Vendor Focus for IBM Global Services: Consulting Services for Cloud Computing

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1 Research Publication Date: 22 February 2010 ID Number: G Vendor Focus for IBM Global Services: Consulting Services for Cloud Computing Susan Tan Amid the hype and buzz of cloud computing are very real benefits, but many companies are struggling to sort out the real opportunities for their organization from the market hype. Even fewer understand how to proceed on the journey to the cloud. This note discusses and analyzes IBM consulting services in helping clients understand and benefit from cloud computing. Key Findings Since cloud computing is fairly new, none of the service providers, including IBM, has deep experience in specific cloud implementations. However, IBM's emphasis on cloud computing, as well as the company's early experiences in cloud consulting work with clients, has positioned it well in this space. IBM has developed its own intellectual property, including a return on investment (ROI) tool, methodologies and technology know-how around cloud computing, and it is leveraging its current consulting principles, tools and methodologies, as appropriate, in cloud engagements. However, many of IBM's cloud consulting services are newly announced, and client work is too early to yield measurable benefits. IBM offers a broad spectrum of cloud consulting services, but clients can purchase individual services as needed, such as testing or security consulting. Recommendations Organizations must evolve to deal with the changes created by cloud computing and understand how to leverage cloud for its advantages while ignoring hype. Cloud consulting services, such as those offered by IBM, can help. Clients buying cloud consulting services from any provider, including IBM, need to be aware that they may be among one of the first engagements for the provider, and they are advised to work closely with the consultants and put in place clear measures of success. Clients considering buying IBM's cloud consulting services are advised to choose the right group to engage. Both Global Business Services (GBS) and Global Technology Services (GTS) offer cloud consulting services: GBS addresses the platform and application layers and the linkage to the business strategy and models, while GTS addresses the infrastructure layers of a cloud. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

2 WHAT YOU NEED TO KNOW IBM's consulting services for cloud computing target both enterprises adopting cloud for internal use, as well as enterprises that aspire to be cloud service providers. At the highest level, IBM consulting services help address the key areas of uncertainty; namely, whether cloud is beneficial to the business, how to implement cloud, and how to address security and availability concerns, as well as specific functions, such as testing services, security services and implementing IBM products for the cloud. VENDOR FOCUS Introduction In addition to a growing set of products and services that customers can procure as cloud services, IBM also offers a broad array of discrete consulting services that help clients evaluate the fit of cloud computing to their business and IT environment and the best route to taking advantage of this new phenomenon. This note analyzes IBM's consulting offerings related to cloud computing and the implications for clients. Vendor Background IBM ( is a large technology provider (approximately 400,000 employees at yearend 2009), with FY09 revenue of $95.8 billion (down 6.6% from FY08 revenue of $103.6 billion) and net income of 14.0% (up 8.8% from FY08 of 11.9%). Services including consulting, implementation and management make up the largest piece of its business where most of its revenue about 58% is derived. The remainder is divided roughly equally between software and hardware. Gartner estimates IBM's consulting and implementation revenue in 2008 to be $22.4 billion, which makes it the No. 1 market share leader. IBM Global Services is made up of two business units: Global Business Services and Global Technology Services. ANALYSIS Starting in 2007, IBM made a significant investment in cloud computing. IBM now has a growing set of products and services that customers can procure as cloud services. IBM's cloud services are delivered in three ways: Standardized services, such as , compute power and storage, on the IBM cloud (public cloud) Private cloud services built and/or run by IBM (private cloud) Implementing purpose-built infrastructure (such as CloudBurst) While some enterprises are ready to consume these cloud-related services, the majority are in the assessment stage. There is a need to help decision makers in these companies figure out how they should approach the cloud opportunity. IBM's cloud consulting services addresses this need. Cloud Consulting Services IBM's cloud consulting services are offered by both the GBS and GTS groups in IBM Global Services to help clients make decisions about using and providing cloud services. Some of these services (such as Strategy & Change Services for Cloud Adoption) are new and specifically Publication Date: 22 February 2010/ID Number: G Page 2 of 7

