the IT strategy.

As functions such as e-mail become increasingly mission-critical, and as users gravitate toward rich media, most such strategies require new resources. So where to get them? Few CEOs are willing to increase the percentage of budget allotted to IT. They’re wary of capital-intensive development efforts, mindful of a legacy of misspent investments in IT. Meanwhile, reducing other existing IT expenses through virtualization has been a surprisingly productive approach for the past few years—but most companies have already gone as far as they can with such efforts.

Some users—and executives—push for the cloud. Yet many IT leaders resist, citing concerns with security, vendor lock-in, performance, availability, and integration. And although these concerns are legitimate, users rarely find them persuasive. This is why successful companies have an IT strategy. To be effective, to deliver ongoing value to the company, IT must be more than merely a provider of services. It must have a strategy to understand how external forces will continue to transform the business, and seek opportunities to move in the right direction. The value of IT comes in knowing which of the users’ problems are best served by the cloud, and making the appropriately strategic deployments. It comes in judging those problems, and other opportunities, in the context of the business’ overall goals. It also comes in knowing how to avoid threats.

Successful companies negotiate these opportunities and threats by having not just any strategy, but a good one. “Let’s move to the cloud” is a poor strategy—and so is “We can’t put anything in the cloud.” The savviest companies have strategies that find unique, upto-date, company-specific answers to the classic challenge of seeking to provide business users with the services they need while optimizing budgets. The cloud is merely one of many vehicles that these companies use to accomplish that strategy.

Improving Business Functions

For most companies, the IT strategy identifies one or more business challenges that will define the coming years. Three potential examples are:

1. Cost Control: As compute and storage requirements explode, how can companies avoid huge future capital outlays to purchase new processors or storage devices?

The operational advantage of the cloud is that it pools utilization across companies, so that one company can take advantage of another’s under-utilization. The financial advantage is that the cloud simultaneously shifts capital expenses (CapEx) to operating expenses (OpEx), which frequently results in better profits.

Thus, smart companies that have an IT strategy focused on cost control use the cloud to improve hardware utilization and finances. Some even use it to improve the utilization of their most important resources—their people. For example, many companies that run their email systems on Microsoft Exchange know that Exchange administrators are hard to find. Likewise, they may have legacy applications that require maintenance from senior IT staffers. By outsourcing such functions, they reduce headaches and improve employee morale. In the case of Exchange, their IT strategy likely debated the appropriateness of outsourcing an application as critical as email—and concluded that email may be critical to the business but is not one of its core competencies.

Successful companies thus gain significant savings from using the cloud to support their IT strategy with regards to scale, utilization, and CapEx-to-OpEx. They also manage expectations, realizing that the biggest effects are often not in reducing this year’s budget but in containing potential future cost increases.

2. Speed and agility: The pace of business today is faster than ever, and some businesses are held back by long, bureaucratic processes associated with IT resources. One such process is the provisioning of software tools to information workers. Many cloud serviceproviders are now offering software-as-a-service (SaaS) applications to perform functions such as customer relationship management (CRM). Although these applications have many drawbacks, including limitations in security and flexibility, a huge advantage is that where internal software development efforts can take years, these applications can be available in hours. Successful companies thus evaluate how the benefits and drawbacks of such applications fit into the priorities set by their overall IT strategy.

Less hyped, less transformative, but often boasting a bigger cost/benefit ratio is reforming the process of provisioning hardware. Provisioning in the cloud can reduce the time and costs associated with software development testing or other such temporary demands. The old approach often required several days to get a server up and running and loaded with the appropriate data.

Provisioning infrastructure-as-a-service (IaaS) in the cloud, a new server can be ready in hours. (See Figure 1.) Then, when the temporary demand is complete, de-provisioning the test environment ends its cost drain. Many successful companies also use the cloud to instantaneously provision CapEx-free resources for permanent demands, rather than purchase new hardware.

They can thus improve time-to-revenue and agility in expanding into new customer segments, quickly taking advantage of multiple site deployment, or experimenting with expansions of latency-sensitive applications.

3. Elasticity: Successful companies use their IT strategy to understand their workloads. They realize that they have three choices in addressing bursting demand in those workloads:

a) suffer from underutilization,

b) crash regularly during spikes, or

c) take advantage of cloud resources that can expand and contract with their needs. Examples of bursting demand include: when monthly financial reports are due, after a product is featured on TV, when an oil well is “hot” and needs to transmit massive amounts of seismic data, or when daily web traffic peaks.

Such scaling to react to customer needs is generally of huge benefit to a company’s business users. They can plan more confidently without capacity restraints. They can easily expand to new geographies or markets, execute promotional blitzes, or otherwise quickly respond to market changes.

In our experience, one of the biggest differentiators between companies that succeed or fail in the cloud is how well they understand their workloads. When they know if and how their demand bursts, they use cloud resources to manage it. When they don’t understand their workloads, they end up making poor cloud purchasing decisions.

I was really intrigued by Mike’s answer. I have more case studies and whitepapers to share with you. I will  continue to share via the PrimeTelecomBlog –or contact me and I can send them out to you with Mike’s compliments.

Prime is Coming out of the (Phone) Closet- Cloud Computing, Cloud Phones, Cloud Business Management

We went to a seminar this past week. We followed up with some pretty intensive vendor training from our partners- and there will be more on their offerings in the coming weeks. We learned a lot- and would love to share it with you.

Here are some reasons to give serious consideration to cloud-based business services.

BYOD

The “bring your own device” (BYOD) movement is rapidly altering the business landscape. Employees want to use the power and convenience of their smartphones to access data, sales reports, and other tools to enhance efficiency. Likewise, enterprises appreciate what improved productivity generated by the BYOD movement can do for the bottom line.

Immunity From Disaster

Another major benefit of the cloud is disaster management. Cloud-based communications systems include automatic redundancy. Voice, data, and all digital information are typically routed to multiple data centers. The days of a business losing business hour-by-hour when its phone system goes down is a thing of the past. Fires, super storms, equipment failures, and even cyber-attacks are no match for the built-in redundancy of IP-based telecommunications.

Those that had embraced VoIP phones and cloud-based computing on the East Coast prior to Superstorm Sandy were often able to continue operations when others with traditional systems were down for days.

Business Management “To Go”

For business managers and executives, cloud-based operations allow them to, in fact, be “two places at once.” One can head out to an impromptu but vital sales call without worrying about what will be missed while you’re gone. The advantages of a fully integrated system go well beyond the mere ability to stay in touch via smartphones. Full, seamless integration of all company operations is possible in the cloud, and it can be done securely.

OfficeSuite is one such platform that can integrate your office phones, mobile devices, and data networks into a single system. Over 100,000 business professionals nationwide already enjoy the ease and efficiency of cloud-based communications and business management. Companies like Broadview Networks has already helped many clients to realize productivity gains through OfficeSuite’s business phone systems.

No longer want to be tethered to your office phone? Move your operations to the cloud and you will feel liberated as you can conduct essential business from anywhere at any time – and on any device.

Scalability

Phones that work over the Internet can be set up without the need for telephone installers at your premises. Better yet, as soon as you add staff or new locations, the system is readily scalable. Grow as you need to without having to spend precious capital for new equipment. As you grow, simply add new licenses for your new employees and set them up on the system in minutes.

The number of businesses around the world that will be using Internet-based phone systems is expected to double in 2013, to over 100 million. There’s a reason for this communications revolution, so see how your productivity can soar with cloud phones and cloud-based business management.

Plotting a Course to Innovation

In 2010 Joshua Brewer called Innovation, “The Next Great Buzzword“. Indeed to Google it is to land over 405 million links. What truly is innovation and how do we recognize it? More, how do we generate it?

