Cloud Computing Discussion Dave Duden Director Deloitte Consulting, LLP October 25, 2011
Perspectives on Cloud Computing - 2 -
Cloud computing Why Cloud? What s in it for me? I m not in IT, why do I care? - 3 -
Cloud computing represents a major change in the way information services are delivered, based on wide use of internet standards and virtualization Increase Agility Reduce capital spending Reallocate resources - 4 -
Cloud computing represents a major change in the way information services are delivered, based on wide use of internet standards and virtualization On-demand self-service Pay per use Rapid elasticity Increase Agility Reduce capital spending Reallocate resources Location independent resource pooling Ubiquitous network access - 5 -
Cloud computing represents a major change in the way information services are delivered, based on wide use of internet standards and virtualization Pay per use On-demand self-service Rapid elasticity Service Type Business-as-a-Service Software-as-a-Service Platform-as-a-Service Infrastructure-as-a-Service Increase Agility Reduce capital spending Reallocate resources Location independent resource pooling Ubiquitous network access - 6 -
Cloud computing represents a major change in the way information services are delivered, based on wide use of internet standards and virtualization Pay per use On-demand self-service Rapid elasticity Service Type Business-as-a-Service Software-as-a-Service Platform-as-a-Service Infrastructure-as-a-Service Increase Agility Reduce capital spending Reallocate resources Service Source Public cloud (External) Hybrid Virtual Private Cloud Community Private cloud (Internal) Location independent resource pooling Ubiquitous network access - 7 -
Cloud computing represents a major change in the way information services are delivered, based on wide use of internet standards and virtualization Pay per use On-demand self-service Rapid elasticity Service Type Business-as-a-Service Software-as-a-Service Platform-as-a-Service Infrastructure-as-a-Service Increase Agility Reduce capital spending Reallocate resources Service Source Public cloud (External) Hybrid Virtual Private Cloud Community Private cloud (Internal) Location independent resource pooling Ubiquitous network access Business Model Cloud Service Subscriber Cloud Service Broker Cloud Service Provider Cloud Service Enabler - 8 -
The emergence of cloud computing is a major permanent change to the information services market, is central to the evolution and transformation of business services Cloud computing represents a major change in information technology architecture, sourcing and services delivery, by giving business on-demand access to elastic, shared computing capabilities Cloud Computing is changing in how business purchase, deploy, and support IT services, and offers significant opportunities to expand and enhance their services to customers Ongoing IT industry disruptions will result from the deployment of cloud computing as an alternate sources of supply for products and services For enterprises in the information services business -- as well as IT vendors, services providers, and their suppliers -- cloud computing is the new basis of competition Cloud Computing is a disruptive force comparable to emergence client/server architectures 25 years ago. Enterprises must act to manage risks and taking advantage of emerging services. Businesses that cannot establish a position in the market by leveraging cloud computing, may face increasing competitive pressure from challengers Enterprises that adopt cloud computing delivery models have the potential to fundamentally re-shape the broader business landscape - 9 -
Cloud Computing is defined as multi-tenant, on-demand, scalable, elastic, pay-as-yougo IT applications and services, used to deploy a wide variety of solutions Cloud Service Types Hosted Applications Infrastructure Software Operating Systems Virtualization Servers IaaS PaaS SaaS Service Type Definition Cloud Candidates Sample Vendors Software-as-a-Service (SaaS) Platform-as-a-Service (PaaS) Customers run finished applications from the cloud service provider on a subscription basis, with no software license, and limited operational control Customers load and run software on cloud platforms through a subscription service, without visibility to the underlying server environment. CRM HR, Payroll Finance Productivity Apps, email, collaboration Custom Development Java, Ruby, and extensions to SaaS environments Connectivity Data Centre Infrastructure-as-a- Service (IaaS) Customers provision servers, storage, and database services on cloud infrastructure through a subscription service, with direct operational control. Dev and Test Environments High compute calculations (e.g., Monte- Carlo scenario analysis) Web servers Cloud Delivery Models Delivery Model Definition Public Cloud External to a client s premises Infrastructure third-party owned and managed Multi-tenant Subscription-based Scalable