Cloud Business Guide for
Business Leaders
March 2016
Introduction
As more businesses begin to use cloud computing as part of their business strategy, it is clear
that business leaders are recognising the range of opportunities cloud services can deliver to
their organisation.
Cloud is no longer a new technology but despite the increasing understanding and uptake of
cloud, the benefits and opportunities of cloud to some remain elusive. This is often the case
when the focus of cloud implementation is on technical considerations rather than how it can
be used throughout an organisation to overcome business challenges.
What is cloud computing?
Cloud computing is an approach to computing which enables organisations, of any size or
sector, to access on-demand computing power and resources as and when required. Computing
resources such as software applications, development platforms and Information Technology
(IT) infrastructures are all delivered as a service; charged as consumed.
Cloud represents a shift from traditional computing that will enable businesses to tap into
state of the art efficient data and IT infrastructures without having to make up-front capital
investments, or to develop the sophisticated skills necessary to manage and maintain them.
Cloud computing is sometimes described as a utility- like service and realised on pooling
resources across multiple organisations or other groups of users in order to achieve economies
of scale.
Aim and scope of the guide
This guide has been designed to help business leaders consider how a move to cloud
computing could help to address business needs and whether cloud is right for their business.
It aims to provide support, advice and information on the main considerations for those who
are deciding whether to transition to the cloud. This guide also explores in more detail the role
and benefits of public cloud computing. Rather than discussing cloud in technical terms, this
guide takes you through how cloud can address specific business issues or problems you are
looking to solve.
Each section of the guide provides information and advice covering issues such as:
• how cloud computing can help you meet your business needs and the importance of
mapping cloud services to your business requirements
• an introduction to what cloud is and the various cloud models available
• the process of making a clear business decision about cloud computing
• the specific and unique features of public cloud¹ in comparison to traditional IT assets and
a check list of questions to ask when procuring public cloud services
1 Public cloud is where the cloud infrastructure is provisioned for open use by the general public. It may be owned, managed, and
operated by a business, academic, or government organisation, or some combination of them. It exists on the premises of the
cloud provider. NIST Definition of cloud computing http://nvlpubs.nist.gov/nistpubs/Legacy/SP/nistspecialpublication800-145.pdf
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Taking the first steps – determining your business need
This section of the guide will discuss how cloud computing could help you meet your business
needs and the importance of mapping cloud services to your business requirements.
Do you have a business issue and considering if cloud could be the solution?
So you are interested in adopting cloud computing into your organisation. You may have even
made the decision to implement a cloud computing strategy. Before you move forward take a
moment to stop and consider what is driving your cloud decisions.
The full value of cloud computing to your organisation will only be realised if it addresses your
business needs, aims and objectives. The decision to take the first steps on a cloud journey
should be driven not by a desire to invest in the latest technological innovation, but rather on a
desire to solve business problems.
Stop and consider what is the business issue, or problem, you are looking to solve? For example
are you looking:
• to introduce a new business process or function that increases revenue or reduces costs?
•
•
•
•
•
•
•
for the ability to rapidly deliver business outcomes?
to develop and test a new mobile application before releasing it to the market?
to enable your employees to work from home?
for a scalable infrastructure to meet changing business demands?
to increase your server capability but don’t have time to wait for a new server to be built?
for IT costs which are elastic in proportion to customer needs and demands?
to reduce your IT capital expenditure and running costs (Capex costs) and
operational expenditure (Opex costs)?
• for a more sustainable and greener ICT solution?
In addition to the above, you should also consider the data that you are planning to move to the
cloud. Think:
• have you carried out due diligence on the data? Do you know exactly what it is comprised
of?
• is the data sensitive, classified or confidential?
• what would happen if the data was disclosed, lost or corrupted?
• what would the impact be to your business if you were unable to use the data?
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You may decide that there is data that needs to be managed internally within your own IT
facilities. Carrying out due diligence on your data should enable you to better ensure that cloud
computing meets both your business and information security needs.
This guide will help you to make cloud decisions that are aligned to your business needs and
help you to ensure that you invest in computing services that your whole organisation will gain
value from.
