Cloud Computing Expanding IT flexibility and agility

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Cloud Computing

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2 Cloud Computing _{IBM Confidential}

2

What is Cloud Computing?

Banking

Retail

IT

Self-Service

Economies of Scale

Technology Advancement

A user experience and a business model

Standardized offerings

Rapidly provisioned

Flexibly priced

Ease of access

An infrastructure management and

services delivery method

Virtualized resources

Managed as a single large resource

Delivering services with elastic scaling

Similar to Banking ATMs and Retail

Point of Sale, Cloud is Driven by:

(3)

An effective Cloud Computing deployment is built on a

Dynamic Infrastructure and is

highly optimized to

achieve more with less….

=

CLOUD COMPUTING

Reduced Cost

…leveraging

virtualization, standardization

and

automation

to free up operational budget for new investment.

VIRTUALIZATION

+

STANDARDIZATION

+

AUTOMATION _Increased

(4)

4 Cloud Computing 06/08/09

Cloud Services Delivery

Elastic Scaling

Rapidly provisioned

Flexible pricing

Ease of use

Standardized offerings

Required Infrastructure Characteristics

for effective Cloud Delivery

Open standards-based, service-oriented

Advanced virtualization and automated mgmt

Common components and processes

Advanced security and resiliency

Easy to use service catalog

A dynamic infrastructure provides the foundation for

effective cloud services delivery

(5)

Mission Critical

Packaged Apps

High Compliancy

Test Systems

Pre-production

Developer Platform

Variable Storage

Software as a Service

Web Hosting

Service Integration

Traditional

Enterprise IT

Private Cloud

Services

Service Integration

Public

Clouds

Services

Hybrid Cloud

Enterprise

The future: Three co-existing delivery models

(6)

Cloud computing enables business imperatives and

supports innovation …

Helps drive business innovation

Improves asset utilization and

lowers TCO

Increases responsiveness

Provides open, elastic IT

environments

Optimizes IT investments & reduces

fixed costs

Supports globalization and globally

available resources

Enables real-time data streams and

information sharing

(7)

… and creates new challenges for the CIO.

Ensuring scalability and responsiveness

Managing systems, availability & security

Supporting audits & certifications

Managing the proliferation of systems &

applications

Integrating “cloud” and enterprise services

Avoiding “cloud sprawl”

Providing a range of services

Providing technical support

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How can IT manage these challenges?

Develop the Cloud

architecture and plan

Implement Security, Audit,

and Systems Management

Technologies

Use a Service Oriented

Architecture

(9)

Developing the Cloud strategy and implementation

plan is the first step for the CIO.

Without a strategy, Cloud computing can be a threat to the CIO and the IT team

–

Reduced control of IT services delivered over the Internet

–

Perceived cost gap between a cloud service delivered by providers outside of the

IT team and “traditional” services delivered by IT

With a strategy, Cloud computing is a huge opportunity for the CIO

–

Lower costs, more responsive IT, optimized delivery

–

Greater range of services and capabilities

–

Greater visibility in billing / chargeback to LOBs

–

Better control of the users’ systems, desktops, and services access

5 Steps to Cloud based Services

IT Roadmap

_Architecture

IT Portfolio and

value assessment

Enterprise & Public

Cloud Mix

Implementation

Systems Storage Network Computing Infrastructure Platform & Applications

Email _AppsBus

BPM _MgmtSys

Info

Mgmt Web Svr

E-Mail,

Collaboration DevelopmentSoftware

Test and Pre-Production Data Intensive Processing Database ERP Enterprise Private Public Hybrid Trad IT Capital Private Cloud Hybrid Cloud Tim e Trad IT Rent Financial W or kl oa d C us to m S ta nd ar d Service Definition Tools Service Publish ing Tools Service Fulfillment & Config Tools Service Reporting & Analytics Service Planning Role Based Access OSS BSS Infrastructure Platform Software End Users, Operators Service Catalog Operation al Console Cloud Services Cloud Platform

(10)

The IT Transformation Roadmap

Simplified

Shared

Dynamic

Consolidate

Virtualize

Automate

Reduce

infrastructure

complexity

Reduce staffing

requirements

Improve business

resilience

(manage

fewer things

better)

