Shaklee CIO goes "all in" to the cloud

Customer adopts cloud for half of business processes

Shaklee CIO Ken Harris was all about the cloud before it was even called the cloud. Five years ago, the nutritional products retail company decided to move as many of its business processes into software-as-a-service (SaaS) platforms as possible.
Well before Microsoft CEO Steve Ballmer declared Microsoft was "all in" on the cloud, Harris was adopting the same strategy from the customer side, he explained in a speech this week at the Cloud Leadership Forum, a conference hosted by IDC and IDG Enterprise.

Six misconceptions about cloud apps 

"I define 'all in' not as being guaranteed we're going to do a cloud-based solution, but rather that we will consider a cloud-based solution for any and every business need the company has," Harris said.

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Shaklee CIO Ken Harris was all about the cloud before it was even called the cloud. Five years ago, the nutritional products retail company decided to move as many of its business processes into software-as-a-service (SaaS) platforms as possible.
Well before Microsoft CEO Steve Ballmer declared Microsoft was "all in" on the cloud, Harris was adopting the same strategy from the customer side, he explained in a speech this week at the Cloud Leadership Forum, a conference hosted by IDC and IDG Enterprise.

Six misconceptions about cloud apps 

"I define 'all in' not as being guaranteed we're going to do a cloud-based solution, but rather that we will consider a cloud-based solution for any and every business need the company has," Harris said.

Shaklee's strategy hit a rough patch on its very first attempt to move a business process into the cloud. Five months into the implementation of Shaklee's first SaaS application, "the vendor said we're getting out of this business," Harris said, without naming names. "They weren't going out of business. They were just getting out of that section of the business."

Harris said roadblocks like that shouldn't deter customers from adopting the cloud computing model. Shaklee struck a deal with that particular vendor allowing the customer to take the software in-house, and then went about looking for other cloud services.

Ultimately, Shaklee outsourced more than half of its business services to cloud vendors. Shaklee contracts with at least 10 cloud vendors, including Virtela for network access, RightNow for CRM, SuccessFactors for human resources and PivotLink for business intelligence. Shaklee determined that the cloud was not a good fit for numerous applications, including order processing and order entry.

No consideration, even security, prevents Harris from considering a cloud service, but he won't adopt one unless it's just as good as an on-premise option.

"You cannot give up stability, performance, availability or anything just to go to the cloud," Harris said. "Not all vendors understand what it takes to be a cloud service provider."

Harris is a seasoned negotiator, an important skill for dealing with software vendors. In all his dealings with cloud vendors he demands a certain monthly uptime, for example 99.9%. If the vendor hits 100% in a month, it gets a bonus. At 99.9% the vendor receives 100% of the agreed-upon price. If availability is lower than 99.9% the vendor takes a pay cut, and if the service is atrociously low -- say 90% -- the vendor gets nothing for the month.

Vendors initially resisted, but "with almost every vendor we've reached an agreement," Harris said. Interestingly, Harris says as cloud computing has grown in popularity he has noticed some vendors adopting the very same terms as standard clauses in service-level agreements.

Harris applies the same strategy to response time in the event of an outage. If Shaklee has a major problem and demands that a vendor respond within, say, four hours, the vendor gets a bonus if it's there in two hours, and a penalty if it takes more than four hours.