Why now is the right time to move to the cloud
At a time when organisations are increasingly doing more with less, the time is now right to
consider the many benefits that cloud computing can bring to your organisation. Benefits of
moving to the cloud right now include:
• the ability to access complex computing platforms, infrastructures and software on demand
as a service and delivered via the internet in real time
• a flexible, elastic approach to IT that enables businesses to scale up and scale down IT
requirements based on business need resulting in reduce IT costs
• increasing operational flexibility, agility and efficiency by not having to wait to build
traditional complex computing hardware based infrastructure
• increased security benefits with cyber security delivered as a service via the cloud
• automated and repeatable deployment of computing infrastructure
• clarification of the regulatory environment for cloud computing.
Many organisations are already adopting cloud computing services that are appropriate and
aligned to their business requirements and are benefiting from cost reductions and improved
operational agility, flexibility and efficiency. However, there are some simple steps you should
follow to make sure you are ready to make cloud a part of your journey.
So are you ready to start your journey to the cloud?
Your willingness to start a cloud journey should be based on addressing a business need as well
as a clear understanding of the risks involved.
Before deciding whether a move to the cloud is right for your business you will need to
determine your business’ risk position. Do you feel the need to own, operate, manage and staff
all of the physical computing assets (such as servers) involved in the handling and processing
of a given data set? Are you comfortable with maintaining the necessary investment needed
to service, manage and secure this infrastructure and ensure staff are continually trained? Or
would you rather this is all contracted to an external third party?
Your business will need to determine where you sit on the risk spectrum between internal and
external data handling.
Perhaps take the simple test opposite to assess what your personal risk appetite might be.
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Quiz
1. Would an inability to visit or touch the IT servers enabling your IT infrastructure prevent you
from adopting a cloud based service?
A) no
B) yes
2. Would you still be interested in buying a service that works for you and meets your business
needs without knowing what the cloud providers back end IT functions look like?
A) yes
B) no
3. Do you already have a data centre inside your organisations which drives your business
decisions?
A) no
B) yes
4. Have you already outsourced the provision of your data centre services?
A) yes
B) no
If you answered mostly A - You may be ready to take the first steps on your cloud journey.
If you answered mostly B – You may have to overcome some internal, cultural issues before you
are ready to start on your journey. But remember you may face challenges and a step by step
approach should be followed. By making the move to cloud you can benefit from the business
benefits and advantages that your competitors using cloud are likely to be enjoying such as
increased agility and flexibility at a lower cost.
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What makes cloud different and key benefits of cloud models and services
In this section we will explain what makes cloud computing different, the key business benefits
of cloud as well as the different cloud models and cloud services that are known as Software as
a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).
What makes cloud different?
Are you looking for computing services that are:
•
•
•
•
on-demand regardless of scale?
able to be accessed across devices and networks?
pooled resources² – assigned and reassigned automatically as demand requires?
rapid and elastic³ – able to scale up and scale down as and when business requirements
change?
• measured – resource usage can be monitored meaning you only pay for what you use?
These are the characteristics that make cloud computing different from a traditional hardware
based IT infrastructure and provide the economic benefits and cost savings. For example
organisations using SaaS no longer pay up-front licence fees associated with traditional volume
licensing models. The investment changes from capital expenditure for software and hardware
to an operational expense. This “pay-as–you-use” subscription model means organisations
simply pay for the software as it is used and where it is used, thereby aligning costs with
business benefits.
Purchasing cloud computing services is essentially a service providing a host of solutions to a
range of business problems. Access is flexible and there are no initial upfront capital cost
(CAPEX) allowing a company to be able to access shared information without owning hardware
or servers. With cloud computing traditional CAPEX costs are replaced by operational (OPEX)
costs given that what is being purchased is a service and commodity not physical, traditional IT
hardware.
Adoption of current cloud service models such as Infrastructure as a Service (IaaS), Platform as
a Service (PaaS) and Software as a Service (SaaS) are enabling UK businesses to reduce
business costs and increase operational efficiency. Agility, sustainability, value and innovation
are all key areas where cloud can provide direct benefit to your organisation.
If these sound like the cost savings and essential characteristics of computing you are looking
for in your organisation then cloud computing may be the right fit solution.
But it should be remembered that moving to the cloud is not a case of all or nothing and there
is no such thing as a one size fits all approach to cloud computing. It is simply a matter of
finding, choosing and deploying the right cloud tool for the right job.
