The Transformative Power of the Private Cloud: Why Your Organization Can t Do Without It. March 2012

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1 The Transformative Power of the Private Cloud: Why Your Organization Can t Do Without It March 2012

2 The Transformative Power of the Private Cloud: Why Your Organization Can t Do Without It 2 Introduction Economics have always driven major change in information technology (IT), and today, cloud computing represents the latest example. The cloud's arrival in business organizations has been likened 1 to the introduction of electricity to the once-steam-powered manufacturing industry: inevitable, irreversible, and instigating such a shift in operations that unintended benefits continue to arise, often outdoing the intended advantages. The cloud requires new thinking, new goals, and a shift in an organization's cultural mindset and with these items come tremendous rewards for IT and, even more important, the business side of the house. Conservatively, cloud computing offers advantages in "productivity, collaboration, analytics, and application development," according to MIT Principal Research Scientist Andrew McAfee, who adds, "The cloud is here to stay, and companies that don't start exploring it now run the risk of falling behind their rivals." For large organizations with existing IT investments, private clouds a version in which a company owns its hardware, and its servers remain on its premises, behind the firewall there's the appeal of greater control and predictability. Private clouds also offer a more streamlined and so more agile solution that, comprising infrastructure, platform, and server services, can truly be thought of as "IT-as-a-Service." In industries where compliance requirements make security and data control particular concerns, private clouds also prevent IT decision-makers from having to choose between peace of mind and the benefits of a new business architecture that research firm Gartner says "the majority" of its clients are now pursuing. 2 Why Keep It Private? A public cloud addresses the needs of some organizations, based on its four key features. Pooled resources computing, storage, networking, and software shared by multiple customers or groups make for better economies of scale and so offer notable savings. Self-service capabilities enable users to proactively manage their IT needs through interactive portals, freeing IT staff to concentrate on bigger-picture agendas. The vastness of the cloud makes it simple and instant to scale up or back, whether to accommodate a burst of traffic or a long-anticipated slow month. And finally, pay-as-you-go capabilities let users pay for only what they use, again benefitting the bottom line. Private clouds also offer these same benefits. But by essentially putting an abstract cloud interface over existing IT resources, they also offer a much richer experience that builds on existing investments. For example: 1 Andrew McAfee, principal research scientist, MIT Center for Digital Business, in the Harvard Business Review

3 The Transformative Power of the Private Cloud: Why Your Organization Can t Do Without It 3 Focus on Applications: Just as applications have become quintessential to consumers' mobile experiences, so are they now intrinsic to enterprise operations. With a private cloud, IT can do more than simply manage business-critical apps. The private cloud makes it possible to deploy new and legacy applications-as-a-service which users can better help themselves to, as needed. The private cloud also offers more nuanced and smarter control of applications, making it possible to optimize their lifecycles, improve performance, gain critical insights into captured data, and to be alerted to issues more quickly, so that they can be addressed immediately, meeting SLA goals and keeping customer satisfaction high. Support for Mixed Environments: In a private cloud, you call the shots, which means supporting as many mobile OS environments as your employees use. There's support for configuration across platforms and toolsets, and applications can be developed using multiple app toolsets. With comprehensive support for heterogeneous IT environments, a business's needs never have to come second to an IT vendor's particularities. Redefining IT, Redefining What's Possible: Order some devices, buy a server, set it all up, and hope it all lasts a few years before and it breaks and you start again: this was status quo for yesterday's IT. Today, the cloud absolutely redefines business agility and economics, the innovation that's possible through better information, and the role that IT plays in business not simply keeping it running, but helping to drive it. The private cloud introduces fundamentally new capabilities that can have long-term implications on a company's future. Research firm IDC has written that there's an "urgent need" for IT to better align itself with business goals. To this end, it explained in a recent cloud computing whitepaper, 3 "Private clouds present an opportunity to accelerate the shift to a more fully automated, self-service-centric form of computing to reduce costs and to better align with the speed of business." Cost Benefits: Private clouds help companies to be more nimble, enabling them to make smarter and more specialized use of their existing investments, infrastructure and skill sets. This not only increases revenue, but for very large enterprises it can even come at an overall cost that's lower 4 than public cloud solutions. When evaluating private cloud solutions, consider the components you'll need and which vendors can deliver on these. While you can work with multiple vendors to create a private cloud, you ll need to assess each

4 The Transformative Power of the Private Cloud: Why Your Organization Can t Do Without It 4 component they can provide and determine if they all work well together. There's also the option of going with a single vendor that can custom-build an end-to-end solution, from the hypervisor to the application service management software. Microsoft, for example, can help you build a solution, refer you to trusted partners, and offer an ROI Calculator to help compare the costs of their solution versus competitors'. How to Get Started When you're ready to begin building a private cloud, start by asking your current vendors for advice and about when they'll be making cloud versions of their offerings. Look for vendors with proven experience in virtualization and especially VM management. While virtualization is important, private clouds are about far more than that: it's the abstraction of computing resources from infrastructure, as well as from virtual and traditional machines, that enables private clouds to deliver near-instant scalability, a lower total cost of ownership, and a sharper focus on business goals, in addition to the efficiencies of virtualization. From there you'll need to: Decide what you'd like to run in the private cloud, particularly which applications are scalable and can take advantage of the cloud Standardize on a cloud-ready platform that can make efficient use of existing hardware assets, as well as to cost-effectively streamline physical and virtual server management Enable self-service features for application users, and create a service model that binds the application's architecture to the resources where the application is hosted Set up process automation capabilities and provisioning tools that can configure and deploy the infrastructure and application layers Have a single go-to view for monitoring and managing assets attached to both virtual and physical server environments. One way to go about this is to buy a pre-validated configuration. A number of vendors offer hardware and software combinations that have been optimized for the private cloud. A second option is to build your own solution for which there's plenty of help available. Microsoft, for example, offers Microsoft Services, which has a set of "engagements" that help to reduce the risks, costs, and time associated with testing and deploying a cloud environment. Save on all three and learn from the tested experiences of trusted partners. Finally, a third option is to choose a service provider to host a private cloud for you.

5 The Transformative Power of the Private Cloud: Why Your Organization Can t Do Without It 5 Also important to implementation is training. Again, the transition to the cloud is a major change, so you'll want to make sure that everyone on your team fully understands the initiative and is on board with it. Forrester Principal Analyst James Staten has warned that being mindful of the attitudes of key staff members toward such a project "could be the difference between a successful implementation and a catastrophic failure." 5 Still unsure? Experts advise that experimenting (safely) is a great way to discover the benefits and possibilities that a private cloud can offer. Consider running a trial, with just one team or unit working in the cloud, and comparing the results. Conclusion MIT's McAfee has written that, over time, the cost economics of building and running technology favor the cloud. Further, IDC, in a 2011 whitepaper, compiled a list of the benefits of private cloud computing, writing that they include a reduced burden on IT staff, greater scalability, faster reaction times to issues, better workload balancing, the ability to maintain control over data and regulatory environments, and the ability to provide consistent support and to better honor SLAs. All of these are terrific benefits. Harder to pin down, however, though just as compelling to IT decisionmakers, is the private cloud's potential particularly given its deep ties to applications the lifeblood of modern enterprises and the possibilities that are created with these industry-changing tools to truly redirect a company's future. Less an investment in hardware and software, private clouds are an investment in a company's most valuable assets: its people, their ideas, and what they can make happen when fully supported, informed, and mobile. 5