Following my curiosity I chased down some of those 405 million links to learn that of the 32 Innovations that Will Change Your Tomorrow the New York Times predicts most will have to do with seemingly mundane items including clothes, coffee and underwear. I was hoping for George Jetson’s flying car, but I guess I’ll need to settle for using my tee shirt to recharge my iPod while on cross country bike rides.

What got me thinking about this topic was a talk I attended recently by Michael Rogers author of the Practical Futurist column. Michael described progress in organizations with the analogy to sailing. He said that when an organization wishes to get from where they are to some new context, they don’t go in a straight line. It is more like a sailboat in a headwind. The task is to tack, going back and forth making marginal progress toward the goal on each pass.

I find this analogy more approachable than books including the The Innovator’s Dilemma. I can see how investments not fully depreciated, an established frame of reference, cultural and other influences both internal and from outside the organizations exert atmospheric pressure that impedes progress. Not the least of these includes customers and their needs. There’s an old joke in the communications industry that goes, “How could the all mighty create everything we know in just seven short days?” … “No embedded base,” goes the punch line. Customers need to be ready at the time your ship comes in.

Like sailing, bringing successful new innovations to the market are both a science and an art. It often takes an almost perfect combination of the right wind, favorable tides and a bit of luck that few squalls form in your path. The helmsman needs to know when and the crew must execute the perfect jibe to maintain course.

For those crews involved in the processes used by organizations to deliver innovations certain periods when forward progress is difficult can feel as if on a ship in the doldrums. In the way the sailor’s mind wanders while she waits for a breeze to enliven the sails, so too a product manager can wish for the fantastic.

Would there be a streamlined sloop capable of crashing through the bureaucratic surf to run the blockades and deliver our cargo of new innovations to market. Instead, the sailor’s skill is in executing the efficient gathering of requirements, validating of assumptions, preparing compelling business cases, enrolling supporters, dissuading opposition, cajoling management and adeptly negotiating vagaries of the corporate sea. Expert execution of the processes is the true test.

Unquestionably, we understand the need for such regiment. Nothing comes free. Every organization must carry ballast to maintain stability in the choices for the equitable allocation of resources in the best interests of their customers and investors. Companies successful in crossing today’s often unfriendly seas depend upon the skill with which the course is executed. The results must be products that appeal to large markets, which are priced appropriately to attract buyers and can be delivered and serviced with quality. For all of our sophistication today, this still remains a significant challenge even in the most elite of organizations.

Michael Rogers might say that it is the company that combines the best designed boat of processes and culture within which innovative people can operate. It then takes a skilled crew who master the currents and land successfully ashore.

Can Your Communications Solution Really Be Green?

Have you tried carbon foot printing your digital life? You might be surprised:

According to a study by the security firm McAfee, the carbon footprint of unwanted emails (i.e., “spam”) is roughly 0.3 grams of carbon dioxide per message. Multiply that by the many trillions of spam messages sent annually and it’s like driving around the earth 1.6 million times.

According to Google, a single Google search is equivalent to about 0.2 grams of CO2. A few thousand searches and you have produced the carbon footprint of a mile in a car.

Time spent on Facebook? Posting videos on YouTube? The tens of millions of tweets every day on Twitter?  Everything ultimately has a carbon footprint and as we become more and more data and digitally empowered, that footprint gets bigger.

For example, consider the phone on your desk. Avaya commissioned studies that show its IP Phones consuming up to 24.5% less energy than competitive phones. If a business uses a lot of phones—a small contact center for example—the savings can add up.

Avaya has actually take a number of steps in its product designs to consume less energy.

Avaya Ethernet switches use less power than competitors and have a power saving mode. The automatic energy saver cuts consumption up to 25% in periods when full line speed is not needed. In addition to being good for the environment, the reduced energy consumption gives Avaya switches (such as the ERS 4548GT-PWR) a lower total cost of ownership.  

