What is Happening?  On 15 February, Amazon announced broad availability and new partners for Redshift, a Cloud-based data warehouse offering. On 4 March, IBM announced that all of its cloud services will be based on an open source cloud architecture. And, in a more low-key fashion, Dimension Data has been increasing sales emphasis of services offerings for managing their customers’ Cloud-resident workloads.

Viewed individually, each of the above items denotes a significant strategy by a major vendor in the Cloud IT market. Saugatuck’s view is that, taken together, the above items indicate how the overall market for Cloud IT is maturing and evolving.

In January of this year, Saugatuck informally interviewed 30 customer (developers + IT leaders) and business partner attendees (mostly ISVs) at IBM’s Connect 2013 event regarding their knowledge and perception of three increasingly widely-used, important, and ill-defined terms/concepts: “Social Business,” “Innovation,” and “Transformation.”

In analyzing the 30 interviews conducted in January, we noted eight business interaction/activity-oriented terms that we saw as a spectrum of recurring themes within our discussions regarding “Social Business.” We present the spectrum and define those activity types in Figure 1.

What is Happening?  What does it really cost to move IT workloads into the Cloud? What are the real economic benefits to the enterprise? And which types of workloads are better off running in traditional environments?

Saugatuck research continues to indicate that too many enterprise Business and IT leaders overlook or underestimate Cloud’s true, core costs at the enterprise workload level. Widespread “workload ignorance” thus leads to under-estimating enterprise Cloud costs, over-spending on Cloud services, increasing the actual costs of using and managing IT resources, and reducing the effectiveness of IT resources and departments.

With a legacy customer base moving toward Cloud at multiple, differing, and volatile paces, traditional ISVs adding to or transitioning into Cloud business models are financially vulnerable. They need to protect and prolong legacy revenues and relationships, while building Cloud-based business fast and solidly enough to compete and grow – typically with very different costs, business models, partner relationships, and more.

Problem is, there haven’t been many (if any) useful models or approaches developed to address this. Until now, that is.

Saugatuck recently published a Strategic Perspective which looks at data center moves and suggests adopting Cloud offerings as a way to avoid a move. In the paper Saugatuck offers pragmatic guidance in five areas for planning and executing a data center move. In addition, the paper explains that requirements for networking, and for security and certifications, both frequently neglected, must be considered when evaluating Cloud offerings.

In short, moving a data center will incur substantial costs, risks, and time. Thus, in almost all situations avoiding a move is highly desirable. Saugatuck’s guidance is: Adopting a Cloud-based offering is less expensive, less risky – and far more expedient – compared to moving, or expanding, a data center.