Cloud Computing Leaves Many Gray Areas on the Horizon

Look around the Web and you’ll be hard-pressed to find two matching descriptions of cloud computing. But while the definition is a moving target, "none” is not a cloud strategy, according to Diamond Management & Technology Consultants, Inc. (NASDAQ: DTPI).

At the same, finding value in the cloud will not be an all-or-nothing proposition. Without an objective assessment, free of vendor hype, CIOs and their counterparts on the business side will be unable to weigh the benefits, challenges, and readiness of the enterprise.

"It’s been said it takes 30 years for an idea to truly come to fruition in the marketplace, and cloud computing only entered the enterprise’s lexicon a few years ago,” says Chris Curran, Diamond’s chief technology officer. "Even so, it is a testament to the cloud’s ability to quickly permeate nearly all facets of our lives—both professional and personal—that all large enterprises are at least kicking the tires on cloud options.”

Diamond’s new report, "The Future Is Partly Cloudy,” emphasizes that the pace and direction of each organization’s cloud computing migration strategy will differ, and the traditional hosting model will likely coexist with the cloud for the foreseeable future.

For a copy of the complete report, send an email to cloudcomputing@diamondconsultants.com.

Cloud service providers can make compelling and simple sales pitches in terms of cost of individual services. But as IT and business leaders begin embracing the processes and financial models that accompany the practical realities of introducing a new set of technologies, they will need to explore the "net” value they’ll achieve, and not just the "gross” value.

Avoiding Sticker Shock

"Hidden cloud expenses can really alter a company’s outlook,” says Curran. "In general, costs related to people, processes, and architecture aren’t new to IT professionals, but the challenge lies in uncovering these expenses in the relatively unfamiliar cloud model and determining accountability for each.”

As companies consider taking the next steps into the cloud, senior leadership should explore four key questions to help uncover the "hidden” costs and assess their cloud computing readiness:

1. What are the viable paths to move (or replace) legacy applications into the cloud?

2. What architectural changes are required to integrate cloud and non-cloud applications?

3. How should we change our technology and operations processes to take advantage of different procurement, provisioning, and management models?

4. How will a private cloud—built for the sole use of one enterprise—give me more flexibility than current hosting or public cloud models? What are the cost trade-offs?

"When considering costs for cloud services, it’s tempting to look only at the cost per drink,” notes Curran. "That misses the point about how companies can really use cloud computing to their advantage.”

One Size Does Not Fit All

According to "The Future Is Partly Cloudy,” Diamond expects to see companies travel in two directions toward the cloud. Firms with high business and technology volumes demand high levels of performance. Many of these firms must also meet robust regulatory and security mandates, such as Wall Street firms and other large highly-regulated enterprises.

For these companies, the current hosting model will likely evolve into a hybrid cloud model that combines hosting with elements of a private cloud. These companies may selectively adopt public cloud services for things such as customer relationship management, but for the most part, public clouds will not be able to meet their needs in the near term.

On the other hand, small to mid-size companies in less regulated industries, such as retail, may choose to augment their current hosting model (or even replace it) with the public cloud—able to extract its benefits without the need to meet more stringent requirements.

Says Curran: "Any new technology carries the potential for hidden risks beyond its sticker price. As a result, company leaders need a clear picture of their firm’s cloud readiness before engaging cloud providers to discuss high-priority candidate systems. Without this assessment, the cloud can look far more menacing.”

About Diamond

Clients trust Diamond Management & Technology Consultants, Inc. (NASDAQ: DTPI) to help their companies grow, improve margins, and increase the productivity of their investments. Working together to design and execute business strategies that capitalize on changing market forces and technology, Diamond’s consultants are experts in helping clients attract and retain customers, increase the value of their information, and plan and execute projects that turn strategy into measurable results.

Diamond’s capabilities are rooted in deep strategy, technology, operations, and industry experience. The firm’s approach to client service is based on objectivity, collaboration, and an unwavering commitment to its clients’ best interests. Headquartered in Chicago, Diamond has offices in New York, Washington, D.C., Hartford, London, and Mumbai.

To learn more visit www.diamondconsultants.com.

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