Service Level Agreements (SLA) are nothing new and have existed in information technology for many, many years. Now that the cloud has opened the information utility to everyone, SLAs are out in the open. But what does it really mean? It is not like you have a meter or a gas gauge telling you how much you have used in real time. Also, what actually constitutes an outage? A period of time? As a client, how would you prove it? If there was an outage and the client could prove it, how does the client receive compensation? These questions can be answered in as many ways as there are cloud or cloud application providers. Most have very different answers to how they get to numbers that equate 99.9% or better.

Years ago, a client of mine was a service provider that offered enterprise services hosting. They touted 99.999% uptime — excluding 4-hour bimonthly maintenance windows. Those windows were on Saturdays from 12 AM to 4 AM. This is a period of time that would not be an inconvenience for almost any enterprise, even globally. In actual minutes, 99.999% is just over 5 minutes per year which does not leave much time for anything except a reboot. If the maintenance windows were taken and used, this service providers actual uptime would be closer to 98.9% The addition of virtualization has made 99.999% SLAs a potential reality — for a price.

Having sold “Cloud” based services, I can tell you firsthand that SLA is critical to the selling proposition. The questions on uptime, outages and compensation do not have easy answers. It would be nice to see an industry standard on what 99.999% actually means. Once that is set, the other questions would fall into place.

Above the Clouds
Worth reading this engrossing whitepaper from the UC Berkeley Reliable Adaptive Distributed Systems Laboratory on Cloud Computing.

Amazon, Microsoft improve their cloud computing game

Interesting read on AWS and Azure offerings. No surprise that Microsoft is offering SQL Server. One thought though is how many less sophisticated organizations run much of their business on Excel or Access. Is this really going to attract those customers?

The AWS pricing is so attractive that I will bet many organizations will bite. It is even tempting for a start up. Hmm…

See disclosure below.

Amazon EC2 Introduces Reserved Instances
This is a great pricing model for budgets that have the “use it or lose it” money. It might entice enterprises to try the service without the recurring payments and unexpected fees that many “As A Service” providers use.

Full disclosure: The wife works at Amazon, though in an area unrelated to AWS.

The reality of enterprise computing today is not just the migration to the cloud. Rather, it is a range of IT options: First is within the enterprise’s data center, second is in a partner hosting data center, and third is in the cloud. What option is best? Not to sound like a consultant (again), but it truly depends. Ask is this core to our business? If the answer is no, it does not and likely should not live in your data center. If the answer is yes, detail the costs and the cost of control. Chances are there is a cloud-based vendor out there. Do your homework first, then take that sales call.

In the end, it will be about cost and control. Doesn’t it always come down to return on investment?

Challenges and opportunities
Integration outside the enterprise firewall needs to encompass the capabilities of the organization. Larger enterprises have investments in SOA and ESB providing them with new capabilities that can be utilized. Many organizations without these capabilities will find that standard point to point integration will more than meet the requirements for most of the integration challenges outside the firewall to a “cloud computing” CRM solution. Integration within the enterprise is complex and often layered from ERP to CRM. Middleware services, such as Tibco and WebMethods, Service Oriented Architectures (SOA) and Enterprise Service Bus (ESB) infrastructures are common and present their own challenges such as process, configuration and technical.

Ask your organization, “Are we leveraging our SOA and ESB infrastructures to their full potential?”

Do not be surprised if the answer is “no”.

Computing is moving to the cloud.  The names may change and the technology may be different; however, this idea is not new. See Martin Greenberger’s Essay dated 1964. Recall mainframe timeshares, application service providers, “on demand” or more recently the “as a Service” marketing tags. The current iteration, Cloud Computing (real-time, scalable resources available via the Internet), is a fulfillment of the idea that computing power could be a utility.

The enterprise can take advantage of this trend by understanding their core differentiators and the business processes that affect that differentiation. In short, what makes a company great. Enterprise, computing, in any form, has always been about value to the core competency. In considering cloud technologies for business processes, you must answer the following questions:
1) Is this a core competency? Will the top line suffer if this is not implemented?
2) What skills and infrastructure are required? Just because the process or technology is in the cloud does not mean that you will not need someone who understands it.
3) Viability of provider: Value, Due Diligence and Trust. How do they match up?

Return on investment (ROI) has been and will continue to be a key driver for technology purchases. Lowering IT costs is always a consideration and even more relevant in the current economy. A major consideration for any IT Department will be the core business. Take the often cited clock maker. Building the clock is core. Telling the time is not core. E-mail is critical to any business, but it is not necessarily core. Given the options on the market, a cloud offering might make sense, but make sure you answer those questions.