Cloud Computing Why, what, how?

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1 IBM Nederland B.V. Cloud Computing Why, what, how? Ronald Zoutendijk, Johan Arts,

2 1 Why Cloud Computing? Complexiteit

3 Agenda 1 Why Cloud Computing? 2 What is Cloud Computing? (What isn t?) 3 How should we go about it? 4 IBM Cloud Portfolio 5 Closing

4 2 What is Cloud Computing? In our definition cloud computing the IT cloud is the actual delivery model and methodology. It has specific attributes W hat is Cloud Computing Cloud is a user experience and a business model Cloud computing is an emerging style of IT delivery in which applications, data, and IT resources are rapidly provisioned and provided as standardized offerings to users over the web in a flexible pricing model Cloud is an infrastructure management and services delivery methodology Cloud computing is a way of managing large numbers of highly virtualized resources such that, from a management perspective, they resemble a single large resource. This can then be used to deliver services with elastic scaling Service Consumers Monitor & Manage Services & Resources Datacenter Infrastructure Access Services IT Cloud Cloud Administrator 4 Service Catalog, Component Library Component Vendors/ Software Publishers Publish & Update Components, Service Templates

5 2 What is Cloud Computing? These are the attributes explained in more detail 5 Common Attribute Details Standardized offerings Uniform offerings readily available from a services catalogue on a metered basis Elastic scaling Resources scale up and down by large factors as the demand changes Rapid provisioning IT and network capacity and capabilities are ideally automatically rapidly provisioned using Internet standards without transferring ownership of resources Advanced virtualization IT resources from servers to storage, network and applications are pooled and virtualized to provide an implementation independent, efficient infrastructure Flexible pricing Utility pricing, variable payments, pay-by-consumption and subscription models make pricing of IT services more flexible

6 2 What is Cloud Computing? Lets look at a simple example of cloud as a delivery model for standard services Flexible priced: THE PIZZA CLOUD You pay per pizza ordered PIZZA AS A SERVICE Elastic scaling: You order 1, 2, 3 or more Rapid prov.: Pizza (service) in 3 minutes ready Standard off.: Only 4 flavour of pizza 6 level: Only 1 level of service

7 2 What is Cloud Computing? The service delivered from the delivery model are called cloud services which are divided here in four layers. Examples Employee Benefits Mgmt. Industry-specific Processes Procurement Business Travel Business Process-as-a-Service Collaboration CRM/ERP/HR Industry Applications Financials Application-as-a-Service Web 2.0 Application Runtime Middleware Database Java Runtime Development Tooling Platform-as-a-Service Servers Networking Data Center Fabric Storage Shared virtualized, dynamic provisioning Infrastructure-as-a-Service 7

8 2 What is Cloud Computing? Because of the four cloud services layers it is difficult to define where certain IT parts fit as they seem to move from the service side into the cloud delivery model THE CLOUD? CLOUD SERVICE? Cloud Infrastructure Middleware Servers Collaboration Database Monitor & Manage Services & Resources Service Catalog, Component Library Networking Data Center Fabric CRM/ERP/HR Java Runtime Development Tooling Industry Applications Storage Cloud Administrator 8 Web 2.0 Application Runtime Financials

9 2 What is Cloud Computing? IBM sees different delivery models that will be used concurrently for the coming years to support all IT services depending on workload characteristics Over time, IT workloads will move to Cloud delivery models as applicable for the client. Examples: Service Consumers Services Services Service s Service Integration Service Integration Service Integration Traditional Enterprise IT Private Cloud Public Clouds Test Systems Developer Systems Storage Cloud Compute as a Service Storage as a Service Software as a Service Enterprise Mission Critical Packaged Apps High Compliancy 9

10 2 What is Cloud Computing? Examples of workloads that we see moving to a cloud computing delivery or consumption model Single virtual appliance workloads Web application servers Test and Pre-production systems Mature packaged offerings, like and collaboration Software development environments Batch processing jobs with limited security requirements Isolated workloads where latency between components is not an issue Storage Solutions/Storage as a Service Backup Solutions/Backup & Restore as a Service Some data intensive workloads

11 2 What is Cloud Computing? Examples of workloads which may not be ready for cloud delivery today? Workloads which depend on sensitive data normally restricted to the Enterprise Employee Information - Most companies are not ready to move their LDAP server into a public cloud because of the sensitivity of the data Health Care Records - May not be ready to move until the security of the cloud provider is well established Workloads composed of multiple, co-dependent services High throughput online transaction processing Workloads requiring a high level of auditability, accountability Workloads subject to Sarbanes-Oxley, for example Workloads based on 3rd party software which does not have a virtualization or cloud aware licensing strategy Workloads requiring detailed chargeback or utilization measurement as required for capacity planning or departmental level billing Workloads requiring customization (e.g. customized SaaS)

12 2 What is Cloud Computing? Overcoming inefficiencies

13 Agenda 1 Why Cloud Computing? 2 What is Cloud Computing? (What isn t?) 3 How should we go about it? 4 IBM Cloud Portfolio 5 Closing

14 3 How should we go about it? When adopting cloud computing it is of great importance to use a structured approach to ensure outcomes of reduced costs, improved service and managed risks Approach*: 1. Create strategic view and define the benefits, which type of cloud services are most benefitial? 2. Assess readiness of workloads to be migrated 3. Assess organisational, process, tooling and governance impact and start an adoption plan 4. Select implementation projects based on strategy and implement the selected workloads as IT services. *For the first three steps IBM has consulting services available

15 3 How should we go about it? IBM has introduced 3 choices to deploy workloads based on cloud computing Smart Business Services cloud services delivered. 1. Standardized services on the IBM cloud. 2. Private cloud services, behind your firewall, built and/or run by IBM. Smart Business Systems purpose-built infrastructure. 3. Integrated Service Delivery Platform Analytics Collaboration Development and Test Desktop and Devices Infrastructure Compute Infrastructure Storage Business Services

16 3 How should we go about it? New deployment choices aligned to different workloads Analytics Collaboration Developm ent and Test Desktop and Devices Infrastructure Com pute Infrastructure Storage Business Services IBM Smart Business Desktop on the IBM Cloud Smart Business on the IBM Cloud Standardized services on the IBM Cloud IBM LotusLiv e inotes IBM Lotus Liv e Smart Business Cloud Private cloud services, behind your firewall, built and/or managed by IBM IBM Smart Analy tics Cloud Lotus Foundation IBM Smart Business Dev & Test on the IBM Cloud (Beta) IBM Smart Business End User Support-IBM Serv ice Assist IBM Smart Business Test Cloud IBM Smart Business Desktop Cloud IBM Compute on Demand IBM Inf ormation Protection Serv ices IBM BPM Blueworks (Design tools) IBM Smart Business Expense Reporting on the IBM Cloud IBM Smart Business Storage Cloud Smart Business Systems Pre-integrated, workload optimized systems IBM Smart Analy tics Sy stem IBM CloudBurst IBM Inf ormation Archiv e IBM Smart Business f or SMB (backed by the IBM cloud)

17 3 How should we go about it? Transformation Roadmap private cloud Reduce infrastructure complexity Reduce staffing requirements Improve business resilience (manage fewer things better) Improve operational costs/reduce TCO Remove physical resource boundaries Increased hardware utilization Allocate less than physical boundary Reduce hardware costs Simplify deployments Dynamic Optimize Cloud Automate Shared Simplified Standardized Services Dramatically reduce deployment cycles Granular service metering and billing Massively scalable Autonomic Flexible delivery enables new processes and services Self-Service Elastic Automatic service metering and billing Industrialized service delivery Economies of scale Virtualize Consolidate

18 3 How should we go about it? A typical workload that is moving to private cloud delivery today is test workloads because of the challenges faced today 30% to 50% of all Servers within a typical IT environment are dedicated to Test Most Test Servers run at less than 10% utilization, if they are running at all IT staff report a top challenge is finding available resources to perform tests in order to move new applications into production 30% of all defects are caused by wrongly configured test environments Testing backlog is often very long and single largest factor in the delay new application deployments Test environments are seen as expensive and providing little real business value. * Industry Developments and Models Global Testing Services: Coming of Age, IDC, 2008 and IBM Internal Reports 18

19 3 How should we go about it? How can cloud computing characteristics improve the test environment? Common attributes Advanced virtualization Rapid provisioning Test resources are pooled and virtualized. Benefits Providing efficient implementationindependent infrastructure. Test resources are provisioned on Reducing test setup and execution demand. time and eliminating errors Service catalog ordering Test environments are readily available. Elastic scaling Test environments scale down and Optimizing resources utilization. up by large factors as the need changes. Flexible pricing Test resources are priced on supported topology and project phases. Metering and billing 19 Characteristics Enabling visibility, control and automation. Offering pricing schemes options for tests and user acceptance. Test resources used and reserved Prioritizing innovative projects. are charge-backed to LOBs.