and elastic Metered by use Access via Internet Virtual Private Cloud External to a client s premise Third-party owned and managed Multi-tenant (but virtually private) Scalable and elastic Access via dedicated but private link to public cloud Segmented, secured, or compartmentalized for client Private Cloud Usually internal and delivered on client premises (although can be hosted by third-party provider) Only used by internal customers Scalable but with elasticity constraints Access via private link or internal Exclusive membership Spectrum of control / ownership Community Cloud As per private cloud but shared infrastructure resources with communities or groups with similar requirements (e.g., industry peers) Hybrid Cloud Mix of private and public cloud environments (e.g., data stored in private premises but other infrastructure shared in public cloud) - 10 -
Cloud computing has been subjected to significant marketplace confusion. To demystify cloud computing services, clearly define what cloud is, and what it is not... Cloud is on-demand Clouds can provide an almost immediate access to a IT applications and services, platforms, or a pool of hardware resources (compute, network and storage) that can be allocated and provisioned on-demand scalable and elastic The key characteristic of a cloud service is the ability to dynamically provision and de-provision applications, compute, memory, and storage resources, and to be able to seamlessly scale services (up or down) pay-as-you-use Vendor-provided cloud solutions do not require upfront capital investments by the buyer. Billing is tied to metered use of resources, shifting expenses from CapEx to OpEx. Cloud is not simply virtualization just applying SOA principles traditional hosting While many cloud solutions, both public and private, leverage virtualized infrastructure resources to deliver functionality, cloud raises the bar by providing on-demand provisioning. Publicly-announced private clouds are essentially an aggressive virtualization program on top of the traditional enterprise IT stack Service Oriented Architecture (SOA) is a set of design principles, whereas cloud is a service. Cloud based services will be defined and enabled through SOA. As such SOA is a prerequisite to reap cloud computing benefits. However, following SOA design principles alone does not guarantee the ability to easily transition to a cloud based solution Cloud and traditional hosting share many characteristics but unlike traditional hosting cloud service is offered ondemand, is scalable and elastic a user can have as much or as little of the service as they need and pay for the resources actually used Cloud computing offers increased agility through faster time to market, lower upfront IT capital expenditure and the ability to easily scale up / down and reallocate resources - 11 -
Cloud Computing vendors and services are at the different levels of maturity, and are growing rapidly to meet strong market demand for a variety of emerging services Cloud Vendors at Different Stages of Maturity Adoption Nascent technology pilots Early adopters, growing adoption Stable technology, significant adoption Amazon Web Services IBM* Salesforce. Workday com CRM ERP on SaaS Windows Azure NetSuite Google App HP* Engine I-cloud RightNow Force.com Box.net Force.com Microsoft Business Productivity Online Suite (BPOS) Gmail / Google Mail SaaS PaaS IaaS *IBM and HP initially started as cloud enablers, developing hardware and software to deliver cloud; however, they are now moving into the cloud service provider space Maturity (dynamic markets require continual reassessment) Service Type Example Vendors Software-as-a- Service (SaaS) Productivity and Collaboration Microsoft Online Services Google Apps Zoho.com Soonr.com ERP, HR, Finance and BI Oracle PeopleSoft Workday SAP Business ByDesign IBM Analytics Cognos via SaaS Customer Relationship Management salesforce.com NetSuite Oracle (Siebel) On Demand RightNow.com Entellium Platform-as-a- Service (PaaS) Force.com VMForce (Java PaaS offering joint venture from VMWare and salesforce.com) Google App Engine Windows Azure Pega GridGain NetSuite SuiteCloud Platform Engine Yard - Rails Application Cloud Wolf Frameworks WorkXpress CodeRun Infrastructure-asa-Service (IaaS) Amazon Web Services (AWS) HP IBM Rackspace Mozy Terremark AT&T Synaptic Savvis Flexiant Flexiscale 2.0 Unisys Secure Cloud Solution Verizon Computing as a Service (CaaS) GoGrid (previously ServePath) - 12 -
icloud - 13 -
IT Services will migrate to different cloud computing models at different times, based on fit, the maturity of services providers, and availability of suitable technology Comparing Managed Hosting to Cloud Computing Managed Hosting Applications Static & Continuous Cloud Applications Dynamic & Bursty High Mainstream Adoption of Workloads by Service Type New Core Apps SaaS Adoption Office Productivity Collaboration Core ERP Standalone Apps Standard Servers Engineering Apps Storage & Back-Up High-End Servers High Performance Computing / Clusters Productivity Apps IaaS PaaS Dev & Test Rapid App Dev Low Websites, Intranet Today Future - 14 -
