AWS Series #1: Business Case for Cloud — how to pitch to your management and why is it important?
Which cloud model is apt for your organization — how can you make business see eye to eye on Cloud Decision?
Say the Technology management team has decided to move towards cloud. How do you make business meet eye-to-eye on your decision. It is important to answer the below key questions.
Note: In the below questions, I / my represents IT management team for the Organization — does not represent the individual, however all key individuals must have the answer to these questions and all of them must agree on this before pitching to business. IT team should move this decision as a single unit as the failure in the implementation of the cloud, the single unit of failure is not for the individual or even the IT team it is for the Organisation as a whole depends on which phase you are on cloud.
1/ What is my objective? What is the problem am I trying to solve by replacing cloud with On-Premise? — Cost | Maintenance | Performance Optimization?
2/ Do I want to put all the Infra | Data | Applications | Consumption layer everything on cloud and shutdown the Physical Data Centre for Application Development in the near future? Do I know what it takes?
3/ If Cloud, what is the first POC I want to do and which cloud? Perform POC on multi-cloud always.
4/ What is the Service Strategy — IAAS-First | PAAS-First | SAAS-First? Answering these questions will unveil a lot of important facts.
5/ End points and End dates in mind.
First you will have to identify what your Organization wants. Usually it is not one size fits all and there is no need to re-invent the wheel.
For SME: Ask these questions before you start
- If the Cloud Project is a Cost Optimisation (Reduction) Project or Maintenance Optimisation (Reduction) project
- If the product is built from the ground up then you will have to choose the offerings between IAAS | PAAS.
For Startups:
- No doubt that Cloud has been the birth place for many startup these days. MVP cannot be implemented any sooner than it is today — be it Video / Audio streaming as a service, IoT for Health Care or asset tracking or smart buildings etc. No technology debt or pinch of heavy loans like yester-year Entreprenuers.
- If it is a product company and a Startup, how much of flexibility you need and if the product you are creating is a Service / range of services you are offering and if you are not re-inventing the wheel, the solution can be a combination of IAAS | PAAS | SAAS mix.
For Large / Global Organisations:
- Massive migrations to cloud and Enterprise level adoption and Enterprise Cloud Architecture.
- Moving from the pattern of building projects after projects into Platform / Product model.
- Migrating from Legacy technology into Model Cloud native platforms and reduction of Technical Debt.
- It is never a single offering. Be it Server or Storage or Database or Monitoring Services, a single solution in each of the stack may not be sufficient to serve it all. Also different departments design principles and requirement will be different. It will be a combination of PASS | SAAS | IAAS from several cloud providers.
- It may be multi-accounts, multi-cloud,
- The problem you are solving may be a
- Performance Optimization problem or
- Network flow optimisation problem or
- Global Optimization problem or
- Cost Optimization problem or
- Maintenance or Management Optimization problem etc.,
- For overall monitoring of multi-cloud, services such as DataDog or IBM or RackSpace offers multi cloud management platform and capabilities.
- For Global Organisations, the ability to access data and applications closest to the area of operations and saving on network and data transfer cost is the best service Cloud can offer.
Business case to convince Management and / or Board? — In or Not in!
- What is in it for Business: What is in it for business and how will benefit your area of business.
- Elastic Demand: Serving elastic demand of Web Applications, if your organization has external Websites either for booking / reports only. Talk about the possibilities of new business growth.
- Customer Obsession: Certain businesses may have multiple level of customers, use of cloud and architecting solutions using that not only takes care of the immediate business’s customers but navigates till the last customer.
- Fast: Low Latency for the customer’s based on the region they are accessing the website from.
- Retention of Data: Business critical Data that are required to be retained for longer period of times can be stored in the archival storage in a cost efficient manner.
- Backup and Recovery: Multiple backups using cloud
- Fit for Purpose: Any Business critical applications with massive amount of data that needs to be run once a month or not so frequently can be run using transient servers and can be shut down once the reports are delivered.
- Data Share: Businesses where data needs to be shared across multiple downstream (internal / external) — ease of share with utmost security and portability can be done with ease with Modern Cloud Data providers (eg., Delta Share using DataBricks).
- Rapid Innovation: For organizations where either they innovate constantly and roll-out or wants to experiment, Cloud is the best way for Rapid innovation and roll-out. Enables to Pivot easily with much lesser cost if an approach / idea does not work.
2. Narrative: On-Premise First to Cloud-Second and Cloud-Fit organization.
3. Best in class Cloud Services: Use of best in class and advanced SAAS / Cloud-only tools / service offerings.
4. Stay ahead of competition: To be in the competition and not left out several years behind due to non-adoption of Technology advancements.
5. CAPEX vs. OPEX: What are we trying to optimize — Cost (CAPEX vs OPEX) | Maintenance. Talk about the possibilities of cost savings with Depreciation as key aspect.
6. Cost | Maintenance: Put up a Cost / Maintenance Economies chart between On-Premise and several cloud options to put up a case. ROI on cloud for business. While cost aspect is important, talking about the profit aspect and increase in productivity and focus on new projects and new income there by is a very important focus point.
7. Key Benefits: Operational excellence, Business agility with quick to market and operational resilience. Provide a comparitive analysis and Cost Benefit Analysis on the “Do Nothing and follow Legacy” vs “Slow and steady transformation” and “Fully migrated to cloud” — be realistic while talking about the key benefits.
Management, who is the sponsor, for them to understand the need of the cloud for the organization and get them on-board is extremely important. Cloud-First may not be a business initiative however, the possibilities cloud can provide to the organization is immense. It enables the business to enter in to new market, much more scaleable processing, agile, flexible and quick to market. Instead of directly jumping into putting business case for the management and make a cloud adoption push across the firm, pre-wire with the business teams and take baby steps by first asking for sponsor and budget to set up cloud exploratory team and experiment with multiple cloud models, solutions and providers and publish articles and results around it. Solve the most critical and niche problems with cloud that exists at that point in time in the organization which has a clear technology trend changing and dollar value for business. Bring truth to power to the management by clearly highlighting what works and what does not work. This will establish trust between your team and the management that will open a window of opportunity
A organization that is spending US $ 500 Million and with business turn over of US $ 50 Billion, you cannot convince them for Cost optimization alone. It is a combination of several factors such as cost, maintenance, use of latest technologies etc. But before convincing the management on how cloud can be advantageous for the business, the very initial proposition we have to make is give the business narrative — what is in it for the business? then provide a clear narrative on the shift and trend (say, On-Premise First to Cloud-Second. or Cloud-Fit and not Cloud-First or Business runs on state-of-art Technology). A strong narrative is the driving strategy that can potentially lead the discussion for cloud adoption strategies, clear-cut migration plan with all advantages of quick to market etc.
What are the blockers for Cloud adoption and how we can handle it?
- Migration: Legacy Application to new platform migration — Paper architecture may begin as Refactoring but with the available resources and cost only Lift and Shift could be possible.
- Data: Disparate and / or Redundant Data across the firm and Business busy with Functional projects and no time for Digital Transformation projects.
- Do not fix something that is not broken.
Note Digital Transformation is not essentially a Technology project and part of cost center. It is a Profit centre project / program, as with Digital Transformation it brings new business opportunities and entry to new market.
- Fear of Third-Party: No-Go from Infrastructure due to obvious reasons of Security threats in cloud and not very keen in putting the firms key resources into infrastructure that is not managed by them.
While we like to think that we are in control in on-premise environment and with cloud, we may loose the control, we need to understand that (1) the Data Center especially secondary is usually not run by us or not in our own building — it is already a cloud like environment. (2) All the softwares that we use be it paid or open-source is not created by us — we use third party softwares. So, all the infrastructure and software is third-party. Cloud is just yet another third-party software!
- Total Cost of Ownership (TCO) of the cloud may be more than the TCO of On-premise.
While this may be true if we compare the cloud vs on-premise for 7 or 10 or 15 years, we need to consider depreciation cycle into the equation. Most of organization’s Depreciation cycle will be 3 years. If you compare the Cloud Vs. On-Premise TCO for 3 years, if all are architected correctly — for the like-to-like workloads, the cost will be either comparable or lesser to On-premise.
- Not a clear understanding of As-Is Architecture: Before jumping to Cloud migration and designing As-is-To-Be Architecture, it is imperative to understand the As-Is architecture.
- A poor Cloud Strategy and Migration Plan: The essential first step before Migration is to have a sophisticated and clear migration plan covering all the aspects of business, systems, data, databases, interfaces, API’s, software’s etc. A complete project migration plan encompassing time, resources and what needs to be done must be clearly charted out and agreed upon involving Technology and Business.
- Sponsor and Budget: Lack of trusted sponsors and partners is one of the key blockers for cloud. It is imperative to get a very realistic budget along with buffer in order to avoid cost surprises and rejection of Innovation from the Financial angle.
- Where to draw the line: Some Technical teams gets too excited to migrate literally everything and build a giant architecture. It is imperative that the cloud migration must happen in phases and proper testing and production must be planned along with a proper parallel run and well defined acceptance criteria and automated test results signed-off by the users.
- You cannot be everything for everyone — be clear about the scope and what will be done in a phased out approach.
- Bring truth to power to business and management about what can be done and what cannot be done and set realistic expectations and timeline on when, what and how it can be delivered.
- Do not promise the moon and deliver a ice cube. Build trust slowly and steadily by building winning trial projects. Remember, like how the First 90 Days for a CIO or any Technology Director role is handled and is important, cloud initiative at organization level is no different.
- Leaders vs Laggers: Most of the top data sensitive firms such as Finance and Health care fear to be leaders and stay as laggers or followers and try to follow the Government / Regulators mandate.
- Clients, Regions and Jurisdiction restrictions
Organization Strategy for On-Premise Only?
Certain Organizations that are Infra-driven or as a management policy, it would have been decided that as long as the organization exists, it will only be an On-Premise Organization. While it is the choice of the organization to have that part, it is also important to note that Cloud is not the matter of never, it is only a matter of When. So even if it is the policy for No Cloud, conducting on-going POC’s on the multiple cloud offerings and business units is imperative. Allocate budget for Cloud POC’s.
Rather than On-Premise Only strategy, be flexible and make it as “On-Premise First” strategy so that there is room for “Cloud-Second” or “Hybrid” when there is opportunity.
Cloud and Sensitive Data?
When you are choosing Cloud as the home for your sensitive business Data or information, it is important for you have to plan for
- how to store the data
- how will you retrieve the data and
- how will you move the data.
Depending on the type of Industry Vertical, the Data Points or Information that we store on cloud may vary from
Also, to put up a good business case, use AWS Services
- Business Case: AWS Migration Evaluator
- Readiness: AWS Migration Readiness Assessment. 6 factors — Business, People, Governance, Platform, Security, Operations and takes thru’ approximately 70 questions. Do this before putting up a business case as it will help to answer all questions Management is looking for.
Future Articles: Cloud Deployment Models; Cloud Strategy and Migration Plan.
