How to Formulate Your Cloud Strategy

A methodology for migrat ing IT serv ices to the c loud

A WHITE PAPERBY CLOUD CRUISER

Execut ive Summary

As cloud computing accelerates, and its value becomes better known and understood, both

the hype and the economic need pressure IT to begin migration of some applications or utility

services to cloud platforms. Moving the wrong services could result in huge and expensive

troubles, but failing to move the right services could mean lost opportunities. So, how do you

evaluate and select the right IT services to move?

In this paper, we’ve put together a methodology to pick the right services for migration to cloud-

based platforms. We’ll consider the major service categories, such as data and applications, as

well as how they rank in importance to the business.

This paper is business case-focused, meaning the migration to the cloud should have a clear

business benefit. We’ll provide concepts to better understand the value proposition for the use of

cloud-based platforms, as well as suggest approaches and tools that will help you understand the

existing state of your IT assets. You’ll also learn how you can benefit from moving some or most

of these services to public, private, and hybrid cloud platforms, and how to monitor that value

once your cloud-based systems are in production.

In t roduct ion

Many in IT find it hard to translate their

existing business needs into a true migration

plan. We’re quickly reaching a point in time

when a migration plan will be a requirement,

one that includes financial considerations and

strong metrics. Those who have kicked the

cloud computing can down the road for the

last several years now face situations where

cloud computing can provide some unique

strategic and economic advantages that can

no longer be ignored.

The first trick is to understand how to define

the business value. The second trick is to

define the business case for the migration, as

well as the prioritization of services, and then

develop an ongoing strategy to monitor and

optimize the financial value to the business.

This means leaving nothing to chance. You

need complete visibility into what drives your

cloud solution, and how that cloud solution is

measured in terms of operations, as well as

the strategic value to the business.

The concepts provided in this paper will guide

you through the process of selecting the right

IT services for migration to the cloud. We will

also provide a model in the form of an Excel

spreadsheet that you can leverage for your

own enterprise to do a self-evaluation. The

examples in this paper use that tool, and we’ll

walk you through a use case using the same

concepts, process, and model.

This model should provide the knowledge and

methodology you’ll need to get through the

initial analysis, and put you on the right path

toward enterprise service migration to the

cloud. The model is meant to be modified to

meet your exact needs. As such, it will provide

a sound foundation to get you started on the

right path to move your IT services to cloud

computing, or give you an understanding as to

why certain services should not move to the

cloud.

This approach provides the ability to

understand the technology benefits of

leveraging cloud computing for certain IT

services, as well as how to form business

cases that will typically guide you toward

the right services selections. It’s a matter

of understanding what goes where, and

then following a process to create the right

prioritization of service migration (when it

goes), and how this all translates into a master

plan (how it goes).

There are a few fundamental issues to consider when selecting which IT services should

move to the cloud, including the business use case, the demand for the service, and the

patterns of usage. During the selection process, we evaluate the services as potential private

or public cloud services, and approach this problem from the business to the technology.

As an accompaniment to this white paper, we provide you with a basic model in the form of

a spreadsheet that you can leverage as-is, or modify to meet the exact requirements of your

organization. You now have the guidelines and the basic tool you’ll need to make the right

initial calls.

>> Open spreadsheet here

The process we suggest is basic, but effective, if followed correctly. There are two major

steps:

First, create a list of IT services that should be considered for relocation to the cloud. These

services will be categorized and evaluated for the purposes of understanding their relevance

to the business and their dependencies on other key factors, as depicted in Figure 1. Second,

consider these services in relationship to different cloud models, and understand the patterns

of the IT services in the process, as depicted in Figure 2. Note that the output from one,

feeds into the other.

Select ing IT Serv ices for Cloud

Figure 1: The process of selecting IT services for the cloud results in the initial services catalog, which defines the ser-vices that should move to new platforms, including cloud-based platforms.

Model

IT Service Identification Model

Note: Zero out existing values in green and input the values that are relevant to your business.