IT Services will migrate to different cloud computing models at different times, based on fit, the maturity of services providers, and availability of suitable technology Comparing Managed Hosting to Cloud Computing Managed Hosting Applications Static & Continuous Cloud Applications Dynamic & Bursty High Mainstream Adoption of Workloads by Service Type New Core Apps SaaS Adoption Office Productivity Collaboration Insurance Apps Core ERP Standard Servers Engineering Apps Storage & Back-Up High-End Servers High Performance Computing / Clusters Productivity Apps IaaS PaaS Dev & Test Rapid App Dev Low Websites, Intranet Today Future - 15 -
Enterprises deploying Cloud Computing services must have a comprehensive strategy for managing a wide variety of key capabilities in a new cloud savvy way Service Operations Service Provisioning Resource Planning Incident Mgmt Technical and Professional Support Claims Economics Product Development Pricing /Underwriting Profit vs. Break-even External Cloud Contracts (Hybrid Operations) Platform License & Entitlements Compliance Corporate Policies Industry Policies Regulations: -State -Federal -Safety Tax Proactive tax analysis and strategy Tax alignment Domestic and Local Country Tax Treatment Legal Contract Mgmt Service Mgmt e-discovery Business Processes Regulatory and Compliance Governance Risk Management Security & Privacy People Technology Cloud Computing Strategy Business-IT Alignment Cloud Service Delivery Strategic Planning and Architecture Data controls Technology controls Audit and Assurance Backup and DR Vendor lock-in IT Operations Readiness Data Segregation, Integrity and Deletion Identity and Access Physical Security Network Security Application Security Skills and Talent Culture Training and Development Organization Virtualization Next-Gen Architecture Infrastructure and Process Standardization Resource Mgmt and Metering If using public clouds or hybrid clouds, also consider implications for Sales and Marketing, Underwriting, Billing, Order and Customer Experience - 16 -
Potential Cloud-based applications include analytics, leveraging non-traditional data structures to achieve high scale and rapid results Datasets used in business can grow very large because they are increasingly being gathered by ubiquitous information-sensing mobile devices, software logs, cameras, microphones, wireless sensor networks, etc. Data analytics workloads are computationally intense. The computing environments needed to perform analytics can require significant capital investment using traditional approaches, so many enterprises do not incorporating analytics into their business. Because it is horizontally scalable, cloud computing is well suited to the very large datasets typically used in analytics applications. Horizontal scalability is achieved by adding more computers to a cloud computing architecture, allows them to achieve aggregate computing power many times greater than traditional systems. A variety of new database technologies is now available to support these NoSQL data sets, such as those powering Google, Facebook, Amazon, and others. In cloud computing, NoSQL database management systems differ from classic relational database management systems, and may not require fixed table schemas, avoid join operations and typically scale horizontally. The combination of horizontally scalable cloud computing architectures and NoSQL database technologies allows for dramatically improved data analysis capabilities. - 17 -
Approach for Adoption of Cloud Computing - 18 -
Cloud Considerations Organizations should consider several dimensions when evaluating strategic options for applications and services to be delivered through cloud computing Considerations For Building a Cloud Strategy Technology Business and Financials Do the workloads exhibit characteristics that can derive real benefits from scalability and elasticity? What are the anticipated usage patterns for the application and will it be cost effective to move to the cloud? Will the application be built to run on a cloud supported platform (e.g., commodity hardware, supported OS) Can the application components be architecturally designed to be suitable for deployment to a cloud based solution? What design trade-offs will be needed to make this application cloudready? Are internal IT architecture and organization structures ready? What is business sponsor's preference for CapEx vs OpEx? How will designing for cloud readiness impact my implementation cost and timelines? Can I achieve overall lower TCO? Will moving to cloud help me capture new sources of value for the business? Are cloud offerings mature enough for these workloads? Operational Regulatory and Compliance What are the availability requirements for this application and can those be met by cloud? Are there any risk