How Will Platforms Develop in 2019 – Especially Cloud?

IBA Group
Mark Hillary

One of the biggest changes in recent years in the IT market has been the use of platforms to deliver solutions. Software development may have moved on from the old waterfall style developments to agile delivery models, but many projects still required analysts to design solutions, developers to build them, and engineers to then deliver the product.

Consider just these three types of platform and the change becomes obvious:

1. Cloud; the ability to use a system remotely without local hardware or storage requirements and usually charged on a pay-as-you-use basis.

2. App Store; developing systems for Android or iOS and releasing them to the App Store allows software to be globally distributed instantly.

3. Social and mobile; the success of games such as Farmville or Mafia Wars has largely been because they were designed to be social – play is integrated into social networks such as Facebook so friends can actively engage with your game or compete with you.

These are all major changes to the way that software is designed and released. Not least, one of the biggest changes because of these platform adjustments is that business line heads – rather than the CIO – will make decisions on new IT systems. If the IT tools can be delivered without affecting the infrastructure of the client company then this is much more likely.

In particular, the cloud is changing how enterprise systems are delivered. Business users can pay for systems on a subscription basis without the need to plan for infrastructure and this is radically transforming how many companies see their use of IT and supportive software systems, such as ERP or CRM.

But even the cloud is undergoing rapid change. Many developers are now suggesting that there are some key trends to look for in the cloud market in 2019, such as:

1. Multicloud; AWS, Google, and Microsoft are the cloud giants and all have their strengths, but many companies are now exploring how to reduce their reliance on a single cloud supplier – for security, resilience, and to gain advantages from the strengths of each one.

2. Migration; it will be more common to migrate across different clouds to take advantage of deals or strengths from specific suppliers. New tools will make this much easier.

3. Governance; many companies still have fairly weak rules governing their cloud use and this will get stronger in 2019.

These are interesting points and worth noting. It has never been a good strategy to get locked into a single IT supplier and now we are seeing the same caution with cloud suppliers. 2019 will not only be a year of opportunity for various platforms, it will be a year where we start auditing how these platforms are being used.

Using The Cloud To Achieve Digital Transformation

IBA Group
Mark Hillary

Cloud computing has transformed how the enterprise uses both storage and applications. Local storage is no longer a requirement with remote server farms immediately managing any requirements and applications using cloud resources to cope with heavy loads – such as online retailers on particularly busy shopping days. All these benefits of the cloud have become normalised, but could we be achieving more with cloud-based services?

A recent feature in ZDNet suggests that we can – digital transformation. Most enterprises view digital transformation through the lens of a change in business model, for example a retailer with a focus on in-store sales shifting their attention to apps. However, the ZDNet research shows that enterprises with a requirement to quickly change business model or offer an improved digital service could be more effectively exploring cloud-based services.

The research group IDC claims that spending on digital transformation in 2017 topped $1.3 trillion, so this is a market where a lot of enterprises are spending, but are they getting the best value and results from that investment?

The problem in many cases is that the technology makes the problem look simple. The cloud, Big Data, the Internet of Things (IoT) – on the surface all these technologies are easy to understand. Executives can sit in the boardroom and proclaim that we need a business strategy that builds on the IoT, yet it is one thing to declare that you want to use a certain type of technology and another to figure out how to make that an integral part of your business in a way that delights your customers.

This is where ZDNet believes that a focus on the cloud can pay dividends. Too many enterprises do not have an efficient or well-structured IT department. There are disparate apps spread across different storage facilities and no easy way to share and analyse data across all the business applications being used. Rather than focusing on technology-led solutions, such as what can we do with AI or the IoT, it makes more sense to fix this central core of the organisation by using cloud-based services. Fix the platform and your applications and data use will naturally transform.

Secure cloud access is a proven technology and it is simple to deploy if you hire a good partner with cloud expertise. The initial focus can be on storage, but you can build out from there to centrally manage business applications and data.

This approach can drive digital transformation in your business, not because it is a radical change to manage storage or apps in this way, but because once you organise your systems around this central core, with strong business application support and the ability to share data across systems, you will be able to quickly design new solutions that could only ever work in this environment.

