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"The full ROI of moving to a cloud environment is compromised if you need to also build an on premise environment for customers that either do not want to move to the cloud or cannot move the cloud due to security constraints. Be very careful in projecting savings in moving to the cloud and look at all the cost components including staff costs before advertising the ROI.'
'An important lesson for any organization that is moving to the cloud is to not underestimate the amount of change that will occur with the people, process, and technology. A savvy organization will incorporate a change management program early in the process of establishing cloud platforms to properly transition staff, customers, business processes, and traditional on premise technology to the cloud.'
-- Bill Kehoe, CIO, King County, Washington
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Global weather forecast specialist AccuWeather has been delivering its content from the cloud since 2012, when it adopted the Microsoft Windows Azure platform.
It's All About Scale at AccuWeather
"We don't have a gigantic staff," says Christopher Patti, vice president of Technology at AccuWeather. "In the past it took a serious amount of time to provision equipment. Now my development staff can go to the Web and click a few buttons and have a full environment deployed worldwide. The whole concept of the company has changed. We don't have this locked-in, capital expenditure artificial boundary around us anymore."
For AccuWeather, the drive to the cloud was all about scalability. AccuWeather used to serve most of its content from its main data center in Pennsylvania, and most of its forecast requests came from the U.S. But today nearly half of all requests are international in origin (it provides weather forecasts for nearly 3 million locations worldwide), and those requests are coming from multiple channels, including smartphones, websites and broadcast media.
"As more connected devices came on the market worldwide, we went from 2 million to more than 4 billion requests a day within five years," Patti says. "Scale became a challenge."
The company's website remains on-premises for the moment, though Patti notes that the company plans to move it to the cloud as well in the next year to ensure optimal performance, availability and disaster recovery.
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"Companies that are looking for fast growth and scalability have way passed the point of selling internally cloud as a concept. Fortunately cloud offers are more mature now and we are able to leverage its benefits combined with a high level of security and reliability." "Not everything can go to cloud yet, but there are many reliable services available with genuine cloud approach such as commercial flexibility, on-demand models and fast setup."
-- Leandro Balbinot, CIO, Heinz
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Overall, Patti says, AccuWeather's adoption of the cloud has allowed it to speed time-to-market and innovation, scale on demand, improve access to real-time weather data and cut its capital expenditure costs by 40 percent. But the journey has had its rocky points. For instance, Patti says some of his staff have been hard to win over.
"Ten percent to 20 percent of my staff are not embracing the cloud concept because they feel it's going to put them out of a job," he says. "I wish they would embrace the cloud more. You've got to align your staff with your strategic goals. All our new hires are being hired with that in mind. I don't need anyone to manage physical assets anymore."
Patti notes that AccuWeather now tries to do as many educational internal sessions as it can to show his IT staff what the company has done cloud-wise. In fact, Patti now considers cloud the default option for any project. His people need a solid justification for doing something on-premise.
"I challenge them to pick something they're doing now and figure out how to do it with the cloud," he says. "Look at things from a cloud-first perspective. The cloud should always be the default option because of what it buys you."
Underwriters Laboratories (UL) also has extensive tenure in the cloud. The global independent safety science company was the first to deploy a complete, global instance of Office 365 for its employees.
Office 365 Cures Paralysis by Notes and Domino
The company provides testing and certification services for 19,000 different products, materials, components and systems for more than 66,000 customers. But with more than 300 custom applications running on its IBM Lotus Notes and Domino messaging and collaboration infrastructure, the company found itself paralyzed.
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"Kennametal thrives on product innovation to support our customers' most demanding requirements. More than 40 percent of our revenue comes from new product introductions, which in turn drives innovation and productivity for our customers."
"Moving to the cloud has enabled a rate of change that was not possible with an on premise solution and has opened up an entirely new channel for rapidly delivering new business capabilities that we're able to deliver in months versus years."
"As a result, we constantly have the latest tools for our employees, which puts them on a faster innovation path, and provides better solutions and service to our customers."
-- Steven Hanna, vice president and CIO, Kennametal.
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"The best way to put it: We had become entangled," says Thomas Boxrud, director of Enterprise Infrastructure Services at UL. "We had more than 300 custom applications running in Domino. We were at the point where we could not even upgrade because we had customized it so much and newer versions would not support our global infrastructure."
Christian Anschuetz, senior vice president, Global CIO and head of the Enterprise Transformation Office at UL, set out to change that, beginning with the replacement of its aging telephony system with a voice over IP (VoIP) solution, upgraded computers for all employees, a complete restructuring of its Active Directory service and the adoption of Office 365 cloud-based communication and collaboration services.
"We've been in the cloud now on Office 365 since its inception and have been very, very satisfied," Anschuetz says. "Our ventures into cloud platforms have been very successful. They are different and they are difficult in some ways -- different than organizations might be used to from traditional on-prem installations."
For one thing, Anschuetz says, forget about customization.
"There's nothing more standard than a cloud-based product," he says. "You can configure, but customization you do at your peril."
And, like Patti, Anschuetz says that change management was a surprisingly important part of the transition, though at UL it was more about end users than the IT staff.
"Getting the uptake of this richer and deeper and much more immersive and personal way to communicate, we thought it would be more natural," he says. "In actuality, we had to spend a lot of time doing internal marketing."
Today, as the company prepares to adopt Microsoft Dynamics in the cloud, Anschuetz notes that his organization has learned to be much more deliberate in how it architects processes in accordance with what the selected technology can do.
"What we know now is that we really have to have a thorough organizational readiness," he adds. "If the organization's not ready, if it doesn't have the right culture, the right leadership, then we probably shouldn't implement it. One of the key things we're doing is making sure the organization is ready for it."
The other key learning Anschuetz has gained from UL's experience with the cloud is this: Organizations are often attracted to the cloud for projects because they perceive the demand as highly variable, and if that's the case it needs to be reflected in your contract with your cloud provider.
"When it comes down to the cloud, we need to have a really frank understanding of what the cloud is really like," he says. "Is the cloud cheaper No, the cloud is not cheaper. If you look at the TCO, it may be more expensive. Is it more open No. Cloud systems are generally more proprietary. Is it easier to integrate The answer is no. What it is, is it's faster to provision and it's perceived to be more variable in terms of the cost profile. Organizations often consider things variable when in fact they're fixed. When you're negotiating your cloud contract, if you think you need that variability, make sure that's very, very clear in your licensing agreement. Make sure the variability of your business is supported by your underpinning contract."