2 NIST Definition of cloud computing http://nvlpubs.nist.gov/nistpubs/Legacy/SP/nistspecialpublication800-145.pdf
3 ibid
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What are the different cloud deployment models?
There are different cloud deployment models that provide different benefits and value based on
an organisations needs and wants. The following are the U.S. National Institute of Standards and
Technology (NIST) definitions of the different cloud service models.
Private Cloud
Hybrid Cloud
The cloud infrastructure is provisioned
for exclusive use by a single organisation
comprising multiple consumers
(e.g., business units). It may be owned,
managed, and operated by the organisation,
a third party, or some combination of them,
and it may exist on or off premises.⁴
The cloud infrastructure is a composition
of two or more distinct cloud
infrastructures (private or public) that
remain unique entities, but are bound
together by standardised or proprietary
technology that enables data and
application portability (e.g., cloud bursting
for load balancing between clouds).⁴
Public Cloud
Community Cloud
The cloud infrastructure is provisioned for
open use by the general public. It may be
owned, managed, and operated by a
business, academic, or government
organisation, or some combination of
them. It exists on the premises of the
cloud provider.⁴
The cloud infrastructure is provisioned
for exclusive use by a specific community
of consumers from organisations that have
shared concerns (e.g., mission, security
requirements, policy, and compliance
considerations). It may be owned,
managed, and operated by one or more
of the organisations in the community,
a third party, or some combination of
them, and it may exist on or off premises.⁴
It is important to remember that there is no single cloud. Organisations can chose to access
cloud services via public, private, hybrid or community cloud offerings.
4 NIST Definition of cloud computing http://nvlpubs.nist.gov/nistpubs/Legacy/SP/nistspecialpublication800-145.pdf
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What is a cloud service?
The NIST defines three different cloud service models, which have become widely used by
suppliers and user organisations throughout the industry:
Software as a Service
Platform as a Service
Infrastructure as a Service
The capability provided to
the consumer is to use the
provider’s applications
running on a cloud
infrastructure. The
applications are accessible
from various client devices
through either a thin
client interface, such as a web
browser (e.g., web-based
email), or a program
interface. The consumer does
not manage or control the
underlying cloud
infrastructure including
network, servers, operating
systems, storage, or even
individual application
capabilities, with the possible
exception of limited
user-specific application
configuration settings.⁵
The capability provided to
the consumer is to deploy
onto the cloud
infrastructure consumercreated or acquired
applications created using
programming languages,
libraries, services, and tools
supported by the provider.
The consumer does not
manage or control the
underlying cloud
infrastructure including
network, servers, operating
systems, or storage, but has
control over the deployed
applications and possibly
configuration settings for the
application-hosting
environment.⁵
The capability provided to
the consumer is to provision
processing, storage,
networks, and other
fundamental computing
resources where the
consumer is able to deploy
and run arbitrary software,
which can include operating
systems and applications.
The consumer does not
manage or control the
underlying cloud
infrastructure but has
control over operating
systems, storage, and
deployed applications; and
possibly limited control of
select networking
components (e.g., host
firewalls).⁵
Now that you are aware of the different cloud models and services you may be wondering
whether cloud is right for your business needs and if so what cloud model and cloud services
would be appropriate based on your business needs and requirements.
5 NIST Definition of cloud computing http://nvlpubs.nist.gov/nistpubs/Legacy/SP/nistspecialpublication800-145.pdf
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Making a clear business decision about cloud computing
How to decide whether cloud is right for your business needs
Now that you understand what makes cloud computing different and how it can help to
address your business needs or challenges, how do you make the right cloud decisions for your
business?
This section of the guide offers advice on how to determine what type of cloud model and
cloud service may be right for your business.
The diagram below outlines the thought process you should go through to help you assess your
options and decide which cloud service would best help you based on your business need, and
the relative risk of outsourcing.
Solution for
business need
Internal or
Exteral Options
s/w only available
through provider SaaS
Source of best
value s/w for
business need
Relative Risk of
Outsourcing*
High
Consider alternative
solution
Low
Select SaaS
High
Consider DIY
infrastructure
Low
Consider IaaS or PaaS
s/w self-built or
available as EULA
* The risk of outsourcing has many elements. Assessment to own all assets/employ all the personnel to handle and process a given
data set will depend on the individual company; its capabilies and its ability to invest (in the necessary, infrastructure/security/
training/service mmt/ etc.) and maintain a competititive advantage as compared with that of an external 3rd party.
