Meeting the Challenge of Enterprise Cloud Development: 7 Best Practices for Hybrid Cloud

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1 A research report prepared by: Publication sponsored by:

2 TABLE OF CONTENTS Introduction 1 The Hybrid Cloud 1 The Development Challenge 2 Managing Complexity at Deutsche Post DHL 4 The Seven Best Practices 4 Meeting the Challenge 6 TABLE OF FIGURES Figure 1: Business Software Deployment Preferences Figure 2: Enterprise Cloud Development Triad 3 About this Report This report is based on independent research developed and conducted by Saugatuck Technology Inc., who is solely responsible for the analysis, conclusions and recommendations presented in this report. The publication of this report was funded by CollabNet. About Saugatuck Technology Saugatuck Technology, Inc., provides subscription research and management consulting services focused on the key market trends and disruptive technologies driving change in enterprise IT, including Software-as-a-Service (SaaS), Cloud Infrastructure, Social Computing, Mobility and Advanced Analytics, among others. Founded in 1999, Saugatuck is headquartered in Westport, CT, with offices in Falmouth, MA, Santa Clara, CA and in Frankfurt, Germany. For more information, please visit or call Saugatuck Technology Inc. i

3 INTRODUCTION: At Saugatuck, we ve been watching the Cloud evolve for the past eight years from a fringe, early-adopter resource to where it is today, a mainstream option for most business solutions. Today we are witnessing a declining interest in purchasing onpremises software. Venture capitalists no longer invest in traditional software applications and have not done so for the past several years. Cloud solutions are now flourishing in every solution category and, though still maturing in ERP and other core financial categories, the time is near when the Cloud can meet every application software need. Not only have the Software-as-a-Service Cloud solutions mushroomed, we have also witnessed the accelerating growth of infrastructure offerings and platforms for software development, integration, collaboration, mobility, social networking and data analytics. Moreover, an emerging and disruptive master architecture is now forming to enable the Boundary-free Enterprise that Saugatuck first foresaw in Every ten to fifteen years a new master architecture emerges that provides businesses and individuals the ability to get their work done in a new computing paradigm. Usually the computing paradigm is based on a technology platform such as mainframe or client / server or the Cloud. However, now we are witnessing the emergence of a new master architecture that is not based on a single computingplatform paradigm as in the past. Rather, it is based on multiple technologies and platforms that build synergies among themselves through loosely-coupled and opportunistic exchanges of value. The Boundary-free Enterprise will not be constrained by organizational boundaries and firewalls, but can enable a new model of work and facilitate new business relationships that are not bound by time or place. In fact, today s businesses and individuals are already less encumbered by constraints of time and place, doing their work through a new Cloud-based array of time- and location-independent computing capabilities collaboration, mobile, social and data analytics plus integration that make the Boundary-free Enterprise possible. Integration is the necessary glue that links these various platform capabilities together and joins them up with on-premises data assets in data centers where mission-critical money systems will continue to operate behind highly-secure firewalls. As business enterprises evolve their understanding of the capabilities of this emerging master architecture, each one must find its own way of creating an anytime / anyplace hybrid-computing network that will realize its competitive aims. While the challenges of navigating this journey are significant, the benefits of the Boundary-free Enterprise are transformative. And it is the challenge of Enterprise Cloud Development to transform today s enterprise into one that is essentially boundary-free, virtually integrated with its suppliers, buyers and distributors worldwide and with its customers and potential customers. THE HYBRID CLOUD The evolving hybrid Cloud is built on the synergy of Cloud and on-premises assets. As the Boundary-free Enterprise evolves to express the operational strategies of any given line of business, the IT organization has a new and challenging mission. Acquiring Cloud assets and implementing them, integrating them with other assets in the systems portfolio to exploit their synergies, IT has a more proactive role because 2012 Saugatuck Technology Inc. 1

