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© 2011 IBM Corporation Chesapeake Technology Council The New Economics of Cloud Computing… Scott Sadler Cloud Business Development Executive IBM Channels & Mid-Market, East IMT [email protected]

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Presentation from Chesapeake Regional Tech Council\'s TechFocus Seminar on Cloud Security; Presented by Scott C Sadler, Business Development Executive - Cloud Computing, IBM US East Mid-Market & Channels on Thursday, October 27, 2011. http://www.chesapeaketech.org

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© 2011 IBM CorporationChesapeake Technology Council

The New Economics of Cloud Computing…

Scott Sadler

Cloud Business Development Executive

IBM Channels & Mid-Market, East IMT

[email protected]

Scott Sadler

Cloud Business Development Executive

IBM Channels & Mid-Market, East IMT

[email protected]

© 2011 IBM Corporation2

A Crisis of Complexity… The Need for Progress is Clear…

85% idleIn distributed computing environments, up to 85% of computing capacity sits idle.

Explosion of information driving 54% growth in storage shipments every year.

1.5x

70¢ per $170% on average is spent on maintaining current IT infrastructures versus adding new capabilities.

Soon 1 trillion connected devices

3© 2011 International Business Machines Corporation3

Nothing Is Changing More than IT …

The wayit’s applied…

The wayit’s accessed…

Ubiquitously

The wayit’s architected…

Integratedand flexible For insight

© 2011 IBM Corporation4 04/12/23Cloud Computing Strategic View

By 2011, the world will be 10 times more instrumented then it was in 2006. Internet connected devices will leap from 500M to 1 Trillion by 2013…

2005 2006 2007 2008 2009 2010 20110

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Exa

byt

es RFID,Digital TV,

MP3 players,Digital cameras,

Camera phones, VoIP,Medical imaging, Laptops,

smart meters, multi-player games,Satellite images, GPS, ATMs, Scanners,

Sensors, Digital radio, DLP theaters, Telematics,Peer-to-peer, Email, Instant messaging, Videoconferencing,

CAD/CAM, Toys, Industrial machines, Security systems, Appliances

10xgrowth infive years

Approximately 70% of the digital universe is created by individuals, but enterprises are responsible for 85% of the security, privacy, reliability, and compliance.

Approximately 70% of the digital universe is created by individuals, but enterprises are responsible for 85% of the security, privacy, reliability, and compliance.

© 2011 IBM Corporation5 Cloud Computing Strategic View04/12/23

Organizations are struggling to progress toward a more flexible infrastructure…

Source: 2009 IBM CEO Survey

How do I respond to the pressure to cut costs, reduce risk and complexity?

How do I react more quickly to take advantage of new opportunities?

How do I move my data center architecture into the future?

A lot of buzz on cloud, where is the best place to start and how?

6© 2011 International Business Machines Corporation6

We Are Entering the Next Era of Computing…

‘The Era of Insight for Discovery’

Big Data

Cloud OptimizedSystems

• Created by the integration of Big data in Optimized systems, managed as a Cloud

• Applied to deliver new insights and drive innovation

• Twice the capacity for service on a flat budget

© 2011 IBM Corporation7 Cloud Computing Strategic View04/12/237

Cloud computing is extending its impact …

An Enabler of Business Transformation

Changing the economics of IT

Automating service delivery

Radically exploiting standardization

Rapidly deploying new capabilities

An Evolution of Information Technology

Enabling new business models

Supporting speed and innovation

Re-engineering business processes

Providing new levels of collaboration

… becoming a catalyst for transformation.

© 2011 IBM Corporation8 04/12/23Cloud Computing Strategic View

1990

2009

Software as a Service

Utility Computing

Grid Computing

Cloud Computing

“Clouds will transform the information technology (IT) industry… profoundly change the way people work and companies operate.”• A new paradigm for consumption and delivery of IT based

services

• Enhanced User Experience (Self Service UI)

• Flexible Pricing (Pay Per Usage)

• Enables flexible Delivery - and Sourcing Models (Private, Public, &

Hybrid Clouds)

• Automated Provisioning and Elastic Scaling

on a highly virtualized Infrastructure

High Quality User

Experience

Significantly Improved Supply

Economics

= Reduced Cost

VIRTUALIZATION + SERVICE MANAGEMENT +STANDARDIZATION AUTOMATION+ SECURITY+

Flexibility

© 2011 IBM Corporation9 Cloud Computing Strategic View04/12/23

What is different about cloud computing ?

With cloud computing

Virtualized resources Automated service

management Standardized services

Location independent

Rapid scalability Self-service

• Software• Hardware

• Storage• Networking

© 2011 IBM Corporation10 Cloud Computing Strategic View04/12/23

Beyond the hype . . .

Cloud is a new consumption and delivery model inspired by consumer Internet services...

