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Demystifying the cloud: New economics of cloud computing

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Demystifying the cloud: New economics of cloud computing Bruce E. Otte IBM Cloud Computing Marketing December 1, 2009 The world is getting smarter more ... – PowerPoint PPT presentation

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Title: Demystifying the cloud: New economics of cloud computing


1
Demystifying the cloudNew economics of cloud
computing
Bruce E. Otte IBM Cloud Computing
Marketing December 1, 2009
2
The world is getting smarter more instrumented,
interconnected, intelligent.
Intelligent oil field technologies
Smart energy grids
Smart retail
Smart traffic systems
Smart healthcare
Smart food systems
Smart water management
Smart regions
Smart weather
Smart countries
Smart supply chains
Smart cities
3
A crisis of complexity. The need for progress is
clear.
Global Annual Server Spending (IDC)
Uncontrolled management and energy costs
Steady CAPEX spend
To make progress, delivery organizations must
address the server, storage and network operating
cost problem, not just CAPEX
Source IBM Corporate Strategy analysis of IDC
data
4
CIOs visions of enhancing competitiveness
include business oriented elements
Six Most Important Visionary Plan Elements
Interviewed CIOs could select as many as they
wanted
High growth markets
Low growth markets
Source IBM Global CIO Study 2009 n 2345
5
Renovate innovate
  • How do we address the immediate pressure to cut
    costs, reduce risk and complexity?
  • How do we Innovate to take advantage of new
    opportunities?
  • How can we do both at the same time?
  • We focus on delivering services in new ways -
    lowering cost while increasing speed and
    flexibility!

6
Cloud Consumption Delivery Models Optimized by
Workload
Cloud enables
Cloud is
  • A new consumption and delivery model inspired by
    consumer Internet services.
  • Self-service
  • Sourcing options
  • Economies-of-scale

Cloud Services
Cloud Computing Model
Multiple Types of Clouds will co-exist
Cloud represents
  • Private, Public and Hybrid
  • Workload and/or Programming Model Specific
  • The Industrialization of Delivery for IT
    supported Services

7
Is cloud computing really new? Yes, and no.
  • Cloud computing is a new consumption and
    delivery model inspired by consumer Internet
    services. Cloud computing exhibits the following
    5 key characteristics
  • On-demand self-service
  • Ubiquitous network access
  • Location independent resource pooling
  • Rapid elasticity
  • Pay per use
  • While the technology is not new, the end user
    focus of self-service, self-management leveraging
    these technologies is new.

Usage Tracking
Web 2.0
Business Services
IT Services
End User Focused
Service Automation SOA
Virtualization
8
Today there are three primary delivery models
that companies are implementing for cloud
Enterprise
Traditional Enterprise IT
Public Clouds
Private Cloud
Hybrid Cloud
  • Public Cloud
  • IT activities/functions are provided as a
    service, over the Internet
  • Key features
  • Scalability
  • Automatic/rapid provisioning
  • Standardized offerings
  • Consumption-based pricing.
  • Multi-tenancy
  • Private Cloud
  • IT activities/functions are provided as a
    service, over an intranet, within the enterprise
    and behind the firewall
  • Key features include
  • Scalability
  • Automatic/rapid provisioning
  • Chargeback ability
  • Widespread virtualization

Hybrid Cloud Internal and external service
delivery methods are integrated, with
activities/functions allocated to based on
security requirements, criticality, architecture
and other established policies.
Source IBM Market Insights, Cloud Computing
Research, July 2009.
9
Cost savings and faster time to value are the
leading reasons why companies consider cloud
To what degree would each of these factors induce
you to acquire public cloud services?
Pay only for what we use
Hardware savings

77
Reduce costs
Software licenses savings
Lower labor and IT

support costs Lower outside maintenance costs

Take advantage of latest functionality

72
Faster time to value
Speed deployment

Simplify updating/upgrading

Scale IT resources to meet needs
Improve system reliability

Improve reliability
50
Improve system availability
Respondents could rate multiple drivers items
Source IBM Market Insights, Cloud Computing
Research, July 2009. n1,090
10
Elements that Drive Cloud Efficiency and Economics
Infrastructure Leverage
Virtualization of Hardware
Drives lower capital requirements
Virtualized environments only get benefits of
scale if they are highly utilized
Utilization of Infrastructure
Clients who can serve themselves require less
support and get services
Self Service
Labor Leverage
Automation of Management
Take repeatable tasks and automate
More complexity less automation
possible people needed
Standardization of Workloads
11
Managing Cloud Adoption
  • Cloud economics can be compelling
  • Small companies will adopt as reliable,
    easy-to-use services are available
  • Scale economics are within reach of many
    enterprises
  • Client migration will be work load driven
  • Trade-off is value vs. risk of migration
  • Workload characteristics are critical
  • New workloads will emerge as cloud makes them
    affordable (eg pervasive analytics, Smart
    Healthcare)

12
Enterprise Benefits from Cloud Computing
Capability
From
To
Server/Storage Utilization 10-20
Self service None
Test Provisioning Weeks
Change Management Months
Release Management Weeks
Metering/Billing Fixed cost model
Standardization Complex
Payback period for new services Years
70-90
Unlimited
Minutes
Days/Hours
Minutes
Granular
Self-Service
Months
Cloud accelerates business value across a wide
variety of domains.
Legacy environments
Cloud enabled enterprise
13
Clients cite "push factors" for and "barriers"
against cloud adoption for each workload type
Barriers
Higher propensity for cloud
  • Data privacy or regulatory and compliance issues
  • High level of Internal control required
  • Accessibility and reliability are a concern
  • Cost is not a concern
  • Fluctuating demand
  • Highly standardized applications
  • Modular, independent applications
  • Unacceptably high costs

Lower propensity for cloud
Push factors
Source IBM Market Insights, Cloud Computing
Research, July 2009. n1,090
14
IBM Best Practices Align the DR approach with
the environment and virtualize
  • Align DR to match environment
  • Update DR in line with changes in production
  • Provide choices to match customers considerations
  • Virtualizing the DR environment, along with the
    production servers and storage, can dramatically
    improve recovery times as measured in both
    recovery time objectives (RTOs), and recovery
    point objectives (RPOs).

Customer Example A large defense contractor
client was interested in the Resilient Cloud
Validation program to combat the very real fear
in the industry that clouds should only run
applications that you can actually do without for
a couple of days. Since their end-user clients
are all DOD, they needed to be able to prove to
them that the proposed Cloud services could
provide the same level of reliability that
traditional data center centric service offerings
provide. The Resilient Cloud Validation program
demonstrates to their clients and to the press
that they are running a true cloud service that
can be trusted.
15
So what is IBMs approach?IT needs to become
smarter about
  • delivering services and service management
  • Standardized processes
  • Service management systems provide visibility,
    control and automation
  • Lower operational costs and higher productivity
  • optimizing workloads
  • Rate and degree of standardization of IT and
    business services
  • Complex transaction and information management
    processes
  • Rapid return-on-investment and productivity gains
  • deployment choices
  • New models are emerging for the enterprise
  • Self-service, economies-of-scale, and flexible
    sourcing options
  • New choices of deployment define these new
    models

16
Focus on Managing Services
End to End Service Management
Architectural and process level integration that
delivers business aligned Visibility, Control and
Automation of all Data Center Elements
Modular, Self-contained, Scalable Workload
Delivery Platform
Legacy Environment NON IBM Solutions Requiring
workload connectivity
Modular, Self-contained, Scalable Workload
Delivery Platform
Service Management
Service Management
Service Management
WORKLOAD A
WORKLOAD B
WORKLOAD C




Facilities Infrastructure
Production Infrastructure
MobilityInfrastructure
TechnologyInfrastructure
Communications Infrastructure
IBM CONFIDENTIAL
17
Clients told us their implementation strategies
public or private Cloud, present or future for
25 specific workloads
  • Analytics
  • Data mining, text mining, or other analytics
  • Data warehouses or data marts
  • Transactional databases
  • Business Services
  • CRM or Sales Force Automation
  • e-mail
  • ERP applications
  • Industry-specific applications
  • Collaboration
  • Audio/video/web conferencing
  • Unified communications
  • VoIP infrastructure
  • Desktop and devices
  • Desktop
  • Service/help desk
  • Development and test
  • Development environment
  • Test environment
  • Infrastructure
  • Application servers
  • Application streaming
  • Business continuity/disaster recovery
  • Data archiving
  • Data backup
  • Data center network capacity
  • Security
  • Servers
  • Storage
  • Training infrastructure
  • WAN capacity

Source IBM Market Insights, Cloud Computing
Research, July 2009.
18
IBM has introduced 3 choices to deploy workloads
providing you the choice to meet your business
needs!
  • Smart Business Services cloud services
    delivered.
  • Standardized services on the IBM cloud Public
    Cloud.
  • Private cloud services, built and/or run by IBM
    Private Cloud.
  • Smart Business Systems purpose-built
    infrastructure.
  • Integrated Service Delivery Platform

Desktop and Devices
Infrastructure
BusinessServices
Development and Test
Collaboration
Analytics
19
New deployment choices aligned to workloads.