Service CategoriesRelative importance to the business

Data35%

Application35%

Infrastructure10%

Management10%

DevOps10%

Sum100%

Service Position Relative to Benefit (1-5 scale) 1=less advantaged 5=more advantaged

AgilityTime to MarketCostScalingRiskBus ValueOther

Data32.5322.533

Application3.533322.52

Infrastructure433.532.522.5

Management3422322

DevOps32.543222

Weighted Scoring, Service Positioning

BenefitsWeightingAgilityTime to MarketCostScalingRiskBus ValueOther

Data35%1.10.91.10.70.91.11.1

Application35%1.21.11.11.10.70.90.7

Infrastructure10%0.40.30.40.30.30.20.3

Management10%0.30.40.20.20.30.20.2

DevOps10%0.30.30.40.30.20.20.2

Index score100%3.32.93.12.62.32.52.4

Relative importance of Service Catagories:

Individual benefits of Cloud Service:

Mapping a few benefits against each other:

Time to MarketDataApplicationInfrastructureManagementDevOps0.8751.04999999999999980.300000000000000040.40.25AgilityDataApplicationInfrastructureManagementDevOps1.04999999999999981.22499999999999990.40.300000000000000040.30000000000000004Time to MarketDataApplicationInfrastructureManagementDevOps0.8751.04999999999999980.300000000000000040.40.25CostDataApplicationInfrastructureManagementDevOps1.04999999999999981.04999999999999980.350000000000000030.20.4DataApplicationInfrastructureManagementDevOps0.350.350.10.10.1AgilityDataApplicationInfrastructureManagementDevOps1.04999999999999981.22499999999999990.40.300000000000000040.30000000000000004CostDataApplicationInfrastructureManagementDevOps1.04999999999999981.04999999999999980.350000000000000030.20.4ScalingDataApplicationInfrastructureManagementDevOps0.71.04999999999999980.300000000000000040.20.30000000000000004RiskDataApplicationInfrastructureManagementDevOps0.8750.70.250.300000000000000040.2Bus ValueDataApplicationInfrastructureManagementDevOps1.04999999999999980.8750.20.20.2OtherDataApplicationInfrastructureManagementDevOps1.04999999999999980.70.250.20.2

IT Service Selection ToolFile AttachmentDouble-click to open

Understand the Business

The first step in the process is to understand

the core business IT assets. What systems

are already in place, including applications,

data, services, processes, security

and governance? We do this to form a

fundamental understanding of what exists

before we move through the process of

creating the services catalog. Lacking this

information, we can’t identify the services

that are best to relocate to the cloud.

The idea here is to gain a good

understanding of the application

architectures, use of data, governance,

security, etc., and thus know the best

way to turn core application services into

cloud services. This includes having an

understanding of the structure and workings

of the database, how the database is

accessed, the use and execution of business

logic, integration with user interfaces and

perhaps other core business processes.

The Process

The best way to deal with this situation

is to decompose the application into

functional primitives, typically data, services,

processes, user interfaces, processes, etc.

However, this is no easy task, taking months

for larger enterprises.

From there we can understand each

primitive, and then recreate a logical

architecture for the application that best fits

the needs of the cloud service we’re looking

to expose or migrate. Then it’s a matter

of mapping the new logical architecture

into a physical architecture, and then you

can define the work to create that physical

architecture.

The output from this process is typically a

list of IT assets, what they do, how much

they cost, ownership, and other details

you can gather that will provide a better

understanding as we move through the

remainder of the process.

Data

Appl icat ions

Services that are primarily concerned with producing and

consuming data. While these are typically databases, they

could be data services that exist on top of existing data as

well.

Services that provide core solution functionality, such as

business processes. They are typically bound to data or data

services, as we’ve previously defined. However, it’s helpful to

break them out into their own category to better understand

services as separate and more primitive concepts.

Services that provide core infrastructure services, such as

storage and compute, which are not specifically bound to an

application or data service. Think of this category as providing

all of the foundational services that allow applications and

data to exist.

Services that manage other services. For example, the ability

to monitor applications, data, and infrastructure operations.

They provide a “single pane of glass” view into the other IT

services, which may become cloud services. All services, no

matter if they are legacy or cloud-based, require some type of

management.

Services that are focused on the development, deployment,

testing, and operations of an application. The term refers

to development and operations working together, as well as

core services that support both development and operations.

This also includes newer and emerging concepts, such as

continuous integration and continuous delivery, which are

directly associated with the use of on-demand cloud-based

platforms.

Def ine Serv ice Categor ies

In the first step, we begin to place the candidate services into service categories, including:

In f rastructure

The Process

Management

DevOps

How the service is linked to the data defined in the previous step. For instance, a customer edit service would obviously work on customer data

Defines how services are linked to applications

How the services is bound to infrastructure services, such as storage

Refers to who owns the service(s), including people, organizations, cloud providers, etc.

How the service will likely perform during operations. Complex services can perform poorly due to dependencies upon external system services, while simple services typically perform well considering that not much is going on.

The service’s security services, such as encryption.

The compliance issues the service must handle. For example, the need to comply with emerging healthcare regulations.

