Outsourcing Providers should get on the Cloud

Analysts say cloud computing represents a sea change in the way computing is done in corporations. Merrill Lynch estimates that within the next five years, the annual global market for cloud computing will surge to $95 billion. In a May 2008 report, Merrill Lynch estimated that 12% of the worldwide software market would go to the cloud in that period. According to a Tier1 Research server virtualization is currently being used by more than 70% of enterprises to reduce costs, and cloud computing is being used or planned for use by more than 10%. Analyst firm IDC predicts that cloud services will generate US$44.2 billion by 2013.
The potential benefits of public clouds are obvious to most IT execs, but so are the disadvantages - security concerns, compliance issues, and questions about performance, management or SLAs. A recent survey released by the Information Systems Audit and Control Association (ISACA) confirms that most of the IT managers are wary of entrusting sensitive data or important applications to the public cloud. In the online survey that attracted 1,809 responses from ISACA members, 45 percent of the participants indicated that the risks of cloud computing outweigh the benefits. Moreover, only 10 percent of the respondents planned to use cloud computing for mission critical services, and 26 percent had no plans to use cloud computing in any form whatsoever.
Maybe is just a matter of time until the IT managers will fill comfortable with cloud computing. But cloud service providers can offer more information around their internal security and privacy procedures in order to destroy these worries. Transparency is a key aspect of risk management. And for cloud providers with effective governance in place, transparency should not be an issue. Gartner predicts that by 2012, 20 percent of businesses will own virtually no IT assets. Outsourcers need to build cloud-based, multi-client data centers to lower their own costs and increase their service provisioning speed. While adoption of cloud services is still low, outsourcers need to adapt to this change. The days of dedicated data centers are probably limited. Outsourcers need to invest in cloud services and cloud-based offerings or risk being marginalized. In fact, this should be a competitive advantage.

A Pentalog Cloud?
Since the end of 2009, Pentalog has been conducting a thorough reflection on how to shift towards Cloud Computing. We know that equipment remains an important part of a software solution but since the first virtualization solutions, the interest in material has decreased. The transition to Cloud Computing is the next logical step. Soon the very existence of processors, memory and storage will be only distant memories as is the machine language. Always there, but forgotten by all!
The concept itself, of Cloud Computing is very convincing: transforming investments (CAPEX) in operating cost (OPEX). Buyers also get agility because only the “click” of the mouse gives access to more processing power and or storage without having to follow the order, delivery and installation cycle. But we must not neglect the component “network”. The Internet access of the enterprise is already critical, often polluted by non-professionals traffic. What was not visible in a LAN or VPN, is going to become a problem for a high business traffic did not use to share the same resources as the Internet access. The solutions of a private Cloud will also have to integrate WAN optimization solutions in order to reduce the distance with their Datacenters which are not always on-shore. On the other hand, we are also exploring the provision of SaaS in a sector that we master very well. Also Pentalog has studied for many of our clients the adaptation of their solution in a SaaS model. It is true that with this model, editors are able to reduce the client decision cycle or show prototypes for a reduced cost. The shift to production is so much easier.
Pentalog has not yet decided whether to invest in our own Cloud solution in order to have greater ramp-up capabilities or to become Cloud broker. Asking the question is not totally meaningless, because Pentalog has already established offices that can accommodate the equipment in Paris, Bucharest and soon in Asia (Singapore, Hanoi …). Moreover we have the supervision and administration capacity for these platforms. In the past Pentalog has been able to respond positively to hosting needs with our infrastructure. The Cloud market is large; there is room for a Pentalog Cloud between the internal solutions and the major actors in this market place. In our sphere of services, the use of Cloud Computing would seem to be a natural step forward. Pentalog is regularly faced with restrictions concerning the solutions we develop for our clients in regards to a shared integration platform, performance testing on a production platform, later adaptation to Cloud Computing. Indeed, when the network environment of our client is impervious to external access, the required shared access for good reactivity has an immediate impact. When our client is (already) in this process of outsourcing the execution of its solution, our responsiveness and our visibility in the project are enhanced significantly.
Smart organizations need to start exploring service provider relationships where Cloud is on the horizon.Cloud computing is not only rapidly emerging as an infrastructure option that is relatively inexpensive; it is also becoming a buyers' market. This is a very appealing value proposition in a tight economy - especially tying elements of Cloud and SaaS delivery intoa BPO model, where savings from lower-cost labor can be combined with an increased process efficiency.