The Future of IT: Drive New Consumption Models with Cloud and Hybrid IT

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1 Issue 1 The Future of IT: Drive New Consumption Models with Cloud and Hybrid IT Lead Strategic Business Outcomes in a Challenging IT Environment Featuring research from

2 Welcome 2 Welcome 4 From the Gartner Files: Top 10 Technology Trends, 2013: Cloud Computing and Hybrid IT Drive Future IT Models 8 About Cisco Giuliano Di Vitantonio, Vice President, Product Solutions and Marketing Now more than ever, IT departments must bring relevance to the business and promote IT initiatives that support strategic business objectives. IT needs to lead conversations with the business, guiding value-based discussions related to the services that IT provides. By taking a serviceoriented and consultative position, IT can keep up with the rapid pace of change in technology. But to do this, IT must evolve and become more adaptive and incorporate in its portfolio the wide range of consumption models enabled by the cloud. Chief information officers (CIOs) are finding themselves in an uncomfortable position. Cloud providers have made it easy to buy public cloud services with a swipe of a credit card. In many cases, IT is not involved in or aware of these transactions. However, IT will have to manage the consequences of these purchasing decisions. Just imagine the security implications of multiple rogue purchases across your organization. To overcome this challenge, CIOs need to engage the line-of-business (LoB) groups and take the lead as brokers of IT services. This role will help them establish credibility as strategic leaders who can confidently bridge the gap between business and technology. This point was underscored at the Gartner Symposium/ITxpo 2013 in Orlando, Florida, at which Gartner identified hybrid cloud and IT as a service broker in its Top 10 Strategic Technology Trends for The Future of IT: Drive New Consumption Models with Cloud and Hybrid IT is published by Cisco. Editorial content supplied by Cisco is independent of Gartner analysis. All Gartner research is used with Gartner s permission, and was originally published as part of Gartner s syndicated research service available to all entitled Gartner clients Gartner, Inc. and/or its affiliates. All rights reserved. The use of Gartner research in this publication does not indicate Gartner s endorsement of Cisco s products and/or strategies. Reproduction or distribution of this publication in any form without Gartner s 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. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see Guiding Principles on Independence and Objectivity on its website, 2

3 Also in the newsletter that follows this introduction, Top 10 Technology Trends, 2013: Cloud Computing and Hybrid IT Drive Future IT Models, Gartner states that most enterprises that consume cloud services will operate in a hybrid model in which they must secure, manage and govern what is in their environments, as well as external cloud services including those that have been acquired without IT involvement. This need for security and management means that all technology projects should be under IT supervision, regardless of whether they are projects that the business funds and of which IT is aware, or projects jointly funded or wholly funded by IT. Some of these projects may be outside IT s range of view. However, they are not outside the CIO s range of responsibility in the CIO s role as broker of IT services. As a broker of IT services, the CIO is actively engaged with the LoB groups, adding business value to the discussion in the early stages of development. The CIO takes the lead and helps ensure alignment of IT and business objectives. The CIO can be flexible in helping the LoB group select multiple sourcing options (public, private, and hybrid), with a full understanding of the technology requirements (security, service-level agreements [SLAs], etc.) behind each consumption model. The result is a business that is more agile in a challenging and competitive economic environment. Buy Cisco Powered cloud services offered by Cisco partners; Cisco s strategy to deliver public cloud services remains primarily partner based (for example, to consume public cloud infrastructure-as-a-service [IaaS] offerings, hosted collaboration services, etc.). Buy complete Cisco cloud services directly from Cisco for applications for which Cisco has differentiated intellectual property, such as collaboration, security, and network management (for example, Cisco WebEx, Cisco Cloud Web Security, and Cisco Meraki products). These flexible sourcing options tailored to your organization s specific cloud strategy can help you address critical business measures of value, including total cost of ownership (TCO), agility, and risk. Our professional and technical services provide the why and how for your cloud strategy. We can help you accelerate business value from cloud deployments. By responding to the role of business change with cloud solutions, IT departments that support LoB groups have found that our integrated approach to cloud brokerage and governance results in tangible gains in stakeholder satisfaction while reducing cost and risk, regardless of whether a solution deploys a private, public, or hybrid cloud. Source: Cisco Cisco s cloud strategy offers flexible sourcing options. You can: Build differentiated cloud services tailored to your needs by using Cisco cloud infrastructure products, cloud management and automation software, and solutions and professional services (for example, to build private cloud environments). 3

