© 2013 ibm corporation rethink it. reinvent business. page 1 five cloud essentials for the...

© 2013 IBM Corporation

Rethink IT. Reinvent Business.Rethink IT. Reinvent Business.

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Five Cloud Essentials for the Boardroom What Banking & Financial Markets Executives Need To Know About Cloud Computing

David ZimmermanGlobal Solutions Executive, WW Cloud LeaderIBM Banking and Financial [email protected]



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Five Cloud Essentials for the Boardroom

Cloud is “computing as a service over the internet”

1. Why Cloud for Banking & Financial Markets?

2. Cloud hype vs. Cloud realities?

3. Cloud “feels” like IT plumbing, very tactical. . .• Impact on my overall strategy?

4. What about Cloud’s risks and “hidden costs”? 5. Cloud economics: What’s the business case for Cloud?

1. Why Cloud for Banking & Financial Markets?

2. Cloud hype vs. Cloud realities?

3. Cloud “feels” like IT plumbing, very tactical. . .• Impact on my overall strategy?

4. What about Cloud’s risks and “hidden costs”? 5. Cloud economics: What’s the business case for Cloud?



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1. Why Cloud? Industry changes mean that Banking & Financial Markets Executives need agility to drive growth and profitability

Clients have rapidly evolving expectations for

offerings and services.

Competition is intensifying with M&A, divestitures, and

non-traditional entrants

Turbulent global conditions are affecting revenue and reducing demand for services.

Mature and emerging market segments are focus on optimizing use of capital.

Radically increased oversight is driving investment in risk management technology.

Rebuilding customer trust and marketplace confidence is critical to future growth.

$Cloud helps address The Boardroom Paradox: “How do we cut costs today, while still investing in future growth?”Cloud helps address The Boardroom Paradox: “How do we cut costs today, while still investing in future growth?”



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Changing Cloud economics: It’s more than just cost savings…Improving Business Agility, too.

13%

41%21%

28%38%

21%

Today 3 yrs

What is Your Organization’s Level of

Cloud Adoption? % of Respondents

+215%

Piloting

Adopting

SubstantiallyImplemented

72%

91%

Source: IBM/The Economist Cloud-enabled Business Model Survey of 572 leaders



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2. “Hype” vs. realities: Common “hype” About Cloud Computing

Cheap

Easy

Cloud:•Rent vs. own computing

•Drives growth while saving money

CompletelyFlexible

Fast results

Turnkey

. . . . . . Can be true – IF you set it up that way



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Today2015

Strategy: Expect significant increase in substantial change resulting from cloud:

41%13%

Customers: Expect to reinvent their customer value propositions with cloud:

29%10%

Business Value: Expect to create / transform value chain through cloud:

Transformation: Shift focus to driving substantial impact on customer relationships:

57%

16%

14%

*Source: Institute for Business Value / The Economist

43%

Cloud realities: Forward-thinking companies view Cloud as a force that will impact their business models



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Cloud realities: Cloud is already solving many of today’s typical Enterprise challenges

• Maintenance accounts for over 70% of the IT budget

• Annual operational costs (power, cooling, and management) exceed their acquisition cost by 2-3X

• Maintenance accounts for over 70% of the IT budget

• Annual operational costs (power, cooling, and management) exceed their acquisition cost by 2-3X

10 weeks: The mean time to deliver a new (or expanded) IT Service from the time of request. Nearly 40% take more than 90 days.

2/3’s of companies miss their original

project/solution deployments.



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3. Cloud “feels” like IT plumbing, very tactical. Impact on my overall strategy? Cloud’s Six potentially “game-changing” business enablers

Source: IBV Analysis

Cost Flexibility• Shifts fixed to variable cost• Pay as and when needed

Business Scalability• Provides limitless, cost-

effective computing capacity to support growth

Market Adaptability • Faster time to market• Quickly adapt to regulatory-

driven changes• Seasonal & special

projects• Rapid product, pricing and

services innovation

Simple Self Service• Hides IT complexity

Context-driven Variability• User-defined experiences• Increases relevance

Mobile Banking & Eco-system Connectivity

• New value nets• Potential new businesses• Enables rapid simulation

and development

Cloud’s Business Enablers

Social Media

Mobility

Hyper-connectivity

Big Data

2

1

6

5

4

3



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Cloud’s Impact on my overall strategy? Disruptive Leapfrogging: Cloud’s Strategic Impact

1. Disruptors create radically different value propositions: New Asian Mobile Banking provider implements Cloud plus 10,000 agents. Accelerates growth

