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Cloud Assets: A Guide for SMBs-Part 1

Written By: Phil Reney
Published On: January 27 2011

Cloud computing is changing the scope of information technology (IT) management, and organizations need to be highly adaptable to safeguard the continuity of their business operations. Although small to medium businesses (SMBs) lead the adoption of hosted services, little information is currently available to help them integrate these tools. In fact, most of the information currently published caters to large businesses.

To add to these challenges, the clouds can mean a freefall for your business if you let yourself be blinded by the ease of access, scalability, and substantial savings. Having worked in SMBs, I felt compelled to work on a guide aimed specifically at such companies, and share insights for navigating through the clouds in a three-part series:

By way of launching into the basics, I want to touch upon what you should know before googling vendors.

 

Terminology
While the terms “cloud computing” and “as a service” (or "*aaS," where "*" refers to the solution being offered) are related, there lies a difference. Cloud computing refers to the actual technological frame for hosting infrastructure where your data and applications (and sometimes hardware) are managed outside your organization’s premises and are remotely accessible through the Internet. As a service refers to its commercialized application where vendor offerings, service conditions, and pricing structures are defined.

 By the same token, as a service refers to more than just software—aka software as a service (SaaS) offered by a large base of vendors and the main driver behind SMBs’ *aaS adoption. As such, it is important to understand the differences between the terms infrastructure as a service (IaaS), platform as a service (PaaS), monitoring as a service (MaaS), and communication as a service (CaaS). Why? Labeling your needs will greatly help your search for the right vendors. Derivatives or combinations of these offerings also exist. While you may find some variations, the pricing structures will often be defined as a subscription, utility-based (per use), or a combination of both.

 

Important Definitions
IaaS refers to the concept of having all computer infrastructures (servers, network equipment, software, internet connectivity, etc.) managed by a service provider, with user fees based on a subscription basis for what has been used or rented.

PaaS is the virtualization of a development platform for the creation and hosting of mostly Web-based applications. This medium is intended to meet the computer resource needs of developers.

MaaS represents the outsourcing of an IT department’s security operations and its affiliated activities, such as maintaining server logs and data integrity. This would apply to businesses currently looking to other departments within the organization to fulfill these services or to those looking to add this capability to their current setup.

CaaS is the evolution of business communication from traditional solutions, such as e-mail and conference calls. This type of service is responsible for the management of both hardware and software in the delivery of voice over IP (VoIP), instant messaging (IM), collaboration, and video conferencing services.

In fact, the notion of as a service has expanded way beyond its original conception. Its lines are being blurred with outsourcing services, as providers are now offerings services that would normally be part of an IT department’s daily operations. Is it IT support or support as a service?

 

Who Are You, Anyway?
Are you looking to make a change to your IT platform?

Have you reached a certain plateau in your effectiveness?

Is your profitability not where it should be?

Understanding the reasons that drove you to these crossroads is critical because it will help you define the tools and processes you will need to support your strategies.

For example, if your strategy is to expand toward international exportation, you will require a tool that can accommodate international paperwork issues, compliance and regulatory mandates, logistics, and so on.

On the other hand, if your strategy is simply to streamline processes in order to become more efficient, functionality may not necessarily be the first consideration; instead, you should probably focus on rigorously defining your to-be processes before proceeding any further down the road of change.

 

Defining Your Needs
A lot of businesses regard IT as a different breed of department altogether to the extent that some basic rules of engagement are often forgotten when making IT business decisions. It shouldn’t be. In most cases, the lack in the effective implementation of an IT decision stems from the variables surrounding the decision process not being fully identified or properly analyzed.

Take the time to analyze where your business is currently going and where it might be in five years’ time. While it might be comforting to plan for much longer, smaller businesses deal with far more fluctuating circumstances, and thus excessive infrastructure or organizational planning can be time consuming and costly. How should this affect the choice of your solution? Look for solutions that can easily be upgraded to support future scenarios. As-a-service offerings are often scalable not only in the number of users, but also in functionalities.

When looking to implement a new solution, you see that the core questions about business process mapping, role definition, and functionalities are very similar between the traditional on-premise and the hosted/outsourced/*aaS options. Part 1 and 2 of a series written by TEC analyst Gabriel Gheorghiu entitled “The Path to ERP for Small Businesses,” offer practical insights in regard to enterprise resource planning (ERP) selection, and while they don’t cover as-a-service offerings, they address the core essentials behind the decision process for an IT solution. The considerations requiring special care (service agreements, data security, etc.) involve the procurement and management of these assets, which I cover in the subsequent entries of this series.

 

Building Your Strategy for Change
When looking at SMBs, I found that the successes or failures come primarily from the knowledge and engagement of the people working for you. While this is true for companies of all sizes, the decisional impact and the individual contribution is far less mitigated within a smaller team. So, before starting a decision process that will eventually have a significant impact on your business, I highly recommend an assessment of your personnel.

If you are choosing a hosted solution for the first time, it could be beneficial to see whether any of your personnel have verifiable experience in implementing a hosted or on-premise solution. They will be some of your key players contributing to the planning. However, this does not mean that you have to exclude personnel with no previous experience. Ideally your team should include representatives from (or at least those with sound knowledge of) all the various processes affected directly or indirectly by the change to come. Understandably, because of the size of your company, you can’t leverage a committee for every activity, but the various available inputs you’ll receive will help mitigate the blind spots in planning that often occur with complex projects.

