cloud computing and the drummond report
TRANSCRIPT
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Cloud Computing and theDrummond ReportBest practices in Transformation through Cloud Computing
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Table of Contents
Executive OverviewThe Drummond Report .............................................................................. 3ITaaSIT as a Service ............................................................................................................... 3Recommendation 16-10: Outsource to Innovate ........................................................................ 4
Business Transformation: Best practices & thought leadership ..................................................... 5Data Center EfficienciesShared Services Canada ................................................................... 5ITaaS Procurement...................................................................................................................... 6Cloud Service Brokers ................................................................................................................ 6GovCloud 2.0 .............................................................................................................................. 6
Cloud Services Architecture ........................................................................................................... 7Hybrid SaaSPlatform for Government Software as a Service ................................................ 7
Economy and InnovationOutsource to Innovate......................................................................... 8Addressing Canadas Innovation Gap Innovation Best Practices............................................ 8Government as Early AdopterInnovation in Procurement..................................................... 9New Cloud Innovation Models ................................................................................................. 10
Vendor Showcase & Keynote Agenda ......................................................................................... 11Cloud 2.0 Showdown ................................................................................................................ 11
Salesforce.com - Social CRM for Government .................................................................... 11Microsoft - GC Docs from the Cloud ................................................................................... 11
Big Data in the Data Center ...................................................................................................... 11Ontario Cloud Ventures Showcase ........................................................................................... 12
About the Authors ......................................................................................................................... 13Neil McEvoy.......................................................................................................................... 13
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Executive Overview The Drummond Report
The objective of this paper is to establish the link between Cloud Computing and the recent
fiscal analysis for the Province of Ontario called the Drummond Report.
The Drummond Report is the nickname given to a report commissioned by the Province ofOntario and carried out by economist Don Drummond, with a view to identifying a
strategy for dealing with the growing deficit for the province, the largest in Canada.
The report makes a number of cost-cutting recommendations to address the situation, and
our paper will explain the latest developments in the field of Cloud Computing and how
they can help realize these recommendations.
ITaaS IT as a ServiceFundamentally this white paper will describe the current evolution from traditional data-
centre models to ITaaSIT as a Service, a process already underway at the IT department
for the Province.
As CIO Dave Nicholl explains inthis article:
The biggest challenge around virtualization has been moving from an I own it to an
Im moving to shared services and Im buying a service model, according to Nicholl.
But were making great progress because people believe that the model works, and I
think weve proven that it works.
He then illustrates a number of the business transformation benefits that are being achieved
via these new strategies, such as removing 1,000 servers from an estate of 6,000,
conducting a shared services consolidation to drive $100m annually in savings and
consolidating around single applications for ERP, HR and so on.
This white paper will document what they have achieved so far and how, with a view to
sharing these as leadership best practices for other public sector CIOs to follow, and will
also showcase what can be further achieved through new Cloud innovations.
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Recommendation 16-10: Outsource to Innovate
The Drummond Report details a number of cost-cutting measures, with the potential
relationship specifically relevant to Cloud Computing highlighted in the following section:
Use Alternative Service Delivery Options for Information and Information TechnologyFunctions
While less visible in the publics eye than service delivery, information and informationtechnology (I&IT) functions form the technological backbone of government operations.
These functions include services such as a help desk, local and wide area network management,
mainframe operations, web hosting, and the development of applications that can advance the
governments business vision andprovide flexible solutions to IT problems faced by allorganizations.
Previously, there were separate I&IT infrastructures developed by over 20 ministries. In the
late 1990s, however, the government combined this hodgepodge of IT solutions into eightministry clusters and one corporate cluster. Further efficiency and better value for money can
be found by eliminating redundant services and centralizing common functions.
Recommendation 16-10: The government should shift its service delivery of information and
information technology (I&IT) from in-house to external sources, where feasible.
The governments existing I&IT infrastructure already uses a blended approach of servicedelivery made up of both in-house and external service delivery that includes both small and
large arrangements with vendors. This blended approach typically reflected decisions to keep
certain functions in-house, which retains the I&IT expertise that comes with being a
knowledgeable owner. In a constrained fiscal environment, however, outsourced contracts may
make the difference between the continuation and the end of some services.
