What a difference a year makes. Twelve months ago it was almost impossible to find Australian organisations that had embraced cloud computing. Now pretty much everyone is planning, piloting or executing some form of migration to the cloud.
If there was ever doubt that cloud was little more than hype, it was eradicated in April 2010 by Commonwealth Bank of Australia (CBA) group executive for enterprise services and chief information officer, Michael Harte. In a speech to Committee for Economic Development in Australia, Harte declared that never again did he wish to be locked into using proprietary hardware or software and cloud computing was his escape route.
Harte is one of many CIOs who have been able to satisfy concerns that initially arose regarding the data security, accessibility and governance of cloud computing.
The bank has been investigating ways to buy software and infrastructure as a service for several years. A trip to the US in May 2007 included a meeting with Google and a chance to investigate its cloud-based services for messaging and email.
“It freed up so much resource,” Harte says. “And we thought, ‘Wow, wouldn’t it be nice if you could do other enterprise-scale activities on public infrastructure, and you could partition and secure that’.”
At the time, however, there simply wasn’t the business motivation for suppliers to make the switch.
“The incumbent service providers, whether it’s IBM or EDS, were really struggling with the model because they tend towards their own accounting standards,” Harte says. “They still have their own strong business models. They still wanted to continue to ‘lock’. They do resist contestability. And those things are the antithesis of what we were trying to do.”
We want to get out of infrastructure computing and into fine-grain components and highly granular data, so that our customers enjoy new services.
“We only want to pay for what we use,” Harte says. “We want to get out of infrastructure computing and into fine-grain components and highly granular data, so that our customers enjoy new services. This is not about some technical breakthrough; it is about supplying customers the services they want — and doing that at value.”
An initial area of activity has been in test and development, which Harte says can account for up to 40 per cent of the bank’s server resources. CBA is utilising capacity-on-demand from Savvis and Amazon Web Services for part of the workload.
“Once we’ve developed and tested those capabilities, and we have them operating at full production, we can determine whether they stay outside in the public cloud or [should be] brought back inside the corporation,” Harte says. “We can provision those in under 10 minutes and we can do it at up to a tenth of the cost.”
Read the full interview with Commonweath Bank CIO, Michael Harte
Harte is not alone in his thinking. For many CIOs, the cloud is a chance to move away from technology strategy and embrace business strategy, although the definitions of cloud computing remain a grey area. Westpac, for example, has completed a trial of an internal private cloud and plans to bring the service into production.
This is not about saving money; it is about reducing risk and improving business continuity.
“[We want to] move away from a capital demand-driven budget to one that’s a utility-based model, that is much more predictable and reliable in terms of determining what our ongoing costs will be,” Nikoletatos says. “But this is not about saving money; it is about reducing risk and improving business continuity.”
He says that the experience for students is going to change significantly in the next 10 years, requiring greater flexibility in how data is handled.
“Unless you have a bottomless pit of funding to help build things organically, you have to be thinking differently about how you deliver services,” Nikoletatos says. “It's about getting the foundation right and, as you mature areas that you can move to the cloud, you slowly progress them and move them once you satisfy the governance-related issues.”
As the deputy chair of the Council of Australian University Directors of IT (CAUDIT), Nikoletatos says many other universities are looking to cloud computing as a way of reducing costs and increasing functionality, including through collaboration. “The University of Melbourne, Monash and RMIT are all working collectively on a model with a Fujitsu data centre in mind,” Nikoletatos says. That large organisations are treating cloud computing seriously reflects the rapid maturity of the capabilities of many service providers. According to the chief technology officer at Melbourne IT, Glenn Gore, much has been learned in a short period.
Melbourne IT has been running VMware’s vCloud Express service since September 2009 and is now switching over to a full vCloud implementation, with vCloud Express to be relaunched as an SME-focused service later this year.
“What I have realised is that some really good things come along with cloud, but with those good things come a different set of responsibilities and accountabilities,” Gore says. “Supporting cloud-like infrastructure is more complex than we anticipated, and that’s even with our decade of hosting experience.”
Melbourne IT is one of several service providers to launch cloud service offerings, and they are finding customers quickly. The earthmoving equipment maker Komatsu, for example, has signed with Telstra to have its IT infrastructure delivered as a service. Komatsu CIO, Ian Harvison, says the decision was catalysed by the expiration of the leases on several of its servers, coupled with the infrastructure in its data centre beginning to show its age. Harvison supports 1200 staff spread across 43 branches around Australia, New Zealand and New Caledonia.
He invited three organisations — Hewlett-Packard, Fujitsu and Telstra — to investigate Komatsu’s requirements and propose a new infrastructure plan. HP withdrew, and the solution that stood up from a cost perspective was Telstra’s. Komatsu has signed a five-year, whole-of-business agreement for Telstra to provide infrastructure-as-a-service in a virtual private cloud, and has also renewed its communications contract with Telstra. “This really is about aligning our resources to focus on the strategic and the core things we need them to do,” Harvison says.
“And in running infrastructure, it's [Telstra’s] core capability. They can do that — we don't need to be doing it.”
The problem in the traditional model is you have to go and buy a server, put it in, and put the whole disaster recovery environment in place.
“It was something we’d wanted to do but the problem in the traditional model is you have to go and buy a server, put it in, and put the whole disaster recovery environment in place,” Harvison says. “This model means we don’t have to worry so much about having to procure the servers ourselves and get them up and running.”
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