Moving to the Cloud: A guide for Southeast Asian IT and Business Managers

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1 Moving to the Cloud: A guide for Southeast Asian IT and Business Managers Prepare for with these key strategies on cutting costs and managing risk

2 Realizing true value from the cloud requires strong planning and effective migration strategies. We ve handpicked the following articles to help IT and business decision makers in Southeast Asia make smarter cloud computing decisions. In this E-Guide, you ll find expert advice designed to prepare your data center, your organization and your budget for a. ( By Bob Plankers For good reason, clouds are a popular topic in IT. They offer numerous benefits, such as pay-as-you-go billing models, seemingly infinite resources and the ability to place workloads around the globe to boost capacity. Still, as you consider a, you will likely have to make changes to your data center infrastructure and your organization to prepare for the move. You need to think carefully about the impact on all aspects of data center infrastructure and on IT teams. Before taking on a project, you need to take a step back and evaluate the wisdom of the move. It's critical to make the business case for why a migration to the cloud makes sense -- and the fact that the cloud is en vogue is not enough. So, assuming that you already have a private cloud, why would you want to add public cloud capabilities? Perhaps you want to broaden your disaster recovery (DR) options by running work loads from a different location. Or maybe you want to add workloads, but are constrained by capacity limitations at your on-site data center. Or perhaps your reasoning for the move to a hybrid cloud model is financial. The pay-as-you-go aspect of public clouds can shift capital expenditures to operational ones and free you from unpleasant leases and forklift upgrades. It is critical for all levels of your IT organization to know what the goals of this move are, so your organization can make solid decisions. It is also important to include all IT teams --including application, system, network and storage administrators -- in these plans. Their knowledge will be key to solid preparation for implementing a hybrid cloud. Page 1 of 11

3 Assess existing infrastructure and set goals As you consider moving to a cloud model, the first step is to assess where your infrastructure is now. Do you already have a private cloud and want to bridge the gap between it and a public cloud? Perhaps you are on the path to virtualization, but you haven't progressed to a cloud. And while the term "cloud" has many meanings, it doesn't just mean greater degrees of virtualization; it also involves a push to ward centralization and automation. In particular, this move toward centralization makes the cloud as much about people and process as it is about technology. Gather technical requirements Once your organization has made its business goals for a hybrid cloud clear, develop technical requirements with your staff. Do the applications you want to move need to scale? Perhaps you need load-balancing capabilities, not just for service availability, but also so you can distribute workloads and automatically redistribute resources to accommodate the peaks and valleys of cloud demand. Do applications require secure communication to a backend database that will continue to live in your data center? Do you need services to run from particular parts of the globe for support or DR reasons? Once you have identified your technical needs, consider public cloud provider offerings objectively. For example, perhaps some providers natively support your virtual private network (VPN) concentrator or a network tunneling technology your engineers are already comfortable with, thereby making secure networking easier. At this stage, it's also important to gather performance data. Knowing how much network and storage I/O your applications generate enables you to size network connections and virtual machines that reside in the public cloud and to select from differing service tiers offered by public cloud vendors. Select hybrid cloud tools Several self-service cloud portals can connect your on-premises infrastructure to public cloud infrastructure. Most work with a subset of public cloud providers, so knowing your technical requirements and organizational goals is important to match a tool set with providers' capabilities, as well as with your own infrastructure. Page 2 of 11

4 There are several aspects to consider. First, how well do these tools manage existing heterogeneous infrastructure? Do they require completely new infrastructure, or do they plug into what you have already built? Where do these tools run? Do they get installed in a legacy data center or run in the cloud? Some tools, like VMware's vcloud Connector, plug in directly to existing infrastructure, but that has implications for DR. You would need to plan for your primary site becoming unavailable and ensure that you fully protect your management infrastructure. Can these tools access more than one public cloud? What about accessing a provider's different locations? Are these tools capable of doing chargeback and real-time reporting of costs and performance metrics across all sites? Does it help monitor and meet service-level agreements (SLAs)? Does it create a service catalog from which users can choose? How does it help manage templates and configurations? How does it handle authentication? Is there an audit trail? At this stage, you need to ask all these questions. Implement security safeguards Once you have selected a cloud provider and a tool set, you need to address the multifaceted issue of security. To begin, determine how the tools and the cloud provider will interact with your data center and grant them access through network- and host-based firewalls if necessary. This might be tricky with offsite, hosted tools, as private clouds' management interfaces are often on completely internal, private networks. You need to implement authentication and access control for the new hybrid cloud tool as well. Perhaps the tool has its own authentication systems, so you need to recreate your users and your access control policies in its user database. For example, when an employee leaves the company, you need to revoke his cloud access at the same time as you revoke his onsite access. You also might need to grant access to your internal help desk for password resets. If the tool uses existing authentication systems, you may need to make those systems more robust, especially if one of your goals is DR. Without a robust authentication system, consider what would happen if your primary site went down and users were still trying to access these systems. Page 3 of 11