Blended approaches to service delivery have been successfully adopted by British Columbia,
Alberta and Saskatchewan. They have also been used broadly at the national level in the United
Kingdom. The difference in outsourcing I&IT services is a choice of scope.
Most jurisdictions explicitly engineer a solution to remain a knowledgeable owner in some
areas, so policy, standards development and strategic/operational planning normally remain
in-house. In the current fiscal environment, the Commission believes that government IT service
delivery should be driven by considerations of relative value-for-money and effectiveness
calculations.
Simply put, governments cannot afford to remain the only centres of expertise when it comes to
IT service delivery if more cost-effective options are available.
Drummonds conclusion is therefore that there is potential for cost-savings through
outsourcing. This is true, and furthermore there is also potential for growing revenues
through more innovation tooOutsource to Innovate.
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Business Transformation: Best practices &
thought leadership
This paper will document how this 16-10 section can be mapped to and implemented
through the latest Cloud Best and future trends of Cloud Computing.
Keynote topics will include:
Data-center efficiencies and consolidation ITaaS procurement Cloud Service Brokers GovCloud 2.0
Data Center Efficiencies Shared Services Canada
Shared Services Canada is the recent Federal initiative to better share resources at this level
of Government, however to fully maximize taxpayer cost savings there is also potential for
collaboration across different levels of Government.
This is particularly true for data centers, where there is considerable duplication of efforts
and under-utilized capacity that could be consolidated to maximize efficiencies for all
parties.
Microsoft provides an executive briefing on the economics of this in their22 page white
paper, where key highlights include:
The model indicates that a 100,000-server datacenter has an 80% lower total cost of
ownership (TCO) compared to a 1,000-server datacenter.
Based on our analysis, we see a long-term shift to cloud driven by three important
economies of scale: (1) larger datacenters can deploy computational resources at
significantly lower cost than smaller ones; (2) demand pooling improves the utilization of
these resources, especially in public clouds; and (3) multi-tenancy lowers application
maintenance labor costs for large public clouds. Finally, the cloud offers unparalleled
levels of elasticity and agility that will enable exciting new solutions and applications.
Dave Nicholl himself is a visionary in this regard and as described inthis articlelast year
called out for this multi-level collaboration, leveraging their new Guelph data center. Our
report will detail what role Cloud Computing can play in these shared service scenarios.
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ITaaS Procurement
The ongoing maturation of the market means a marketplace of different Cloud options are
coming online for Government buyers.
However not only is the technology new to their organizationsit even presents challenges in areas as basic but essential as
procurement. Many are not prepared to consume IT as a
Service.
Our report will explain how this can be mastered in Canada, building on existing
international best practices such as the latest CIO.gov Cloud document - Cloud Best
Practices guide called Best Practices for Acquiring IT as a Service. Download the44-
page PDF here), and in Europe theENISA Procure Secure guide.
Vendors are also documenting resources, such as Cisco and their recent white paper
Enabling IT as a Service(11-page PDF).
Cloud Service Brokers
The next step in the ITaaS evolution is the implementation of Cloud Service Brokerage
ITaaS procured from across multiple Cloud providers, aggregated and managed by an
intermediary CSB market.
CSBs help drive IT efficiencies through features such as:
Aggregating a catalogue of many 000s of applications Single sign-on for secure access across all of them Ordering automation, IT administration and reporting features to better manage
utilization
GovCloud 2.0
The opportunity for Ontario to leverage technologyadvancements to drive cost savings isn`t limited only to data-
centers and hosting.
