journey to the cloud operating model

Journey to the Cloud Operating ModelJim Cooke, Cisco

Senior Director, IT Transformation PracticeInternet Business Solutions Group (IBSG)

March 22, 2012

© 2012 Cisco and/or its affiliates. All rights reserved. Cisco PublicITMGEN-2014 2

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


Why Now? – Macroeconomic Drivers

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

Cisco Confidential 3© 2011 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group

Compute & network speeds

Storage costs

Service-Oriented Architectures

Standardization

General acceptance of ITaaS

Virtualization

Global economic crisis

Accelerated cloud adoption


What Makes Cloud Different?

Traditional

Computing

Dedicated

Traditional hardware

procurement

New services added

manually

Manual repair of

system failure

Months

Incremental CapEx

purchases

Shared

Self service

Automated, scale on-demand

Self-Healing

Minutes

Pay per use

Consumption

Ease of Use

Scalability

Availability

Provisioning

Cost

Cloud

Computing

Source: Cisco CMO SP Mktg - Data Center Solutions


Why Now? - Business Drivers

1. Clouds‟ flexibility and economics provide certainty in uncertain times

Clouds encourage transition from CapEx to OpEx, conserving cash

Sources: Cisco IBSG, CBA, SMO, Commercial Sales, CSG, 2011

At least 12% of enterprise workloads will run

on clouds globally by 2013

0%

5%

10%

15%

20%

Professional

Services

Public

Sector

Retail,

Wholesale,

and

Distribution

Healthcare Financial

Services

Manufacturing

Workload Shift by 2013 (by Vertical)

SaaS

IaaS

2. Clouds enable new business and technology capabilities to support emerging digital workforce, workplace

3. Competition is aggressively adopting cloud services

• At least 12% of enter-prise workloads will run on clouds globally by 2013)

• SMBs will spend over 1/3 of their IT budgets on cloud/managed services by 2013


Why Now? – IT Drivers

1. Addresses unpredictable application demand on the data center

2. Fuels top-line growth

Improve business agility, reach, scalability

Enable new services innovation

Differentiate with new technologies

Enhance business resiliency by improving data center/application uptime

3. Improves bottom-line economics

Pay only for what you consume, when you need it

Improve employee productivity with consistent experience, access to state-of the-art cloud applications

Deliver key IT benefits: reduce TCO by 50%+; utilize resources more efficiently (Cisco on Cisco – from 9% to 37%, targeting 50%); reduce collaboration applications IT TCO by 15% to 23% (Cisco CSG)

Sources: Cisco IBSG, CBA, SMO, Commercial Sales, CSG, 2011

Reduce Time to Market and

Improve Margins on Services:

Faster Provisioning

3 Months

Average

From 90 days to

minutes (Savvis)

Reduce TCO by

Up to 50%+

~$3,500/

month

~$1,610/month

-54%


We Are at the Very Beginning of a Major Shift

2000 2006 2012

Adoption CurveCloud Computing

Public or PrivateTraditional

Data Centers

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


On-Demand, At Scale, Multitenant

Business

Services

Everything as a Service in the Cloud

Consumer

ServicesVirtual Infrastructure

Content and Applications

(Compute, Storage, Networking)


A World of Many Clouds

Seamlessly ConnectedSecurely AccessedPublic Private

Media

Government

Financial

Services

Pharma

HealthcareGames


Automation

Hybrid

Cloud

Public

Cloud

Virtualization

Inter-

Cloud

Consolidation

Private

Cloud

The Cloud Computing Journey

Consumption models for IT,

applications and services are

changing dramatically and will be a

hybrid mix – available both

on-premise with private clouds and

from service providers in public

clouds.

Source: Jim Cooke - Cisco IBSG Innovations

PRESENT


Factors to ConsiderPrivate Cloud

Security & other compliance factors

Govt. mandates, Sarbanes-Oxley, Gramm-Leach-Bliley, HIPAA,

SAS 70 Type-I and Type-II certification

Application Performance

Latency, protocol chattiness, volume of data exchanged, etc.

