Executive Summary Info-Tech Research Group1 Smaller enterprises should take advantage of compelling opportunities in infrastructure-as-a-service. Take advantage of lower financial and technical barriers to entry to accomplish what otherwise would be cost-prohibitive. Evaluators and implementers say up front capital cost savings and rapid deployment are strong positive reasons for adopting cloud solutions. Consider appropriateness of each candidate application. Few expect the cloud to be the home for all application workloads and data. The critical exercise will be to identify those applications and data which can be moved to a public cloud and then selecting a service provider that best meets the needs of IT for that particular workload. Navigate an increasing number of cloud service options. With “cloud” being slapped on just about any service by marketing hype machines, it is important to be clear about the kind of cloud service being sought and the requirements of a specific service. Infrastructure-as-a-Service vendors will be evaluated on: – Available features – Affordability – Usability – Vendor viability, including geographic presence – Support Compare against total cost of internal hosting. A key advantage of Infrastructure-as-a-Service is that an initiative in the cloud can be provisioned rapidly and at low cost (do it fast and do it cheap). Longer term total cost savings are not as clear. In selecting a cloud service, consider both the relative upfront costs and longer term costs of hosting a given workload and/or associated data on internal infrastructure.

Beyond the hype: third party compute clouds will be a significant part of enterprise computing Info-Tech Research Group2 A significant majority see the Cloud becoming a place for the efficient deployment and hosting of selected key applications and processes. Few see the cloud as an eventual wholesale replacement for internal infrastructure; however, even fewer see the cloud as not playing any role. n=124 n=123 Source: Info-Tech Research Group Cloud Computing is the future for the next 3-5 years, as it empowers the business to deploy and integrate applications faster than with traditional models.” ~ Director, Finance “ But these are the early days... n= A majority have yet to deploy Clouds and enterprise IT in three to five years

Using “the Cloud” instead of onsite servers and storage is an infrastructure service rental decision. A cloud is not a product. Abstracted compute resources (processor cycles, memory, storage) that are typically derived from aggregated and virtualized commodity hardware. This aggregated and virtualized infrastructure is typically owned by an external third party (outside IT). Application workloads are provisioned by these abstracted resources which are elastic (they scale up with need). Cloud service customers share access to these resources (typically via the Internet) in a multi-tenant environment. 3Info-Tech Research Group What is a compute cloud?  The three types of cloud-enabled service are Infrastructure-as-a- Service (IaaS), Platform as a Service (PaaS), and Software-as-a-Service (SaaS).  Infrastructure-as-a-Service (IaaS) involves direct rental of abstracted compute services such as processing and storage.  Typically these services are packaged and accessed as virtual entities (virtual machines, virtual storage targets).  Examples: Amazon EC2 (virtual server computing services) and S3 (storage services). See Info-Tech’s solution set “Use Cloud Computing to Achieve Small Enterprise Savings” for more information on opportunities with the three types of cloud enabled services.Use Cloud Computing to Achieve Small Enterprise Savings Info-Tech Insight: Infrastructure as a Service is but one cloud-enabled service.

For evaluating all cloud-enabled services, use Info-Tech’s three rules of cloud investment to identify what really matters. Info-Tech Research Group4 Are the business requirements of the software being met? A cloud is abstracted shared infrastructure but it is the application hosted in the cloud that enables the business. If the software is not meeting requirements it does not matter where it lives. This is especially true for SaaS. Evaluate SaaS as an application product, not as a cloud product. How does cost per unit of capacity compare? If the application meets requirements, it now needs to be provisioned with cloud resources. Particularly in IaaS, resources are normally sold on a metered basis. Compare cost per unit between providers. How are service levels ensured and risk mitigated? Start by assessing risk tolerance for the candidate application. What kind of downtime can be tolerated? How sensitive and valuable is the data? Beyond raw capacity what kind of assurances of security, privacy, and availability does the provider make? Do they have SLAs? What additional premiums, per unit of capacity, are there for higher levels of assurance? Alignment is Software IT must align with business goals and objectives. Applications are the intersection point between the strategic and operational goals of the enterprise and IT. Infrastructure is Capacity Applications in the cloud are provisioned with processing, memory, and storage. The important business measure is cost per unit of capacity as well as the value added cost per unit of capacity of risk mitigation and service levels. Management is the Differentiator Software that efficiently manages the utility infrastructure for business processes is a key value add. Management software can also provide visibility into the cloud for compliance and performance monitoring purposes The Three LawsCritical Questions

Selecting an infrastructure service is like renting a truck Info-Tech Research Group5 What are the load requirements? What is the proposed cargo? How big is it? How fragile is it? What is its value? How often will it have to be moved and how far? What do the rental agencies offer? Some agencies may specialize in one size and type of truck. Others may have a diverse fleet. Some may offer special value add-ons such as extra insurance or free road side assistance if the truck has a breakdown. What is the total rental cost? Finally, what are the all in costs of renting the truck? This is important for comparing services but also for rental against other options. (When all in costs are considered over the long haul, maybe just buying a pickup would be cheaper.) A truck rental may be considered when a transport need exceeds the carrying capacity of your owned vehicle(s). Selecting a rental agency is guided by three questions: Selecting the right cloud Infrastructure-as-a-Service partner involves answering these same three critical questions. Info-Tech Insight:

First assess candidate applications for their requirements and suitability for a cloud infrastructure service.  What kind of load are you going to carry (resource requirements)?  Does the load need to be insured (security/availability)? Some loads you just won’t trust on a rental because of their high value or fragility.  How long will you need the truck (duration of service)?  How far are you going to drive the truck (geographic location)?  Do you have a truck license or a general license (virtual licensing restrictions)? Info-Tech Research Group6 Similarly, when assessing a workload’s fit for the cloud, determine what a specific workload requires in terms of capacity, security, and availability levels. Like assessing load requirements Use Info-Tech’s “Cloud Candidate Assessment Tool” to assess workload appropriatenessCloud Candidate Assessment Tool See appendix for more about this tool.

Next explore what the Infrastructure-as-a-Service providers offer in terms of services, support and service level guarantees. In selection of a cloud partner – it is essential to know how secure your data is going to be, what sort of assurances and service level agreements they are able to provide, the level of support offered, and in some cases, the physical location of your data. Info-Tech Research Group7 Like assessing the rental agencies  Do they have a model that meets your needs? (Some might say no we just rent vans and you need a big two ton four by four.)  What are the distance restrictions, can you take the truck out of province/state/country?  Is there extra insurance offered? How much does that add to the cost?  Does the truck have maintenance guarantees?  What about roadside assistance if the thing breaks down? Info-Tech’s “Cloud Vendor Shortlisting Tool” will determine vendors that fit with your current environment and prioritiesCloud Vendor Shortlisting Tool See appendix for more about this tool.

Finally, be sure to evaluate the total cost of service, not just the initial entry costs (which are tantalizingly low) A key draw of cloud services is that a project can get started cheap and it can get started fast. But be sure to be able to account for total costs over time. The bigger and longer a project the more likely it is to have a total cost similar to the total cost of on-site hosted hardware. Info-Tech Research Group8 Like assessing total rental costs  A big truck can be had for a small price for a day, but what if you need to rent it for a month, a year?  Are there discounts available for long term rental (lower than the sum of the hourly/daily rates over the same time period)?  At what point does the total cost of the rental start to compare unfavorably with the cost of just buying or leasing your own truck? Use the Info-Tech “Cloud versus On-Site TCO Comparison Tool” to compare the total costs of servers hosting on-site and in a cloud over timeCloud versus On-Site TCO Comparison Tool See appendix for more about this tool.

Amazon and Rackspace lead the cloud vendor landscape Info-Tech Research Group9 VendorFeaturesAffordabilityUsabilityVendor Viability Geographic Presence SupportOverall Rating AmazonChampion RackspaceChampion GoGridContender SavvisContender TerremarkContender JoyentEmerging Star FlexiantVanguard OpSourceVanguard Harvey Balls represent a relative score from zero to four with four being the top score.

Rackspace has great support and is a good match for SMBs Info-Tech Research Group10 “We don’t fear portability or federation in the cloud. Portability of data is good for the cloud. We don’t lock you in.” ~ Rackspace A company that pioneered managed hosting, is now pioneering managed cloud services. It’s a natural step forward for Rackspace, as they can leverage the lessons learned with physical server hosting as they move into the virtual world. Rackspace is aimed at the start-ups, the one-person IT shops, and small SMB who don’t have a lot of money, but are still interested in moving to the cloud. They are – above all – a hosting service. Rackspace competes on their level of service. Rackspace is a great low-cost solution. The vendor embraces open standards, and is a great starting platform for SMB customers. At worst, you can simply export your website content and take your business elsewhere. At best, you will be able to achieve a higher level of availability for your data at a fraction of the cost of doing it yourself.

Security and availability remain important considerations, however small enterprises tend to be more risk tolerant Info-Tech Research Group11 For small organizations with standard business practices, cloud- based applications offer a tremendous cost savings... Larger organizations with specialized application needs and extreme security requirements will have trouble utilizing the cloud for significant parts of their operations.” ~ C-level Officer at a small Education organization “ Small enterprises should consider the classic cautions, such as security and availability; however: Small enterprises are less likely to have Tier 1 data centers with % availability. 99.9% uptime (which many cloud services promise) will be good enough. Cloud security assurances may also compare well against what can be provided in-house. As competition heats up in the cloud space, look for continued efforts by all providers to mitigate security and service level concerns.

Associated Research and Tools Info-Tech Research Group12 Strategize Cloud Computing to Achieve Small Enterprise Savings Cloud Candidate Assessment Tool Compare Storyboard: Select the Right Cloud Infrastructure Partner Select Cloud Vendor Shortlisting Tool Cloud versus On-Site TCO Comparison Tool