WHY MANAGED CLOUD SERVICES ARE REALLY CLOUD ON THE USER S TERMS

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1 WHY MANAGED CLOUD SERVICES ARE REALLY CLOUD ON THE USER S TERMS Managed services provide an alternative to expensive on-premises infrastructure and applications, enabling organisations to move from a capital expense for equipment and multi-seat software licenses to a lower, recurring and predictable operating expense. This White Paper looks at how managed services can form part of a cloud strategy to help organisations reduce costs, increase flexibility and focus inhouse resources on their core business. Fueled by the availability of low-cost bandwidth and businesses need to cut IT capital and operating expenses, managed services have shaken off their negative connotations to emerge as a credible option for many aspects of enterprise networks. They offer an alternative to traditional based business investments, enabling organisations to move from a capital expense for equipment and multi-seat software licenses to a lower, recurring and predictable operating expense. Managed services offer four key benefits: Transfer costs from Capex to Opex. This provides tremendous value by allowing organisations to stretch their IT budget further and assists with long-term financial planning, Free up time and resources from basic infrastructure administration and management, enabling the in-house IT team to concentrate on strategic projects that will add value to the business. Employee utilisation and productivity increase because staff are able to focus on specific projects, rather than spreading resource across a mix of strategic implementations, managing infrastructure and providing second and third line support. Provide access to additional skills - there is a continuing shortage of IT staff with the range of skills available to support the broad spectrum of modern IT systems, and frequent technology change and increased complexity require investment in continuous training to keep up. Specialist skills, such as storage management and security, are expensive to buy in the marketplace and very few organisations can justify the cost of full time headcounts to fulfil a requirement which may typically require 20 days or less of activity per year. Enable the enterprise to benefit from optimised infrastructure and best of breed technology - this should enable the organisation to implement ITIL processes and best practice, working to standards such as ITIL/ISO2000 for IT service delivery, ISO27000 for information security and BCI best practice for business continuity. Maintenance and upgrades are streamlined, and disaster recovery and business continuity supported. The result is fixed and predictable costs, internally managed service delivery and clear, internally developed, robust SLAs. Fordway Solutions Ltd Hambledon House Catteshall Lane Godalming Surrey GU7 1JJ Tel: web:

2 Managed services should not be confused with outsourcing, where both the responsibility for providing a service and the staff who had previously provided it were transferred to the outsourced service provider. Little attempt was made to optimise the service/s before being handed over, so the outsourcer had to manage whatever was already in place, whether state of the art or overloaded legacy infrastructure. HOW MANAGED CLOUD SERVICES DIFFER FROM CLOUD Do many of the benefits we ve just listed sound familiar? Cloud, too, promises to transfer costs from Capex to Opex, as well as offering limitless capacity, almost total flexibility and increased efficiency. However, there are two significant differences between managed cloud services and what we might term vanilla cloud. With a vanilla cloud service, a third party provides capacity in their data centre, but the organisation still has to manage the service themselves which, although it does not require infrastructure, means that the organisation needs to have appropriately skilled staff and the time to manage the service or services effectively on an ongoing basis. The vanilla cloud service also does not include application specific security or anything else tailored to the organisation s specific needs. Many of the cloud services currently available are not yet able to handle all aspects of infrastructure and applications especially when an organisation has 20 years worth of legacy infrastructure to consider. Few of the services currently available offer the ability to transfer legacy applications and all the associated data. In this instance the best option is to choose Infrastructure as a service (IaaS). The service will not include all the organisation s data and it will therefore still need to have an in-house monitoring and management capability. In contrast, managed cloud services enable an organisation to transfer responsibility for all aspects of a specific service or services to a third party provider or partner. They are provided with a cloud service with a management layer on top. The outcome is fixed and predictable costs, internally managed service delivery and clear internally developed, robust SLAs. We call it cloud on the user s terms. An increasing number of organisations are implementing cloud services in some areas of their network. In the public sector, this has been assisted by the development of the Cloud Store within the GCloud framework, enabling organisations to select from services which have already been accredited to Government standards and are provided by suppliers that are approved by Government as being agile, efficient and offering value for money. Managed cloud services can be provided in different ways to suit the needs to the end user. For example, for one client with a shortage of skills in a particular area Fordway manages this area collaboratively with them; another has a small IT team and updated its IT but didn t want to increase its head-count so asked Fordway to manage its infrastructure while the in-house team handles the applications which interface with their customers. Managed cloud services will not suit all organisations, but we recommend that any organisation considering implementing cloud should also consider including one or more managed cloud services to reduce the workload of running a complex enterprise network. Challenging established thinking to ensure our clients achieve the best from their IT infrastructure

3 REVIEWING WHETHER MANAGED CLOUD SERVICES ARE APPROPRIATE FOR YOUR BUSINESS Most organisations have complex infrastructures built up through many valid but separate decisions, which consumes a large amount of resource and cost while providing little business benefit. Before implementing managed cloud services, the organisation should first review and optimise its existing infrastructure. If this step is not taken, the organisation is unlikely to achieve all the benefits. This is one of the key reasons outsourcing failed to deliver on its promise in most cases, the outsourcers simply took on the existing infrastructure and contracted to manage it, using the existing staff. This is why it was often referred to as your mess for less. In the same way, simply transferring an existing service to cloud or a managed service provider without first reviewing its fitness for purpose will negate some of the potential benefits. Based on our experience with a range of public, private and third sector organisations, Fordway recommends a four step process to review whether managed cloud services are appropriate for your business: Evaluate the services your business needs Assess potential suppliers Assess the risks Develop an appropriate SLA. 1. Evaluate the services your business needs The first step when reviewing IT infrastructure is for the business to agree the applications and services required and the associated SLAs. Our recommended starting point is a business and IT alignment review to ensure the organisation has accurately defined the service levels it requires for the key operational processes that IT supports, and fully understands the cost, performance and availability implications of those service levels. Fordway has developed its own APAC methodology, which we have used successfully with a range of organisations. There are several others, such as COBIT, that can be used. Having defined applications and service levels, the organisation is ready to consider how best to deliver them. They will almost certainly want to run the business applications themselves. However, rather than optimising and managing all aspects of the infrastructure, a decision may be made to hand non-core or commodity services to a third party to provide and manage using its own infrastructure. The decision could also be based on handing over responsibility for areas where the organisation does not have the skills in-house or cannot justify the cost of employing specialists, such as a storage system and back-up management or security systems. At this point, the organisation will want to review whether cloud or managed cloud services are most appropriate. Do you simply want capacity and equipment to be provided by a third party, or would you like management too? It is also important to appreciate that there are different types of managed cloud service. For example, in a typical hosted managed service scenario the IT equipment is housed at a hosting centre, either on a dedicated platform or on shared infrastructure. Alternatively, in a user hosted managed services scenario the organisation retains ownership and housing of its infrastructure, but contracts externally for the technical support and day-to-day operational administration, including second and third line support and systems monitoring. This would typically be architected as an internal private cloud, with optimisation taking place before the management is handed to the managed service provider (MSP). Fordway Solutions Ltd Hambledon House Catteshall Lane Godalming Surrey GU7 1JJ Tel: web:

4 2. Assess potential suppliers If an organisation has decided on one or more areas where managed cloud services might be appropriate, the next step is to assess potential suppliers to see if any can provide the required service to the desired level. The key criteria to consider are: Expertise Track record Responsiveness and flexibility Innovation Ability and willingness to guarantee service levels Independently verified quality standards: ISO27000, pan-government accreditation, ISO2000, ISO9000. Despite the benefits managed cloud services offer, concerns about trust, reliability, security and continuity remain, and the right choice of partner is crucial. Not all service providers are the same, and an organisation may need to work with several providers to create a hybrid solution in order to ensure the required level of expertise and support in each area. Potential suppliers naturally need to demonstrate that they have successfully provided such services already. Both parties need to understand and manage the idiosyncrasies that have evolved in the organisation s current IT infrastructure. Information sharing, maintaining a clear bilateral definition of roles and responsibilities and good communications will go a long way toward building trust. The more both parties can reach mutual understanding on goals, metrics and mechanisms, the better the potential for a strong working relationship. Responsiveness and flexibility in a supplier are also vital. Challenges will arise in every relationship due to changing requirements or organisational afterthoughts, and the end user expects and deserves a rapid response to these dynamic situations. Unexpected developments or contingencies will always surface, even in the best of relationships. When these challenges become points of contention, a natural reaction for each party is to build its own encampments the service provider around the statement of work (SOW) and the end user around the service level agreement (SLA). Neither of these knee-jerk reactions is particularly productive in solving these challenges. The more responsive and productive approach is for the service provider to help the client recognise possible changes in requirements in a timely fashion. Organisations should also look for innovation. Many providers will claim to be technology innovators, but problems are usually solved by a fairly finite set of tools. It is in other areas of solution delivery that service providers can be truly innovative. Managed service contracts usually mean delivering highly tailored solutions for very specific problems. Therefore, it is in the processes and procedures related to the solution where the most innovative, outside-the-box thinking can provide the most value. 3. Review and manage the risks The next step is to assess the risks of using a third party provider for the services being considered. Fordway recommends reviewing the potential provider and their service against the following checklist: Will the supplier still be around in 5 years time? Is their infrastructure up to the job? Are the SLAs understandable, viable and agreeable to you? Do they have genuine expertise in the areas which they will be managing? Will you as an organisation have access to that in-depth expertise, or will your needs by handled by a junior member of their team? Are they flexible enough to respond to changing circumstances, or so tied up in red tape that any change requires a lot of work? Are you just another customer, or does providing a first class service genuinely matter to them? Challenging established thinking to ensure our clients achieve the best from their IT infrastructure

5 A lot of these statements are subjective rather than objective. For example, do you like the people you will be dealing with and do you feel that they care about your business? If your business changes you will need to change the terms and conditions appropriately, but if there is a large amount of legal jargon wrapped around every sentence of the contract, this implies that they need get-out clauses. It s important to remember that these companies spent most of their time providing managed services, so are working with this type of contract every day, whereas you are not. Two aspects that can deter organisations from considering managed cloud services are a perceived loss of control of network and services and concerns about trust, reliability, security and continuity. There is also a cultural aspect to navigate, as many people are resistant to the concept of handing the management of some of their services to a third party. Any organisation which chooses to go down the managed cloud service route should expect at least as much commitment, probably more, from their service provider as they would have obtained from their in-house team. 4. Develop an appropriate SLA One of the key definitions of managed cloud services is that the services provided are measurable; we are frequently amazed when we discuss this with organisations that operate their IT without defined and agreed service levels, or who have defined service levels but no way of measuring them to ensure they are being met. One of the benefits of managed cloud services should be the cost effective delivery of high quality, fit for purpose and guaranteed service levels that meet or exceed what your organisation requires. We recommend that the SLA should include both service levels and other factors we believe are vital in the relationship between organisation and service provider: Defined and measureable service levels Accountability Detailed monitoring and management A regular communication programme, including regularly scheduled meetings and meaningful reporting mechanisms. Figure 1: key factors for an SLA If the review concludes that managed cloud services will be beneficial in one or more areas of your organisation s business, the final step is migration to the chosen service provider. This should use standard, well-proven processes to ensure that the migration is carried out in a seamless manner. Fordway Solutions Ltd Hambledon House Catteshall Lane Godalming Surrey GU7 1JJ Tel: web:

6 CONCLUSION: WHAT MANAGED CLOUD SERVICES OFFER Managed cloud services offer organisations significant business benefits by enabling them to focus on the IT activities that add value to their business while saving money and improving productivity. They have specific service provided, with a defined and mandated process and to an agreed SLA. Managed cloud services also help organisations to manage skills shortages by using the skills of the service provider to complement those they have in-house. There are many different ways to provide managed cloud services, and what is right for one organisation may not suit another. However, we believe organisations are missing out on a significant potential for cost savings and increased efficiencies if they do not consider the opportunity managed cloud services offer when reviewing their IT infrastructure provision. In Fordway s experience, medium sized businesses face the greatest challenges in funding their IT infrastructure. With a small in-house team, they are unlikely to have the diverse range of skills required to run a complex IT infrastructure, and hence either have to take a best guess approach or turn to external experts on a regular basis. Carefully chosen use of managed cloud services will enable them to focus internal resources on the most business critical services. Where managed services provide clear benefits An organisation was not large enough to have its own network security expert, so this role was handled by the senior IT technician. In response to a security attack, he disabled a number of ports/access methods on the firewall and external routers. However, he did not fully comprehend the implications of the settings entered, and this had a direct negative impact on the business. An external organisation with the appropriate skills can quickly implement changes such as this without any unwanted consequences. An engineering joint venture was set up by three large organisations to deliver a major infrastructure project, and they decided to create an independent IT infrastructure and outsource management to a third party. By using a managed service they were able to get the infrastructure up and running quickly and ensure consistent access for all parties. They can add capacity as and when needed, only paying for the capacity used, and then scale it back as the project draws to a close. They also have the security of knowing at the end of the contract they will have no residual issues and the environment will be torn down, with the data distributed as required. This type of framework is ideal for volatile projects, providing IT on a pay as you need basis. About Fordway Fordway is an independent ICT infrastructure integrator specialising in planning, management, delivery and support of business-critical infrastructure change. We provide short and long term advice and guidance, IT governance, IT service delivery process improvement, technical expertise, complete ICT infrastructure solutions and support services. For further information on any aspect of this White Paper or to discuss any of the issues it raises in more detail, please contact us. Fordway would be happy to provide you with an initial consultation free of charge to help you to evaluate your options. Please call : or Challenging established thinking to ensure our clients achieve the best from their IT infrastructure

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