3 designed to address cloud computing, but like many other providers, IBM also has evolved its existing consulting services (such as Data Center Strategy and Design) to include the cloud dimension. The following is our analysis of IBM consulting services for cloud computing. Strategy & Change Services for Cloud Adoption Delivered by IBM GBS This service helps clients understand which applications/services they can best look to cloud providers for, and it recommends cloud pilots and road map based on business drivers. It is an eight- to 11-week engagement, and the output of this engagement includes a cloud readiness assessment, cost-benefit analysis, future-state vision, cloud service prioritization, migration road map and organizational change plan. The methods, tools and accelerators in this service, by and large, are based on the standard GBS's IT Strategy & Change arsenal. The Cloud ROI tool was developed by IBM Research. Offered by GBS, there is a specific focus on business drivers and the organizational change necessary to successfully transition into a cloud environment, which differentiates this service from its competitors'. CIOs interested in including cloud computing in their environments can accelerate their cloud strategy and planning, and do so in way that makes business sense and takes into account the organizational aspect, by engaging such a service. However, because it is a fairly new service, clients are advised to work closely with the IBM Consulting team to fully understand the inputs and outputs of this engagement, so as to better evaluate the opportunities and associated costs. Strategy & Change Services for Cloud Providers Delivered by IBM GBS For potential cloud service providers, this service, which spans eight to 16 weeks, helps them understand the opportunity, business model, operating strategies, services to provide, partnerships and alliances required, and implementation road map to becoming a cloud provider. This service is of interest to organizations that seek to provide external services on a cloud platform. For them, cloud can be a new and lower-cost way to deliver current services or a way to access new markets, such as small and midsize businesses or companies in emerging countries that can't afford traditional IT. IBM is seeing demand from telecommunications companies seeking to offer cloud services to complement their current offerings, healthcare companies hoping to provide cloud services to their clients, and governments seeking to provide standard cloud services to their agencies at a lower cost. IBM GBS is working with several clients on this service to create new business models and additional revenue streams, but because these are still early days, measurable results are not yet available. Also, IBM has worked with many software vendors to help them migrate to a software as a service (SaaS) model and for whom IBM provides hosting services. The insight IBM has gained from working with these vendors on SaaS helps the company in the provisioning of this service. Aspiring cloud providers can leverage IBM's methodology and tools to help them think through and strategize this opportunity, but they should complement IBM consultants with internal experts to come up with the business model and operating strategies. Testing Services for Cloud Delivered by IBM GBS Publication Date: 22 February 2010/ID Number: G Page 3 of 7

4 IBM's Testing Services for Cloud provides a business case for moving application functional testing activities to a cloud-based environment and a road map to streamline test environment management. It also identifies opportunities to reduce the cost associated with software test practices, defect prevention and application virtualization. IBM Testing Services for Cloud helps clients understand their test environment issues and craft a solution to improve cost-efficiency and create a more agile and test environment. This service identifies opportunities for improvement, establishes the business case, and identifies how solutions such as application virtualization can be deployed to remove infrastructure constraints. Testing Services for Cloud consist of four types of assessments that can be used alone or in conjunction: Defect Analysis Starter (DAS) assessment quantifies and prioritizes risk and opportunity and measures quality. DAS for the Environment analyzes environmental issues to identify defects and where automation a cloud-computing solution would help eliminate them. Server Consolidation and System Virtualization Assessment identifies specific opportunities for server consolidation, standardization and virtualization for additional cost savings and rapid provisioning of the test environment. Business Value Assessment for Application Virtualization helps assess opportunities to remove the constraints that are associated with the specific test environment by identifying where intelligent models can be deployed to alleviate these constraints, increasing the speed and effectiveness of testing. IBM reported very positive client response to its Testing Services for Cloud as companies seek to reduce costs, speed time to benefit and improve quality of the applications they move into production. Companies with high defect rates and difficulty in responding quickly to provision test environments should evaluate if they can benefit from such a service. Infrastructure Strategy and Planning for Cloud Computing Offered by GTS, this service focuses on assessing the infrastructure aspect of moving to cloud. It includes a business and IT executive workshop to identify if cloud computing can drive business value, ROI value case, diagnostic assessment of the current infrastructure readiness for cloud environment and a road map to successfully implement the selected cloud delivery model. Clients contemplating cloud computing can benefit from infrastructure strategy and planning services. While cloud computing is hyped to be a cost-saving approach, individual IT environmental factors may determine the business case of cloud computing. Identifying business value and doing an ROI analysis ground the decision on facts and serve as the yardstick to measure future gains. The use of public or hybrid cloud can have serious implications for the internal infrastructure. Assessing these impacts and addressing risks before embarking full steam into the journey can help mitigate any unintended consequences. Resiliency Consulting Services: Resilient Cloud Validation Publication Date: 22 February 2010/ID Number: G Page 4 of 7

