stay ahead in the cloud

8/8/2019 Stay Ahead in the Cloud

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Stay Ahead

in

the

Cloud:

How

to

Grow

Your Cloud‐Based Services Business

Debra Osswald

Global Communications Industry Strategy Leader IBM Corporation



IBM Global Communications Industry

© 2009 IBM Corporation1

The changes in the communications industry ecosystem have not worked

out very well for our CSP friends, Cloud presents new opportunities…

Source: Forrester, “Farewell to the Traditional Telecom Ecosystem,” May 2009.

“ Each t i e r i s d i rec t l y connec ted to t he ad jacen t l eve l . Service to customerscan only be provided if the tiers areinterconnected...”

“ The ecosystem is in t e rdependen t as a w ho le . Just as eachpiece in the jigsaw must fit, the whole puzzle must also makesense. It is important that the whole ecosystem fit together.”

“ Each t i e r i s b roader in w ha t i t encomp asses .Rather than the relatively simple linear verticalsilo, the supply chain has added horizontalconnections too. Furthermore, each tier is more

complex than the one above it.”

NEW NEW OPPOR OPPOR - -

TUNI TI ES TUNI TI ES

NEW NEW THREATS THREATS





SaaS & Cloud Computing Have Emerged as the Next Enterprise Computing Platform

This Model Creates Opportunities for CSPs to Use Cloud Computing to Deliver an Expanded Set

of Services Providing Greater Value with Potentially Lower Infrastructure and Operating Costs

Source: Saugatuck Technology

Wave III: 2008‐2013Workflow‐Enabled

Business Transformation

Beyond Software‐as‐a‐Service: Cloud Computing

Wave I: 2001‐2006Cost‐Effective

Software Delivery

A d o p t i o n

Low

High

Wave II: 2005‐2010

IntegratedBusiness Solutions

SaaS 1.0

Early SaaS Adoption• Stand‐alone Apps• Multi‐tenancy

• Limited

Configurability• Focus on TCO / rapid

deployment

Mainstream SaaS Adoption• Integrated w/ Business• SaaS Integration Platforms

• Business Marketplacesand SaaS Ecosystems

• Customization

Capability• Focus on Integration

SaaS 2.0

Ubiquitous SaaS Adoption• Optimized Business Ecosystems• IT ‐Targeted Ecosystems• SaaS Development Platforms• Inter ‐enterprise Collaboration• IT Utility / SaaS Infrastructure• Customized, Personalized Workflow

• Focus on

Business

Transformation

2006 2007 2008 2009 2010 2011 2012 20132004 2005 2014 2015 20162003

Cloud Computing

Post‐SaaS Adoption• End‐to‐End Business Processes• Integrated with Services Anywhere• Intelligent Hubs Linking Platforms• Mobile Device‐ and Sensor ‐Controllable• SLAs for Composite Service Offerings• Dynamically Scalable Infrastructure• Focus on Optimal Business Process

Wave IV:

2011‐2016Measured, Monitored, Managed

Business Processes

The focus of SaaS shifts over time from cost‐effective delivery of stand‐alone application services (Wave I), to integrated

business solutions

enabled

by

web

services

APIs

and

ESBs (Wave

II),

to

workflow

‐and

collaboration

‐enabled

business

transformation (Wave III), leading to measured, monitored and managed business processes (Wave IV). By 2013, at least

20 % of enterprise IT workloads – that historically would have operated on‐premise – will be run in the cloud, providing significantly enhanced functionality, lower costs, fewer staff, and a reduced carbon footprint.





Cloud: Consumption & Delivery Models Optimized by Workload“Cloud” is a new consumption and delivery

model inspired by consumer Internet

services.