2. Innovators significantly extend customer value proposition: Cloud accelerated Global Bank’s results “From 45-days to 20 minutes” for their 20,000 developers3. Optimizers use the cloud to improve organizational efficiency: Cloud drives European Bank’s 10-month ROI

Imp

rove

Tra

nsf

orm

Cre

ate

Enhance Extend Invent

Va

lue

Ch

ain

Customer Value Proposition

OptimizersOptimizers

DisruptorsDisruptors

InnovatorsInnovators

Cloud Enablement Framework

The Power of Cloud -- IBV PoV and Executive Report

Five Executives discuss Cloud’s disruptive leapfrogging…

http://www.youtube.com/watch?v=CD_elWBD1Zk

Five Executives discuss Cloud’s disruptive leapfrogging…

http://www.youtube.com/watch?v=CD_elWBD1Zk



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Competitive Insights: Getting started is easier than you might think.Cloud computing is already transforming the financial services industry

Analytics Allows integration of customer data across banking silos to enable near-real-time insight

Business servicesEnables application and service management, customer relationship management, and client and market analytics

CollaborationProvides communications and collaboration tools and solutions to enable employees to share information almost seamlessly

Desktop and devicesHelps reduce costs and complexity, enables better security of personal computer data and facilitates centralized management of critical enterprise data

Development and testHelps accelerate provisioning of resources for development and test environments, facilitating faster time to market while supporting reduced costs

Banking & Financial Markets Solutions•Cloud & Payments•Cloud & Retail Banking•Cloud & Financial Markets•Cloud & Mobile Banking•Cloud & Risk Management (Basel III, Solvency II), etc.

Infrastructure compute Provides more flexible and elastic on-demand compute resources for variable application scaling

Infrastructure storageEnsures that the near-real-time demands of today's trading and analytics processes are maintainable through scalable storage solutions

Managed backup Enables high availability through more rapid backup and recovery services

Security Enforces security and endpoint management to help ensure compliance of corporate governance and IT policies



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4. What are Cloud’s risks and “hidden costs”?. . .For starters. . .one size does not fit all. . .

Key Takeaway: Cloud Service Level Agreements (SLA’s) are very important. SLA’s record a common understanding about services, availability, security, privacy, governance, data protection, disaster recovery, workloads, audit, priorities, responsibilities, exit strategies, etc.



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Cloud risks and “hidden costs”: Projects can fail for many reasons

Unrealistic Expectations Performance

IssuesUnderdeveloped Transformation

Strategy

Business Case

Poor Due Diligence

Security, Data Protection,

Migration, Governance. . .

. . . . . . How do I mitigate Cloud risks?



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Business Models

Data Platforms

Application and Delivery Platforms

Enterprise Cloud

Strategy

Broad

Narrow

Performance Impact

High Tech High BizStrategic Focus

Innovate and Integrate

Building cloud-native apps on cloud

Governance integrating with other providers

Innovate and Integrate

Real time product changes in market

Big data feeding the business model

1

2

34

Cloud’s risks and “hidden costs”? Cloud Strategy is Important “Getting it right, the first time” covers four key dimensions for cloud adoption

A Cloud strategy needs to incorporate four key dimensions in order to fully address the transformation opportunity for the business.

Our guidance builds on a core set of time-based transformative practices, including roadmaps, business and technology architecture, and investment cases.



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• Profitable Growth• Cloud business-model ecosystem:

customers, partners, suppliers. . . • Governance, Organization and

Service impact of cloud

• Profitable Growth• Cloud business-model ecosystem:

customers, partners, suppliers. . . • Governance, Organization and

Service impact of cloud

• Predictive Cloud-enabled Analytics• Data protection & Privacy• Cloud disaster back-up & recovery

• Predictive Cloud-enabled Analytics• Data protection & Privacy• Cloud disaster back-up & recovery

• Roadmap• Cloud

Infrastructure Strategy and Design

• Workload Transformation Analysis

• Network Application and Infra Optimization for Cloud

• Security Assessment

• Security Roadmap

• Resiliency Planning

• Migration Services

• Private Cloud Implementation Services

• Roadmap• Cloud

Infrastructure Strategy and Design

• Workload Transformation Analysis

• Network Application and Infra Optimization for Cloud

• Security Assessment

• Security Roadmap

• Resiliency Planning

• Migration Services

• Private Cloud Implementation Services

• Brutal Efficiency• Testing & Development Services for Cloud• Mobile Innovation in the Cloud• Cloud Application Modernization• ADaaS (Application Development as a Service)• API Centric Architecture & Roadmap

