Clarity in the Cloud
Deloitte Insights video
A short while ago the concept of cloud computing was at the fringe of the information technology (IT) camp. Now, it seems everyone has the ability to access a cloud. Much like the Internet, the cloud has become fundamental to business innovation and it’s not going away. Tune into this episode of Deloitte Insights to learn how cloud computing can enable both incremental improvements and transformation in your organization.
Sean: Hello and welcome to Insights. Today, we are going to get some clarity on clouds. Now, we are not talking about weather; we are talking about the technological variety. And to do so, we are joined remotely by guests from where else, but just North of Silicon Valley in San Francisco. We are welcoming back to the program Irfan Saif, a principal in the Security and Privacy Practice of Deloitte & Touche LLP and we are saying hello and welcome to Paul Clemmons, a principal in Deloitte Consulting LLP and the leader of Deloitte’s Cloud Practice. Now, Paul that in itself is an interesting sign of the times that Deloitte even has a Cloud practice, considering that just a short while ago this concept of Cloud was sort of on the fringe of the IT camp, but now it seems that everybody has access to a Cloud and so my first question for you is what is the value proposition here? Why should executive boards have their head in the Clouds?
Paul: Well Sean that is a great question, it is a question we get quite frequently from clients and from analysts and vendors. Essentially, there are two important things to think about as it relates to Cloud computing – one is that there are significant improvements in the way systems and applications are delivered in the marketplace that are better, that are faster and that are cheaper. These are incremental improvements for the IT community primarily, but they really enable more business capabilities. So, they are better functionality, better user experience, they are easier to implement, they are faster to market. So instead of spending quarters or years trying to implement a solution you can actually deliver things in weeks or months okay. So, faster, speed to market and then cost of ownership is also much different and much better and delivered in a different way. So, instead of a large upfront cost of capital, they can be delivered more as the value is delivered. So, incremental improvements that is certainly one area that we see a lot of dramatic improvement, but the other is transformational and this gets to the infrastructure providers, the technology providers in delivering capabilities in the marketplace has been very transformational for these companies. And then also for your large companies trying to utilize Cloud computing, there are opportunities to do things differently that we just couldn’t do before because of Cloud computing. If you think of the social enterprise, mobility, these sorts of things are enabled through Cloud computing that are much different than what we had years ago. So, Cloud computing is very important. It is enabling transformation and incremental improvements in IT.
Sean: Thank you for that Paul. I would like turn it over to Irfan who is sitting there next to you in San Francisco and Irfan with your background in security and privacy I was wondering what values you see there for implementing cloud.
Irfan: Yes Sean, I think the critical thing is that this is not an IT play. As Paul mentioned, this is about a strategy and transformational change for the business and really enabling entire new business models in many circumstances. So when people think about cloud, they typically always thought about the cost benefit and the fact that it was about lower cost and perhaps that it was an IT-centric solution and the reality is it is really about much broader strategy in business enablement and I think that is a critical takeaway that I hope viewers get from this session today.
Sean: Now, let us stick with you Irfan because this is your area of focus and it would appear that one of the biggest barriers to entry is that question of Cloud security. So my question to you is, is that concern justified?
Irfan: Sean, yes I think it is. I mean, I think that on one hand there are some really risks and there is no denying that. All of the problems associated with security and privacy and risk in the Cloud, certainly haven’t been identified or resolved as yet, but by the same token this is no different than many other technologies and solutions that have come before and businesses can find effective ways to manage their risk while still embracing Cloud and embracing Cloud solutions. And I think in my view, there are a couple of critical elements to consider; one of them is that not all data is created the same. And so while there may not be the most critical corporate data going into the Cloud, there are many other types of data and applications that could well go into the Cloud and risk be effectively managed. I think the other thing to consider is that there is a misnomer, a great myth; I think that on-premise instantaneously means far better security than off-premise or than in the Cloud. And I think that that is really not accurate and I think that in many instances on-premise is less secure than in the Cloud for a number of reasons. One of them is that security programs aren’t always robust enough to manage all of the data on-premise and the second one is that there is a sense of security, perhaps a false sense of security that because something is behind the corporate perimeter, it is therefore inherently much more secure. And I think that a lot of the breaches of data over the last couple of years have highlighted the fact that is not really true. And so I think it is important to realize, for example if you look at a CRM solution on-premise, there is a limited amount of security that goes into that system. If you look at a comparable system in the Cloud, you find that there is a tremendous amount more in the way of third-party assurance, in the way of people looking at the systems, in the way of monitoring, in the way of security and the bar is set much higher. So, I think it is all about context and I wouldn’t just make a blanket statement, which says that it is too risky to put data in the Cloud. I think it depends on many other factors.
Paul: If I can just build on that point, we have been helping clients in this area for four-to-five years and in their early days, there was a lot of concern around security and privacy and data and are these application providers truly hardened and what not. And what we have seen over time is that we have been able to work through most, if not all, risks, challenges as it relates to using Cloud computing. And more of the concern is myth, is perception, it is lack of awareness, it is lack of understanding and lack of rigor, rather than a true risk that cannot be addressed. So, over time I think we are going to see more and more comfort with dealing with some of these topics. So, it is something that is more about awareness than anything.
Sean: It sounds like you are advocating that there is some superstition surrounding it. Irfan back over to you, if a company wants to go Cloud, I guess for lack of a better term, is there a strategically way that they should be thinking about this?
Irfan: Well, absolutely, I will give you a simple answer or a couple of key things to think about. Number one is they need to think about obviously the overall cost and as I said earlier it is not all about cost, that is an important consideration and I think they need to realize where is the actual spend, not only as far as the technology solution is concerned, but as far as the maintenance as far as the people and the talent that are running whatever processes are being enabled by the Cloud. So, there is a number of factors associated with cost, so they can really understand what the value is behind adopting a Cloud solution as compared to something on-premise. I think the second one is really looking at flexibility; the fact is a lot of these Cloud solutions, there are some niche solutions out there that do very specific things incredibly well. And the idea is that through flexibility and looking at that lens, you can really find a number of different things that you could do with Cloud solutions that your on-premise solution does not enable you to do. And so I think that is another characteristic and it gives you a chance to think about different business models, gives you way to think about different ways of involving different parties within your ecosystem and a number of other factors. So, I think flexibility is the second one. The third one is enablement. How do you enable different things, different points of integration, things like that to occur with an on-premise versus a Cloud solution and if you think about things like mobility and mobile enablement and if you think about things like social collaboration and networking, whether it is networking groups of vendors, networking business partners, networking your customers, things like that. There are many considerations to be had there. So, I would say really those are three areas cost, flexibility and enablement and then certainly around that there are a number of other factors that would go into building a very effective strategy.
Sean: And Paul, I would like to transfer that same question over to you since you are working with clients. What are the strategies that you are suggesting they implement when they want to go down this path?
Paul: Yeah, another great question Sean. What we advocate is thinking about it from a business perspective. So, this is not again an IT solution, is not a solution looking for a problem. This is about when you are trying to solve business problems, Cloud computing can help enable things that just weren’t previously available. So again, social enterprise, mobility and also things just like sales and marketing and HR. Basic fundamental components of your business can be improved through Cloud computing and we encourage clients to think about, not you know ‘we need the Cloud,’ but more like how can we do sales and marketing better utilizing Cloud computing.
Sean: It sounds like there is got to be quite a few conversations upfront. As we are wrapping up the segment, I would like to address this question to both of you, but we can begin with Irfan and that is about the waiting game. I have to assume that some companies may take the sideline approach and they are just going to want to sit out and say we are going to let this technology mature a bit. In your view are there companies that are doing that, is there anybody left on the sideline, or should this be something that should be embraced now. Why or why not? Irfan we will begin with you.
Irfan: Thanks Sean. That is a great question. In my view, I think that there is really no company today that isn’t in the Cloud. They may not know that they are in the Cloud or they may not like there in the Cloud, but they are there and their data, more importantly, is there. And I think one of the important things that we have seen serving a lot of clients is that sometimes clients want to take a step back and they want to build a strategy and they want to build policies and think about how they will approach Cloud. In the meanwhile, people in the business, people in IT are already out there procuring services and they may be doing it using their corporate cards and they may be using it in different ways, but the bottom line is the data is out there. And I will give a couple of examples, I have a client who is a CIO, who felt that because they put a mandate forth that said that they would not do anything in Cloud until there was a strategy everyone would stop. We asked them to sign on to a social collaboration site and lo and behold, they found that they were put in a group with over 400 people from their company. Over 100 of those people happen to be in his organization in IT. So, clearly there was an unmet need and clearly people in the business were finding ways to go out and use Cloud. Another example was another client who had a concern that there was all of this activity going around Cloud, little small projects that were not necessarily officially sanctioned or on-boarded and so they went out and they went to finance and their purchasing department and they said give us a view over the last 120 days of all of the purchases that have gone on with whole list of different vendors and we found that there was over a dozen different Cloud vendor services that had been procured by the business to do different things, may have been marketing, may have been some small collaboration things and you add to that the fact that people have now smartphones and tablets and other devices that really bridge, both personal as well as enterprise data and all of those devices have different Cloud-enabled solutions on them and so that data is quite possibly sitting in a variety of different Clouds. So, I think it is very hard to avoid and I think therefore it is all the more important that businesses really figure out what their strategy and approach is because it is happening whether they like it or not.
Sean: So, very sobering statement to stay that if you don’t think you are in the Cloud, you probably already there.Paul, would you agree with that.
Paul: Absolutely, I absolutely agree the concepts, the capabilities delivered through Cloud computing are fundamental. So, it isn’t as though you are in or you are out. It is like saying we are not going to use the Internet, or not going to use mobile devices, etc. So, it is not about using Cloud, it is about running your business better, utilizing new capabilities, new innovations, new technologies, that allow you to do things better and allow you to transform your business and Cloud computing is enabling that. It is really transforming the way companies can quickly start up, so startups are using Cloud computing virtually to create an entire business in the Cloud, without anything on-premise, but also large banks, health care providers, governments are utilizing Cloud computing in a strategic and fundamental way. So, this should not be viewed as in or out, should we do it, can we do it, is it risky, it is fundamental to how we run our business, it is fundamental to innovation and it is not going away.
Sean: Well, I certainly cannot imagine a world without the Internet. So, I guess we can’t imagine a world without Cloud. So, gentlemen thank you both very much for joining us today.
Irfan: Thank you.
Paul: Thank you.
Sean: You are welcome. Alright, we have been gaining some clarity on the Cloud with Irfan Saif, a principal in the Security and Privacy Practice of Deloitte & Touche LLP and with Paul Clemmons, a principal in Deloitte Consulting LLP and the leader of Deloitte’s Cloud Practice. If you would like to learn more about Irfan, Paul, or any of the topics discussed on today’s broadcast, you can find that information on our website, it is deloitte.com/insights/us. For all the good folks here at Insights, I am Sean O’Grady, we will see you next time.
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