How Government Early-Adopters Use Cloud Services

What are the best practices for deploying managed cloud services? Case studies have now confirmed that cloud services can be a better, faster, less expensive and less risky way to source Information and Communications Technology (ICT) solutions, according to the latest market study by Ovum.

Results from recent research conducted by Ovum details the experiences of five public sector organizations that have successfully deployed cloud services -- either with Infrastructure-as-Service (IaaS), Software-as-a-Service (SaaS) or Platform-as-a-Service (PaaS).

Highlighting the known benefits and the catalysts that empower organizations to embrace the cloud service delivery model, Ovum says they have developed a framework to assist government agencies in understanding the organizational factors associated with early adoption of managed cloud services.

Moving Beyond Analysis Paralysis

"Cloud services have long been debated across the globe, but it is now time to stop discussing theory and start discussing the actual experiences of early adopters,” says Dr Steve Hodgkinson, Director of IT research and advisory services at Ovum.

According to their assessment, many government agencies are stuck in a mode of perpetual cloud service evaluation. Meanwhile, they're unable to sustainably develop strong ICT capabilities because of funding, resource and skill constraints.

That being said, we know that mature enterprise-grade cloud services will provide an innovation edge to agencies -- enabled by ICT capabilities delivered at a lower cost than would otherwise be possible.

The five case studies included in this research reinforce this key fact. Each of the agencies used cloud services to overcome constraints in their ICT capabilities, and the results were compelling.

Cheaper, Faster and Better ICT Solutions

These organizations found that the benefits were greater than expected while the risks and difficulties were lower than typically experienced with traditional ICT projects.

"These proof points reveal that cloud services do actually live up to the promise of better, faster, less expensive and less risky ICT," states Hodgkinson.

The Ovum cloud services catalysts framework defines the key leadership decisions, business needs and forward-thinking that explain why early adopters were able to embrace cloud services.

The framework provides guidance for considering the degree to which a cloud service is a good fit for an agency. It also provides a diagnostic tool for thinking about the catalysts that may need to be created or nurtured in order to enable agencies to understand and embrace cloud services.

Ovum believes that the case studies of early adopters reveal more about leadership and decision-making than they do about the abstract benefits of the cloud delivery model.

"Why is it that some agencies embrace cloud services while others remain sceptical -- and even fearful -- of the cloud services model? Our framework is a major step forward for understanding the enablers, and sticking points, of cloud services adoption in the public sector," concludes Dr Hodgkinson.

All five case studies were conducted in Australia and include:

• The Salvation Army Employment Plus: 750 employees in 80 locations, all applications moved to Telstra Dedicated Hosting IaaS.
• Monash University: 15,000 staff and 63,000 students all moved to Google Apps Education Edition SaaS.
• The Queensland Department of Environment and Resource Management: a CRM application for coal seam gas exploration regulation deployed for 30 users using Microsoft Dynamics CRM SaaS.
• The Torres Strait Island Regional Council: 350 employees, all applications moved to Telstra Utility Hosting IaaS.
• The Victorian Department of Business and Innovation: CRM and grant administration applications deployed for over 450 employees using Salesforce SaaS/PaaS.

Five Predictions for Managed Cloud Services in 2012

The proof-positive business impact from managed cloud services deployment, including the numerous associated productivity benefits and anticipated cost-savings, have pushed cloud computing well into the mainstream during 2011.

As we move into 2012, International Data Corporation (IDC) predicts that this evolution will continue as more users test the growing capabilities of the public cloud services that are already available.

However, by 2015, IDC envisions a very different scenario -- one where cloud services will become commonplace, thereby forcing significant changes in the ongoing adoption of progressive business technology practices throughout legacy IT organizations.

"In the next 24 months, the 'cloud' as a marketing label will cease to exist, as the success of cloud services will mean that it will permeate the sourcing strategies of the CIO and business unit manager alike," says Chris Morris, Lead Analyst for Cloud Services at IDC Asia/Pacific.

He adds, "The use of externally sourced business and IT services from the cloud will form the basis of what we see as the Outsourcing 3.0 period, and will provide an extensive portfolio of services from which innovative solutions can be constructed."

How Cloud Drives the Next Wave of Outsourcing

With Outsourcing 3.0, the cloud will metamorphose into a universal service catalog of individual cloud services. This will begin to replace both traditional information technology outsourcing (ITO) and business process outsourcing (BPO) engagements as well as on-premises infrastructure.

IDC believes that in an Outsourcing 3.0 scenario, the sourcing of business and IT services from multiple external suppliers will result in a major challenge for the enterprise CIO. They will become a service broker and aggregator, involved in sourcing, integrating and managing the services -- on behalf of their business units.

Drawing from the latest research and internal brainstorming sessions amongst IDC's regional and country analysts, the following are five cloud predictions for 2012.

These key points represent major trends with either the most significant financial impact or long-term market impact across the Asia-Pacific region, according to the IDC assessment.

1. Less than Half of End-Users across APEJ will complete their Private Cloud Projects by 2014
2. Making 2 + 2 = 1: Cloud Service Orchestration Services Lead the Drive to Outsourcing 3.0
3. Infrastructure as a Service (IaaS) will become Verticalized by 2013
4. By the end of 2012, 90% of Telecom Service Providers (SPs) in the APEJ region will have brought a broad portfolio of Cloud Services to market; but, by end of 2013, their Portfolios will become Specialized as they redefine their preferred role in the Cloud Ecosystem and target specific markets
5. Cloud SP (CSPs) strategies based on Aggregation and Resale of IT and business services will Fail to meet Profitability Goals by 2013 unless they can efficiently and effectively Manage, Support and Bill Services from Multiple Service Providers