Cloud enables:

Self-service

Sourcing options

Economies-of-scale

“Cloud” represents:

The Industrialization of Delivery for IT

supported Services

Multiple Types of Clouds will co-exist:

Private, Public and Hybrid

Workload and / or Programming Model

Specific

Cloud Services

Cloud ComputingModel

Key Attributes of Cloud Services Shared, standard service – built for a market (public),

not a single customer Solution-packaged – a “turnkey” offering, integrates

required resources Self-service – admin, provisioning; may require some

“on-boarding” support

Elastic scaling – dynamic and fine-grainedUsage-based pricing – supported by service meteringAccessible via the Internet/IP – ubiquitous

(authorized) network access Standard user interface (UI) technologies –

browsers, RIA clients and underlying technologies Published service interface/API – e.g., web services

APIs Key Attributes Source: IDC, Cloud Computing 2010 Update, Sept. 2009.





IT Cloud Services Forecast Indicates Cloud Services MarketOpportunity is Large and Fast-Growing

26%

CAGR





Cloud market is composed of three sub-marketsComponents SupplyComponents Supply Business ServicesBusiness Services

Services

Software

Hardware

Infrastructure ServicesInfrastructure Services

Business Processas a Service (BPaaS)

Platformas a Service (PaaS)

Softwareas a Service (SaaS)

Infrastructureas a Service (IaaS)





A CSP must develop a Cloud Computing strategy that leverages theirassets & the unique aspects of Cloud to generate new, low-cost revenue

Cloud is changing the service deliveryparadigm. Can CSPs benefit?

Increasing number of workloads able toshift to the cloud, especially to privateclouds

The market is expressing stronger

interest in Private vs. Public Cloud – though both are appealing

Global economic situation highlightinglow cost and high quality service

Highly flexible compute model demandsa flexible delivery model

Range of network requirements createopportunities for cost savings when

networks are matched to workload;otherwise, risk of cost inefficiencies exists

CSPs are well-positioned to delivercertain cloud services given their assetsand expertise in the network domain

Cloud delivery networks haveunique requirements

Careful development and management of a cloud strategy are required to ensure that a CSP can deliver the value cloud promises at the lowest cost possible

Source: MI Cloud Computing Market Adoption August 2009.





Creating Your Cloud-Based Services Business

Identify the market opportunity most relevant for your business and the bestservice category to leverage core competencies and any unique assets

Assess the barriers to entry and competitive landscape

Identify several plays (service offering areas) with the highest probability forproviding differentiated value and financial success (e.g., 15% targetmarket penetration with 32% net profit margins on average per services).

Understand the required IT and network capabilities, ecosystem partnersand other interdependencies needed to deliver the identified services, aswell as how to best market and promote them.

Identify the most likely inhibitors to adoption and key counter measures.

Analyze the market to identify attractive price points and service bundles, aswell as other distribution channels and go-to-market strategy aspects, etc.





Two strategic frameworks to analyze the opportunityKey framework elementsKey framework elements Strategic frameworkStrategic framework

Industry / Segment / Sub-Segment

C o m m u n i t y v a l u e d r i v e r

• Financial svcs.

• CPG/Retail

• Government

• Energy & Utilities

• Healthcare

• Processes

• Information

• People

C o n s u m p t i o n m o

d e l

Workload

• Public cloudservices

• Shared cloudservices

• Private cloudservices

• Componentssupply

• Transactionprocessing anddatabase

• Analytics andhigh performancecomputing

• Businessapplications

• Web, collaborationand infrastructure

EnterpriseData Center

PrivateCloud

EnterpriseData Center

PrivateCloud

WWW

WWW

WWW

WWW

WWW

WWW

WWW

WWW

WorkloadsWorkloads Consumption modelConsumption model

Industry verticalsIndustry verticals Community value driversCommunity value drivers

x

x

UserA

UserB

UserC

UserD

UserE

Public Cloud

Services

Enterprise

IBM owned andoperated


Hosted PrivateCloud



Hosted PrivateCloud

Enterprise A

Enterprise B

Enterprise C

Shared CloudServices

ComponentsSupply

Infrastructure

Services

BusinessServices




© 2009 IBM Corporation9 9 Cloud Computing

It is critical to identify workloads with an affinity for Cloud Risk and migration cost may be too high

– Database

– Transaction processing

– ERP workloads – Highly regulated workloads

Can be standardized for cloud – Web infrastructure applications

– Collaboration infrastructure

– Development and test

– High Performance Computing

Made possible by cloud – High volume, low cost analytics

– Collaborative Business Networks

– Industry scale “smart” applications

9





Developing your Cloud requires addressing multiple ecosystems& providing a single, high-quality experience to cloud service users

S i n

g l e

W i n

d o w

Virtualized Infrastructure – Server, Storage, Network

A n c h o r

S a a

S I S V

,

P a r t n e r s

I n d u s

t r y P a r t n e r s

D e s

k t o p

C l o u

d

D e v e

l o p

e r

C l o u

d

Common Cloud Service Platform

I S

V

I S

V

I S

V

Single access to

all services onthe CSP Cloud

Developers

and Users

Application ISV, Client/

Partner Ecosystems

CSP Cloud

E c o s y

s t e m

E n a

b l e r

O t h e

r I B M p

l a y s

/

o

t h e r

I S V s

PaaS Tooling

BSS plugin OSS plugin

2 3

…

A P I

Common Cloud Platform

+

CSP Cloud Ecosystem

Platform ISVs4

CSP Users1





The right systems management software and tools can addressthe many challenges of deploying secure, cloud-based services.

Centralized Identity and Access Control policies

Well-defined input/output interfaces

Consistent enrollment, proofing, validation and management of trusted usersPeople and

Identity

Computing services running in isolated domains as defined in service catalogs

Default encryption of data in motion & at rest

Virtualized storage for better inventory, control, and tracking of master dataInformation

and Data

Autonomous security policies and procedures

Personnel and tools with specialized knowledge of the cloud ecosystem

SLA-backed availability and confidentialityProcess &Application

Automated provisioning and reclamation of hardened runtime images

Dynamic allocation of pooled resources to mission-oriented resources

Simplified, built-in security controlsNetwork Serverand Endpoint

Closer systems coupling for management of physical & logical identity/access

Strong platform of compute resources with workload-balancing and resiliency

Highly-fortified physical data centersPhysical

infrastructure





CSP Challenges are Making Cloud-based SDPs Attractive

Business challenges are increasing and putting more pressure on CSPs: Grow customer base for existing service offerings. Increase ARPU and retain customers (especially higher value customers).

Reduce time-to-market for new service offerings. Quickly respond to changes in market demand and competitive offerings. Enable innovative and flexible billing/business models for service offerings. Deliver services with shared infrastructure and cost-effective security model.

Greater number of competing priorities for capital funding:

The pressure in allocating limited capital funding drives CSPs to outsource many non-network systems (and recently, to outsource the operations of their networks as well). CSPs should invest their funds in developing the services that ride on the SDP rather

than on building and maintaining the SDP itself.

SDPs are often more complex than some CSPs are prepared to manage:

Large scale SDP deployments integrate many technologies across network, Internetand partner interfaces and require capacity planning and performance monitoring. After some first-hand experience with early SDP systems, some CSPs are finding they

do not have all the skills in-house to manage, grow and expand these platforms. Many CSPs would prefer to partner and share the deployment risk with an experienced

vendor rather than take on the total project risk alone.





The SDP can leverage traditional IT computing investments and link

services and applications to the business processes that monetize them.Many CSPs consider their SDP the main engine of revenue generation and Brand growth .

OSS/BSSOSS/BSS

Service Fulfillment

Service Assurance

Billing

Mediation

Analytics

Information Managemen

t

Security

ServicePlatformServicePlatform

NetworkNetwork

ServicesServices

SDPSDP

Business Processe

s

DynamicSOA

Service Creation

Desig

n

Build

Deploy

Service Execution

Legacy Services

Next Gen Services

Network

Adaptation NGN // Legacy

Service Exposure Third Party AccessPortals / Web 2.0Mobile Retailing /

Payments

A Cloud-based SDP can provide these same functions in close coordination with the existingCSP model; in some cases to replace functions, in other cases to enhance or extend them.