Analytics
Collaboration
Development and Test
Desktop and Devices
Infrastructure Storage
Infrastructure Compute
Business Services
IBM Smart Business Desktop on the IBM Cloud
Smart Business on the IBM Cloud
Standardized services on the IBM Cloud
IBM Compute on Demand
IBM Information Protection Services
IBM BPM Blueworks (Design tools)
IBM Smart Business End User Support-IBM Service
Assist
NEW - IBM LotusLive w/ iNotes
IBM Smart Business Expense Reporting on the IBM
Cloud
IBM Smart Business Dev Test on the IBM Cloud
(Beta)
Smart Business Cloud
Private cloud services, behind your firewall,
built and/or managed by IBM
IBM Smart Business Test Cloud
IBM Smart Business Desktop Cloud
IBM Smart Business Storage Cloud
IBM Smart Analytics Cloud
Lotus Foundation
Smart Business Systems
Pre-integrated, workload optimized systems
IBM CloudBurst
IBM Smart Analytics System
IBM Smart Business for SMB (backed by the IBM
cloud)
IBM Information Archive
Existing
New - Oct
20
IBM services technology in support of Cloud
Computing To help customers get started and
deploy more effectively
  • Services in support of cloud computing
  • IBM Infrastructure Strategy and Planning for
    Cloud Computing (GTS)
  • IBM Strategy Change Services for Cloud
    Adoption (GBS)
  • IBM Strategy Change Services for Cloud
    Providers (GBS)
  • IBM Testing Services for Cloud (GBS)
  • IBM Networking Strategy Optimization network
    application optimization for cloud computing (GTS
    - ICS)
  • IBM Data Center strategy (GTS SF)
  • IBM Data Center FamilyTM Solutions data center
    design services (GTS SF)
  • IBM Vulnerability Management (GTS - ISS)
  • IBM Managed Email and Web Security (GTS ISS)
  • Security Consulting Services in support of Cloud
    Computing (GTS ISS)
  • Resiliency Validation for Cloud Computing (GTS
    BCRS)
  • Technologies designed for cloud computing
  • IBM Solution Edition for Cloud Computing (System
    z)
  • IBM WebSphere CloudBurst Appliance (WebSphere)
  • IBM WebSphere Application Server Hypervisor
    (WebSphere)
  • Service Management Center for Cloud Computing
    (Tivoli)
  • Software Delivery Services for Cloud Computing
    (Rational)

21
Large Hotel Chain Leverages iNotes
  • Hundreds of thousands of employees working in gt60
    countries
  • Knowledge Workers are small of the total
    workforce (5)
  • High of under-served employees, many of whom
    were using free email accounts to conduct
    business.
  • Underserved Employee Types
  • Customer Service Reps
  • Hotel Managers
  • Front Desk Staff
  • Catering
  • Housekeeping
  • Maintenance
  • Underserved Employee Needs
  • Web-based Email
  • Small storage requirement
  • Infrequent usage patterns
  • Access to Corporate Addresses
  • Access to all-company notices
  • Easy communication within each locale

15,000 previously un-served users enabled with a
Boundary Worker email account for 3 years. Reps
are no longer using Yahoo accounts to interact
with customers. Per user costs are a fraction of
those of the Knowledge Workers.
https//www.lotuslive.com/fr/compare
22
Smart Business Desktop Cloud Pike County,
Kentucky, USADelivers a modern education to its
students without incurring modern costs with help
from IBM
  • Business Challenge
  • 27 school buildings with computer labs
  • Outdated systems wont run current applications
  • Budget cuts reduce capital fund by 80

We no longer worry about what hardware is in the
school as much. We also no longer worry about the
applications or processes that the schools are
using because they are the same for everyone.
Maritta Horne, CIO Pike County Schools
  • Solution
  • IBM Desktop Cloud leveraging x86 and VMWare
  • Reuse existing computers as thin clients
  • Capital investment only in central data center
  • Benefits
  • Cost of solution 40 less than replacing desktops
  • Reused existing equipment
  • Improve learning for students
  • Lower application licensing costs
  • Solution components
  • IBM Smart Business Desktop Cloud

