Private Cloud Reigns! 11 Questions to Help You Choose the Best Vendor

Why is demand accelerating in cloud computing deployments? We’re seeing a variety of economic forces converging with interesting results.

The thaw that we reported on a while back has materialized and is helping fuel this growth, resulting in huge demand from enterprises — large and small — for private cloud collaboration solutions.

In our 2014 trends white paper, we suggested:

“Most early cloud initiatives were tactical, focused on vetting vendor capabilities and testing discrete, non-core processes in the cloud. Now, as more businesses make capital expense (CapEx) vs. operating expense (OpEx) spending decisions, organizations that choose the cloud option — whether through a private, public, or hybrid model — will see a shift in how their IT organizations operate. IT functions will focus less on delivery and support of technology and instead spend more time as technology advisers and enablers.”

Six months later, IT dollars are moving to private cloud with support from managed services.

As you might remember, we first marked the emergence of the three clouds — public, private, and hybrid — in “Best of Both Clouds,” in February 2013.

Back then, the public cloud, led by cloud companies like Amazon Web Services and DropBox, were the choice of enterprises, large and small because they could leverage simple, low risk, low cost services quickly.

Related article: The Top 7 Communications Trends for 2014

In the last several months, we have seen a dramatic shift from the lowest-cost public cloud option to private cloud.

As Forrester Research reported, IT managers at companies deploying private clouds said that “accelerated access to resources for test and development” and “greater IT team efficiency” were more important than the suggested cost savings associated with public cloud. Key activities like these are so proprietary in nature that companies do not want to risk them in a public cloud infrastructure. In addition, they can require custom solutions that are not easily accommodated in a public solution.

The great migration started in 2013 and has built considerable momentum.

No wonder.

In a 2013 KPMG International survey, more than 30 percent of global IT leaders deploying public cloud infrastructures complained about deployment costs, integration issues, data loss, and privacy risks or loss of control. Nearly one in four of those surveyed said legal and regulatory challenges of the public cloud were causing them to look into private clouds.

In fact, the momentum — whether starting with a managed service and migrating or jumping straight into private cloud — has been so great with my company’s customer base that to better align with what customers are demanding from us, our portfolio of services to meet their needs was renamed “Avaya Private Cloud Services.”

IT managers want all of the cost savings of the public cloud plus the benefits of the private cloud including customization, security, and upgradeability at the individual timetables of the enterprise.

Private cloud, with managed services support enables IT to redeploy resources to core business projects which give this model several distinct business advantages over other options:
•The benefits of the OpEx model are the sweet spot for many businesses. In addition to the obvious tax and productivity benefits, OpEx means less immediate spending on infrastructure and application solutions that are outdated months after purchase. The burden of keeping a system up and running falls on the cloud provider who is providing managed services as part of the full private cloud solution. Systems can be more consistent and reliable than in the public cloud environment. Costs are fixed with utility pricing.

•Alleviates security concerns. Long a public cloud concern, private clouds operate on dedicated equipment not shared with other companies. In fact they can be hosted behind the customer’s security infrastructure. Control over who sees the company’s data, what network connections are allowed and where it is stored allows for greater compliance ease and auditing.

•Customization of the environment. As we wrote awhile back, a public cloud is shared with multiple organizations, with the promise of spreading cost. To do so effectively the environment must be relatively homogeneous, leaving limited ability to customize a public cloud to a business’s specific needs. Private cloud enables businesses to migrate from proprietary configurations to the cloud without the need for business affecting process changes. This enables faster deployments, faster enterprise app deployment, database management, and time to value for the customer.

•Simplifies transformation of the company infrastructure over time. Given the infrastructure is owned by the Private cloud provider, companies do not have to make investments in infrastructure or worry about upgrades. These are part of their service.

