The Large Enterprise and the Cloud

Recently, I was privileged to begin working on a project where a feasibility study was being conducted similar to other studies that are happening all over the world these days.  “Shall we go to go to the cloud or to not go to the cloud; more precisely, to go Exchange 2010 on premises or the venerable Business Productivity Online Suite (BPOS) from MSFT, as upgradable to Office 365.”  It is telling that it took so long for many companies to even consider ‘cloud’ as infrastructure, but these days, most companies worth their salt are either:

1. Actively leading with cloud first/why not cloud or
2. Dipping their toes in the water and trying out the services to see what all the fuss is about

It’s no mistake that Office 365, or even other similar cloud solutions are very attractive to the small business – for me this is anything between 1 and 100 employees.  As a general rule of thumb, this also holds true for the SMB space – between 100 and 500 employees.  The sheer costs of acquiring the hardware, software and talent needed to build such services in house are pivoted against the relatively pain free experience of, point, click, insert credit card – off you go!  But what about the modern enterprise?  What about the enterprise beyond the SMB space – for me this is anything > 500 employees?  In this article, I’d like to discuss and explain away some of the misconceptions surrounding the cloud based infrastructure approach that many SMB+ or Enterprise scale businesses are encountering, as well as talk about what we’re hearing from them during their assessments.

The first and foremost question that I get is actually more of a statement, typically sourced from a concern about interoperability and perceived ceding of internal controls – “cloud services as an infrastructure are better suited for small businesses.”  The vast majority of these statements come from companies with existing infrastructure and expertise that would be re tasked or re trained for other services in the event of a move to the cloud.  But let’s set that aside for the moment and discuss the technical or practical implications of a large enterprise moving to Office 365.

1. Capital expenditures in messaging and collaboration infrastructure are now operational expenditures.  This can be VERY attractive for the CFO and CEO for many reasons that involve lots of numerical figures better suited for a PowerPoint and an easel.
2. I saw a study once from Gartner that stated the cost of running an on premises instance of Exchange ran somewhere between $25-$30 per user per month.  Typical Office 365 seats will run between $7 and $10 per user per month.  This takes into account things like cost of initial investment, depreciation expenses, facilities and power, engineering and support, storage, etc. etc.  What could you do with a savings figure like that which just magically showed up in your budget when you have say, 10,000 seats? J
3. How good are you at Exchange – really?  Would it not make more sense to allow the people whose sole function in life is Exchange (or SharePoint, or OCS) high availability, stability and security?  I know lots of great Exchange deployments, lots of great SP and OCS deployments – but you know what I’ve not seen?  Deployments that can match the security, availability and stability of the Microsoft data centers.  Of course outages happen – to expect there to be no outages is just being silly.  But when they do happen – Microsoft is backing that SLA with actual financial incentives.
4. This fourth point is a similar statement as number 3 but bears mentioning.  It is a rule of thumb when considering the importance of your collaboration solutions.  EMAIL MUST ALWAYS WORK. (emphasis on the period)  Like the phone system and the postal system – email is a necessary function of the large enterprise.  It cannot go down – ever.  It may be unavailable for whatever reason from time to time, but the maximum acceptable loss of email, communications or collaboration data is exactly ZERO.  So, I ask again – how good at Exchange, SharePoint and OCS are you?  You could certainly bring in outside consultants to architect a very reliable and stable system.  In fact – that’s what I do for a living!  But what happens when the consultancy is done and head off to the next project – surely you took some training, but now what?

So, in general, cloud services like Office 365 are very much not just for small businesses.  There are very real and very important financial, technical and logistical reasons why companies of all sizes, particularly some big ones choose cloud infrastructures (see MSFT for case studies).

Let’s look at the next most frequent question we get, particularly from large enterprises: “cloud services are not practical for our enterprise because we must be able to integrate with key on prem systems like CRM, SharePoint, Phone, ERP, Billing, etc.”  So…integrate them!  Office 365 sports many, if not all in some cases, web services for integration points that you would find in the on prem flavors.  Let’s go down the list:

1. Exchange – With VERY few exceptions, the full body of web services are available for integration tools in Exchange 2010.  If you go with O365 Dedicated (as many of the large enterprises do), it literally is the full body of EX web services.  Things like integration with on prem AD are available in both standard and dedicated using ADFS.  It is also entirely possible to have mixed mode Exchange – where some parts are on prem and others are cloud based.  One of the neat demos I give is using the Exchange Management Console (or PowerShell) and moving a mailbox back and forth from on prem to cloud with just a flick of the mouse.
2. SharePoint – Same drill as Exchange, however, note this caveat in O365 standard – out of the gate, the Business Connectivity Services will not be available.  They’ll be ‘coming soon,’ however there are workarounds that are compelling.  Because the web services are available for SharePoint, additional Azure or on prem solutions can connect to O365 SharePoint and do great integrations.
3. OCS/Lync – This is one that is still a ways out there, but let me articulate what I’m hearing.  Insofar as the main functionality of Lync, it will be there out of the gate including IM/Presence/Meetings (internal and external) and voice (client to client).  What isn’t there is the enterprise voice features up in the cloud, but those are most certainly coming.  Imagine this scenario: full SIP trunking enabled – your trunk terminates to MSFT data center, ACD functions like a full PBX as constructed using a pretty little Silverlight interface, routes calls to hardware or software based endpoints wherever they may be.  Pretty neat?  Not quite there yet, but that is certainly coming.

