All Clouds are Not Created Equal: A Logical Approach to Cloud Adoption in Your Company

All Clouds are Not Created Equal:
A Logical Approach to Cloud Adoption in
Your Company

An Executive Brief
Sponsored by IBM

February 2012 www.frost.com

Stratecast | Frost & Sullivan

ALL CLOUDS ARE NOT CREATED EQUAL:
A LOGICAL APPROACH TO CLOUD ADOPTION
IN YOUR COMPANY

INTRODUCTION

In conference rooms worldwide, enterprise IT departments are evaluating entry into ‘the
cloud’. Armed with media reports and marketing materials, they are considering
questions like, “Is the cloud appropriate for critical workloads? Will the cloud really save
time and money? Does the cloud pose a security risk?”

There’s only one problem with such due diligence: there’s no such thing as ‘the cloud’.
Instead, there are multiple clouds, with different configurations, offered by different
providers and representing different degrees of benefit and risk.

As a result, enterprises should think of the cloud not in terms of a “yes/no” decision, but
as a “how, when, and which” decision. They need to understand how specific IT
challenges can be met by specific cloud-based options. They need to consider when and in
what order to migrate workloads and processes to a cloud environment. And they need
to carefully evaluate which provider offers the most robust and flexible cloud portfolio to
meet current and long-term needs.

In this white paper, we look at various cloud models, and assess their suitability to solve
IT challenges. We provide recommendations on what to look for in a cloud provider.
Finally, we take a look at IBM SmartCloud Services.

MAKING SENSE OF THE CLOUD

One thing is for sure: the cloud is here to stay. In our increasingly technology-dependent
world, the cloud represents a new model for creating and delivering IT resources and
services, a model that offers the elasticity to deal with unpredictable workloads, the scale
to handle exponential growth, and the shared costs to place computing resources within
reach of any business user. The cloud is transforming the way we communicate,
collaborate, and conduct business; and businesses that refuse to adopt the new model
will find themselves at a competitive disadvantage.

But what exactly are ‘clouds’? Stratecast defines cloud computing as a flexible and
scalable shared environment which uses virtualization technologies to create and
distribute computing resources to customers on an as-needed basis, via the public
Internet or private network.

2 February 2012 © 2012 Stratecast. All Rights Reserved.

All Clouds are Not Created Equal

Businesses can access an increasing variety of ‘cloud’ services via the network. Software
as a Service (SaaS) subscriptions enable users to access software applications over the
network, with little or no client-side installations. This means users can access their
favorite applications (e.g., LinkedIn, Twitter) from any Internet-accessible device, without
having to fuss with software versions or updates. More recently, Platform as a Service
(PaaS) offers have come to market, providing IT professionals and developers with
middleware and software for developing, delivering, integrating, and managing SaaS
applications. Infrastructure as a Service (IaaS) offers have perhaps the greatest
opportunity to transform corporate IT departments. IaaS provides users with network-
accessible storage and computing capacity, with bare metal servers usually augmented
with an operating system and hypervisor platform to allow users to virtualize their
applications. Virtualization—the dissociation of the logical and physical aspects of an
application—is at the core of cloud infrastructure services, enabling multiple virtual
applications, or virtual machines (VMs), to share server resources.

Enterprises may choose to place their workloads in any or all of three types of cloud
environments:

▪ Public cloud – A hosted environment in which server and network infrastructure
is shared among enterprise subscribers. Enterprises upload their applications to
the cloud provider’s data center as discrete VMs. In addition, enterprises can use
the elastic capabilities of the cloud for applications designed for the Web. In
public cloud configurations, physical servers are shared among tenants, so that
any given server may house applications from several different enterprises.
Access is generally via the public Internet or via application programming
interfaces (APIs).

▪ Private cloud – This term can be used to denote both hosted and premises-
based environments. An externally hosted private cloud is an environment in
which server hardware and some ancillary equipment (e.g., load balancers and
firewalls) is dedicated to a specific enterprise. Thus, the VMs on a given server all
belong to the same enterprise. Alternatively, an enterprise may build a private
cloud in its premises-based or self-managed data center by utilizing commercially
available hypervisors, platforms, and management software, and high-density
server hardware. In some cases, cloud vendors are offering optional managed
services to augment their cloud offers.

▪ Hybrid cloud – A hybrid cloud generally comprises multiple IT environments
(public and private). In a hybrid configuration, a single application may be
deployed across environments; for example, an enterprise may host a marketing
application in which the user-facing front end is hosted in a public cloud, while
the private account data accessed by the application is stored in a premises-based
private cloud.