4 From the Gartner Files: Top 10 Technology Trends, 2013: Cloud Computing and Hybrid IT Drive Future IT Models Cloud computing continues to evolve, with new technologies emerging to support the dynamic creation of cloud services. IT departments in large enterprises should play the role of IT as a service broker, and train staffs to manage cloud provider relationships. Impacts The need to deal with hybrid environments gives rise to hybrid IT process models and the positioning of IT as a service broker (ITaaSB). As the use of multiple cloud services increases, enterprises should look to cloud service brokerages (CSBs) to facilitate consumption as part of an overall hybrid IT strategy. As cloud computing matures, IT departments will need to establish a more strategic approach to IT operations and service management. Dynamic infrastructure requirements make software-defined networking (SDN) a critical component of private cloud development and external service consumption. Recommendations IT departments in large enterprises should become ITaaSBs for their organizations. Design private cloud services with a hybrid future in mind, and ensure that future integration and interoperability is possible. Evaluate third-party CSBs that can facilitate the consumption of cloud services. Train IT staff to enable them to manage cloud provider relationships and contracts. When there is sufficient value in the IT operations management (ITOM) functions embedded in the cloud management platform (CMP), replace superfluous ITOM tools. CMP vendors may represent potential lock-in, so select them carefully. Coordinate server, network and storage teams to maximize the benefits of a policy-driven, software-controlled data center. Insist that vendors support open, standard northbound controller APIs to maximize flexibility and minimize lock-in. Analysis Cloud computing is an important and disruptive long-term force in the industry, with a significant potential for impact on every aspect of IT, the business and how users access applications, information and business services. Cloud computing is shifting from an isolated project to a central IT strategy, and most organizations now assume that cloud computing, in some form, will become a reality. Cloud computing and related technologies continue to evolve rapidly, and there is continuing confusion and misunderstanding as vendors cloud offerings proliferate and they hype cloud as a marketing term. Nevertheless, the cloud offers significant potential advantages in delivering greater business and IT agility, more rapid access to application enhancements, innovative new cloud-optimized applications, and a shift to operational costs and lower costs in some instances. Gartner estimates that total spending on cloud services will increase from $110 billion in 2012 to $210 billion in Gartner sees enterprise cloud strategies evolving in five key areas: Consuming cloud services Building private cloud services Securing, managing and governing hybrid IT and cloud Cloud-enabled and optimized applications Enterprise delivery of cloud services The primary focus during the past few years has been on building private cloud services and establishing models to determine if, when and where to consume cloud services. These continue to form the baseline for any successful cloud strategy. Companies that have not already established formal mechanisms to evaluate cloud services based on business benefits and workload/ data constraints must do so in 2013 or risk falling behind. Likewise, companies that have not examined how they can apply targeted technologies and techniques from the world of cloud computing to build a cloud-like data center risk falling behind. In 2013, technologies such as SDN and CMPs are influencing the design of private cloud computing, and will lead to advances in consuming external cloud services. The need to establish hybrid IT strategies that span traditional and new cloud models becomes an imperative in 2013, and hybrid models, in one form or another, will influence cloud strategies for the foreseeable future. Impacts and Recommendations The need to deal with hybrid environments gives rise to hybrid IT process models and the positioning of ITaaSB Most enterprises that consume cloud services will operate in a hybrid model in which they must secure, manage and govern what is in their environments, as well as external cloud services including those that have been acquired without IT involvement. Enterprises must deal with application development, delivery and integration patterns that need to be modified 4