It can also be used to transform processes themselves, the
potential for which is clearly conveyed through the SOCITM Better Served report, which
describes a Cost To Serve ratio which highlights how much it costs to meet citizen
requests through different CRM channels:
http://www.cio.gov/cloudbestpractices.pdfhttp://www.cio.gov/cloudbestpractices.pdfhttp://www.cio.gov/cloudbestpractices.pdfhttp://www.cio.gov/cloudbestpractices.pdfhttp://www.enisa.europa.eu/media/press-releases/procure-secure-enisa2019s-new-guide-for-monitoring-cloud-computing-contractshttp://www.enisa.europa.eu/media/press-releases/procure-secure-enisa2019s-new-guide-for-monitoring-cloud-computing-contractshttp://www.enisa.europa.eu/media/press-releases/procure-secure-enisa2019s-new-guide-for-monitoring-cloud-computing-contractshttp://www.cisco.com/en/US/prod/collateral/netmgtsw/ps6505/ps11869/esg_enabling_it.pdfhttp://www.cisco.com/en/US/prod/collateral/netmgtsw/ps6505/ps11869/esg_enabling_it.pdfhttp://www.socitm.net/downloads/download/382/better_served_customer_access_efficiency_and_channel_shifthttp://www.socitm.net/downloads/download/382/better_served_customer_access_efficiency_and_channel_shifthttp://www.socitm.net/downloads/download/382/better_served_customer_access_efficiency_and_channel_shifthttp://www.socitm.net/downloads/download/382/better_served_customer_access_efficiency_and_channel_shifthttp://www.cisco.com/en/US/prod/collateral/netmgtsw/ps6505/ps11869/esg_enabling_it.pdfhttp://www.enisa.europa.eu/media/press-releases/procure-secure-enisa2019s-new-guide-for-monitoring-cloud-computing-contractshttp://www.cio.gov/cloudbestpractices.pdfhttp://www.cio.gov/cloudbestpractices.pdf -
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Face to face : 7.40 Telephone: 2.90 Web: 32p Cloud 2.0: ??
This clearly demonstrates that agencies who have not yet embraced modern technology fortheir business processes will be costing Government 20 times more than those who have,
and are therefore where the bulk of real cost-savings could be found for Ontario.
Furthermore with our focus on the trend ofCloud 2.0, well explain how increasing
public participation in the process too can reduce this even further.
Cloud Services Architecture
The core remit of this white paper will be to explain how Cloud Computing can enable
these transformations faster and cheaper than was possible before.
Hybrid SaaS Platform for
Government Software as a
Service
The technical backbone of this exercise
will focus on the Cloud Best Practice we
describe as Hybrid SaaS.
This refers to a combination of the NIST best practice model called a Community Cloud
and the SaaS (Software as a Service) delivery model, and how this offers the public sector
the best of both worlds where they can access software and IT resources on a PAYG basis,
but via hosting models that have the data hosted as locally as possible, including regionally
(I.e. Ontario).
Within this category there are further permutations, include:
SaaS localization and encryption technologiesMethods of using SaaSapplications in a manner that achieves Government compliance.
Hybrid Community Cloud hostingLocal hosting companies installing andproviding SaaS from local data-centers, with key aspects like secure WAN links
addressed.
Shared service overlay software architectureA single instance of traditionalsoftware that is made accessible to multiple client scenarios through additional
overlay software.
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Economy and Innovation Outsource to
Innovate
Equally if not more importantly is the potential benefit for the local economy that this
increase in outsourcing to Cloud providers will deliver.
As highlighted inthis news articleit has already been identified how outsourcing to save
costs will also drive benefit for local suppliers and with the right programs this effect can
be magnified and applied to greatly boost local ICT innovation and growth.
Addressing Canadas Innovation Gap Innovation Best
Practices
The need for this is critically important. As many articles, experts and journals have
described, Canada has a notorious Innovation Gap.
The Conference Board of Canada recently described this as a 'D for Innovation' amongst
many other analyst reports, and the depth and history of this is summarized in the Mowat
'Canada's Innovation Underperformance report':
Its one of the most consistently under-performing attributes of Canadas economy.So
reliably underwhelming is Canadas innovation performance that new studies decrying
this fact are anything but surprising.
