Applying Cloud Computing: An Executive Workshop

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1 Applying Cloud Computing: An Executive Workshop March 11, 2013 Joseph Pucciarelli VP & IT Executive Advisor

2 The 3 rd Platform Shift: From IT Productivity to Business Productivity Innovation Information Public Safety Smart Grid Smart Buildings Omnichannel Retail Connected Vehicles Connected Health Smart Cities Mobile Payments Business Agility Intelligent Industries IT Agility Services Systems 2

3 Today we will discuss Cloud computing has been hailed for its ability to shift expense from capital to operational budgets promising a new economic paradigm for IT organizations. But for technology buyers migration to cloud presents a strategic investment that requires financial justification. In order to capitalize on the demand for the 3 rd platform, IT suppliers need to understand the financial issues that are influencing corporate investments in cloud: Why move to cloud and where do I start? Public cloud vs. private cloud How do I decide? Once we decide how do we justify the costs? What will the investment look like? What will be the financial impact on our organization? 3

4 Public cloud vs. private cloud How do I decide? Operations Public Cloud completely outsourced from development Business Organization Financial Converged IT Inf. Private Cloud Goes Beyond Virtualization to Focus on Services and Consumption 4

5 IT Portfolio Rationalization: Why move to cloud and where do I start? Business Value Invest Optimize Data Traditional IT Financial analytics Analytics Innovation B2B Marketing Team Rooms Web Social Business Public Cloud Video/ Web Conf ERP CRM Private Cloud Decision Support Supply Chain Database Application Development Environment Sales Automation HR apps File Print AP/AR Payroll Virtualize/Outsource Sunset? Consolidate Delivery Cost 5 5

6 IDC s Cloud Decision Framework Outcomes: Public Cloud best fit Organization & Business, and Private Cloud was best fit for Operations & Financial 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Results to Date of IDC Cloud Decision Framework by Analysis Category Organization Business Operations Financial Total Private Cloud Public Cloud N=246 6

7 How do we justify the costs of Public Cloud? Public Cloud reduces TCO by 73% $2,500 $2,000 $1,500 $375 $434 Traditional to Public Cloud 73% User productivity loss Infrastructure $1,000 $500 $328 $845 $31 $64 $22 $406 IT staff - app dev and deployment IT staff - system management $- Traditional Public Cloud 7

8 How do we justify the costs of Private Cloud? Private Cloud reduces TCO by 62% $1,800 $1,600 $1,400 $375 $1,200 Traditional to Private Cloud 62% $1,000 $800 $600 $400 $200 $434 $845 $6 $197 $428 User productivity loss Infrastructure IT staff Increasing Application Availability Generates User Productivity Cost Savings $- Traditional Private Cloud 8

9 What will be the financial impact on our organization? Moving to cloud will allow you to automate your business through increasing the rollout of business applications Moving to cloud will reduce average costs to deliver services by 60-70% and increase business resiliency Moving to cloud will reduce risk by increasing services reliability by over 80% Moving to cloud will increase business agility reducing the time to deploy new applications by 50-60% 9

10 Most Valued Content When Making IT Decisions Q. What types of vendor content do you most value during the IT investment decision process? Financial Justification/ROI Product features Product Demo or Proof of Concept Product/service Reviews & Test Results Peer/Customer References Industry Trends Competitive Comparisons Vision/Thought Leadership Customer Case Studies Other % of Participants Source: IDC, Sales & CMO Advisory Services: 2012 Buyer Study 10

11 Contact Information IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. Joseph C. Pucciarelli Vice President & IT Executive Advisor IDC 5 Speen Street Framingham, MA

12 IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. Terms of Use: Except as otherwise noted, the information enclosed is the intellectual property of IDC, copyright Reproduction is forbidden unless authorized; contact for information. All rights reserved. 12

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