© 2012 Stratecast. All Rights Reserved. February 2012 3


The cloud model is attractive to enterprises because it solves many common IT
challenges. Enterprises can turn to cloud solutions to:

▪ Minimize capital investment in hardware – In a recent Frost & Sullivan survey,
40 percent of enterprise decision-makers identified aging, inefficient hardware as
a top data center challenge; and 28 percent cited a reduction in capital budget.
With limited budget to replace old hardware and to add new capacity to support
growing data volumes and a flood of new applications, IT is increasingly looking
to the cloud. Because the cloud provider is responsible for purchasing and
installing infrastructure components, the enterprise avoids investment in
equipment and labor; instead paying a monthly subscription fee from the
operating budget.

▪ Maximize scalability – Many workloads are dynamic, with peak usage requiring
many times the processing power of downtimes. But traditional data centers do
not easily accommodate scaling. Enterprises have traditionally built their data
center infrastructure for peak usage, which means server capacity remains idle
for the majority of times. In contrast, cloud infrastructures support scaling of
applications. Capacity is allocated among VMs as needed, on demand.
Furthermore, with most cloud offers, users pay only for the capacity they actually
use.

▪ Reduce lead time for launching new applications – To remain competitive,
enterprises must be nimble, quickly responding to opportunities and changes in
the market. The cloud model supports fast deployment of workloads. Templates
and application programming interfaces enable IT to deploy a new application in
minutes, rather than days, whether in a test or production environment.
Furthermore, when a cloud development platform is integrated with
infrastructure services, enterprise developers can use templates and tools to
avoid repetitive tasks and quickly develop, test, tweak, and roll out new
applications.

▪ Improve quality and consistency – In addition to speeding application launches,
the cloud can also minimize errors and bugs related to development and
deployment. IT can test apps in a fully-scaled environment, enabling them to
accurately gauge performance and load. IT can also standardize configurations, as
needed, ensuring that instances deployed throughout the company adhere to
corporate guidelines for security and performance, for example.

▪ Minimize maintenance time – Many IT departments operate close to the 80-20
guideline for resource allocation: 80 percent of resources (time and budget) go
toward maintaining existing systems, and only 20 percent is invested in exploring
new initiatives. It’s no wonder 43 percent of IT decision-makers in Frost &
Sullivan’s survey cited “keeping up with new technology” as a top data center
challenge. With cloud services, infrastructure maintenance is offloaded to the



cloud service provider, freeing up in-house resources to devote to strategic
initiatives.

However, cloud services also raise concerns among enterprises—concerns that are
severe enough to keep many enterprises from engaging in the cloud in a meaningful way.
The chief concerns, along with ways to alleviate them, include:

▪ Security – When server resources are shared, there is increased opportunity for
data to become contaminated or lost. Furthermore, when applications are
accessed over the Internet, there is greater risk of access by unauthorized users.
While many enterprises address this concern by simply limiting their cloud
presence to non-proprietary workloads and data, a better option is for
enterprises to work with cloud providers to determine how to protect their
information assets. One way is to select a private cloud solution, accessed
through a private network, for sensitive workloads.

▪ Performance – In a shared environment, applications vie for infrastructure
resources (e.g., processors, load balancers, firewalls). If the provider does not
have sufficient infrastructure, or if the infrastructure isn’t configured to handle
subscribers’ dynamic loads, bottlenecks may occur, introducing latency or jitter
and affecting application performance. To alleviate this concern, enterprises may
choose applications that are less latency-sensitive. Or they may select a provider
that offers visibility into application performance as well as service level
assurances.

▪ Reliability – Equipment failure, loss of power, and network Denial of Service
attacks can strike any data center, whether cloud or enterprise-managed, and
cause outages. While most cloud service providers have service level agreements
that specify a minimum level of availability, the truth is that providers may not
offer the same level of business continuity planning or backup resources as the
enterprises do in their own centers. Enterprises should work with their
providers to ensure that workloads are protected appropriately, and they should
be prepared to pay for additional redundancy, and backup and recovery services
for the most critical workloads.

▪ Control – Underlying many of the fears is loss of control. Enterprise IT is
responsible for the overall security, performance and availability of applications
and data. By placing responsibility into the hands of a third party, they believe
they are ceding control. To overcome this concern, enterprises need to trust
their cloud provider partners. And the partners need to earn that trust through
transparency and information; that is, they must share processes and plans, and
offer visibility into performance data.

