The Business Case For Private Cloud Services

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This Private Cloud Services guide will:

• Define a common vocabulary around Private Cloud Service Providers • Describe how Private Cloud Services can reduce the total cost of ownership (TCO) • Provide a TCO analysis of a traditional vs. private cloud model • Identify ways in which a Private Cloud Service model decreases risk • Identify ways in which a Private Cloud Service model increases productivity

The Business Case For Private Cloud Services

Velocity Technology Solutions / April 2015

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Defining Private Cloud Service Providers

A Private Cloud Service Provider

offers application hosting and software services available through a private cloud dedicated to a single enterprise.

A Public Cloud Service Provider

uses commoditized components to deliver generic services co-mingled across industry, domain and application.

In 2010 the global private cloud market was worth

$8 billion

The adoption of private

cloud services is

expected to grow

_by

over 40% in 2015, more

than 2X as fast as the

growth of public clouds.

2

70%

of private cloud

adopters use third

parties to manage

their environments

1 In 2013 the global private cloud market was worth

$32 billion

By 2018 the global private cloud market is expected to be worth

$69 billion

2015 Private Cloud Growth 2015 Public Cloud Growth

2x

faster growth

than public clouds

40%

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A Great Time To Move To The Private Cloud

The cost savings achieved through a private cloud model has

sparked its rapid adoption. There are a number of factors that

contribute to the lower TCO of private cloud services.

How Private Cloud Service Providers Lower TCO

When you are planning an upgrade…

Organizations considering a PeopleSoft upgrade will benefit from a move to a Private Cloud Service Provider. Upgrading an application is the perfect time to make a move to the cloud in order to reduce costs, gain efficiencies and simplify maintenance. For companies who need to spend a few years on the version they have, cloud models provide operational and maintenance benefits that can significantly reduce costs compared to an on-premise solution.

When you need an interim Oracle Cloud solution…

Private Cloud Service Providers can accelerate the cost benefits of moving to the cloud without

feeling rushed to upgrade or convert to the Oracle Cloud. This is a good option when business situations force customers to delay their upgrade to the Oracle Cloud.

When you need specialized resources now…

Private Cloud Service

Providers have the resources with specialized Hyperion skills organizations need, when they need it, and at a much lower cost. The unique configuration requirements and complexity of Hyperion requires specific skillsets that are not necessarily transferable to other enterprise applications. Additionally, specialized Hyperion resources reduce the strain on in-house IT resources who should be dedicated to other business-critical goals.

ORACLE

EBS

HYPERION

PEOPLESOFT

Traditional On-Premise

Private Cloud

Large upfront capital expenditure Zero to minimal upfront costs

for hardware and migration

Multiple experts across a wide skill Fractionalizes the cost of industry set for solutions - MM, SD, FICO, etc. experts across multiple clients are cost prohibitive

Recurring costs to refresh, fix and Low, predictable monthly costs for

maintain systems 5, 7 or 10 years

Long processes for new installations Cuts timeline by 25-40%

due to hardware procurements, provisioning, etc

Limited agility and flexibility in Leverage economies of scope and scale

response to changes and demands (pay for only the environmental

on environment, space and resources footprint and staff you need at any

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A TCO Analysis:

Traditional On-Premise vs. Cloud Service Provider

See how the TCO of Oracle applications differs between cloud and traditional

models over a 5 year period.

What business improvements

could you make with an extra

$577,000?

TRADITIONAL COST MODEL

$4,667,000

5 YEAR TOTAL COST OF OWNERSHIP BUDGETARY

COMPONENT DESCRIPTION PAYMENT TIMING ESTIMATE3 _{PAID TO:}

Hardware Hardware for server Month 1 + Refresh $150k Hardware Vendor environments every 3-5 years

Hosting Hosting in data center, Monthly $15k-20k/mo Hosting Vendor including 3 environments + DR

Compass Consulting fees paid for Month 1 + 2 $45k Application Consultant

(Roadmap Engagement) package selection

Implementation Consulting fees paid monthly Equal Installments $1,100k Application Consultant Months 3-14

Project Expenses Estimate of travel Equal Installments 15% of Application Consultant material expenses Months 1-14 Consulting Fees

Support Hire 4 resources with Annually $100k per resource Client P&L new ERP knowledge x 4 resources

PRIVATE CLOUD MODEL

$4,090,000

5 YEAR TOTAL COST OF OWNERSHIP

BUDGETARY

COMPONENT DESCRIPTION PAYMENT TIMING ESTIMATE PAID TO:

Hardware Hardware included 1 Upfront Fee + $550k Upfront Application Service Fixed Monthly Fee + $59k/month Provider

Hosting Private cloud hosting in data center, including 3 environments + DR

Compass Consulting fees paid for

(Roadmap Engagement) package selection

Implementation Implementation included

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10 Ways Cloud Service Providers Reduce Risk

Ensure your ERP system stays current with the most recent releases and up-to-date with industry-specific requirements (e.g. tax updates required for payroll).

