How to Select a Cloud Provider

Glenn Gruber — Fri, 21 Aug 2009 01:51:16 +0000

Geva Perry is starting a series called “The Purpose-Driven Cloud” where it appears that he’s trying to address the aforementioned question by evaluating a number of different attributes that are all technology-centric. It looks like it should be a worthwhile discussion, although it’s mostly written from a developer’s point of view.

But I think his angle is missing some important elements (although in fairness they may get addressed along the way) that are more customer-driven and business-driven:

Suitability to task: What is the kind of application that you have? Is it primarily workflow and transaction oriented like an ERP application or are you doing heavy number crunching and using complex algrorithms like a pricing credit default swaps? Some cloud platforms like Force.com are great for the former, but wouldn’t be good for the latter. And if you are accessing data frequently, cloud storage options like Amazon S3, might not be the right selection.
Data and Code Portability: When you are deciding what cloud platform to select, you’re not just making that decision for yourself, you’re making it for your customers. So choosing a platform that doesn’t lock you in to a proprietary codebase or where extracting the data is more of a challenge must be a primary consideration. Nobody wants to be locked in. Call it the ‘Hotel California’ effect. Many companies are wary of the Force.com platform for this very reason, unless they’re building their product in order to take advantage of the Salesforce.com ecosystem. Also, what kind of protections are you afforded via code escrow? Think about the challenges that companies who built their businesses — don’t just think about building applications — on Coghead? For many this was extremely challenging to their business and to some it was fatal. there’s a financial stability aspect to this as well, so advantage to the mega-vendors like Microsoft, Amazon and Salesforce.
What Does Existing Code Look Like?: Let’s start out simply: do you have existing code? If not your choices are much wider. But if you’re heavily invested in .NET or Java, your choices may be clearer, because the migration path afforded to you will be faster. And speed does count for a lot. Here’s one area where Microsoft Azure will have a strong value proposition to existing Microsoft shops.
Integration: According to Forrester Research, integration is a top concern of clients when selecting SaaS companies. So does the platform you’re selecting make this challenge any easier on you? With Force.com, AWS and OpSource Connect you have a lot of existing connectors and modules sitting at the ready that make solving the integration problem easier and significantly reduce the associated coding effort. Of course there are integration platforms like Boomi and Pervasive Software that you can integrate into your application, but if all else is equal, why not go with the platform that has the integration built in?

What else did I miss? Please let me know.

Outcome-based Outsourcing Easy to Promise, Hard to Deliver

Glenn Gruber — Tue, 18 Aug 2009 05:42:52 +0000

Tying the costs of outsourcing to the achievement of outcomes that support real business objectives sounds like nirvana. You can assign a value to a given activity and it can help you better evaluate the ROI that you’re getting too.

Not surprisingly in this economy, outsourcers are trying every angle they can to get business and many are tired of just reducing rates. So dont’ be surprised if they start making promises about delivering against outcomes and outputs. But don’t just believe the hype.

The real question that you have to get to is how committed are they to really delivering on outcomes and how much are they just trying to suck you into a sales conversation, only and perhaps purposefully, to shift the conversation back to traditional outsourcing engagement models.

Do your own due diligence and understand how committed they truly are to this kind of engagement. Here are a few questions to ask

What they’ve changed organizationally to enable them to deliver against outcomes instead of providing bodies?
What % of their business is coming from outcome or other performance-based arrangements
Especially for vendors that have a heavy offshore component, how are they dealing with the philisophical and cultural shifts required to really deliver.

What you may find is that their’s not much beneath the veneer. In the meetings that our CEO Gordon Brooks and I have had with journalists and analysts, we’ve of course gotten very good feedback on our approach to outcome certainty (especially in BusinessWeek’s NEXT blog).

But what’s really struck people, like AMR’s Dana Stiffler, is the extent that we’ve embraced this approach. Today about 20% of Symphony’s engagements are outcome or output-based with another 40% of so utilizing other performance-based mechanisms like revenue sharing, fixed margin and SLA’s. According to Stiffler, she hasn’t heard of anyone else in the software product development outsourcing space really embrace outcome-orientation at all and even in the big Indian IT shops its a tiny percentage of their business.

Now why don’t other firms adopt performance-based contracts as aggressively — because it’s hard. It’s hard to track the metrics that matter. It’s hard to change the way that your employees think about thier work to align with delivering outcomes. And most of all it’s hard to change the risk profile that your company is used to when taking on these committments.

Software Industry Insights » R&D

How to Select a Cloud Provider

Outcome-based Outsourcing Easy to Promise, Hard to Deliver