Obviously, a wide range of strategies are needed to cut our energy consumption:  we have to alter our behavior, design more energy efficient devices and, ultimately, embrace renewable energy. Given our dependence on IT, energy usage is going to keep going up. The question is by how much.

Looking for evidence of a Post-PC world

A number of vendors are touting that a post-PC era has begun, I believe it, but believing is not seeing. Lets begin with what a Post-PC world should look like. Will there be PCs in the future? I would say yes. They still have a purpose, and some general value, but they will be a minority form factor as far as local computing is concerned. What will the majority form factor look like? Mobile computing platforms: smartphones, tablets, and devices that are hybrids of those two. A key characteristic is the ability to be data connected at a decent bit-rate while on the cellular network. Many things should look and act differently given these changes, lets speculate on a few.

Lets start with form factor, the PC usually is connected to a healthy size monitor, this makes digesting large scale data sheets (web pages as an example) easy, it produces a conducive environment for running multiple applications (windows), it provides a large rendering space for user interface (more real estate to easily activate or modify entries while seeing the entire UI) and a number of people can easily view the monitor at once. A large tablet can handle all of this today except the sharing aspect. A smart phone, for the most part, is challenged. What adaptations are necessary? Optional micro-projectors would increase real estate and address all these characteristics. We can see evidence of thinking here at [here & here] Another possibility is a wireless interface between the mobile computing device and a general purpose display. Evidence of thinking in this domain can be found at [here]
I’d characterize this as early evidence that the video real estate characteristic is being solved.

Another physical characteristic is the input method (keyboard, mouse, trackpad, etc.). This area is already well addressed in the commercial market. In fact, it may be driving the post-PC evolution as users embrace touchscreen tablets. Additionally, as natural gestures and speech become more important as input and control methods, something the smartphone and tablet provides easily, as is already being witnessed in the consumer marketplace.

Lets look at application modeling. Apple iOS and Android provide excellent local application capabilities that can operate while network connected or not. Some productivity toolsets require video real estate to create content effectively or view complex content (like spreadsheets). As discussed before, technology innovators seem to already have a handle on that problem. Some applications require connectivity (they may be focused on messaging, collaboration, or real time feeds) or may be better used if connected (augmented data and search are a couple of examples). Both mobile computing platforms and PCs provide the connectivity. Mobile computing platforms can do so from many locations and while in motion. Connectivity requiring significant bandwidth could be challenged on cellular networks (video calls for example). Even with LTE deployments on North American cellular networks, the likelihood of a significant bandwidth crunch is high if video calling is supported natively on the network. For this reason, expect most high bandwidth real time applications to be limited to WiFi networks for a few years.

This brings up another consideration for the connectivity model: Virtual Desktop Infrastructure. Virtual Desktop Infrastructure (VDI) eliminates the need for a fully functional PC, it can be replaced by a special purpose low cost viewing brick, or it can be replaced by a browser running on any platform. While it does not necessarily require significant bandwidth to support, there are times where it might, and certainly some use cases where it certainly will. Mobile computing platforms already support VDI viewing, but connectivity can dictate how functional it is. VDI is an example of an application type that requires connectivity, cloud based service applications is another example (think Google tools). As connectivity reach increases (think WiFi on airplanes) the need for intense local processing on PCs decrease. The evidence based on application connection model certainly indicates that mobile computing has evolved enough to begin replacing desktops.

Other evidence will be in the types of applications that become favored over long standing PC applications. Email, Calendaring, Web browsing all come to mind. Email is evolving to include common inbox, virtually no one wants multiple email clients on their platform. Both iOS and Android support this well. Many users are shifting to prefer Instant Messaging or SMS because they offer prospects of answers in near real time. Users will want to have a common messaging client for the same reasons they do not want multiple email clients. Evidence of this can be seen with iMessage, Gtalk, and Yahoo Messenger. There is no dominant calendaring application outside of Microsoft, a Post-PC world should see some movement here. Calendaring clients can be Microsoft independent. Web browsing innovations are already outstripping the need for a PC and have been for a number of years. HTML 5 adoption will foster this and is another strong indication of a Post-PC world.

