The Cloud. The Search For The Perfect Solution

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1 The Cloud The Search For The Perfect Solution

2 Can Somebody Give Me A Good Definition of the Cloud? Application that uses a Web Browser? Hosted Application? Web Based Application Why should I care?

3 A Brief History A Repeat History Mainframe App Client Server Cloud Internet

4 A Definition On-Demand Self-Service Customers automatically choose the services they need Broad Network Access Services can be accessed through a variety of technologies Rapid Elasticity Technologies can be scaled up or scaled down as needed Measured Services Service prices based on metered results

5 NIST Service Models + 1 PaaS IaaS XaaS SaaS

6 as a Service Platform as a Service Infrastructure as a Service Software as a Service Anything as a Service

7 Deployment $$$$$ Private Cloud Community Cloud $$$ Public Cloud $ Single tenant uses Internet technologies to access data and applications on segregated servers. Customers with similar needs and goals share resources. Example: NeoGov, Shared ERP Customers share resources in multi-tenant environment offered to the general public. Example: GoogleDocs

8 Why Should A Finance Officer Care? Reporting Tools Dashboards Data Warehouse Middleware ERP CRM Comm. Dev. Enterprise Database

9 Why Use The Cloud?

10 Current Pricing Methods Activation Fees: $$$ Start Up Cost: $$$ Fixed Cost: $$$ Annual Fee: $$$ New Service Fee: $$$ Total: Yikes!

11 What Am I Purchasing?

12 Scope Considerations What Who What is being served in the cloud vs. only on prem or other strategy? What functions have limitations (i.e., platform limitations)? What type of platform? What are my service levels? Who is responsible for technologies? Contractual relationships Where Where are applications and data located? Where are back-up applications and data located? Where are my programmers located? Financing Capital vs Operating

13 Procurement Strategy Functional and Technology Requirements Technology Scope Service Level Agreements Contractual Relationships Pricing Model

14 Procurement Strategy: Functionality

15 Functionality (Revised) Column E: Available Responses Y Requirement Met and Proposed (Standard features in the generally available product) Y-ND Requirement Met and Proposed (Features that are not offered as a generally available product or require custom development) N Requirement Not Met with Proposal I Need More Information/Discussion IF Y-ND Selected Column J: F Feature Schedule for Future Release in Generally Available Software E Feature Developed as Enhancement for this Project Column F: Available Responses S Requirement and Feature Supported by Software Developer TPS Requirement and Feature Supported by Third Party NS Requirement and Feature Not Supported Req # Function Process Requirement (1) Implementation Response (2) Support Response (3) Module / System Example of Outcome Based Function: System accommodates transactions in the following fiscal year while the current fiscal year is being closed.

16 Procurement Strategy: Technology On-Premise ( On-Prem ) Network Requirements Security Requirements Service Level Agreements Database Requirements Server Requirements Hardware Requirements Cloud Network Requirements Security Requirements Service Level Agreements Data Ownership Disentanglement

17 Procurement Strategy: Pre-Define Minimum SLA Listing of Services that should be governed by the Service Level Agreements. Measures or Metrics that represent the quality of delivery of listed services. (e.g., Uptime, usage statistics, etc.) Minimum Acceptable Service Levels. (e.g., 99.5% Uptime) Frequency of Monitoring Service Levels. (e.g., 7 day intervals) Frequency of Reporting Service Levels. (e.g., Monthly) Formula/Calculation used to determine actual service level performance, e.g. (Total Time Cust. Down Time/Total Time) Tools to be utilized for measuring and reporting Service Levels.

18 Procurement Strategy: Sample Documents Sample Cloud Services Agreement Sample Managed Services Agreement Sample License Agreements (if applicable) Sample Reports

19 Example

20 Procurement Strategy: Pricing (pt. 1) Request Traditional Pricing Instruct Vendors to use alternative price schedule if not applicable. Software license traced to functions 5 or 10 year maintenance costs Third-Party Software Other Costs

21 Procurement Strategy: Pricing (pt. 2) Request Cloud or Managed Services Pricing (fixed and ongoing costs) Enterprise Application Licenses (traced back to requirements) Managed Services Application Management System Administration Network Administration End-to-End Support Third-Party Software Other

22 Procurement Strategy: Pricing (pt. 2) Request Cloud or Managed Services Pricing (fixed and on-going costs) Data Center Services Storage Access Other Professional Services Enterprise Applications Managed Services Data Center Services Activation Fees Enterprise Applications Managed Services Data Center Services Third-Party Software Travel and Other

23 Selection Process Proposal Analysis Review functions against proposed products Review proposed SLAs DON T fall for line, Cloud is an evolving product Demos/Interviews Insist on Cloud environment for demo If possible, create technology scenarios (e.g., wireless vs. hardwire; firewall failure, etc.) DON T fall for PowerPoint presentations of functions

24 Recommendations to Control Price Functional Requirements Traceability Uptime Statistics Critical vs Non-Critical Applications 99.5 % vs 99.9% Uptime Terms and Conditions Holdback payments rather than Performance Bonds Limitations on Liability (e.g., 2.5 x Cost) Deliverable/Milestone Payments

25 The Future Internet of Things Employee Expectations Will Be Complex Customer Expectations Will Be Complex Traditional Content Delivery Tools Will Change Dedicated Solutions Will Go Away Internet Technologies Will Enable Strange, Unforseen Combinations Pricing Models Will Change Immediate Satisfaction Will Prevail

26 Shameless Plug Visit Western Maryland This Weekend Spend Your Money In CUMBERLAND! Thank You! Rob Roque Technology Services Manager GFOA

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