5 5 FIGURE 1 Impacts and Top Recommendations for Top 10 Technology Trends, 2013: Cloud Computing and Hybrid IT Drive Future IT Models Design private cloud services with a hybrid future in mind, and ensure that future integration and interoperability are possible. Impacts The need to deal with hybrid environments gives rise to hybrid IT process models and the positioning of ITaaSB. As the use of multiple cloud services increases, enterprises should look to CSBs to facilitate consumption as part of an overall hybrid IT strategy. As cloud computing matures, IT departments must establish a more strategic approach to IT operations and service management. Dynamic infrastructure requirements make SDN a critical component of private cloud development and external service consumption. Source: Gartner (February 2013) Top Recommendations IT departments in larger enterprises should play the role of ITaaSB for their enterprise. Design private cloud services with a hybrid future in mind, and ensure future integration/interoperability is possible. Evaluate third-party CSBs that can facilitate the consumption of cloud services. Train IT staff to enable them to manage cloud provider relationships and contracts. Where feasible, replace superfluous ITOM tools with CMP functionality. Because they may represent a lock-in, select your CMP vendors carefully. Coordinate server, network and storage teams to maximize the benefits of a policydriven, software-controlled data center. Insist vendors support open, standard controller APIs to maximize flexibility and minimize lock-in. Determine the relative role of the IT organization and external brokers and integrators in fulfilling the hybrid IT mission. Establish security, management and governance models to coordinate the use of cloud services across isolation and provider boundaries, particularly across internal and external boundaries. As the use of multiple cloud services increases, enterprises should look to CSBs to facilitate consumption as part of an overall hybrid IT strategy As cloud computing adoption proliferates, so does the need for consumption assistance. CSB refers to the market model and roles that support the intermediation between cloud services and cloud consumers. A CSB primarily delivers three capabilities: to safely exploit this hybrid internal/ external, cloud/noncloud environment. Meanwhile, users continue to clamor for the speed, agility, flexibility, more choices and the perceived cost savings that cloud computing promises. Hybrid IT is emerging as an approach to deal with these complexities; however, hybrid IT does not refer to a particular technological approach or delivery model. Hybrid IT describes a new mission and operational model for IT in a dynamically multisourced, heterogeneous world. In hybrid IT, the role of the IT organization is to be the value-added enabler for the most effective and efficient use of services across the enterprise. Hybrid IT requires that the relationship between the IT department and the business evolve and expand. IT becomes the trusted broker for most, if not all, IT-based services, regardless of provider sourcing or the style of service delivery. In this ITaaSB model, IT takes responsibility for service delivery and service levels, even when those services are delivered by other providers. This eliminates the requirement for the enterprise user to be concerned about how a service is being implemented and acquired enabling them to focus strictly on using the service. As a broker, IT engages with the business to select services, while shielding them from many provider selection, style of computing choice and integration issues. It also ensures compliance with corporate and industry governance requirements. Recommendations: IT departments in larger enterprises should plan on playing the role of ITaaSB for their enterprises. Aggregation Integration Customization These capabilities can be delivered by both internal and external service providers to add value to one or more cloud services (generally public or hybrid, but possibly private) on behalf of one or more consumers of those services. As part of the move to ITaaSB, IT departments should explore how they can position themselves as internal CSBs by establishing a purchasing process that accommodates cloud adoption and encourages business units to come to the IT organization for advice and support. This key element of a hybrid IT model will 5

6 enable IT to track the services that business users are acquiring and bring a degree of governance to the process. However, IT must walk a fine line. If this process is used simply to erect a barrier to accessing cloud services, individuals will once again bypass IT. The enterprise CSB approach can be implemented by modifying existing processes and tools, such as internal portals and service catalogs. In addition, vendors of operations management and portal software, as well as external CSB providers, will offer tools to facilitate the process. Augmenting ITaaSB will be external CSBs. During the next three years, we expect the use of external cloud brokerage to accelerate, with an expanded set of providers and offerings. Deploying cloud services will involve substantial integration work, and many CSBs will deliver integration services and employ business process management suites to address this complexity. Steady investments by IT distributors and communication service providers for cloud aggregation brokerage offerings will help small or midsize businesses acquire, leverage and maximize investments involving multiple cloud services. Recommendations: Focus on the cloud and internal CSB as key elements of a larger hybrid IT approach. Establish an ITaaSB model to facilitate the use of external CSBs, as well as individual cloud services. Train IT staff in relationship management to better enable them to manage cloud provider relationships and contracts. Determine the strategic focus of a CSB provider and align this with your greatest need aggregation, integration or customization. Evaluate third-party CSBs that can facilitate the consumption of cloud services. As cloud computing matures, IT departments must establish a more strategic approach to IT operations and service management The need to deliver CSB capabilities and establish ITaaSB is changing how IT delivers and manages services. Both operational processes and supporting tools and technologies must be re-assessed with an eye toward standardization, repeatability and automation to drive speed, reduce service delivery cost and increase quality. As a result, IT organizations are adding or modifying roles (financial managers, service delivery and automation specialists) and investing in IT operations and service management architectures in a more cohesive and integrated fashion. On the process side, IT organizations are shoring up their business management expertise in areas such as cost accounting, overall financial management, benchmarking and end-to-end process design. These efforts, along with other decision frameworks, are used to assess the relative merits of internal versus external services delivery and rationalize cloud sourcing strategies. These changes require IT to increase attention to the business of running IT like an external service provider, because they are selling and delivering IT services to the business. As a result, IT service and operations management has never been more strategic to organizations serious about cloud computing. As the service and operations management architecture is redesigned, it will require a greater degree of integration of management tools. CMPs are emerging and evolving as the next generation core of the IT service and ITOM framework, one that enables management and governance over internally and externally delivered services, automated service delivery and business/financial management. Initial implementations often focus on provisioning frequently requested sets of services with variable demand on top of IaaS, so that both labor and infrastructure costs are reduced by raising utilization rates (e.g., development and test cloud). Longer term, cloud infrastructure services will be designed such that even single-instance services will be provisioned and managed from the CMP, making it more of a runtime service assurance platform. Moreover, CMPs will evolve to provide more-robust management of platform and application services. They will also need to make choices between management platforms that handle all services based on a heterogeneous infrastructure versus those that focus on optimizing a particular application or software infrastructure platform. Recommendations: When there is sufficient value in the ITOM functions embedded in the CMP, replace superfluous ITOM tools in your architecture. CMP vendors may represent potential lock-in, so choose them carefully. Mitigate CMP acquisition risks in this rapidly evolving market by developing a long-term plan and planning for technology migration. 6