Sometimes it is better to build the platform and let the solutions arrive through innovation, rather than trying to build the solution on day one. Once you have a platform in place that allows data sharing, then the ideas will flow and your teams will automatically start exploring digital transformation options that are driven by business needs – not just technology.

IBA Group has been exploiting the capabilities of cloud computing, as well as other CAMSS technologies (cloud, analytics, enterprise mobility, social media, and security) to provide end–to–end business transformation services to our customers. In 2015, IBA Group opened its data center that offers various types of cloud services, including IaaS (Infrastructure as a Service), PaaS (Platform as a Service), and SaaS (Software as a Service).

Can We Really Rely 100% On The Cloud?

IBA Group
Mark Hillary

Companies across the world will recall February 28th 2017 as a bad day. It was a day when their patience was tested beyond anything most executives can remember in years. It was the day that the Amazon Cloud went down.

The Amazon Web Services (AWS) Simple Storage Service (S3) service now accounts for an enormous amount of Internet traffic. There are many major players in Cloud services, such as Microsoft, Google, and IBM, but AWS is the biggest. In fact, AWS is so big that their cloud revenue is about twice the total of those three other companies.

Forrester Research predicts that the cloud marketplace will be worth $236bn by 2020 – that’s up from around $95bn in 2016. So it is clear that this is an important market. It’s growing fast and it has changed the nature of IT services and IT outsourcing. Companies are now keen to buy end to end services that can be delivered over the cloud, rather than requiring infrastructure and software on site.

However, the AWS service failure in February shows that some companies have become complacent about the cloud. It was a simple human error by an engineer at AWS that took the service down for over 4 hours and affected millions of people. Why were so many companies taken by surprise and why did nobody have a backup plan?

This feature in Database magazine asks all these questions and suggests a few pointers for executives who want to mitigate against a similar disaster in future.

In general, cloud services are more reliable than setting up infrastructure inside your own office. Companies like Amazon invest enormous amounts to ensure that network and power outages are avoided. However, as we have seen, problems can happen and if your service needs to be available to customers 100% of the time, how can you offer your own guarantee when you can never be 100% sure that your own infrastructure providers will deliver?

In my opinion, the three best tips from the Database feature are:

1. Monitor services yourself – don’t just rely on your supplier. You might notice service issues before the cloud supplier ever tells you something is wrong.
2. Have an alternative provider ready – it’s expensive to duplicate, but if you really cannot afford any outage then mirroring may be required.
3. Communicate – make sure that you tell customers you have a problem so they can come back later or otherwise delay their interaction with you. By saying nothing, customers will expect a normal level of service.

IT services has been transformed by cloud based services and because it generally improves the reliability of services executives have often been blinded into believing these services can always be relied on. Mostly they can, but it’s worth remembering that even the biggest and best planned networks can fail. What would that mean for your business?

Enterprise IT Is Changing Fast

IBA Group
Mark Hillary

I saw an interesting Tech Target blog on the storage requirements associated with Big Data projects recently. It’s interesting to see just how many technology concepts are now either blurring together or becoming interdependent.

Consider this as an example. A shipping company installs tracking devices on every vehicle and container they use – it might be tens of thousands of individual items that can now be tracked and monitored and more effectively moved into position. Clearly that increased efficiency is great for the company, but what does it mean in terms of additional IT infrastructure?

First there is a need for an IoT strategy – the Internet of Things – where all these individual items can be tagged and monitored in some way. Either they can independently broadcast their location or they can be monitored using devices that pass in close proximity to them.

So the sheer amount of information that is being captured requires a Big Data strategy because instead of just having an inventory of items, now you need to model the items and their location in real-time. Your database has to become a reflection of the business.

Then a data analysis strategy is required because you need to build models that can maximise the efficiency of the data model and improve on what humans can do manually. As the machines learn the optimum processes, much of the system will be able to run automatically.

But underpinning all of this will be a storage strategy because the amount of data that is created, stored, and manipulated will be huge compared to earlier inventory-based systems. In some cases the data capture will appear to be extraneous – capturing the movement around a port of a single container might not by itself add a lot of value to your business, but when aggregated with the location and movement of every container and analysed, efficiencies can be created.

And this leads back to the use of a cloud strategy to ensure that all these systems always have the storage and computing power available whenever needed.