•Better fit for transformation over time. Private cloud options that include managed service in the offer provide more flexibility and scalability to businesses looking to expand without incurring the costs. This is due to the ability of IT to redeploy critical resources to critical business impacting projects vs. worrying about maintain existing IT & application infrastructure.

As we discussed in “Why IT Should Spend More Time Focusing on Passengers, and Less Time on the Locomotive”:

“Clouds have offered freedom never before possible. There’s no need to deploy physical resources to perform labor-intensive and repetitive tasks. The paradigm has changed. IT no longer needs to spend the majority of its time ensuring the locomotive (infrastructure) is pulling strong.

“Outsourcing, especially cloud-based outsourcing, now enables IT managers to perform value-added tasks that lead to meaningful business outcomes, in addition to anywhere, anytime, hassle-free collaboration for employees and business partners.”

While private clouds continue to surge in IT executive and director interest (because of significant benefits, like customization, predictability, resource redeployment, and stability), the burden still falls on the customer to choose the right private cloud and the right partner.

Customers comfortable with outsourced unified communications, collaboration, and contact center Software as a Service (SaaS) deployments are now looking to maximize their investments by shifting costs. Choosing the right Private Cloud (with integrated managed service) partner to operate the locomotive requires that IT executives deal with several key questions they need to ask themselves:

•What is your company’s likely CapEx spend in 2014 that could be reduced if you moved to an OpEx model?

•What are your company’s expansion plans for 2014 and 2015?

•What applications are of most importance now and in three years?

•What vendors share your vision for how these important apps should evolve?

•How is your business “future-proofed?”

•What services are most in demand by your employees and how are those goals being met?

•Have you worked with the cloud partner before? How familiar are you with their team?

•Does the cloud partner have the capital and resources to relay on them for business critical applications into 2020 and beyond?

•How easy can your cloud partner make your transition in to a cloud service?

•Does your team have deep technical expertise that can scale as necessary and can follow you around the globe? If not this can be a key benefit of a private cloud solution, if so then can you redeploy them to higher business impacting projects

•How is your cloud service partner at anticipating your future needs in 3 to 5 years?

Has your company made the migration to private cloud? If so, then what is your advice? Let us know in the comments below!

Follow me at @Pat_PattersonV

Related Articles:

Enterprise Connect 2014 Preview: Managed Cloud in Focus

Orlando is getting a little cloudy. With Enterprise Connect kicking off today, I sat down with Bruce MacVarish, Avaya’s Director of Cloud Product Management, Marketing and Strategy, to discuss how cloud applications are taking center stage at this year’s show.

Matt Young: What can you tell me about what you’re doing with the cloud?

Bruce MacVarish: Considering how enterprise customers take advantage of cloud architectures and models, we believe that whether they’re small, medium or large, some of them are moving into private cloud, and moving into utility or operational expenditure (OPEX) pricing.

They’re moving to true cloud-class applications and deliveries of services. Our Avaya cloud strategy has really been structured to provide the platforms and solutions to migrate on their path, pace and choice if they consider cloud benefits and delivery models.

Related article: Enterprise Connect 2014 Preview: What to Expect from Avaya in Customer Experience Management

Our cloud portfolio is a mix of managed services, a mix of partner-hosted solutions that take our enterprise-hosted platforms and bring them into a partner-hosted model, to system providers and integrators. A third part of our portfolio is true cloud SaaS delivery of a mix of applications.

MY: What kinds of increases in efficiency can businesses see by adopting cloud solutions?

BM: For a good portion of businesses, the main driver is shifting how they actually pay for the applications and services. Traditionally, it’s been a licensed model, where it’s treated as a capital expenditure (CAPEX).

It all gets defined and purchased upfront and then there’s integration and deployment, but ultimately all of the hardware- and software-integrated solution is sitting on-premises behind a firewall.

We’re seeing the rise of customers adopting the OPEX model. It’s all based on “x-dollars per users per month,” and they get to treat it differently financially. It’s more in line with the costs they incur on a monthly basis, so there are some financial benefits just in how they treat it.

