There's no easy path to the cloud for large companies with decades of legacy IT investments.
Roughly 20 percent of Progressive Insurance's business applications run in a SaaS model, while 80 percent run on the company's own hardware. On the infrastructure side, Progressive uses IaaS, but mainly for experimentation.
It would be "a whole new ballgame" if Progressive were some medium-sized business that didn't have an extensive data center footprint, says CIO Ray Voelker, but "we already have assets we own that we can leverage."
Chris Drumgoole, chief operating officer for cloud at General Electric, says legacy is "where it's more interesting for us; we need to be more thoughtful there." Most new apps -- over 90 percent of those deployed so far this year -- have been in the cloud. "That's the de facto place to deploy apps for us," he says.
But for a substantial number of the 9,000 apps GE has in its infrastructure, a decision will need to be made about whether to move the app, kill it, consolidate multiple apps or allow the software to stay on some sort of legacy system. "We're hoping by 2016 to have made all those decisions and started action" on whatever the decisions are, Drumgoole says.
The burden of legacy systems is just one challenge that adds to the complexity of cloud computing for large enterprises. CIOs and cloud leaders wrestle with many other common challenges, including security, vendor lock-in, and shadow IT.
Dow Chemical knows firsthand that it can be difficult to change cloud providers. The company is in the process of moving to a new human capital management provider, says David Day, director of WorkPlace Services at Dow.
But switching clouds isn't as easy as vendors lead people to believe. "Providers don't talk to each other. It's complicated," Day says. The market needs better "orchestration tools," as well as standards, to allow companies to move more easily from one supplier to another, he says.
That said, it is generally less expensive to switch providers in the cloud than it is to change on-premises vendors, Land O'Lakes has found. "There is a cost," says Mike Macrie, CIO. "But where it can cost $10 million to change on-premises ERP, it costs $2 million in the cloud. The barrier has come down."
Lock-in is always an issue, says GE's Drumgoole. "We're cognizant of the potential for lock-in" and are trying to mitigate that. For one thing, there are multiple cloud providers in each category of service GE deploys.
The company has also developed a service rail, which provides a raft of services needed by just about every application -- from identity management to Domain Name Services and time and date. "You can use that GE service the same way whether you're on an Amazon, Azure on VMware cloud," Drumgoole says.
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