Slide 1Copyright © 2011 Stephen D. Poe V.01 — July 2011

To Cloud or Not to Cloud for

Transaction Document ProductionStephen D. Poe

Nautilus Solutions

Slide 2Copyright © 2011 Stephen D. Poe V.01 — July 2011

Transaction Docs & the Cloud Our Agenda

• What is This ‘Cloud’?• How is it Applicable to Transaction Document

Production?• Cloud Concerns• To Cloud or Not to Cloud?• Entering The Cloud

Slide 3Copyright © 2011 Stephen D. Poe V.01 — July 2011

What is this ‘Cloud’

The Cloud

Slide 4Copyright © 2011 Stephen D. Poe V.01 — July 2011

A Bit of History• Cloud concept first described by

John McCarthy in the 1960s– "computation may someday be

organized as a public utility"• My first Cloud

– GE Timesharing, 1970-1974• Using a TTY communicating via an

acoustic coupled modem• “Cloud Computing” term first used

in 1997• Amazon Web Service (AWS)

launched 2006

Slide 5Copyright © 2011 Stephen D. Poe V.01 — July 2011

Another Historical View

Slide 6Copyright © 2011 Stephen D. Poe V.01 — July 2011

The Cloud• Remote computing over a

network• Very thin client/server

– Typically, only a Web browser on the client machine

Slide 7Copyright © 2011 Stephen D. Poe V.01 — July 2011

Cloud Acceptance

• Although growth rate is very high, still a small % of overall IT spending

Slide 8Copyright © 2011 Stephen D. Poe V.01 — July 2011

Levels of Clouds

Source: Microsoft

Slide 9Copyright © 2011 Stephen D. Poe V.01 — July 2011

Levels of Clouds

• The Cloud can be used as:– IaaS

• As a remote server to run your IT on– PaaS

• As a remote platform to run your applications on– SaaS

• As a remote provider who provides a turnkey operation to you

Slide 10Copyright © 2011 Stephen D. Poe V.01 — July 2011

Public vs. Private Clouds• Public Cloud

– Servers and infrastructure are owned by an external organization and are shared

• Your organization rents time on them• As do many other organizations

• Private Cloud– Your organization sets up an internal Cloud behind your firewall for

your organization’s departments to run on• Or an external vendor sets up a Cloud for your organization’s exclusive

use – May still do same type of charging as a Public Cloud vendor

• Hybrid Clouds– Many variations of the above two

Slide 11Copyright © 2011 Stephen D. Poe V.01 — July 2011

Public vs. Private CloudsHow does the appeal of private clouds in your organization compare

with that of using public clouds?

Source: IDC’s IT Cloud Services Survey, 2Q10

Much more, 31%

More, 27%Just as, 23%

Less, 5%

Much less, 5%

Don't know, 9%

Slide 12Copyright © 2011 Stephen D. Poe V.01 — July 2011

Cloud Cost Advantages

Source: Microsoft

Slide 13Copyright © 2011 Stephen D. Poe V.01 — July 2011

How is it the Cloud Applicable to Transaction Document

Production?

Slide 14Copyright © 2011 Stephen D. Poe V.01 — July 2011

Transaction Document Production

Options in the Cloud• Moving parts of your transaction document

production process to The Cloud; e.g., – Document composition– Document reengineering– Postal hygiene, presort, electronic postsort– Document archive

• Archive of record• Archive for customer support and end users

• Process control and monitoring (ADF)

Slide 15Copyright © 2011 Stephen D. Poe V.01 — July 2011

The Cloud or a Service Bureau?