Public Cloud

Private Cloud considerations +

Security & other compliance factors

IaaS vs. PaaS. vs. SaaS

Application licensing

Operational/Administrative requirements – what is allowed by the service provider

Other technical feasibility criteria to consider

• Application‟s run time environment needs --

• Instruction set (x86 vs. SPARC vs. Power), OS (Linux, Solaris, AIX, Windows, etc.)

• Sizing / Scalability – What is the maximum atomic unit of compute power available

at cloud

• If not adequate does the cloud architecture lend itself for horizontal scaling?

• Architectural constraints – Does the Cloud infrastructure provide necessary

architectural features to facilitate smooth application migration?

• Need for specific clustering (e.g. Unisys Safeguard 30 m solution)

• SSL off-loading (need for server based encryption / decryption)


Q & A


Thank you.


1) Understand where you are

2) Determine where you want to be

3) Understand the pros and cons

4) Develop your roadmap

5) Begin execution

6) Track progress to objectives

7) Course correct as necessary

Moving to a Cloud Operating Model


BusinessProcessing

Collaborative& Web

DecisionSupport

Other

InfrastructureSoftware

Desktop

Process

We tested the potential for workloads / applications to migrate to IaaS & SaaS

0% 5% 10% 15% 20% 25% 30% 35% 40%

ERP

OLTP

Batch

CRM

Email

Workgroup

Web Serving & Streaming

Data Warehousing/Data Mart

Data Analysis/Data Mining

Scientif ic/Engineering

Other

Application Development

Systems Management

File & Print

Other - Infra

Desktop Applications and OS

Test & stage

BC/DR

How likely are you to migrate these workloads to IaaS / SaaS by 2013?

SaaS

IaaS

n/a

n/a

From raw data to cloud potential:

Estimate

total spend

per workload / application

- Software (Datamonitor)

- Servers (IDC) & Desktops

- Network & Storage (Estimate)

- Maintenance & Support (Estimate)

- Application Customization (Estimate)

Estimate

migration %

per workload / application

PaaS migration % calculated based on

- “Application Development” score in SaaS

- Typical % of custom developed applications

SaaS IaaSPaaS

Take into account

increased resource utilization and

IT efficiency

in the cloud vs. enterprise DC

- General workloads: -30%; Batch: -50%

- Test & Stage: -70%; BC/DR: -80%

- Desktop: -99%

x

x

Source: Cisco IBSG SP


Workloads

Primary Bus Drivers for Cloud*

Explanation

Business

Processing

CRM Commodity: Standardization on SaaS will reduce cost

Batch Processing Requirements seasonal – systems over-dimensioned

OLTP Limited cloud potential

ERP Run ERP on IaaS to handle spiky resource demand

Collaborative

& Web

Web & eCommerce Unpredictable demand & scale are major cost drivers

Workgroup / Collaboration Considered too complex to run in-house

Email Running outside firewall improves access

Decision

Support

Data Analysis Seasonal variations and short-term projects

Data Warehousing Large data sets (TBs) are expensive to manage

Scientific / Grid Non-core app with huge, short-term requirements

Infrastructure

Software

Unstructured Data Non-critical, with unpredictable, user-driven demand

Systems Management Myriad of ITSM tools in need of standardization

Application Development Developers make unplanned / last-minute requests

Desktop Desktop OS & Apps Standardization drives security, while decreasing cost

Process BC/DR DR equipment lies idle 99% of the time

Test & Stage Testing requirements very volatile

Business Drivers Impact Applications Strategy

Note: *Drivers 6 (Capex-to-Opex) and 7 (Fixed to Variable Cost) do not play on a workload level. They rather impact overall IT and financial management.

Source: Cisco IBSG Enterprise Interviews 2010


Scenarios for Cloud BenefitsScenario Drivers of Cloud adoption

Greenfield Applications • Applications such as Collaboration, Unified Communications have no pre-existing legacy to complicate

cloud adoption

→ SaaS (Internal or Public) enables cost reduction, rapid deployment and managed deployment costs.

