Posts Tagged ‘cloud governance’

Service Agreements in the Cloud

October 11, 2011

Service agreement: an expression of functional and/or non-functional aspects of a service delivered from one party to another, along with any obligations upon either party.

In an earlier post I described how at Arjuna we believe that IT service will increasingly be delivered by Federated Clouds. In This post I want to look at the glue which connect Clouds together – Service Agreements.

When a service is both commissioned and delivered within a single organisation, the appropriate IT resources are designated and trialled until an effective service is deemed to have been provided. In this case both the consumers of the service and the suppliers belong to the same organisation, are ultimately responsible to a single authority, and have common interest. Common interest results in a level of trust where formal contractual and detailed expressions of precisely what is required of the service can frequently be avoided. Knowledge of the specific dedicated resources being used and/or faith in the ability of the IT team within the organisation can reassure the IT consumer that the requisite quality of service will continue to be delivered.

However, today if you’re commissioning an application delivering some service you’d ideally like to push it into the cloud and forget about it. You want the cloud to be opaque. You don’t want to have to make resourcing decisions (and particularly you don’t want to incur any expense associated with over-capacity). But if the cloud is opaque then you don’t know what resources will be utilised, and as there isn’t the same level of trust, how can you, or the consumers of your service, be confident that a satisfactory quality of service will be maintained?

Well, if the risks associated with the failure of the service to behave as expected are low enough so as to be ignored or effectively mitigated by the consumer then a general purpose, low-cost, cloud which offers simple ‘best-effort’ quality of service may well be ‘good enough’. Many of the applications hosted on the cloud today do indeed fall into this category.

However, if the risks are perceived to be higher then a service may only be useable if backed by a service agreement which provides some specific contractual guarantees. Those guarantees might constrain the provider to utilise specific resources in support of the service e.g. fault-tolerant hardware, replicated storage, the availability of skilled support staff etc, and thereby reassure the consumer that the risk is lower than it might otherwise be; and/or the provider might agree to compensate the consumer if quality of service is not maintained. This compensation could be through the provision of an effective alternative service or may even be financial. Service providers supporting this form of service agreement are effectively reducing the overall cost of using the service for individual consumers by mitigating their collective risk.

A service agreement could specify not only how the service can be operated and what it is expected to do, but also what might go wrong and what then happens, the legal, financial and support obligations, what reporting is to be delivered etc. In the real world service agreements (just like other legal contracts) can rarely be absolutely complete i.e. aspects remain open to interpretation, but in the cloud they certainly need to be much more explicit than they need be when services are utilised within a single organisation. The trust relationship which exists within an organisation needs to be replaced by a more formal relationship i.e. a contractual service agreement which clearly defines all relevant aspects of the service to be delivered.

Servce Agreements and the Federated Cloud

September 30, 2011

Federation: an organisational structure where the parties concerned are autonomous but cooperate through agreement.

The Cloud Computing paradigm is, at its core, about improved sharing, where the means of sharing is through the consumption of services. With constantly improving network capacity IT users are now able, in many cases, to consume services sourced from third parties rather than managing their own applications. As a consequence services will increasingly be delivered by providers who can reduce service costs by taking advantage of economies of scale. This trend puts economic pressure on IT consumers to utilise shared services, and by implication the IT resources (hardware, software and staff) used to deliver those services. As prices fall, and shared services proliferate and mature, it is inevitable that we will see a gradual but consistent move from services delivered by dedicated IT to services delivered by shared IT.

However, for at least three reasons we are unlikely to move to a situation where all IT resources are in the hands of a few providers, irrespective of the economic benefits. Firstly, there will be many cases where sharing is unfeasible or undesirable – bespoke services may not deliver value to anyone but their creators, or may be of such competitive value that the creators will keep them to themselves; other services might have restrictions e.g. security or latency considerations, that prevent sharing from occurring. Secondly, the transition to using shared services will be very gradual (due to inherent conservatism and to sunk costs in existing dedicated IT) and therefore it will be many years before even all of those services which could be shared, will be. Thirdly, governments will not allow such strong economic controls to be concentrated in the hands of a few.

As a consequence, at Arjuna we believe that IT services will increasingly be delivered by a complex, interconnected network of federated service providers. Providers will consume services from each other, organisations will cooperate together to share services to mutual advantage, service brokerage and trading will be commonplace. Given the variety and multitude of possible IT services we believe that the resultant network will be orders of magnitude more complex than other service delivery networks such as the electricity grid or telephone network. While a lot of effort has been aimed at enabling the technical integration that is required in order to build such networks, we believe that insufficient effort has been directed towards issues of organisational integration. In particular we believe that much of the complexity in federated networks will come from the need to manage service agreements between organisations.

Arjuna’s Agility product delivers the service agreements that are the glue for the Federated Cloud.