management or compliance requirements for this application? Will cloud be able to satisfy those requirements? How will support model for this application change if it is moved to the cloud? Are the potential changes acceptable? Does the application hold confidential or customer data? Can this data be easily masked in the future? How will cloud impact my chargeback model for this application? Can I support the new model? Will business accept the changes? Does the application data need to reside within organization? Will we be prohibited from moving data outside of the country? Can cloud meet my business continuity and disaster recovery requirements for the application? Is the vendor limiting interoperability or access to your data? Who owns the data? How is it used? Are controls in place? How is security achieved? What is the level of privacy protection? Can you meet needs for legal compliance and tax issues? - 19 -
Cloud Capabilities Enterprises should take a comprehensive approach to cloud strategy, integration, migration, and monitoring, to manage the risks and maximize benefits of adoption Cloud computing opportunity assessment Assessment of application portfolio to select applications suitable for cloud migration Impact to regulatory compliance, such as SOX and HIPAA Impact to data privacy and protection standards, data location/segregation standards Impact to organizations security posture and likelihood of increased vulnerabilities Cloud Computing Strategy Evaluate vendor capabilities, mapped to requirements, with financial benefits Assessment of cloud computing providers security capabilities, control, and monitoring Assess tax Implications and evaluate strategic alternatives Define cloud computing architecture, migration, and operations plan Create processes to integrate cloud computing into security framework Ongoing monitoring Implementation of cloud computing Periodic security activities for cloud related components to evaluate for vulnerabilities Conduct review of logs/audit monitoring, vulnerabilities/controls mitigation/remediation Assist in conducting cloud proof of concepts (POC) and pilots to mitigate risk Assist with installation, configuration, and testing; migration, and operational transition - 20 -
We recommend a structured multi-phased approach to developing a Cloud Computing Strategy for IT services delivery and technology adoption In-scope activity A standard strategic approach to cloud adoption follows the three major Phases and activity steps as shown below: 1. Discovery which works with the key stakeholders and gather the data which will allow the team to understand the current state and identify opportunities 2. Direction Setting and Gap Analysis which builds on the data gathered through discovery, and allows the team to analyze, group, and prioritize along benefits, cost, and value dimensions, including a gap analysis between the current state and future target states of Cloud capabilities 3. Future State Direction completes the strategy, including detailed projects to advance the strategy and improve Cloud capabilities 4. Roadmap with a prioritized high level multi-year Cloud roadmap of major milestones Phase I: Cloud Computing Strategy Phase II: Detailed Implementation Planning Phase III: Implementation Step 1: Discovery Step 2: Opportunity Analysis Step 3: Future State Direction Step 4: Roadmap Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS) - 21 -
Cloud Suitability Evaluation Criteria During the opportunity analysis, a structured approach as shown below should be taken when reviewing cloud suitability factors for applications and workloads Level 1 Workload Analysis Opportunity Analysis Level 2 Determine Suitability for Cloud (IaaS Cloud Candidates) In Depth Analysis & Planning Level 3 Business Case and Execution Operational Analysis Source Workload attributes Application characteristics Suitability framework Technical reviews with application owners and infrastructure teams Input from application business owners and SLAs TCO Data and Analysis Stakeholder Inputs Business Case Analysis Technical Analysis Workload Attributes Potential Cloud Candidates Feasible Cloud Candidates Proposed Cloud Candidates Applications / Workloads Targeted for Migration Analysis Inputs Preliminary Assessment Application Criticality (business criticality of app) Application Complexity Poor Virtualization Candidate Utilizes Commodity Infrastructure In-house / Colocation Candidates Technical Feasibility High Network Bandwidth Needs Infrastructure Requirements Shares Environments Shares Software Stack Utilizes Specialized Infrastructure Not Technically Feasible Business Feasibility Internal / External Facing Application High User Impact Service Level Requirements Confidential / Customer Data Evaluate Suitability for SaaS and PaaS Not Business Suitable Detailed Analysis Business Case Analysis Detailed Technical Analysis Operational Analysis Management Considerations Migration Not Feasible Migration Planning Testing Change Management Cutover Outputs Candidate list for cloud evaluation List of cloud applications / workloads with high migration potential Business Case Analysis (including cost vs. run rate analysis) Technical Analysis Detailed application and workload migration analysis Migration plan Realized benefits ILLUSTRATIVE Filtered App / Workload Identified App / Workload - 22 -