While these benefits and challenges represent broad characteristics of ‘the cloud’, their
applicability to any given cloud solution from an individual provider varies. Thus, the onus



is on the enterprise to not only select the type of cloud service and environment for
each workload, but to understand at a granular level the solutions available from each
provider. Furthermore, because the cloud represents the way IT services will be
delivered in the future, it is imperative to understand a provider’s solutions in that
context. Thus, the provider must not only offer solutions that are right for each
individual workload, but the solutions must also work together to provide maximum
value.

In the next section, we explore tips for selecting cloud solutions and cloud providers.

CHOOSING A CLOUD SOLUTION PROVIDER FOR YOUR BUSINESS

The cloud service market is crowded with providers and vendors. In researching cloud
offers, it’s important to understand how well the provider will meet your company’s
needs, today and in the future. Here are some elements to probe for:

1. Interoperability across environments: Enterprises do well to select the right
cloud environment (for example, public or private cloud) for each workload. But
that doesn’t mean the environment should operate in isolation. Needs may
change; workload sensitivity and volume may change; business continuity and
disaster recovery plans must be met. For these reasons, enterprises should look
for a provider that offers full interoperability across environments. Ideally,
interoperability should extend beyond the provider’s own limited private and
public cloud offers; it should also extend into the enterprise premises-based
private data center.

Recommendation: Understand how the cloud provider defines ‘interoperability’.
Ask if the service will enable you to create a single virtual data center with full
interoperability across all the environments that you currently or may in the
future rely on: on-premises, private and public cloud; and even hosted offers that
are managed by your Managed Service Provider (MSP), Value Added Reseller
(VAR), or Systems Integrator (SI). If the definition is too restrictive to be useful
for your needs, look elsewhere or limit your exposure.

2. Flexibility to Appropriately Support Different Workloads: The rich
variety of business applications comes with different needs for security and
performance. In determining the appropriate data center environment, it makes
little sense to over-engineer (and overpay) or to under-engineer (and expose
yourself to risk) for any given application. As a result, IT needs to build an
environment that supports the right configurations for each workload.

Recommendation: Choose a service provider that enables not only a range of
data center environments (on-premises and hosted, shared and dedicated), but
also a range of configurations for each. Look for security and availability



assurances for all applications, but opt to enable higher levels of both for your
most sensitive and critical workloads.

3. Built-in Security: Security is cited by enterprises as a top concern about the
cloud; yet, a surprising number of providers leave all or most security functions
to the enterprise. The impact of that decision on cloud adoption is evident in the
Frost & Sullivan survey. Not only do IT decision-makers consider cloud to be
riskier than their private data centers, but among those who are familiar with
cloud computing and have chosen not to adopt it, the perceived risk premium is
nearly 50 percent. It’s hard to make an argument for them to adopt cloud
services that they consider to be 50 percent riskier than traditional options.
They will naturally turn to cloud providers that have invested in elements that
protect user data and workloads from unauthorized access, inadvertent
contamination from other users, service disruptions, and loss or leakage of data.

Recommendation: Understand what the cloud provider offers and is willing to
stand behind when it comes to security. Look for security components that are
baked into the fabric of every offer, such as isolation of enterprise workloads,
and firewalls to protect against hacking. For more sensitive workloads, seek out
greater degrees of security and availability. Don’t rely on marketing claims; insist
on security certifications, and be sure any assurances are backed up with reports
and SLAs.

4. Meaningful SLAs: Cloud providers are starting to issue SLAs associated with
their services, although the industry has yet to gel on a standard definition. This
leaves it to the enterprise to think through what performance metrics are most
important, and what is appropriate compensation if they are missed.
Unfortunately, many enterprises neglect to do that, which means they can be left
without compensation for a business-impacting outage. Today, most IaaS SLAs
relate to availability of service—more specifically, to average uptime associated
with the provider’s cloud servers. But the trade press is full of reports of cloud
outages that are not covered by standard SLAs; for example, because the outage
impacted a peripheral component or service, or because the total duration was
lower than the annual average cited in the contract.

Recommendation: Understand what is important to your business and be sure
the SLAs support that. Think of SLAs as insurance to protect your business
operations, rather than a way to manage your provider in the handling of small
issues. If the provider’s standard SLAs don’t match your needs, ask for custom
SLAs. For example, an average annual uptime figure may be less important to you
than duration and repair time for any given outage.

5. Enterprise Support: Thanks to high levels of automation, the cloud is largely a
“do it yourself” model, with enterprises responsible for configuring, deploying,
and managing their own applications. As such, most vendors have adopted self-



service support tools, such as an online library and, perhaps, a customer forum.
Unfortunately, for many vendors, that’s where service options ends; they offer
little or no live access to experts.