Whether it be the latest benchmarking report from Canadas Science, Technology and
Innovation Council (STIC 2011), another D grade on the Conference Board of
Canadas periodic report cards (2008, 2010), or the assessment by the Council of
Canadian Academies (CCA) scrutinizing the root causes of Canadas innovation
performance (CCA 2009), the basic message has differed little from their predecessors
decades prior (Britton and Gilmour 1978; Science Council of Canada 1979; Ontario.
Premiers Council 1989).
Our CCN is based on analysis of a number of innovation best practices, and then
interpreting these into action plans specifically for the Canadian Cloud industry:
The Federal Governments Building Canadas Digital Advantage Innovation CanadaA Call To Action The CATA Innovation Nation business plan Cisco's Next Generation Cluster
http://www.itworldcanada.com/news/ontario-looks-to-private-sector-for-it-savings/145143http://www.itworldcanada.com/news/ontario-looks-to-private-sector-for-it-savings/145143http://www.itworldcanada.com/news/ontario-looks-to-private-sector-for-it-savings/145143http://www.conferenceboard.ca/HCP/Details/Innovation.aspxhttp://www.conferenceboard.ca/HCP/Details/Innovation.aspxhttp://www.conferenceboard.ca/HCP/Details/Innovation.aspxhttp://www.mowatcentre.ca/research-topic-mowat.php?mowatResearchID=36http://www.mowatcentre.ca/research-topic-mowat.php?mowatResearchID=36http://www.mowatcentre.ca/research-topic-mowat.php?mowatResearchID=36http://de-en.gc.ca/eic/site/028.nsf/eng/h_00025.htmlhttp://de-en.gc.ca/eic/site/028.nsf/eng/h_00025.htmlhttp://de-en.gc.ca/eic/site/028.nsf/eng/h_00025.htmlhttp://rd-review.ca/eic/site/033.nsf/eng/00288.htmlhttp://rd-review.ca/eic/site/033.nsf/eng/00288.htmlhttp://www.cata.ca/Media_and_Events/Press_Releases/cata_pr11241101.htmlhttp://www.cata.ca/Media_and_Events/Press_Releases/cata_pr11241101.htmlhttp://www.cata.ca/Media_and_Events/Press_Releases/cata_pr11241101.htmlhttp://canadacloud.net/innovation-programs/next-generation-cluster/http://canadacloud.net/innovation-programs/next-generation-cluster/http://canadacloud.net/innovation-programs/next-generation-cluster/http://www.cata.ca/Media_and_Events/Press_Releases/cata_pr11241101.htmlhttp://rd-review.ca/eic/site/033.nsf/eng/00288.htmlhttp://de-en.gc.ca/eic/site/028.nsf/eng/h_00025.htmlhttp://www.mowatcentre.ca/research-topic-mowat.php?mowatResearchID=36http://www.conferenceboard.ca/HCP/Details/Innovation.aspxhttp://www.itworldcanada.com/news/ontario-looks-to-private-sector-for-it-savings/145143 -
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Government as Early Adopter Innovation in Procurement
The headline theme that emerges from all of them is the critical role Government
themselves can play as a catalyst and driver of local innovation progress and growth,
especially through leveraging their existing procurement programs.
Indeed for Canada specifically it is proposed as a headline remedy, where their own Digital
Advantage white paper describes 1) the root problem being a lack of ICT investment by the
Canadian private sector resulting in a corresponding lower level of business innovation,
and 2) the solution to this issue being the proactive adoption of new technologies like
Cloud by the public sector as the required leadership to inspire others to follow.
"Governments can play an important role in promoting private sector innovation and
driving ICT uptake by acting as model users and leading by example, by being an early
adopter and demanding purchaser of emerging and next generation technologies like
Green IT and Cloud computing.
The Innovation Canada: Call to Action report from a committee of high-profile business
experts like Tom Jenkins of OpenText, also make exactly this same recommendation:
Recommendation 3:To this end, public sector procurement and related
programming should be used to create opportunity and demand for leading-edge goods,
services and technologies from Canadian suppliers.
Indeed they have built on this with adedicated reportspecifically on this topic, entitled
The Case for the Use of Procurement to Stimulate Innovation. In the UK they have also
pioneered this technique, called Forward Commitment Procurement.
