See what cloud can do for you

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1 See what cloud can do for you Tieto. Bringing a new perspective on cloud.

2 Table of contents Foreword 4 Executive summary 5 2. Why Cloud is relevant for your business 2.1. Business is changing rapidly IT is expected to enable significant business change To make expectations real, IT must be approached 7 as a source of agility and innovation 3. Who is using cloud? 3.1. Business is increasingly adopting cloud, IT people 8 still have concerns 3.2. Cloud adoption in the Nordic region is growing 9 rapidly, but countries are different 4. Can you find real business value in cloud? 4.1. Focus on buying business solutions and 10 consuming technology instead of investing into it 4.2. Cloud can increase the speed of innovation, 11 improve agility and drive cost-efficiency 4.3. Business benefits of Cloud Benefits of Cloud for enterprise IT Tieto s cloud portfolio is relevant for your business Are cloud solutions enterprise-ready? 5.1. Organisations are happy with cloud solutions 16 addressing simple use cases 5.2. Cloud solutions must become better integrated 16 into IT strategy 5.3. Tieto s cloud portfolio is enterprise-ready How to combine traditional IT and cloud 6.1. Cloud consumption is leading organisations into 17 more complex IT environments 6.2. A hybrid IT operating model will provide help Tieto can make Hybrid IT governance and 19 security easier 7. How and when to bridge old IT to the new world? 7.1. Often existing IT assets have not yet reached the 20 end of their lifecycle 7.2. Doing nothing leaves opportunities unlocked and 20 marginalises the internal IT position 7.3. Tieto can ease the transition challenge with ready 21 platform solutions 2014 Tieto Corporation 2

3 8. How to manage Cloud providers effectively 8.1. Cloud based vendors are emerging rapidly, but it 22 is hard to judge who will create sustainable business value over time 8.2. Cloud service brokerage will greatly simplify the 22 consumption of cloud services 8.3. Tieto is a cloud broker and can manage cloud vendors on 24 your behalf 9. How to ensure access to future cloud based innovation 9.1. Digitalised business will depend on ecosystems 25 running on cloud based platforms 9.2. Tieto is active in chosen major global technology 25 ecosystems and brings new cloud related innovations into your context 10. My current vendor is not proactively introducing cloud services Cloud is driving IT market consolidation All IT services must stand in comparison against 28 public cloud services Tieto is a partner who is willing to change to stay 29 competitive 11. Differentiation through innovative services and 30 cloud committed for the future 2014 Tieto Corporation 3

4 Foreword Cloud is a new wave of industrial revolution that will have a fundamental impact far beyond the IT industry. The impact of cloud can be compared to the way the development of electric currency transformed society in the late nineteenth century. When central power plants were introduced, it took only a decade for electricity to spread everywhere. Thanks to the internet and high-speed networks, we are now moving from distributed computing systems to high-scale centralised computing power plants called cloud services. Cloud services will change the way we interact with friends, work with colleagues, collaborate with business partners and disrupt value chains in all industries. This paper will introduce you to why cloud is relevant for your business and how cloud is driving customers business change, transforming enterprises and organizations for the future Tieto Corporation 4

5 1. Executive Summary Tieto is committed to cloud. Today s business environment is constantly changing and requires flexibility and foresight to drive continuous innovation, operational optimisation and risk mitigation. Top business management expects IT to contribute significantly to business development by enabling fast innovation and new models. At the heart of cloud computing is the low barrier to entry and speed: asset free services and the ability to turn services on quickly, scale them up or down rapidly, and turn them off, on demand and near real-time. All this is making cloud services well suited for serving organisations willing to leverage IT as a source of business agility and even enabling IT led business innovation. Cloud has already become mainstream. Over 80% of organisations have adopted some cloud services, and adoption is expanding rapidly. Therefore, it is safe to say that most organisations already agree that cloud can deliver business value. While cost reduction was the primary value in the early years of cloud computing, the market has matured and agility has been the primary driver during the last few years. Next, we will see an increased focus in using cloud to improve the speed of innovation. In this paper Tieto shares its views and opinions regarding the following questions, which organisations often face when deploying cloud services: 1. Can you find real business value in cloud? 2. Are cloud solutions enterprise-ready? 3. How to combine traditional IT and cloud? 4. How and when to bridge old IT to the new world? 5. How do you manage cloud providers effectively? 6. How to ensure access to future cloud based innovation? 7. What if my current vendor is not proactively introducing Cloud services? In brief, key success criteria is an organisation s ability to manage the delicate balance of existing traditional IT and new cloud based solutions and services. Tieto can help you to bridge your old IT smoothly and securely into new cloud world. Our long history and market share give us an exceptionally strong understanding about your legacy systems. Our major investments into hybrid IT (blending legacy and cloud services) delivery model and our tested and tried cloud solutions give us the tools to act. Most established outsourcing players do cloud if the customer asks for it, and they need to, reactively. We drive change proactively and are even ready to cannibalise legacy services to enable new value provided by cloud. Tieto is a player who is committed to cloud Tieto Corporation 5

6 2. Why Cloud is relevant for your business 2.1. Business is changing rapidly 72% of CEOs think that the next decade will be far more volatile and unpredictable than the previous one. Today s business environment is constantly changing and requires flexibility and foresight to drive continuous innovation, operational optimisation and risk mitigation. Hypercompetition, evolving customer expectations, rapid progress in technology, changes in value chains and many other external drivers cause sudden disruptions and force organisations to change and re-prioritise key business objectives. The willingness and sense of urgency in transforming the business and operating models are high among top business decision makers. According to Gartner s 2013 Global CEO Priorities study, 72% of CEOs think that the next decade will be far more volatile and unpredictable than the previous one. Also, 68% of CEOs assume that changes arising from current economic uncertainty are so deep that companies and industries will have to redesign their business models. Constant change is the reality we face today. Organisations can seldom stop external disruption, but being continuously prepared and ready for a change will keep them as forerunners in the game Tieto Corporation 6

7 2.2. IT is expected to enable significant business change Based on Gartner-Forbes survey, top business management expects IT to contribute significantly by enabling innovation and new business models. There is a big expectation that disruptive forces driven by new technology could be leveraged when seeking a competitive edge over competitors and transforming organisations. These disruptive forces include cloud, mobility, social media and big data as well as yet emerging technologies like 3D printing. Expectations for IT: IT s strategic contribution to the business will increase in next few years 86% 50% IT is the way to change the rules of business competition Source: Gartner-Forbes 2012 Board Of Directors Survey 2.3. To make expectations real, IT must be approached as a source of agility and innovation Leveraging IT to transform business and rewrite the rules of competition requires more than just focusing on optimising IT s direct cost. Instead, organisations need to reconsider how IT is perceived and start to change opinions about what value IT actually is delivering to business. Tieto s maturity model focuses on a view of business value provided by IT. The diagram and table below explain key maturity steps and characteristics Tieto Corporation 7

8 Maturity steps Reduce cost of IT Leverage IT to improve productivity Optimize business processes leveraging IT Differentiate business leveraging IT as a source of agility Transform business leveraging IT as an innovation driver How IT is seen IT is seen as a commodity and cost center and management focus is in how to reduce the direct cost of it. IT is seen as a tool to improve organisational and employee productivity and thus drive cost efficiency. IT is seen as a way to optimize business processes and improve business performance. It is seen as a driver for organisational agility enabling rapid adaption and driving competitive differentiation. IT is seen as a profit center. It is a core source for new ideas and innovation, and makes new business models possible. IT works tightly How IT engages The IT unit works in isolation and is considered as a group of technical specialists. The IT unit is joining in productivity development projects and provides expertise about possible solutions. connected to business process development experts and provides insight about business applications and related best practices. IT works closely with business management and provides new ideas and a technology context for business discussions. IT expertise is pervasive and embedded into business units and all budgets are considered IT budgets. What to do in-house in IT? Focus on driving business objectives Referring to expectations by top business management, IT must focus on understanding the business and even lead the innovation. This would mean that the work done in-house (in the CIO office) should not focus on operational production of IT services, but be more like business development finding creative and proactive means to drive business objectives. 3. Who is using cloud? 55% of CIOs indicate that they would source all their critical apps in the cloud by Business is increasingly adopting cloud, IT people still have concerns Several surveys and Tieto s own experience show that cloud has already become mainstream. The majority of organisations have already adopted some cloud services and adoption is expanding rapidly. Today, for example, around 80% of Tieto s RFP responses include cloud services. Equally, a recent Gartner study stated that 80% of organisations will be using public cloud services by 2014 and spend nearly $154 billion when doing so. This is over 10% of combined IT services and enterprise software and datacenter systems market ($1429 Bn), and does not even include private cloud services! 2014 Tieto Corporation 8

9 Interestingly, business and IT people have had strongly different views about cloud services, benefits and risks. Business has seen cloud as an easy and fast way to implement needed applications and innovate the business: no need to wait until IT delivers needed features and a handy way to move the IT budget from capex to opex. IT has seen cloud as an unsecure and potentially expensive environment which is also hard to integrate and customise. Additionally, IT people have been mostly focused on cloud capacity services, not cloud applications. Therefore, cloud adoption has been driven especially by businesses procuring cloud applications in an ad hoc fashion, addressing opportunistically lowhanging fruit. According to surveys, 59% of organisations use some public cloud applications (most commonly HR, CRM and /collaboration) and 40% of those applications have been purchased directly by business, bypassing IT. However, now even IT organisations have been waking up to this opportunity. A recent Gartner study highlighted that already 55% of CIOs indicate that they would source all their critical apps in the cloud by Cloud adoption in the Nordic region is growing rapidly, but countries are different According to Radar s recent study, cloud services have penetrated organisations in the Nordic region well, and also future market growth is expected to be rapid: around 36% annually. However, Nordic countries have clear differences in cloud adoption. Finland and Sweden are the most mature, and Denmark and Norway lack behind in adoption. This is caused by overall IT maturity, but very much also by local economic conditions. Because of the Euro crisis, organisations in Finland have had the biggest economical urgency to change and also transform their IT by leveraging cloud services. At the same time Norway has been only remotely impacted by global economic turmoil and thus organisations and their IT have not been forced to transform Tieto Corporation 9

10 4. Can you find real business value in cloud? By leveraging cloud services, companies can gain an assortment of technological and business benefits Focus on buying business solutions and consuming technology instead of investing into it IT is rapidly transforming into asset free services, where organisations consume elastically needed technology as a service instead of making upfront investments for their own hardware or software assets. This change has already been going on for years, driven by traditional outsourcing services, and is now accelerating further with the cloud services paradigm. At the heart of cloud computing services is the low entry barrier the ability to turn services on quickly, scale them up or down rapidly, and turn them off, on demand near real-time. In technical terms this means that users can manage IT services (e.g. applications) using self-service interfaces, and the provisioning and deprovisioning of resources happens in a policy-based and fully automated manner, without human work involved. Resources can be dedicated to one organisation (private cloud), shared between few organisations (industry cloud), available to any organisation (public cloud), or even utilise a mix of these models (hybrid cloud). Additionally, the use of resources is measured and users are billed accordingly, based on actual use Tieto Corporation 10

11 By leveraging cloud services, companies can gain an assortment of technological and business benefits. Enterprise IT is embracing cloudbased solutions for many reasons, including: 1. Free valuable resources from maintaining legacy software and infrastructure to focus on higher-value and innovationdriven activities 2. Easier and quicker deployments leading to faster time-tovalue and freeing up resources for more strategic initiatives 3. More flexible and scalable solutions to provide long-term support for growth and expansion 4. Need to shift IT investments from the capital budget to the operating budget to closer align business benefits with cash outflow 5. Buy outcomes and results instead of technology, work tasks and hours 6. Get orchestrated solutions from an ecosystem instead of getting siloed technical projects from separate vendors 7. Pay by actual use instead of paying for predicted needs 8. Agree on relationship governance based on created business value instead of measuring traditional technically oriented service levels such as availability All this is making cloud services well suited for serving organisations that are willing to leverage IT as a source of business agility and even enabling IT driven business innovation. According to Gartner, cloud services will continue to penetrate deeper into the IT landscape and by % of the most successful CIOs will use cloud sourcing to cut costs and generate new revenue in order to stay in the game and to outperform competitors Cloud can increase the speed of innovation, improve agility and drive cost-efficiency Customer pains with current on-premises systems Abilitity to respond to competition Growing need to leverage technology as a competitive advantage Outdated and inflexible technologies do not support new activities Traditional software vendors struggle to deliver innovation 2014 Tieto Corporation 11

12 Cost/benefit Dissatisfaction with the perceived business value received from software investments Never-ending upgrade cycles License, maintenance and support fees and models Tougher economic conditions User experience Inflexible and unfriendly processes and interfaces The nexus of forces (mobile, social, cloud, information) is creating significant user expectation changes regarding all technologies. Next we will see an increased focus in using cloud to improve speed of innovation Business benefits of Cloud While cost reduction was the primary factor in the early years of cloud computing, the market has matured and agility has been the primary driver during the last few years. Next we will see an increased focus in using cloud to improve speed of innovation. The best performing organisations already understand that agility is not simply about delivering old things faster, but about rapid innovation on how things could be done differently. Cloud lowers the barrier to entry and exit. Being able to deploy (and undeploy) services quickly enables users to experiment without prerequirement to commit long term into resource, budget and IT assets Benefits of Cloud for enterprise IT Common drivers for enterprise IT for cloud adoption include the following: The desire to offer a more agile and responsive IT environment. Many organisations leverage cloud as a way to minimise bureaucracy and offer rapid deployment of new applications, functionality and services. The desire to simplify IT operations. Cloud enables organisations to remove lower-level tasks, such as infrastructure installations, and simultaneously take advantage of advanced features such as elasticity, scalability, global networking and security options. The desire to reduce costs. For many organisations, there is an implicit assumption that cloud will lead to reduced costs because of the scale advantages that cloud service providers can utilise Tieto Corporation 12

13 The desire to shift to a more flexible cost model. Many organisations have large capital expenditure (capex) budgets associated with IT assets. A move to cloud will shift the expenditure substantially from capex to operating expenditure (opex). The desire to reduce dependence on hiring skilled IT staff. Many organizations have concerns about their long-term ability to attract skilled technical staff and see cloud as a way to reduce the burden on their staff, and reduce their exposure to rising costs for skilled IT people. Tieto s ready-touse cloud solutions are relevant for your business and fit for local conditions. We both broker and develop cloud solutions, industry specific and horizontal Tieto s cloud portfolio is relevant for your business However, it is not good to have ready-to-use cloud solutions, if those are not meaningful to your specific business demands. Most global players have focused on generic portfolios and not e.g. developed country customised versions of their solutions in Nordic countries. Our ready-to-use cloud solutions are relevant for your business and fit for local conditions. We both broker and develop cloud solutions, industry specific and horizontal. Tieto s cloud solution portfolio is the widest in the Nordic region. Our industry specific cloud solutions are based on real industry expertise that our vertically oriented organisational structure helps to aggregate. Examples are Lifecare as a Service, PCI compliant IaaS and Government IaaS. Our horizontal cloud solutions are developed by benchmarking against public cloud alternatives. We often decide to develop richer feature sets than public cloud services have, but always consciously, and based on increased customer value. Examples are Tieto Cloud Server and Dynamic SAP Landscape. Tieto has the broadest and deepest cloud offering portfolio in the Nordics, covering both industry specific and horizontal solutions, end-to-end services and brokered 3rd party services and solutions Tieto Corporation 13

14 Tieto s cloud portfolio includes among others: Tieto cloud solution name Description Cloud solution group Tieto EMS Media asset management SaaS Media Tieto EMS Content delivery platform SaaS Media Tieto Cross Add Media sales SaaS Media SpotGate Advertisement delivery SaaS Media Tieto EMS Advertisement management SaaS Media Industry area Tieto Google apps Mail, calendar, search, docs, sites SaaS Horizontal Tieto ucaas Mail, video confrencing SaaS Horizontal TPC Exchange Mail, calendar SaaS Horizontal TPC Lync Instant messaging & conferencing SaaS Horizontal Microsoft Office 365 Office tools from public cloud SaaS Horizontal Hosted Desktop Virtual desktop SaaS Horizontal Hosted Applications Desktop applications as a service SaaS Horizontal Tieto Watch Availability & performance monitoring SaaS Horizontal Web analytics SaaS Web usage analysis SaaS Horizontal Identity Provider SaaS IdP functionality as a service SaaS Horizontal Eureka Enterprise idea management tool SaaS Horizontal Tieto Open Mobility Platform (TOMP) Tieto Mobility Gateway (part of TOMP) Tieto Notification Service (part of TOMP) Suite of enterprise mobility accelerators SaaS Horizontal Secure enterprise application mobile gateway SaaS Horizontal Multichannel notification solution SaaS Horizontal Tieto App Store (part of TOMP) Private enterprise appstore SaaS Horizontal Ticketing and Information System etuile PPM Cloud Services Ticketing, Payment, Sales, Passenger Information, Traffic Management, Traffic Light Priority, Clearing, BI&Reporting. Purchasing and distribution of products. Online loading of travel cards. Suite of program and project management applications SaaS SaaS SaaS Horizontal Horizontal Horizontal Archiving As a Service Archiving As a Service SaaS Horizontal Intranet in a Box Intranet from shared cloud service SaaS Horizontal Testing Tool as a Service Test Management SaaS SaaS Horizontal Business Information exchange (BIX) E-invoicing for corporations (part of BIX) E-invoicing for service partners (part of BIX) Tieto SWIFT Service Bureau (part of BIX) Direct bank connectivity (part of BIX) Cloud services for B2B integration SaaS Horizontal E-invoice exchange service SaaS Horizontal E-invoice exchange platform for service partners SaaS Horizontal Global bank connectivity service SaaS Horizontal Nordic bank connectivity service SaaS Horizontal Lifecare aas Solution for social services and healthcare IT SaaS Healthcare and welfare 2014 Tieto Corporation 14

15 Tieto cloud solution name Description Cloud solution group Energy information exchange (part of BIX) E-salary - Verkkopalkka (part of BIX) Industry area Energy information exchange service SaaS Energy E-salary presentment service for Finland SaaS Horizontal E-salary - E-lön (part of BIX) E-salary presentment service SaaS Horizontal Performance testing as a Service Performance testing Project Horizontal Tieto Productivity Cloud TPC Platform for Microsoft based cloud offerings Platform & sales concept Horizontal Tieto Java PaaS Java platform as a service PaaS Horizontal Tieto Database PaaS Database as a service PaaS Horizontal TPC Sharepoint Sharepoint as a service PaaS Horizontal TPC Tieto SQL Server Database as a service PaaS Horizontal TPC Dynamics CRM CRM as a service PaaS Horizontal TPC BizTalk Application integration PaaS Horizontal Dynamic SAP Landscape SAP platform as a service PaaS Horizontal Tieto Big Data Platform as a Service Tieto Integration Platform as a Service Hadoop platform as a service PaaS Horizontal Application integration PaaS Horizontal Tieto Java PaaS IBM Java platform as a service PaaS Horizontal Tieto Java PaaS OSS Java platform as a service PaaS Horizontal Tieto Drupal PaaS Web content management PaaS Horizontal Tieto DB2 Platform as a Service Tieto Enterprise DB Database PaaS Database as a service PaaS Horizontal Database as a service PaaS Horizontal Tieto Maria DB Database PaaS Database as a service PaaS Horizontal TOAS - Tieto Open Application Suite TOAS PaaS TOAS Cloud Management Tools An open source based Java enterprise business application development platform running in infrastructure independent environments. Harmonized private cloud environment for enterprise solution creation Infrastructure agnostic deployment mechanisms for TOAS elements PaaS PaaS PaaS Microsoft Azure MS cloud platform IaaS, PaaS Horizontal Horizontal Horizontal Horizontal Tieto Cloud Server Server capacity IaaS Horizontal Tieto Cloud Server On-site Server capacity on-site IaaS Horizontal ITAP Server capacity / IBM IaaS Horizontal Activation campaign (part of BIX) Business partner onboarding service BPaaS Horizontal 2014 Tieto Corporation 15

16 5. Are cloud solutions enterprise-ready? 5.1. Organisations are happy with cloud solutions addressing simple use cases It is a common saying in the market, that cloud applications are not enterprise-ready. However, according to a recent Marketvisio study, 79% of organisations using SaaS are happy with their solution and experiences, and 70% would recommend the model for other organisations. Regardless of an organisation s size. This indicates that cloud applications are actually delivering what they promise. On the other hand, based on Tieto experience, many organisations are struggling to move past the easy use cases because they are confused by ad hoc adoption and a lack of direction. Customisation and integration of cloud based solutions is not easy, but it must be done, or organisations cannot fully move their workflows into cloud based solutions Cloud solutions must become better integrated into IT strategy Most cloud customers now face an immediate challenge: They need to decide how to better realise the value of cloud services and make cloud a normal part of their IT strategy and landscape, rather than a series of random implementations. There is also a pressing urgency in doing that. According to Gartner s end-user surveys, 75% of applications will be upgraded, replaced or retired by the end of Organisations should ensure that they are leveraging cloud applications properly to help them in this exercise. Enterprises looking to deploy more mission-critical applications to the cloud are driving the need for more choices among different cloud services and providers in terms of configuration, flexibility, price, service levels, performance, integration, security and availability. However, many organisations find that trying to negotiate these demands with various cloud service providers is difficult Tieto Corporation 16

17 5.3. Tieto s cloud portfolio is enterprise-ready Tieto takes your service experience seriously. Our cloud solutions are enterprise-ready and give you enough visibility, control and compliance to trust your critical business processes for us. Tieto s long and extensive experience from working with industries such as manufacturing, finance, telecom (to name a few), as well as the Public sector, mean that we understand our customers business processes very well. This in combination with our integrated service offerings consisting of consulting, system integration, managed services and products puts us in an unique position in the Nordic market. 6. How to combine traditional IT and Cloud 6.1. Cloud consumption is leading organisations into more complex IT environments Gartner predicts that monolithic software suites are being deconstructed into postmodern enterprise applications. Postmodern Enterprise Applications will lead to a federated, loosely-coupled application environment. Much of the functionality will be sourced as cloud services or via business process outsourcers. Heavily-customised core applications will focus on the important systems of record functionalities. Best-ofbreed applications E.g. CRM, HR and Financial management On-premise monolithic application Complete migration or Two-tier strategy PaaS IaaS Cloud application suites Virtual private cloud 2014 Tieto Corporation 17

18 Hybrid cloud computing is in the same place today that private cloud was in three years ago; actual deployments are low, but aspirations are high, nearly three fourths of large enterprises expect to have hybrid deployments by Impact on existing enterprise software ecosystems: The devolution of the monolithic enterprise application will change the application market power base. Traditional software vendors may not provide the functionality needed to drive innovation or differentiation. Best-of-breed approach is beginning to emerge along domain areas (e.g. HR, CRM) Smaller vendors and niche providers may be better placed to meet local business requirements. Ecosystems are likely to break down and reform along differing lines and alliances. (Source: Gartner Hype Cycle for ERP, 2013) The vast majority of enterprises that consume cloud services will operate in a hybrid model. They must secure, manage and govern not only what is already in their environments, but also external cloud services including those that have been acquired without IT involvement. The management functionality from cloud providers rarely integrates with the enterprise capabilities that organisations already have to run in traditional IT. Therefore, organisations cannot manage cloud and internal services consistently and e.g. extending ITIL processes to the public cloud is very hard without significant investment in creative processes, custom software or cloud brokers. Organisations not only have issues with providers, but they should also be aware of all the issues they have with themselves organisational, educational and cultural issues. The inertia often found in large organisations is daunting, and catalysing change to adopt cloud services is not easy. Cloud services require operational processes that are designed for speed and customised for the services offered. A traditional IT culture focused on technical expertise and IT heroes does not fit a fully automated, self-service model that requires a service-oriented, team approach. Even if managing a hybrid environment is complex, organisations should not try to avoid it and push back, but remember why they actually are doing this. Ultimately users are the driving force behind the move to cloud services, whether they realise it or not.the blend of internal and external services, both traditional and cloud based, is successful when the experience of the user is seamless, and the risk to the enterprise is contained Tieto Corporation 18

19 Users/Business Hybrid IT Broker Traditional IT Private Cloud Industry Cloud Public Cloud TIeto can help you to bridge your old IT smoothly into a new cloud world A hybrid IT operating model will provide help Many companies are now turning towards a hybrid IT operating model. In this model, the IT organisation (or external third party) acts as the broker to all IT services, whether traditional, private cloud or public cloud, and must add value to the business in doing so. As the intermediary of IT services, a broker can offer internal customers the price, capacity and provisioning speed of the public cloud, while maintaining the security and governance that organisations require for critical applications and data. According to Gartner, hybrid cloud computing is in the same place today that private cloud was in three years ago; actual deployments are low, but aspirations are high, nearly three fourths of large enterprises expect to have hybrid deployments by Tieto can make Hybrid IT governance and security easier In Tieto s opinion, key purpose of the governance is to link the business needs with IT possibilities, rehearsing and selecting the potential solutions, and executing continuously flawless delivery. We are investing heavily into our fully automated hybrid IT capability to provision and manage services blending traditional IT with private and public cloud. Our self-service channel gives powerful tools to adjust our services to individual needs, for IT people as well as end-users Tieto Corporation 19

20 7. How and when to bridge old IT to the new world? 7.1. Often existing IT assets have not yet reached the end of their lifecycle While it is clear that cloud computing can save capital costs in various use cases, the capex savings can depend on the IT organisation s current assets (e.g. servers, storage and network) life cycle. The longer the asset life cycle, the tougher the cloud business case becomes. This challenge is further strengthened since some independent software vendors and independent hardware vendors do not license their product in a cloud friendly way. Therefore, their customers are unable or prohibited from moving their application to the cloud due to licensing constraints or additional costs. Thus for some organisations, there is no way to transfer their existing licenses to the cloud provider or service, leading to duplicity of license purchases. All this leaves many organisations judging whether the opportunity cost of NOT moving to cloud is big enough to justify needed investments, or whether it would be better just to first wait and let existing assets to amortise further Doing nothing leaves opportunities unlocked and marginalises the internal IT position An IT organisation that wants to stay relevant for lines of businesses and sees cloud as a strategic opportunity to deliver more value, will quickly put together a cloud strategy for most of the applications. This will help increase agility through scale-out architectures and automated operations, increase optimisation of the application SLAs and underlying infrastructure, and drop service delivery costs by 50%, or even more. Organisations that do not develop their cloud strategy will miss significant agility and cost savings opportunities, thus, greatly reducing their ROI. Ironically, this will also weaken internal IT s position in comparison to external public cloud providers, particularly for SaaS offerings that enable these cloud properties Tieto Corporation 20

21 7.3. Tieto can ease the transition challenge with ready platform solutions TIeto can help you to bridge your old IT smoothly into a new cloud world. Our long history and market share give us an exceptionally strong understanding of your legacy systems. Our major investments into the hybrid IT delivery model and ready cloud solutions give us tools to act. One opportunity to ease the challenge of bridging old IT to a new world is to leverage ready-to-use cloud platform solutions. These solutions will isolate workloads from underlying systems and capacity services and provide ways to introduce cloud based elastic services even for old IT landscapes. Same platforms support extending and customising new cloud based applications to match specific requirements of the organisation, simultaneously enabling the new cloud services to work seamlessly together with existing applications and data. Tieto has developed an understanding of customers IT landscapes during the last 40 years, and has been investing heavily into ready-to-use cloud platform solutions to make transitions and modernisations easier. Tieto will help you bridge Your old IT into the new world by utilising the existing IT landscape. Examples of our ready platform solutions: Tieto cloud solution name TPC Sharepoint TPC Tieto SQL Server TPC Dynamics CRM TPC BizTalk Dynamic SAP Landscape Tieto Big Data Platform as a Service Tieto Integration Platform as a Service Tieto Java PaaS IBM Tieto Java PaaS OSS Tieto Drupal PaaS Tieto DB2 Platform as a Service Tieto Enterprise DB Database PaaS Tieto Maria DB Database PaaS TOAS - Tieto Open Application Suite TOAS PaaS TOAS Cloud Management Tools Description Sharepoint as a service Database as a service CRM as a service Application integration SAP platform as a service Hadoop platform as a service Application integration Java platform as a service Java platform as a service Web content management Database as a service Database as a service Database as a service An open source based Java enterprise business application development platform running in infrastructure independent environments. Harmonised private cloud environment for enterprise solution creation Infrastructure agnostic deployment mechanisms for TOAS elements 2014 Tieto Corporation 21

22 8. How to manage Cloud providers effectively Tieto acts as a multisourcing service integrator and invests actively into delivery ecosystem, cloud management and brokerage capability. We know how to best manage and integrate other service provider solutions, both traditional and cloud based, on your behalf Cloud based vendors are emerging rapidly, but it is hard to judge who will create sustainable business value over time The average number of external IT service providers that organisations are using is increasing. This is particularly true as organisations adopt more cloud services. According to Gartner this average in Western Europe grew from 12 in 2010 to 26 in The largest cloud providers tend to dominate organisations plans when it comes to building strategies, assessing providers and dealing with issues. However, organisations also employ many small, niche cloud providers to solve very specific business and technical problems. These providers are fulfilling business requirements due to a unique application or narrowly scoped use case, or by bringing in new ideas and innovation. All this means that cloud computing is taking multisourcing to a new, more dynamic level, changing the mission and operational model for IT. Multivendor relationship management is a key skill for CIO organisations, and it is getting all the time more important. To make it easier, organisations need to identify partners who can take part of the workload by brokering smaller service players on your behalf. All this should happen in an automated manner, so that even the most complex delivery structure provides a seamless service experience to the end-user, and needed changes are executed through the entire service chain in near real-time Cloud service brokerage will greatly simplify the consumption of cloud services Cloud services brokers (CSBs) are an intermediary between the cloud provider and consumer. CSBs layer additional services on top of the cloud provider s service to provide a more robust and seamless cloud experience for the cloud consumer. CSB is not necessarily a new vendor, but can also be a role that e.g. an established IT service integrator adopts 2014 Tieto Corporation 22

23 (Source: Gartner, Cloud Services Brokerage is Dominated by Three Primary Roles) These brokers will help to customise and integrate various cloud solutions, and more importantly, specialise in creating ready bundles of cloud solutions for certain business purposes. This may mean e.g. pre-integrating together several third party cloud applications to deliver seamless support for a pulp and paper industry specific supply chain process or e.g. adding a feature enabling secure data location on top of a common collaboration solution. Bundles will make procurement of cloud solutions easier and enable even brokered cloud suites that will make it possible for organisations to source most of their cloud solutions smoothly from one source and still leverage combined power of several underlying suppliers Tieto Corporation 23

24 Gartner believes that in the future a significant share of cloud consumption will happen through cloud brokers instead of customers buying directly from cloud providers Tieto is a cloud broker and can manage cloud vendors on your behalf Tieto acts as a multisourcing service integrator and invests actively into delivery ecosystem, cloud management and brokerage capability. We know how to best manage and integrate other service provider solutions, both traditional and cloud based, on your behalf. Tieto s cloud offering portfolio covers brokered third party services and solutions. The portfolio covers Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS) solutions Tieto Corporation 24

25 9. How to ensure access to future cloud based innovation 9.1. Digitalised business will depend on ecosystems running on cloud based platforms Enterprise ecosystems will follow the same development path that has been happening earlier in consumer oriented technology ecosystems. Mobile phones have transformed from communication devices to generic computing devices where related app stores and application ecosystems can make and break device manufacturers. Today, when you buy a mobile phone, you are not starting by making comparisons based on device specifications. First you decide in which ecosystem you want to be, mostly based on value of services (e.g. apps) that others than the actual mobile phone maker are providing. In a similar manner, enterprise ecosystems are gradually evolving into more tightly connected business models. They will also expand out from their technology industry origin. Digitalisation of business will disrupt all industries and the essential driver for this development will be rich ecosystems powered by a cloud based industry platform. These platforms will enable organisations in the ecosystem to integrate with other organisations automatically and effortlessly, thus accelerating shared innovation and value creation Tieto is active in chosen major global technology ecosystems and brings new cloud related innovations into your context While today s increasingly interconnected world brings complexity, it also brings a multitude of emerging opportunities for those who are ready to grab them. We at Tieto believe in collaboration with our ecosystem partners to create synergetic value rather than isolating innovation in the company. Together with our partners, we create a joint vision, developing skills to collaborate and gain mutual trust - providing more customer value than we could do alone. We already both leverage shared innovation in R&D and deliver services together, leveraging our ecosystem Tieto Corporation 25

26 We have an established role in chosen major technology ecosystems globally (IBM, Microsoft, Google, Oracle, SAP, Opensource). We have offerings like Tieto Productivity Cloud, Tieto Cloud Server, Google Enterprise Services by Tieto, and SAP Dynamic Landscape with partners like Google, Microsoft, SAP, and IBM. Active participation in Open Source communities has been a source for our TOAS and TOMP platforms. We have developed Tieto Cloud Server (launched 2012) leveraging the skills, expertise and technology of 13 partner organisations. We recently announced that we have joined the Microsoft Cloud OS Network to drive this development further. We launched Google Enterprise Services offering as the first major IT services player in the Nordics in 2013, and also 5000 of our own employees already use Google tools. We are also a regionally active catalyst. Our CEO is a chairman of Finnish Information Technology Industries. Suomen Laatuyhdistys (Finnish Quality Association) laatukeskus.fi/suomen-laatuyhdistys/laatukeskus-english Tieto has Key Corporate Membership. FiSMA (Finnish Software Measurement Association) fisma.fi/ Tieto s SPOC: Tuukka Haarni 2014 Tieto Corporation 26

27 We strongly believe in ecosystems and in the future aim to master our own cloud based industry platforms. This will enable our ecosystem parties to connect with us and others in an automated manner, thus driving and increasing agility and value. We are already taking steps into this direction as evidenced by our Business Information exchange (BIX) offering and its industry variants like Bank Connectivity. These platforms enable various parties to exchange information by automating and rationalising labour intensive manual processes between them. With Tieto you will experience a journey from a world of siloed ecosystems into a world where value is created at real-time speed in interconnected digital ecosystems based on industry platforms 2014 Tieto Corporation 27

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