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Managed cloud a new answer to an old problem

IT shops that want to use cloud services but don't have the staff or know-how to make it work can benefit from managed cloud services.

NEW YORK -- Cloud computing is at the center of business growth today and managed cloud could provide the means to maximize the benefits of the technology.

That was the message from Melanie Posey, research vice president for IDC, an analyst firm based in Framingham, Mass., who spoke at a Rackspace-hosted conference here this week. With 80% of businesses using some form of cloud computing resources, Posey paraphrased Winston Churchill in saying that we're not at the beginning of the end with cloud adoption, but at the end of the beginning.

"Everybody's doing it," Posey said. "We've gotten past the point where it's this new, interesting, exciting thing, and now it's just a part of doing business."

Organizations will spend $122 billion on public cloud IT services in 2018 and those using cloud expect to increase their cloud spending by 34% over the next two years, according to IDC.

Managed cloud provides a new answer to the old problem of outsourcing, Posey said. Tech companies often feel that unless they're doing everything themselves, they're not a bonafide tech company, but that mindset has to change.

"In the digital economy, you're not selling tech," Posey said. "You're selling an app or you're selling an experience or you're selling a new way of consuming a product. The infrastructure is there because it has to be, but a service provider can help you innovate on that infrastructure as well."

I have no doubt it will cost us more than if we knew everything going into it, but the benefits far outweigh the risks.
Chris Duceyowner of startup Pocketbook Voters

Along with mobile, social and business analytics, cloud is one of the pillars in the next wave of IT, Posey said. It blurs the lines between the IT department and the business department and forces businesses to engage in continuous innovation and transformation. Managed cloud can help foster innovation in this new model by freeing the IT department from just putting out fires and keeping the lights on.

"When you have your foundational infrastructure managed or co-managed, you have more space, more time, more brainpower devoted to things that really matter to the business," Posey said.

Chris Ducey, owner of startup Pocketbook Voters, a political commerce app business in Jersey City, N.J., is an Amazon Web Services customer that is looking to move to Rackspace managed cloud as the company expands. With all the unknowns around how that growth will be realized, having a partner to help that implementation is appealing, he said.

"I have no doubt it will cost us more than if we knew everything going into it, but the benefits far outweigh the risks," Ducey said.

There are only a handful of service providers offering managed cloud, including Rackspace, Datapipe and Carpathia, Inc., but the number of vendors will likely increase to meet demand, Posey said.

There will be different types of clouds for different customers, and managed cloud will fill an important role going forward, Posey said. It can assist not only with the day-to-day services and install demands, but, as we enter the mass adoption stage of cloud, there will only be so many cloud experts to hire and retain for companies that want to do it themselves.

Do-it-yourself cloud worked great for early adopters, but even some of them that jumped in feet first are starting to move to managed cloud because of troubles with scale and complexity, Posey said. The reason is half of U.S. organizations don't have enough people in their IT department to effectively support cloud, while another 45% have the people but aren't necessarily up to date on the latest and greatest, she added.

"You hit a wall there and you find the self-managed model doesn't work for a couple reasons," Posey said. "The main reason is you have to make hard choices."

When businesses get deeply involved with these hands-off clouds, they must decide whether to hire more IT people, more developers or more marketing and sales staff, Posey said. And for startups in particular, those employee decisions could also include finance hires as they face the potential for IPOs or mergers and acquisitions.

Trevor Jones is the news writer for SearchCloudComputing. You can reach him at [email protected].

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