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A Buyer’s Guide to the Cloud

Steve Ford & Bill SinnettJune 2011

Why is a Cloud Buyer’s Guide Critical for Today Finance Executive?

“The cloud has reached an important inflection point that is impacting corporate strategy and changing business models. Organizations that recognize and are able to effectively manage risks around cloud will create a sustainable competitive advantage.”

From “The Cloud Transforms Business,” by Mark A. Goodburn and Steve Hill, in Financial Executive, December 2010.

But Confusion & Uncertainty Exist…

Confusion at the CFO Level – You’re Not Alone

• 29% of CFOs really don’t know what Cloud Computing means

However...• 44% of CFOs say Cloud will allow them to

rethink and restructure their overall IT strategy

(CFO Magazine, March 2011)

The Buyer’s Guide Sets Out to Do the Following:

• Define Cloud technology• Describe Cloud service models and categories of

applications• Describe potential benefits that can be achieved• Describe potential risks and pitfalls of the Cloud• Provide the right questions that financial executives

should ask vendors, IT departments, and their own staff

• Help customers evaluate vendors• Provide considerations for contracts

What Type of Content Is Featured?

Excerpt: Asking the Right Questions

Internally:• Where in my business, and in my IT landscape, does cloud fit? Some common areas are:

sales force automation, global payments and transactions, expense management.• Does a point solution fit my need, or does a suite offering better suite my business?• What business goal am I really seeking to achieve? • How can I prevent vendor lock-in?• Do I truly understand the terms of the contact? Does IT clearly understand the terms of

the contact?• Have I negotiated protection against additional costs in the contract?• Have I negotiated penalties or other behavior drivers to protect my company and ensure

expectations are met by the vendor? • Has my team (along with IT) conducted a thorough market analysis and cost analysis prior

to contract or renewal?

Excerpt: Asking the Right Questions

\To Vendors: • What’s your current history and track record of new products and innovation? How often

do you issue new products and releases?• How long have you been in business? What’s your growth rate over time? • What happens if you go out of business? • What happens if you’re acquired by a competitor? What do you do to make the data

useful without context?• Can I buy the data models and logical models?• How do I provide input into future product roadmaps?• What are your remedies for breaches in service level agreements?• How are systems backed-up? What will be done during disaster recovery? How much

liability will you provide?• How do you see “chain of custody” and “data privacy compliance” being managed?• What kinds of end-to-end Service Level Agreements (SLAs) and inter-agent Operational

Level Agreements (OLAs) do you have?• What type of availability targets can be set realistically when you span multiple clouds?

What type of Data Center tiering forms the “boring but real” physical underpinning required to deliver the cloud itself?

Excerpt: Potential Benefits of Cloud

Carlos Passi of IBM describes the operational benefits most organizations look for in Cloud:• Cost Savings: IT and line-of-business decision makers demand at least 20% cost savings

to move into the cloud.• Security: Nearly 25% of developers cite security as the primary inhibitor to cloud • Flexibility: After security, deployment flexibility is the biggest driver of cloud adoption

worldwide.• Ease of Use: As use extends from on-premise to cloud, users expect real time access and

updates with reliable up-time.

In “Cloud Computing: Business Benefits With Security, governance and Assurance Perspectives,” ISACA describes some of the key business benefits offered by the Cloud: Cost ContainmentThe cloud offers enterprises the option of scalability without the serious financial commitments required for infrastructure purchase and maintenance. There is little to no upfront capital expenditure with cloud services. ImmediacyMany early adopters of cloud computing have cited the ability to provision and utilize a service in a single day. This compares to traditional IT projects that may require weeks or months to order, configure and operationalize the necessary resources. This has a fundamental impact on the agility of a business and the reduction of costs associated with time delays.

Next Steps for the Buyer’s Guide

• Obtain feedback from FEI members• Publish Buyer’s Guide to members• Conduct Cloud webinar• Generate additional educational content:

– Chapter sessions– Videos

Your Thoughts, Suggestions & Questions?

Thank You

Steve FordBill Sinnett