Recommendation: Adoption of any new technology will require some degree of
expert technical assistance, whether to answer simple questions or to help with
migration projects. So, be sure your provider has the expertise to provide
guidance as you embark on your cloud journey. Ensure the provider and/or its
network of partners understands both the technical challenges of cloud adoption
and business process challenges. The provider should offer multiple channels to
reach out with technical questions; for example, via phone, email, or chat. In
addition, the provider and partners should offer professional services
engagements to assist with projects such as cloud strategy planning, migration,
and security assessments.

6. Support for Key Enterprise Applications: Few enterprise IT leaders have the
nerve to attempt to bring their critical systems into a cloud environment. Highly
customized, far reaching systems like SAP are not conducive to
compartmentalization into a VM; and the risks of failure are too high.
Furthermore, many providers of complex ERP and similar systems will not
unilaterally support cloud configurations, which means performance assurances
may be void. Yet, IT departments could certainly benefit by introducing cloud-
related efficiencies to their legacy work engines.

Recommendation: Ask cloud service providers if they support SAP and/or other
commercial business applications. Does the provider have expert technicians and/
or business consultants who are versed in the service? Will it help you assess and
migrate your system workloads? Will you be able to easily upgrade and integrate
system components after migration? Be sure to talk to the provider’s experts, as
well as other enterprises that have deployed the service.

THE CASE FOR IBM SMARTCLOUD ENTERPRISE AS YOUR IAAS

In selecting a provider that offers a breadth of cloud infrastructure solutions, enterprises
would do well to consider IBM SmartCloud Enterprise and the growing family of services
that are part of IBM SmartCloud.

IBM SmartCloud Enterprise is an on-demand IaaS offer that meets the needs of both
enterprise IT and development organizations for flexible, scalable hosted infrastructure.
The service is distinguished by its embedded security and isolation features, which are
configured into the hardware and systems of six IBM cloud centers worldwide.
Enterprises can subscribe to SmartCloud Enterprise capacity, as needed; with flexible
pricing options across virtual machines and layered software, including pay-as-you-go,
bring-your-own-license, and developer-use-only.



SmartCloud Enterprise offers an array of enterprise-grade features and functions,
including:

▪ Multiple configuration options, including nine virtual server configurations in a
choice of operation systems, to support different types of workloads.

▪ A robust catalog of preconfigured software images, from IBM and its partners. Or
enterprises can upload images of their own licensed software.

▪ Persistent storage option, which can be ordered and dynamically attached/
detached in blocks.

▪ Object storage system, for storing and sharing large files over the web.

▪ Access via public Internet or virtual private network.

▪ Standard and premium support options.

Furthermore, SmartCloud Enterprise addresses prevalent concerns about the cloud. For
example:

▪ Security – As with all IBM SmartCloud offers, SmartCloud Enterprise has
security built into the solution. Cloud infrastructure is protected via intrusion
detection software and vulnerability scanning. In addition, the six SmartCloud
delivery centers worldwide are built with high levels of physical security.

▪ Performance – IBM SmartCloud centers are monitored 24x7, to assure
infrastructure-related bottlenecks are caught and eliminated before they impact
your application performance. For highly critical applications, IBM experts are
available to help assess the right cloud configuration and environment.

▪ Reliability – IBM offers several standard and optional features to help
enterprises build resiliency into their cloud configurations. The ‘anti-collocation’
options allow enterprises to specify that certain VMs must reside in separate
physical nodes, to safeguard against failure. Virtual IP Addressing enables two or
more VM instances to serve the same ‘virtual’ IP address. Additional services,
including backup and recovery and monitoring, are available separately.

▪ Control – Authorized users can access and manage their clouds via the Web-
based customer portal. Hierarchical administrative tiers allow role-based
permissions, allowing the enterprise to control usage and spending.

For enterprises that are looking for a higher degree of expert assistance in deploying and
managing their cloud environments, IBM has announced SmartCloud Enterprise + , a
managed IaaS service that combines the high-touch of managed hosting services with the
efficiencies of a virtualized cloud infrastructure. SmartCloud Enterprise+ offers users a
broader range of options for underlying hardware, as well as a greater choice of
hypervisors.



WHY IBM?

With over 20 years of experience managing mission-critical applications for enterprises,
it’s not surprising that IBM launched the industry’s first set of enterprise-grade cloud
services. Today, its cloud services portfolio, IBM SmartCloud, is the broadest in the
industry. IBM continues to invest in its enterprise cloud vision, with tightly integrated
services that span infrastructure, platform, and software layers; and that support private,
public, and hybrid cloud environments.

