digital transformation and the role of cloud computing capgemini mark skilton v1

Digital Transformation and the role of Cloud Computing

Mark Skilton

Director, GBD, Global Infrastructure Services, Capgemini

[email protected] [email protected]

mailto:[email protected]

2© Copyright Capgemini 2013 All Rights Reserved

Agenda

Digital transformation – Cloud in Context Challenges - case studies - SLAs & Cyber Security Case Study – Pharmaceutical Company Solutions – the Cloud Orchestrator and other

patterns

> Cloud Ecosystem and TOGAF CE

> Session Architecting on Social , Mobility , Big data and Cloud


Where have we got to ?

Unprecedented pace of change


Technology shift is not incremental

How do we cope with new Business Model Realities?


Capgemini Report on Global Cloud Adoption Nov 2012

460 detailed interviews with executives at a variety of enterprises (most with over 10,000 employees) from key sectors and from selected geographic regions. IT

executives and line-of-business decision-makers

http://www.capgemoni.com/insights-and-resources/by-publication/business-cloud-the-state-of-play-shifts-rapidly

Responsibility for deciding Cloud strategy lies with business units in 45% of cases, and with IT departments only just ahead with 46%.

Firms are increasingly taking a careful, step-by-step progression to Cloud maturity, rather than making an all- or-nothing decision – 80% respondents are saying they are maturity their adoption

78% respondents saying New applications and business initiatives are hitting the Cloud first, with many “edge” solutions going straight to the new platform, almost as a default;

IT and Business aligned in that 52% and 51% stated Cost reduction as main cloud driver

Cloud is now owned right across the business. A broad range of functions are now perceived to be involved in encouraging the use of Cloud – from the Board to Legal, in addition to IT.




Context of Business Constructs - Service Orchestrating This

FRONT END BACKEND END

TRANSFORMDIGITAL BUSINESS MODELS

TRANSFORMCUSTOMER EXPERIENCE

TRANSFORMOPERATIONALPROCESSES

Search Subscribe Consume

Process Publish Run

CEO, CFO, COO, CIO..

MARKET ECOSYSTEM CONTEXT


Use of Digital Technologies to transform Customer Experience

The FRONT END


Use of Digital Technologies to transform operational processes


Technology drivers pushing New Digital Business Models


Some key questions for Technologists and BusinessNew models emerge…..

How much data traffic is there on the Internet ?

INTERACTIONS

21 exabytes per month 2010

How big is the Internet ? How big is 1 exabyte ?

DIGITAL NETWORK SIZE7 Billion “things” connected toInternet, tipping point 2008By 2020 50 Billion “things”Smart phones, PCs, devices..(2)

How big is big Data ?

DIGITAL DATA SIZE

161 exabytes in 2006 globally3 million times amount of Information contained in allthe books ever written (3)988 exabytes in 2010

1 exabyte = 1 million Terabytes

1 Zettabyte = 1000 exabytes

How is computing power increasing? When will computation power exceed the human brain?

DIGITAL COMPUTE POWER SIZE 1 Billion Transistors 2010 Had doubled per year but Moores Law ends in 2013Density double only every 3 years (4). Now Multi-core.

16 Petaflops 1.6 million cores 2012 – Super computer (16,000 trillion flops)76.8 GFLOPS GPU in A6X Apple ipad4

The “Exaflood” 2007(1)


Technology entanglement

INTERACTIONS

DIGITALDATA

DIGITAL NETWORK SIZE

DIGITAL COMPUTE

POWER

SOCIAL NETWORKS

INTERNETOFTHINGS

BIG DATA

SEARCH

ACCESS & LOCALITYTO CLOUDRESOURCES,MOBILITY

CONNECTIONS

MULTIPLICITYOF WORKLOADS

KNOWLEDGEINSIGHT

VALUE, RISK, TRADEOFFS

Innovation happening at intersections

DATA NETWORKS


So where do we go from here?2015 - 2020

Post cloud computing

Multiple device era

Ubiquitous presence

Ubiquitous potential access and choice

Changing population growth and dynamics

Changing Economics

Changing sustainable markets and resources

Reimagining

ExtensionsTodays World

Enhancements

Substitution

Disruptions

DIGITAL INNOVATION

Incremental

Warwick Business School - ISM

Digital Entanglement


Example Cloud Computing issues from IT perspective

Service Management

– Google email outage 10 Dec 2012. 15 minutes

– http://techcrunch.com/2012/12/10/gmail-experiences-a-widespread-outage-most-users-affected/