With 5 key characteristics:

1. On-demand self-service

2. Ubiquitous network access

3. Location independent resource pooling

4. Rapid elasticity

5. Pay per use

© 2011 IBM Corporation11 04/12/23Cloud Computing Strategic View

There are three ways to acquire IT capabilities…

Cloud computing is a new delivery and Cloud computing is a new delivery and consumption model or methodology consumption model or methodology spanning all 3 ways.spanning all 3 ways.

Software, hardware

and services

Pre-integrated systems and appliances

Provided as services

© 2011 IBM Corporation12 Cloud Computing Strategic View04/12/23

Major factors influencing cloud computing economics

Infrastructure leverage

Virtualization of hardware Virtualization drives lower capital requirements

Utilization of infrastructure Virtualized environments only get benefits of scale if they are highly utilized

Labor leverage

Standardization of workloads Lower complexity = more automation possible = reduced IT labor costs

Automation of management Automation takes repeatable tasks and automates services, reducing IT operation costs

Self-service Clients that can “serve themselves” require less support and have easier access to services

© 2011 IBM Corporation13 04/12/23Cloud Computing Strategic View

Software-as-a-Service

Collaboration

Financials

CRM/ERP/HR

Industry Applications

Infrastructure-as-a-Service

Servers Networking StorageData Center

Fabric

Shared virtualized, dynamic provisioning

Many IT- aaS models are being discussed, including four main Cloud categories…

Platform-as-a-Service

Middleware

Database

Web 2.0 ApplicationRuntime

JavaRuntime

DevelopmentTooling

Business Process-as-a-Service

Employee Benefits Mgmt.

Industry-specific Processes

Procurement

Business Travel

Market Examples

IBM Examples

© 2011 IBM Corporation14 Cloud Computing Strategic View04/12/23

A Spectrum of deployment options for cloud computingA Spectrum of deployment options for cloud computing

Private Public

Hybrid

IT capabilities are provided “as a service,” over an intranet, within the enterprise and behind the firewall

Internal and external service delivery methods are integrated

IT activities / functions are provided “as a service,” over

the Internet

Third-partyoperated

Third-party hosted and operated

Enterprise data center

Enterprise data center

Private cloud Hosted private cloud

Managed private cloud

Enterprise

Shared cloud services

A

Enterprise

B

Public cloud services

A

Users

B

© 2011 IBM Corporation15 Cloud Computing Strategic View04/12/23

Cloud will be adopted based on workloads…

Ready for Cloud…

May not yet be ready for migration…

Sensitive Data

Complex processes & transactions

Regulation sensitive

Not yet virtualized 3rd party SW

Highly customized

Analytics

Collaboration

Development & Test

Workplace, Desktop & Devices

Infrastructure Storage

Infrastructure Compute

Business Processes

Industry Applications

Pre-production systems

Information intensive

Isolated workloads

Mature workloads

Batch processing

New workloads made possible by

clouds…Medical Imaging

Financial Risk

Collaborative Care

Energy Management

Disaster Recovery

© 2011 IBM Corporation16 04/12/23Cloud Computing Strategic View

Workload characteristics determine standardization…

Web infrastructure applications

Collaborative infrastructureDevelopment and testHigh Performance

Computing

...

Test for Standardization Examine for Risk

DatabaseTransaction processingERP workloadsHighly regulated workloads

...

High volume, low cost analytics

Collaborative Business Networks

Industry scale “smart” applications

...

Explore New Workloads

© 2011 IBM Corporation17 04/12/23Cloud Computing Strategic View

Cloud Standards help drive consistency and interoperability Cloud platforms are diverse; open standards are

critical:– Visit: TheOpenGroup & CloudBestPractices.net– Cloud Reference Architecture -

http://cloudbestpractices.net/2011/08/07/ibm-ccra/ The Open Cloud Manifesto outlines standards

principles: – Existing standards should be reused– All standards efforts should be based on customer

requirements– Standards development efforts should stay coordinated

– Visit : http://www.opencloudmanifesto.org/

Standards organizations to drive new standards – Virtualization – Security– Common interfaces (to ensure flexibility in moving applications and data)– Management

Standards TaxonomyTypes of Standards

SaaS PaaS IaaS

Enterprise

Across Vendors within a cloud

Cross - Cloud

Within an Enterprise

Cloud to Enterprise

© 2011 IBM Corporation18

Consider Joining the Cloud Standards Customer Council

18

• Drive user requirements into standards development process.

• Establish the criteria for open standards based cloud computing.

• Deliver content in the form of best practices, case studies, use cases, requirements, gap analysis and recommendations for cloud standards.

On April 7, 2011 industry leaders from across the world formed the first customer led consortium designed to shape the face of open standards based cloud computing.

Join your colleagues including Citi Group, Lockheed Martin, State Street, Open Management Group, North Carolina State University - and over 220 other organizations !

• Participation –. Primarily C-Level executive, VP of Development, IT management, Enterprise architects, cloud strategy

• Meetings– Monthly virtual meetings. Quarterly face-to-face co-located at OMG events. Participation through forums and subgroups.

