Transitioning from a traditional data center to an internal cloud infrastructure delivery model is an inevitable part of most enterprise organizations' futures, according to interviews with analysts.
The private cloud presents some very clear advantages for SAP customers, such as increased flexibility and decreased costs of a shared infrastructure and service on-demand.
But getting there won’t be easy, according to several analysts, one saying it’ll take companies five years or more to transition to the cloud.
"Transitioning a traditional data center to a cloud infrastructure capable of delivering infrastructure on-demand is a daunting task," said Chris Wolf, a research vice president for Gartner’s IT Professionals service.
A private cloud is a virtualized, automated, self-service data center behind a corporate firewall.
Virtualization -- partitioning one physical server into several virtual servers -- is just one of several components of a true cloud offering, said Sean Hackett, research director for The 451 Group‘s CloudScape Service.
But deploying x86 virtualization is an early first step to the private cloud, Wolf said. His clients understand that they can't wait a few years for the private cloud to mature before getting started. Instead, they are working today to virtualize their infrastructures, while automating operational processes, revising procurement processes, and updating internal accounting and chargeback processes to support the virtual environment.
Ultimately, he said, the private cloud must have the framework to automate the provisioning of applications and services, and the necessary back-end workflows to support any provisioning operation.
For that reason, building a private cloud requires careful attention to governance, service automation, service management, capacity and utilization management, demand forecasting, cloud infrastructure management, and virtual- and physical-infrastructure architecture decisions, Wolf said.
It requires close coordination among many internal departments that drive several evolutionary activities in parallel.
Benefits of the private cloud
Many SAP customers are already experimenting with the private cloud, if only on a pilot basis, RedMonk analyst Stephen O‘Grady said.
"In a private environment, enterprises have full control over their environment," he said. "The only real difference is that it is more agile and flexible and costs less to support (than a public cloud). In this case, enterprises aren't taking on the risks often associated with the cloud around performance, availability, and security and compliance."
One of the major benefits of utilizing the private cloud, Hackett said, is enhanced IT agility.
"In its simplest form, an IT infrastructure is composed of technology resources (servers, storage, etc.) that drive the creation of IT services that meet business needs," he said. "The complexity of most internal IT departments that end-user organizations have built up over time only decrease IT’s ability to respond to changing business requirements."
The key benefit of the private cloud is it allows for a more flexible and adaptable infrastructure, O’Grady said.
Another benefit associated with the private cloud, according to Hackett, is that it defers, and in some cases, avoids costs.
"Cloud computing enables end-user organizations to scale back their investment in resources to manage expensive underutilized IT equipment," he said. "By leveraging the cloud, organizations can defer or avoid altogether the expense associated with building and managing additional data centers."
The private cloud also removes complexity, Hackett said. With the cloud, end-user organizations can reduce the size and complexity of their internal IT operations by moving nonstrategic assets onto a cloud service provider infrastructure.
The private cloud also provides access to inexpensive disaster recovery.
"Cloud computing provides end-user organizations with the ability to leverage third-party resources for DR without incurring the costs associated with building, maintaining and managing its own internal DR resources,” Hackett said.
In turn, hosted, private clouds are becoming an alternative to an organization building its own cloud. SAP’s working with its partners to package these offerings, according to James Governor, another RedMonk analyst.
But keep in mind that the private cloud isn't without its negative aspects.
The lack of maturity of the cloud market is also a concern for end users planning to put mission critical applications and data into the cloud, Hackett said.
"It appears many end-user organizations are still confused about exactly what cloud is and what the associated risk profile looks like," he said. "End-user organizations oftentimes have concerns regarding vendor viability, service quality and support."
Those risks, Wolf said, include lack of security, compliance, and virtual machine sprawl due to the simplicity of provisioning new virtual machines, applications or services.
There is also the issue of service-level agreements (SLAs), Hackett said. SLAs are meant to ensure that the service provider meets its contractual obligations and provides contingency clauses in case issues arise. Many cloud service providers, Hackett said, offer rudimentary SLAs, while others do not provide an SLA at all.
Many service providers also lack the transparency and audit capabilities required by enterprises for use, Hackett said, meaning end users assume increased legal and compliance risks.
In turn, many companies have spent so much on applications, infrastructure and other resources that private cloud adoption isn't a realistic option.
Vendor lock-in is also a very real concern, Hackett said.
"Service providers have leveraged lock-in as a strategic weapon to combat increasingly lower switching costs," he said. "Often, end users write applications to a specific platform, making moving workloads to a different service provider challenging."