It’s becoming hard to consider any of these strategies as distinct from each other because the way that IT projects work today has moved far from the world of PC-based applications. Enterprise systems are getting bigger and better, but they need more consideration and strategic planning to succeed.

CEE Looks Strong For IT Outsourcing But The Market Is Changing

IBA Group
Mark Hillary

Earlier this year the management consulting firm AT Kearney released their latest IT Global Services Location Index. This research shows where they believe are the best locations for IT outsourcing globally.

The first thing that is interesting about the report is that a quarter of the top 20 countries are all located in Central or Eastern Europe (CEE). It’s clear that locations such as India or China will offer lower cost IT services, but based on a wider variety of factors the CEE region performs extremely well.

The CEE countries featured in the AT Kearney top 20 are Poland, Bulgaria, Romania, Latvia, and Russia. All these countries, except Latvia, improved their position in the top 20 year on year so there is not just a large proportion of CEE countries in the top 20, there is a trend towards this region becoming more attractive too.

But there is also a big shift taking place in IT outsourcing. The AT Kearney research also describes how Business Processing As A Service (BPaaS) is poised to reshape how outsourcing works. Outsourcing is not just about a client commissioning IT work from a supplier in another country – the entire process of buying IT systems is changing.

This is an important point and echoes what we have seen in the consumer market. Think about how you use software on your own computer or phone. Either there is an easy to install app available from the app store or you can use a service within a browser. There is no installation or configuration required to use your own personal technology systems and enterprises are mirroring this behaviour.

The cloud was originally popular with companies that wanted flexible access to computing power or storage, but it has matured into a strategy that allows systems to be centrally installed and configured and accessed remotely. The client can then only pay for the time they are using the system, blending IT systems with BPaaS.

The real winners in IT outsourcing in future will not necessarily be the companies in the lowest cost location or with the most technically gifted employees, it will be the companies that can plan for cloud-based services with pricing plans that make sense for companies that do not want to pay up front for technology services.

Business Intelligence is Being Led by Data Intelligence

IBA Group
Mark Hillary

The analyst firm Gartner recently published some fascinating data trends in Forbes magazine. They summarised how important Big Data is becoming for business intelligence in three clear trends:

1. By 2020, information will be used to reinvent, digitalize or eliminate 80% of business processes and products from a decade earlier.

2. By 2017, more than 30% of enterprise access to broadly based big data will be via intermediary data broker services, serving context to business decisions.

3. By 2017, more than 20% of customer-facing analytic deployments will provide product tracking information leveraging the IoT.

These trends are exciting because what they point to is how communication is changing between individuals and how this is now affecting the way that companies do business.

Mobile, social, cloud, and shared information are all forces that have really only grown in importance over the past 5-6 years. Many company leaders have not realised how all these factors will change the way that companies do business and how decisions from new products to choosing a partner company will all be data-led.

The Gartner predictions are point at corporate behaviours just 18 months in the future. Have you explored how your own organisation is using data today and if not then can you be sure that your competitors will not be making better business decisions a year from now?

Outsourcing Trends Becoming Important in 2015

IBA Group
Mark Hillary

I was recently asked about the classic price vs service argument by a consultant who advises on IT outsourcing. I replied that I am surprised there is still a debate over this. You can compare IT supplier based on the quality of what they do and then compare equally competent suppliers on price, but price is not a primary variable that should be used to compare companies.

After all, if the service delivered does not work then how much have you saved? The price debate reminds me of where IT outsourcing was a decade ago – it was surprising to be asked about this in 2015 when most organisations have a far more mature approach to finding expert partners.

I looked at CIO magazine to see what they considered the key trends in IT outsourcing would be this year. They published a good summary at the beginning of the year and never once mentioned that price would be an important comparison point.

Several of the trends they identified are very important though and I don’t feel that they are being given enough focus in the business and technology media:

1. A focus on outcomes: outcome based pricing has been around for years, but is often focused on BPO outsourcing where specific business processes can be priced. A focus on the outcome rather than process of delivering IT will be how many projects are charged in future.

2. The business ordering direct. The CIO used to manage all information systems, but now the business units are doing far more ordering direct because many solutions can be delivered using apps or the cloud, therefore not impacting on the infrastructure managed by the CIO. This means that suppliers need to develop new relationships and change their sales strategy.