7 7 Recognize that using multiple CMPs creates silos that must be independently managed, and consider designating a top-level CMP for visibility across all cloud services. Dynamic infrastructure requirements make SDN a critical component of private cloud development and external service consumption A key component of any cloud computing strategy is making IT more agile and, therefore, more responsive to the needs of the business. Historically, it could take two months to provision physical servers and two weeks to provision the network. With the adoption of server virtualization, server provisioning is measured in hours. This makes the two weeks needed to provision the network a key bottleneck and a barrier to business agility. SDN is a new approach to designing, building and operating networks that support business agility. SDN brings the same degree of agility to networks that abstraction/ virtualization has brought to servers. In the SDN architecture, the control and data planes are decoupled, network intelligence and state are logically centralized, and the underlying network infrastructure is abstracted from the applications. As a result, programmability enables automation, which supports highly scalable, flexible networks that readily adapt to changing business needs. SDN is increasingly being used as an enabler of cloud service implementations to support the need for rapid, dynamic and elastic scalability of the networking component of the cloud service. Recommendations: Coordinate server, network and storage teams to maximize the benefits of a policydriven, software-controlled data center. Insist that vendors support open, standard northbound controller APIs to maximize flexibility and minimize lock-in. Avoid getting hung up on architectural purity at the expense of a practical focus on agility and lower total cost of operation. Consider a multiphase approach that leverages network infrastructures, where appropriate, and enables longer-term capital expenditure savings by leveraging open-switch control protocols, such as OpenFlow. Gartner Research Note G , David Cearley, Donna Scott, Joe Skorupa, Thomas Bittman, 6 February

8 About Cisco Enterprises, service providers, small businesses, and governments are looking for cloud solutions to reduce costs, increase profitability, improve efficiency, and support innovative business models. Cisco enables the world of many clouds private, public, and hybrid. Cisco enables our customers by bringing together the intelligence of the network, the power of the data center, with business applications. The result is a compelling and assured cloud experience with applications/services delivered from the world of many clouds: anywhere, any time, on any device. Customers can now enjoy the security, agility and better economics of the cloud experiencing IT as a service and content delivered on demand. Cisco is the worldwide leader in networking that transforms how people connect, communicate, and collaborate. Cisco s networkcentric platform is changing the nature of work and the way we live. Founded in 1984, Cisco pioneered the development of Internet Protocol (IP)-based networking technologies. This tradition continues with the development of routing, switching, and other networkingbased technologies such as application networking services, collaboration, home networking, security, storage area networking, telepresence systems, unified communications, unified computing, video systems, and wireless. All of these technologies are made possible due to the evolution of the network. As an innovator in the communications and information technology industry, Cisco and our valued partners sell Cisco hardware, software, and services to businesses of all sizes, governments, service providers, and consumers. An integral part of Cisco s business strategy is strong corporate social responsibility. Beyond our investments in social programs and commitment to environmentally conscious operations and products, we are proactively engaged with global governmental, scientific, and social leaders to develop solutions to climate change, to create economic and educational opportunities, and to address other pressing social and environmental issues. To learn more cloud perspectives for executives, please visit Share this newsletter with your colleagues on Facebook, Twitter, LinkedIn, or , encouraging your team to read the newsletter. Please contact your Cisco sales representative for additional conversations. Americas Headquarters Cisco Systems, Inc. San Jose, CA Asia Pacific Headquarters Cisco Systems (USA) Pte. Ltd. Singapore Europe Headquarters Cisco Systems International BV Amsterdam, The Netherlands Cisco has more than 200 offices worldwide. Addresses, phone numbers, and fax numbers are listed on the Cisco Website at Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to this URL: Third party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. (1110R) 8