22
23
North Carolina State University
Making a breakthrough in improving access to
academic computing resources
  • Business ChallengeNC State has more than 31,000
    students and nearly 8,000 faculty and staff.
    Growing demand for academic computing resources
    meant the school needed to fundamentally change
    the way it managed these resources in order to
    deliver the service levels that its key user
    populations required.
  • SolutionIBM adapted high-performance computing
    into a virtualization model enabling NC State to
    deliver more resource support across the
    university at lower cost. The new cloud
    computing model for provisioning technology
    offers the school a quantum improvement in
    access, efficiency and convenience over the
    traditional computer labs it had relied on.
  • Benefits
  • Projected savings in software licensing costs of
    up to 75 percent
  • 150 percent increase in students served per
    application license
  • Increased flexibility to shift computing
    capacity between instructional, research and
    administrative needs

Our goal was to rethink the way we met the
academic computing needsBy collaborating with
IBM, we are now better able to deliver on that
mission. Mladen Vouk, Department Head
Computer Science NC State University
24
UNIFEM/USNC, Womens International
Non-ProfitImproves fundraising initiatives using
LotusLive and Cloud Computing
  • The Business
  • UNIFEM is a non-profit organization dedicated to
    ending violence, poverty and inequality for
    women.
  • The Challenge
  • Improve efficiency of distributed fund raising
    teams
  • Connect 28 volunteers from different chapters
    across 8 states to national organization and to
    each other
  • Reduce volunteer time spent on administration to
    increase time spent on fundraising
  • Solution
  • Use Files to create central repository to store
    and share documents (e.g., sponsor contracts,
    planning documents, fundraising forms)
  • Use Activities to
  • Plan and coordinate events (e.g., walkathons)
  • Ensure 24 hr access to current materials for
    events
  • Capture and share meeting notes, photos, talking
    points
  • Benefits
  • Reduced 10 of weekly hours spent on coordination
    and administration for volunteers
  • Little training needed for volunteers, they could
    just use it
  • Worked across multiple environments/firewalls

Before we started using LotusLive Engage, I
would constantly get emails and phone calls
asking for information, so I spent a lot of time
responding to those requests. Now people know to
go to LotusLive. In fact, I personally saved two
hours a week, which is 10 of the time I spend
volunteering for UNIFEM. Younghee Overly,
Unifem, North Carolina Chapter President Member,
National Annual Walk Committee
www.lotuslive.com
25
IBM Information Protection Services on the IBM
cloud
Cloud-based technologies protect your information
with professionally managed business continuity
and resiliency services
  • The United States Golf Association depends on IBM
    cloud services, both the Email Management Express
    for email recovery and Remote Data Protection to
    back up their servers.
  • Jessica Carroll, managing director of IT for the
    nonprofit governing body of golf, says her
    existing backup and disaster-recovery plans were
    well designed for business conditions five years
    ago.
  • But they were no longer adequate for today's
    world in which companies can't afford to be down
    for even brief periods of time.
  • She looked for a better option and found a
    cloud-based business resiliency service from IBM.
    "IBM's reputation and the services it was
    offering were enterprise class," Carroll says. "I
    knew right away this was the way to go. The
    product was so strong."

26
IBM IPS on the IBM cloud remote data protection
Managed Service Provides Reliable Data Protection
  • Automatically backed up via your existing network
    through the cloud to our security-rich, offsite
    data centers or onsite to your own data center.
  • Fully managed solution can reduce backup costs by
    up to 40.
  • Skilled IBM storage specialists worldwide who
    provide 24x7 monitoring and management.
  • Quickly implement a best practicesbased data
    protection strategy.
  • Customer Example
  • One of Houston's largest and fastest-growing
    human services agencies
  • Serves over 200,000 citizens in Texas.
  • Depends on IBM cloud services to back-up server
    and PC data
  • Tom Comella, chief information officer,
    Neighborhood Centers Inc. "IBM cloud services
    were critical in our community recovery efforts
    following Hurricane Ike. The benefits of cloud
    services reach far beyond disaster recovery.
    Better data protection -- demonstrating that we
    are good stewards of information -- has become a
    selling point for us in willing contracts."

27
VNTT Telco Services Cloud for Businesses
  • Goal
  • Become a leading Telco provider of IT cloud
    services
  • Support a powerful eco system for innovation
  • Incubator for new business models
  • Transform how IT is consumed in Vietnam
  • Pain Points
  • Efficiently provide resources services to
    surrounding companies
  • Benefits
  • Accelerates time to market - rapid access to
    applications services and virtual resources
  • Provides business flexibility and lower costs
    with a pay per use model to its clients
  • Rapidly established a cloud based data center

Vietnam Technology Telecommunications - State
owned telecom joint venture
IBMs Blue Cloud solution is the key connection
between the two success factors of business model
innovation and strong technological
infrastructure - Nguyen Minh Tan, General
Director, VNTT
http//w3.ibm.com/news/w3news/top_stories/2009/06/
vn_wins_vnttoncloud.html
28
Platform/Application/Service A Mobile Cloud for
BoP Applications
Government officials enters district, state and
national level information
  • Kiosk-operator gathers local information
  • from various sources
  • Makes phone calls to get train schedule
  • Gets movie list for today
  • Gets blackout timings from electricity office
  • Gets weather information through internet
  • Gets visitor list (doctors, etc.) by officials
    from panchayat

Kiosk-operator uploads information through a
phone
Spoken Web
Govt. Voice sites organized in a distributed
nation-wide cloud
Villagers call the VoiceSite to get local as well
as district, state and national level information.
Service delivery to villagers through (mobile)
phones by a voice interface
Mobile Cloud IBM Confidential
9/29/2013
28
29
Application/Service Cloud B2B Collaboration for
an Asian Department Store
  • Challenge
  • Thousands of suppliers need efficient operation
    effective collaboration with a department store
  • Solution
  • A retail B2B solution on a low cost, scalable
    secure platform ( gt2000 suppliers so far)
  • Cloud platform with scalability, security,
    process monitoring dashboard, data transmission
  • ISVs Retail B2B app for biz info exchange, order
    inv. mgmt, sales data analysis
  • Business benefits
  • Enables suppliers to operate business
    independently w/ lower cost w/o IT operations
  • Provides dept store with common order and
    inventory mgmt across suppliers
  • Allows ISVs to join w/ core knowledge in the app
    w/o worrying about scalability and security

Clients 2000 of Retail Groups suppliers
Ind Service Vendor E-Future
Client Reln Owner Large Intl Retail Group
Operator/Composer IBM
Client
Cloud Platform
30
IT transformation includes Cloud Computing within
IBM. Yielding a cumulative benefit to IBM in
excess of 4B
IBM Technology Adoption Program (TAP) Saving
IBM over 2.5M per year (Case Study on IBM TAP)
Self-service, on demand IT delivery solutionfor
3,000 IBM researchers across 8 countries (Case
Study on IBM Research Cloud)
Enterprise class utility computing solution for
clients
Systems platform testing for Enterprise Clients,
SMBs, ISVs
Cloud computing solution for IBM Learning Centers
in Europe (Case Study on IBM Learning Cloud )
31
video
  • IBM and Dubuque IA partnership

32
Getting started with cloud computing
IBM can help you
  • Develop cloud strategy and roadmap
  • Assess cloud deployment models, service options
    and workloads
  • ROI Analysis
  • Choose initial project
  • Condition existing infrastructure for cloud
  • Virtualize and automate existing systems
  • Add service management, service catalog

?
Plan and Prepare
  • Start with an isolated private cloud deployment
  • Architect and implement low-risk workloads such
    as test and development for cloud
  • Standardize applications and systems
  • Deploy self-service portal

?
Pilot and Deploy
  • Roll out cloud across the enterprise
  • Enable additional workloads on private cloud
  • Add new users
  • Use trusted public cloud services to supplement
    business and IT workloads

?
Extend and Evolve
33
In Summary there is opportunity in the shift to
a smarter planet.
  • Growth of instrumentation, interconnection and
    intelligence in the world will drive the
    emergence of IT and business services ... and the
    requirement for service management systems.
  • New IT consumption and delivery models are very
    compelling for some workloads today and will
    position your enterprise for the future.
  • IBM offers new choices to
  • Reduce infrastructure and operational costs.
  • Accelerate service deployment and return on
    investment.
  • Deliver consistent, secure services.

34
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