Some companies will view “external” as a risk as much as others will regard “internal” as a risk.
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How to decide which cloud model may be right for my business needs?
The diagram below outlines some key questions to consider to help you decide which cloud
model may be right for your business.
Is your organisation looking to
benefit from the cost economies
offered by a shared cloud service?
NO
YES
Do you want an IT environment
that is customised and only used
by your organisation?
YES
NO
Are there components of your
data and/or systems that you
need to keep in an isolated or
private infrastructure?
YES
NO
PRIVATE
CLOUD
PUBLIC
CLOUD
HYBRID
CLOUD
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COMMUNITY
CLOUD
How do I decide which cloud service may be right for my business needs?
To assist you to decide which cloud services (IaaS, Paas, SaaS) may be appropriate based on
your business, below are three examples of scenarios where organisations are able to acheive
real business benefits through the adoption of IaaS, PaaS and SaaS.
Infrastructure as a Service (IaaS)
If you are looking for flexibility, scalability and reliability then cloud and specifically IaaS
could work for you. IaaS allows organisations to engage in low-risk development.
Think of IaaS as “rented hardware” that can be accessed instantly with no upfront
cost, providing you with the computing, storage and networking functions for existing
services or new projects.
Platform as a Service (PaaS)
If you have no interest in the underlying infrastructure then PaaS takes agility to another
level by enabling developers to focus more on business requirements and less on
technical requirements.
A key benefit of cloud computing is agility. PaaS enables you to have access to
computing power needed to bring new features or products to market quickly; the value
of this far outweighs other benefits such as cost reduction.
Software as a Service (SaaS)
If you want to consume software and only pay for what you use then SaaS is the cloud
solution for you. It is an alternative model to standard software installation. No longer
does the user have to build the server install the application and configure it. In a SaaS
environment the user does not pay for the software, it works like a rental agreement.
The organisation is authorised to use the software and pays for it as it is used.
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Benefits of Public Cloud Services
This guide has shown that the possibilities created by cloud computing are wide ranging so this
section of the guide explores in more detail the benefits of adopting public cloud services.
Adoption of pubic cloud technologies in particular can help business leaders achieve levels of
technical and operational capabilities; all with the elastic, flexible, pay for what you need
characteristics associated with other utility services.
This section provides you with more details as to the key benefits, unique features and cost
savings presented by public cloud services. In particular the key features of public cloud and
how this can translate into real business benefits such as reduced costs and increase
operational efficiencies. The guide then offers a check list of questions to ask when procuring
public cloud computing.
Benefits of public cloud
The following are benefits of adopting public cloud services:
Managed by a third party – shared resources, no ownership of equipment and provision of only
what is required when needed.
Scalable – scale up and down seamlessly based on business need and only pay for what is
consumed.
Cost effective – Public cloud does not require time or capital to get up and running. The
economies of scale gained by sharing resources allows for affordability. Short term contacts
means IT use can be charged by the hour based on consumption.
Accessible - to anyone with the proper credentials.
Unique features of public cloud
There are also unique features to public cloud. These include:
•
•
•
•
12
lower transaction costs achieved through automation and orchestration
standardised Service Level Agreements (SLAs)
standardised Terms and Conditions
appropriate security level access.
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Your IT requirements – Ride the bus or take the car
When thinking how public cloud is different from traditional IT, it is useful to imagine that public
cloud is like riding the bus whereas traditional IT is like taking the car. The best option for you
depends on your requirements.
Public cloud is like riding the bus; you only pay when you use it, hop on and off when you like,
have no concerns about maintenance and it is good value for money. On the other hand you
will be sharing your journey with other passengers, cannot customise your surroundings or
determine your route.
Traditional IT assets is like taking the car; there is an upfront cost, there are costs even when
you don’t use it or fully optimise it, and it is your responsibility to maintain it and keep it secure.
However, it is easier to customise the car to suit your exact needs and have the freedom to
choose how you use it.
If the bus suits your requirements, you may not have the opportunity to customise it to your
specific requirements but you get access to an easy to use, inexpensive and flexible service
when you need it and you are not paying for it when you don’t.