IBM SmartCloud is a fully integrated portfolio of services that represents the entire
cloud service stack. As shown in Figure 1 below, IBM SmartCloud consists of three
“pillars” or service families:

Figure 1: IBM SmartCloud

Business Process as a Service
Software as a Service

Platform as a Service

Infrastructure as a Service

Design Deploy Consume

Foundation Services Solutions

Private & Hybrid Clouds Managed Cloud Services Cloud Business Solutions
Cloud Enablement Technologies Infrastructure and Platform as a Service Software and Business Process as a Service

Commitment to open standards and a broad ecosystem

Source: IBM

▪ SmartCloud Foundation comprises hardware and software that enterprises
can use to deploy on-premises private clouds, connect their private clouds with
hosted clouds in a hybrid configuration, or both.

▪ SmartCloud Services includes the SmartCloud Enterprise public (shared) cloud
offer—a secure, virtual machine-based Infrastructure service; as well as
SmartCloud Enterprise+—a hosted, managed private cloud service. In addition,
SmartCloud Application Services extend the infrastructure services with
integrated platform functionality, which includes tools for development,
deployment, integration, and management of applications. Of great value to



enterprise IT: SmartCloud Application Services offer a unique level of support for
specific commercial business applications, starting with SAP.

▪ SmartCloud Solutions includes SaaS-based services from IBM’s enterprise
software portfolio.

With its SmartCloud family of services, IBM differentiates itself from other cloud
providers in two important ways:

▪ Not only is IBM one of few companies that provides solutions for each part of
the cloud stack—infrastructure, platform, and software—but the company has
fully integrated its infrastructure and platform layers. This increases the value of
the cloud for enterprises, which can do more than simply deploy their
applications; they can also build and manage their applications in the cloud.

▪ Furthermore, IBM enables enterprises to build on-premises private clouds and
hybrid clouds that are interoperable with public and hosted private cloud offers.
Because the solution supports multiple environments, IT management is less
complex, enabling applications and workloads to be moved across cloud
environments and managed via a single console. Leveraging its reputation as a
technology leader serving the world’s largest enterprises, IBM is executing a
cloud strategy that positions the company as the cloud provider of choice for
enterprises. As enterprises increasingly seek to deploy cloud services, they can
turn to IBM and its partners for products, services, and solutions that address
their current concerns and meet their future needs.

In addition, IBM leverages its expertise by providing a broad range of managed and
professional services, both internally and through its extensive network of certified
partners. Services include strategic planning, assessment, migration, and management of
workloads in the cloud.



Stratecast
The Last Word

The cloud is not a single entity; nor do enterprises have identical needs. As a result,
each enterprise needs to develop its own pathway into and throughout the
cloud model. Adoption decisions should be made on a workload by workload basis,
with careful consideration to the inherent qualities of the workload (e.g., does it
contain sensitive data?); the resource restraints of the enterprise IT department (e.g.,
do we have trained employees to manage the migration?); and the cultural and
regulatory factors (e.g., what degree of risk is the enterprise willing to accept?).

But cloud adoption is about more than solving today’s short-term challenges. To
prepare their companies for the future, enterprises must seek a strong foundation to
deliver tomorrow’s IT services to users, quickly, securely, and with highest
availability and performance. That requires partnering with a cloud solution provider
with a broad range of integrated services and the expertise to guide the enterprise
along the journey.

IBM offers the breadth of solutions that enterprises need to maximize the benefit
from the cloud, regardless of their point of entry. The company’s robust cloud
infrastructure solution, SmartCloud Enterprise, delivers on the promise of scalability,
budget-friendliness, and rapid, on-demand deployment of workloads. Bolstered by
high availability, strong security, and ease of management, these features satisfy most
enterprise short-term needs for efficiency and nimbleness.

At the same time, IBM solutions are designed to support broader IT and business
requirements. The IBM SmartCloud portfolio offers the industry’s first view of a
robust, comprehensive virtual IT infrastructure; one in which workloads can be
deployed, integrated, and managed consistently, securely, and efficiently—regardless
of infrastructure environment. The solution portfolio not only offers enterprises a
solid reason to entrust their critical workloads to the cloud today, but it offers a
blueprint for strategic IT growth in the future.

As cloud models transform the way we develop, deliver, and consume IT services,
enterprises need to be prepared. The way to start is with the right cloud solution
provider.

Lynda Stadtmueller
Program Director – Cloud Computing
lstadtmueller@stratecast.com


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