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How Cloud is transforming Business & IT?

Mr. Hasan Ganny Hanif President of IASA MalaysiaCTO, Dagang Net Technologies Sdn Bhd

IT Architect Regional Conference"Business Agility with Enterprise Architecture “24th August 2011, Pullman Hotel Bangkok, Thailand

ITARC Thailand 2011

Session Topic:

Presented By:

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Typical Business Scenario

You're in a meeting. You and your team identify a great new business opportunity.

If you can launch in 60 days, a rich new market segment will be open for your product or service. The action plan is developed.

Everything's a go!

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The reality

• And then you come down to earth. You need new computer equipment, which takes weeks, or months, to install. You also need new software, which adds more weeks or months.

• There's no way to meet the timeframe required by the market opening. You are stymied by your organization's lack of IT agility.

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Or

• You could have the experience a company had when it needed to convert a large number of digital files to a format suitable to serve up over the web. After the inevitable "it will take a lot of time and money to do this project," one of their engineers went to the cloud Web Service provider, created 20 compute instances (essentially, virtual servers), uploaded the files, and converted them all over the course of one weekend.

• Total cost? $$$

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Cloud transforming IT

• This example provides a sense of why cloud computing is transforming the face of IT, with the potential to deliver real business value.

• The rapid availability of computational resources in a cloud computing environment enables business agility — the dexterity for businesses to quickly respond to changing business conditions with IT-enabled offerings.

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Set Your Organization's IT Free - How Cloud is Transforming Business

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BUSINESS ITLoves Cloud Hates Cloud?Outsource Keep IT Job?

Speed to market, Innovation Less cost of ownership

???

Business vs IT (Love Hate relationship)

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The “New” RealityThe “New” Reality

Balance & shift Balance & shift costcost

out of out of operationsoperations

Capture & create Capture & create

new opportunitynew opportunity

Get more out of Get more out of your peopleyour people

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Business’ Cloud vision

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IT’s Cloud vision?

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How Business looks at Cloud

Organization Operations Infrastructure

Improve Productivity &

Innovation

Improve Efficiency

Reduce Cost

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Leverage the Cloud to Deliver Business Impact

Business Success High User Adoption

Focus People

Automate Process

Leverage the Cloud

Simplified Programming ModelCompose with ClicksFast Delivery

Instant Start and ScaleReusable ComponentsCloud EcosystemContinuous upgradesDisaster recoveryOn latest release

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8 ways that cloud computing will change business

1. The creation of a new generation of products and services.

2. A new lightweight form of real-time partnerships and outsourcing with IT suppliers

3. A new awareness and leverage of the greater Internet and Web 2.0 in particular

4. A reconciliation of traditional SOA with the cloud and other emerging IT models.

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8 ways that cloud computing will change business

5. The rise of new industry leaders and IT vendors

6. More self-service IT from the business-side.

7. More tolerance for innovation and experimentation from businesses.

8. The slow-moving, dinosaur firms will have trouble keeping up more nimble adopters and fast-followers.

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3 – Cloud Business: Your Office Can Operate from Anywhere in the World

7 - Cloud Computing Risks and Benefits

1 – “Internet-based Computing”

2 – Cloud Computing Security 5 – How Your Business Can

Save Money – Free software, no licenses, stress free

4 – Cloud Computing IS Disaster Management

6 - Cloud Computing for Small Businesses

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How IT looks at Cloud

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Security & Data Confidentiality Concerns

• Of those who outsource, nearly three-quarters (72.1%) cited concerns about IT security, and more than half (58.7%) indicated that concerns about regulatory compliance will limit their adoption of these emerging service offerings

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Cloud Computing

* From http://en.wikipedia.org/wiki/Hype_cycle

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“Cloud computing is simply a buzzword used to repackage grid computing and utility computing, both of which

have existed for decades.”

“Cloud computing is simply a buzzword used to repackage grid computing and utility computing, both of which

have existed for decades.”

whatis.comDefinition of Cloud Computing

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From http://geekandpoke.typepad.com21

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Cloud Computing – Primary Characteristics

• on-demand self service, which allows business units to get the computing resources they need without having to go through IT for equipment.

• ubiquitous network access, which enables applications to be built in ways that align with how businesses operate today - mobile, multi-device, etc.

• resource pooling, which allows for pooling of computing resources to serve multiple consumers

• rapid elasticity, which allows for quick scalability or downsizing of resources depending on demand.

• measured service, which means that business units only pay for the computational resources they use. Translation: IT costs match business success

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IT is under siege

• The cloud, in all its incarnations, is reshaping the way IT thinks about delivering services to the business.

