Thursday, August 19, 2010

Matson CIO’s five guidelines to moving apps to the cloud

To most people -- especially in August -- 'Ocean Services' probably conjures visions of boogie boards, sun umbrellas and bringing the drinks without getting sand in the glass.

To Matson Navigation CIO Peter Weis, it means logistics, and the need to gather, analyze and coordinate information so his customers can monitor the location, condition and progress of finished goods in one container on one freighter in the South Pacific, more easily than they'd be able to check on a new phone battery being delivered by FedEx.

It's not the kind of information or access the ocean services business has been accustomed to offering.

Weis, who took over as CIO of the $1.5 billion Matson Navigation in 2003, says the company is 75 percent of the way through an IT overhaul that focuses on retiring the mainframes, DOS and AS/400 systems the company has depended on for years in favor of a Java-based application-integration platform and a plan to get as many of Matson's business applications as possible from external SaaS providers.

1. Decide Why You Want SaaS
Weis was hired in 2003 to revamp Matson's IT infrastructure, so part of his mandate was to design an infrastructure and draw up a strategy to coordinate the company's use of SaaS and internal applications.

Business agility, not cost savings, is the leading reason U.S. companies are interested in cloud computing, according to a survey of 500 senior-level IT and business-unit managers Sand Hill released in March.

2. Think Architecture
Before Weis started signing on SaaS providers and ramping down internal applications, he and his staff spent a year taking inventory of all the company's existing systems and building a reference platform that provided middleware and application servers to connect new and existing applications.

3. Take Inventory and Throw Out Apps
Weis says back-office applications are good candidates for SaaS-ification, as are finance, HR and accounting apps.

Those that have to meet specific requirements may not be, however.

"In ocean shipping, there are 30 or so major carriers, which isn't a big enough market to have a ton of developers building products for it," Weis says. "So things like core booking systems and order systems -- those are absolutely custom builds because the documentation, the bill of lading, the business rules and requirements are so specific."

4. Check More Than a Provider's Books
In SaaS relationships it's critical to know if a software provider is financially stable, well managed and uses secure, well maintained data centers. So it's important to do due diligence checks on a provider's financial health and ability to pass audits for privacy or financial-reporting regulations, Weis says.

5. Compare the Right Costs
SaaS applications look inexpensive because the subscription cost is far lower than the payout of an acquisition, and they begin delivering useful functionality more quickly than it would take IT to spec, build and test an on-premise application.

Without a coherent strategy and set of criteria for success, however, it's impossible to know if a SaaS application is delivering real value.

That's the real challenge with SaaS, according to Weis. He must make sure that the platform on which the applications are deployed can connect them easily and the end result of many SaaS contracts is less confusion, greater efficiency and a better handle on practical aspects of the business. That means what container is on what ship and how long will it take to get to port, not where data is stored and whose server is running the application.

-Reuters/CIO

For the full story: www.reuters.com

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