4 of this transformation to assemble acquired assets, integrate where possible and develop other assets as needed to fill in the gaps It is more than clear that business and IT executives envision this evolving hybrid Cloud. In the 2012 Saugatuck Cloud Survey, we asked enterprise executive buyers from business units and from IT to express their preference for deploying new business software in three timeframes. Survey respondents were asked to indicate whether they would prefer on-premises software, hybrid-cloud or pure-play Cloud deployment for their newly-acquired business solutions. They were asked to express these preferences as if buying today in 2012, in two years in 2014 and in four years in As Figure 1 below indicates, buyers expressed different preferences for each of the three timeframes (See Figure 1- Business Software Deployment Preferences ). Figure 1: Business Software Deployment Preferences In 2012, the preference for acquiring on-premises software is still at 50 percent, but this declines rapidly to 18 percent in 2014 and to 13 percent in 2016 (See the blue bars in Figure 1). Meanwhile, the Cloud-based pure-play software preference rises from 10 percent in 2012 to 19 percent in 2014 and to 39 percent in 2016 (See the green bars). What is most striking, however, is the shape of the red bars in Figure 1 above. Rising from 40 percent in 2012 to 63 percent in 2014 and then falling off to 47 percent in 2016, the red bars indicate a transitional emphasis on buying especially for the hybrid architecture, joining Cloud software to on-premises assets, as an interim or transitional stage in the evolution of the Boundary-free Enterprise. THE DEVELPOMENT CHALLENGE Source: Saugatuck Technology Inc. Developing for the hybrid Cloud will be the primary activity of enterprise developers over the next three-to-five years, and maintaining these Cloud solutions, integrations and workflows will be the mainstay of IT for a decade or more to come Saugatuck Technology Inc. 2

5 Though the transitional spike in hybrid-cloud procurement declines after 2014, the next wave to come is the pure-play Cloud, where an equal challenge awaits enterprise developers and their IT organizations. If any lesson can be drawn from the past, it is that architectural transitions, though gradual, are permanent, as the business IT assets that are created seldom, if ever, go away. It is estimated that not only are there a 100 million lines of COBOL still in production, but another 100,000 lines are added every month. Much of what the Cloud era ushers in will be built on the back of mainframe and client/server IT assets. Even new Cloud business applications will integrate with those legacy assets. Thus, what enterprises need most are forward-looking strategies for managing the business IT portfolio through this transition to the Cloud and to the Boundary-free Enterprise (See Figure 2 below). Figure 2: Enterprise Cloud Development Triad Source: Saugatuck Technology Inc. In order to manage the Cloud transition, our review of best practices tells us, enterprises will need an architecture that serves, flexibly, not only current business needs, but the evolving needs of the emerging Boundary-free Enterprise that can exploit synergies among platforms for collaboration, mobility, social networking and data analytics. To instantiate that architecture, and evolve it dynamically, enterprises will need a coherent toolset, designed for the task of Enterprise Cloud Development, that can enable the creation, integration, and ongoing extension of Cloud and hybrid-cloud assets. And, to complete the triad, enterprises will need a consistent approach to ALM/Process management that makes use of current techniques in Agile Development and DevOps, in order to create Cloud assets and ensure their efficiency and effectiveness in production. Clearly there are both risks and rewards associated with meeting the development challenge. A disciplined approach to Enterprise Cloud Development embraces a target architecture based on synergy and integration, a coherent Cloud toolset assembled and maintained for that purpose and a consistent approach to lifecycle management, utilizing Agile and DevOps is the price of admission, table stakes, if you will. The benefits of Enterprise Cloud Development include a dynamic, flexible, and synergistic solutions portfolio that is poised to compete and meet competitive challenges, meet regulatory requirements and return measurable financial benefits Saugatuck Technology Inc. 3

6 The downside associated with not doing this well, or doing it partially or only in some departments and not in others, is significant: higher costs, inefficiency, vulnerability to attack, continuous repairs, inability to respond to business needs quickly, and production failures, to cite a few examples. Building applications in the Cloud requires a disciplined approach in order to control costs, manage risks, and ensure governance and security of the enterprise. MANAGING COMPLEXITY AT DEUTSCHE POST DHL Deutsche Post DHL is a global mail and logistic services company with 470,000 employees in more than 220 countries and territories and revenues of $65 billion. Rapid growth paired with a strong push into online services accelerated the business demand for new software applications, and, currently, there are more than 300 active, concurrent software projects in development and maintenance going on in the mail division alone (about one-third of DeutschePost employees), most of them critical to the core business. More than 2,000 project members have been working on those projects in crossfunctional teams, spanning geographies and organizational boundaries based mostly in Germany, but also from Brazil, Russia and India. Suppliers, contractors, and professionals from over 100 providers also deliver essential services including development and testing, maintenance and IT operations services. To coordinate this complex development environment, Deutsche Post identified the need to drive efficiencies through better governance and oversight, and by automating and standardizing application delivery. Saugatuck has assessed the Deutsche Post approach and has identified key best practices that we believe will lead to successful Enterprise Cloud Development. It is likely that many, in fact most, organizations will not be challenged with the complexity, geographic reach or inter-organizational breadth that faced Deutsche Post in managing its rapid growth. Nevertheless, these best practices are ideally suited to the complex challenges of developing across multiple platforms collaboration, mobility, social networking and data analytics among them that all must be managed in assembling hybrid Clouds of the new master architecture to enable the Boundary-free Enterprise. THE 7 BEST PRACTICES 1. Make use of Cloud-based developer toolsets and lifecycle management environments whenever possible and appropriate Saugatuck Insight: The use of Cloud resources, for example a development- Platform-as-a-Service (dpaas) offering, is not only convenient, when operating across geographies and when collaborating with external services providers, but also helps avoid making expensive capital investments by shifting CAPEX to OPEX Saugatuck Technology Inc. 4

7 2. Manage central provisioning of all necessary and updated information regarding an IT system for all participants along the lifecycle Saugatuck Insight: Information is the lifeblood of a smoothly-operating development organization, especially one that can support multiple teams in different organizations with differing responsibilities and also diverse external resources spread across the globe. 3. Provide simplification and standardization of project setups Saugatuck Insight: Disparate agile tools and cloud services provide isolated workgroup quality and time improvements, at the expense of enterprise integration, cost escalation, governance, and visibility. Gain both workgroup agility and enterprise governance by standardizing on a cloud development platform that supports consistent agile processes that meet the needs of both your teams and executives. In addition to the improved productivity that standardization of project setups brings, there are several other quantifiable rewards to be realized: reuse, consistency, dependency management, scalability and lower overall maintenance costs. 4. Reduce costs by eliminating redundancy, managing a cohesive architecture across all cloud and IT systems with focus on enabling access to reusable software components and IP assets including open source Saugatuck Insight: While the use of open source alone can yield clear financial benefits and ensure higher-quality systems assets, managing a repository of software assets and metadata can speed the development process by eliminating costly rework and by avoiding reinventing the wheel. 5. Implement Agile ALM and DevOps with 3 key elements for control: Process control over entire lifecycle Ensure development controls for quality and efficiency Centralized platform with operations-centric controls across the applications lifecycle Saugatuck Insight: Control over the lifecycle process, embracing the rapid development approach of Agile and the collaboration between developers and operations of DevOps, ensures not only that development will be quick and responsive, but also that when transitioned into production, system assets will operate as efficiently and effectively as designed. 6. Develop and manage fully-automated handover process leveraging test and production infrastructure from choice of public and private clouds Saugatuck Insight: Similar in benefits to standardization of project setups, fullyautomated handovers enable improved productivity, consistency and transform the test and production transitions from an art into a science that can be measured, improved and managed. 7. Assure efficient provider management in a multi-sourced environment, for example, an instance of CollabNet s TeamForge hosted at a T-Systems private Cloud, integrated to Amazon for elastic build-and-test resources Saugatuck Insight: When multiple external resources are brought together across private and public Clouds, successful development depends upon proactive management of solution providers, their service levels and resources for support Saugatuck Technology Inc. 5

8 MEETING THE CHALLENGE Managing the hybrid Cloud through ongoing, continuous delivery of development assets, the integration of Cloud solutions, both developed and subscribed and managing their ongoing change is a truly complex challenge. Enterprise Cloud developers can meet that challenge, while boosting productivity and quality and reducing capital investment, all at the same time. Ultimately, Enterprise Cloud developers need a coherent platform which includes capabilities to develop, test, manage and maintain applications in the Cloud, a comprehensive lifecycle management methodology to ensure consistency and transparency, and a common target architecture that can be built up, brick by brick, from multiple ongoing project efforts. Putting these three key strategies in place has enabled companies of all sizes whether a large and complex business enterprise, or an emerging Cloud startup, or an international systems integrator coordinating dozens of Enterprise Cloud Development projects to build and implement new categories of Cloudbased applications, including collaboration, mobile, social and analytics, yet without the upfront capital costs normally associated with tooling up a new IT development capability. Enterprise Cloud Development is in its early stages. Looking out across the next several years, as we witness the rise of the hybrid Cloud, and the later shift to the pure-play Cloud, one thing is very clear. A major transformation is now underway, as what has historically operated behind firewalls is migrating to the public Cloud, to private Clouds and internal private Clouds. Across these Clouds, business solutions must interoperate, share data and deliver value to customers, suppliers and other business partners. Not only across Clouds, but across geographies, organizations and work environments, the emerging Boundary-free Enterprise will integrate and interoperate through collaborative, mobile, social, and analytics capabilities and applications with no single platform, but rather an exchange of value across these multiple platforms. The maturing of Enterprise Cloud Development is inevitable. Yet already we can see the guidelines necessary to success in the hybrid Cloud and beyond. The seven best practices itemized in this thought leadership paper, are seven proven ways to realize success in developing for the Cloud. The risks and rewards of Enterprise Cloud Development may seem, on the one hand, daunting, and on the other, difficult to attain. Meeting the challenge is really just a matter of following these proven practices, measuring the results, making improvements where possible and managing the toolsets, the lifecycle methods, and the target architecture, as the Boundary-free Enterprise continues evolving in the Cloud Saugatuck Technology Inc. 6

