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Cloud Computing for the Enterprise

Originally published October 21, 2009

Chet Kapoor, CEO of Sonoa Systems, and Cyrus Golkar, the BeyeNETWORK's cloud computing expert, discuss various aspects of cloud computing.

What are the main drivers behind cloud computing adoption in the enterprise?

Kapoor: All businesses need to cut costs, innovate and ultimately drive revenue. Cloud computing lets you do all three.

The cost advantages of cloud computing have been discussed at length. But more importantly, cloud computing lets you focus on your core business. If you are in the business of credit reporting, you shouldn’t be worrying about getting good power rates or other issues around building your own data centers and infrastructure. You need to shift your thinking and focus on innovation.

Innovative companies are using the recession as a forcing function, thinking of what opportunities there are to come out of the downturn swinging. For example, we have a customer with a lot of financial customers. While this customer base is hurting, our customer used APIs to encourage third-party developers to drive adoption in new customer segments that are doing better.

Many enterprises see what software-as-a-service (SaaS) pureplays and consumer Web companies are doing and are asking why they can’t employ these models as well.

Golkar: How can the enterprise decide if it’s the right time to adopt cloud computing?

Kapoor: The time is now. Cloud is a natural evolution for enterprise IT. It just depends on the rate of adoption and where to start.

It’s hard to find an enterprise that isn’t using some kind of cloud computing already for non-core functions that are lower risk – whether it’s a general manager that’s used his or her credit card for any number of SaaS products or development teams using Amazon Web Services (AWS) to accelerate a project.

Offering an API or SaaS-based product gives you a way to turn information you already have into new revenue streams. Once you get a taste of the benefits of this model, then it’s all about how fast to ramp up adoption and address any new risks.

Golkar: What are the main challenges facing the enterprise when deciding to move into the cloud?

Kapoor: A key issue is making sure you’ve got a handle on what’s moving in and out of the cloud – that you protect your organization and yourself.

You’ve got to make sure you’re still enforcing all the same security and data protection issues you are for on premises. You’ve got to understand impacts on audit and compliance regulations to stay out of an orange jumpsuit.

And if employees and consumers are relying on apps that depend on cloud services, they want to be sure that they get the same SLAs that they would with on-premises solutions.

Golkar: What do companies that successfully adopt cloud computing solutions have in common?

Kapoor: Even with the risks discussed and with cloud computing becoming mainstream, the folks that call us are still the aggressive innovators more so than the ones that are fearful of security or compliance risks.

Companies that adopt more quickly also focus on their own core business and don’t reinvent the wheel. Cloud computing gives them a powerful weapon to get better capacity utilization of their people and resources.

Finally, we’re seeing adoption in organizations where there is a more pressing business mandate – that is, when the IT executive is closer to the business, or the product executives on the hook for delivering products or revenue are involved in projects to offer new services or APIs.

Golkar: How is the role of IT professionals changing as cloud computing sees more widespread adoption?

Kapoor: IT professionals can do more and become more strategic. Much has been written on how cloud computing streamlines capacity utilization of people and resources.

Less has been written on the opportunity for enterprises to innovate in offering cloud services on their own as new products and services – such as offering new ways to buy data and services via an API or SaaS delivery model. Once IT frees up cycles required to build so much infrastructure in house, they can turn their attention to how to drive the business to harvest these opportunities. In other words, IT will be thinking how to drive more top line vs. bottom line results.

Golkar: How can businesses monetize their APIs and cloud offerings?

Kapoor: There are tons of ways for businesses to make money off their APIs and cloud services. By opening up services and content, companies can provide new value to their consumers and to other businesses and partners.

For many developers and businesses, a "freemium" model has also proved successful. Advertising can generate revenue as well. There are also a number of indirect ways that companies make money from cloud services. New SaaS apps launched quickly in response to changing market conditions can quickly engage customers and draw new audiences.

Cloud computing gives many businesses a way to make their information dynamic, valuable and accessible – a major value-add for customers.

Golkar: What are some of the challenges facing businesses and API developers as they create and monetize their services?

Kapoor: When your API goes live, you’ve got a number of things you need to watch out for. First things first, make sure you have visibility into the traffic. It is amazing how many enterprises we see with APIs and not even a Google Analytics-level visibility into what’s happening or the ability to do basic usage analysis.

Security and access control is critical. You must be able to apply and enforce policies and SLAs, and make changes to your policies quickly to respond to business issues and opportunities.

You have to be able to see and control by who and how your services are being accessed. You need some kind of “surge protector” for your service – something to monitor and protect against outages through metering and traffic control.

Finally, you’ve got to be able to do all of this while staying flexible and innovative. You need rules and governance, but this governance can't impede your ability to rapidly adapt and innovate.

Golkar: What security concerns pose the most threat to cloud computing and how can businesses mitigate those threats?

Kapoor: Outages, hackers, inadvertent data exposure and lack of visibility all pose threats to cloud computing. In order to mitigate these threats, you need some sort of security and control layer between your data and the open web. I often talk about “naked APIs” – many APIs start out as just an exposure of raw, naked features – and there is a big gap between a feature and an enterprise service.

You don’t want your cloud services to be out there naked without any protection or any visibility. You’re going to need a service that gives you a proof-point of who and how people are accessing your data, and where it’s going. You need something that sets SLAs and makes sure they are enforced. And you need to monitor and control traffic. Cloud security is a big topic but don’t forget about visibility, access control, and cloud governance and visibility. You need to see what’s happening, and you need to control it.

Golkar: What industries can we expect to see adopting cloud computing?

Kapoor: Currently, we’ve been seeing industries with massive infrastructures and data loads experiment more and more with cloud computing options. These enterprise verticals have huge monetary and organizational incentive to move to cloud. Streamlining and optimizing information for these industries represents efficiency gains and cost reductions totaling billions of dollars. For example, the United States government just opened its “cloud computing storefront” to allow government agencies to transition to cloud. You're also seeing this in the financial sector, with financial institutions using cloud technology to manage and open sensitive data. I expect to see more and more adoption in the healthcare industry also.

Golkar: What are the long-term effects cloud computing will have on enterprises and their business models?

Kapoor: There's a lot of hype in the industry about how cloud is the future, and a lot of speculation about what this future will look like. But the fact of the matter is that cloud is already here. The current adoption rates are creating a massive competitive force – companies who either haven't made an API or aren't looking into cloud solutions will be left behind as economic pressures and consumer demand lead businesses into the cloud and API economy. It’s here, now. And if you’re not doing it, you won’t be able to compete. In the long term, cloud computing will provide a continual mechanism through which companies can innovate and improve. As this process goes on, more and more companies will find themselves actually becoming providers of cloud services as they offer their own apps externally. This represents a change in the business model that I think we can expect to see continuing.

  • Cyrus GolkarCyrus Golkar
    Cyrus Golkar is an information technology executive with a unique combination of entrepreneurial, business and technical expertise, and more than 20 years of experience in enterprise software, database, analytics, web services and cloud computing.

    Previously, Cyrus led Sun Microsystems (now Oracle) $2 billion database, business intelligence and data warehousing business for 9 years, recommended the acquisition of and investment in database companies, and led the development of Sun's data warehouse appliance.
    He is also the co-founder of several companies, including 3Bubbles
    (acquired) with the creators of Jabber, the open standard for web-based instant messaging.

    At Siemens/Pyramid, Cyrus was recognized by the CEO for the creation of "Smart Warehouse" an industry leading data warehousing business that generated $200 million in annual revenue. He also held leadership and technical positions at Open Text and GE.

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