To successfully make the transition, enterprises must address key operational and governance issues during the adoption of cloud computing services models Cloud Operational and Governance Issues Data Controls Who owns the data? How is it be used? Are controls in place? Security and Privacy Audit and Assurance How is security achieved? What is the level of privacy protection? Are there risk management controls to applications and data? Tax and Legal Back Up and Disaster Recovery Vendor Lock-In Can you meet needs for legal compliance and tax issues? Are data backup, retention, and disaster recovery practices sufficient? Is the vendor limiting interoperability or access to your data? IT Operations What IT services and applications are best suited for the cloud? IT and Business Readiness Are internal IT architecture and business organization structures ready? Alignment with Enterprise Risk and Governance strategy will help organizations address the operational hurdles to cloud adoption - 23 -
Summary & Discussion - 24 -
What are the near term business benefits of comprehensive Cloud Strategy? Significantly increased flexibility: reduced time to design, implement, and go to market with cloud-based software systems Much faster time to develop, test, and deploy packaged software Encapsulating single-tenant non-cloud software is a fast path to short-term value Longer-term value in cloud will offer significantly higher benefits, but will require replatforming and replacement of legacy software and that is a big hurdle Cost Savings: reduced CapEx, at a lower amortized cash flow, using subscriptions Reduction in total costs of software licenses and ongoing maintenance costs, through use of SaaS subscription models rather than on-site licensed software Reduced physical infrastructure costs by moving to vendor cloud IaaS: reduced hardware, networking, data center, facilities, power, etc. Positioning for major cloud architecture changes coming in the future: By introducing cloud products and services into the complex IT architectures, you will be positioned for the major changes to reap the benefits of cloud Enterprises that adopt cloud computing delivery models have the potential to reshape their competitive position and the broader business landscape - 25 -
Our POV: Cloud Computing will have a significant impact on IT Strategy Cloud offers major benefits of flexibility, cost savings, and improved IT capabilities. To gain these advantages, we recommend that enterprises: Establish new IT application and technology architectural principles and standards which are necessary to reap cloud benefits. Revisit current major system architecture and design principles and evaluate fit with cloud suitable design concepts Understand the timing of major system software architecture changes, and plan for adjustments to enable cloud friendly application delivery models Identify new usage models, considering new options for SaaS, IaaS encapsulation, mobility apps, and Big Data analytics, to enable highly efficient and flexible products and services Quantify the benefits that cloud will bring to your company, while assessing all affected roles and functions to gauge organizational and business impacts and risks New cloud software is fundamentally different, and improvements to legacy software often require complex software engineering and architecture refactoring. - 26 -
What are other large Companies doing at this time? Moving development, testing, and integration of major system systems to cloud Infrastructure as a Service For smaller functions and services, deploying cloud systems to replace on-site major system implementations of older stand-alone systems ( CO) Decoupling the major systems stacks using a best of breed approach, taking into account new software now available on a SaaS subscription delivery model Consolidating major application platforms on to single cloud-based infrastructures, while removing edge services to other cloud vendors when possible Understanding their major system roadmaps, working with vendors to influence the product direction to map to their customer priorities Taking a hard look at their end-to-end IT architectures, to determine their long-range plans for a more fully cloud-enabled business architecture and customer services Many enterprises with large systems are taking the first steps to make their cloud plans actionable, to position themselves for strategic advantage - 27 -
Contact information Dave Duden Director Deloitte Consulting dduden@deloitte.com +1 860 725 3041-28 -
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