Biztech Jan 5, 2013
The cloud service provider may come as a saviour for businesses looking to increase IT capacity and capabilities without being bogged down by the expense of buying new infrastructure, licensing software and training staff. But, landing up in a disastrous situation becomes inevitable, if not selected prudently. Separating the men from boys among this maze of global as well as local service providers, therefore, becomes imperative to minimise the risks associated with cloud.
While being cost-effective and the choice of more services attract large enterprises and SMEs alike, are they reason enough to trust your IT with the service provider? Rackspace Hosting recently commissioned a survey indicating the important considerations for IT decision-makers in choosing their cloud service providers. According to Lanham Napier, CEO, Rackspace, “The world is in the midst of a tectonic shift toward cloud computing that is revolutionising the way companies do business, IT decision-makers understand the importance of selecting a cloud provider that empowers their businesses with the systems, products, and customer service capabilities to successfully make the transition to the cloud.”
Biztech2.com reached out to some of the key analysts to drill down to some of the ‘must–have’ cloud service provider selection guidelines for CIOs. While not an all – exhaustive list on the selection criteria, the points raised are among the essentials to keep the search on the right track.
Service Provider’s Reputation: Couple of questions that enterprises must seek answers to as they set out on the first leg of their cloud service provider selection journey: How stable is the service provider as a company? Are the existing customers happy with the service?
“The sustainability and capability of the service provider should be of top priority and enterprises, especially SMEs, should go for vendors with big pockets,” says Akhilesh Tuteja, Executive Director at KPMG. The past record of the service provider, in terms of management, issues redressal, after-sales support, etc should also play a significant role in the decision-making process.
According to the findings of the Rackspace survey, IT decision-makers view customer service and technical support as important considerations when choosing a cloud computing provider. By a three to one ratio (75 percent to 25 percent), the IT decision makers surveyed prefer a cloud provider with strong customer service and technical support even if that provider has higher prices. This view was consistent by IT decision makers regardless of organisation size and type.
“Once the service goes live, it is very important to see how the vendor is rectifying things like downtime, etc. The quality of after-sales support is absolutely critical,” adds Tuteja.
Service Level Agreements (SLAs) Promised: When an enterprise, irrespective of size, is looking for a cloud service provider, one of the key elements for consideration is the SLA. SLAs are an almost fool-proof method to indicate how seriously the vendor is willing to provide highly reliable and available services. “The SLAs in this domain are as critical as they have been in outsourcing.
The enterprise should confirm availability, reliability and level of control,” says Dr. Alea Fairchild, VP & Principal Analyst, Constellation Research.
Right SLAs will ensure that the business gets the guaranteed uptime, with financial penalty on the vendor in the event of failure to meet uptime. On the contrary, wrong SLAs mean that the enterprise might end up getting a rough deal and on the losing end. This calls for the need to thoroughly understand the service provider’s SLA framework.
According to analysts, specific areas to look out for are the security and availability terms. “Nowadays vendors are promising 99.95 percent availability, but there is no such mechanism to measure the same,” warns Tuteja. On the other hand, Dr. Fairchild adds that enterprises should make sure that security commitments are well spelled out in the SLAs with penalty clauses.
Many a times the vendors are ready to incorporate all the concerning factors in the SLAs but the enterprise should be ready to pay for it.
One of the biggest concerns on the technical front is the ability to move data easily between cloud providers and concerns over vendor lock-in. These two areas emerge among the major selection criteria in the Rackspace survey. As per the survey, for 92 percent of IT decision-makers surveyed being able to move data easily between cloud providers was an important consideration when choosing a cloud provider. The issue of vendor lock-in was an important consideration for 86 percent of respondents. According to Napier, it is important for companies to be empowered with choice. This requires an open cloud. A cloud provider with open-source technology allows portability of workloads across vendors and elimination of vendor lock-in.
The cloud providers’ technology architecture should also ensure future viability and scalability, which means the ability to add computing power as and when required. “SMEs especially should consider the fact that ultimately their enterprise will require a hybrid cloud solution, and therefore should look for vendors who can embed the flexibility in the design to go that direction in long-term,” Dr. Fairchild points out.
Reading into the fine print of the pricing model the service provider is offering, the services it entails, and under what conditions is a must. What may look like a bargain price point now may turn out to be a loss making proposition with cleverly built in terms and conditions.
The key is to understand the long term pricing model and how it will impact the company’s competitive edge and its services to customers. “Visibility into long-term pricing is essential in the Indian context. Enterprises tend to miss out on long-term price visibility. In my opinion, they should not fall for first year pricing, but rather see the cost spread over three to four years and make a decision based on that,” adds Tuteja.
So how can the enterprises exactly position cost among the list of priorities? “The decision is actually a trade-off between cost and control, but the cost element includes facilities and staffing - so consider the whole TCO in considering the entire price model,” says Dr. Fairchild.
The proportionate consideration for each element will vary with the size and type of organisation, and also differ from one vertical to the other. For instance, for an insurance or healthcare company SLAs might overrun the cost consideration. So, as such it will be difficult to uphold a standard guideline applicable to all organisations. It’s not an exact science, and will require a mix of both art and science for each to come to an understanding of what makes for the right cloud service provider for them.