Ontario is a flagship example of this approach; Dave Nicholl recognizes this important role
of Government IT procurement, such asthis recent procurement exercisefor Cloud-based
Unified Communications.
In their case study of adoptingMicrosoft Private Cloud technologyDave comments:
We really are a forward-looking organization, says David Nicholl, Ontarios
Corporate ChiefInformation and Information Technology Officer. Theres no doubt
that technological advancement will be a key characteristic of future economic growth
and innovation, and Ontario is continuously looking at ways we can better communicate
online with each other, with businesses, and with citizens.
http://rd-review.ca/eic/site/033.nsf/eng/00318.htmlhttp://rd-review.ca/eic/site/033.nsf/eng/00318.htmlhttp://rd-review.ca/eic/site/033.nsf/eng/00318.htmlhttp://www.bis.gov.uk/policies/innovation/procurement/forward-commitmenthttp://www.bis.gov.uk/policies/innovation/procurement/forward-commitmenthttp://www.bis.gov.uk/policies/innovation/procurement/forward-commitmenthttp://www.itworldcanada.com/news/ontario-to-plunge-deeper-into-outsourcing/145253http://www.itworldcanada.com/news/ontario-to-plunge-deeper-into-outsourcing/145253http://www.itworldcanada.com/news/ontario-to-plunge-deeper-into-outsourcing/145253http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=4000011335http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=4000011335http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=4000011335http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=4000011335http://www.itworldcanada.com/news/ontario-to-plunge-deeper-into-outsourcing/145253http://www.bis.gov.uk/policies/innovation/procurement/forward-commitmenthttp://rd-review.ca/eic/site/033.nsf/eng/00318.html -
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New Cloud Innovation Models
Cloud Computing is so important to the Canadian innovation challenge because it is both a
high-growth global market opportunity, and also the technology is valuable primarily
because it is an enabler of more innovation.
This is eloquently explained in the Cisco white paper 'Cloud - What a Business Leader
Must Know':"Cloud accelerates your business by allowing you to transform ideas into marketable products
and services with greater speed. Many enterprise-focused service providers have an opportunity
to create higher-value, differentiated service offerings. They have unique capabilities they can
leverage, including customer relationships, physical assets and operational excellence".
This product development capability can also be extended into a general framework for
industry collaboration as a whole. As described in one of the innovation best practice
documents from CATA:
CATA believes that market-oriented collaborations models should be evaluated and measures
should be taken to incent more companies in Canada to act as anchor companies and to
encourage more SME companies to cluster around large anchor ones with good reach into the
global markets.
This is indeed a powerful idea and model, especially so in the Cloud Computing industry
and era. Consider an organization like Salesforce.com who operate in Canada, employing
hundreds of people, who are a global firm and most importantly who provide a product
distribution platform for exactly this purpose, their Apps Store.
Canadian firms can and do contribute to this as a method of global expansion, and
furthermore its the ultimate catalyst for major economic growth. As theRadian6
acquisitionhighlights this acceleration pathway can even lead to a final exit for the start -
up, generating over $300 million new inward investment to the province of New
Brunswick in this case, so this a strategy capable of substantial levels of this investment
attraction.
The objective of our Canada Cloud
Network is to utilize these practices to
help develop lots more Radian 6 typeventures, and via this particular campaign do so specifically within Ontario, via:
Ontario SaaS Ventures ProgramA program to build a portfolio of more SaaSstart-ups.
Procurement CommercializationWork with Government to define how theycan help fast-track these ventures, through `SaaS Spin-out` processes.
http://techcrunch.com/2011/03/30/salesforce-buys-social-media-monitoring-company-radian6-for-326-million/http://techcrunch.com/2011/03/30/salesforce-buys-social-media-monitoring-company-radian6-for-326-million/http://techcrunch.com/2011/03/30/salesforce-buys-social-media-monitoring-company-radian6-for-326-million/http://techcrunch.com/2011/03/30/salesforce-buys-social-media-monitoring-company-radian6-for-326-million/http://techcrunch.com/2011/03/30/salesforce-buys-social-media-monitoring-company-radian6-for-326-million/http://techcrunch.com/2011/03/30/salesforce-buys-social-media-monitoring-company-radian6-for-326-million/ -
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Vendor Showcase & Keynote Agenda
The document will be further populated with sponsored input from vendors, and this also
describes the speaking agenda for the workshop.