5 Resilient Cloud Validation service validates the resiliency of a cloud provider delivering applications or services through public or private cloud environments, as well as its ability to sustain those resilience capabilities over time. Availability is a key concern of clients adopting cloud services. This service helps cloud providers demonstrate a level of reliability that traditional data center provides. With IBM's reputation in industrial-strength technology, having one's cloud services validated by IBM lends credibility to the cloud provider. Security Consulting Services IBM offers Security Consulting Services that are enhanced for the cloud. These services deliver a comprehensive, detailed assessment of the business and IT security risks; identify vulnerabilities and gaps in key security controls; create policy design and definitions for secure controls; and offer a prioritized list of recommendations against business goals for security best-practice improvements to help mitigate business risks. Concern about security is the No. 1 inhibitor to cloud adoption. By offering Security Consulting Services, IBM hopes to mitigate this inhibitor and help clients move into the cloud. Implementation Services In addition to pure advisory services, IBM also helps enterprise clients implement their cloud environment. It helps clients install, configure and deliver cloud computing inside the data center, including installing the CloudBurst appliance and building a private cloud environment leveraging new and existing infrastructure. Implications for Clients Cloud computing can have a far-reaching impact on IT and business. Organizations must evolve to deal with the changes and understand how to leverage cloud for its advantages while ignoring hype. Even as CIOs weigh the merits of cloud computing, business units are procuring cloud services on their own, potentially putting their organizations at risk. CIOs need to move quickly to understand the "what, why and when" of cloud computing. Cloud consulting services, such as those offered by IBM, can help. Many of IBM's cloud consulting services are newly announced, and client work is too early to yield measurable benefits. However, IBM has developed its own intellectual property, including an ROI tool, methodologies and technology know-how around cloud computing, and it has also leveraged its proven methods and approaches. Clients buying IBM cloud consulting services need to be aware that they may be among the early engagements for IBM, and they are advised to work closely with IBM consultants and put in place clear measures of success. They should evaluate and seek competitive bids from several of IBM's competitors to ensure they get the best match and value for their needs. Since cloud computing is fairly new, none of the service providers would have deep experience, but being one of the first to engage has its advantages: Service providers are keen to get a marquee client reference and will bid competitively, as well as perform to the best of their ability, to make the client referenceable. The possibility of sizable downstream cloud-building work can also act as a "carrot" for these providers. Clients considering buying IBM's cloud consulting services are also advised to choose the right group to engage. Both GBS and GTS offer cloud consulting services. In some cases, they may approach similar services from a different perspective. For example, both Strategy & Change and Publication Date: 22 February 2010/ID Number: G Page 5 of 7

6 Infrastructure Strategy and Planning services assess ROI and readiness for cloud computing. However, Strategy & Change, offered by GBS, has more of an emphasis on business outcomes and organizational change management, while Infrastructure Strategy and Planning, offered by GTS, focuses on the infrastructure readiness for cloud computing. The two services are thus complementary, but clients need to ensure they are buying from the group with the right talent and approach that best meet their needs. RECOMMENDED READING "Vendor Focus for IBM 2009: Cloud-Computing Initiative" "The What, Why and When of Cloud Computing" Acronym Key and Glossary Terms ROI GBS GTS SaaS DAS return on investment Global Business Services Global Technology Services software as a service Defect Analysis Starter Company Information IBM Headquarters: Armonk, New York Founded: 1911 Ownership: Public Employees: Approximately 400,000 (at year-end 2008) Financial Data: Revenue $103.6 billion, FY08 Partners: Many Publication Date: 22 February 2010/ID Number: G Page 6 of 7

7 REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT U.S.A European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo JAPAN Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, andar World Trade Center São Paulo SP BRAZIL Publication Date: 22 February 2010/ID Number: G Page 7 of 7

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