– http://www.zdnet.com/gmail-in-widespread-outage-also-caused-chrome-browser-crashes-7000008568/

Cyber Security

– Go-daddy domain hosting Sept 10 2012. 50,000 sites affected. 6 hours down

– http://news.cnet.com/8301-1009_3-57509753-83/go-daddy-serviced-web-sites-go-down-hacker-takes-credit/

– US banks cyber attack Sept 2012.and again in Jan 2013

– http://bits.blogs.nytimes.com/2012/10/05/in-cyberattacks-on-banks-evidence-of-a-new-weapon/

http://techcrunch.com/2012/12/10/gmail-experiences-a-widespread-outage-most-users-affected/

http://techcrunch.com/2012/12/10/gmail-experiences-a-widespread-outage-most-users-affected/

http://www.zdnet.com/gmail-in-widespread-outage-also-caused-chrome-browser-crashes-7000008568/

http://www.zdnet.com/gmail-in-widespread-outage-also-caused-chrome-browser-crashes-7000008568/

http://news.cnet.com/8301-1009_3-57509753-83/go-daddy-serviced-web-sites-go-down-hacker-takes-credit/

http://news.cnet.com/8301-1009_3-57509753-83/go-daddy-serviced-web-sites-go-down-hacker-takes-credit/

http://bits.blogs.nytimes.com/2012/10/05/in-cyberattacks-on-banks-evidence-of-a-new-weapon/

http://bits.blogs.nytimes.com/2012/10/05/in-cyberattacks-on-banks-evidence-of-a-new-weapon/


Data of Everything - Search versus Big Data

How everyone can use Hadoop / map reduce directly on Amazon to run his / her own analysis of the web

So the question is…

Not whether you have data of everything but how old and accurate is this data ?

How to marry intuition + data insight ?http://www.technologyreview.com/news/509931/a-free-database-of-the-entire-web-may-spawn-the-next-google/

http://www.technologyreview.com/news/509931/a-free-database-of-the-entire-web-may-spawn-the-next-google/

http://www.technologyreview.com/news/509931/a-free-database-of-the-entire-web-may-spawn-the-next-google/


Agenda

The Pharmaceutical Industry in Context


Competitive threats- New Competition DynamicsThis example illustrates Industry Services in Cloud that a SME can access and compete in areas that larger Companiesonce had incumbent control due to own assets and services. This means that there are lower switching costs via Self ServicePortals and 3rd party Cloud service providers. Because people can choose Self Service over other General Traditional Services


Pharmaceutical Industry

Global pharmaceutical market

• Worldwide

• Many segments: Consumer healthcare products, advanced medical devices,

• biotechnical research…

• Dynamic interconnected marketplace

• Local / Regional / Global Segmentation

• Multiple channels

• FDA / HIPAA compliance

• Patent Expiration

• Erosion of existing or expired brands

• Price cuts (lower operating costs)

• Reimbursements

Industry is heavily regulated

• Regional and global governance standards

• Patent Laws

• Products and drugs licensing

• FDA (US Food & Drug Administration) as well as specific health data protection laws such as HIPAA (Health Insurance Portability and Accountability Act).


The Pharmaceutical CompanyGlobal pharmaceutical companyHealthcare Products and Pharmaceutical

250 Operating Companies operating across Americas, Europe, Middle East, Asia Pac, South American Markets +

Wider Partner channel Ecosystem network

100,000 employees

Research &Development

Design Manufacturer

Brand Management

Sourcing

Support

Compliance Market

Trials LaunchesInvestment

Distribution

Values

Familyof

Companies

BusinessSegment

BusinessSegment

BusinessSegment

Consumer Health care

Medical Devices & Diagnostics

Pharmaceuticals

Franchises TherapeuticFranchises TherapeuticFranchises Therapeutic

Product range :

• Consumer products

• Medical Devices & Diagnostics

• Prescription Products

• Product Coupons, Promotional offers from the Family of Companies

Citizenship CorporateGovernance

People & Diversity

Business Processes

Organization

Categories

StrategicBusinessUnits

OperatingCompanies


Pharmaceutical Industry – Operating consequences

Dynamic distributed Business Workloads

• Research

• Collaboration

• Regulatory Compliance (FDA, HIPAA..)

Operating Model Pressures

• Constant Research

• Rapid Market trials

• Dynamic scaling up and down of collaborative product design /manufacturing

• Diverse distribution supply chains to deliver residential , wholesaler and retailer marketplaces


Familyof

Companies

BusinessSegment

BusinessSegment

BusinessSegment

Consumer Health care

Medical Devices & Diagnostics

Pharmaceuticals

Franchises TherapeuticFranchises TherapeuticFranchises Therapeutic

Categories

There are many internal and external stakeholders- The Formal Organizational Tree

TechnicalAssessmentPlanners

StrategicPlanners

Competitors

Own BUIs - Business Leaders

Own BUsBU CIO’s

Global CIO

Investment Funding Planners

Strategy Planners

InvestmentFundPlanners

Global CIO

Suppliers &Intermediates



How to you deal with the many internal and external stakeholders and investors ?

Suppliers

Customers

Customers & Channels

Geographies

Own BUs

Competitors

Intermediates

CIO

CIO

CIO

BusinessLeaders

BusinessLeaders

BusinessLeaders

HQ

Global CIO

Investment FundPlanners


StrategicPlanners

VirtualizationConsolidationPrograms

Competitors – SME can get cloud services and get into our market space. It can attack our customer base through lower entry from using 3rd party cloud resources which we previously enjoyed incumbent strengths from ownership of our own asset infrastructure.

Own BUIs - Business Leaders are buying Cloud services direct with external cloud vendors

Own BUs – BU CIO’s are pushing request for own Cloud projects

Global CIO - Wants to define a Cloud Strategy having seen the impact of the above trends in own business – IT needs to respond

Investment Funding Planners – How do I execute and build foundations for cloud investment to meet business needs?. What do I need to do? What do I need to build ? What is the 2 to 5 year roadmap?

Technical Assessment Planners – How do I compare different cloud vendor offerings ? – The comparing apples problem

Strategy Planners – How does the business investment need to change ? How does the Business itself need to change?

Virtualization Consolidation Programs – “..We are building our own Private Cloud and developing Projects to consolidate Servers into virtualization with Benchmarking ..”


Many competing Strategies


Security, GRC Governance , Risk and Compliance

In the Cloud everything is perceived as untrusted and insecure

Many enterprises have company policies requiring data and access to be stored behind the Corporate firewall; transport between geographies are not allowed

Industrial certifications require physical isolation, audit and authentication processes

Trust ?

Internal

Private

Hybrid

Public

PhysicalResources/locations Edge

IDAMNetwork

Encryption

Trust Zones

Contract Law

Compliance Law

…

http://en.wikipedia.org/wiki/File:ASUS_Eee_White_Alt-small.png


Changes Competitive Advantage Barriers?

Critical Success Factors CSFs

AssetInvestment

SwitchingCosts

SelfService

AlternativeChannelsof Service

Accessto Services

SourcingAssetOperations

Provisioning

Intermediates

Brokerage/Aggregation

Innovation

InnovationSourcing

Lowers

Lowers

LowersLowers

Lowers

RelativeCost OfEntry

Competitive Advantage Levers

Avoidance

UtilizationOptimization

AccessTime

Loci of riskResponsibility

B2CB2B

Collaborative

Responsibility

ConvenienceLeverage

Speed ofTransformation

Growth /Margin

Rate ofChange

One tomanySpeed

Economicsof Scale


How Technology develops Differentiation

RelativeCost Of Entry

Barriers toCopying Service

Barriers to Horizontal Investment Scaling

Barriers to Horizontal Geographic Scaling

Barriers toBrand Awareness

Horizontal geographicScaling

Bundling / Cross-sellingBrand Awareness

Mimicking Copying Service

Horizontal InvestmentScaling

Barriers to VerticalIntegration

Supply chainVertical Integration

Barriers toAugmented Intelligence

Collaboration, KnowledgeAugmented Intelligence

Barriers toAugmented capabilities

Content, insight, BPO, LPOAugmented capabilities

Barriers tobeing faster

Barriers tobeing more secure

Speed to marketSpeed of service flexibilitySpeed of operation performance

Dedicated ComplianceAssurance

Substitutable

canibalization

How does this change forEach Industry ? IntegrationBarrier versus legislation/openness ?

Does this suggest access andspeed are key ?

easierharder


Cloud Computing impact on the On Shore – Off Shore Model

• Redefines onshore• Moving to Cloud Computing redefines the need for each region and business unit to

develop certain types of IT service onshore.

• Common services• Common services hosted in a secure private cloud Data center provides the possibility

to move to an off-shore shared model for many business units.

• Front end Agility• Individual market and business unit agility is still essential for competitive response but

this can be supported by targeting cloud computing services for specific business activity needs.

• Off-shore Governance • The off-shore move also enables service management and capabilities to be invested in

shared regions to further improve the operating model organizational efficiency.


Technology of the Cloud processes

Moving to a Cloud Computing Environment involves a number of new IT and Business Processes

Hosting

Networks

Virtualization

ExternalServices

Physical Virtual

CloudServices

Services

ROADMAP JOURNEY…

ITPORTFOLIO

BusinessPORTFOLIO

InternalServices


Operating Roadmap concept

Refurbishmentof Infrastructure /

Data Centers

ModularData Centers

Mix of Commonand Specific

Business Services

Alignment of Business

Services with Modular Cloud

Services

Business Processes

Infrastructure Software Applications

Theworkloadsthat runon the Infrastructure

But , is this a Technical Roadmap…?

Workload Analysis


Self- Service and On-demand Collaboration Service model

Self-Service

• enables business and IT users to select the cloud hosted services to expand or change as the business needs change rather than go through a provisioning cycle with local or central IT.

On-demand Collaboration Service Model

• Quality of Service

• Aims to improve the quality of service and support in cloud hosted services

• Catalog based

• a Catalog and an Account Management process enabling business and IT users to get better visibility and control of usage and requests.

• Variants versus / and maverick buying / usage

• Conversely it enables variations and maverick buying to be monitored to encourage the development of further common IT service reuse and specific development of new capabilities based on actual usage demand patterns.

• Flexibility / Swaps

• Hitherto commercial contract locking customers and vendors into longer term contractual solutions limited options for change. Cloud computing catalogs and services aim to create a looser coupling between buyers, consumers and users of IT services.


Defining the Right Type of Cloud Computing Operating Model

Modular Data Centers

• Strategic Decision

• Strategic decision to move to Private Cloud Computing

• Existing Investment in Virtualization

• Pharmaceutical company already invested in infrastructure virtualization technology and a Global Data center Network. Enabled storage, compute, network, blades, switches and entire Data Center to be developed with the potential to be treated as an “appliance” – a “data Center in a Box”

• Refurbishment

• Modernize the Data center and infrastructure

• New Target Infrastructure

• Offer Modular Data Centers and Networks

• Enable a New Operating Model for IT Resources and Software Applications

• Align business capacity needs across global Operation to meet specific business unit needs


The Business needs driving new capabilities in Business and IT

What are the Role Needs ?

What are the Solutioning needs?


Typical Workloads Today 2013

Vertical Workloads

• Data Analytics

• Master Data Management

• Simulation

• Business Intelligence

Horizontal Workloads

• Email

• Storage

• Office Productivity

• VOIP comms , video

• Shared BusinessApps for

Diagonal Workloads

• Social Network collaboration

Enterprise Workloads

• ERP

• CRM

• MRKT

• SCM

• Finance

• ...

• IT Service Management

• Apps StoreManagement

• Business ProcessManagement

• MobileManagement

• Partner Management

• Security & GovernanceMonitoring Management

• SLA and QoSManagement

• Usage CapacityManagement, Metering


Market Workload - Services

SystemsWorkloads

Move to CloudIaaS

SaaS -Move discreteApps Workloads

AppsPortfolio

Non-Platformservices (Clientspecific service)

AppsPlatform

Workloads

SaaS - ApplicationPortfolio Services

BusinessPlatform

Workloads

BPaaS - BusinessPortfolio Services

Platform enabledServices

PaaS Dev /TestDevelopment

Bus

ines

s /

IT S

tack

Service Service Service

ISV SourceMarket Catalog

Integrated Information Services

ProcessIntegrated Platform

Ecosystem Management


Challenges

Shift in Revenue and Monetization models

Shift in funding models

Changing Sales Value and Platform sales automation

Changing Sales Channel methods to Cloud

Competitor versus Partner Cloud Ecosystem

Interoperability and Portability standards to support hybrid cloud agility function

Skills and competencies in house versus partners

Data synchronization and Ecosystem workload partition management e.g. Social Enterprise, Big Data,

Cost reduction shift versus new Innovation demand

Speed of change – hyper competition forces

digital transformation and the role of cloud computing capgemini mark skilton v1

Technology

consumer health

computing

digital network

investment

medical devices

models emerge

information

digital technologies