3. Analytics taking over. In areas such as CRM and customer service technology systems data is all that matters now. This approach to data-led decision-making is affecting many business functions including the more creative ones such as sales and marketing.

The IT outsourcing trends are changing and developing as the IT services space develops, but sometimes it seems that the advisors cannot escape some of the old debates.

The future for IT – apps in the cloud?

IBA Group
Mark Hillary

Technology is continuously evolving at such a rapid rate – it is impossible to predict with any certainty how it will impact on our lives in coming years. When people make predictions about how technology will evolve, try this exercise. Look back ten years and think of all the technologies you take for granted today: social networks, smart phones, mobile Internet, tablet computing. None of them existed even a decade ago – or were so nascent an elite few were the only users.

Think back a decade more and you will find yourself at the birth of the web. Adverts for major consumer products did not even feature URLs until the late 1990s. Now you see how difficult it is to predict what technologies will be common by 2015.

There will always be winners and losers in the search for new ways to use technology to achieve business success. The downfall of companies such as Nokia, Kodak, and Blackberry illustrate the consequences of not understanding how society is changing and using new technologies.

But one development that is likely to evolve further is technology outsourcing. As the world becomes more complex, it is even more unlikely that companies will retain the right kind of expertise internally. IT services will be outsourced more often because only the IT companies understand the complex technological solutions – rather than some of the drivers we saw a decade ago, such as labour arbitrage.

The globalization of IT is itself becoming more complex anyway. There are still IT service companies all over the world offering their services, but now they don’t always need to directly contract with a customer to provide a specific service. The cloud-based model allows service providers to offer a specific service – storage or computing power – that can be turned on and off as desired. The app store model many people use on their phone can also be used in the enterprise to create an environment where end users on the business front-end (not the IT department) can choose and install technology solutions themselves.

Change is taking place fast in the IT services market and nobody can predict how it will look in ten years, but one thing is for certain, IT experts need to offer a variety of delivery methods because enterprise IT is borrowing many of the ideas that consumers are already familiar with.

European IT Excellence Awards and IT Developments

IBA Group
Irina Kiptikova

Last Wednesday, IBA Group was awarded for implementing the best vertical solution of the year. It happened at a gala reception organized by IT Europa to recognize the winners of the European IT & Software Excellence 2015 Awards.
Gyles Daubeney Brandreth, an English writer, broadcaster, and actor announced the results to the audience of more than 350 contestants and their colleagues, friends and families. Winners were selected from 83 finalists that represented 32 European countries. IBA was honored to be one of the winners.

We nominated one project in two categories. Those were Vertical Solution of the Year, and Public Sector and Utilities Solution of the Year. In both categories, IBA Group competed with six other finalists for an award. The Vertical Solution of the Year category turned out to be award-winning for IBA. Congratulations to the winning IBA team!

IBA Award-Winning Team
IBA Award-Winning Team

This year’s award was specific for IBA Group because the winning solution comprises not only software but both software and hardware. The solution was an Automated Fare Collection (AFC) system. All of us who are passengers of the Minsk public transport tested the solution. Visitors of the 2014 IIHF World Ice Hockey Championship held in Minsk last year were among those who tried the AFC system in practice.

The project posed many challenges for the IBA team as they had to find answers to quite a few questions. Minsk has different types of public transport, each with specific features. How should we handle the specifics? Should the AFC be fully automated or use fare collectors? Should it use the internet as a communication channel? Which security technology is most suitable? Passengers prefer to use single paper tickets instead of transport cards. Will they agree to change their habits?

However, all these issues were solved and the system was launched. Today it is easy and comfortable to use. Passengers enjoy tapping their cards on validators and ticket inspectors produce proudly their automatic terminals to check the fares. The city authorities are able to analyze the operation of the public transport. This solution is just one example of how IT can improve people’s life.

The European Software & Solutions Summit that IT Europa conducted right before the Awards focused on the changes that the IT industry should be able to accommodate.

ISV Convention
ISV Convention

Presenters from Gartner, Oracle, HP, and other market leaders spoke of the new buyers and how their behavior has changed in the past 20 years. John Chapman of IT Europa said that we live in a new world. It is an interconnected world, where equipment and customers become connected. Gartner predicted that 75B products will be connected by 2020.

