cloud computing...the cloud computing journey consumption models for it, applications and services...

Cisco Confidential 1© 2011 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group

Cloud Computing: The New Economics of IT

Jim Cooke – Senior DirectorIBSG IT Transformation Practice

Cisco Confidential 2© 2011 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions GroupCisco Confidential 2© 2011 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group

Bespoke Consolidation Utility

FarmingIndividual

FarmsIndustrial Farming

Farming Conglomerates

ElectricityFactory Steam

EnginesLocal Power

PlantsElectrical Grid

ITEnterprise Data

Centers

Cloud Service providers (CSP‟s)

IT Service Grid

Evolutionary Pattern

IT is Following a Common Evolutionary Pattern

Source: Jim Cooke - Cisco IBSG Innovations


Why Now?

Compute & network speeds

Storage costs

Service-Oriented Architectures Standardization

General acceptance of ITaaS

Global Economic Crisis

Virtualization

Cloud Acceleration

Source: Technology Avalanche; Dave Evans, Jim Cooke Cisco IBSG


Cisco Confidential 4© 2011 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions GroupCisco Confidential 4© 2011 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group

What Makes Cloud Different?

Traditional

Computing

Dedicated

Traditional hardware procurement

New services added manually

Manual repair of system failure

Months

Incremental CapExpurchases

Shared

Self service

Scale on-demand

Automated recovery due to integration / interoperable

Minutes

Pay per use

Consumption

Ease of Use

Scalability

Availability

Provisioning

Cost

Cloud Computing

Source: Cisco CMO SP Mktg - Data Center Solutions


Private Public Hybrid CommunityDeployment

Models

ServiceModels

Software as a Service (SaaS)

Platform as a Service (PaaS)

Infrastructure as a Service (IaaS)

EssentialCharacteristics

On-Demand Self Service

Broad Network Access

ResourcePooling

Rapid ElasticityMeasured Service

http://www.csrc.nist.gov/groups/SNS/cloud-computing/index.html

Cloud Definition from NIST (National Institute of Standards and Technology)









Deployment Benefits and Challenges

Sharing services and elastic

scaling

Adding capability without time

and resource intensive build-

outs

Shifting Economics – capex to

opex

Simplifying operations

New potential revenue streams

Deployment Benefits Deployment Challenges

Security, Compliance and

Regulatory risks

Cloud services management

(Billing , SLA’s, Dependencies)

Organizational and operational

challenges and impact to

business processes

Interoperability and integration

with existing processes and

technologies




Automation

HybridCloud

PublicCloud

Virtualization

Inter-Cloud

Consolidation

PrivateCloud

The Cloud Computing Journey

Consumption models for IT, applications and services are changing dramatically and will be ahybrid mix – available bothon-premise with private clouds and from service providers in public clouds.


PRESENT


30% 70%Business

TransformationInfrastructure Operations“Keeping the Lights On”

70% of the IT Budget for Maintenance30% Available for Innovation*

*Source: Gartner - IT Infrastructure, And The Shift To ―Real-Time‖

Need to Change the Balance

50% 50%Business

TransformationInfrastructure Operations“Keeping the Lights On”

Creates Flexibility & Reduces Cost

Allows Innovation &Competitive Advantage

Current SituationThe 70/30 Dilemma


Infrastructure TCO:Significant Portion of Government IT Spend

1 Source: http://www.transitionaldata.com/publications/Dr-Data-Center.pdf2 Federal Govt IT spent for 2010 approx $78B

Other IT Spend

Infrastructure Spend

50 - 75%1

$39.2 to $58.8B2

25% Capex and 75% Opex

http://www.transitionaldata.com/publications/Dr-Data-Center.pdf






Yet, Much Of The IT Spend Is Wasted On Inefficient Infrastructure

1 http://www.cioupdate.com/trends/article.php/3289721

2 Averaged from multiple sources

3 Assumes 50% of IT Budget of $58B and a 50% utilization improvement

Infrastructure Utilization

0

20

40

60

80

100

25%1

Utilisation Target

75%2

$29.4 B MissedOpportunity3

http://www.cioupdate.com/trends/article.php/3289721


Infrastructure Costs Are Continuing to Increase

Resources available for new services and innovation will continue to diminish

Agency impact from the IT organization will become more difficult to achieve

Proliferation will increase, ultimately making the problem even worse

Growth Is 6% per Year and Will Have Significant Impact on the Organization


What Can Be Done?

