EDC Collaboration White Paper Cloud Companion SM IT Services Delivery Transformation

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1 EDC Collaboration IT Delivery Transformation By W. Fred Rowell Vice President and Chief Technology Officer Companion Data, LLC

2 IT Delivery Transformation Contents Introduction... 1 Cloud DNA... 1 Through the Lens of a Cloud An Enterprise Data Center Migration... 6 Companion Data as a Cloud Vendor... 6 Summary... 8 Appendix A: IT Service Transformation Grid... A Appendix B: Cloud Computing Capability Matrix... B Appendix C: NIST Definitions for Cloud Computing... C Appendix D: Sources... D List of Figures Figure 1 Cloud Watcher's Cheat Sheet... 1 Figure 2 IT Service Model Evolution... 2 Figure 3 IT Service Transformation Grid Sample... 5 Figure 4 IT Service Delivery Model Comparison... 6 Figure 5 Cloud Computing Capability Matrix [Excerpt]... 7 Figure 6 IT Service Transformation Grid... A This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved.

3 Introduction IT Delivery Transformation Cirrus, Altocumulus, Nimbostratus, Stratocumulus, Contrails, Billow, Mammatus, Orographic, and Pileus are all types of what? You may be scratching your head on this question; so to assist you the answer is Clouds. As you may recall from grade school not all clouds share all the same features, shapes, or sizes, but they are all considered clouds. However, if you are planning an outdoor event the specific type of clouds becomes very important and critical to your success so know your cloud types. Now look at these, SaaS, IaaS, and PaaS are all types of what? Correct Cloud Computing offerings a.k.a Cloud. As with the clouds of nature these types of cloud computing do not share all the same features, functionally, security, and cost structures, but are considered an implementation of Cloud. As with knowing the cloud types for a successful outdoor event, knowing which type of Cloud can be leveraged by a consumer is critical to transforming the way IT services are delivered. Cloud has quickly become an emerging trend that has introduced significant benefits as well as confusion in the IT industry. The term is applied freely to various implementations of IT solutions whereby making it extremely difficult to know if an IT solution, designated as a cloud computing offering, delivers on the promises of Cloud or is just a marketing pitch. To this end, Companion Data (CDS) welcomes the opportunity to provide this document as a reference guide to demystify the world of Cloud. Cloud DNA Common Cloud Computing Types Is Cloud a revolutionary technology or a transformation of traditional IT service delivery? The last acknowledged revolutionary technology was client/server. This revolution was initiated by the introduction of Intel s x86 server / workstation hardware into the IT environment that was dominated by mainframes and micro computers. Intel s entrance into this environment has forever changed the capabilities of computing. Looking at IT environments that are supporting Cloud it is clear that the improvements in virtualization technologies played a major role in growth of Cloud. However, Cloud could technically occur without virtualization, but, it would be a difficult economic model to sustain. Therefore, other than the improvements noted in virtualization technologies there is no evidence supporting the entrance of a revolutionary technology that created the Cloud. This leaves the transformation of traditional IT service delivery as the genesis of the Cloud marketplace, but why? SaaS IaaS PaaS Description Storage as a Service Infrastructure as a Service Platform as a Service Figure 1 Cloud Watcher's Cheat Sheet This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page 1

4 IT Delivery Transformation To assist in answering why, Figure 2 illustrates how Cloud is delivered as compared to traditional IT services. This figure presents the progression of IT service delivery models from a traditional on-premise delivery model transitioning to an Internet service delivery model. There are some interesting consequences, worth noting, that occur as a consumer migrates away from a traditional model. Figure 2 IT Service Model Evolution These consequences represent the promises and concessions that the Cloud brings to the marketplace. The following describes these promises and concessions from both a consumer s and provider s viewpoint: This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page 2

5 IT Delivery Transformation Promises Cost Structure: is moved from a capital intensive structure to a usage based subscription cost structure and incurs a reduction in his internal IT labor costs, thus improving cash flow. Flexibility / Agility: can quickly stand up new computing resources, without any capital expenditures, using the excess capacity made available from the provider as part of the subscription cost. On-Demand : can increase / decrease his capacity as necessary without incurring fees. Concessions Less Functionally / Integration: concedes functionally to achieve a reduction in cost and flexibility in service delivery. Please note - there is one area that the consumer will have major difficulties in conceding in functionally and that is in the area of security. In fact, this has been the major area that has restrained the growth of Public cloud computing offerings whereas in a Private cloud computing offering security functionally can be implemented to the consumer s requirements. Increased Standardization: concedes specific technology architecture / configuration deployments and upgrades. Less Customization: concedes to utilize the service as delivered without organizational specific modifications. Provider Promises Less functionally / integration: To be able to support the consumer s cost structure requirements and resource requirements, the provider normally provides less functionally than what is installed in an on-premise solution. Increased standardization: Provider provides a standard resource offering for all consumers. Less Customization: Provider provides limited customization to reduce maintenance costs to the consumer. Provider Concessions Cost Structure: Provider assumes the risk of acquiring and maintaining the computing resources for the subscription based consumers. Flexibility / Agility: consumer s request. Provider must enable the ability to quickly standup resources for the On-Demand : Provider must be able to handle increases and decreases in resource requirements. The IT services delivery model foundation portrayed in Figure 2 serves as the backdrop to apply specific IT services against. This is in an effort to determine if from a: View: Can a consumer gain an economic and/or competitive position by transforming from a traditional IT service delivery model? This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page 3

6 IT Delivery Transformation Provider View: Can a provider gain economic advantage and market positioning by offering other IT service delivery models? In the progression from the traditional IT service delivery model care must be given to characteristics of the IT services being considered. Specifically, there are two basic types of IT services: Horizontal: that are normally standardized across all consumers like , SharePoint, Office Apps, human resource (HR) systems, enterprise resource planning (ERP), other office automation systems, etc. This similarly affords the Cloud provider the opportunity to leverage a large amount of compute resources, both in hardware, software, and operational maintenance, thus producing an aggressive cost structure to the consumer. These services are normally the lowhanging-fruit where the consumer and Cloud providers can achieve quick successes. Vertical: that are normally different across consumers and require specific environmental customizations, such as specialized security requirements, unique to the consumer, thus making the service unable to be leveraged by the provider across their delivery portfolio. These services are specific to each consumer or a small set of consumers and have less standardization, more customization and a higher subscription usage cost. As the above points out, horizontal services are highly scalable and share a highly leveraged and standardized infrastructure to provide access to a large population of unrelated users. Vertical services, onthe-other-hand, are less standardized, more customized with a smaller population of related users. These generalities hold constant while the Cloud is established as a Public Cloud and not as a Private Cloud. Public Cloud services are accessible by a limitless number of unrelated consumers; whereas Private Cloud consumers are normally smaller in scope and are related (i.e. employees of a corporation, the federal and state governments). It is this reduction in scope of a Private Cloud that brings features of vertical services into the horizontal services profile: Standardized to the smaller related group of consumer s requirements Customization to the smaller related group Dedicated infrastructure resources to the services of the Private Cloud Increases in the cost structure as compared to the same service provided by a Public Cloud The concept that the Cloud s DNA is first and foremost the movement to transform the traditional IT service delivery models more than just a simple thought; to this point, Figure 3 illustrates just one of the transformations from traditional IT service delivery to a Cloud delivery. Figure 3 demonstrates the movement of IT services from the Traditional Service Delivery model to the Software-as-a-Service model. To see the complete grid of IT Service Delivery transformations, please review Figure 6 in Appendix A. This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page 4

7 IT Delivery Transformation IT SERVICE TRANSFORMATION GRID SAMPLE TRADITIONAL IT ENVIRONMENT Internal IT Service Delivery Model 1 CLOUD COMPUTING ENVIRONMENT SAAS Software As A Service Provider (Remote) Data Center Storage Hardware Applications System Software Operations Application Database Administration Engineering Server Engineering Development Technical Database Administration Disaster Recovery Backup / Recovery Remote Support Multi-Year License Fee + Support Maintenance Contracts Multi-Year License Fee + Support Maintenance Contracts Data Center Storage Hardware Applications System Software Engineering Operations Application Database Administration Server Engineering Development Technical Database Administration Disaster Recovery Backup / Recovery IT SERVICE TRANSFORMATION GRID SAMPLE Benefit Summary Cost Structure BENEFIT SUMMARY LEGEND Customization and Integration Functionality Standardization Across Customer Base Flexibility / Agility On Demand Figure 3 IT Service Transformation Grid Sample When viewed in this manner the confusion around the various technical implementations of Cloud are replaced with view of the new IT service delivery models placed in the light of how they can lower cost, add flexibility and add agility, therefore making Cloud a business choice and not a technology choice. This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page 5