5 If you have sensitive data that is stored in a public cloud, investigate encryption technologies for that data. Securing network connectivity among sites is also important, and it may require changes or additional purchases. You also need to consider how to store important data, like cloud application programming interface (API) keys and encryption keys. Access to them is important in an emergency, but they also grant powerful access rights to whoever knows them. This is a good time to take steps to protect these access rights but also to make them available when needed, protecting them as you would an administrator password, logging access and changing access information periodically. Buyer strategies for By Tom Noelle Since cloud computing entered the mainstream, the market has seen dozens of price reductions, often from a single cloud service provider. Competition in pricing and improved economies of scale are expected to lower overall cloud service pricing, but the dizzying pace of price reductions suggests there's more at work here. Understanding the factors behind pricing reductions helps cloud buyers get the best ROI out of their clouds -- now and in the future. Providers may drop prices for competitive reasons, but only to a point that doesn't compromise a profit. In an immature market such as cloud computing, providers most often drop prices to increase total addressable market (TAM). Reducing cloud prices reduces costs, and this makes it easier to negotiate deals. In a market with falling prices, consumers must consider pricing protections on their service contract. Ensure your service provider will adjust the contract if reductions occur so you're not locked into a higher price. This adjustment is common practice among larger cloud service providers, so you may need to look a bit deeper into pricing to find new ways to benefit. Page 4 of 11

6 Cloud buyers should also prepare project justifications so they can update them to reflect changing prices. A surprisingly large number of enterprises report they don't revisit cloud project considerations when service provider prices change; many enterprises don't even monitor provider pricing to know when prices change. If a cloud project approval is withheld because it doesn't meet corporate targets for return on investment (ROI), project materials should be added to a watch list and reviewed each time vendor prices change. Moving from Capex to Opex Since providers want to increase TAM by reducing prices, buyers may overlook the potential benefits in cloud projects beyond just simply cost savings. Current cloud projects that succeed are likely low-use applications running on dedicated servers, IT applications for small and medium-sized businesses with limited technical support, or both. Moving up the value chain to mainstream IT resources means moving beyond the traditional cost-ofserver value proposition -- and moving from a capital expense (Capex) to an operating expense (Opex). Opex costs for applications include hardware management; however, businesses report operating costs for software are actually three to five times higher than hardware expenses. Companies with higher-than-usual support costs find it's easier to justify cloud computing, providing that their cloud service actually affects operational costs. Infrastructure as a Service (IaaS) replaces servers with virtual servers but still requires users to maintain the software images for loading into the cloud. Therefore, IaaS displaces only the hardware portion of Opex. On the contrary, adopting Platform as a Service (PaaS) or Software as a Service (SaaS) may improve an enterprise's cloud justification. Because these platforms move system software (PaaS) or all software (SaaS) into the cloud, operational costs for software are reduced significantly. That reduction could mean the difference between a cloud project making its business case or being unapproved because it doesn't appear to offer enough benefits. Page 5 of 11

7 Data storage choices for cloud apps affect your bottom line When cloud price reductions qualify new applications as cloud candidates, it's important to review the data storage and access costs of the cloud carefully. Sometimes highly promoted price reductions for compute instances aren't matched by corresponding cuts in data storage and access costs, which limits the effects of cloud price changes on total service pricing. Users who move regularly accessed applications to the cloud because of lower cloud prices may find data costs are prohibitive when these projects move from pilot runs to production-level runs. Sometimes cloud pricing changes enable users to deploy more reliable or predictable forms of cloud services, including dedicated instances and geographic diversity. It may be valuable to re-examine cloud project proposals that require higher performance or high availability to see if projects once unfit for the cloud because of cost may now work. Cloud-pricing models continue to evolve Most users wonder how long these can continue. Some companies have considered factoring in 15% annual reductions in cloud pricing when doing their five-year total cost of ownership calculations. This is likely an overly optimistic assumption, particularly as increased cloud consumers begin to move more mainstream applications to the cloud. In any event, economies of scale don't grow at a linear rate with the size of the cloud; they grow at an ever-decelerating rate. Therefore, the current price declines cannot be sustained indefinitely. The current trend toward very low use of cloud applications allows operators to pack more onto a single cloud server than expected, which means more can be sustained as projects mature. Additional price declines may be in the cards. Cloud compute costs have fallen faster than cloud data costs; data pricing may be the next target as cloud operators try to strike a balance between prices attractive enough to move buyers and earning enough profit to sustain their own businesses. Page 6 of 11

8 Cloud service providers will likely introduce special data services designed for backup and archiving, which will have restrictions on access frequency but offer more attractive pricing. This kind of price change -- one that affects cloud services selectively -- requires more analysis but may offer special benefits for users whose applications qualify. Pricing models continue to evolve and it's important to watch the trends carefully for the best near- and long-term deals. It's also important to recognize that industry consolidation could easily reverse price reductions in cloud services. Enterprise IT needs to carefully monitor applications with ROI tied to their rate of return for changes in both reward and risk. CEB: for managing cloud By Mark Tonsetic and Jeremy Bergsman The debate around cloud computing risk continues. This isn't because the that large enterprises care about have worsened (they haven't, broadly) or because there is a new set of that present concern (there aren't, again broadly). The debate continues because cloud computing technologies have introduced "buyer uncertainty" into the sourcing market. Cloud capabilities have matured enough to induce vendors to rapidly evolve offerings in an effort to capture market share -- but not to promote interoperability. The clarity of cloud's risk-adjusted value proposition thus has yet to emerge, mostly because evaluations of risk and value remain moving targets. So what is there about managing cloud that should be top of mind for IT leaders in today's environment? CEB analysis suggests that the foremost risk is not anything intrinsic to the cloud provider community as a whole, but rather the lack of a consistent framework in large enterprises for engaging with and managing cloud services. The risk issues normally associated with cloud technologies, such as data privacy and security, are evolving rapidly. Even the technologies themselves vary by provider and service. The absence of a consistent approach to these technologies and providers Page 7 of 11

9 should be the risk that is top of mind, in that it will exacerbate the of what could otherwise be a perfectly acceptable sourcing arrangement. What does an services entail? We'd argue that it must account for three deficiencies: First is the lack of a consistent approach to the evaluation of cloud providers. Early CEB studies conducted around "flaws" in cloud services indicate there are several flaws that should represent immediate disqualification or screening criteria for vendors. However, many organizations have yet to evolve their vendor evaluation criteria to account for these criteria for both current and new vendors. Second is the lack of clear guidance for integration and the migration of applications or capabilities to cloud providers. This should take the form of reference architecture patterns that developers, project managers and business partners can use off-the-shelf to promote consistency in managing architectural risk. Third is the lack of clear communication with key stakeholders around IT's strategy for engaging cloud services. Vendors have a clear incentive for bypassing IT in selling and promoting cloud services because they can increase contract value by 50% to 100% by going directly to business partners, and they can reduce sales cycle time by 50% to 80%. For IT to promote consistent evaluation frameworks and architectural guidance, leaders need to convey a strategy that ties to articulated business objectives, shapes business partner expectations, and defines challenges that require business- IT collaboration to solve. The latter objective is particularly true in areas where provider/platform need to be tested in coordination with business partners and providers to determine what constitutes acceptable risk management. Means are available to most IT organizations to address these, but not through conventional vendor management frameworks. Most existing vendor management frameworks are premised on a view of risk that is too focused Page 8 of 11

10 on the technology or the provider, and some IT organizations are today beginning to question the assumptions built into these premises. For example, should you build redundancy and "hardening" into the application layer rather than the infrastructure layer? The best organizations recognize that the tools they need should come from reference architecture. These include business capability-aligned roadmaps to help clearly understand where cloud providers can provide: New sources of business value Patterns and standards to integrate cloud capabilities within the larger architecture Decision frameworks and guidelines that help partners procure cloud services safely Large enterprises that will successfully manage cloud technologies and recognize that, no matter how the market evolves, cloud services are likely to represent an element of our future technology architectures, and they need the reference models in place to define the role these services play. They understand that the bigger risk lies not in the technology or provider, but in the cost of lost opportunities if the enterprise is unable to take advantage of different-in-kind cloud capabilities. Page 9 of 11

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