Develop and execute an infrastructure roadmap that targets a cloud operating model as an end state to:

1. Implement virtualized and unified architectures to drive down costs in the near term and ensure long-term efficiencies

2. Free up valuable resources to focus on innovationand new service development—IT activities that create impact

3. Better prepare the environment to take advantage of new technology developments – private, community, hybrid and public clouds


The Challenge

While the problem may be clear to IT, it is not immediately apparent to the respective agencies

The agencies are typically the culprit in driving these inefficiencies

The key is helping the agencies understand the issue in business terms

The next step is then convincing the agencies to invest in IT over other competing alternatives

© 2010 Cisco and/or its affiliates. All rights reserved. Cisco PublicPresentation_ID 14

Convincing the Funding Agencies#1 Educate them..describe the vision


Understanding The Importance of Architecture

Vision of a state-of-the-art home…

The Winchester Mansion

• 160 Rooms

• 6 Kitchens

• Gas lights

• 47 Fireplaces

• 10,000 Windows

• Intercoms

The first no-clog sink (patent issued)

Date: 1884

Built without a blueprint

Builders Architects

147 0Wo

rk f

orc

e

• 65 Doors to blank walls

• 13 Staircases abandoned

• 24 Skylights into floors

Construction time

38 Years

Results

The Winchester Mystery House


… and Some JustHappen

An Architecture is Not Optional…

Some Are Designed…

The Cloud Operating Model is the Target Architecture

Technology and business architectures are not optional.Every agency already has them…


Cap

ab

ilitie

s

Arc

hitectu

reElements of Transformational IT

New BusinessProcess

Growth/InnovationProductivity Strategies

Vision/Strategy

IT/Business Capabilities, Execution

CIO CEO

Technology/Business Architectures,Operational Excellence

Technology/Business Architectures,Operational Excellence


New Revenue Regeneration

Agency Outcomes Agency Imperatives

Minimise compliance reporting risk

Aligning agency capabilities to strategic initiatives How to efficiently enable IT

Increase Productivity

Agency Strategic Initiatives

Re-engage

with our

constituents

Restore the

pride of our

people

Radically

simplify the

agency

Grow quality

services

Avoid / Reduce Costs

Improve Customer Satisfaction

Improve Staff Morale

Improved Cross-Sell & Up-Sell

Risk Mgmt.Simplify divestitures

Improve staff ability to sell other products

Enable innovation and collaboration

Redesign customer experience

Rationalise and align IT

Enable staff to work anywhere

Rapidly Align SMEs to cust. need

Sell applications

Introduce mobility

Reintroduce insurance

Infrastructure

Scale mortgage across all channels

Simplify divestitures

Move customers to direct channels

Invest in development of people

Enable flexible staff work locations

Cisco Solution Enabled

Legend:

QueueBusterEnabled

IT Capabilities

Provide lean back office Mortgage function

Core insurance functions

Core mobility functions

catalog service

SME Presence Engine

Virtual workspace functionality (Smart Workspace)

Virtualisation services

Host service interface within IT

Common business functionality across channels

Queue Buster, Decisioning, Expert Locator

App store (Staff Facing) function

Enable Shift Swap functionality

Enable HR channel subscriptions

Corp. communication channel subscriptions

eLearning functions

Social collaboration functions(team huddles)

Provide mobility functionality

Social networking function

Remote access service (VPN)

Click-to-Chat/Serve

Risk and compliance framework with automation

Host service interface within IT

Provide governance anytime, anywhere

Lean the Mortgage app (web/retail)

Agency Capabilities

Buy or Build insurance capability

Mobility as-a-channel

Establish an App store (customer facing)

Provide mobile applications to staff

Expert Locator function

Rapid service termination

Smaller IT footprint in branch

Location-independent workplace

Enable direct channel & decisioning

Reduce customer wait time <5 mins.