The cost savings of public cloud
A major benefit often associated with cloud is cost saving through the economies of scale
achieved through public cloud. Listed below are the main reasons why public cloud achieves
cost savings.
Typical cost savings
Direct cost savings
Indirect cost savings
• No hardware ownership and associated
costs
• Rapid speed to implementation
• Pay-as-you-go model based on
consumption
• Ability to scale up and down requirements
in line with business requirements
• No infrastructure requirements
• Outsource IT support, back-ups, security
and storage
• Automated, scripted repeatable
deployments
• Scripted shut down and start-up to
minimise resources consumed
• High user adoption of IT applications due
to anywhere, anytime, any device access
• Upgrades and enhancements are made in
smaller frequent releases enabling easier
learning
• Application support provided by the
vendor
• Assurance/compliance
• Supports agile development methods –
quicker route to market for new
applications
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Key questions to ask public cloud service providers
The checklist below offers a list of key questions to ask before committing your business to a
particular public cloud provider.
Checklist to ask public cloud computing providers
The checklist below is not a list of functional requirements, but a list of questions to ask based
on the cloud service that your business needs.
Cost
• What is your pricing structure? For example do you price per
named user, live user, per unit of consumption etc?
• Do you offer a guarantee that the cost will not be increased, and
how long for?
• Would you be able to offer basic support or maintenance and if
so what would be the pricing?
• In terms of cost, what would be the price per additional seat or
user?
• What would be the pricing if additional storage was needed?
• How many times and by how much have you reduced your
charges over the past three years?
Data loading
• How do I move my existing data to the new system?
• How much will this cost?
Legal and compliance
• What is the governing law and jurisdiction of the contract?
• Where will the data be located?
• Can the provider unilaterally change the contract and terms of
service?
• If data is to be transferred to the US or any jurisdictions not
providing adequate protection in accordance with the EU
standards, can we put in place controller to processor EU
standard contractual clauses or other appropriate data transfer
mechanisms?
• Is there transparency regarding the supply chain? For example
what subcontractors is the cloud provider using and what
contractual reassurances are offered regarding subcontracting?
• Do you have a Service Level Agreement (SLA), and what
happens if we don’t meet it?
• Would it be possible to ascertain whether the Transfer of
Undertakings (Protection of Employment) Regulations 2006
(“TUPE”) may or may not apply in the context of this service?
• How would you deal with an enforcement request for access?
• Do I have the right for the data to be transferred back to me at
the end of a contract at no additional cost? Will the data be
returned in a form that I can use?
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Audit requirements
• What audit rights do I have?
Continuity
• How do you measure unscheduled service outage/unavailability?
What unscheduled service outage/unavailability have you had in
the last 12 months?
• Do you have a standby system if the main data centre fails, and
how often do you test failovers?
• How far apart are these data centres?
• Does your organisation (cloud provider) have business continuity
and disaster recovery procedures in place?
Support and training
•
•
•
•
Development plan
• What new features were released in the last 6 months?
• What new features are planned for the next 6 months?
• How can I influence your product roadmap?
Information security
• What are the IT security arrangements in place?
• What standards are you compliant with? Have they been
externally validated?
• What are the technical and organisational measures in place in
the event that a data security breach may occur?
• What are your access management processes, i.e who has access
to my data and what policies do you have for staff access?
• What checks or vetting do you undertake with your staff?
Back up and disaster
recovery
• What function do you provide that enables me to take control of
my backup/recovery needs?
• If it is not possible to customise this services what is your
standard offering? For example how often are backups taken and
how long is the data held for?
Exit and collaboration
• What is the cancellation notice required to cancel the service?
• Will I be penalised for terminating the contract?
• How and in what format will data be returned once the contract
has come to an end?
• How do I get my data back?
• Can I get my data back in a viable format?
What form does the support offered take?
Where is the support based?
Can I see your support SLAs?
Is training needed and are there any additional costs involved?
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Advice on overcoming possible obstacles to using public cloud
This section of the guide provides advice on how to be aware and overcome possible barriers
identified earlier in the guide that may stand in the way of your organisation adopting public
cloud computing. For example the need to raise awareness inside your organisation about how
cloud is different, how to create a cloud culture change that ensures public cloud adoption is a
success and how cloud can help to address the risk to your organisation from shadow IT.
