At ISG, we see a great number of successful sourcing deals, and contracts for Infrastructure-as-a-Service (IaaS) are often successful, but, we have also seen some need for going back to the proverbial drawing board. Sometimes pricing doesn’t turn out to be competitive enough. Sometimes the IaaS-based solution doesn’t provide the functionality needed for the particular application, and sometimes a company or a provider lacks the required expertise. Then the deal falls through, or the contracted IaaS service is never actually used. Based on what ISG has learned from real-world cloud deals, here are the Top 5 recommendations for success:
1. Avoid the “Big Bang” approach. Adoption of IaaS is a journey, not a monolithic project with a well-defined beginning and end where you pay $X to “cloudify” your IT infrastructure and then sit back to reap the benefits. Evaluate each candidate application for cloud readiness, prioritize it against other applications, and develop a detailed migration plan for it. See Pitfalls of the Big Bang Approach for more.
2. Get the right people involved. Believe it or not, IaaS is not just about adopting new infrastructure. It’s about creating a new platform that enhances the capabilities of your applications. You’re only ready for IaaS if your applications are ready, so involve your development teams along with your infrastructure teams when you evaluate.
3. Prepare a business case. Many early cloud projects begin before the true costs are even clearly understood. Then once initial estimates – or initial invoices – start coming in, the result is sticker shock. IaaS pricing, typically developed to serve a very broad, horizontal market, has numerous options and is, therefore, necessarily complex. See the blog post Pricing Iaas: Know What You’re Buying for more. Once costs over time are identified, you still need to factor in hardware savings, software savings, labor-cost savings, plus any increased revenue or profitability that result from new capabilities possible only with cloud.
4. Address security and compliance concerns. IaaS providers have come a long way in addressing security concerns, and sometimes hybrid solutions can help work around issues by placing only less sensitive data in the cloud, but barriers remain. Sometimes the barrier is less technical and more political; no one wants to be blamed for taking a risk on cloud and then experience a breach. Some firms are surprised to find that even though the provider has a check in the box for compliance with the appropriate standard, most of the burden of achieving compliance is still on the customer.
5. Match your unique functionality or performance requirements. Some solutions are difficult to implement in any environment, and many public IaaS offerings are still trying to be the solution that works for the greatest number of customers. If the main challenges in designing the solution are not scalability or elasticity but rather response time, latency, extreme reliability or simply a very unique configuration, then private IaaS or traditionally managed services may still be a better fit. This is particularly true if IT is already outsourced and the customer doesn’t have internal staff to manage the service.
In future columns, we’ll discuss pricing models and involving the right decision-makers in the provider selection process.
ISG can help you develop your cloud strategy, evaluate cloud readiness, evaluate cloud service providers and transform IT services by leveraging cloud. Contact us to discuss further.