OC CIO Roundtable Minutes 6-11-09

1993-2009
Southern California/Orange County CIO Breakfast Round Table
June 11, 2009 meeting

Present: Sean Brown, Greg Gillis, Jim Sutter, Sharon Solomon, Jeff Reid, Jeff Hecht, Jennifer Curlee, David Mann, Andy King, William Zauner, Carmella Cassetta, Dave Phillips

We welcomed Greg Gillis, SAP, to the meeting to assist with the presentation.

The minutes of this and prior breakfasts are available online at the Peer Consulting Group’s website, www.peergroup.net, with links to the presentation material, when available.

Topic: Cloud computing update.

This is a popular topic and is the lead article in the June 1, 2009 CIO Magazine – Cloud Control. Sean Brown, RJTCompuquest, started with an informative video, http:/www.youtube.com/watch?v=XdBd14rjcs0. Cloud computing is a dynamically scalable computing resource, where virtualized resources are provided as a service over the Internet. It incorporates infrastructure (IaaS), platform (PaaS) and software (SaaS) as a service. IDC forecasts the Cloud computing market to grow to $42B by 2012, from $16B in 2008, and will consume 25% of the total IT budget. It’s becoming popular as a pay-as-you-go option because of increased bandwidth, faster and cheaper hardware, virtualization and web services protocols. Users can avoid capital expenditures, and consumers are billed for what they use as a utility (like electricity), or subscription (like a paper). There are little or no upfront or termination costs, and services are provided with service level agreements. Despite differences of opinion on what Nicholas Carr has to say, there are names worth watching in this space. Founded in 1994, Amazon is one of the innovators in Web-based computing, offering pay-as-you-go access to virtual servers and data storage space (see Sean’s handout for more detail). Prominent customers include NY Times and Eli Lilly. Another major force is Salesforce.com, founded in 1999, with its set of CRM tools and a platform for building web applications. Google is a big player offering Google Apps, and a simple Web site creation tool, Postini. While the company’s main focus is search, no one knows the Internet quite like Google. And never underestimate Microsoft. The Pros of the Cloud include fast start-up, scalability, business agility, faster product development, and no capital expenditures. The Cons include bandwidth can become expensive, application performance could suffer, data integrity, you could be too big to scale, and human capital may be lacking. To mitigate this, you can demand SAS 70 compliance. Gartner lists several issues which potential users of Cloud computing should be aware of, including the location of the data storage units, data segregation and availability, disaster recovery, long-term viability of the vendor and how to recover your data if the vendor becomes unable to respond. Sean's presentation is at http://www.slideshare.net/occio .

Jim Sutter, Peer Consulting Group, said that he has limited experience with Cloud computing, although he is on the Board of a small vendor that offers a development environment on Amazon. Lots of Silicon Valley start-ups use the Cloud approach. He agrees that there are issues including integrating with other IT services used, and management problems, especially for small company CIOs when trying to solve service problems. One of his clients is looking at this especially since they have found a predictive maintenance SaaS provider to enhance their J D Edwards systems.

Sharon Solomon enjoyed the presentation. It makes you think about what do you need in your environment, and how best to supply those services – part Cloud and part in-house. She worked in a heavily regulated environment where they had to be very careful with protecting against unauthorized access to data, but they did use Salesforce.com

Jeff Reid also does not have much experience with SaaS, and he has lots of questions, similar to those you have when considering outsourcing. How open are these vendors to audit? Last month, he introduced the topic of Virtualization but talked about it in terms of in-house use of virtual resources. Cloud computing adds another wrinkle to that discussion, and it depends where you are in your business cycle.

Jeff Hecht, Word & Brown, said that it depends on where you are in your business cycle and on where you are with each of your applications. They are looking hard at outsourcing Exchange to a Cloud vendor. He likes the availability (24X7X52), DR, etc. Integration is an issue. You still need expertise to run the Cloud computing and to manage the network.

Jennifer Curlee, Surefire, said that they outsource their storefront, which is transaction based. They are starting to use SaaS where they don’t have in-house expertise, like using Avatax (?) for Tax. They are finding problems with the interface between it and SAP, and are having performance problems. They have had to segregate the services.

David Mann, Word & Brown, complimented Sean on his presentation. They are seriously evaluating the ROI of Cloud computing, and last year looked at Salesforce.com. The balance is between time-to-market vs. integration. They have decided to go with Microsoft CRM, as it gave them more options than Salesforce.com.

Andy King, Exemplis Corporation, added his compliments on the presentation, and reflected on how company culture affects these decisions. It is not their style to use Cloud computing, but they will crawl, walk then run with it. They might go with Salesforce.com, but don’t like subscription services – they prefer capital expenses to operating expenses.

Carmella Cassetta, Corinthian Colleges, also thought it was a good presentation. They use SaaS for Emergency Call-in, and are seriously looking at Cloud computing for things they are trying to test. It depends on the data, the application, whether it is informative, not transactional in nature.

Thanks again to Sean and Greg for the very good introduction and informative handout.

See you on July 9, 2009 – 7:00 a.m. in the RJTCompuquest conference room at:
940 South Coast Dr., Suite 260, Costa Mesa, CA 92626.