• Brutal Efficiency• Testing & Development Services for Cloud• Mobile Innovation in the Cloud• Cloud Application Modernization• ADaaS (Application Development as a Service)• API Centric Architecture & Roadmap

What are Cloud’s risks and “hidden costs”? Cloud Strategy is ImportantThe “right” Cloud Strategy drives your cloud transformation roadmap

11

22

3344



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Unprecedented choice in the deployment and management of applications on the IBM SmartCloud platform

The most complete set of automated and integrated application services to support enterprise applications

Open standards based platform for portability across Cloud environments

Unprecedented choice in the deployment and management of applications on the IBM SmartCloud platform

The most complete set of automated and integrated application services to support enterprise applications

Open standards based platform for portability across Cloud environments

Enterprise class governance,

administration and management control

Multiple security and isolation options built into

the virtual infrastructure and network

Real business-centric SLAs that align IBM

accountability to your business

Enterprise class governance,

administration and management control

Multiple security and isolation options built into

the virtual infrastructure and network

Real business-centric SLAs that align IBM

accountability to your business

Multiple delivery models allow clients to optimize against economics, integration, security and control.Multiple delivery models allow clients to optimize against economics, integration, security and control.

Deliver Enterprise class, production applications such as SAP & Oracle via IBM’s SmartCloud platform with subscription-based pricing

Deliver Enterprise class, production applications such as SAP & Oracle via IBM’s SmartCloud platform with subscription-based pricing

Application Lifecycle

Application Resources

Application Environments

Application Management Integration

InfrastructurePlatform

Availability andPerformance

Security and Compliance

Payment and Billing

Application Services

Enterprise Enterprise+

Management and Support

Enterprisedata center

Managed private cloud

Enterprise

Hosted private cloud

Enterprise

Shared cloud services

A B

Client defined

services

Industry services

Business Analytics Services

Workplace Services

Security Services

Resilience Services

Enterprise applications

Partner services

Services

Cloud risks and “hidden costs” : Build it yourself? vs. IBM’s One-stop shopping



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Cloud risks and “hidden costs” : Workload is Important

Ready for cloud

Evaluate: May . . .or may not. . . be ready for Cloud based on their attributes or maturity

Sensitive Data

Complex processes & transactions

Regulation sensitive

Not yet virtualized 3rd party SW

Highly customized

Analytics

Collaboration

Development & Test

Workplace, Mobile, Desktop & Devices

Infrastructure Storage

Infrastructure Compute

Business Processes

Banking & Financial Markets Solutions

Pre-production systems

Information intensive

Isolated workloads

Mature workloads

Batch processing

New growth workloads made possible by cloudHealthcare

Payments

Wealth Management

Collaborative Care

Risk Management

Disaster Recovery

Key Takeaway: Not all workloads may be suited for CloudKey Takeaway: Not all workloads may be suited for Cloud



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New!New!

ObjectivesObjectives

Get it right, the first time: Cloud Architecture is Important: IBM joins the new OpenStack Foundation as Platinum Sponsor

Get it right, the first time: Cloud Architecture is Important: IBM joins the new OpenStack Foundation as Platinum Sponsor

• Contribute to open source projects and provide resources to help shape and promote the organization

• Continues IBM strategy to leverage standards (LinkedData, CCRA, TOSCA, etc.) that accelerate clients’ success with cloud

• Work with 180 companies to focus the industry around an ubiquitous Infrastructure as a Service (IaaS) open source cloud computing platform for public and private clouds

• Develop and sustain a vibrant, innovative ecosystem and become a platform of choice to build upon

• Contribute to open source projects and provide resources to help shape and promote the organization

• Continues IBM strategy to leverage standards (LinkedData, CCRA, TOSCA, etc.) that accelerate clients’ success with cloud

• Work with 180 companies to focus the industry around an ubiquitous Infrastructure as a Service (IaaS) open source cloud computing platform for public and private clouds

• Develop and sustain a vibrant, innovative ecosystem and become a platform of choice to build upon

Platform as a Service Technologies

Infrastructure as a Service Technologies

Infrastructure UsagePerformanceAdministration Security

Lifecycle Resources Environments

Applications Integration

Foundation

IBM’s Cloud Computing Reference

Architecture (CCRA)

Cloud StandardsCustomer Council

(CSCC)

LinkedData, OSLC*, TOSCA*

IBM’s Ecosystem approach to standards

OpenStackOpen Source

Reference

*Open Services for Lifecycle Collaboration; Topology and Orchestration Specification for Cloud Applications *Open Services for Lifecycle Collaboration; Topology and Orchestration Specification for Cloud Applications

Cloud risks and “hidden costs”: Architecture is ImportantCloud risks and “hidden costs”: Architecture is Important



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Cloud risks and “hidden costs”: Security is ImportantIBM’s history with Cloud Computing in Defense

A Security Framework developed through real-world operational experience

Mis

sio n

Va l

u e

Time & Innovation2009 2010 2013+

Through the NCOIC*, IBM demonstrates a cloud-delivered Common Operational Picture integrating real-time track data across nine worldwide nodes.

