Using The Cloud Compass to Evaluate Technology

Risk in Cloud Decisions

Craig Stanley, VMware

PHC7117

#PHC7117

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Presenter Introductions

CRAIG STANLEY

Benchmarking Practice Lead

VMware Accelerate Advisory Services

@benchmarkguru

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Agenda

Overview of Risk and Risk Analysis Concepts

Lufthansa Systems Case Study

Live Cloud Compass Demo

Summary

Q&A

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Overview of Risk and Analysis Concepts

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Deciding Between Private and Hybrid Clouds

Analyzing the Results

Risk Analysis

Risk Accelerators

Return Factors

Risk Factors

Three Rules of Risk

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Anatomy of a Decision

Decision Basis

• Fitness

• Value

• Risk and fear

FEAR

False Emotion Appearing Real

• Natural reaction

• Personal

• Creates confusion

• Results in decision paralysis

“The oldest and strongest

emotion of mankind is fear, and

the oldest and strongest kind of

fear is fear of the unknown.”

H. P. Lovecraft

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Who’s Afraid of the Big Bad Cloud?

Cost more and take more time?

Not deliver on what we need?

Lock us into specific contracts or technology?

Cost us financially in terms of fines, penalties, etc.?

Impact our reputation, goodwill, etc.?

Organization Impact

Cost me personally (status, respect, job, etc.)? Personal Impact

Basis of FEAR

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Everyone Reacts to Fear in These Three Ways

FIGHT

Challenge the unknown

FLIGHT

Run away

FREEZE

Do nothing

“Indecision may or may not be my problem.” – Jimmy Buffett

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Three Rules of Risk

Finance The size of the stakes drives the emotional response

1

Tolerance The risk tolerance must be greater than the risk exposure

2

Benefit The upside potential must be greater than the downside risk of failure

3

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Service Terms

Data EOL

Technology Fungibility

Contractual Fungibility

Performance

Business Relationship

4

Customer Productivity

Revenue

Legal & Regulatory

Goodwill

Intellectual Capital

Security& Privacy

3

Legal & Regulatory

Geopolitical Restrictions

Standards Compliance

Governance & Compliance

2

Common Areas of Risk

Availability

1

Employee Productivity

Customer Productivity

Revenue

Legal & Regulatory

Risk Factors

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Access anywhere, anytime, any device

Accessibility

1

Ability to rapidly deploy IaaS, PaaS and SaaS

Reduction in Time To Market

Agility

2

Scale on demand

Offload on demand

Enhance BCDR

Scalability

3

Reduction in asset tracking

Reduction in support costs

Reduction in physical device management

Cost & Resource Acct

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Return Factors Enabled by the Cloud

Return Factors

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Risk Accelerators that Feed Uncertainty

Complexity

Commitment Level

Time to Implement

Pressure to Decide

Ability to Execute

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Tools to Analyze Your Risk

Inherent Risk

Risk-Adjusted TCO

Return on Risk

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Results That Deliver Insight

Overall guidance based on

the ratio of TCO investment

to its return (Rule #1)

The inherent risk (Rule #2)

The return on risk (Rule #3)

Decision Guidance

Exposes risk for consideration

Helps quantify risk

Provides insight into non-TCO decision factors

Knowledge & Leverage

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Lufthansa Systems Case Study

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Challenges Lufthansa Systems Faced

Situation

• Moved

business critical

application

to cloud

• Used worldwide

Complication

• Ubiquitous

Requirement

• Cloud TCO

costs higher

• Prove decision

was right

Implication

• High cost

of failure

• Worst case

scenario

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How Lufthansa Systems Validated the Cloud

Process

• Evaluate factors

beyond

standard TCO

• Validate and

communicate

decision

Action

• Develop a better

way to

understand and

evaluate risk

• Analyze risk,

return and

impact factors

Benefit

• Developed a

personalized

assessment

• Public cloud risk-

adjusted TCO

was lower

• Unmitigated risk

was exposed

• Gained insight to

prove public

cloud value

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Live Cloud Compass Demo

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Summary

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Summary

The size of the financial stakes drives the emotional response

The risk tolerance must be greater than the risk exposure

The upside potential must be greater than the downside

risk of failure

TCO is not the only factor in hybrid cloud decisions

Understanding and quantifying risk enables you to make more

informed and confident hybrid cloud decisions

VMware Cloud Compass

www.vmware.com/go/cloudcompass

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Q&A

THANK YOU

Using The Cloud Compass to Evaluate Technology

Risk in Cloud Decisions

Craig Stanley, VMware

PHC7117

#PHC7117