Timo Koskinen, Cloud Computing Leader & Chief Technologist, IBM Finland IBM Corporation

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1 Timo Koskinen, Cloud Computing Leader & Chief Technologist, IBM Finland

2 AGENDA Rethink IT Reinvent Business

3 Cloud Myths 1. Cloud is New Technology 2. If It s Virtualized, It s Cloud 3. SaaS, IaaS - It s All the Same 4. Only One Delivery Model The Internet 5. Public Cloud is the BIG Opportunity 6. Cloud is a NEW Revenue Opportunity

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5 Cloud computing represents the Industrialization of IT, similar to when: Telcos automated trafiic through switches to assure service and lower cost. Manufacturers started using robotics to improve quality and lower cost. Banks built the automated teller machine network to improve service and lower cost.

6 Cloud Computing is a new user experience and delivery model inspired by consumer Internet services. Cloud Computing exhibits the following key characteristics: 1. On- demand self- service, service catalog 2. Ubiquitous network access 3. Location independent resource pooling 4. Rapid elasticity 5. Pay per use/ Ilexible pricing models, eg, pay per use Monitor & Manage Services & Resources Datacenter Infrastructure Access Services Service Consumers People Services Business Services Applica2on Services Cloud Administrator IT Cloud Service Catalog, Component Library Component Vendors/ Software Publishers Publish & Update Components, Service Templates Pla3orm Services Infrastructure Services Clouds will transform the information technology (IT) industry profoundly change the way people work and companies operate. (Source: The Econonomist)

7 There is a spectrum of delivery models Private IT capabilities are provided as a service, over an intranet, within the enterprise and behind the 5irewall Corporate Firewall Public IT activities / functions are provided as a service, over the Internet Third-party hosted Third-party hosted and operated Enterprise data center Enterprise data center Enterprise Enterprise A Enterprise B A Users B Private cloud Managed private cloud Hosted private cloud Shared cloud services Public cloud services Private Implemented on client premises Client runs/ manages Third- party operated Enterprise owned Mission cri=cal Packaged applica=ons Third- party owned and operated Standardiza=on Centraliza=on Security Internal network Mix of shared and dedicated resources Shared facility and staff Subscrip=on or membership based Shared resources Elas=c scaling Pay as you go Public Internet Hybrid Internal and external service delivery methods are integrated

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9 Market trends Majority of services providers are more comfortable with private clouds. Private Clouds are viewed as suitable for many workloads, including core business Strong interest in moving just about any IT activity or workload to a Private Cloud Over 90% CSI s and ESP s use or plan to use in the next 12 months Clients are experimenting with Public Clouds for certain workloads Public Clouds used for web conferencing, , and CRM/sales force automation 20-30% use or plan to use in the next 12 months Private Clouds appeal across all industries while Public Clouds appeal to industries under margin pressure Private Clouds appeal to all industries with highest interest by Banking, Government, Healthcare, Insurance, Manufacturing, Transportation Public Clouds appeal for certain workloads in industries with high margin pressure

10 Enterprise Observations Investments in traditional IT is expected to be reduced from 69% to only 36% of the IT budget in just 10 years Q. Please estimate now much of your company s IT budget will be allocated to buying and managing these different types of IT services 100% 11% 27% Public Cloud 16% 80% 2% 2% 9% 7% Outsourced IT Private Cloud Hosted 60% 21% Private Cloud In House 69% 40% Tradi=onal IT 36% 20% F IDC s Cloud Computing Survey, January 2011 n=603

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12 Why companies would be interested in Clouds? Changing marketplace becoming international, connected & chaotic! Ensure growth and agility new business models emerging Competitive landscape new entrants coming to market

13 Why not earlier? we did not have virtualization software secure multi- tenancy proliferation of broadband networks

14 Enterprise Observations CIOs are under increasing pressure to deliver transformative business value with limited resources available Increased expectation 52% CAGR growth in self- service channels Increased opportunity 75% of non- IT executives believe cloud computing could drive value at their company Increased risk 8,562 public vulnerability disclosures in 2010 up 27% year- to- year Increased demands 10x growth in digital data from 2007 to 2011 Increased collaboration 80% Within six years, workers will spend an estimated 80% of their time collaborating Budgetary constraints 71% of the average IT budget is dedicated to ongoing operations.

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16 The market forces leading to Smarter Computing are driving the proliferation of Cloud computing 55% of business executives believe cloud enables business transformation and leaner, faster, more agile processes. Reinvent Business Faster time to market for new services EfIiciency Rethink IT Rapidly deliver services Increased focus on differentiated processes Meet changing customer expectations, direct access to technology Transformation Integrate services across cloud environments Increase efiiciency 60% of CIOs plan to use cloud up from 33% two years ago. 16

17 What is driving Cloud adoption? Cost takeout is cited as the top value consideration Cost savings is the key driver of public cloud adoption with clients seeking a 20-30% improvement in order to adopt Infrastructure Leverage Labor Leverage Virtualization of Hardware Utilization of Infrastructure Self Service Automation of Management Standardization of Workloads Drives lower capital requirements Virtualized environments only get benegits of scale if they are highly utilized Requires less support, less dependent on IT staff Take repeatable tasks and automate Fewer customizations mean fewer people required

18 Workloads may be at different levels of readiness for cloud Workloads and patterns are emerging Almost all workloads require connection to other IT services Collaboration and analytics meta-patterns are occurring

19 IBM s Cloud Portfolio: IBM has an extensive cloud portfolio that enables clients to beneiit from cloud across all service layers, deployment models, adoption patterns and projects. Business Travel Procurement CRM / ERP / HR Web 2.0 Application Runtime Database Employee Benefits Mgmt. Industry-specific Processes Collaboration Industry Applications Financials Development Tooling Middleware Java Runtime Storage Virtual Machines Images Shared Pool Virtual Network Business Process as a Service (BPaaS) So:ware as a Service (SaaS) Pla3orm as a Service (PaaS) Infrastructure as a Service (IaaS) Consulting & Implementation Services Business Systems Cloud Management System Infrastructure Components HPC Load Engine Security Hybrid Test tools SaaS Enablement Composite Deployment Desktops Pooling Governance Service Management Servers Storage Data Center Fabric Virtualization Networking Dynamic Provisioning

20 IBM drives client focused open standards and interoperability and, our cloud solutions are based on solid architecture models. Guidance to the multiple cloud standards- deiining bodies Establishing the criteria for open standards- based cloud computing Best practices, case studies, Use cases, requirements, IBM Cloud Computing Reference Architecture

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22 In Summary Cloud economics and technologies are real Clients can achieve signigicant ROI Enterprises can speed innovation Shift from assets to services & the change from a license model to subscription model Workloads will drive adoption Cloud architectures will Git workloads Service management is critical Multiple deployment models will co- exist Clouds will be integrated with each other and with traditional IT systems Open standards based architectures are required to enable integration Clients are leading the evolution Development & Test Collaboration Workplace & Desktop 22 22

23 Thank you 23 Timo Koskinen

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