It makes sense to relook at corporate cloud strategy time to time!

Intended Audience: CxOs and other IT decision makers

We have seen recent news items where an established cloud based businesses switches out from one of the leading cloud vendors to one that is not in the top 2-3 of the leader’s board. This kind of news often create a lot of noise and confusion that eclipses the opportunity to look at such developments pragmatically, and to learn from them.

When Hostnet Brazil, a cloud hosting and solution provider, made it public that they had decided to switch over to the infrastructure provided by CloudFlare by the end of 2015 for their entire network in Brazil, many in the industry were surprised and everyone was eager to know the prime reason. Hostnet found that with CloudFlare, web pages of their customers in Brazil loaded, on average, almost 2x faster! (Read more)

In case of Marks & Spencer, Britain’s largest clothing retailer, the company decided in early Feb 2014 to create a new platform for their websites. Marks & Spencer’s websites until then were running on an Amazon AWS provided platform since 2007. It drew attention as M&S decided to switch out of AWS public cloud and to set up own private cloud platform after 7 years of association with AWS. M&S said in its statement that the move was inline with its new “multi-channel” retailer strategy and that it would complement its e-commerce initiatives as a means to reverse the decline in market share of its business. (Read more)

What became obvious from the above cases is, the enterprises using public cloud services need not remain forever with the cloud service provider they selected in the first place. In fact, it is important for every business to review their cloud providers with regular frequency and plan to switch if one finds a significantly better vendor offering better services at better costs.

This is not a new concept since companies are used to doing hardware refreshes for their in-premise data centers regularly. There is no reason why the same process should not be applied to resources being used from the cloud.

Clearly changing a cloud service provider for valid reasons is not a bad thing and in fact, may be good for business. Let us try to identify some early triggers (other than just time) when an active re-assessment of the current cloud services may be required:

  1. Changes in business requirements and/or priorities and the inability of the current cloud service provider to fulfill the requirement(s) within a given budget.
  2. Availability of new technology; new/distinctive capabilities that a cloud service provider offers (e.g. Speed – in the case of CloudFlare).
  3. Non availability of a new platform, for a new solution, in the existing offerings of the current Cloud Service Provider (as in the case of Marks & Spencer).
  4. New business/service expansion strategy (as in the case of Marks & Spencer).
  5. Changes in Government policy and regulations, e.g. sensitive data to reside within in-country data centers.
  6. A business deal resulting in reduction in operating cost, or a partnership deal to utilize services from each other’s offerings.
  7. Merger and acquisitions requiring better utilization of the combined cloud resources.
  8. Withdrawal of services, changes in key engagement terms by the current provider, or  deterioration of service quality.

Finally, an ongoing review of the cloud strategy is, in fact, a healthy sign that the enterprise is continuously measuring its operational efficiciencies, cloud ROI and then taking the corrective action as needed.

Google and Amazon in race to buy $700m Tata data centres

In late July, 2015 there were hints that Tata Communications had planned to sell its stake in its subsidiary “Tata Communications Data Center Pvt. Ltd.” to restructure its debts. Now we hear that Global leaders of IaaS providers, Google and Amazon, have shown interest to buy Tata Data Centers. (Read more)

It may be recalled that in 2014 Microsoft’s announced plans to build data centers in India for its Azure and Office 365 services keeping in mind the growing demand of cloud services from Indian subcontinent.