There are others who are saying, “I’m interested in expanding capacity and mapping incremental spikes of SIP requirements, whether it’s collaboration or customer experience management. That way I can map the addition of extra capacity to when I need it and pay for it as I need it, and then scale back if I don’t need it.”

So some are looking at this as a way to align capacity to spikes and manage the costs with that.

Finally, I’d say there’s a group of users who are interested in some of the new applications and the new flexibility of cloud SaaS deployment models in terms of quickly turning up seats, quickly turning up services and applications, again on an OPEX, utility-priced model. It allows them to get people, locations, branches and sites up and running quickly.

MY: What about security concerns? I think that’s one of the elements that can make companies delay cloud adoption – public vs. private solutions.

BM: I think that’s true. Over the past few years, enterprises were largely concerned about moving to cloud architectures, but recently there’s been a recognition that it’s not as risky as they once thought.

They may be pursuing deployment models where there is a single instance, so it takes advantage of a cloud architecture, utility-pricing model. It’s a dedicated instance to the enterprise, so the data associated with it and with the users and interactions are self-contained within that instance. They’re able to hedge their bets and address their concerns by keeping it dedicated to them while still getting the benefits from the cloud.

In addition, there’s been progress in how to drive secure interactions and communications between cloud providers and on-premises for mobile users. So there’s been improvement there as well.

Related article: Q&A: Avaya’s Service Provider Chief, Joe Manuele, on Our Cloud Strategy, Momentum

MY: What do you think are some common misconceptions that businesses may have about the cloud?

BM: There are misperceptions in the market that cloud only represents just one architecture or one offering– SaaS.

There’s a growing recognition that there’s value around managed and hosted solutions as elements or stepping stones to a broader cloud strategy. Across the industry, there’s been a focus on the SaaS offers, but over the next couple of years it will be platform-as-a-service.

Vendors who are providing platforms that allow developers to add value on top to integrate with other third-party vendors, and allowing enterprises to develop on top is going to be a big part of the story going forward.

MY: What can we expect from Avaya at Enterprise Connect?

BM: We’ve used Enterprise Connect in the last few years to describe our intent to get into the cloud space.

In 2012, we laid out our vision for cloud, in terms of collaboration and contact centers. Last year, we updated the audience, analysts and people at Enterprise Connect with progress against that vision. We announced availability for trials on a number of different platforms across UC, CC and video/cloud offers primarily targeted toward service providers/system integrators (SP/SI).

Last year, we talked about the offers, but this year it’s about traction with a number of service providers who are testing or adopting our platform to power their UC- or CC-as-a-service to their end markets. It’s not just platforms available now; it’s also partners testing, trialing and running the SP/SI platforms.

Finally, as we look at 2014, a big part of our story going forward is introducing the right set of Avaya-hosted cloud SaaS offers, both in terms of value-added applications that kind of ride on top, as well as others considered more core collaboration- and Customer Experience Management-oriented.

MY: Where would you like to see things go over the next few years?

BM: I think this a great opportunity for Avaya to establish the ability for our enterprise users and new customers to take advantage of Avaya solutions, either through a private-managed service or a hosted service, or through a public, Avaya-hosted SaaS solution.

Across all of those, there’s commonality, right? We’re taking advantage of the platforms we have today that have been successful in enterprise. Over the next couple of years, the opportunity is to first leverage those platforms into the cloud. Second, we want to introduce a number of Avaya-driven-and-hosted Cloud SaaS applications to help our users at the small- and midmarket-level.

Over time, a big part of the story for Avaya (and more importantly our customers) will be the value of analytics. That gives you the ability to capture not only the interactions that happen between a customer and an agent powered by an Avaya contact center, but also the interactions that happen across the enterprise as a whole as colleagues collaborate around projects.

There’s great value in being able to capture that information and data in a way that will be usable and sharable.