Improve

operational

costs/reduce TCO

Remove physical

resource

boundaries

Increased hardware

utilization

Allocate less than

physical boundary

Reduce hardware

costs

Simplify

deployments

Standardized

Services

Dramatically reduce

deployment cycles

Granular service

metering and billing

Massively scalable

Autonomic

Flexible delivery

enables new

processes and

services

(11)

An architectural model that includes standards based

interfaces is key …

Service

Creation & Deployment

Service

Request & Operations

Provider

Service

Service Definition Tools Service Publishing Tools Service Fulfillment & Configuration Tools Service Reporting & Analytics

Service

Planning

Role-based

Access

Operational Support

Systems (OSS)

Business Support Systems

(BSS)

Infrastructure Services

Software Platform Services

Application, Process and

Information Services

End Users,

Operators

Service Catalog Operational Console

Standards Based Interfaces Standards Based Interfaces Standards Based Interfaces

Cloud Services

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12 Cloud Computing

… as well as identifying which aspects of your IT portfolio

have an affinity for Cloud.

Cloud as a supplement where 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

(13)

Infrastructure as a Service

Platform as a Service

High Volume

Transactions

Software as a Service

Servers

Networking

Storage

Middleware

Collaboration

Business

Processes

CRM/ERP/HR

Industry

Applications

Data Center

Fabric

Shared virtualized, dynamic provisioning

Database

Web 2.0 Application

Runtime

_Runtime

Java

Development

Tooling

(14)

Current IT Services that are adopting cloud models

IT Services

Service Management

Virtualization

Physical Layer

E-Mail,

Collaboration

Development

Software

Test and Pre-

Production

Data

Intensive

Processing

Information

Infrastructure

Service

Catalog

Request

UI

Operations

UI

Scheduling

Dynamic

Monitoring

Capacity

Planning

SLA

Virtual Applications & Middleware Virtual Clients Virtual Networks Virtual Storage Virtual Servers

IBM & Other

Storage Networking System x, BladeCenter IBM System z Power Systems Non-IBM Servers

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What IT Services workloads are we seeing move to

cloud delivery?

Single virtual appliance workloads

1 Test and Pre-production systems

2 Mature packaged offerings, like e-mail and collaboration

(see http://www.lotuslive.com)

3 Software development environments

4 Batch processing jobs with limited security requirements

5 Isolated workloads where latency between components is not an issue

6 Storage Solutions/Storage as a Service

7 Backup Solutions/Backup & Restore as a Service

8 Some data intensive workloads if the provider has a cloud storage

offering tied to the cloud compute offering

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What IT Services workloads may not be ready for

cloud delivery today?

Workloads which depend on sensitive data normally restricted to

the Enterprise

Employee Information - Most companies are not ready to move their LDAP

server into a public cloud because of the sensitivity of the data

Health Care Records - May not be ready to move until the security of the cloud

provider is well established

Workloads composed of multiple, co-dependent services

High throughput online transaction processing

Workloads requiring a high level of auditability, accountability

Workloads subject to Sarbanes-Oxley, for example

Workloads based on 3

rd

_{party software which does not have a}

virtualization or cloud aware licensing strategy

Workloads requiring detailed chargeback or utilization measurement

as required for capacity planning or departmental level billing

Workloads requiring customization (e.g. customized SaaS)

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2

3

4

5

6

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Demonstrating ROI shows the business value of cloud

computing and the value of the IT Department …

1. Identify Key

Performance

Indicators (KPIs)

for the

Organization

2. Capture Metrics for

Baseline and Target

Environments

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... and can show the impact on the financial statement.