Keep in mind that some or all of your team may not necessarily be able to dedicate their full attention to the project, as they fill critical roles within the organization. Establishing the different tasks or phases of the project will define the scope of the project. It will help validate whether the available and qualified resources will be sufficient to bring the project to completion before leveraging additional resources internally (new hiring, reassignment, overtime, etc.), from the vendor, and/or from an integration firm.

 

Who Needs to Get Involved?
In regard to your business, all relevant parties should contribute. This is both an easy and difficult answer. How does this work? Communication, education, and involvement are the spokes of the wheel that will drive your project. Not only should you communicate the need for change, but also educate on the reasons behind it—you need everyone to share a common vision. This will not only make promoting project involvement easier, but also get the necessary retroaction for planning and establishing your requirements. Think synergy.

Sometimes, however, outside help might be needed, despite doing all the right things. Who should you turn to? A few options exist, including research analysis and integration firms.

Research analysis firms specialize in helping businesses with the selection process for an IT solution. Under the umbrella of impartiality, firms such as TEC, Gartner, and Forrester, among others, can leverage significant comparative data from a variety of vendors. In some cases, such as TEC, an online decision support system (DSS) is available to conduct comparative studies on potential solutions and greatly speed the process of obtaining a shortlist of vendors. Using a DSS is a good option for validating your selection process, particularly if this is the first time you are selecting software for your business.

Integration firms, such as Progress Software and Dataprise, are organizations that specialize in the implementation of IT solutions (hardware and software). Besides helping you bridge the gap between your current situation and a solution implementation, some of these firms have distribution partnerships with solution providers. This can work to your advantage, as the integration firm has significant knowledge of available solutions and can leverage that knowledge for a faster implementation. On the other hand, if due diligence is not done, you might find a solution being pushed to you that wouldn’t necessarily best meet your business needs.

Unlike vendors that sometimes cater to specific industries (due to comfort level, current business strategy, or fate for that matter), research analyst and integration firms often deal with a wider variety of businesses and with their extensive business knowledge can significantly help you reduce the transition time to solution implementation. If your business is working on a strict timetable (important pending contract, fast-growing activities, etc.), this trade-off in initial cost could prove itself more an investment than an expense.

Although not intended to diminish the quality of offshore vendors, it would be advisable to concentrate your selection on more local providers or at least ones that have local offices. Principal reason for regional selection is legal. And although you may be tempted by the offerings or pricing from abroad, unless you are quite (and even despite being) versed in the provider’s country’s legal system, the law may not necessarily be in your favor. The justice system can be even slower than what you are familiar with at home, let alone how rulings will be enforced. To date, in international business, services still do not enjoy nearly as much support as traded goods. Be sure to weight this point first before considering international vendors. And regardless of the region, make sure that support is readily available for your needs and in your preferred language.

 

Reference Checks
Vendors should be able to offer you some reference checks of a few clients with similar stature to your company. Ideally you should try to obtain references from different vendors, and not simply multiple references from the same vendor (who may refer you to its success stories—mind you, a positive outcome can still provide you with the contributing key elements). Certainly, diversity will help you develop a wider perspective on the type of solution more suitable to your needs.

Some of the points you would like to see covered with the reference checks are: the length of the projects, the contribution from the vendor, the level of preparation prior to go-live (such as data cleanup and formatting, process mapping, training, etc.), and the various successes and/or difficulties encountered with implementation. This will help you scope the frame of your own project.

The project length will help you plan your project-specific activities in relation to your operations and see how (and when) you can mitigate the impact on your business. In particular, look at the total time for completing the following: preparation, training, and implementation. Obviously, these time frames will not be absolute, as businesses are as varied as the vendors themselves. However, they will help you target some areas where you may consider allocating more resources to fit a time frame more suitable to your needs. Additionally, it can offer you some comparables as you move closer to the negotiation table.

The contribution that was received from the vendor could provide you with some insights as to what can be done or, better yet, what can be included in the offering. Some of the key contributions will relate to the manpower, availability, technology, and expertise being leveraged. Although hosted services have been available for some time now, this medium knows very little standardization, either technical or at the service level. Offerings are often varied and equally personalized, and you may uncover certain points that could be of benefit to your company when conducting your negotiations.

The preparation level of these references can help you compare and elaborate your own list of activities attached to this phase. Drawn from the same principle of lack of normalization, this information provides an excellent opportunity to glean best practices being established and adjust accordingly on areas that you may find lacking. This is also a good time to gather clues for future endeavors if other areas of activities are being considered for change. Growing companies often need to adjust more than one aspect of their administrative support.

Getting a perspective of the various successes and difficulties encountered with implementation will help you manage the risks to your activities. Inquire about the vendor’s service level compliance that touches upon the availability of the application as well as its performance, problem resolution, price scaling when number of users goes up/down, security, and data integrity. These points will be defined further in the procurement entry.

 

Takeaway Message
As business requirements show no sign of relaxing and SMBs get easier access to more fleshed-out options, it’s easy to assume that more functionalities can only be beneficial. I have seen two types of damaging scenarios: companies buying into more features because they make sense on paper, but hardly use them at all due to high comfort level to previous practices, and companies fully embracing the concept of change but couldn’t structure it properly to effectively leverage the new functionalities. Do not forget: communication, education, involvement—and be systematic!

What I want you to take away from the guide is more than just the tools necessary to successfully implement an as-a-service solution. I want you to understand that it is critical for your organization to retain a complete understanding of all activities pertaining to your business inside and out. Why? Vendors may help you in your success, but they do not live your day to day, nor are they privy to your business strategies (usually).

 
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