Lastly, there should be evidence in trending. Fewer PCs and laptops sold; more smart phones; more tablets. More application sales for mobile computing, more SMS, MMS, and their derivatives. What do the trends show? Canalys reports that in 2011 smartphones outsold PCs. [here] Further its growth rate is a scorching 63%, tablets grew at an incredible 274%, while desktop PCs shrank 3.6%. ComScore’s review of 2010 indicates that mobile subscribers preferred text message use to email use 2:1 in the US and almost 4:1 in Europe. [here] Further the growth rate in SMS traffic is presently between 20 and 30% for the age 18-54 demographic. [here]

It seems like there is evidence that the era of Post-PC is approaching, will the evidence become even more pronounced? It will be an interesting year or two as we observe.

Until next time …

RuralSourcing: Using Communications to Build Business Where the Grass is Greener

Will “ruralsourcing” take hold on the back roads and country lanes of America? With 60 million people accessible via broadband and often located near a college/university system, it’s more and more likely. The very things that made outsourcing overseas so attractive—lower costs, an  educated workforce and an established technology infrastructure—also exists here in the U.S. That’s why more large, U.S.-based businesses are beginning to turn to small rural companies for back office and other services—a phenomenon that’s been dubbed “ruralsourcing.”

The benefits are numerous: lower costs, shorter supply chains, better data security, intellectual property protection, cultural compatibility and convenient time zones.

Hard numbers on the growth of rural sourcing are difficult to come by, but according to Mary Lacity, professor of information systems at the University of Missouri’s College of Business, the past year or two has seen a spike in demand. Lacity estimates that there are some 20 rural outsourcing providers in the United States pursuing a market of $100 million.

• Iowa has launched an effort — Off Shore Iowa—to promote the ability of several Iowa communities to provide technologically enhanced administrative back office services.
• A number of IT services companies, such as The C&L Group (C&L), Rural Sourcing Inc. and Cross USA are specifically focused on developing high-tech hubs in rural areas across the U.S.
• New numbers out of South Dakota show a boom in sole proprietors.

Small rural businesses looking to capture their share of rural sourcing dollars will do well to pay close attention to the communications capabilities that they have in place. The right communications can help support the efficient, professional business processes desired by outsourcing companies. In particular, consider the following:

Multiple, Incoming Business Lines: You will very likely need to establish multiple, incoming business lines each with its own separate phone number and identity. But you want to be able to manage all of these lines through one system and be able to easily use one set of people resources to manage incoming calls on all the different lines.

Connect Multiple Offices: If you have more than one office location, take advantage of a communications system that lets you have all the offices on one dial plan so everyone is reachable as an extension on the system (not an outside call) and can also share resources such as messaging or a receptionist.

Home Office Workers: It’s very likely you will be “sourcing” business yourself, by taking advantage of home-based workers. With the right communications solution, home-based workers can be just another extension and have access to all of the communications capabilities as if they were working in the office.

Conference Calling: A communications system with a built-in conference bridge gives you the option of instantly setting up conference calls with a few people or a few dozen. It’s a great way to streamline communications with people in a wide range of locations.

Software Options: Different people in your organization are going to have different communications needs, depending on whether they are managers, office workers, home-based employees, frequent travelers, etc. Make sure your communications system gives you options to get the right fit for each type of employee and not have to spend on capabilities that aren’t needed.

Avaya IP Office is an example of a new breed of small business communications system that offers a great option for companies looking to take advantage of the ruralsourcing trend.  What makes Avaya IP Office particularly attractive is that is has an established track record: 30 million users around the world.

For more information on Avaya IP Office