The importance of the Managed Cloud for the enterprise

Cloud computing continues to grow. The public cloud is predicted the greatest growth for the future. Depending on who you listen to, in 2017 this lies between $107 billion (IDC) and $244 billion (Gartner). At this point, as a reader you may feel free to ask the question, where do these not insignificant difference comes from. However, talking to IT decision-makers, the public cloud, which is designed primarily for standardized workloads and self-service, does not corresponds the needs of most businesses. Cloud computing is definitely attractive, but the shape is crucial.

The complexity should not be underestimated

The greatest success stories in the public cloud come from startups or companies that have implemented ideas and business models on it. Although it is repeatedly reported about migrations of SaaS applications with up to 90,000 users. And these reports seem to reflect the fulfillment of the requirements good. But, the truth in most companies is rather different. Even the migration of an e-mail system, one of the supposedly most standard applications, becomes an adventure. The reason is that many companies do not use a standard e-mail system and instead have connected further proprietary add-ons or proprietary extensions, which do not exist in the cloud.

There are also other applications that belong to the IT enterprise architecture to meet very individual needs. I recently spoke with the strategy manager of a German DAX company with a global footprint, which is currently evaluating a cloud strategy. The company has about 10,000(!) applications globally (desktop, server, production systems, etc.). This example is extreme and does not reflect the average challenges of a company. But it shows the dimension in which one can move and which can also be broken down to much smaller application infrastructures.

Managed cloud services are the future in business environments

One may argue that the IT architectures of most companies are too complex and standardization would do any good. Unfortunately the reality is not that simple. Although some standard business applications are already certified for public clouds. Looking at the most successful workloads in the public cloud these are web applications for the mass market and less specific business applications. The majority of enterprises are not prepared for the cloud. But to rely on and expect equally help on the way to the cloud as well as during the operation of applications and systems.

This also had shown our investigation of the European cloud market. Companies are interested in cloud computing and its properties (scalability, flexibility or pay per use). However, they admit to themselves that they do not have the knowledge and the time or its simply not their core business to operate IT systems and instead let it take from the cloud provider. So it is about a flexible type of managed services. Public cloud providers are not prepared for this, because their business is to provide highly standardized infrastructure, platforms, applications and services. The remedy is to provide specially certified system integrators by the provider.

Here is an opportunity for providers of business clouds. Cloud providers that do not offer a public cloud model, but on the basis of managed services to help the customer find the way to master the cloud and take over the operation and thus a “everything from one source” service offer. This normally is not on a shared infrastructure but within a hosted private cloud or a dedicated cloud where a customer is explicitly in an isolated area. Professional services to round off the portfolio, which will help by integration, interfaces and development. Business clouds are due to this service, exclusivity and higher safety (usually physical isolation) more expensive than public clouds. However, considering the effort that a company has to operate itself in one or other public cloud to actually be successful or getting help of a certified system integrator, then the cost advantage is mostly eliminated. In addition, business cloud (managed cloud) providers to credit a higher knowledge in the own cloud and its properties as system integrators, because they know the infrastructure and also can make more specific adjustments for the customer than in a mostly highly standardized public cloud infrastructure.

Public Cloud is not a no-go for the enterprise

The public cloud is per se not a taboo subject for businesses. On the contrary, because on the one hand a public cloud offers the most easiest and most straightforward way to the cloud world, without coming into contact with sales people. On the other hand, it depends on the workload / use cases that need to be identified.

The biggest advantage of a public cloud for businesses is that they can make their own experiences in a real cloud environment and just can try “things” out very cheap and quick. It also offers the opportunity to make mistakes very cheap and fast and learn from them early, what would formerly have been very painful. Based on a top-down cloud strategy new business models can also be build in the public cloud, which are realized through web applications. Here, for example, a hybrid approach can separate applications of the data to take advantage of the scalability of the public cloud for the application itself, but to store the data in a self-defined safe area.

Whether critical workloads should be operated within a public cloud is among other things a decision of the risk management and the own effort you want / can run to ensure this. This must be considered during the evaluation between a public and a managed (business) cloud.

By Rene Buest

Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies.

Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn.