Whitepaper: Enterprise Public Cloud: A Practical Guide for CxOs. Prepared by: Barry Hogan

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1 Whitepaper: Enterprise Public Cloud: A Practical Guide for CxOs Prepared by: Barry Hogan An essential read for CxOs in Enterprise-scale organisations exploring Public Cloud Infrastructure-as-a-Service as a means of delivering business agility in a cost-effective manner.

2 Table of Contents Definitions... 2 Public Cloud Usage... 3 Public Cloud Providers... 4 Evaluating the Public Cloud... 8 Conclusion... 9 About Version

3 Definitions Cloud Computing Cloud Infrastructure is the "computing" in cloud computing. Compute, storage and network resources, delivered on-demand, in near-real-time, as a service. There has been tremendous hype surrounding these services and the market is evolving rapidly. There are two main types of Cloud Infrastructure Provider as defined below. Private Cloud Providers Private, shared multi-tenant infrastructure services from typically local service providers offering a multi-tenant service on virtualised infrastructure environments. Public Cloud Providers Public infrastructure services from large, global operators providing cloud infrastructure service directly or through a partner channel (e.g. Amazon Web Services, Microsoft Azure). Public Cloud Infrastructure Service A standardised, highly automated offering, where compute resources, complemented by storage and networking capabilities, are owned by a service provider and offered to the customer on demand. The resources are scalable and elastic in near-real-time, and metered by use. Self-service interfaces are exposed directly to the customer. Public Cloud Models Cloud infrastructure services are deployed to support single application needs as well as multiple related and unrelated workloads. The level of services range from: Unmanaged solutions which do not have formal IT operations management to; Self-managed solutions that require the customer to be responsible for all management at the OS layer and above, to; Outsourced managed solutions where a third-party service provider takes on responsibility for the OS, the security and network functions, the middleware and application stack and provides an end-to-end SLA in this regard. Cloud Manifesto I ONLY pay for what I use, ONLY when I use it, with the ability to SCALE up and down ON DEMAND Definition based on the National Institute of Standards and Technology, US Department of Commerce, Special Publication Version 1 Whitepaper Page 2

4 Public Cloud Usage The following scenarios are typical of Enterprise usage of Cloud Infrastructure to date: 1) Scale-out cloud hosting Typically companies have a website or web application running on dynamically scalable infrastructure. Marketing sites, software as a service enablement (that is, a software company sourcing infrastructure on which it will host its software as a service offering) and Microsoft SharePoint hosting are common use cases. Technology start-ups are often wholly dependent on scale-out cloud hosting to run their customer-facing infrastructure. 2) Virtual lab environment The provision of self-service infrastructure to a group of technical users, such as developers, for the purposes of test and development or for example batch computing or back-up / disaster recovery. 3) Self-managed Virtual Data Centre infrastructure Self-provisioned, self-managed and cost-effective infrastructure which provides an alternative to buying on premise or hosted equipment. These customers typically begin by running a variety of nonmission critical business applications within the cloud, but may eventually intend to move as many workloads as possible into the cloud. 4) Managed Virtual Data Centre A third-party service provider assists in navigating the complexities of interoperating on-premise and cloud infrastructure. The service provider is typically responsible for securing infrastructure and handling routine operations. Typically this involves management right down to the OS level, including OS patch management, often with the addition of managed security and networking services. Many of these management functions can be partially, if not fully, automated. Typically a variety of business applications would run in a Managed Virtual Data Centre, many of which would be mission-critical, and often the long-term vision is for Cloud Infrastructure, in conjunction with co-location, to replace existing data centres. 5) Hybrid Cloud Model A hybrid cloud is a cloud computing environment is one in which some IT services remain on-premise and other IT services or components reside in a cloud environment such as AWS or Azure. For example, in the case of a Web Service with a Database backend, an organisation might move Web Servers to the Cloud to avail of features such as auto-scaling, auto healing or website caching while the Database remains hosted within the On-Premise environment. Version 1 Whitepaper Page 3

5 Public Cloud Providers Public Cloud operators offering services of interest to Enterprise organisations include Amazon Web Services (AWS) and Azure from Microsoft. In Detail: Amazon Web Services The widely acknowledged leader in public cloud infrastructure services, Amazon has nine groups of data centres across the world, which it calls regions, with each region containing two or three data centres. Amazon has the richest Infrastructure as a Service product portfolio and regularly expands its service offerings and reduces its prices. It has the largest pool of capacity and offers specialised infrastructure options for high-performance computing and big data applications. Amazon has a very large technology partner ecosystem which is important as many software vendors (including Oracle and Microsoft) have specially licensed and packaged their software to run on Amazon Elastic Compute Cloud (Amazon EC2); a web service that provides resizable compute capacity in the cloud. They have done so either independently or via the Amazon Web Service Marketplace, easing deployment and eliminating some of the challenges associated with licensing software to run in the cloud. Amazon has broadened its technical capabilities, increased its go-to-market partnerships with system integrators and obtained many security and compliance-related certifications and audits. All of this serves to position Amazon Web Services as a strong Enterprise Cloud option. However, many Enterprise organisations struggle with the fact that Amazon Web Services is a besteffort cloud with a weak narrowly defined SLA. At the same time, while Amazon Web Services is a price leader, administration can be complex and Enterprise-scale management can become difficult. Cloud Managed Services provided through third-party consulting partners are therefore attractive to Enterprise organisations. Version 1 Whitepaper Page 4

6 What s on offer from Public Cloud? Reliable Cloud Public Cloud providers are starting to target enterprise and mid-market customers with a "reliable cloud" offering achieved through redundant infrastructure across multiple regions. This redundancy means providers offer a very high level of infrastructure availability, typically as high as % (expressed as a 100% SLA with 10-minute exclusion). However, few providers are willing to offer substantial SLA penalties for outages and service credits for outages in a given month typically cap at 100% of the monthly bill. Auto Scaling Most Public Cloud providers offer auto-scaling functionality which is a way to automatically scale up or down the number of compute resources allocated based on need at any given time. In a traditional, dedicated hosting environment, you are limited by your hardware resources. With auto-scaling, resource allocation can be modified when various monitored thresholds are triggered. Packages and Payment Options Most Public Cloud providers offer per hour metering for a certain amount of capacity (in terms of CPU, RAM, storage, networking ports etc.) including options to oversubscribe that capacity voluntarily or automatically. Pre-packaged combinations of CPUs, RAM and VM storage are on offer, subject to some limits, and can accommodate inter-operability interfaces with stand-alone or on-premise services and network infrastructure. Security All Public Cloud providers offer private network connectivity (MPLS or Ethernet) and most use Internet-based IPsec VPN. Providers claim high security standards and offer security controls such as intrusion detection system/intrusion prevention system, access control lists etc. Self-Service All Public Cloud providers offer customer portals and self-service mechanisms. What Business Benefits can be delivered? Agility, Rapid Deployment to Quickly Meet Business Needs A properly deployed Public Cloud Infrastructure will facilitate a transformation in terms of business agility and innovation. Under the traditional infrastructure models, the amount of time it can take from the business request for system resources to deployed can be up weeks for the infrastructure component alone. With Public Cloud, once a baseline reference architecture is in place, the same deployments can be delivered in a matter of days without bypassing the relevant change processes or controls. This allows organisations to react extremely quickly to business change. Version 1 Whitepaper Page 5

7 Operating Cost Model Running Public Cloud Infrastructure will significantly reduce capital investment in hardware, so organisations only pay the running cost for what is used with no upfront investment. Public Cloud cost models are typically based on per hour billing creating opportunities to significantly reduce operating costs by implementing simple changes to the traditional model such as: Automatically shutting down certain systems when they are not required. Leverage auto-scaling functionality for critical web services to meet spikes in business activity. Pay up front for one web server and automatically bring on new web servers when certain thresholds are reached. Short Term Provisioning and Associated Commitment Public Cloud does not demand any upfront commitment. Any system or service provisioned can be stopped, removed or shut down at which point the running cost of the service is also stopped. This granular Pay as you Grow cost model allows organisations to provision systems as and when required, for as long or as short as is required without any capital investment in hardware, licenses or associated hardware support costs. This offers the flexibility and scalability required by Enterprise business, in the most economical way possible. Flexibility Public Cloud is very flexible to meet a very broad range of business needs. Workloads vary in their availability and performance needs and in the general complexity of the overall application infrastructure. Organisations also have varying infrastructure needs relating to security, customer service and ease of use. What s not on offer from Public Cloud? Full availability and performance Very few Public Cloud providers offer full availability and performance monitoring and most are still evolving in terms of enterprise class operations support. Pricing simplicity and management ease Flexible pricing models introduce a level of complexity in administration and management that can make effective Enterprise-scale management difficult. Version 1 Whitepaper Page 6

