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How Does Cloud Computing Affect IT Delivery and Operational Risks?

kenhjr ‎05-21-2013 07:40 AM - edited ‎09-30-2015 06:56 AM



By James Bond, Chief Technologist, HP Enterprise Services, U.S. Public Sector


Adopting Cloud computing profoundly affects the methods, costs, and risks associated with delivering IT services to your end-consumers. The days of huge IT departments and budgets are gone, in both private and public sector, so unless your organization is in the business of providing IT, you are better off re-focussing resources on your core business and away from a large IT department. Cloud computing can deliver the technology you need, more effectively, and at a lower cost. With the transition to cloud, however, comes the CIO’s management challenge to be responsive to mission needs while managing the inherent risk.  


How can cloud computing coexist alongside the on-going value generated by the traditional IT approaches used for many mission-critical core systems? Well, incorporating cloud computing into an enterprise is not necessarily an all or nothing proposition. A “hybrid” IT environment, made up of a mix of traditional and cloud-based solutions can be implemented successfully and it requires decisions to be made based on cost, risk, and value.


As the sourcing broker of IT services to an organization, the CIO is responsible for placing enterprise systems and data into the most appropriate location or provider. For instance, while the promise of pay-per-use is significant savings, it could also quickly spiral out of control and turn into a significant risk. The IT Department provides value by bringing the tools, access and controls that are needed across technologies and from all sources.


Managing the risk profile of IT solutions based on business rules and cost considerations can be done through various methods, for example:


  • Place the workload with multiple providers so that your organization benefits from:
    • a more robust Continuity of Operations (COOP) strategy that offsets the potential outages of a single provider,
    • multiple options for similar services based on cost, service level agreements (SLA), and features available from multiple providers,
    • avoiding single supplier “lock-in”, while improving scalability and data portability within the enterprise.
  • Divide work between public and internal IT systems to improve the utilization and focus of your internal IT department personnel, budgets, and resources. Move lower risk business applications to a cloud delivery model and focus your IT investments on key business/mission activities.
  • Achieve significant IT cost savings (CapEx) by not having to upgrade or replace the physical platforms and software every X number of years. External cloud service providers (CSP) handle all systems maintenance, upgrades, and migrations throughout the IT life cycle. CIOs can generate significant savings by avoiding these life-cycle costs, internal labor efforts, and disruption to core business applications.
  • Reduce deployment time and cost for short-term IT projects, development environments, and bursting by using a public cloud service as opposed to traditional build-on-demand internal IT.
  • Make change to accreditation, monitoring, and operations to accept type accreditation of “automatically deployed” servers to specific providers at any time of the day, 365 days a year. The concept of performing manual security assessments of new systems before they are brought online is replaced by pre-approving virtual machines (VM), operating system, and application templates and platforms. Acceptance of hosted cloud, such as VM, means the acceptance and use of automation in the deployment of new servers/hosts/applications.


A hybrid approach to designing and deploying selective cloud services allows the CIO to better balance the support for IT consumers and manage operational risk within the organization. The CIO negotiates with suppliers and manages delivery performance through SLA and business rules. The costs of providing services can be tracked and reconciled more accurately, which in turn allows the CIO to better manage internal IT resources while off-loading lower risk IT activities to their chosen CSP. Couldn’t most organizations benefit from this approach?



Note: This blog topic will be explored further in our upcoming “Manage the Transition to Cloud Computing” white paper. The paper, developed by our team of Public Sector subject matter experts - James Bond, Chief Technologist; Michael Donovan, HP Distinguished Technologist; Judy Douglas, Government Client Industry Executive; Dan Gilbert, HP Strategist and Mateen Greenway, Fellow, CT UK&I PS - will address relevant challenges facing public sector customers.

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on ‎05-21-2013 08:19 AM
James, what you're writing is true and most companies should know already if the CIO follows the technology. My understanding is that, however, the cloud technology starts to shift from this technology-economics starting point to a more business focused one. Business’ needs were always the key point of the IT, as much as their need drove any investments. The usual IT project is a cumbersome work that starts from specification and goes down to the testing after a successful implementation. Not a process, a business unit is happy with because their needs require always some fast response, even from the IT. So the biggest benefit of a cloud is the speed, especially if there is already a service the business needs, promptly. I know that these two standpoints are not against one another, probably the two sides of the coin. But it seems to me, that this coin is not a fair one, it’s skewing into the business side…
on ‎07-16-2013 06:24 AM

You have said right that minds behind cloud computing are continuing to decrease the security risks that relate to their services. However, challenges will continue to emerge and get resolved until something extraordinary comes on the market that entirely eliminates the threats to security of data. At eh moment, nothing that extraordinary is going to happen because technology is taking its own course of evolution. I think; the ideal clouding service provider will be he who gives complete control of data security to users. 

on ‎07-22-2013 07:15 AM

There are many reasons why people will either choose to move to cloud computing or stay away from it, although it is mostly based on lack of information or the knowledge on how to implement a cloud solution.  We are a Sydney based company which offers social networking solutions for cloud infrastructure, as cloud solutions gain in popularity we believe that many people will be looking for additional solutions to implement in the cloud, making their business practices easier and faster, being able to socialize with colleagues and clients securely is highly important to a lot of people.

on ‎07-30-2013 09:46 AM
Cloud computing is too vague to be discussed. My original comment was about the services that are serviced from the cloud that means these are public IT services. Just like the TV providers, everyone has different channel choices and if you have two or more in your house, you can select the one, which is more suited your needs. I imagine the IT services the same way. If the business needs some IT service, even today can it find something with google, and before the IT department can think about it she can make a contract with a provider. This can be a real threat to a company whilst it is a big win too. If the provider goes out of business or has poor service model, or its security is not handled properly, then the company is in big trouble. With their IT department surely they would not have that much threat, but they would reach their goal definitely much slower.
on ‎12-24-2013 02:23 AM

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on ‎06-17-2015 11:17 PM

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