Cloud 2.0 Showdown
The headline review will focus on the Cloud
2.0 topic, looking at how two vendors,
Microsoft and Salesforce.com, offer solutions
for this capability.
Salesforce.com - Social CRM for
Government
For Salesforce.com we will focus on how the public sector can utilize their core Cloud
CRM and in particular their recent GovCloud announcement, which includes:
A GovCloud Apps Store Dedicated multi-tenant GovCloud architecture Plans to train 1,000 channel integrators.
Microsoft - GC Docs from the Cloud
For Microsoft we will focus on the recent Federal Government announcement about their
plans to launch a GC Docs portal to underpin their Open Government plans.
We will identify innovations at the Ontario Province level that already match these needs
and how they can be implemented via a Shared Services Canada model to meet the project
requirements, and how this can be achieved through a SaaS Spin-out process.
Big Data in the Data Center
The other headline topic is Big Data in the Data Center, referring to the hot topic ofBig
Data and how these tools might be applied within the data center environment, for cost-
saving analysis and consolidation purposes.
Sponsors in this category include Sungard, who have recently announced Hadoop hosting
services.
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Ontario Cloud Ventures
Showcase
This vendor showcase will also include a
section dedicated to Ontario Cloud start-ups.
As part of this we will identify how the Cisco
`Next Generation Cluster model can be
applied to realize the goals described in the
report `A National Strategy for High-Growth Entrepreneurship`.
This report was covered in a Globe and Mail
news article that best epitomizes everything
that we are setting out to achieve via the
Canada Cloud Network:
CanadaTime to Lead and `Own the
Entrepreneurial Podium`.
http://www.theglobeandmail.com/report-on-business/small-business/starting-out/time-for-canada-to-own-the-entrepreneurial-podium/article1944371/http://www.theglobeandmail.com/report-on-business/small-business/starting-out/time-for-canada-to-own-the-entrepreneurial-podium/article1944371/http://www.theglobeandmail.com/report-on-business/small-business/starting-out/time-for-canada-to-own-the-entrepreneurial-podium/article1944371/http://www.theglobeandmail.com/report-on-business/small-business/starting-out/time-for-canada-to-own-the-entrepreneurial-podium/article1944371/http://www.theglobeandmail.com/report-on-business/small-business/starting-out/time-for-canada-to-own-the-entrepreneurial-podium/article1944371/http://www.theglobeandmail.com/report-on-business/small-business/starting-out/time-for-canada-to-own-the-entrepreneurial-podium/article1944371/ -
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About the Authors
Neil McEvoy
Neil McEvoy is a Scottish entrepreneur who has been pioneering disruptive innovations in
the Cloud Computing industry for over 15 years, including leading PSINet to domination
of the European enterprise web hosting market, the launch of one Europe`s first pure-play
ASPs (Application Service Providers) via a joint venture with Microsoft, the Unified
Communication SaaS offering for British Telecomm, amongst many others.
Most recently since immigrating to Canada he has launched theCloud Best Practices
Networkand now theCanada Cloud Network.
Connect onLinkedin, or send an email : neil.mcevoy @L5consulting.net
http://cloudbestpractices.net/http://cloudbestpractices.net/http://cloudbestpractices.net/http://cloudbestpractices.net/http://canadacloud.net/http://canadacloud.net/http://canadacloud.net/http://www.linkedin.com/profile/view?id=34727544http://www.linkedin.com/profile/view?id=34727544http://www.linkedin.com/profile/view?id=34727544http://www.linkedin.com/profile/view?id=34727544http://canadacloud.net/http://cloudbestpractices.net/http://cloudbestpractices.net/