Jumping on the Cloud Bandwagon
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Jumping on the Cloud Bandwagon
Despite the hesitancy of many CIOs, the growing ranks of cloud providers are aggressively positioning themselves to take advantage of the anticipated explosion in cloud provisioning. Amazon, Google (with its Google Apps and Google Apps Engine) and Salesforce.com have the most mature offerings for IT departments and seem to add new functions daily.
IBM, which last year joined Google in a cloud computing research effort, is aggressively marketing its Blue Cloud architecture to support private clouds. Not to be outdone, Hewlett-Packard in July partnered with Intel and Yahoo to form a vast cloud computing testbed that sounds very similar to the IBM-Google effort.
Dell sells an assortment of cloud computing hardware targeted at telecom firms, cable companies and Internet service providers. And EMC joined the cloud storage marketplace late last year with its $76 million acquisition of startup Mozy. Plus, dozens of smaller firms--among them Joyent, RightScale and Terremark--are also hoping to get a piece of the pie.
Whether or not IT executives decide to enter the cloud now, during its infancy, depends largely on their tolerance for risk. The lingering questions about reliability, security and overall performance hang over cloud computing providers, while skittish CIOs (and they're in the majority) sit on the sidelines, waiting for the technology to mature before putting even the most non-essential applications on someone else's servers.
But make no mistake, there are a growing number of large companies that are accepting the risk and jumping on the cloud with both feet--or, at least, are allowing isolated teams working on one-off projects to peek into the cloud and catch a glimpse of its value. Whether they're tapping the capabilities of software as a service (SaaS), platform as service (PaaS), infrastructure as a service (IaaS) or any of the countless other XaaS alternatives flooding the market, businesses find all manner of benefits from the cloud.
The Schumacher Group is on the short list of companies jumping in. However, in a decidedly nontechnological and macabre twist of fate, it was Mother Nature that provided Menefee with the motivation he needed: It came in the form of Hurricane Katrina, which pummeled the Gulf Coast shortly after Menefee took over as Schumacher's CIO.
Though the company's main data center, housed in its Lafayette, La., headquarters, was spared from the devastation surrounding it, the storm provided a much-needed wake-up call. At the time, Menefee was in the midst of selecting a new CRM system, but, after Katrina hit, subscribing to an application residing on someone else's servers--in this case, Salesforce.com's--looked awfully good. So a new approach to IT was adopted at Schumacher.
About 18 months later, the company's reliance on cloud computing shifted into higher gear when Salesforce.com introduced its Force.com application development platform. Backed by the vendor's servers, database and development tools, Menefee's staff started rolling out business processes in the cloud at a dizzying pace.
They implemented physician recruitment, contract management, insurance carrier applications and operations workflow in Salesforce.com. Then the staff integrated these applications with Peake Software Labs' Tangier emergency physician scheduling application, another on-demand software program.
And then came the piÃ¨ce de rÃ©sistance: Menefee and his crew built a hurricane-tracking mashup on top of Salesforce.com, using APIs from Google, Salesforce.com and Tangier to combine data on weather, airport and road conditions from multiple sites. The result is a powerful tool that helps Schumacher more effectively deploy physicians where they're needed during a storm, such as the recent Hurricane Dolly.
Despite the myriad of cloud computing successes under his belt, Menefee admits the transition wasn't painless. Notably, in the first 18 months after the company started its foray into the cloud, 85 percent of the IT staff left, forcing Menefee to build a cloud-friendly crew.
"Some didn't like me, some didn't like my approach and some didn't like the transition to on-demand," he says. "We had a lot of folks who wanted to build software." Since Menefee replaced all the departed employees, his staff has experienced zero turnover.
Menefee isn't ready to put the most mission-critical systems in the cloud just yet, but he's not ruling it out--and that puts him in an even smaller group of risk-embracing CIOs. "I've not put out a mandate that we're going to shift to the cloud, but I feel that as we grow as a company, we're going to continue to put more processes there," he says, citing billing and document imaging as potential candidates.
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