John Wise introduces Cloudonomics for Software (part 2 of 4)

The increasing number of vendors and varying types of firms providing a “software” cloud is the most significant paradigm shift in technology happening today. Simply, consumers and businesses are not only becoming more comfortable with, but also beginning to prefer, cloud-based software platforms where there is no hardware visibility from the user’s or CTO’s perspective.
Reduced Cost of Updates
Cloudonomics is optimized if the applications (software) hosted in the cloud are truly “multi-tenanted,” meaning that an individual application is set up to service multiple customers. An immediate benefit of this approach is that a single software update will simultaneously benefit all users. Only one update is necessary, as opposed to the traditional difficulty of enterprise software that requires updates to occur on each site remotely, and in many cases doesn’t allow for local configurations. In an enterprise software environment the potential for negatively impacting employees or clients during an upgrade is greatly increased because of the varying number of computers and servers. The economic cost of this is lost time and productivity.
A cloud vendor’s ability to provide simultaneous updates generates a significant cost and time benefit to the company. This is because of the elimination of the need for technical experts to implement periodic updates. Additionally, if the deliverable to the consumer relies on the updates, then the simultaneous updates will also generate a cost savings.
Enterprise software updates are also hazardous to work efficiency because they are often large undertakings, which forces the retraining of users and the reintegration of other applications. This can be a source of frustration for consumers who are used to a previous version of the system and do not have the time to train and adopt large changes.
The cloud brings with it the concept of functional adoption, whereby functions are adopted incrementally as they are used. Small function-focused software updates can be consumed more naturally than large, monolithic updates across various functions and features. Also, typically, many of the solution integration/upgrade requirements are handled by the cloud supplier, and therefore the consumer is unaware that their inter- faces have been changed. A cloud company might release software weekly, whereas an enterprise software company might look to do large upgrades annually. Practically, cloud updates are smooth. For example, Google functional updates are gradual, and the user experience is positive. In sharp contrast, Microsoft’s update from XP to Vista was extremely difficult and unpopular.
Overall, software Cloudonomics results in a more cost-effective solution to implement software purchases and provide maintenance. The result is a simple and frequent adoption of changes while reducing the training and interface rework requirements. The savings can be in the range of $100,000 to even millions for a large enterprise.
Improved User Experience
Leveraging software clouds also frees up some of the traditional design constraints associated with enterprise software and allows for the development of user experi- ence-centric interfaces.
Traditionally, user experiences with enterprise solutions are designed by the programmers who built the application. Programmers are, by nature, more technical and generally accepting of user interfaces that are “C:\” (a prompt to take instructions), a technical interface that is not led by design or the user experience.
Meet PADI: Presentation, Application, Database and Interfaces (P<>A<>D<>I = pure PADI). Software designers are aware of the need to divide solutions into the four-layer PADI. The issue that enterprise software programmers face is that they suffer from a discipline that is weak, and the Application logic gets spread throughout the Presentation, Database and Interface layers (i.e., PA<>A<>AD<>AI). Another deficiency is that the presentation has been wedded to the application logic, which results in difficulties when trying to change the application. The result is that enterprise software is very difficult to move to a native browser, and various slow (non-cloud) software are used to stream desktop interfaces to the customer (i.e. cloud fake). This approach may be the only approach for some enterprise vendors.
Software Cloudonomics addresses the user experience from the point of view of usability, accessibility and flexibility. Usability requirements are functional, psychological and aesthetic. The functions need to be obvious and honest, with their value self-evident. The psychological and aesthetic needs relate to the positive experience of the solution and how intuitive and self-explanatory are the solution’s functions/workflow.
The technical requirement is to ensure pure PADI. If this is achieved, the presentation layer can be designed by user interface experts to achieve the expected software cloud user experience; multi-client platforms (many browsers, iPad, smartphones, etc.) are practically mandatory and force the separation.
Leverage Solution
Cloud software can provide substantial leverage from other cloud suppliers. This can be achieved by mashing (combining) other suppliers’ user interface functions and data from disparate sources. If done well, the user is unaware that an application might combine several mashed points.
More sophisticated mashing is possible through a cloud vendor deploying a repository into its cloud. The repository can be integrated in the cloud, allowing multiple vendors to provide a data storage area that is neutral to the integrated vendors. The cloud vendor provides the presentation and application logic to the repository as a database (repository/warehouse). Cloud repositories represent an extremely powerful method of providing often talked about but rarely implemented requirements such as “enter once and only once”; “all in one place”; or “primary location of access, control and entry.” A cloud repository is a simple approach to achieve these requirements and provides better access to information.
Overall, a software cloud consumer can benefit from a) lower cost, b) a more intuitive interface and user experience and c) better access to information than the 1980s enterprise computing.
Level 2 Software Cloud Concerns, Objections and Barriers to Adoption 
Typically, internal technology departments drive the concerns and objections to software clouds. These objections often include:
a) Data and cloud security
b) Ease of customizing and reacting to customer needs
c) Existing investment in legacy enterprise solution
d) Asset write-downs of existing hardware and software
Addressing These Concerns
a) Although security will be continually debated, data in an enterprise deployment environment is less secure than when stored in a professionally managed and secure data center. In that case the primary importance is not where the applications and data reside, but rather that the correct level of user permissioning is configured, which increases overall security and offers a full audit trail of user access.
b) Being able to react to the customization needs of clients needs to be addressed and tested on a vendor-by-vendor case; however, it is often the case that an agile business manages this process internally, alleviating wait time for an outside vendor. Cloud can be reactive, but this will be de- pendent on selecting the right vendor.
c) There are various ways to not only leverage and extract continued value out of existing infrastructure (as discussed previously) but also ways to resell equipment if it is no longer wanted onsite.
d) Due to the accelerated depreciation of technology equipment these days, this should not be a consideration, as the equipment can remain on the book while leveraging the machines for development, testing or backup, and within a very short amount of time, the cost savings far exceed the consideration of the assets’ values on the company’s financials.
The perceived risks associated with adopting a cloud operating model need to be weighed against the likely improvements in governance and security controls a focused supplier will offer versus an in-house or part-time administration resource. 
The overall reduction to the firm’s bottom line may also include a reduction in IT staff. As to be expected, internal IT departments will be protective of their jobs and therefore may be prone to keeping their objections high on the agenda. However, some IT teams have the vision to look ahead, and to them and their teams, the cloud represents an opportunity to shift IT focus from server updates and maintenance tasks to innovation, managing cutting-edge technology and creating new applications for the users.
These points need to be individually considered against each cloud vendor while weighing the overall business advantage. In addition to the direct economic advantage, there are other important factors to distinguish when migrating to the cloud, such as opportunity advantages, increased scalability for company growth and one that is often missed by firms: core focus versus context (i.e. focus on the primary business and key differentiators versus necessary business utilities).
Software clouds can also be referred to as Software as a Service (SaaS). The other popular term is Platform as a Service (PaaS). PaaS provides a computing platform and a solution stack as a service. The PaaS layer lies between the SaaS and IaaS. PaaS is often seen as a more custom/development platform for a solution (i.e., full life-cycle support for software solutions custom to a customer). Unfortunately, be aware that some SaaS and PaaS suppliers are not compliant with the hardware cloud requirements, and therefore the benefits of Cloudonomics might not be there.
**For a complete copy of white paper, please contact Kim Wise at
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