What is Happening?  This week, Saugatuck research executives found themselves participating in three, simultaneous industry events shaping the world of Cloud IT and business. CEO Bill McNee and SVP Bruce Guptill sat down with key executives (including C-level meetings) at SAP Sapphire in Orlando; VP Mike West met with company leaders and users at ServiceNow’s Knowledge12 conference in New Orleans; and VP Charlie Burns took part in IBM’s invitation-only Cloud Innovation Forum in Chicago. It’s been a Cloudy week for Saugatuck, in other words.

The net takeaway from all three events, including dozens of discussions with provider and customer leaders, is that the religious wars and mystery about what Cloud is all about is clearly gone. The critical questions for providers and user enterprises have shifted from “What is it” and “Why should we?” to “When should we?” to “How do we?”

Given that the majority of Saugatuck clients today utilize multiple (usually dozens or more) Cloud-based IT and business services, how many have dusted off the SLAs related to those? What we’re finding out from our ongoing SaaS and Cloud IT research programs is that most have not given enough time and thought to viewing and understanding their Cloud IT SLAs. And too many, it seems, have not even negotiated the terms of those SLAs with their providers. That’s bad business for enterprise user/buyer and provider both.

This week, we’re reviewing and updating our original guidance regarding SaaS/Cloud SLA provisions and negotiation, and we strongly recommend that our client do the same. We’ve updated our core Strategic Perspective on the subject, which is being published this week for clients of our CRS subscription service. Here are the five points that every IT and business executive needs to understand and negotiate when it comes to any Cloud service level agreement:

What is Happening?  As the emerging Master Architecture takes shape, enabling the Boundary-free Enterprise™ with solutions that free the mobile knowledge worker and executive from their desks and build on the Cloud, as well as other capabilities (such as social/collaboration, data analytics and integration), will stimulate business innovation through synergies of value.

According to a current article in the trade press, a new study from the Pew Internet & American Life Projectand Elon University, indicated that by 2020, the majority of U.S. consumers will use smartphones to pay for goods and services. While we believe this is an exciting development, Saugatuck regards the real interest in this trend to be in the way in which mobile payments will become a part of the emerging master Architecture and enable business innovation in the Boundary-free Enterprise™.

An emerging and disruptive master architecture – combining Cloud, Mobile, Social and Data Analytics plus Integration to on-premises Data Assets – is now forming to enable the Boundary-free Enterprise™ that Saugatuck foresaw in 2008. The Boundary-free Enterprise will not be constrained by organizational boundaries and firewalls, but can enable a new model of work and facilitate new business relationships that are not bound by time or place. Nevertheless, there are new risks and challenges that must be managed for its rewards to be fully realized.

Table 1 - Convergence in the Cloud: 21st Century Organizations, Boundary Free and Global

What is Happening?  Acquisition of SaaS and other Cloud-based IT and business services has always differed across the globe, due to factors such as relative market maturity, average business size, and state of the economy. We first pointed this out in 570RA A Slice of SaaS: Worldwide Channel Preferences Show Mainstream Trends 04Mar2009.

Since that time, the differences have become more pronounced, with initial preference shifting rapidly over the past few years to more broad types/groups of sources.

Saugatuck clients will be interested in this Perspective which re-examines the high rate of growth in Cloud IT within the Asia/Pacific region. This growth provides important indications as to how Cloud will develop elsewhere, as well as providing opportunities for international vendors to escape the doldrums of sluggish economies in the West. Here, we follow up on our projections from earlier research and look at emerging opportunities.

Key drivers of Asian Cloud developments include:

Recently-published Saugatuck research provides Saugatuck’s Cloud vendor clients with TCO considerations and suggestions for accelerating Cloud adoption. In addition various factors are explained for users to consider when evaluating potential costs of Cloud offerings. These factors include:

• Average utilization of the Cloud infrastructure
• Economies achievable by large Cloud providers
• List prices versus negotiated discounts for large/aggregated workloads

Our research has shown that users do not consistently consider these factors during evaluations and consequently do not gain an accurate projection of the costs of Cloud offerings.

As the IT discipline around Big Data matures, it will drive businesses to seek answers and value from their own data. We have seen an interest in leveraging this data for competitive advantage. To help our customers do this we have built this simple list of criteria to help judge the value of your data, as well as the likelihood of return on any data initiative conducted with an organization

1. Data Uniqueness – Is the source of the data unique to your organization? Data that is not unique (customer information, for example) might have been collected by your competitors just as easily as by you. For competitive advantage, focus on unique data such as clickstream information to minimize the intrusion of external variables.
2. Data Accessibility – Is your data in the form of log files spread across 50 different webservers? Or is it already nicely formatted, ready for analysis? If huge investment in time and resources is necessary to bring data together for analysis, does the effort outweigh the costs?
3. Data Relevance – Does your data address your specific business problem? Data sources should be examined with a particular business goal in mind. Forcing irrelevant, but available data to suit a problem is a recipe for faulty analysis.

Not all data is created equal, and for many organizations it will be of paramount importance over the coming year to prioritize and evaluate the relevance and quality of the data they have been collected. Though all the data may yield prescient insights into various dimensions of the business, the majority will be more suited to facilitate internal review, rather than drive competitive advantage.