The aspects of organizational policy that are parts of the service. For example, accounting policies around accounts payable leverage the accounting organization.

How the service should be managed. For example, management interfaces the service may provide.

Data Bindings

Appl icat ion Bindings

Infrastructure Bindings

Owners

Performance

Secur i ty

Compl iance

Organizat ion

Management Prof i le

The Process

Def ine Candidate Serv ices

In this step, we take the IT services we’ve listed, and evaluate them based on dependencies

and other core concepts listed below:

Create Initial Services Catalog

The value of services catalogs is to provide

a single access point for discovery, as well

as access to any number of services that

provide application functionality or data for

use by end users or applications. The value

is that we’re able to reuse these services

across applications, and they may exist on

any number of platforms, including private

and public clouds.

Cloud services catalogs are a centralized

resource to both discover and leverage

private or public cloud services. Growing

from the service registries and repositories

from the days of SOA, this technology is

now new and improved to provide a single

gateway for service access for applications

and end users.

The initial services catalog feeds into the

next part of the process. This is basically

a list of services that we’ve identified

through the processes and steps defined

in this section of the paper. They become

the initial starting point, a list of services

that are relevant to the business, and thus

services that should be considered for

cloud-platforms. The catalog defines what

these services do, their current operating,

and the costs of operating these services in

private or public clouds.

The Process

Once we have the initial services catalog, it’s time to select the right cloud-platform model

or models to leverage. Figure 2 depicts this process, through the creation of service profiles

and service bundles, and then using that information to select a cloud model (IaaS, PaaS, and

SaaS), as well as a delivery model (private, public, hybrid, or community). You can think of

this as selecting the right platform based upon the requirements we’ve previously gathered,

and the analysis in the model we provided.

The Model

Figure 2: Selecting the appropriate cloud model to host enterprise services requires an understanding of the services, the cloud models, and the delivery models. Using this process, we can determine where the enterprise services should best reside.

To select the right services to move to the cloud, you should define the categories of services

that are most important to the business. These are typically services that cost the most to

operate, and thus should be considered first when you’re looking to move to cloud platforms.

The next steps are to define the cloud models to deploy on. This is rarely a single selection,

such as just IaaS. More likely, you’ll pick a few if not all models of clouds, including IaaS, PaaS,

and SaaS, for use within your enterprise. This multi-cloud approach, or, leveraging several

cloud models and cloud brands, is common.

Finally, you need to select a delivery model. Your choices are private, public, hybrid and

community. Again, most enterprises will leverage a mix of public and private, thus hybrid is

the most popular approach. Indeed, there may be many brands of private and public clouds in

play at most enterprises. Your approach is completely dependent upon the business problems

you want to solve, as well as the analysis in the model we’ve provided.

The Model

Table 1: To select the right services to move to the cloud, define the categories of services that are most important to the business. This table drives a ranking approach that allows you to pick what service categories are most important to your business.

Let’s continue with understanding the model. Table 1, from our spreadsheet model, drives a

ranking approach for the service categories by considering their relevant importance to the

business. Note that the ranking will change based upon the types of organizations, including

the business objectives, that are currently in place.

Figure 3 shows the ranking via a spider diagram. Note that in our example, data and

application service categories are most important to this business. This the typical case for

most enterprises, but some place a greater emphasis upon infrastructure and management

than data and applications. Newer organizations may stress services related to DevOps,

considering that they are typically building new applications at a much greater rate.

Figure 3: This is how the ranking looks when we compare service categories using our example’s data. Your organization may look very different, and that’s okay.

Service Category Relat ive Importance to the Business

Data 35%

Appl icat ion 35%

Infrastructure 10%

Management 10%

DevOps 10%

Sum 100%

The Model

Additionally, we will need to rank each service category with other factors, including “Agility,”

“Time to Market,” “Cost,” etc. (see Table 2). This allows us to figure the relative advantages

each service category brings to the business, and thus allows us to better prioritize the

ranking of types of services that should move to the cloud.

Again, the potential benefits that are ranked against the service categories include:

The organization’s ability to change to accommodate new requirements, such as changes in the market. Cloud computing can provide resources on-demand, as well as change those resources, which provides the value of agility.

Related to agility, time to market speeds business solutions into production. For example, applications can be quickly created and updated to accommodate new product lines, or changes to product lines.

An obvious benefit is reducing the amount of IT services costs. The less the better.

The solution can scale up to support more users and higher processing loads. Cloud computing typically can self- or auto-provision, and has access to a massive amount of resources, which results in the ability to scale.

In typical cloud architectures, we avoid risk by shifting that risk to public cloud providers. They invest in hardware and software infrastructure, not your enterprise, and thus there is less cost of risk to your organization.