Plan for the impacts that updates and patches have on your ERP system configuration, customization and performance.

Test your applications based on your requirements in the development environment and after the updates are applied in production.

Identify customizations and manual processes that can be eliminated as a result of the updates or patches.

Deploy best practices based on how other clients across a wide range of industries and platforms are leveraging the latest updates to improve their processes.

Fully manage the cut-over from the development environment to production.

Provide analytics to monitor segregation of duties and make business process optimizations and manage compliance.

Eliminate HR risks associated with the knowledge transfer and ramp-up time required with any new personnel or turn over within your business’ technical and functional teams.

Ensure compliance with changing and complex requirements for your industry. _{Provide disaster recovery (DR)} services in the event of a natural disaster.

How Private Cloud Service Providers Reduce Risk

According to a leading technology market research firm, enterprise

businesses in North America lose as much as $100 million per year

in downtime related to information and communication technology.4

Larger organizations may be apt to manage the infrastructure,

implementation, upgrades, updates, end-user support and functional support required for large ERP applications. But for many businesses, in-house application management places a heavy burden on internal IT resources, especially at the point of major upgrades.

The probability that a natural event,

resource or system could exploit a

vulnerability in the application or ERP

system that causes business loss.

How Private Cloud Service Providers

Ensure Application Compliance

• Control in a virtual private cloud • Focus on ITL

• Software-defined environments • Third-party audit and attestation • Penetration testing

• Advanced logging and monitoring

Disaster Recovery Data Center

Requirements

If you are considering a private cloud service provider for DR services, check to see if their data center locations meet the following criteria: • FEMA region coordination (MDR/EDR) • Network bandwidth

• Capacity planning • Optimization

• Dedication/syndication levels • Storage management

• Each DC connected to 2 other DC

1 2 3 4 5 6 7 8 9 10

4_{“ Infonetics:Technology and Network Downtime Costing Businesses $4 Million a Year,” February 2, 2015, Market}

Wired, http://money.cnn.com/news/newsfeeds/articles/marketwire/11G032065-001.htm.

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Velocity Technology Solutions, Inc. is a leader in enterprise and business application hosting services which are fully-managed and protected within a virtual private cloud. Velocity lowers operational costs, provides world-class customer experiences, and delivers application access at top levels of performance and availability. Velocity’s expertise managing software 24/7, combined with its proprietary infrastructure design and cloud management platform, guarantee the availability, security, and control over software. Velocity is the trusted partner for rapidly deploying application software into a secure and resilient virtual private cloud.

Velocity is headquartered in Charlotte, North Carolina with facilities in North America, Europe, and Asia. Velocity is a portfolio company of Silver Lake Sumeru, a global leader in private equity

How Private Cloud Service Providers Increase Productivity

Progressive organizations realize that placing resources on the tasks best fit for their skill set increases productivity. Private Cloud Service Providers have resources specifically trained in your application within your industry to manage your applications. Private Cloud Service Providers can:

•

Free talented resources

to focus on strategic initiatives vs. tactical tasks associated with managing software applications and environments.

•

Manage multiple and simultaneous demands

of various

businesses within your organizations (e.g. HR, Finance & Payroll) through a shared service model.

•

Provide comparison analytics

for similar-sized organizations in

your industry to identify bottlenecks that prevent streamlined processes and monitor compliance and risk.

Characteristics of a Shared Service Model

1. Alignment of subject matter experts (SMEs) 2. Guaranteed service levels

3. Platform agnostic best practices and thought leadership 4. Preparation for business events (e.g. an acquisition) 5. Ticketing system

6. Periodic strategy meetings 7. 24/7/365 call center 8. Service transparency

9. Eliminate risk associated with staff turnover

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Velocity and the Velocity logo are registered trademarks of Velocity Technology Solutions, Inc. © 2015 Velocity Technology Solutions, Inc. All rights reserved. All other trademarks are the property of their respective owners.

Velocity Technology Solutions 1901 Roxborough Road, 4th Floor Charlotte, NC 28211

Phone: 888.430.9252 Fax: 612.337.3400

The Business Case For Private Cloud Services

This Private Cloud Services guide will: