Essay: Enterprise Cloud Computing Platforms

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[. . .] The IDC study, Salesforce1 Platform: Accelerate App Dev with Huge ROI (Hilwa, Mahowald, Perry, 2014) reports that IT labor cost reductions on a cloud platform can deliver as much as a 44% reduction in annual labor costs. The same study found when enterprises chose a cloud platform, they were able to attain a cost and efficiency reduction of $243,814 per 100 users vs. legacy, on-premise systems and platforms (Hilwa, Mahowald, Perry, 2014). When an enterprise cloud computing platform was standardized on vs. continuing to rely on legacy on-premise systems and platforms, enterprises realized a savings of $318,965 per 100 users per year (Hilwa, Mahowald, Perry, 2014).

One of the most commonly cited concerns and regarding enterprise cloud computing platforms is application, login and data security. With the many instances of public cloud computing platforms being hacked including Amazon Web Services, this is a valid concern. Security and stability of enterprise cloud computing platforms is so essential to the business models of enterprises standardizing on this platform, they have strategic IT plans defined with entire sections on security planning and management (Sharif, 2010). Enterprise cloud platforms of The Federal Information Security Management Act of 2002 (FISMA), Statement on Standards for Attestation Engagements (SSAE) No. 16, Reporting on Controls at a Service Organization (SSAE 16) (formerly SAS 70), International Standards Organization (ISO) 27001, Payment Card Industry Data Security Standard Level 1 (PCI DSS), Safe Harbor & TRUSTe standards) and SSL 128-bit VeriSign transmission level security. Enterprise cloud computing platform provides are investing the majority of their research and development funds into security in an added effort to alleviate this as an objection to selling their services. Annual infrastructure costs are reduced from $170,731 to $67,902 as a result of the combined effects of these factors taken together (Hilwa, Mahowald, Perry, 2014). Table 1 in the Appendix, Comparison of Enterprise Cloud Platform and Legacy On-Premise Systems and Platforms summarizes the analysis completed that shows the business value of an enterprise cloud platform. Each of the attributes listed in the table are what CIOs and IT departments use to evaluate IT platforms and infrastructures to determine how best they align with their specific strategic goals and initiatives. Integration, infrastructure, IT costs and IT staff productivity are essential cost and benefit components in calculating the total business value of an enterprise cloud computing platform.

Conclusion

Each industry's competitive landscape continues to accelerate based on real-time data availability and greater insights into supply chains, customers and costs. The previous-generation, legacy on-premise systems and platforms does not scale to current and future business models and their accelerated data needs. Enterprise cloud computing platforms are being designed to provide a scalable, secure system of record that can support both previous and current generation enterprise applications. Through the use of APIs, cloud-based resource allocation and optimization, and the development of virtualization technologies, enterprise cloud platforms are capable of surpassing legacy IT systems from an application performance and scalability standpoint (Wood, Ramakrishnan, Shenoy, Van, 2012). There continues to be intensive levels of investment in development and programming languages as well (Hilwa, Mahowald, Perry, 2014) including support for Ruby, Java, Python, visual workflows and role-based access control (Aleem, Christopher, 2013). These factors and the innate scalability and security enterprise cloud platforms are delivering greater time-to-market, collaboration, cost reduction and support for emerging business models today.

Appendix

Table 1:

Comparison of Enterprise Cloud Platform and Legacy On-Premise Systems and Platforms

Platform Feature

Enterprise

Cloud Platform

Legacy On-Premise Systems & Platforms

Time-to-Market For New Applications and costs

A recent IDC study shows that the Salesforce1 platform accelerated time-to-market for new applications by 70% or more

Source: (Hilwa, Mahowald, Perry, 2014)

Time-to-market for legacy applications designed through agile and waterfall methods average $250K or more in many organizations; time lag drives delivery date past deadline.

APIs for legacy system integration and costs

Extensive with Salesforce1 having 10X the number of APIs

Source: (Hilwa, Mahowald, Perry, 2014)

None, all custom hand coding for adapters and connectors

(Avg. is $60K - $90K per adapter per system integrated to.)

Infrastructure Cost Reductions (including costs associated with in-house development activities such as servers, software, hardware, travel, and consultancy services)

$102,829 per 100 users cost reductions

Source: (Hilwa, Mahowald, Perry, 2014)

No Cost Reduction Possible

IT Labor Cost Reductions Based on Greater Efficiency

44% annual reductions IT labor costs.

Source: (Hilwa, Mahowald, Perry, 2014)

Requires unique, expensive skill sets to keep existing infrastructure in place and operating reliably

IT Staff Productivity (avoiding IT hires and reduce their ongoing maintenance and application development costs).

$243,814 per 100 users cost reductions

Source: (Hilwa, Mahowald, Perry, 2014)

No Cost Reduction Possible

Data Independence -- All Apps. Operate Completely independent of the underlying data, increasing app. Security and reliability

Inherent in the design of an enterprise cloud platform.

Not available as many on-premise apps rely on tight integration to databases at the field and record level.

(unavailable)

Development environment that includes advanced support for Ruby, Java, Python, visual workflows and role-based access control

Inherent in the design of an enterprise cloud platform.

Each of the programming languages would operate separately; there would be no common code base; further fragmentation of IT development and application management.

Application and Platform Security

FISMA, SSAE 16 (formerly SAS 70), ISO 27001, PCI-DSS Level 1, Safe Harbor & TRUSTe standards) and SSL 128-bit VeriSign transmission level security.

(standard and included at no charge)

Customized security programming and development; security to the O.S. level requires frequent patches and ongo8ing system maintenance contracts (22% of the purchase price of the operating systems and apps)

Support for Mobility Application Development and costs

Supported to the API Level

Source: (Hilwa, Mahowald, Perry, 2014)

None -- must start an entirely new programming effort for each new mobile app.

(new mobile app. ranges from $5K to $50K depending on complexity)

Business Productivity (faster application development, moving staff members to positions focused on growing the business, higher productivity because of better applications, and other cost reductions in operations.)

$318,965 per

100 users per year.

Source: (Hilwa, Mahowald, Perry, 2014)

Not Applicable

User Productivity

Average productivity gain of $62,227 per 100 users.

Source: (Hilwa, Mahowald, Perry, 2014)

Not Applicable

Annual Infrastructure Costs (IDC Study)

$67,902

Source: (Hilwa, Mahowald, Perry, 2014)

$170,731

Source: (Hilwa, Mahowald, Perry, 2014)

Bibliography

Aleem, A. & Christopher, R.S. 2013, "Let me in the cloud: analysis of the benefit andrisk assessment of cloud platform," Journal of Financial Crime, vol. 20, no. 1, pp. 6-24.

Beimborn, D., Miletzki, T. & Wenzel, S. 2011, "Platform as a Service (PaaS)," Business & Information Systems Engineering, vol. 3, no. 6, pp. 1-384.

Berman, S.J., Kesterson-Townes, L., Marshall, A. & Srivathsa, R. 2012, "How cloud computing enables process and business model innovation," Strategy & Leadership, vol. 40, no. 4, pp. 27-35.

Cowen, T. & Gawer, A. 2012, "Competition in the Cloud: Unleashing Investment and Innovation Within and Across Platforms," Communications & Strategies,, no. 85, pp. 45-62,219-220.

Creeger, M. 2009, "CTO Roundtable: Cloud Computing," Association for Computing Machinery.Communications of the ACM, vol. 52, no. 8, pp. 50.

Cusumano, M. 2010, "Technology Strategy and Management Cloud Computing and SaaS as New Computing Platforms," Association for Computing Machinery.Communications of the ACM, vol. 53, no. 4, pp. 27.

Fershtman, C. & Gandal, N. 2012, "Migration to the Cloud Ecosystem: Ushering in a New Generation of Platform Competition," Communications & Strategies,, no. 85, pp. 109-123,219.

Ghormley, Y. 2012, "Two's Company, Three's A Cloud: Challenges To Implementing Service Models," Journal of Service Science (Online), vol. 5, no. 1, pp. 19.

Hayes, B. 2008, "Cloud Computing," Association for Computing Machinery.Communications of the ACM, vol. 51, no. 7, pp. 9.

Hilwa, A., Mahowald, R., Perry, R. (2014). Salesforce1 Platform: Accelerate App Dev with Huge ROI. Available: https://secure2.sfdcstatic.com/assets/pdf/misc/IDC-Business-Value-Whitepaper.pdf. Last accessed March 21, 2014

Reavis, D. 2012, "Information Evaporation: The Migration Of Information To Cloud Computing Platforms," International Journal of Management & Information Systems (Online), vol. 16, no. 4, pp. 291.

Sharif, A.M. 2010, "It's written in the cloud: the hype and promise of cloud computing," Journal of Enterprise Information Management, vol. 23, no. 2, pp. 131-134.

Silva, L.A.B., Costa, C. & Oliveira, J.L. 2013, "A common API for delivering services… [END OF PREVIEW]

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