Cloudsourcing

Cloudsourcing refers to sourcing complete solutions to run your business from the public cloud. The solution provider that offers Cloudsourcing products or services is called "Cloudsourcer". The Cloudsourcer typically provides solutions that knits together cloud applications, cloud platforms and cloud infrastrcuture.
According to IDC Anlayst, Michael Fauscette, "It's really an extension of the business process outsourcing (BPO) business that exists today. There could be significant value generated to businesses by combining the two concepts, cloud computing and outsourcing a business process to a 3rd party. It takes cloud to the next step and offers the valuable combination for business of leveraging cloud computing + a cloud application (or cloud service) + business process execution in one bundle."
Introduction to Cloudsourcing
Overview
Cloudsourcing reflects the latest trend to source complete solutions to run a business from the public cloud. By running the business on cloud-based IT applications and services, Cloudsourcing lowers IT costs (as a % of revenue) and provides companies with the people and expertise to create a “pre-integrated suite” of SaaS applications that provide a better integrated, more flexible and elastic technology foundation for a company's business operations.
In its simplest state, Cloudsourcing is composed of three main elements:
* Migration of on-premise application portfolios and infrastructure to cloud-based, multi-tenant infrastructures, platforms and applications.
* Cloud Services to transition and support this cloud-based environment including help-desk support, administration, maintenance, application development and continuous improvement
* A cohesive business and technical interface to the cloud that abstracts away the complexity of managing multiple SaaS applications and cloud platforms.
Differentiation from Hosting and Outsourcing
* Hosting: Cloudsourcers do not directly manage or provide hardware or infrastructure. Instead, they manage the cloud technologies enabling client companies including applications, platforms and infrastructure (storage, computing, etc.). Cloudsourcers own the ‘production’ deployment in a shared fashion with cloud providers. Cloudsourcers provide this oversight with far fewer people than traditional hosting entails.
* IT Outsourcing: Unlike outsourcing, Cloudsourcing aims to use a pre-determined set of cloud applications and infrastructure to meet IT demands vs. hosted data centers running traditional on-premise applications that the customer used previously. Any custom application development occurs atop pre-selected cloud platforms.
Economics of Cloudsourcing
Multi-tenancy drives value
Cloud computing has already proven to be a disruptive force in IT, due in part to its reduced total cost of ownership compared with on-premise or hosted solutions. IT systems supporting customer relationship management, email and collaboration, HR systems, high performance computing and even storage are moving to cloud-based applications and platforms because they provide substantial economic value and, in most cases, provide an even higher level of capabilities.
One of the major contributors to this value is multi-tenancy. A single instance of a multi-tenant application serves multiple customers (or tenants). By only having a single instance to maintain - that is, troubleshoot, fix, upgrade, enhance and support - the application provider is able to focus its resources. In contrast, a single tenant infrastructure serves each customer with separate instances of software, hardware and infrastructure. This creates headaches for the provider such as sustaining old versions, tracking customer-specific patches or hot fixes, performing lengthy upgrades (including data migrations), and regression testing multiple configurations. All of this disappears with multi-tenancy. The resulting efficiencies in staff, resources, and infrastructure provide pure multi-tenant providers with a significant cost advantage over traditional on-premise application providers as well as single-tenant hosted solutions. While there may be additional time involved in designing the multi-tenant architecture up-front, the associated costs are dwarfed by downstream benefits. In contrast, hybrid providers (providing both on-premise and ‘cloud’ solutions) face a much more imposing cost structure since they have to manage traditional architectures while also developing and managing a multi-tenant one. The hybrid approach is an appealing near-term approach for many companies. However, in the medium and long term, it will not be economically sustainable and reduces business benefits to the lowest common denominator. Extending the concept of multi-tenancy to Cloudsourcers helps explain how Cloudsourcing provides a financially attractive proposition compared to other models.
Knitting together solutions from the public cloud drives value
Cloudsourcing offers cost efficiencies in two fundamental ways - by leveraging cloud providers for all application, platform and infrastructure needs and by using a “virtual suite” of pre-integrated cloud applications and infrastructure to make many traditional IT services less cumbersome or even obsolete.
Cloudsourcing relies on cloud providers for low level management and service levels of their multi-tenant applications, platforms and infrastructures. The Cloudsourcer then focuses on a higher level of management and visibility across an entire “pre-integrated cloud suite.”
The Cloudsourced model relies on cloud providers to provide the following services as part of their usage-based subscriptions:
* Hosting of a single multi-tenant version for all customers atop a standard technology stack
* Upgrades for all customers (with no migration or added consulting costs in order to be current)
* Elastic computing power and storage capacity allowing customers to scale both to meet increased or reduced demand
* Security, backup and disaster recovery in line with industry best-of-breed approaches
* Open Application programming interfaces to support integration and migration to competitive products, if required
* Real-time performance monitoring via a web browser
* Primary user access through a supported web browser
* Regional data centers to reduce latency impacts to distributed users
This list seems daunting, but actually:
* Google provides these services with Google Apps
* does as well
* Amazon Web Services provides these services as well
These are just examples, but legitimate cloud providers have to provide these services to be viable. They mirror services provided by Outsourcers, but the costs are being amortized across millions of users - an economy of scale that is difficult to match with a dedicated infrastructure approach, whether internal or outsourced. In addition, by using a pre-determined set of cloud providers, the Cloudsourcer can provide a “virtual cloud suite” by creating a unified layer for management, integration and business process innovation atop the individual applications.
Perceived Benefits of Cloudsourcing
There are benefits from moving all of an enterprises IT infrastructure to the cloud. The benefits include the following:
* Lower Total cost of ownership: A number of categories of IT spend will go away when moving entirely to the cloud. For example, there will no longer be costs associated with VPN, Firewall, DMZ, rack space to build/rent, datacenter power or cooling. Even with slightly increased subscription fees, overall TCO will likely be lower.
* Higher Agility: IT will be able to move quickly to meet the needs of the business by not having to deal with difficult integrations and customizations of on-premise infrastructure.
* Increased user effectiveness: By knitting together cloud applications and platforms, end users can have access to the right information at the right time without even needing to know which application is providing the data and functionality. This can increases adoption and effectiveness.
Breadth of Cloudsourcing Services
Cloudsourcers can focus on more value-added services for their customers, such as:
* Cloud monitoring - provide operations management and oversight across a diverse set of cloud technologies and infrastructures
* Cloud application development - rapidly developing and extending applications using cloud platforms; For example, 4.9 times faster on the Force.com
* Cloud and legacy integration - tying together applications quickly in response to shifting business processes and interfacing with legacy systems to provide access to data via browser-based applications
* Mobility strategies - leveraging the cloud to enable easy mobile access (this is possible with traditional outsourcing as well, but much easier in a Cloudsourcing scenario)

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