Total Operating Expenses

Research and Development

Selling, General and Administrative

NET INCOME

Total Cost of Goods Sold

Materials

Production

Expenses - Income Statement

Taxes

Interest Expense

Other Overhead Costs

Utilities

Depreciation and Amortization

Operating Expenses

Cost of Goods Sold

SG&A :

Reduce maintenance overhead and labor requirements through automation

and standardization

Cost of Goods Sold :

Reduce material waste and increase production assets reuse through

decreased error rates and workload optimization

Interest Expense :

Reduce interest expense through postponement of new loans

Depreciation :

Reduce depreciation through postponement of capital expenditure

Assume 3-Year Depreciation and 10% Discount Rate

Utilities :

Reduce energy consumption (power and cooling) through workload

optimization and consolidation

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Fixed

Traditional IT

Managed

Operations

Public

Cloud

Services

Private Cloud

Services

Financial Models

D

el

iv

er

y

M

od

el

s

Off Premises

Shared

Variable

Off Premises

Dedicated

On Premises

Utility

Mixed

On Premises

Develop a roadmap that leverages both public and

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Implement with the focus on the end user experience

End

Users

Service Portal

Service Request

Catalog

Provisioning Engine

_Workflows

Expert Systems

Scripts

Optional Service

Modules

e.g. Metering/

Usage Billing,

Monitoring, etc.

Virtualized Cloud

Infrastructure

Easy to access, easy to use Service Request Catalog

Hides underlying complex infrastructure from user and

shifts focus to services provided

Enables the ability to provide standardized and lower

cost services

Facilitates a granular level of services metering and

billing

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Managing security, audit & compliance, and systems

requires technologies for cloud.

We Have Control!

It’s located at X.

It’s stored in server’s Y, Z.

We have backups in place.

Our admins control access.

Our uptime is sufficient.

The auditors are happy.

Our security team is engaged.

Who Has Control?

Where is it located?

Where is it stored?

Who backs it up?

Who has access?

How resilient is it?

How do auditors observe?

How does our security team engage?

Today

?

Tomorrow

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The right systems management software and tools can

address these challenges.

Centralized Identity and Access Control policies

Well-defined input/output interfaces

Consistent enrollment, proofing, validation and management of trusted users

People 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 data

Information

and Data

Autonomous security policies and procedures

Personnel and tools with specialized knowledge of the cloud ecosystem

SLA-backed availability and confidentiality

Process &

Application

Automated provisioning and reclamation of hardened runtime images

Dynamic allocation of pooled resources to mission-oriented resources

Simplified, built-in security controls

Network Server

and 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 centers

Physical

infrastructure

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A Service Oriented Architecture complements Cloud …

Both require similar capabilities:

–

Architectural and organizational models

–

Optimization, Innovation and Value Delivery

–

Flexibility and Agility

–

Secure, reuse and sharing of ‘services’

–

Separation of Concerns (Requestors,

Providers, Creators, Brokers, etc.)

–

Improved Administration

Virtualization at all layers of the

architecture

SOA provides flexibility, reuse,

separation of concerns, etc.

Exploit a dynamic and elastic

environment to enable innovation and to

get optimum use from resources

(24)

… and provides layers of abstraction that enable

Cloud delivery.

Services & Applications

Physical Infrastructure

Virtualized Infrastructure

Middleware

Applications reused in

new dynamic ways

Services combined from

multiple sources

Rapid deployment

Services route to any

available resource

Distributed access

(25)

IBM Technology Adoption Program Cloud, cloud delivered

Current

IT

Spend

Strategic

Change

Capacity

Hardware, labor & power savings reduced annual cost of operation by 83.8% Hardware Costs ( - 88.7%) Labor Costs ( - 80.7%) 100% Deployment (1-time)

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

Hardware

Costs

(

annualized

)

Liberated

funding for new

development,

transformation

investment or

direct saving

Labor Costs

(

Operations and Maintenance

)

Power Costs (88.8%) Power Costs Software Costs Software Costs New Development

Impact:

Reduction of Total Cost of Ownership of

Data Center Infrastructure

Reduced Capital Expenditure

- Improved utilization reduces

requirement for new capital purchases

Reduced Operations Expenditure

- Lower facilities, maintenance, energy,

IT service delivery and labor costs

Additional Benefits

- Reduced risk, less idle time, more

efficient use of energy, acceleration of

innovation projects, enhanced customer

service

Business Case Results

Annual savings: $3.3M (84%)

from $3.9M to $0.6M

Payback Period: 73 days

Net Present Value (NPV): $7.5M

Internal Rate of Return (IRR): 496%

Return On Investment (ROI): 1039%

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IBM Research Computing Cloud (RC2)

A living lab to advance Research strategies

India

Zurich

Provides self service “on demand” delivery

solution for research computing resources

1 Zero touch support for the full life

cycle of service delivery

Order creation

Approval process

E-mail notification

Automated provisioning

Monitoring

2 Research Compute Cloud (RC2)

(27)

Building a dynamic infrastructure to support cloud

Auto Teile Unger

Germany’s largest provider of retail

auto parts and auto services,

engaged IBM Global Technology

Services to design, implement and

support a new private cloud

infrastructure to support its

expansion plan of 50 branches per

year in Europe.