• Oversight – Managed by OMG with Corp sponsorship (similar to SOA Consortium)

• Leadership – Founding members form steering committee

• Standards Development – This group will not produce standards but will provide guidance to existing standards development organizations

Structure• Web Presence- Community, Webcasts, Case

studies, blog, vendor showcase, whitepapers, case studies awards.

• Candidate Deliverables – ready to use content in the form of use cases, case studies, requirements, gap analysis and recommendations for cloud standards, and training.

• Awareness – Drumbeat of awareness utilizing events, press, books, analysts partnerships and media.

Deliverables

http://www.cloudstandardscustomercouncil.org/

© 2011 IBM Corporation19 04/12/23Cloud Computing Strategic View

Integrate a cloud computing deployment as part of the existing IT optimization strategy and roadmap…

Consolidate

Virtualize

Standardizeand Automate

Reduce infrastructure complexity

Reduce staffing requirements

Manage fewer things better

Lower operational costs

Remove physical resource boundaries

Increase hardware utilization

Reduce hardware costs

Simplify deployments

Standardize services Reduce deployment

cycles Enable scalability Flexible delivery

© 2011 IBM Corporation20 04/12/23Cloud Computing Strategic View

A systematic approach to cloud computing can ensure a successful implementation...

Deliver

Plan

Build Integrate Design and construct Quality assurance (test) Security and compliance Lifecycle management

Understand strategic direction Analyze workloads Determine delivery model Define architecture Build the business case

Pilot Deploy Consume Manage Optimize

© 2011 IBM Corporation21 Cloud Computing Strategic View04/12/23

Considerations when adopting cloud computing…

Client migration will be work load driven– Workload characteristics are critical – New workloads will emerge as cloud makes

them affordable (eg Pervasive Analytics, Test & Dev, Storage, VDI, etc…)

Public vs. Private trade-off considerations

Benefits Increased Speed

Lower Cost

Security Insecure or incomplete data deletion

Isolation failure

Malicious Insiders

Management infrastructure compromise

Governance Resiliency

Level and source of support

Architectural & management control

Compliance

Customization / Specialization

Cloud economics look compelling for

some workloads–Small companies will adopt as reliable,

easy-to-use services are available–Scale economics are within reach of many

enterprises

Cloud value in some cases will come from

faster time to value–Cloud provides speed and flexibility in some

situations–New business opportunities can be enabled

© 2011 IBM Corporation22 04/12/23Cloud Computing Strategic View

Steps to success …Steps to success …

22

Create IT Roadmap

Capital

Private Cloud

Hybrid Cloud

Tim

e

TradIT

RentFinancial

Wo

rklo

adC

ust

om

Sta

nd

ard

Capital

Private Cloud

Hybrid Cloud

Tim

e

TradIT

RentFinancial

Cu

sto

mS

tan

dar

d

Capital

Private Cloud

Hybrid Cloud

Tim

e

TradIT

RentFinancial

Cu

sto

mS

tan

dar

d

E-Mail, Collaboration

SoftwareDevelopment

Test and Pre-Production

DataIntensive

Processing

Database ERP

E-Mail, Collaboration

SoftwareDevelopment

Test and Pre-Production

DataIntensive

Processing

Database ERP

E-Mail, Collaboration

SoftwareDevelopment

Test and Pre-Production

DataIntensive

Processing

Database ERP

Assess Workload

Enterprise

Private Public

Hybrid

Trad

IT

Enterprise

Private Public

Hybrid

Trad

IT

Enterprise

Private Public

Hybrid

Trad

IT

Determine the Cloud Delivery Model

Define Business Value Establish Architecture

Service Definition

Tools

Service Publishing

Tools

ServiceFulfillment &Config Tools

ServiceReporting &

Analytics

ServicePlanning

RoleBased

Access

OSS

BSS

Infrastructure

Platform

Software

End Users,

Operators

Service

Catalog

OperationalConsole

Cloud Services

Cloud Platform

Service Definition

Tools

Service Publishing

Tools

ServiceFulfillment &Config Tools

ServiceReporting &

Analytics

ServicePlanning

RoleBased

Access

OSSOSS

BSSBSS

InfrastructureInfrastructure

Platform Platform

Software Software

End Users,

Operators

Service

Catalog

OperationalConsole

Cloud Services

Cloud Platform

Implement Cloud

Systems Storage

Network

ComputingInfrastructure

Platform & Applications

EmailBus

Apps

BPMSys

Mgmt

Info Mgmt

Web Svr

Systems Storage

Network

ComputingInfrastructure

Platform & Applications

EmailBus

Apps

BPMSys

Mgmt

Info Mgmt

Web Svr

Systems Storage

Network

ComputingInfrastructure

Platform & Applications

EmailBus

Apps

BPMSys

Mgmt

Info Mgmt

Web Svr

EmailBus

Apps

BPMSys

Mgmt

Info Mgmt

Web Svr

© 2011 IBM Corporation23 04/12/23Cloud Computing Strategic View

Thank you!