Leverage Your Service Delivery Platform to Offer Cloud Services

Solution Overview

• Self-service request & subscription model for end users.

• User initiated request and subscription of service offerings through service catalog model.

• Deployment of new service requests based on current resource allocation and utilization.

• Integrated automated provisioning and resource monitoring for efficient service deployment.• Usage metering of services and supporting resources to enable a variety of billing models.

• Comprehensive security framework:

• Privileged User Access, Cloud Identity Federation, Data/Information Security, Infrastructure Security

Solution Benefits

• Enables development of innovative services

• Decreased time to market for new services

• Reduced on-boarding cycle time for new content

• Choreography of standardized businessprocesses across all service offerings

Billing & Metering

Services

Security

Services

Monitoring

Services

Provisioning

Services

Deployment

Services

Workload Mgmt

Services

End User Consumable ServicesRequest & Access Services

Implementation Tools & Services

S er vi c e D el i v er yP l a t f or m

Business Services





Developing the Cloud services strategy & implementation plan is the first step.

Without a solid strategy, attempting to offer Cloud-based services can be a hugeresource drain and an initiative that does not achieve its intended objectives

– Wasted time, energy and money resulting in poor customer perception of the CSP’s Brand

– Customer churn resulting from dissatisfaction with the service experience (QoE)

– Poor control of the services delivered; risk of security threats and data/privacy vulnerabilities With a sound strategy, Cloud computing can be a huge opportunity for many CSPs

– The effort results in a lower cost, more responsive, dynamic infrastructure better able toserve both internal and external user requirements

– Optimized service delivery model enables CSP to offer a broader range of services resultingin higher ARPU, and improved customer satisfaction and loyalty

– Greater flexibility in business models and billing arrangements

5 Steps to Cloud

IT Roadmap ArchitectureWorkload

AssessmentEnterprise & Public

Cloud MixImplementation

Systems Storage

Network

ComputingInfrastructure

Platform &Applications

EmailBus

Apps

BPMSys

Mgmt

InfoMgmt

WebServer

E-Mail,Collaboration

SoftwareDevelopment

Test and Pre-Production

DataIntensive

Processing

Database ERP

Enterprise

Private Public

Hybrid

Trad

IT

Capital

PrivateCloud

HybridCloud

T i m e

TradIT

Rent Financial

W o r k l o a d

C u s t o m

S t a n d a r d

ServiceDefinition

Tools

ServicePublishing

Tools

ServiceFulfillment &Config Tools

ServiceReporting &

Analytics

ServicePlanning

RoleBasedAccess

OSS

BSS

Infrastructure

Platform

Software

EndUsers,

Operators

ServiceCatalog

OperationalConsole

CloudServices

Cloud Platform





IBM’s approach is based on our own transformation

1997 Today

CIOs 128 1

Host data centers 155 7

Web hosting centers 80 5

Network 31 1

Applications 15,000 4,700

From 2002 through 2007, IBM's own ITinvestments delivered a cumulativebenefit yield of approximately $4 billion.For every dollar invested, we saw a$4 cumulative benefit.

IBM ITTransformation

Cloud-enabledon demand ITdelivery solution

Self-service for 3,000 IBM researchers across 8 countries.

Real time integration of information and business services.

The virtualized environment will use 80% less energy and

85% less floor space. 2X existing capacity, no increase in consumption or impact

by 2010.

Project

Big Green

Consolidation and virtualization - thousands of servers ontoapproximately 30 IBM System z™ mainframes.

Additional virtualization leveraging System p, System x andstorage across enterprise.

Substantial savings being achieved in multiple dimensions:energy, software and system management and support costs.