Oracle went on to say that Everything as a Service (XaaS) is becoming the preferred consumption model and every company is becoming a software company. Even cloud computing is no longer the same. It is evolving towards a fully integrated digital platform, argued Interoute.

Those businesses that adopt new technologies quicker than others are more likely to have experienced higher growth, concluded Verizon and IBA Group is looking to work with such customers.

IBA Group and IT Europa
IBA Group and IT Europa

For more information about the Awards, visit our website.

Predictions for IT services in 2015

IBA Group
Mark Hillary

The industry analyst Gartner recently published their predictions for technology in 2015. It’s an eclectic list that includes such announcements as 90% of consumer product companies using 3D printing for personalised products and digital disruptions being created by algorithms.

Of course every analyst and pundit is making their predictions now and so if I am going to add to this end of year commentary then I would suggest the following for IT services.

I can see four broad areas where technology products and services will boom in the next year or two:

    Health; particularly remote access to doctors, and wearable monitoring technologies. Health care technology is advancing so rapidly that we will see average life expectancy rates rapidly increase in the next decade.

    War; the world is becoming more unstable and cyber crime (such as the recent Sony hacking) is becoming an issue of national security. War will increasingly rely on technology as much as soldiers and missiles.

    Privacy; since the Edward Snowden revelations, people have become more concerned about their own privacy and the use of their personal data by corporations and government. This will create issues for industries such as advertising and yet create new opportunities for those who can help to preserve anonymity or confidentiality.

    Government; consumers have a greater expectation on their governments, both as democratic legislators and as providers of public services. Both will be dramatically changed through the use of technology with services improving and greater access to information.

    The traditional market for IT services has already changed from what we saw in the past decade. I visited IBA recently and learned how some of their projects are more valuable after deployment because they can then capture and utilise user or customer data – the real value is in the data not the fee for building the system.

    Based on what we have seen recently I believe there will be three major factors that continue to exert major pressure for change on how IT services are delivered:

    Contract flexibility; the old days of very tight SLAs and KPIs have to end because the world moves just too fast for service partners to be relying on measures that might have been designed a couple of years earlier. This is particularly important in industries that are changing month by month – customer service technology for example. IT service companies have talked for years about being ‘partners’ – now they need to truly design contracts that reflect this partnership model because tight contracts are too restrictive for the modern world.

    The app store model will continue to develop in the enterprise. Consumers are used to using apps and IT service companies need to consider how services can be bundled into the same kind of structure for the enterprise.

    The cloud will continue to dominate areas such as storage, but with complex services such as ERP and CRM all available via cloud based tools, is there anything that cannot be delivered this way? We will see every possible option explored soon.

    I think these are the three main drivers within the IT service space at present. Earlier ideas about IT outsourcing being cost-driven and with many concerns about the development location feel dated now. Nobody cares that Skype was developed in Estonia, Angry Birds was developed in Finland, Tweetdeck was developed in London, and Waze was developed in Israel.

    More broadly, as Gartner suggests, we will feel the impact of technology far more on our daily lives whether we are involved in the technology industry or not. Think of many normal activities; choosing a political leader, finding the best price for a new car, finding a new partner, studying for a new degree, reading the news, almost every activity we undertake now engages us in technology. Almost everyone is a technology user and this penetration into every part of society means that for those of us who do work with technology, there is a bright future – every other industry depends completely on technology today.

    Have a great holiday season and enjoy the start of 2015. There will be more comment on the blog in the New Year!

Prosperous Future of Cloud Computing

Zhanna Huziuk
IBA Group

One of the latest trends in the IT industry, cloud computing is rapidly growing and has good prospects for the future. It represents a new kind of service that provides on-demand scalability, cost reduction, and a possibility to utilize IT resources efficiently.

Although cloud computing is currently on the outset, it has already proven to be a revolutionary turn in the IT industry. Moreover, cloud computing represents not only fundamental changes in IT, but also change in the business environment in general. The main underlying reason for business change is a wide range of benefits cloud provides for all types of enterprises, including SME and large-scale organization in terms of lower IT spending and wider business opportunities. All this makes cloud computing a game changer in the industry.