20 3 How should we go about it? IBM Implementation Services for cloud computing design and implementation for test environments Features: Assessment of current test environment to project savings and ROI Strategy, planning, design and implementation services of the solution Create self-service portal with catalog of services Customer Benefits: Integrated platform combining service request management, provisioning / de-provisioning and change and configuration management Reduce IT labor cost by 50% + reduce labor for configuration, operations, management and monitoring of the test environment 75% + Capital utlization improvement; Significant license cost reduction Reduce Test Provisioning cycle times from weeks to minutes Test Environments In the Cloud 20 Improve Quality- eliminate 30% + of all defects that come from faulty configurations.

21 IBM CloudBurst: An Integrated Platform Built for Growth Data Center Optimization Through Modularity End to End Service Management Architectural and process level integration that delivers business aligned Visibility, Control and Automation of all Data Center Elements Modular, Self-contained, Scalable Work load Delivery Platform Service Management WORKLOAD A Modular, Self-contained, Scalable Work load Delivery Platform Service Management WORKLOAD B Legacy Environment : NON IBM Solutions Requiring workload connectivity Service Management WORKLOAD C

22 3 How should we go about it? An example: IBM Technology Adoption Program uses cloud to help reduce expenses and drive innovation. Without cloud Business challenge: Reduce operational expenses and capital investment in order to fund innovation Solution: Develop an internal Collaboration Innovation cloud using IBM technology Benefits: Dramatic labor (-80.7 percent) and capital depreciation (-91.6 percent) savings One of IBM s most successful solutions with over 80,000 participants $3.4M annual expense New development Software and other costs With cloud $1.03M annual expense Liberated funding for transformation investment or direct saving New development (for businessenabling capabilities) Labor costs (operations and maintenance ) Strategic change capacity Deployment (1-time) Software and other costs Depreciation (and amortization) Labor cost ( percent) Depreciation ( percent) Annual cost of operation ( percent) Note: 5-year depreciation period with 5 percent discount rate

23 3 How should we go about it? ROI analysis example- medium # of servers Payback Period (months) Total Initial Investment for Test Cloud Net Present Value (NPV) 6.82 $302, $935, Estimated ROI over 3 years Estimated avg. annual ROI Hardware 10% Software 1% Cumulative Expenses % % Year 1 Saving by Category Testing Productivity 25% Cumulative Cost Comparison -- With and without Cloud $5,000, $4,500, $4,000, $3,500, $3,000, $2,500, $2,000, $1,500, $1,000, $500, $0.00 Transformation Point Year-1 Year-2 Year-3 Current IT Model Accumulated Costs Test Cloud Model Accumulated Costs Provisioning Cost 22% Sys. Admin. Cost 42% = Service Management driven savings ROI projections from IBM Research Study 2009

24 3 How should we go about it? Service Management- the key to unlocking cloud savings On average, 81%* of Cloud payback is driven by labor savings enabled by service management A service management system provides the visibility, control and automation needed for efficient cloud delivery in both public and private implementations: Simplify user interaction with IT User friendly self-service interface accelerates time to value Service catalog enables standards which drive consistent service delivery Provisioning enables policies to lower cost Automated provisioning and de-provisioning speeds service delivery Provisioning policies allow release and reuse of assets Increase system administrator productivity Move from management silos to a service management system *Average of the three studies referenced in this presentation which are based on IBM Research study

25 Agenda 1 Why Cloud Computing? 2 What is Cloud Computing? (What isn t?) 3 How should we go about it? 4 IBM Cloud Portfolio 5 Closing

26 4 IBM Cloud Portfolio IBM Cloud Portfolio Strategy Enable our customers to leverage cloud computing through designing, building, and delivering Service Assets Cloud Consulting Cloud Implementation Cloud Delivered CLOUD ENABLING PRODUCTS & ASSETS Service Management Base IBM Products and Technologies Service Automation Manager Service Availability Service Security Systems Virtualization Management Virtual Resource Pools Virtualized Servers and Storage bringing clarity and focus. 26

27 Cloud Component Offerings by IBM Service Delivery & Management Automated delivery of Cloud services Self-Service provisioning of virtual resources Monitoring and managing virtual resources Optimizing usage of virtual resources Security Management Securing virtual and physical networks Encrypt data outside company firewall Providing access across various security domains Storage Management Data recovery for Cloud storage Creating Cloud storage environment Collaborative Application Lifecycle Mgt Quality Management Application Server Provisioning Dispensing virtual images Servers, Storage Creating virtualized infrastructure 27 IBM Systems and Technology IBM System Storage

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