Welcome to the latest BriefingsDirect Analyst Insights Edition, Vol. 42. Our latest topic centers on governance as a requirement and an enabler for cloud computing.

Our panel of IT analysts discusses the emerging requirements for a new and larger definition of governance. It's more than IT governance, or service-oriented architecture (SOA) governance. The goal is really more about extended enterprise processes, resource consumption, and resource-allocation governance.

In other words, "total services governance." Any meaningful move to cloud-computing adoption, certainly that which aligns and coexists with existing enterprise IT, will need to have such total governance in place. Already, we see a lot of evidence that the IT vendor community and the cloud providers themselves recognize the need for this pending market need and requirement for additional governance.

So listen then as we go round-robin with our IT analyst panelists on their top five reasons why service governance is critical and mandatory for enterprises to properly and safely modernize and prosper vis-à-vis cloud computing: David A. Kelly, president of Upside Research; Joe McKendrick, independent analyst and ZDNet blogger, and Ron Schmelzer, senior analyst at ZapThink. Our discussion is hosted and moderated by me, BriefingsDirect's Dana Gardner.

Here are some excerpts ...

Schmelzer's top four governance rationales:

At ZapThink we just did a survey of the various topics that people are interested in for education, training, and stuff like that. The number one thing that people came back with was governance.

• Control. So first reason to use governance, to prevent chaos. ... You want the benefit of loose coupling. That is, you want the benefit of being able to take any service and compose it with any other service without necessarily having to get the service provider involved. ... But the problem is how to prevent people from combining these services in ways that provide unpredictable or undesirable results. A lot of the efforts in governance from the runtime prevents that unpredictability.

• Design Parameters. Two, then there is the design-time thing. How do you make sure services are provided in a reliable predictable way? People want to create services. Just because you can build a service doesn't mean that your service looks like somebody else's service. How do you prevent issues of incompatibility? How do you prevent issues of different levels of compliance?

• Policy Adherence. Of course, the third one is around policy. How do you make sure that the various services comply with the various corporate policies, runtime policies, IT policies, whatever those policies are?

• Reliability. To add a fourth, people are starting to think more and more about governance, because we see the penalty for what happens when IT fails. People don't want to be consuming stuff from the cloud or putting stuff into a cloud and risking the fact that the cloud may not be available or the service of the cloud may not be available. They need to have contingency plans, but IT contingency plans are a form of governance.

Kelly's top five governance rationales:

At one level, what we're going to see in cloud computing and governance is a pretty straightforward extension of what you've seen in terms of SOA governance and the bottom-up from the services governance area. As you said, it gets interesting when you start to up-level it from individual services into the business processes and start talking about how those are going to be deployed in the cloud.

• Focus on Business Goals. My first point is one of the key areas where governance is critical for the cloud, and that is ensuring that you're connecting the business goals with those cloud services. As services move out to the cloud, there's a larger perspective and with it the potential for greater disruption.

• Ensuring Compliance. [Governance] is going to be the initial driver that you're going to see in the cloud in terms of compliance for data security, privacy, and those types of things. Can the consumers trust the services that they're interacting with, and can the providers provide some kind of assurance in terms of governance for the data, the processes, and an overall compliance of the services they're delivering?

• Consistent Change Management. With cloud, you have a very different environment than most IT organizations are used to. You've got a completely different set of change-management issues, although they are consistent to some extent with what we've seen in SOA. You need to both maintain the services, and make sure they don't cause problems when you're doing change management.

• Service Level Agreements (SLAs). The fourth point is making sure that the governance can increase or help monitor quality of services, both in design quality and in runtime quality. That could also include performance. ... What we've seen so far is a very limited approach to governance. ... We're going to have to see a much broader expansion over the next four or five years.

• Managing Service Lifecycles. Looking at this from a macro perspective, we need managing the cloud-computing life cycle. From the definitions of the services, through the deployment of the services, to the management of the services, to the performance of the services, to the retirement of the services, it's everything that's going on in the cloud. As those services get aggregated into larger business processes, that's going to require different set of governance characteristics.

