Bypassing IT

A new survey conducted by 2nd Watch reveals that 61% of US-based companies are bypassing their own IT departments and moving independently into the cloud. This “shadow IT” trend points to the challenges IT departments face in delivering cloud services. What does this mean for the IT function and for companies looking to move core processes to the cloud? Read more about the survey and its implications here .

Netflix announced yesterday that they are actively pursuing use of artificial neural networks to leverage computing power in the cloud. Though Netflix acknowledges that “most of the algorithmic techniques used in the trendy Deep Learning approaches have been known and available for some time,” recent innovations have made real-world application possible. Ultimately, Netflix plans to use the large-scale neural network training system to improve product performance–improving user experience along the way.

Be sure to check in over the next few weeks–an animated video that highlights the most important findings of our research is on the way.

ZDNet Asia’s recent cloud priorities survey found that 2/3 of Asian businesses are using the cloud—a number that will go up in the coming year. Nearly a quarter and 19%, respectively, report plans to deploy IaaS and PaaS for the first time in 2014, while those who have already deployed these services will push for increased use.

While some industries like financial services and healthcare still hit regulatory roadblocks on the way to cloud adoption, even they are realizing benefits from cloud.  Businesses in Asia—and around the world—are overwhelmingly turning to cloud platforms to achieve competitive advantage.

  • Build vendor networks. Rather than taking a one-off approach, select a vendor as a core cloud provider.
  • Centralize controls to understand how systems and data are being used and to square vendors’ claims with TOS agreements.
  • Rely on KPIs. Common yardsticks include availability, workload compared to utilization, SLA response error rates, and revenue efficiencies.
  • Build a pool of IT talent that matches cloud requirements. Clouds present challenges different from traditional server-client environments.

Learn more in our paper, .

Where you stand on cloud security depends on where you sit. Views differ, sometimes sharply, according to the title of the respondent. For example, 52% of business-unit heads say that the biggest challenges they face from cloud computing is ensuring consistent security. CEOs see things the same way, but IT executives (39%) and executives in operations (30%) are less likely to list security as their top challenge.
Why the disconnect? IT and operations have a more granular focus on all aspects of cloud computing, which gives them a variety of things to worry about, from regulatory compliance (a major concern for operations) to avoiding silos in information and business process flows (more of an issue for IT than any other group). CEOs and business-unit heads, meanwhile, are most attuned to the high-level business risks of security problems. This pattern continues as one looks deeper into the survey data. For example, CEOs are more focused on the financial risks of cloud adoption (70% concerned or highly concerned) than are IT executives (58%); CEOs also worry more about brand and reputation risk (62% vs. 54%), while IT is somewhat more concerned with the nuts-and-bolts of regulatory compliance than chief executives. The lesson from these numbers is unsurprising, but bears repeating: Security in the cloud is a
multi-faceted problem that presents issues across the enterprise.

From our paper on protecting the cloud .

“We are able to use the cloud to manage infrastructure and human capital far more  effectively,” says Lincoln Wallen, Chief Technology Officer at DreamWorks Animation SKG. “A shared-service, distributed-cloud model gives us the flexibility to know who is doing what at any given moment and fully understand what infrastructure is and can be applied to any given problem at any given time.”

From our paper on cloud platform integration, .

Overall, 79% of survey respondents expect meaningful improvements in productivity
as a result of cloud initiatives. These gains typically center on innovation, speed,
and efficiency of processes. “What’s attractive about cloud services is that they can
be switched on, scaled up, scaled down, and reconfigured quickly, and with few IT
resources,” says John Rote, Vice President of Product and Experience at Bonobos,
a fast-growing apparel retailer. “It’s possible to go from State A to State B without
having to navigate an intermediate state.” Constructing streamlined and integrated
cloud networks goes a long way toward achieving this seamless environment.

From our paper on cloud platform integration, .

Our study revealed key differences in the way regions of the world are approaching cloud technologies. For a targeted look at how our APJ respondents compare to the rest of the world, .

Among the predictions about the future of the cloud offered at a recent technology event in San Francisco: The role of IT will become more business-focused as routine operations are off-loaded. Some very large companies will migrate all of their technology infrastructure to the cloud, sooner rather than later. And computing power will follow the same trend as electric power did a century ago, becoming a utility delivered from industrial-grade plants (an idea popularized by Nicholas Carr’s 2008 book, The Big Switch ).

Significant progress toward some version of this future already is in evidence, as shown by our study, Unlocking the Cloud. And companies are moving quickly to further their cloud presence–92% of our survey respondents expect to achieve moderate to significant improvements in speed and efficiency of processes via the cloud.

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As the chart shows, key business functions such as HR and finance will see rapid cloud adoption in the next three years, and companies expect to see significant gains in productivity, innovation, and efficiency as a result.

Our boldest prediction, made in the paper “Connecting the Cloud,” concerns the power of networked clouds. We say that cloud-derived advances to date are “only incremental gains compared with those promised by the merger of disparate clouds, whether operated by different groups within the same company or by external business partners.” Integration of cloud-based operations into business networks promises a variety of payoffs, including better performance across functional areas (e.g., supply chain, purchasing, payments); increased ability to partner with other firms and take advantage of new technology; and access to new markets and customers.

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Nobody who works in technology thinks this will be a picnic. Chuck Hollis, chief strategist for VMware, has posted at his blog a litany of cloud-related woes suffered by vendors and customers in the early days of the transition. But he also sees a way forward, to a market where services tailored to business needs become essential to enterprise users. Here, high-level capabilities, not price, will emerge as the key differentiator. Writes Hollis, “As an IT vendor, you’re known by the quality of your people; I can’t seeing [sic] it being all that different in an enterprise public cloud world.”