A Service Bureau

TransactionData

DocumentComposition

DocumentReengineering

MailProcessing

The Cloud

Print

Slide 16Copyright © 2011 Stephen D. Poe V.01 — July 2011

The Cloud for Archive

TransactionDocuments

The Cloud

Repositoryof Record

Short TermArchive

CustomerAccess

CustomerService

Slide 17Copyright © 2011 Stephen D. Poe V.01 — July 2011

Cloud Printing Service Providers

• Provider offering multiple print options– Centralized and decentralized– Quick response, shipping

• Currently mostly business printing oriented

Slide 18Copyright © 2011 Stephen D. Poe V.01 — July 2011

Potential Applicability

• Functionality– ADF– Archive– Document retrieval and display

• Customer Support• End use display

– Document composition– Document reengineering– Mail/postal hygiene and cost reduction

Slide 19Copyright © 2011 Stephen D. Poe V.01 — July 2011

Potential Benefits• 22% increase in firms seeking external document

outsourcing solutions from 2009 to 2011– Adds a new outsourcing alternative

• SMB gaining inexpensive access to enterprise-level applications

• Lower start-up and capital costs• Reduced IT investment and lower IT operational

budget• Less need for specific technical skills in-house• Lower cost to meet volume spikes• Better Disaster Recovery

Slide 20Copyright © 2011 Stephen D. Poe V.01 — July 2011

Cloud Concerns

Slide 21Copyright © 2011 Stephen D. Poe V.01 — July 2011

CIO Cloud Concerns

7

13

26

32

43

53

56

58

169

Skills

Uptime

Costs/ROI

Lock In/Switching Costs

Integration

Regulatory Compliance

Technology Immaturity

Performance

Security and Privacy

Source: Gartner CIO Survey

Slide 22Copyright © 2011 Stephen D. Poe V.01 — July 2011

Availability• Example: Amazon.com outage April 2011

– 4 days down for some clients• Drop to 98.9% annual up time just for this incident

– Some loss of client data– Clients who configured themselves well were not affected

• What are the SLAs?– What are the penalties? From a major supplier’s

boilerplate:• “Unless otherwise provided in the [Acme] Agreement, your sole

and exclusive remedy for any unavailability or non-performance of [Acme] or other failure by us to provide [Acme] is the receipt of a Service Credit (if eligible) in accordance with the terms of this SLA or termination of your use of [Acme].”

Slide 23Copyright © 2011 Stephen D. Poe V.01 — July 2011

Compliance• Most of the transaction space is regulated

– Does your Cloud provider meet:• Current HIPAA, PCI, SOX, ‘xyz’ regulations?• Are they committed to meeting future regulatory changes?

• Are you multinational?– Where are the Clouds physically located?

• Where will they be located tomorrow?– China is making a major push to be a cheap home for Cloud server farms

– Is data crossing transnational borders?– Does your Cloud provider meet regulations in all countries you will

access the Cloud from?• How about conflicting regulations, such as US eDiscovery rules vs. EU

Privacy laws?

Slide 24Copyright © 2011 Stephen D. Poe V.01 — July 2011

Costs• Pricing based on Usage

– May be hard to gauge ‘usage’• How is ‘usage’ measured?• What are normal usage costs?• What are peak usage costs?

• Pricing– For how long are your prices guaranteed?– Expansion/contraction pricing?

• Lock In– What are potential lock-in costs?– How much will it cost you to move?

Slide 25Copyright © 2011 Stephen D. Poe V.01 — July 2011

Data Usage

• Are you moving large data sets between the end user(s) and the Cloud?– What does this do to Internet bandwidth and

WAN/LAN bandwidth?– Are there any additional costs for higher

bandwidth access to your Cloud?

Slide 26Copyright © 2011 Stephen D. Poe V.01 — July 2011

Data Ownership

• You own your data• But who owns IP and data developed and

modified by The Cloud staff?– Example – in a SaaS, if the Cloud personnel

develop an overlay or write business rules for you, who owns the code/objects developed?

• What are the conditions to retrieve all of your data and IP?

Slide 27Copyright © 2011 Stephen D. Poe V.01 — July 2011

Licensing

• If you own the software and the Cloud runs it (i.e., IaaS or PaaS):– How many licenses do you need?– What type of variable licenses do your vendors

offer?– How can you satisfy your vendors regarding fair

usage?– Are their issues if your licenses are running in

another/multiple countries?