The ability to increase the value of the business with the use of cloud-based platforms as way to drive innovation and grow revenue.

Other things that you may want to consider include compliance, organizational culture, customer management, etc. Keep in mind that you will have to adjust this model to meet the exact needs of your organization; these are just general guidelines.

Agi l i ty

Time to Market

Cost

Scal ing

Risk

Business Value

Other

The Model

Table 2: Rank each service category with other factors. This allows us to figure the relative advantages of each service category, and thus allows us to better prioritize the ranking of types of services that should move to the cloud.

So, using our example data in the Table 2 model, we can rank each benefit relative to our

business for each service category (the data entry area is green), in this case, from 1 to 5.

The idea is to rank the true benefits to your organization, and this goes against the weighting

around the service categories (see Table 1), and is also stated in Table 2 as well.

The calculations on the lower table, are the weighted scores as to how much weight you

put on each service category (from Table 1), as related to the benefits and the ranking you

provided from 1 to 5. The index score on the bottom line is telling, considering your input, and

should be leveraged to determine priorities as to which services to move first to the cloud.

Service Categor ies Relat ive to Benef i t ( 1 -5 scale) 1= less advantaged, 5=most advantaged

Agi l i ty Time to Market

Cost Scal ing Risk Business Value

Other

Data 3 2.5 3 2 2.5 3 3

Appl icat ions 3.5 3 3 3 2 2.5 2

Infrastructure 4 3 3.5 3 2.5 2 2.5

Management 3 2.5 2 2 3 2 2

Operat ions 3 2.5 4 3 2 21 2

Weighted Scor ing, Service Posi t ioning

Weight-ing

Agi l i ty Time to Market

Cost Scal ing Risk Business Value

Other

Data 35% 1.1 0.9 1 .1 0.7 0.9 1 .1 1 .1

Appl icat ions 35% 1.2 1 .1 1 .1 1 .1 0.7 0.9 0.7

Infrastructure 10% 0.4 0.3 0.4 0.3 0.3 0.2 0.3

Management 10% 0.3 0.3 0.2 0.2 0.3 0.2 0.2

Operat ions 10% 0.3 0.3 0.4 0.3 0.2 0.2 0.2

Index Score 100% 3.3 2.7 3.1 2.6 2.3 2.5 2.4

The Model

An Example

For example, a retailer wants to prioritize the initial services that should be relocated to the

cloud. In their ranking of service categories, “Data” is most important for our retailer, say,

60%. As an aspect of the “Data” service category, “Agility” and “Time to Market” are the most

important benefits, and thus are rated as 4 out of 5 each. After filling out the other rankings

around service categories, the index score will reveal the calculation that provides suggested

prioritization of service migration. In this case its “Data” services that provide the core

benefits of “Agility” and “Time to Market,” which will typically be at the top of this list.

Again, this is to be leveraged as a structured approach to selecting services for migration.

Consider that this process will take years for most businesses. It’s important to migrate the

services that provide the most value first. Moving in correct priority order means that the

benefit of cloud computing will be effective sooner. Moreover, leveraging a cloud financial

management system, such as discussed later in this paper, will provide validation of the value

that the migration of these services to the cloud will, or are, actually bringing.

Figure 4, below, is a spider diagram that depicts the top three benefits (agility, time-to-market,

and cost), as ranked against the service categories in our example. This helps you understand

how the benefits map to specific service patterns that are important to the business.

Figure 4: This is a graphic representation of the top three benefits, as ranked against the service categories.

Leveraging Tools and Technology to Def ine Demand

WHAT YOU NEED WHAT YOU’LL GET

BEST

• Understanding of biggest consumers and why• Unit cost data for baselines and benchmarking

Dashboard level reporting and tracking• More credibility in business cost analysis

• Detailed consumption of all resource units• Detailed consumption of all resource units by

department• Detailed costs by resource unit

GOO

D • An aggregate of existing consumption and costs • Tops down look at costs at the server or instance level compared to a total forecasted number

BETT

ER

• Existing consumption by major resource group (CPU, memory, storage, network)

• Costs by major resource group

• ‘T-shirt’ sizing comparison data

• Demand counts for build or buy decisions and improved ability to estimate public cloud costs

In order to understand and quantify the demand for IT services, you need visibility into cost

analysis, both past and future. As depicted in Figure 5, you can see that we have good, better,

and best approaches, where the best approach is an understanding of the detailed consumption

of all resource units by department, as well as detailed costs by resource unit. Resource units

are the way we measure the use of cloud on traditional IT resources.