One America Financial

Partners, Inc.

A nationwide network of financial

companies, recently engaged IBM

Internet Security Systems for

security event and log management

services and X-Force Threat

Analysis services delivered through

the cloud.

“

“The IBM z9 provides the

stability and scalability needed to

accommodate Transzap’s triple

digit volume growth in a SaaS

environment.

"

Transzap

Leading SaaS cloud provider of

ePayable, digital data, and spend

analysis solutions for 900 oil

industry companies, needed to

meet 100% YTY growth

requirement with an easy to scale

and secure solution.

(28)

The result: The CIO enables growth & innovation.

• Lower costs including capital and

operational expenditures

• Availability of skilled resources to

focus on high value innovative

projects

• I

mproved energy efficiency and

reduce idle

time---•

Flexible, self-service delivery for

users, based on requested qualities

of service

• Improved time to market and

acceleration of innovation projects

• Rapid response to new business

requirements

• Improved risk management and

business resiliency

• More efficient pricing and capacity

utilization

Flexible

Service

Delivery

Lower Cost

of Running

Business

Agile /

Optimized

Business

Management

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IBM is Focused on Customer-Led Priorities

Cloud Consulting

How can cloud:

- Improve

responsiveness?

- Save me money?

- Still be secure

and resilient?

Cloud Implementation

How do I:

- Get started?

- Where?

- Measure results?

Cloud Delivered

What software?

collaboration, business

process, applications

What platform?

middleware, database,

systems management, tools?

What Infrastructure?

processing, storage, security

Cloud Enabling Products & Assets

What do I use to build my own cloud?

(30)

IBM Cloud offerings

Growing the portfolio to deliver industry leading cloud computing capabilities

Cloud Consulting

Infrastructure Consulting

Services for Cloud Computing

Business Cloud Consulting

Services

Security and Resiliency

Consulting Services for Cloud

Resiliency Certification for Cloud

Computing

Cloud Implementation

Service Management for

Cloud Computing

Managed Security Services

for Cloud Computing

Scale out File Services

Cloud Delivered

LotusLive

Computing on Demand

Information Protection Services

Managed Data Protection for

desktops and laptops

DeveloperWorks on Amazon EC2

Cloud Enabling Products & Assets

Tivoli Service Automation Manager, AppScan, Rational Quality Manager, Lotus Live

Virtualization & Imaging technologies, Service Catalog, User Access Control

Service Management and Automation software

End User Cloud Services

(31)

In summary …

CIOs are worried that Cloud will bring about disruptive change to IT Operations

Line-of-business units going to “public cloud providers” for IT instead

Disintermediation of the traditional IT team

As some have said, it is “Client / Server all over again”

CIOs need to embrace the change, not resist it

Understand the benefits of cloud, as well as its drawbacks

Understand the public cloud providers capabilities and include these services in IT

offerings as it makes sense

CIOS can use architecture, systems management, and SOA to deliver a Cloud

plan that satisfies their customers and demonstrates ROI delivered by IT

Improves visibility of IT use, more responsive, simpler, cheaper

Requires an overall strategic vision with pragmatic, evolutionary approach

Increases range of services, applications, and capabilities available to clients

(32)

IBM Cloud Computing Leadership

Establishing cloud reference architectures

Delivering cloud enabling technologies and products

Managing cloud computing centers around the world

Providing consulting and implementation services for

Cloud computing

Helping clients speed time to market and reduce costs

1

2

4

3

(33)

Thank you!

For more information, please visit:

ibm.com/cloud

Or contact me at:

[email protected]

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