Decidedly, there are other integration questions as per the initial question, and those are certainly valid.  The integration points with on premises and cloud are on the cusp of being very mature.  O365 is to be fully ADFS (Active Directory Federation Services) aware, as is Azure using the most excellent ACS (Access Control Service) service currently in CTP.  There are also VM roles coming to Azure as well as the other Azure components that make enterprise scale integration both practical and economical –things like Azure Connect, the Service Bus and more.

The next question on our list gets a little tricky.  Setting aside the ‘financial’ impacts for just a second, there is this question in every discussion we have: “what do we do with all of the messaging and collaboration technicians we already have in house – do their jobs just disappear?” Again, let’s set aside the financial aspects here for a second and speak plainly.  In a cloud infrastructure model, one of the main points to understand is that it takes less head count to maintain the environment because you are essentially ‘outsourcing’ those tasks to Microsoft.  Of course we all know what that could mean and it is never a pleasant thought.  Be that as it may, the objective is to reduce complexity and the fact that fewer people are now required to maintain the same level of service (in fact, the level of service will go up for all but the smallest companies), jobs categories will be eliminated.  Obviously that has a financial impact on both the company and the employees, however, I try very hard to look at it another way:

Messaging and collaboration is ‘knucklehead’ stuff.  This isn’t to say that they aren’t technically challenging, but rather to say, everyone has to have it and it must just work.  Therefore, instead of retaining that skillset, along with all of the other benefits we have talked about today, take these knucklehead items off your books and focus your people, talents and dollars on more strategic investments – like the business of the company.  Unless the business of the company is collaboration tools, it is likely that your IT department has a litany of things it wish it could do if only it had the spare this or the spare that (manpower and funds).  So – do that.  Those folks that are messaging and collaboration specialists will need to retrain in some instances and in others tough decisions will need to be made – but that human element can be freed to work on the business of your company and not just the knucklehead stuff like email.  And the dollars that you are saving on the monthly cost of maintaining the environment, as mentioned earlier, will free up large sums of capital to execute on those projects.

“What about our already saturated internet connection?” Not much we can do there – you are going to need to open those pipes up a bit.  Exchange works very well in a limited bandwidth environment, but SharePoint and Lync need capacity.  If you have a 10 gig internal network and all of a sudden you put 5,000 users out on Office 365, that bandwidth requirement is going to shift.  Not suggesting you get a 10 gig internet pipe (if wishing only made it so), but there are calculators available that do a very good job at estimating the increased demand on your pipe(s).  There is no way to sugar coat that, except to say – those pipes have been needing an upgrade for a while, here’s a perfect reason too – and by the way, when that voice stuff lands out in O365, you’ll be glad you did! (Voice will add only marginal increase in bandwidth needs once it comes out on top of the other cloud infrastructures you just moved).

“Where’s my data?  How do I troubleshoot when it goes down?  Who has access to my data? Is it secure?” In one form or another, these questions all portend the same concern – the ceding of control to an external entity.  I’ve discussed previously in my blog ad nausea the security implications and benefits of moving to the cloud so will keep this area moderately brief and concise.  The basic premise of all of these questions is ‘can I trust Microsoft?’ Short answer – you already are and you do so every day.  Longer answer – Microsoft, depending on your O365 package selection (whether standard, dedicated or government), will work with both the technologists and the legal folks of your company to make certain that you have the warm fuzzy around their security and stability features.  Need compliance certifications?  Can do.  Need a single point of contact for troubles? You got it.  Need a financially backed SLA? By default. Can I see where my data is and who has access to it? Yep (and by the way, ask Google if they can do that…they can’t).

At the end of the day, the analysis that every company, large and small alike, are performing is ‘does this make sense for me?’  Some will conclude that it most certainly does and they can hold statistics and studies and magic quadrants up as their proof.  Others will conclude that it absolutely does NOT make sense to move to the cloud and they too will hold statistics and studies and magic quadrants as their proof.  So who do you believe and how do you proceed?  Just like last time, when the question was – ‘should we do email at all?’ or ‘why bother with a website?’ – each company makes their decisions based on the advice and guidance of their experts and the expertise of others.  However, in all my years as a technologist, I have never seen a more compelling time when the practical, financial and security questions all came together at a single point so quickly and with such strong evidence and success stories to support the jump to a cloud infrastructure than now.  Ultimately, however, it is up to you!