Culture change
Don’t underestimate the culture shift required within an organisation both to buy and to use
cloud effectively. Procurement teams are used to traditional lengthy processes, asking many
questions and evaluating responses to select a supplier. Buying cloud is much simpler.
There is less scope to vary terms and fewer variables with a process that can take minutes, or
hours, rather than weeks or months. This shortened process can make some procurement
professionals uncomfortable given a perception that their opportunity to add value has been
reduced.
Once a cloud contract has been placed you may find resistance from existing technical staff, a
“not invented here attitude”. If you are migrating to the cloud you need to keep the technical
team onside during the transition. You need to sell to them the benefits of cloud; they can
concentrate on innovation rather than just keeping the lights switched on.
Application development
Legacy applications can be ported successfully to the cloud but to make best use of cloud
investment platform applications should be developed specifically for cloud. Developers must
understand how cloud handles service dependencies including databases, message servers in
a distributed environment. Cloud has introduced a new variable where IP addresses cannot be
pre-allocated. If applications are not built with cloud in mind this could lead to unmanageable
scalability and refactoring problems. Traditional applications do not easily scale horizontally,
statelessness in the cloud needs to be enforced and affinity rules do not sit well with
on-demand architectures.
Recognising and addressing the shadow IT risk
Shadow IT refers to IT devices, software and services used by employees within the workplace
that are unknown or outside the control of the organisation⁶. It describes the practice of
employees from any area of the business installing their preferred applications and programmes
onto corporate devices and systems – without the permission or awareness of the IT
department.
6 http://www.gartner.com/it-glossary/shadow
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This following situation is an example of the shadow IT risk.
Imagine you have given your employee a task to complete on time and on budget. This
employee is using technology at home and comes across an app that could help
complete the work task with time to spare.
Back in the office the employee downloads the app onto a work computer, shares
confidential company data with the app provider and continues with the task in hand.
The IT department is not aware that this app has been downloaded onto the company
system or that company data is being shared with the application.
While the employee is able to complete the work task the use of an unauthorised app
could have left the company system open to cyber threats and has seen company data
shared with an unknown outside organisation.
The shadow IT risk can be an issue faced by all organisations that may, or may not, be using
the cloud. However, consumer cloud applications such as online email and file storage are some
of the most common technologies used through shadow IT due to their ease of implementation
and use. Staff often turn to these applications because they meet their needs, can be
downloaded and used quickly and helps to get their job done.
However, the use of shadow IT constitutes a real risk to your organisation when it comes to the
security of company data. Consumer cloud applications often do not have the necessary data
policies, procedures and security levels that may be required when company data is involved.
This could result in confidential company data leaving your corporate infrastructure and being
put at risk of being lost or stolen. In addition to the security shadow IT can also create a risk
to business continuity. With different departments and employees using a range of applications
and tools, incompatibility becomes an issue and collaboration becomes difficult. The
organisation risks having its data in a range of locations, in non-standard formats.
If shadow IT is being used in your organisation, it is crucial to take steps to remedy the
situation. To do this it is important to prioritise risks, communicate clear guidelines and,
implement the devices, tools and applications that employees require and are comfortable
using.
The good news is that in the cloud environment, standardised practices allow resources to be
consolidated and offer organisations the applications and tools their employees need to do
their job done well which can help organisations to reduce the risk of shadow IT.
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Conclusion
techUK hopes this guide helps you to start your own cloud journey and benefit from the full
opportunities that cloud computing and public cloud services have to offer.
It is understood that a challenge facing business leaders in making the transition to the cloud
is the change it presents in the way organisations procure and access IT requirements whilst
still needing to balance existing business demand for speed and security. However, it should be
remembered that investment in cloud computing enables organisations to be more mobile and
agile, increase collaboration between customers, suppliers and employees, improve efficiency
and reduce costs. What is certainly clear is that business leaders will find it increasingly difficult
to ignore the benefits of the cloud as the full potential of these technologies are fully realised
by others.
Use the link below to find out more information about techUK’s work on cloud computing,
including newsletters, upcoming events and activities which can support you on your cloud
journey.
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Acknowledgements
techUK would like to thank the members of the Cloud Business Guide Working Group, and in
particular:
Charles Russell Speechlys LLP | LORS | MDS Technologies Ltd | Skyscape Cloud Services Ltd
for their contributions to the development of this guide.
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