8 IT Delivery Transformation Through the Lens of a Cloud An Enterprise Data Center Migration Imagine 22+ data centers across the United States all executing the same set of claim systems to process a portion of a larger base of subscriber s / provider s claims. Within each data center are dedicated computer resources (hardware and software), labor, power and vendor support to ensure the successful completion of the claims workload. Looking back at Figure 2 in the Cloud DNA Section, the IT service delivery model for the above scenario would be a traditional IT service delivery model for all 22+ sites. Additionally, the main IT service is a vertical in nature because there is no single claim system that can be used for all worldwide companies performing claims processing; however, there can be a set of standardized claims systems for this related group of consumers. This scenario was in place prior to the establishment of an Enterprise Data Center (EDC) program that began knowing that a transformation in the way IT was being delivery was necessary to reduce the administrative cost of processing claims while improving security. Should this service delivery model be considered as a Cloud solution? The comparison contained in Figure 4 presents a straightforward alignment of the solution to the Cloud s Software-as-a-Service solution therefore, showing that it is technically a Private Cloud solution. EDC IT Service Delivery Model Cost reduction through consolidation of 22+ Data Centers Centralization of the Claims Systems via a Private Creation of standard infrastructure Cost-per-claim More flexibility in adding claims workloads Software-as-a-Service (Private Cloud) Reduce cost through standardization and increased scale Via the Cloud (aka: ) provides access to a standard Software service In a Private Cloud strong standardization, with limited customization to the related group of consumers Subscription based pricing Workload flexibility and agility Figure 4 IT Service Delivery Model Comparison While the EDC program was not specifically labeled as being a Cloud program it unquestionably has the characteristics of the Cloud movement. It is an IT service delivery model that lowers cost, adds flexibility and agility, and provides accessibility to selected consumers. Companion Data as a Cloud Vendor The market hype seems to be focused on providing and/or using Public Cloud solutions for the horizontal services collaboration applications like and office applications. This focus does not portray the actual activity that is occurring; which is the transformation of the traditional IT service delivery model into This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page 6

9 IT Delivery Transformation new IT service delivery models that lowers cost, adds flexibility and agility, and provides accessibility to selected consumers. CDS has a proven track record of being able to transform into new IT service delivery models in a Private Cloud environment as seen in the IT service delivery transformation of the EDC program. The environment created for the EDC program incorporates all the technology and operational process knowledge necessary to provide Cloud solutions: ing Capabilities Virtualization Capabilities z/os IBM s top 2% data centers in size and technology z/linux One of the largest in the United States and in the World VMWare Large deployment existing of Windows and Linux guests Storage Multi-vendor virtualization and thin provisioning Labor 2,000+ IT Professionals Physical Environment Enterprise Class Data Center ITIL Process Adoption DOD, CMS, HIPAA, PCI Security Posture Assessing Cloud competences from the lens of the EDC program does provide a yard stick in which to appraise CDS capabilities in the Private Cloud market space; as would evaluating CDS capabilities against industry Cloud leaders provide a comparison of CDS capabilities in the Public Cloud market space. Therefore, using Infrastructure-as-a-Service Cloud offering as an example, features offered by industryleading Cloud providers have been documented for comparison. Figure 5, an excerpt of the matrix, illustrates the alignment between CDS and Public Cloud industry leaders (the entire matrix can be found in Appendix B). Features CDS GoGrid RackSpace Amazon Provisioning Rapid Server Deployment Load Balancer (HW/ SW) Multi-Tiered s Limited Shared Servers Dedicated Servers N/A Hybrid Hosting Solutions Private Connections TBD Figure 5 Cloud Computing Capability Matrix [Excerpt] Therefore, while CDS does not currently offer Cloud solutions in the horizontal services space, its offerings in the vertical space, as seen in the EDC program and the comparison to industry Cloud providers, demonstrate CDS capabilities as a Cloud provider. This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page 7