8 What are the Barriers to adoption? Enterprise customers are concerned about issues of data loss, privacy and integration with onpremise or hosted infrastructure. Before core business systems and data can be considered for Public Cloud migration, Enterprise organisations will need to be convinced that: 1. Public Cloud environments can be configured to provide greater levels of data security than on-premise solutions. 2. The risk of the Public Cloud failing materially for an extended period is significantly lower than it is with an in-house IT service. 3. They can secure the expertise to architect a Public Cloud solution that integrates and aggregates in a seamless, secure and performant manner a diverse range of infrastructure and applications across Cloud, on-premise and hosted infrastructure. Version 1 Whitepaper Page 7

9 Evaluating the Public Cloud There are four key dimensions organisations should consider when evaluating Public Cloud as part of their Enterprise Architecture. 1) Will expectations around cost reduction and business transformation be achieved? Many CxOs see the potential benefits of cloud infrastructure but remain to be convinced that these can be realised. Typically decision makers are not well informed about cloud computing costs vis-àvis existing IT services, cloud security, pricing models, integration with existing infrastructure and contractual arrangements such as SLAs. Therefore it is essential to be fully informed on cloud infrastructure and its implications for the business before a decision is made to invest significantly. A true and fair evaluation across commercials, migration, implementation, integration and support is required. Most organisations start with a single deployment initially for example , data backup/archive services, collaboration applications or website, for example. Before migrating to cloud it is important to establish demonstrable cost savings and predictable pricing can be achieved and this is particularly important in the context of existing IT expenditure and budgeting processes where sometimes the shift from capital spending to operational costs is not fully factored in. Moreover, it is important to factor in the service and functionality features of the Cloud which cannot be provided in a traditional on-premise environment (e.g. auto-scaling, auto healing, and availability zones). By calculating the true cost of existing infrastructure and the variable and fixed costs of migration to cloud, a realistic and robust business case for switching to cloud infrastructure can be established. It is also very important to define how cloud can change the business by delivering the flexibility and agility, at less risk, which can facilitate and support business innovation and change. 2) Can adoption concerns of data loss, privacy and integration be resolved? Loss of control is the primary concern for the majority of CxOs. The best approach is to consider each potential concern about loss of control independently, in turn. The specific challenges in this area include data loss, privacy and integration with on premise or hosted infrastructure. To address these concerns, the following questions would need to be answered to a satisfactory level: Security: Is it possible to configure cloud environments to provide greater levels of data security than on premise solutions? Is it possible to resolve specific industry challenges like PCI compliance on Public Cloud? Data Loss: Is the risk of a cloud provider failing materially significantly lower than the in-house IT risk of the same? Is it possible to configure Public Cloud so that it is less prone to data loss than an equivalent on-premise solution? Version 1 Whitepaper Page 8

10 Integration: It is possible to integrate and aggregate a diverse range of infrastructure and applications through reference architecture to fully integrate Cloud and On-Premise? 3) Can a reassuring level of service for applications deployed on the cloud be achieved? For Enterprise organisations the delivery of a strong SLA is of primary importance. Typically this would demand going beyond the infrastructure SLA available directly from the Public Cloud provider. Ideally, the SLA would encompass the following elements: Completeness of Service: No elements excluded from the SLA, including on-premise elements and applications. Specific SLAs: Service levels would address cost effectiveness, security, availability and performance and would ideally include business impacting performance indicators such as efficiency, productivity, business outcomes and commercial success factors. 4) Can the organisation excel in Enterprise Class Cloud Computing? To successfully deploy Public Cloud it is important to have access to the full range of enterprise class products including: Public Cloud enterprise architecture. Cloud computing products and features such as VPC s, network configurations, security, cloud extensions and integration services. Provisioning, monitoring, optimisation and utilisation services including third-party products. Administration, billing and management. Often organisations achieve this through a suitable third-party consulting partner. Conclusion Enterprise Public Cloud represents a significant opportunity for organisations to reduce costs and improve organisational agility by deploying market leading cloud infrastructure. However, Enterprise organisations still need to address specific challenges around SLAs, implementation complexity and pricing. At the same time, they will need to find adequate assurance that key Public Cloud concerns related to issues of data loss, privacy and integration with on-premise or hosted infrastructure can be addressed. Version 1 Whitepaper Page 9

