But Is It a Cloud?
IS A CLOUD SERVICE BROKER really a cloud-based service provider? a cloud’s ar- chitecture is optimized to respond quickly to sudden, large changes in workload demands. a cloud typically consists of a highly standardized distributed computing architecture, uses virtualization to create an elastic infrastructure that can automatically provision and eprovision resources in response to changes in workload demands, and includes usage- based metering for chargeback or pay-as-you-go billing. in the case of Liaison, the bulk of its revenue comes from people-intensive integration and data management services, which it lumps into two groups: professional services for
initial integrations, and managed services for ongoing support. Only the subscription piece, which
maintains all of the connections for Mohawk and provides a tool for monitoring those, leverages
the benefits of a cloud architecture.
what a csB does is not elastic, “but the reality is that not all workloads and cloud deployments
require it,” says Gartner analyst Benoit Lheureux. a strong increase in transaction volume for a csB is
more likely to be in the range of 10% a year overall, he says, and csBs can scale to meet that demand.
the bigger challenge lies in scaling up the staff. “Liaison’s biggest problem is hiring the right skills
to add to the fulfillment group for things like mapping, edi, XML and rosettanet,” says Lheureux.
from Mohawk’s standpoint, to focus on the technology is to miss the point. stamas doesn’t care
about technical details such as virtualization, economies of computing, elasticity of demand or pay-for-use models. those are Liaison’s problems. Mohawk pays Liaison a flat annual fee plus an hourly
rate to set up each integration, most of which come in around $1,000 or less.
“it’s not about technology,” stamas says. “it’s about building business processes in the cloud.
that’s what we’re focusing on.”
than what it might receive from other
service providers because Contivo makes
it easy to redeploy or repurpose data maps
in different technology infrastructures,
Lheureux says. Nonetheless, porting to
a new platform would be painful. “You
can’t just pick it up and drop it on another
platform,” he says.
But for Mohawk, the benefits outweigh
those risks. The low cost per integration
and the rapid turnaround have given the
company the agility to create new business
relationships and build business processes
on a trial basis. Mohawk can do all this
without worrying about the investment of
time, money and other resources required
to do the integration work.
And because its costs are lower,
Mohawk can tackle smaller projects
that it wouldn’t have considered before.
Stamas points to the StrikeIron integration as an example. “It is a small little
Web service,” he says, noting that in the
future there may be hundreds — or thousands — of such initiatives.
— rOBert L. MitcheLL
The benefits of hosting a service-oriented architecture in
the cloud don’t come without risks, and Stamas does have two
concerns. One is vendor lock-in. “If Liaison drops out of site or
becomes too big, what happens to our intellectual property and
the integrations we count on? It’s a real concern,” he says.
Another is whether the cloud service provider can keep up service
levels as Mohawk’s transaction volumes and customer base grow.
While Mohawk has service-level agreements, he says, “the technical
details of their underlying infrastructure are hidden from me.”
Can Liaison scale effectively? “If we’re twice as big in a year,
can they handle the volume? I don’t know,” he admits.
Liaison CTO Bruce Chen says his company has 50% more
capacity on hand than its customers need and has a distributed,
service-based architecture that scales rapidly. But Gartner’s
Lheureux says the technology that keeps data flowing is just one
part of the business. Growing the professional services and managed services
that make up the bulk of the company’s
revenue means scaling up people, methodology and expertise. “The cost is not
in the mapping tools or processors in the
cloud. It’s in the people,” Lheureux says.
As a hedge, Mohawk retains a copy of
all of its translations and mappings. The
information is managed using Liaison’s
Contivo technology, a tool designed for
high-end mapping and best practices.
The intellectual property that
Mohawk receives from Liaison is better
End of Big IT Architectures?
Stamas sees this as the beginning of the
end for monolithic enterprise applica-
tions. “They’re beginning to break apart
into pieces. Rather than monolithic systems like SAP and Oracle,
an ecosystem of cloud services will be interoperating with other
workflows and processes that can be anywhere,” he says.
For example, Stamas explains, “our ERP is the system of record
for financials, but much of the functionality resides outside the
system.” Orders entered via websites and CRM, expense management and HR systems are handled in the cloud, and advanced capabilities such as planning, scheduling, transportation, supply chain,
asset management, manufacturing execution and warehouse
management are performed outside the ERP software. Today, 60%
of Mohawk’s I T portfolio resides outside the ERP system, up from
10% five years ago. “I see this rate accelerating,” says Stamas.
In such a setup, “your ERP system may call Web services at
StrikeIron for a currency conversion, and UPS or FedEx for a
freight rate,” he says. “Then it may check inventory for an item
at a customer or supplier” or ping
other sites to perform credit checks,
calculate sales tax, approve credit card
payments and more.
As the financial bar has been lowered
and turnaround times shortened for ex-
ecuting on such integrations, the number
of projects at Mohawk has increased.
“We can bring in a third-party manufacturer or logistics provider at the drop
of a hat. That’s what’s fueling revenue
generation,” Stamas says. “If it costs us
$1,000 to try something, why not try it? If
it doesn’t work, we just throw it away.” u
If it costs us $1,000 to
try something, why not
try it? If it doesn’t work,
we just throw it away.
PAUL STAMAS, Vice President Of it,
MOhawk fine PaPers