Intro: Saugatuck research clients concerned with the roles and influence of telcos should read this new Strategic Perspective by Bob Cohen. 1045MKT, What Hurdles will Telcos need to overcome to be Cloud Service Brokers?, 23Mar2012, identifies the main hurdles most telcos must to overcome if they want to become influential and relevant Cloud services providers to enterprises. It enumerates a number of regulatory, business model, and technological hurdles, including relationships with key technology partners/providers such as Cisco. In addition to considering these obstacles, the discussion explores what effect telcos as Cloud Service Brokers (CSBs), acting as brokers between Cloud service providers and enterprise end-users, or Cloud Service Providers (CSPs), selling Cloud services directly to enterprises, will have on Cloud markets, including effects on enterprise IT and business leaders.

If telcos only become CSBs and/or CSPs, they will control a large part of the marketplace. But if they perform well as CSPs and CSBs, they could begin to affect prices, competition, and future Cloud services development. The pricing impact would be due to the fact that if telcos served a large part of the enterprise, SMB and consumer market for Cloud services and applications, they would have substantial market power and could influence supply and prices.

Saugatuck clients concerned with their abilities to see and manage the increasingly-rapid pace of technology, business, and market change should read our latest Strategic Perspective on the phenomenon known as “Cloud speed” (link here).

At its heart, “Cloud speed” is an expression of, and an effect of, the accelerating pace of continuous innovation in IT and business that enables and is enabled by Cloud IT and Cloud business.

In September 2008, we introduced the Saugatuck Cloud EcoStack™, a model describing five functional layers of the Cloud and their interrelations:

• Level 4 - Cloud Services
• Level 3 - Cloud Business Solutions
• Level 2 - Cloud Platforms
• Level 1 - Cloud Infrastructure
• Level 0 - Cloud Technologies

We’ve just published a Strategic Perspective in which we discuss two key uses of the Saugatuck Cloud EcoStack™, one for vendors to plan their Cloud strategies and identify business opportunities, and one for enterprise IT and users to apply in planning their evolving business solutions portfolios.

Saugatuck Technology recently reached out to a dozen large-enterprise CIOs and CTOs (all from companies with greater than $1 Billion in annualized revenue), seeking their input and insight concerning the impact that the Cloud is having on their company’s evolving enterprise IT strategies and plans.

In a previous Lens 360 blog post (CIO Insight: Importance of Cloud in IT Strategies/Plans Growing – Part I), we highlighted some of the key findings from Part I of this research, highlighting how most CIOs and CTOs have moved well beyond the learning phase in regard to the Cloud, and instead are fully embracing it in their IT strategy and planning.

Saugatuck research clients might be interested in looking at a research piece just written that delves into the emerging concept of organizational resilience, and aims to build an understanding of this critical area merging risk management with agility.

Resilience is a growing organizational requirement that has come to the fore in recent years as a string of natural disasters have combined with economic issues and changing IT environments to create new treats and new opportunities for survival. This Strategic Perspective looks at resilience in the data center and complements previous work on resilience and the Cloud.

Resilience is an important topic for Saugatuck clients, as natural and financial events have struck across the globe. You might be interested in looking at a research piece just written on this issue that examines how organizational resilience is linked to developments in Cloud IT.

Resilience is a growing requirement for organizations. A resilient organization is prepared for disasters of all types, able to respond quickly and creatively, and capable of realizing opportunities in change. Resilience both IT and the organization at large is fostered by Cloud IT. This Strategic Perspective looks at how the Cloud aids in developing resilience.

What is Happening? This week Informatica, The Data Integration Company, held an invitation-only, two-day conference for a select group of industry analysts at a hotel near the company’s Redwood City, California headquarters. While Saugatuck’s head of research, Bruce Guptill attended the full program of conference events, I conducted an interview with two senior executives at the information management company on the subject of data quality, data governance and the Cloud.

Full Disclosure: More than twenty five years ago, I managed data administration at John Hancock and later at Fidelity Investments, founded the Boston chapter of the Data Administration Management Association (DAMA) and was deeply involved in the issues of data quality and data governance in a number of vendor user conferences, including IBM GUIDE.

What is Happening?   Saugatuck SVP Bruce Guptill has returned from three days at IBM Lotusphere, including the IBM Connect sub-event devoted to social business IT. Among Guptill’s goals for the trip were to test the extent of IBM’s emergent SmartCloud positioning, and to probe IBM’s increasing emphasis on social business, including insights and evidence of how customers are adopting and using it, and what benefits those customers are realizing.

As regards SmartCloud, IBM has developed and is delivering solid and consistent articulation of a still-improving cross-offering, cross-technology, cross-application platform approach to enable and deliver Cloud-based software and business services. While technology and service holes exist in the overall portfolio, and wrinkles remain to be worked out regarding interoperabilities and integration, IBM is one of the few vendors, especially Master Brands, with a coherent and viable strategy in this manner.

What is Happening?   One indication of the growing use and impact of Cloud – from PaaS to IaaS to SaaS to BPaaS – is the growing concern among IT and business leaders regarding Cloud’s overall and long-term costs. Saugatuck routinely handles a stream of inquiries from user and provider organizations regarding Cloud TCO.

Earlier this month, Saugatuck’s Bill Kirwin and Bruce Guptill participated in a webinar that explained the key drivers of TCO and ROI for Cloud IT. Sponsored by Dell Computer, the webinar provided insights into Saugatuck’s Cloud TCO model, and guidance for business and IT leaders. The webinar gave us a chance to revisit and further explain key insights and guidance from previously-published research on what Cloud TCO really is, and how it can be managed effectively (956CLR, A Framework for Cloud IT Total Cost of Ownership (TCO), 29Sept2011 – non-subscribers to Saugatuck’s CRS-CLS service can access the report here).