Slide 28Copyright © 2011 Stephen D. Poe V.01 — July 2011

Privacy

• Who can access the data?– What if it’s stored in a foreign country?– Google is reported to use servers in China to

deliver Cloud services.• What are China’s data privacy laws?

– Again, how about conflicting privacy regulations• US eDiscovery vs. EU Privacy?

• What are the privacy laws in all the countries the Cloud servers are in now and in the future?

Slide 29Copyright © 2011 Stephen D. Poe V.01 — July 2011

Risk

• Corporate acceptable level of risk– To allow corporate data to be held and processed

off-site• What level of risk is acceptable to your

organization?– What level of risk is posed by moving to The

Cloud?– What level of risk is posed by staying in-house?

Slide 30Copyright © 2011 Stephen D. Poe V.01 — July 2011

Security

• Public Cloud provider?– How good is their security? – DropBox.com log-in issue

• Bug allowed anyone to access any account – For four hours on a Sunday morning

• Private Cloud– Can your IT department do better?

Slide 31Copyright © 2011 Stephen D. Poe V.01 — July 2011

To Cloud or not to Cloud?

Slide 32Copyright © 2011 Stephen D. Poe V.01 — July 2011

To Cloud or Not to Cloud?• Remember – this is just another insource/outsource

decision• Yes, there are risks

– But could you do better in-house?– How risk-averse is your organization?– How cost conscious is your organization?

• Which is more cost effective?– Develop a 2-3 year Total Cost of Ownership report for both

options• May be an expensive report to develop• But you’re likely to learn a lot that will also help you elsewhere

Slide 33Copyright © 2011 Stephen D. Poe V.01 — July 2011

Entering The Cloud

Slide 34Copyright © 2011 Stephen D. Poe V.01 — July 2011

Five Phases1. Define the Cloud

– What are your goals? What business objectives do you want to accomplish by moving to the Cloud? What are your primary objectives? And who is the Senior Manager Champion and the Project Manager for the overall move to the Cloud?

2. Test the Cloud– Identify and implement several small cloud pilot projects. Use this phase to learn, set

standards, develop polices and procedures, increase internal skill sets, start discussions with vendors regarding software licensing (IaaS & Paas)

3. Validate the Cloud– Expand your pilot projects enough to demonstrate real ROIs or show that they can

actually meet the business goals set in Phase 1 4. Scale the Cloud

– Start moving and implementing more projects and applications5. Exploit the Cloud

– Expand Cloud usage based on what has been learned to date. Explore new or novel opportunities based on the first four phases.

Slide 35Copyright © 2011 Stephen D. Poe V.01 — July 2011

A Cloud Checklist

• A full checklist is far, far beyond the scope of this presentation– The checklist will need to be tailored to your

organization, environment, and business needs

Slide 36Copyright © 2011 Stephen D. Poe V.01 — July 2011

A Cloud Checklist for Transaction

• What are your business goals in potentially moving to the Cloud?– Do you have specific metrics for each of these

goals?• What level of Cloud makes most sense?

– IaaS, PaaS, SaaS?– Or different for different applications?

• Private or Public?– Or Hybrid?

Slide 37Copyright © 2011 Stephen D. Poe V.01 — July 2011

A Cloud Checklist for Transaction

• What are potential pilot applications?• If public (or private farmed out)

– Who develops the RFP?– Who’s on the list?

• Who manages it in-house?• What’s the definition of ‘success’• How often do you review?

Slide 38Copyright © 2011 Stephen D. Poe V.01 — July 2011

For More Information

Stephen D. Poe, EDP, CSM, CSPO

Nautilus Solutions+1.214.532.0443

sdpoe@nautilussolutions.comLinkedIn: linkedin.com/in/sdpoe

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