*NETWORK CENTRIC OPERATIONS INDUSTRY CONSORTIUM

Joint effort with the US Air Force creates an advanced cyber security and analytics system on a hardened Cloud Infrastructure protecting national data

Defense Agency’s Cloud, one of the first operationally deployed Cloud infrastructures with the US Intelligence community

Provides self-service on-demand access to imagery exploitation assets

NATO ACT announces their Mission Development Cloud, a platform for federating NATO strategic and tactical mission experiments

Best Cloud Computing Security



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Cloud risks and “hidden costs”: Migration & Applications are ImportantCloud Application Modernization requires a factory model for migration/modernization of applications to Cloud. . .

An analytical approach to decide on “cloudability” and “API”s for modernization of applications: Migrate / Transform / Rebuild

Tools to conduct analysis: Cloud Transformation Tool, Workload Analysis Tool

Methods, processes and tools - allowing the scale of mass migration

A control model for approaching cloud elasticity

Step 1: How to get there

Step 2: Tools

Step 3: Tool Output

Migration / Deployment

Strategy Design, Development and Integration

Analysis / Implementation Planning

Design Transform Deploy

Migrate

Cloud Deploy Models

Migration candidates

Transformation candidates

Rebuild candidates

Cloud Transformation Tool Workload Analysis Tool

Pain versus Gain

Effort / Pain10 5 00

Value / G

ain

5

10

App JK

App NM

Dev Test

BW

SAP

Call Center Users

ClientXYZ.com

Field Users

App AB

Intranet Apps

Office Task Users

ABC Data Warehouse

App XC

ExchangeApp JK

App NM

Dev Test

BW

SAP

Call Center Users

ClientXYZ.com

Field Users

App AB

Intranet Apps

Office Task Users

ABC Data Warehouse

App XC

ExchangeApp JK

App NM

Dev Test

BW

SAP

Call Center Users

ClientXYZ.com

Field Users

App AB

Intranet Apps

Office Task Users

ABC Data Warehouse

App XC

Exchange

1. N-Tier loosely coupled architecture

2. Open standards based (JEE)

3. WebServices with SOAP protocols

4. Data communications through standard protocols (JDBC/ODBC)

5. Remedy latest version capable of running on Cloud / Virtualized Platform

RAMInRange RAMOutOfRange Grand TotalITL 64 14 78

RAMInRange RAMOutOfRange Grand TotalITL 64 14 78

CPUInRange CPUNotInRange Grand TotalITL 57 21 78

CPUInRange CPUNotInRange Grand TotalITL 57 21 78



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5. Cloud Economics: Board-level Considerations

Pros: Cons:• Growth: How to reduce time to market for

new products, services & segments. . .while also reducing Cost/Income ratio?

• Efficiency: How to reduce IT maintenance costs (~70% of total IT spend) while accelerating new solution development results?– How to reduce infrastructure duplication?

– How to simplify products and processes?

• Resilience: How to build an evolutionary architectural framework that induces control and supports growth over the next ten years?

• Regulation: How to efficiently adapt to regulatory-driven change?

• Mobile & “Big Data” Analytics Innovation: How to differentiate? How to create a customer-centric view?

• Lack of Compelling Event

– More pressing uses of capital

• Difficult Business case

– ROI is not sufficient to justify the risk and cannot be realized quickly enough

– Time-to-Market improvement is not sufficient to justify Business Case

– Business Case relies on anticipated revenue growth projections rather than “hard” cost reductions

• Transformation Risk

– Underdeveloped Business Transformation Roadmap

– Inexperience with complex projects

• Risk to Reputation



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Summary: Cloud is driving disruptive leapfrogging and business-model transformation.

Getting started is easier than you might think. . .

www.ibm.com/cloud

Getting started is easier than you might think. . .

www.ibm.com/cloud

© 2013 ibm corporation rethink it. reinvent business. page 1 five cloud essentials for the...

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