The Advantage of Service Provider Cloud Solutions vs. Do-It-Yourself (DIY) Internal Cloud Computing Strategies

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1 A Whitepaper for IT and Business Decision-Makers The Advantage of Service Provider Cloud Solutions vs. Do-It-Yourself (DIY) Internal Cloud Computing Strategies Leveraging Enterprise-Class Services to Achieve Your Private Cloud Computing Business Objectives An Independent analysis published on behalf of Savvis. Table of Contents 2 Executive Overview 2 Defining Cloud Computing 3 Macro-Market Trends Fueling the Growth of Cloud Computing 4 Internal Clouds / DIY Are Not the Answer 5 Benefits of Enterprise-Class Service Provider Cloud Services 6 Savvis Private Enterprise Cloud 7 Summary and Conclusions 8 About THINKstrategies, Inc.

2 Executive Overview Few technological innovations have garnered as much broad-based attention as the idea of Cloud Computing, which promises faster access to more powerful processing capabilities and application functionality at a fraction of the cost of traditional on-premise systems and software. The concept of Cloud Computing has become compelling to organizations of all sizes because of the inefficiencies and frustrations associated with traditional, legacy systems and software, especially given the escalating business challenges facing most organizations today. In fact, a recent survey of 600 IT and business decision-makers sponsored by Savvis found that 76% see their lack of access to IT capacity as a major barrier to business progress. 1 Cloud Computing is geared toward addressing this common challenge. But, while the potential benefits of Cloud Computing are clear, considerable debate continues to exist about the best way of maximizing the value of Cloud Computing. Should organizations build their own Do-It-Yourself (DIY) internal clouds, or leverage enterprise-class solutions offered by proven service providers to achieve their business objectives? Many corporate decision-makers believe their unique requirements can only be satisfied with dedicated cloud resources. However, THINKstrategies will show in this whitepaper that organizations can more cost-effectively and quickly satisfy their business needs by leveraging the proven cloud computing capabilities of a specialized service provider. This whitepaper will put today s cloud computing phenomenon into proper perspective, and identify the best path to success for companies seeking to maximize the potential benefits of cloud computing. This whitepaper will examine the specific advantages and benefits of DIY internal cloud and enterprise-class cloud solutions delivered by service providers. Specifically, the whitepaper will: Examine how cloud computing has evolved and the current state of cloud computing services. Discuss the IT and business implications of DIY vs. enterprise-class cloud computing models and adoption patterns. Show how organizations can leverage enterprise-class cloud solutions to satisfy their corporate requirements. Demonstrate how leading cloud computing providers are helping their customers achieve these objectives. Defining Cloud Computing Cloud computing is one of those technology terms which means something different to almost anyone you ask. The U.S. National Institute of Standards and Technology (NIST) has consolidated a number of definitions from a variety of sources into the following summary statement, Cloud Computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. 2 NIST identifies the following elements as essential components of a cloud computing environment: On-demand self-service which permits the user to unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service s provider. Broad network access through standard mechanisms that permits use by heterogeneous platforms and devices, such as mobile phones, laptops, and desktops. Resource pooling to serve multiple users via a multi-tenant model, utilizing location independent physical and virtual resources dynamically assigned based on varying demand. Rapid elasticity to quickly scale out and in at any time to respond to fluctuating user demand. Measured service which automatically controls and optimizes resource use on a metering basis at some level of abstraction appropriate to the type of service. 1 Savvis 2010 Global IT Leadership Report, July, 2010; 2 U.S. National Institute of Standards and Technology (NIST) Cloud Computing Working Paper,