The European Commission may serve as an indicator of the pace of cloud adoption. It has already developed the EU Cloud Strategy to unleash the potential of cloud computing in Europe. The European Commission believes that cloud computing can increase productivity and create new businesses, services, and jobs.

What makes cloud computing so promising? It enables companies to reap a lot of benefits from highly valuable IT assets, including infrastructure resources, middleware, software, and computing resources without actually buying these assets but consuming them as a service.

For example, if a customer deploys software in a traditional way, it buys a license to acquire the software. With Software as a Service, customers do not need to own the license. They just pay a subscription fee instead. In other words, cloud computing is characterized by lower cost of entry and quicker ROI. As a result, organizations reduce IT-related costs and make IT assets more predictable.

Analytical agencies are thoroughly investigating the trend of cloud computing and related issues. IDC summarized that 81% of enterprises reported lower IT costs with cost reduction from 10 to 20% and 12% enterprises reported savings of 30% or more.

The significant savings encourage businesses to think about migration to a cloud service model. Traditional IT is not able to provide such cost savings due to higher entry costs and subsequent high expenditures on support, management, and maintenance activities. The scale of cost reduction in percentage experienced by businesses that adopted a cloud model is presented in the figure below.

Cloud cost reduction

To be a strong player in the market of cloud services, IBA Group is working to deepen its knowledge, master new skills, and gain wider experience.

IBA Group specialists are skilled in virtualization products and technologies, including IT infrastructure server virtualization platform (installation, configuration, management) of VMWare vSphere, systems of Windows Server HyperV and System Center, VMware EXS/EXSi, and KVM hypervisors. In addition, IBA experts are certified in ITIL v3 framework, which is applicable to cloud services.
IBA Group developed a proprietary solution called IBA Cloud Solution. IBA Cloud Solution provides a reliable network, computing, and disk architecture with backup and related software. IBA Cloud Solution offers migration from a current physical infrastructure to a virtual one in an easy step-by-step way. The solution is based on a reliable IBM Cloud&Smarter Infrastructure and uses outstandingly reliable IBM BladeCenter hardware. Virtualization is based on the leading virtualization platform VMWare vSphere.

Big Data and Cloud in decision-making

IBA Group
Aleš Hojka, CEO of IBA CZ
Vitězslav Košina, Business Consultant at IBA CZ

It is a reality today that organizations have to deal with a multitude of unstructured documents and other data. These data have true value, if they are properly and timely processed and extracted, and also are supplied with really useful links.

Almost any business has in some way implemented a data management system (DMS), a content management system (CMS) or a business intelligence (BI) solution. Unfortunately, a new system often provides a very low added value, especially when a large amount of data is involved. Getting reasonable output from unstructured data is problematic. Why is it so?

DMS, CMS, and BI systems can be really effective, if they meet two essential requirements. The first is a sufficiently flexible environment and quick access to information complemented by strong information security. A really flexible environment shoul be able to respond to resource and computing requests in a very short, practically in real time. This can be easily achieved by using a cloud-based solution. As these requests are dynamic and cannot be easily predicted at the time when the system is designed, cloud can be very instrumental. In addition, keeping resources for a «rainy day» is not an effective allocation of resources.

Therefore, cloud is a prerequisite for dealing with big data, but it is not the only one. In some cases, data and documents are not available anytime and anywhere without limitations, though we have an environment designed for large amounts of data. This is true.

It should be noted that effective decision-making involves an increasingly growing amount of information. As the information should be available on mobile phones and tablets, an information management system cannot transfer huge amounts of data and should have short response time. If we meet these two basic requirements, then we are poised for truly efficient extraction and processing of large amounts of data, which can be further aggregated and analyzed to make a grounded decision, deal, and etc.

For many companies, using Software as a Service (SaaS0 is a problem, because they have to do with sensitive commercial information or client data. From the perspective of a cloud-based solution, a dedicated cloud is needed as apposed to shared capacities.

Many organizations outsource only the infrastructure, while we recommend to outsource the entire solution. With a cloud solution, the issue of security is solved to the extent that is normal for corporate clients. In this case, only the needed capacity is commissioned and there is no need to reserve resources for the team that takes care of the infrastructure and applications. The organization can thus focus on business and management objectives, as well as provide added value to the clients.

