How to Design a Winning Cloud Procurement Strategy

The procurement and adoption issues around cloud services are many, and their interactions are complex. One of the fundamental problems is that most organisations view cloud procurement as a technology issue based in the IT department when really it is a core business operations decision requiring stakeholders throughout the organisation. It is vital that CIOs and other decision makers involve these key stakeholders in the process at the outset so that they clearly understand both the objectives and the desired business outcomes. It is also crucial to acknowledge that cloud computing is fundamentally different from traditional IT, and to understand what this means (in both positive and negative terms) before developing a procurement plan.

CIOs must also ensure the cost implications of cloud procurement are fully understood by those who hold the ultimate buying decision. Moving to a consumption model may appear cheaper, but it may not prove to be if services are consumed constantly, without being shut down when not required. For instance, services procured as Platform-as-a-Service (PaaS) may deliver savings over Infrastructure-as-a-Service (IaaS) when internal support costs are considered and the costs of managing Software-as-a-Service (SaaS) procured services and the data in them may also become a factor. Understanding the requirements for managed and unmanaged services – and their true costs – is a key requirement for designing a winning procurement strategy.

Security and governance are also different in a cloud environment, and it is crucial that requirements relating to these operational challenges be integrated into the procurement model. It is also important to work with providers who understand this, and who can demonstrate and maintain appropriate services alongside the core delivery process.

In order to ensure that consumption and management of the procured resources are understood and controlled, it is vital to include monitoring and reporting as part of the procured service. Most cloud service providers will provide some level of this, but it is vital that CIOs ensure that the information provided will meet the business needs as part of the procurement process. Monitoring and measurement are one of the five key aspects of Cloud as it is defined by NIST (National Institute of Standards and Technology), yet often this is overlooked or insufficiently emphasised, leading to failed procurements or abandoned adoption.

Crucially, one of the key benefits of cloud computing is its flexibility and agility and it is important that CIOs are not so overcome by the procurement process that the offering becomes constrained and narrowly inflexible. Having the right commercial terms and conditions and the right management controls are, of course, essential, but at the same time there needs to be flexibility both for current and for future growth, otherwise, the advantages are lost before transformation can begin.

Engaging with the right cloud services provider

It is in the interests of both the consumers of cloud services and the cloud providers to ensure that the requirements and objectives are clearly understood at the outset and that a clear set of metrics and success factors are agreed and in place.

[easy-tweet tweet=”The emergence of hyper-converged infrastructure is now starting to have an impact on the market” hashtags=”Cloud,Software”]

It is vital to establish areas of responsibility and operational demarcations. Is the procurement purely for infrastructure, with the business retaining responsibility for the applications and data or are these in scope for the cloud service provider? How is the business continuity and disaster recovery strategy to be affected and who will affect its invocation and testing? How are future updates to the infrastructure, software and applications to be managed?

The emergence of hyper-converged infrastructure and its integration with cloud management and cloud brokerage software and applications is now starting to have an impact on the market, and the new capabilities and capacity that this offers are both intriguing and challenging. Meanwhile, we are also starting to see platform offerings from the major application vendors take the real hold in the market and affect the choices available to CIOs.

The key is to remember that digital transformation is a journey and not a point of arrival. New options will continue to evolve and new business opportunities will arise as a result, just as old business models will become obsolete. The procurement of services in the cloud will clearly help businesses to become more flexible and adaptable but will also increase the competitive pressure to do so.

Today’s CIOs must not be dazzled by the cloud services options now available but should realise that the right answer for their business is probably a unique hybrid of technology, processes and operations that suit their delivery model and their market differentiation. It is important to establish a trust relationship with a provider or ecosystem of providers that understand this and can help CIOs put the right applications and services onto the right infrastructure components at the right time. Some businesses may be able to move everything to the hyperscale cloud today but, for most, the foreseeable future is hybrid.

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