3 The goals of cloud computing is to: Align the cost of computing resources to actual utilization. Accelerate deployment cycles and time to value. Provide greater flexibility and permit greater organizational agility. Eliminate the risks associated with acquiring, implementing and managing hardware and software. Increase the productivity and return-on-investment (ROI) of IT resources. Enable business innovation. Achieve a competitive advantage. In essence the key building blocks to achieving these objectives and constructing a true cloud computing environment are: Some form of shared or multi-tenancy to permit economic pooling of resources and rapid elasticity. A pay-as-you-go pricing mechanism which makes the economic model appealing to organizations seeking a greater agility and cost-savings. Virtualization technology which permits more flexible and cost-effective hardware and software deployment. Easy and rapid provisioning to enable self-service, preferably through policy based automation and access management. Macro-Market Trends Fueling the Growth of Cloud Computing The rapidly growing demand for Cloud Computing is being driven by escalating business challenges created by continued economic uncertainty, growing competition and changing workplace dynamics. These trends are forcing organizations of all sizes, to re-think how they utilize technology and software applications to support their ongoing operations and achieve their corporate objectives. Rising frustration among corporate executives and business end-users with the costs and complexities associated with traditional, on-premises applications and systems are also fueling interest in alternatives. Legacy systems and applications were not designed to respond to today s business challenges. They have become far more expensive and cumbersome to deploy and maintain than originally expected. In response, corporate decision-makers are seeking new ways to generate a greater return on investment (ROI) at a lower total cost of ownership (TCO) from their systems and software. Organizations also want to shift their IT spending from their capital expense (CapEx) to their operating expense (OpEx) lines. But, they are also trying to reduce the complexity of these resources so they can make them more user-friendly and productive. At the same time, a series of rapidly evolving enabling technologies have emerged which make it more economically feasible to deliver scalable IT services in an economic fashion. These technological advancements include, Pervasive broadband networks Powerful blade and grid technologies Flexible virtualization software Stronger security capabilities Versatile service management and provisioning Application Program Interfaces (APIs) and Web Services Over the past decade, a growing number of organizations have found success putting aside their legacy, on-premises applications in favor of a new generation of web-based, Software-as-a-Service (SaaS) solutions. Today, nearly every organization is employing SaaS solutions to satisfy their front- and back-office application needs, and even address their IT management and industry-specific requirements. 3

4 Now, corporate decision-makers want to extend these same on-demand capabilities into every aspect of their IT operations to permit anytime, anywhere access to their end-users, as well as authorized customers and partners. They also want to achieve the following corporate objectives as they roll out their Cloud Computing capabilities: Increased Flexibility and Scalability Business agility is not an option, but a necessity in today s global markets. The just-in-time model enabled by Cloud Computing for provisioning and de-provisioning IT is very attractive to businesses because they are assured IT capacity while minimizing their ongoing costs. Improved Reliability and Performance Business users depend upon their applications and require high availability ( percent uptime), with robust redundancy and fail-safe disaster recovery capabilities that minimize mean-time-to-recovery (MTTR). Access to Latest Cloud Technologies and Skills Sets Keeping pace with the Cloud Computing technologies demands highly specialized skills and hands-on experience which does not exist within most in-house IT organizations. Reduced IT Infrastructure Waste Approximately 39 percent of organizations are using only 55 percent of their server capacity. Therefore, many are seeking to move away from traditional IT procurement and management techniques to improve utilization levels. Continuous Infrastructure Upgrades Keeping up with server, storage, operating system, network and security updates is an ongoing challenge for more organizations. These businesses are seeking to automate this process to continuously refresh their systems. Gaining Management Control Many companies lack the ability to monitor and manage their own infrastructures via self-service portals or consoles. They need greater access to key performance metrics to ensure their infrastructure is performing in an optimal fashion, especially in light of today s regulatory and security concerns. It is for these reasons that various market research surveys have found growing interest and adoption of Cloud Computing services, and every market research firm is forecasting tremendous growth of this market. For example, Gartner expects the cloud computing market to reach $68.3 billion in 2010, a 16.6 percent increase from 2009 revenue of $58.6 billion. Gartner says the worldwide cloud services market will grow to $148.8 billion in Internal Clouds / DIY Are Not the Answer Although it is easy to understand why a majority of corporate decision-makers are uncomfortable with public cloud services, deploying an internal cloud can pose its own problems. Many IT and business decision-makers believe the safest and most secure approach to capitalizing on the cloud is by deploying their own cloud computing capabilities within the four walls of their existing data center. However, they fail to fully understand the challenges entailed with this strategy. It requires: Technological An organization must swap out its legacy, dedicated systems with more versatile and cost-effect virtualization solutions. Underlying these new systems must be a state-of-the-industry communications network to ensure optimal connectivity. It is equally essential to layer on top of the virtualization systems automated provisioning and access control capabilities to regulate and monitor end-user self-service features. Operational An organization must implement a new set of policies and procedures to administer and govern the automated systems and quickly respond to end-user support issues. Organizational The combination of technological and operational requirements requires staff with a new set of skills, as well as a different idea about the role of the IT department within the larger organization. In essence, the IT department must become a highly efficient internal service provider. 3 Gartner Says Worldwide Cloud Services Market to Surpass $68 Billion in 2010, June 22, 2010 press release. (http://www.gartner. com/it/page.jsp?id= ) 4