11 About Version 1 Established in 1996, Version 1 is a leader in Enterprise Class Cloud Computing services and a trusted technology partner to major domestic and international customers across all industry sectors in Ireland and the UK. Version 1 operates enhanced partnerships with Oracle, Microsoft and Amazon and has achieved unrivalled breadth and depth of competency in all three. An Amazon Web Service Consulting Partner, Version 1 has one of the largest certified AWS capability in Europe. Version 1 is committed to delivering on the cost and business transformation expectations of our customers and to resolving Cloud adoption concerns. Utilising an approach and methodology to Cloud adoption which extends the customer data centre through scalable reference architectures, Version 1 provides a full Cloud service including integration with on-premise infrastructure, application and managed services. Version 1 delivers an ISO certified AWS Managed Service to an SLA which meets every customer s unique business demands while retaining the flexible, agile, pay-asyou-go, pay-as-you need benefits of the Cloud. Case Study: Enterprise AWS Solution Version 1 is a high growth company and enabling our Cloud strategy has been key to managing a mobile, dynamic, ever-growing user base and producing an IT environment not restricted by location or capacity and which can cope with step changes in resource demands. Over 40 AWS instances have been deployed to date covering a technologically diverse range of business, development and test systems. The infrastructure is successfully managed in line with existing ITIL processes and tools, augmented by specialist AWS tools to optimise AWS instance management and billing complexities. Benefits Delivered Rapid Deployment Speed and Scalability AWS has proven ideal in terms of speed of deployment, agility and economical management of the ICT estate. Once the secure baseline or reference architecture is in place, systems can be provisioned and available to the end user within minutes, these systems can be decommissioned just as quickly and the only cost associated with this solution beyond a Managed Service is the AWS running costs throughout the lifecycle of the individual system whether that is hour(s), days, months or years with no capital upfront investment in hardware. When you compare deployment speeds of minutes/hours to the traditional model where server requests can take 6-8 weeks to provision, the AWS solution is an obvious enabler for the business. Version 1 Whitepaper Page 10

12 Reduced Capital Investment in Hardware Traditional infrastructure platforms such as physical dedicated servers and virtual environments incur significant recurring hardware investment every five years. As part of this hardware refresh process, the internal IT department would be required to estimate the future of the organisation and calculate, design and purchase the hardware on Day 1 that would accommodate that five year predicted growth. This would typically result in either underestimation of the business growth requiring additional, unbudgeted capital expenditure on hardware during the five year life cycle, or overestimated business growth resulting in wasted ICT resources. By moving to AWS, the five year lifecycle is no longer a consideration. AWS is for the most part a pure operating cost model. The internal IT department only has to forecast the requirements for the present or a maximum of a few months ahead. Rather than a significant capital expenditure on hardware, the focus has changed to economically managing the operating costs of AWS on a day-to-day basis. Key to maximising cost-effectiveness is a change in mind-set; system owners need to start scoping for now, rather than 5 years down the line. Business Unit Cost Allocation The traditional on-premise model can make it difficult to accurately apportion the ICT running costs to each business units resulting in a Shared Services cost centre absorbing the majority of the ICT costs for systems such as test, development and research & development. This model does not enforce control and responsibility for provisioning and can lead to server sprawl putting significant pressure on resources both in terms of manpower and underlying supporting infrastructure. The move to AWS completely changes this through implementation of formal processes for requesting resources with cost sign-off directly from Business Unit Managers. The granularity of the AWS billing is on a per system basis which makes it very clear what costs have been incurred and where they need to be apportioned within the business. New system requests from the business have been significantly reduced, as has the Shared Services cost overhead. Business Continuity By buying into a Public Cloud model the customer can avail of data centre specialisations that may otherwise be out of reach such as power provision and management, diverse telecoms, anti-static flooring, climate control, fire suppression etc. This results in significant improvements in availability standards, such as % availability, N+1 Fault Tolerance, 72 Hours Power Outage Protection and so on, as well as compliance with major quality standards and frameworks such as ISO 27001, SOC, PCI DSS, among others. The customer is also now location independent in terms of accessing business critical systems. Due to the scale of the AWS architecture, it provides for built in Disaster Recovery solutions across multiple data centres and/or locations worldwide. The baseline ICT environment is now established to facilitate and support growth whatever the business strategy. Version 1 Whitepaper Page 11

13 Version 1 Version 1 Ireland Head Office UK Head Office Millennium House 45 Moorfields Millennium Walkway Moorgate Dublin 1, Ireland London EC2Y 9AE Version 1 Whitepaper Page 12