Disaster Recovery • Customer DR equipment / DC are idle and under-provisioned

→ IaaS (Public –Virtual Private) enables cost reduction: DR Servers on a pay-per-use basis

Application Development

& Testing

• IT departments get unplanned resource requests from developers

• Requirements on testing environments are very volatile

→ IaaS & PaaS (Internal or Public) can improve speed, quality and cost of dev & test

Decision Support

Systems

• Seasonal variations and short term projects: significant peak-to-trough

• Large data sets (TBs) are expensive to manage

→ IaaS (Internal or Public-Virtual Private) With adequate security and low latency (I/O), cloud can

improve DSS efficiency

Grid / High-Performance

Computing

• Huge, short-term requirements: “1000‟s of servers for a couple of hours”

• Non-core business for most enterprises

→ IaaS (Internal or Public) can reduce cost of parallel compute jobs in many industry verticals

ERP/ CRM • Seasonal (end-of-month / quarter) resource demand of financial packages

• Sunk cost of customizing financial applications

→ IaaS and SaaS (Internal or Public) can deliver financial packages that are customized and seasonal

Desktop Virtualization • Upfront server investment reduces ROI of VDI projects

• Variable resource utilization due to temp projects & day-night fluctuations

→ IaaS (Internal or Public-Virtual Private) with low latency access, takes away upfront server

investment

Unstructured Storage • Data volumes on file-systems, wiki‟s, ... are driven by end-users: unpredictable

→ IaaS (Internal or Public) can accommodate sporadic growth of user-generated storage

Source: Cisco IBSG SP


Variables Drive Likely Adoption Paths

Cisco IBSG‟s primary research indicates that there are several variables that can be examined that are indicative drivers of what adoption path the customer will take to migrate to a cloud operating model.

Source: Cisco IBSG 2011


HypothesisOverview of Likely Adoption Paths

Internal SOA / WOA

Development

Internal IaaS / PaaS –

built on standard stack

Web Development on

Hybrid IaaS / PaaS

(tbc) Development

Internal Ent Apps1

2

3

4

5

6

7

8

9

10

Apps Deployed in

Managed Hosting

Enterprise I/PaaS –

with SaaS enablement

(tbc) Deployment

Internal Ent Apps

Internal Web Servers

(often LAMP stack)

Internal IaaS –

built on standard stack

Web Hosting done on

Hybrid IaaS

Web Hosting

(often LAMP stack)

Web Hosting done on

Public IaaS

Internal Grid

For Simulation / R&D

Internal IaaS


Burst / Hybrid IaaS

to offload Grid

(tbc) Deployment

Ent Batch Jobs

No Grid

(no skills / scale)

Public IaaS


(tbc) Deployment

Ent Batch Jobs

SaaS

For non critical apps

Private Cloud

(incl. SaaS)

IT = Cloud Broker

(Internal + Hosted)

SaaS

For non critical apps

IT = Cloud Broker

(Hosted – focus SaaS)

Internal Enterprise ITPrivate Cloud

On-Demand

Internal Enterprise IT IT OutsourcingCloud as Part of

Outsourcing Deal

Note:

Source: Cisco IBSG 2011

Example Adoption Path:

Current adoption status of example company


Cisco’s ApproachPut the User at the Center, Turn the Network into a Platform


Data Network Cloud

BAM

CICS

Web Services MQSeries

XML

MOM Custom AppsSOA

Legacy

Mobile

2G/3G/4G

SAAS/PAAS

Wireless

SIP

Heterogeneity:

Scalability Performance

Security Pervasiveness

Economics

Availability

Manageability

Distributed

Requirements

Today: SERVICE HETEROGENEITY

„Application Internet‟ will change the physics and economics of IT

Step function in cost, flexibility

Cisco is leading the way

Scalability Performance

Security Pervasiveness

Economics

Availability

Manageability

Distributed

Requirements

SONET

Token Ring

VTAM

AppleTalk

NetBeUIAPPN

NetwareSNA

DECNet RJE

VoiceVideo

Heterogeneity:

Why Cisco? We Have Done This Before

20 years ago: NETWORK HETEROGENEITY

Internet changed both the physics and economics of COMMUNICATION

Step function in cost, ease of use

Cisco led the way

Internet

(IP)

Inter-Cloud

(Cloud Exchange)

Source: Cisco IBSG Innovations

journey to the cloud operating model

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