5 Transformational While using today s cloud computing phenomenon as a catalyst for transforming an internal data center and inhouse IT department isn t a bad idea, it isn t going to happen overnight, and the transition process could seriously disrupt the organization s business. Global Reach A Do-it-yourself strategy also generally lacks the human capital, global resources and multinational locations which can accommodate the geographic-specific requirements of many companies. This can pose a serious problem for multinational companies which have to monitor how sensitive data is transmitted across national bounders and must restrict where the data is stored. These issues have inhibited many organizations, especially large-scale enterprises, from pursuing strategic or mission-critical cloud computing initiatives. Recent research reports clearly show that corporate decision-makers are very apprehensive about relying on public cloud services to support their core, mission-critical, business operations. A Forrester Research survey found that less than half of the organizations contacted had virtualized their systems. And, those which had begun the virtualization process expected just 65% of their systems to be converted. Forrester considers initiating the virtualization process as just the first step toward moving to a cloud-like IT environment. The full virtualization process takes four steps: 1. Acclimation 2. Strategic consolidation 3. Process improvement 4. Pooling and Automation Forrester believes that it takes 5-7 years to complete the entire four-step process! 4 Given the acute business pressures facing most enterprises, few can sustain a 5-7 year Time-to-Value transformation process to reap the benefits of today s cloud computing capabilities. The Performance of a DIY Cloud still must be designed for peak usage rather than the usage valleys. Furthermore, the ability to burst into public clouds during peak usage will be difficult to implement. A company s agility to perform quickly for procuring and implementing additional compute, network and storage have been lackluster at best. These shortcomings are compounded by the need to integrate new cloud computing capabilities into existing data center operations. Without Integration with service delivery, service management and governance, the virtues and value of private cloud computing services disappear. Benefits of Enterprise-Class Service Provider Cloud Services An enterprise-class cloud delivered by a proven service provider enables organizations to more effectively reap the benefits of cloud computing without encountering the risks DIY private cloud deployments. Enterprise-class service provider delivered clouds can be standard or custom-configured to meet the specific needs of an organization in a flexible, global, secure and reliable fashion. They are designed, deployed and administered in conjunction with an experienced cloud service provider. An organization can work with a skilled and experienced service provider to: Specify their unique cloud computing requirements. Dictate their service level objectives (SLOs). Address licensing issues and data ownership concerns. Mandate reliability, security and privacy policies and procedures. Leverage the service provider s skills and experiences. Avoid retraining current in-house staff or recruiting new personnel. Accelerate the rollout process. Mitigate the development and deployment risks. Eliminate unanticipated or unnecessary costs. Anticipate disaster recovery/business continuity requirements. Create a scalable platform to meet the long-term needs of the organization. 4 You re Not Ready For Internal Cloud, Forrester Research, July 26, 2010/ 5