Figure 5: In order to determine costs, you’ll need a good understanding of consumption.

In gathering this data, we need to identify the largest consumers, and understand why they are

the largest. Also, define the unit cost of data for baselines and benchmarking. Finally, we need

a dashboard for reporting and tracking, and the ability to track this data back to the IT resource.

These tools enable you to make the right calls, in terms of IT services that should be considered

for relocation to cloud-based platforms. Without this data, you could select IT services that are

actually more costly to run in the cloud, or perhaps don’t provide the business value to even

be considered for a move to the cloud. Moving the wrong services to the wrong platform is a

common, and costly, problem for enterprises.

Leveraging Tools and Technology to Def ine Demand

Tools and technology that are useful here include those that provide cloud financial management

capabilities, such as those by Cloud Cruiser. Cloud Cruiser offers a funding model for your

cloud investment, based upon measurable, defensible IT service usage, not arbitrary accounting

allocations. You can now make calls around the migration of IT services based upon real

business need, and eliminate wasteful spending caused by selecting the wrong services to

move that don’t provide the best impact to the business (see Figure 6).

Figure 6: Cloud financial management systems provide dashboards for use by cloud providers and cloud consumers that offer an immediate look at the state of the business, in terms of usage, cost, billings, etc.

Other features you should consider include:

Automated IT cost collection across hybrid IT which provides automated collection of all your

IT cost data from any private cloud, public cloud, and traditional IT computing platform. This

data is leveraged as foundational analysis to understand the true value of moving services into

private, public, or hybrid clouds.

Universal heterogeneous IT cost metering allows complete cost transparency by collecting

any measurable IT service cost from web services, APIs, databases, spreadsheets, log files, and

more. Considering the issues covered in this paper, this tool helps us understand existing costs

prior to migration of IT services to cloud-based platforms, as well as understand the value they

deliver, or not, when hosted on cloud-based platforms.

Hierarchical IT cost resource mapping allows you to align your IT budgets with business goals

by providing finance and management with cost visibility by department, IT service, business

function, technology tower, or any other accounting structure.

Conclusion

This paper provides basic guidance to form an understanding of your existing state of IT, and

how the use of cloud-based platforms may benefit your business, or not. The intent was not to

present just a bunch of decoupled concepts, but to provide you with the steps you need to make

good decisions about the use of cloud computing, and even a model that provides a mathematical

approach to make your decisions. While no approach is foolproof, having a foundation of

understanding increases your chances of success.

Enterprises re-focused these days on migration to public and private clouds, but often have no

clue how the process works. Many just follow the hype. Smarter organizations understand that

the business case is where the focus should be. This includes an understanding of existing legacy

IT assets, and then following a process to determine which IT assets provide a good business

case for their movement to a cloud platform.

A surprising number of enterprises do not use this business-driven approach to cloud computing

migration. Most lack visibility into existing assets and operational costs, and few understand the

true costs to relocate to and operate on public and private cloud platforms. It’s unacceptably

common for enterprises to move major business processes and other IT services to cloud-based

platforms that actually cost more than traditional platforms, and add risk to the business. You don’t

want to face these issues.

About the Author

Leading technology publications frequently name David S.

Linthicum among the top 10 enterprise technologists in the

world. He is a true thought leader in the industry, and an expert

in complex distributed systems, including cloud computing,

data integration, service oriented architecture (SOA), and big

data systems. As the author of over 13 books on computing

with over 3,000 published articles, as well as radio and TV

appearances as a computing expert, he is often quoted in

major business and technology publications. In addition, David

is a frequent keynote presenter at industry conferences, with

over 500 presentations given in the last 20 years.

David’s industry experience includes tenures as CTO and

CEO of several successful public and private software

companies, and upper-level management positions in Fortune

100 companies. Dave has delivered over $2 billion dollars in

value by transforming companies from traditional to innovative

technologies, moving them to lucrative exits that benefitted

investors, employees, and customers.

Founded in 2010 and headquartered in Silicon Valley,

California, Cloud Cruiser offers an innovative cloud financial

management solution that was built from the ground up

to support the cloud economy. It maximizes freedom of

choice for enterprises and service providers by providing

dynamic financial intelligence, chargeback, and billing across

heterogeneous IT environments. The company’s key strategic

partners include: Microsoft, HP, Cisco, VMware, Amazon,

Openstack, and Rackspace.

www.cloudcruiser.com

info@cloudcruiser.com

+1 844-223-9737 (USA)

+316250-66-463 (EMEA)

David L inth icum

Cloud Cruiser