With mobile devices, security is a very thorny issue because attacks on their security are more likely than on the computers that are located in the company’s premises, where they are protected physically. The good news is that these devices are so powerful that allow for implementing the strongest encryption and other elements of modern security.

Taking into account the links between documents and their associated metadata, as well as other data sources, cloud computing is the best solution one can choose. It is however possible, if needed, to move from SaaS to the model, in which the solution is managed by the customer and yet not loses the flexibility that cloud offers us in terms of resources. Using cloud is much cheaper than building one‘s own infrastructure. Moreover, it enables organizations to concentrate on their requirements and business needs instead of specific software or infrastructure.

Reshoring

IBA Group
Mark Hillary

The calls for companies to explore reshoring keep getting louder, led largely by a new sense of nationalism in Europe that was on show during the recent European elections. Many voters are rejecting internationalism in favour of wanting to see more business done close to home.
There has also been a change in the cost of doing business in Europe. In fact, the FT reports that the UK is now the cheapest manufacturing location in all of Western Europe.

But in all the reports about reshoring becoming something of a trend, the focus is always on manufacturing, not the IT or IT service market. Intellectual services appear to be purchased from the best possible location and the talk of reshoring this year has not changed this.
The way IT services are purchased is certainly changing. The concept of an app store being taken from the consumer market and applied to enterprise systems is becoming a reality and cloud-based computing power on demand is becoming normal.

These differences in the way that IT projects are planned and delivered will ensure that customers continue buying from the best global location for their own needs. With most technology projects today the emphasis is on the required skills – if you can’t find them nearby then it’s only natural to look overseas and hi-tech services operate on a global platform.

So it is true that Panasonic is thinking about moving manufacturing back to Japan, and Otis moved their elevator production from Mexico back to the USA, but in IT development it looks like the future will remain global – bits and bytes can be delivered online unlike cars, DVD players, or elevators.

This is Cloud Computing

IBA Group

Mark Kobayashi-Hillary

Do you use Facebook to keep in touch with friends and family, or YouTube to upload your personal videos and to watch movie trailers and music videos? Are you using Flickr or Picasa to store your personal photo collection – after all, when was the last time you took photographs using film that needed to be developed?

This is cloud computing.

Forget the hyperbole you read in the media about the future of computing. For most of us, it’s already here today. We are already using the cloud. Just it’s mostly personal, rather than business related. Our personal use of technology systems and the infrastructure used to deliver those services is far more advanced than that used in almost any organisation.

So how do we move from a situation where our personal IT footprint can almost entirely exist in the cloud – using tools such as Google Mail, Google Docs, and photo, video, and document sharing sites – to a point where this is accepted business practice?

It’s a tall order. IT leaders have a different focus to personal end users, particularly when it comes to availability and security. These are particularly important factors when the IT service is purchased from a supplier and will translate into key performance indicators applied to a service level agreement. The small print of the publicly available services does include information about service levels, but it will just excuse the provider from any responsibility to give you a reliable service.

If Google Mail was never available when you wanted to use it then it would be abandoned and never used, but it’s reliable enough for most people. However, a regular user doesn’t have much control. I can only stamp my feet in anger if I need to send an urgent email and Google has decided to take the service down for an hour for maintenance. But Google does offer a paid-for version, with SLAs in place for availability.

The cloud is confused as it refers to many areas of IT, in particular, infrastructure as a service, software as a service, and utility computing. Can the cloud model offer a future scenario for IT leaders where capital expenditure is almost zero because the back-end, and front-end of almost all business applications can be purchased and paid for only when needed?

And what does all this mean for the clients of IT services, or the IT supplier community itself? The world is about to change in a number of ways.

First, the business users can very easily benchmark the cost of the systems they use. If the CIO is asking the business users to pay $300 a month for CRM, yet they know they can use Salesforce.com for less than a third, then why would they use the internal systems?

Second, the systems integrators who rely on customising and installing major systems may need to think of what customisation can be performed in future. It’s very difficult to change cloud-based systems, and if office services like email, CRM, and word processing all move into the cloud then there is no longer a need to install, upgrade, and maintain those systems.

There is a big change ahead for the people using corporate IT, and the companies who maintain those systems.