6 Figure 1 provides a clear illustration of the performance and time-to-value advantages of enterprise-class service provider cloud solutions over DIY cloud deployments. Figure 1: Do-It-Yourself (DIY) Cloud Deployment vs. Enterprise-Class Service Provider Cloud Solutions Source: THINKstrategies, Inc. Savvis Private Enterprise Cloud Savvis is a leading provider of cloud infrastructure and hosted IT solutions for enterprises. It provides a broad spectrum of services which enable its customers to optimize their capital expenses, improve service levels, and harness the latest advances in cloud computing technologies. Savvis has been delivering services for more than 15 years and currently utilizes 31 data centers worldwide to support over 2,500 client organizations, including 30 companies in the Fortune 100. Like most organizations, Savvis customers are seeking to leverage highly efficient hybrid enterprise infrastructure solutions with optimal security, performance and quality of service capabilities. These services include: Cloud computing Carrier-grade network backbone Colocation Managed hosting Security Professional services Once viewed as appropriate only for smaller businesses, Cloud Computing is being adopted by even the largest multinational enterprises as well. These enterprises are seeking speed-to-market, minimized costs, increased agility and scalability. Furthermore, they need to improve the reliability and performance of their operations while maintaining control of over their infrastructure. Rather than do-it-themselves, they are turning to proven providers like Savvis which offers enterprise-class services and global reach. In addition to its Symphony Cloud suite, colocation, managed hosting and broad application support, Savvis also provides critical security capabilities. These include data protection, identity management, vulnerability management, physical and personnel security, application security, incident response, and privacy measures. Savvis also has achieved key industry certifications, such as SAS 70 Type II, PCI, and HIPAA. Savvis also employs a consultative approach to ensure that its expertise and experience is properly applied to help clients transition their enterprise operations to Cloud. 6

7 Figure 2 illustrates Savvis spectrum of services aimed at helping organizations achieve the right mix of Cloud Computing resources. Reduced Opex Savvis Symphony VPDC Enterprise features, multi-tier QoS Cloud Track Hosting Track Savvis Symphony Open Multi-Tenant virtual infrastructure Savvis Symphony Dedicated Dedicated, virtual infrastructure Utility Compute Multi-tenant stateless bladeframe Managed Hosting Dedicated physical infrastructure Colocation Enterprise-grade space and power service Standardization, Virtualization & Automation Figure 2: Savvis Spectrum of Services Source: Savvis Summary and Conclusions Enterprises are facing unprecedented business challenges which are forcing them to reconsider how they utilize computing power and software applications. These challenges are driving IT and business decision-makers to consider a widening array of cloud computing alternatives. Some companies are attempting to transform their legacy data centers into internal clouds to meet their rapidly changing enterprise requirements. However, these companies are quickly discovering that building an internal cloud computing environment is a difficult undertaking because of the time, skills, risks and costs involved. Therefore, THINKstrategies recommends that organizations and corporate decision-maker seriously consider enterprise-class cloud solutions offered by proven service providers, such as Savvis, who are leveraging their proven service delivery infrastructures and management capabilities to provide highly elastic, reliable, and secure private cloud services. 7

8 About THINKstrategies, Inc. THINKstrategies is a strategic consulting services company formed specifically to address the unprecedented business challenges facing IT managers, solutions providers and investors today as the technology industry shifts toward a services orientation. The company s mission is to help our clients re-think their corporate strategies, and refocus their limited resources to achieve their business objectives. We help enterprise decision-makers with their sourcing strategies, IT solutions providers with their marketing strategies, and VCs with their investment strategies. THINKstrategies is also the founder of the Software-as-a-Service Showplace (www.saas-showplace.com) a vendorindependent, online directory and information resource center of SaaS solutions. For more information regarding our unique services, visit or contact us at This independent analysis was published on behalf of Savvis. THINKstrategies, Inc., 2010

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