Amazon has lowered its storage costs 46 times in the past six years – the last reduction at the end of March was by 30% – leaving Google and Microsoft to follow suit within days, and the price pressure continues.
It may seem that public pricing wouldn't necessarily affect enterprise-focused providers such as Terramark and IBM, but in fact the reverse is true. However, the key for businesses is to be aware that contractual agreements are the key to securing lower pricing models. In the cloud world, cheap does not always mean good. Therefore, proper alignment of the right cloud element to support your business needs coupled with market awareness will deliver the best cost structure.
TRP: What additional steps should enterprises take to ensure they are maximising their cloud investments?
RL: One challenge that our customers often face is low adoption rates.
Apps that do well on cloud are usually led from the top down – the management team must lead by example, and also encourage employee adoption. There are often deemed to be good returns on IP telephony applications such Lync in Office 365. However, these applications can often look good on paper, but if there is not enough pressure or encouragement from leadership, adoption will be slow and the investment will not pay for itself.
An example of this is when Telepresence launched – there was a lot of hype about the benefits of ad-hoc meetings and reduced travel costs. However uptake did not progress at the speed that was expected and it never quite lived up to its initial hype. It wasn't until PC camera and small screens emerged that we saw a more favourable uptick.
TRP: How can an enterprise make sure that their cloud investment is suitable both now and for years to come?
RL: This is an important question, because if you read industry insight you will know that technology is changing dramatically, even in cloud services. In the next year we can expect to see developments with the quantum computer taking place and the Internet of Everything will continue to evolve at a dramatic rate.
The changes in the industry can be seen even from the use of language these days. For example, Computer as a Service used to be known as 'CaaS' – now this stands for 'Car as a Service', using a car as an actual CPU, or a storage device!
Therefore, in investment terms it's important to have an architectural plan that is documented and agreed upon to ensure you are prepared for any developments as they arise. Cloud has to fit into the overall strategy – otherwise there will be too many different parties whose opinions will not fit in with the wider business objectives and goals. You can either come up with this documented roadmap yourself, or partner with someone to do so. This kind of planning takes time, resources, and people.
However, the lack of an overarching cloud strategy can damage the business and end up costing more. For example, when procurement departments make decisions purely on price that do not echo the strategy, it becomes much more costly in the long run.
TRP: What are the internal skillsets required to help enterprises through this transition?
RL: Clients need the resources to articulate, plan and manage cloud application integration. However not all businesses possess these resources internally. The most powerful, but most underestimated, resource that a customer brings is knowledge of their own business – the goals, objectives, known obstacles, motivations, success indicators, task 'owners', and departmental idiosyncrasies in the way they work.
If this is not possessed internally, then relying on a partner that can help articulate the pathway with you is critical to understand where the endgame is and how to get there. Don't be afraid to find partners or third parties that can do that. Any kind of professional services can be hugely helpful to help you with this transition, and will often be the difference between success and failure.
About Russ Loignon
Russ Loignon is Vice President of Cloud Consulting at Tangoe. He has more than 20 years of telecommunications industry experience. Previous to Tangoe he was at AT&T for 16 years, most recently as lead market development manager in the Advance Solutions Organisation, where he focused on creating business-related cloud offerings aimed at mobility, healthcare, sourcing and 'as a service' solutions.