McKendrick's top five governance rationales:

There is an issue that's looming that hasn't really been discussed or addressed yet. That is the role of governance for companies that are consuming the services versus the role of governance for companies that are providing the services. On some level, companies are going to be both consumers and providers of cloud services.

• Provisioning Management. Companies and their IT departments will be the cloud providers internally, and there is a level of ... design-time governance issues that we've been wrestling with SOA all these years that come into play as providers. They will want to manage how much of their resources are devoted to delivery of services, and to manage the costs of supplying those services.

• SLA Management. Companies will have to tackle SLA management, which is assuring the availability of the applications they're receiving from some outside third party. So, the whole topic of governance splits in two here, because there is going to be all this activity going on outside the firewall that needs to be discussed.

• Service Ecology Management. A lot of companies are taking on the role of a broker or brokerage. They're picking up services from partners, distributors, and aggregators, and providing those services to specific markets. They need the ability to know what services are available in order to be able to discover and identify the assets to build the application or complete a business process. How will we go about knowing what's out there and knowing what's been embedded and tested for the organization?

• Return on Investment (ROI). ROI is another hot button, and we need to be able to determine what services and processes are delivering the best ROI. How do we measure that? How do we capture those metrics?

• Business Involvement. How do we get the business involved [in shaping the refining the use of services in the context of business processes]? How do we move it beyond something that IT is implementing and move it to the business domain? How do we ensure that business people are intimately involved with the process and are identifying their needs? Ultimately, it's all about governing services.

Gardner's top five governance rationales:

The road to cloud computing is increasingly paved with, or perhaps is going to be held up by a lack of, governance.

• Managing Scale. We're going to need to scale beyond what we do with business to employee (B2E). For cloud computing, we're going to need to see a greater scale for business to business (B2B) cloud ecologies, and then ultimately business to consumer (B2C) with potentially very massive scale. New business models will demand a high scale and low margin, so the scale becomes important. In order to manage scale, you need to have governance in place. ... We're going to need to see governance on API usage, but also in what you're willing to let your APIs be used for and at what scale.

• Federated Cloud Ecologies. We need to make this work within a large cloud ecology. Standards and neutrality at some level are going to be essential for this to happen across a larger group of participants and consumers. So with people coming and going in and out of an ecology of process, delivered via cloud services, means we need federation. That means open and shared governance mechanisms of some type. Standards and neutrality at some level are going to be essential for this to happen at that scale across a larger group of participants and consumers.

• Keep IT Happy. My third reason is that IT is going to need to buy into this. We've heard some talk recently about doing away with IT, going around IT, or doing all of these cloud mechanisms vis-à-vis the line of business folks. I think there is a role for that, and I think it's exploratory at that level. Ultimately, for an enterprise to be successful with cloud models as a business, they're going to have to take advantage of what they already have in place in IT. They need to make it IT ready and acceptable, and that means compliance. IT should have a checklist of what needs to take place in order for their resources and assets to be used vis-à-vis outside resources or even within the organization across a shared-services environment.

• Collect the Money. The business models that we're just starting to see well up in the marketplace around cloud are also going to require governance in order to do billing, to satisfy whether the transaction has occurred, to provision people on and off based on whether they've paid properly or they're using it properly under the conditions of a license or a SLA of some kind. This needs to be done at a very granular level. Governance is going to be essential for making money at cloud types of activities.

• Data Access Management. Lastly, cloud-based data is going to be important. We talk about transactions, services, APIs, and applications, but data needs to be shared, not just at a batch level, but at a granular level across multiple partners. To govern the security, provisioning, and protection of data at a granular level falls back once again to governance. So, I come down on the side that governance is monumental and important to advancing cloud, and that we are still quite a ways away from [controlling access] around data.

Read a full transcript of the discussion. Listen to the podcast. Download the podcast. Find it on iTunes/iPod and Podcast.com.

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