10 Summary IT Delivery Transformation There is in fact a movement underway that is changing the method in which IT services are being consumed. This movement is not based on a revolutionary technology, but on a transformation from the traditional IT service delivery models to new IT service delivery models that come with: Promises Lowers cost Adds flexibility and agility Concessions, to varying degrees, in Customization Standardization Functionally The industry is calling this movement Cloud Computing or just Cloud. And while the name is catchy, it does cause confusion for consumers that are questioning themselves about their entrance into this brave new world. Therefore, demystify this world by knowing your Clouds and the business impacts / disruptions that each type of Cloud would cause to your organization. This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page 8

11 IT Delivery Transformation Appendix A: IT Service Transformation Grid IT SERVICE TRANSFORMATION GRID TRADITIONAL IT ENVIRONMENT CLOUD COMPUTING ENVIRONMENT Internal IT Service Delivery Model 1 Hosting IT Service Delivery Model 2 IAAS Infrastructure As A Service PAAS Platform As A Service SAAS Software As A Service Provider (Remote) Data Center Storage Hardware Applications System Software Operations Management Application Database Administration Engineering Server Engineering Development Technical Database Administration Disaster Recovery Backup / Recovery Remote Support Multi-Year License Fee + Support Maintenance Contracts Multi-Year License Fee + Support Maintenance Contracts Data Center Storage Hardware Applications System Software Operations Application Database Administration Engineering Server Engineering Development Technical Database Administration Disaster Recovery Backup / Recovery Multi-Year License Fee + Support Maintenance Contracts Multi-Year License Fee + Support Maintenance Contracts Applications Data Center Storage Hardware Systems Software Operations Application Database Administration Engineering Development Technical Database Administration Disaster Recovery Backup / Recovery Server Engineer Applications Data Center Storage Hardware Systems Software Application Database Administration Engineering Development Operations Server Engineering Technical Database Administration Disaster Recovery Backup / Recovery Data Center Storage Hardware Applications System Software Engineering Testers Operations Application Database Administration Server Engineering Development Technical Database Administration Disaster Recovery Backup / Recovery IT SERVICE TRANSFORMATION GRID Benefit Summary Cost Structure BENEFIT SUMMARY LEGEND Customization and Integration Functionality Standardization Across Customer Base Flexibility / Agility On Demand Figure 6 IT Service Transformation Grid This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page A

12 IT Delivery Transformation Appendix B: Cloud Computing Capability Matrix Provisioning Features CDS GoGrid RackSpace Amazon Rapid Server Deployment Load Balancer (HW/ SW) Multi-Tiered s Shared Servers Dedicated Servers N/A Hybrid Hosting Solutions Private Connections TBD Security & Compliance Firewalls (Hardware or Software) VPN Accessibility Limited Intrusion Detection Limited Limited Host Intrusion Detection Virus / Malware Detection Operating System Patching Application Patching Infrastructure Audit Compliance Application (OS Instances, Application, and Data) Audit Compliance PCI, HIPAA, SAS 70, FISMA (High) SAS 70, PCI, HIPAA SAS 70, PCI, HIPAA SAS 70, PCI, HIPAA, FISMA(low), ISO Infrastructure OS / Application 24x7 Service Backup and Recovery Infrastructure (Storage,, Physical Server) Application (OS instances, Application, and Data) This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page B

13 IT Delivery Transformation Appendix C: NIST Definitions for Cloud Computing Infrastructure-as-a-Service (IaaS): Provides users [consumers] with processing, storage, networks, and other computing infrastructure resources. The users [consumers] does not manage or control the infrastructure, but has control over the operating systems, applications, and programming frameworks. Platform-as-a-Service (PaaS): Enables users [consumers] to deploy applications developed using specific programming languages or frameworks and tools onto the Cloud infrastructure. The user [consumer] does not manage or control the underlying infrastructure, but has control over the deployed applications. Software-as-a-Service (SaaS): Enables users [consumers] to access applications running on a Cloud infrastructure from various end-user devices (generally through a web browser). The user [consumer] does not manage or control the underlying Cloud infrastructure or individual application capabilities other than limited user-specific application settings This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page C

14 IT Delivery Transformation Appendix D: Sources Cloud Seven Clear Business Models Timothy Chou Various Cloud Research Documents from Gartner Group Various Cloud Research Documents from Cisco Various Cloud Research Documents from Oracle Various Cloud Research Documents from NIST Various Cloud Research Documents from Various Internet BLOGS, POSTs, etc. This material is a product of Companion Data, LLC. Any unauthorized use, Companion Data, LLC. All rights reserved. Page D

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