9 SPONSOR PERSPECTIVE: COLLABNET AND ENTERPRISE CLOUD DEVELOPMENT Over the last decade, CollabNet successfully pioneered collaborative and distributed agile software development in the cloud for many of the world s largest organizations. We see Enterprise Cloud Development as the evolution of basic cloud development that enables enterprises to embrace the cloud in a hybrid way at their own pace. The CollabNet Blueprint for Enterprise Cloud Development maps a path that enables organizations to leverage the benefits of the hybrid cloud in five steps. At each step, we offer a combination of tools and services that deliver incremental value and collaboration, and positions you for the next stage in the process. The CollabNet 5-step blueprint lines up quite well to the Saugatuck 7 Best Practices for the Hybrid Cloud. The Saugatuck Best practices 1 and 2 line up well with CollabNet step 1, practices 3 and 4 with step 2, practices 5 and 6 with steps 3 and 4, and practice 7 with step 5. CollabNet s Enterprise Cloud Development approach speeds cycle times and controls costs, while improving enterprise visibility and maintaining compliance standards. We ve seen customers achieve anywhere from 60 to 80% improvements in cost savings, productivity, and time-to-market acceleration through the adoption of Enterprise Cloud Development. To implement Enterprise Cloud Development, CollabNet has helped thousands of organizations establish private shared cloud development platforms, running on their own infrastructure or on infrastructure hosted and managed by CollabNet. This platform is built around TeamForge, the leading solution for end-to-end application lifecycle management. The TeamForge open architecture lets you recoup existing investments in your corporate tools, including Subversion, founded by CollabNet. It also provides easy plug-in to a wide choice of third party tools and build, test, and deployment clouds, both on-premise as well as public. CollabNet helps enterprises leverage public compute assets, including those provided by CollabNet itself. Our hosted, public cloud development platform, CloudForge dpaas, enables organizations to Develop and Deploy in seconds, using a wide range if tools, application frameworks, or run clouds. You can deploy code to your public and private cloud, or to your favorite IaaS and PaaS cloud providers. CollabNet also provides hybrid cloud services that connect CollabNet's on premise products to our Cloud- Forge dpaas Platform. Our currently available hybrid cloud service, CloudBackup, provides seamless data archiving, redundancy, and migration capabilities for any on premise user of TeamForge or Subversion Edge, without leaving their own desktop environment. CollabNet s implementation, consulting and training services are based on a decade of practical experience in getting workgroups on boarded quickly and then guiding organizations to a coherent Enterprise Cloud Development strategy to accelerate their enterprise application development and delivery. Learn more about CollabNet and Enterprise Cloud Development at Saugatuck Technology Inc. 6

10 SAUGATUCK OFFERINGS AND SERVICES Saugatuck Technology provides subscription research / advisory and consulting services to senior business and IT executives, technology and software vendors, business / IT services providers, and investors. Our Mission is to help our clients make better business decisions and create new business value through trusted and objective insights into the key market trends and emerging technologies driving real change. Over the last few years, this has included a major focus on Software-as-a-Service (SaaS), Cloud Infrastructure, and Social Computing, among other key trends. CONTINUOUS RESEARCH SERVICES (CRS) Subscription research / advisory services that provide independent / unbiased analysis, insights and guidance into the most important emerging technologies driving change in business computing. We are experts in Cloud Business and Cloud IT, among other key market trends / technologies - with a balanced view that is valued by both providers and consumers of technology-enabled products / services. USER STRATEGIC CONSULTING SERVICES Leadership and Planning Workshops Strategy and Program Assessments Vendor Selection / Evaluations Cloud Transition / Migration and Mgmt Best Practices VENDOR STRATEGIC CONSULTING SERVICES Market Assessment Strategy Validation Opportunity Analysis Positioning / Messaging / Go-to-Market Strategies Competitive Analysis THOUGHT-LEADERSHIP PROGRAMS Custom research programs targeting key technology and business/it investment decisions of CIOs, CFOs and senior business executives, delivered as research reports, position papers or executive presentations. VALUE-ADDED SERVICES Competitive and market intelligence Investment advisory services (M&A support, due diligence) Primary and Secondary market research. To learn more about Saugatuck consulting and research offerings, go to or Chris MacGregor. While there register for our complimentary Research Alerts, which are published on a weekly basis, or visit our Lens360 blog Saugatuck Technology Inc. SAUGATUCK LOCATIONS: US Headquarters: Westport, CT Silicon Valley: Santa Clara, CA Germany: Wiesbaden, DE

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