Enable staff to swap shifts

Provide personalised HR mgmt. services

Personalised corporate communications to staff needs

Provide comprehensive training anytime, anywhere

Enable virtual team huddles

Enable staff to work anywhere, anytime

Enable staff visibility and recognition across boundaries

Provide home user with secure access

Multichannel sales progression

Provide risk guidance & minimise staff involvement

Rapid service termination

Provide structure &guidance for staff

Managem

ent

Martini

Presentation & Middleware

Compute

Data

Security

CustomerColleague

Network

That accesses:

Applic

atio

n

Example: Show the Linkage


#2: Describe how you will get there


Our Story: Cisco Data Centre Issues

Company growth and business requirements such as agility, service continuity

Data Centre space, power, cooling, physical structure

Current locations prone to disaster, DR site 2500 miles away

Heterogeneous hosting platforms/architectures, history of “silo” approach

High resource growth rates and a flat IT headcount & budget


4 Phase Approach to Address Issues

ConsolidateConsolidate Data Centres, Resources

Begin to Increase Utilization

Data Centre Standards

VirtualizeVirtual Resource Pools

Rapid Delivery of Services

Increased Availability, Utilization

UnifySingle, unified network fabric

Integrated services

Unified Compute

AutomateOn Demand Utility

Runbook Automation

Real Time Provisioning


Cisco Data Centre Evolution

2005 - 20062004 2007 - 2008 2009 - 2010

• Standardization

• Virtual Machines

• 4 Tier Silos

• Heterogeneous OS

• Storage Silos

• Low Utilization

• IP Connectivity

• Perimeter Security

• Application Silos

• Distributed

• Server Repurposing

• VM Mobility

• Storage Virtualization

• Virtualized Network Services

• Virtual Firewalls

• SOA Pockets

• Infrastructure Aligned to Application Services

• Policy Based Management

• Intelligent Data Management

• Tiered Recovery

• Usage and SLA-based Funding Model

Legacy

Data Centre

Virtual

Data CentreCITIES

Consolidated

Data Centre

Consolidation PhaseVirtualization Phase

Automation Phase

Compute

Storage

Network

Security

Application

• SANs, VSANs

• Tiered Storage

• Consolidate, Centralize

• Consolidated Network Services

• Secure Each Application Tier

Unification Phase


PS Scenarios with Affinity for CloudScenario

- Typical Applications

Driver for cloud adoption / Use Case Cloud Type

Citizen facing portals:

• Subject to Freedom of Information Act

• With event-driven access behavior

(disasters, campaigns, happenings, …)

• Scalability of cloud computing is attractive, due to highly variable and

unpredictable demand, e.g.

- Seasonality of access to some website (tax year, …)

- Disasters will drive people to some core portals (e.g. Texas Online)

IaaS (State/

Fed)

& SaaS

(Local)

• Backup and Disaster recovery

• BI / Decision Support Systems

• Unstructured Data, Grid Computing

• Paying „too much‟ for existing BC/DR solutions

• Increasing demand from legislature for more speed and capability

• See slides on cross-vertical IaaS opportunities for more detail

IaaS

• ERP HR, Finance

• Desktop Virtualization

• Collaboration

• Pilots underway already

• Cross vertical SaaS opportunities

• Specific collaboration use case (HUD): Embed UC an app e.g. open video

conference with field office while reviewing grant application for the city

SaaS (mostly)

STATE & LOCAL:

Data Management / Business Intelligence

• Public Safety and Police Video footage

• Explosive growth of content that needs to be retained

• Cloud scalability and low cost per GB attractive to store those data

IaaS

Seasonal apps/ deal with enrollment

• School enrollment, test scores

• Parks & recreation, Campaigns

• Peak-trough of these applications: 2.5 – 3.5

• Applications are often customized / special-built

• Flexibility of IaaS attractive to manage cost

IaaS & SaaS

FEDERAL:

• HUD: Single Family Mortgage Insurance

process (Batch)• High volume, working with multiple groups (e.g. 11,000 lenders) IaaS (mostly)

• IRS: Decision Support Systems - Data Mining

& Analysis• Analysis of history of tax collection, returns. Future revenue

projections. Need for increased frequency

• Pursued by Asst. Commissioner of Research pulling statistical data

(not individual data). Lower security requirements

IaaS

Source: Cisco IBSG SP


Siloed Technologies = Siloed Organization

App / Web Server AFS

Collaboration/Communication CTAPS

Content Networking / Mgmt DCS

Database AFS

Desktop CTAPS

Directory Services AFSIP Address Mgmt INS

IP Telephony INS

Networking INS

Print CTAPS

Server / OS DCS

Software Frameworks AFS

Storage DCS

WebServices / Appl Messaging AFS

Client Services & Support CTAPS

Identity Management AFS

Data Centre Manager

Application Groups

Client Service Manager

Network Manager

Voice Manager


Service Models and Technology Convergence Require Changes in the Organization Structure

Architecture Program & Portfolio Management

Solutions Architects

Ap

p /

Web

Serv

er

A

FS

Co

lla

bo

rati

on

/Co

mm

un

ica

tio

n

CTA

PS

Co

nte

nt

Ne

two

rkin

g /

Mg

mt

DC

S

Da

tab

as

e

A

FS

De

sk

top

C

TA

PS

Dir

ec

tory

Se

rvic

es

A

FS

IP A

dd

res

s M

gm

t

IN

S

IP T

ele

ph

on

y

IN

S

Netw

ork

ing

IN

S

Pri

nt

C

TA

PS

Se

rve

r /

OS

DC

S

So

ftw

are

Fra

mew

ork

s

A

FS

Sto

rag

e

DC

S

Web

Serv

ices /

Ap

pl

Messag

ing

A

FS

Management AFS

Security IST

Clien

t S

erv

ices &

Su

pp

ort

C

TA

PS

Iden

tity

Man

ag

em

en

t

AF

S

App / Web Server AFS

Collaboration/Communication CTAPS

Content Networking / Mgmt DCS

Database AFS

Desktop CTAPS

Directory Services AFSIP Address Mgmt INS

IP Telephony INS

Networking INS

Print CTAPS

Server / OS DCS

Software Frameworks AFS

Storage DCS

WebServices / Appl Messaging AFS

Client Services & Support CTAPS

Identity Management AFS

Data Centre Manager

Application Groups

Client Service Manager

Network Manager

Voice Manager


#3: Show the business case


The Value of a Cloud Operating Model For Public Sector Agencies

The most significant impact of a Cloud Operating Model is improved agency agility.

Other benefits include…

Lower cost structures for providing products and services (improved capabilities)…

Shorter cycles to deliver new services (rapid constituent impact)

Ability to implement changes in response to changing constituent needs (improved constituent care )

Ability to innovate due to reduced time spent on ―just getting things to work‖ (sustainable service models)…

and numerous others….

Source: Cisco IBSG Innovations


Value Approach – Old vs New Architecture

Top Initiatives1..........N

Old DC Architecture

TCO1..........N

New DC Architecture

TCO1..........N

What can be done with

$$ Available

Old

NewBusiness Benefit TCO


Data Centre Benefits Calculator


Green Infrastructure Carbon Calculator


Network Carbon Calculator


Other Business Benefits

Time to delivery for applications

Time to business capability

Application rationalization benefit

SLA benefits (application availability benefit)

Time to market for new services

Green / Sustainability


Key Takeaways

Service orientation and technology convergence will drive

change in your current infrastructure model.

You can choose to take advantage of this shift to create a

competitive advantage or wait until you are forced into the

change – either way, your infrastructure will change.

Three key areas to focus on to help you take advantage of

this change:

#1:Tell a story from the business perspective – lay out your vision

#2: Show your roadmap

#3: Show your business case – compete for resources!


Q & A

cloud computing...the cloud computing journey consumption models for it, applications and services...

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