Data CenterEfficiencies

Achieved





An Example: IBM Technology Adoption Program Cloud

Economic Benefits of a Cloud Deployment Model

ImpactReduction of Total Cost of Ownership of

Data Center Infrastructure

Reduced Capital ExpenditureImproved utilization reduces requirement for

new capital purchases

Reduced Operations ExpenditureLower facilities, maintenance, energy, IT

service delivery and labor costs

Additional BenefitsReduced risk, less idle time, more efficient useof energy, acceleration of innovation projects,

enhanced customer service

Business Case Results

Annual savings: $3.3M (84%) Costs went from $3.9M to $0.6M

Payback Period: 73 daysNet Present Value (NPV): $7.5M

Internal Rate of Return (IRR): 496%Return On Investment (ROI): 1039%

ROI Analysis

CurrentIT

Spend

StrategicChangeCapacity

Hardware,

labor &powersavingsreducedannual costof operationby 83.8%

Hardware Costs( - 88.7%)

Labor Costs( - 80.7%)

100%

Deployment (1-time)

Note: 3-Year Depreciation Period with 10% Discount Rate

HardwareCosts

(annualized)

Liberatedfunding for newdevelopment,

transformationinvestment ordirect saving

Labor Costs(Operations and

Maintenance)

Power Costs(88.8%)

PowerCosts

SoftwareCosts

SoftwareCosts

New

Development





VNTT: Telecom Services Cloud for BusinessesVietnam Technology & Telecommunications - State owned telecom joint venture

http://w3.ibm.com/news/w3news/top_stories/2009/06/vn_wins_vnttoncloud.html

Goal:

Become a leading CSP provider of cloud-based ITservices

Support a powerful ecosystem for innovation

Establish an incubator for new business models

Transform how IT is consumed in Vietnam

Pain Points:

Efficiently provide resources & services to surrounding

companiesBenefits:

Accelerated time to market and provides rapid access toapplication services and virtual resources

Provided business flexibility and lowered costs with anattractive “pay per use” model that could be offered toclients

Enabled rapid establishment of a cloud based datacenter

Monitoring(Tivoli Monitoring)

Monitoring(Tivoli Monitoring)

Provisioning(Tivoli Provisioning

Manager)

Provisioning(Tivoli Provisioning

Manager)

Servers Network Storage

Physical and Virtual Resources

Business UsersBusiness Users

IT AdminsIT Admins

Self-service Portal

Backup(Tivoli Storage

Manager)

Backup(Tivoli Storage

Manager)

CollaborationSoftware

VNTT Cloud Center built on IBM Platform and Software (Tivoli monitoring, Tivoli Storage, Tivoli Provisioning Manager, Lotus Domino, Lotus Foundat ion, WebSphere Por tal Express





An architectural model that includes standards based interfaces is key

ServiceCreation & Deployment

ServiceRequest & Operations

ServiceProvider

ServiceDefinition

Tools

ServicePublishing

Tools

ServiceFulfillment &Configuration

Tools

ServiceReporting &

Analytics

ServicePlanning

Role-basedAccess

Operational Support Systems (OSS)

Business Support Systems

(BSS)

Infrastructure Services

Software Platform Services

Application, Process and Information Services

End Users,Operators

ServiceCatalog

OperationalConsole

Standards Based Interfaces



Cloud Services

Cloud Platform





Services will be workload driven

Web infrastructure applicationsCollaborative infrastructureDevelopment and testHigh Performance Computing

Test for Standardization Examine for RiskDatabaseTransaction processingERP workloadsHighly regulated workloads

High volume, low cost analyticsCollaborative Business Networks Industry scale “smart” applications

Explore New Workloads

Workload characteristics determine standardization

– For example, transaction and information management processes may present challenges and risks

– Other workloads, such as collaboration and development and test, will move faster and can provide rapid return-on-investment and productivity gains.

For most enterprises, the best opportunities will be clear



10/23/2009 25

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