Cloud at first then sunshine

In the rush to deliver new applications and services, agile businesses increasingly take a “cloud first” approach to procuring the IT infrastructure they need, writes Jessica Twentyman

In less than two months’ time, internet grocery company Ocado will start delivering online orders to customers of Morrisons, the UK’s fourth largest supermarket chain.

With the need to turn the deal between the two companies, struck in May 2013, into a fully functioning online grocery service by January 2014, cloud technologies are playing a starring role, says Paul Clarke, chief technology officer at Ocado.

In particular, the cloud will allow Ocado and Morrisons to exchange data relating to products, orders and deliveries. Each company has built its own cloud data platform – in Ocado’s case on Google’s Compute Engine and in Morrison’s on Amazon Web Services. These two platforms will be able to “talk” to each other, swapping information that is regularly uploaded to the platforms by the two firms from their own back-end systems, at regular intervals, according to urgency, in some cases daily, but in others every 15 minutes.

It’s just one of the many ways Mr Clarke and his team are taking advantage of the speed at which cloud technologies allows them to set up new systems and deploy new services. “Cloud is key to our agility,” he says. “It also makes sense cost-wise, but actually cost is not the main driver – it’s agility.”

That’s a recurrent theme among business leaders, says Thomas Davies, head of Google Enterprise in the UK & Ireland. “They’re increasingly interested in how cloud can help them respond faster to business challenges, whether that’s expanding into new markets or launching new services that will enable them to see off the competition.

It’s about delivering IT at a brisk pace that matches the speed of change in modern business

“It’s about having the technology infrastructure ready to support new strategic initiatives in days or weeks, rather than months or years. It’s about delivering IT at a brisk pace that matches the speed of change in modern business.”

Unlike ten-year-old Ocado, however, many companies drag behind them a burden of legacy systems and bloated data centres, acquired over decades. These are a major drain on business agility, says Paul Daugherty, chief technology officer at management consultancy firm Accenture. But smart companies are tackling these issues head-on.

Mr Daugherty has just completed research into the IT strategies of high-performing companies. “They’re disentangling the legacy ‘hairball’ and streamlining their application portfolios, essentially crafting a lean organisation that can respond adroitly to the volatility of today’s global markets,” he says. In particular, they’re taking a “cloud first” approach and deploying all new services on cloud architectures and, where appropriate, also migrating older ones to the cloud.

But that doesn’t mean all workloads will end up on public-cloud infrastructure, owned and operated by third-party providers like Google or Amazon – far from it. Where workloads need to be kept in-house, for reasons of security or compliance, they’re increasingly hosted on internal private-cloud infrastructures that sit behind the company firewall, but scale upwards and downwards according to demand.

This “cloud first” approach, says Mr Daugherty, will result in a “hybrid” cloud architecture at the most agile companies, where workloads and applications reside on a combination of public and private-cloud resources. To high performers, he says, hybrid cloud “is not a stepping-stone, it’s integral to the future state of their organisations”.

In fact, that shift to cloud-based agility is already underway, with demonstrable benefit in the here and now. Accenture’s research shows that 40 per cent of high-performing organisations are already seeing measurable improvements in IT agility by using cloud technologies to upgrade their enterprise architectures, compared to 9 per cent of other organisations. Over the coming years, the gap is only set to widen, but it’s already clear who the winners will be.