• Conversely, the cloud is also providing new avenues for the business to procure IT services.

• For the first time, business users who consume IT services have a choice: if IT cannot provide them with the services they require in a timely and cost-effective manner, they'll simply go elsewhere.

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IT Pros – Are your ready for the Challenge?

• While cloud computing is emerging as a promising IT service delivery vehicle, to cloud or not to cloud? That is not the question.

• For IT professionals, it is crucial to recognize the opportunities and play a key role in the transformation from existing infrastructure-focused IT into a service-oriented, user-centric, and IT as a service environment.

• Are you ready for the challenge to lead and transform your IT organization?

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Transformational strategies for IT

• How CIOs are applying transformational strategies in their organizations to keep up with the change.

• Three "new rules" gleaned from their experience in aligning IT with business priorities:1. CIOs Need to Manage IT Like a Supply Chain2. Cost Accounting is the New Must Have IT Skill3. IT Transformation Starts with Culture

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Rule #1: CIOs Need to Manage IT Like a Supply Chain

Less More

Beginning to think about IT less as a collection of technology products

More as a portfolio of IT services that should be managed like a traditional supply chain.

However, getting a handle on what these services actually cost to deliver – and how they're being utilized has until now been more dark art than scienceIt's critical to understand the fully burdened costs of all the raw materials (i.e., the cost of goods sold or "COGS") that comprise the finished product.

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Rule #2: Cost Accounting is the New Must Have IT Skill

Overlooked Essential

An overlooked and essential skill for the new generation of IT personnel is basic cost accounting.

Without this foundational skill, they believe (and rightfully so) that IT managers are unable to provide meaningful cost analysis back to the business.Example : while calculating unit cost information at the server level might be valuable from an operational perspective, understanding and communicating the variance in cost ismore relevant to the business since this type of data point speaks to the budget planning cycle.

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Rule #3: IT Transformation Starts with Culture

Cultural Sensitivity

IT transformation projects on their agenda must recognize that cultural changes are just as important as technology decisions

Make a concerted effort to implement strategies that address the cultural aspect of services transformation

Example : ensure cross-functional support through sharing leadership strategies and best practices as an instrumental in terms of getting everyone to buy into the notion of transformation.

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Bottom Line

• Business is demanding greater accountability and alignment from IT.

• The cloud is but one external factor driving CIOs to "self reflect" by understanding their own cost structures at a deeper level and delivering services at

• CIOs who are prepared to answer questions from the business with cold, hard facts will be in a significantly better position to transform their IT organization and contribute to the bottom line market rates.

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The next chapter for cloud computing

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Has Cloud Computing changed the Traditional Role of IT?

• “Cloud Computing has simplified IT operations to an extent that many of the roles in IT have fundamentally been obviated.”

• “Definitely, the IT department should act as the service broker, the entity that provides services to the business and sources those services from a variety of sources.”

• “Certainly, Software-as-a-Service (SaaS) will change role of IT in most organizations but I think that SaaS will have a different effect on IT in different size organizations. SaaS is a great equalizer.”

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Has Cloud Computing Changed the Traditional Role of IT?

• “Of course cloud computing has changed (and will continue to change) the role of IT, but not necessarily more so than previous disruptive shifts in IT have done in the past. There are two major factors at play - the technology aspect and the organizational aspect.”

• “IT folks are spending less time and effort building and supporting commodity technology services, and are now applying their energy and system-driven thinking directly to the design and management of innovative cloud-based systems that enable business processes that were not even possible five years ago. “

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Has Cloud Computing Changed the Traditional Role of IT?

• “I've been working in a large company that has outsourced network, infrastructure, applications, infrastructure, helpdesk and their management all together. What's left: business planning.”

• “You can now kick off a new business leveraging Cloud based Apps with very little IT knowledge (and almost zero CAPEX). As you grow and need more integration and eventually some custom development, you will need first an IT Architect rather than a Sys Admin which can map business workflows with App integration.

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Has Cloud Computing Changed the Traditional Role of IT?

• “I think the most profound effect will be on smaller companies, and that instead of the lone IT tech working in a windowless office stuffed with computer parts, that the more successful SMBs will incorporate IT into every level of the business. Which means, those looking for a future in IT might want to step away from the computer and brush up on their people skills.”

• “IT's role is shifting from technical expert to strategic adviser.”

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Conclusions

Cloud computing is transformational– Change business models, cost models, speed to provision, and

datacenters

• Cloud helps IT organizations focus on what’s important– Efficient IT service delivery, reduce costs and complexity, outsource

non-essential IT service

• Cloud computing has many issues– Lack of clarity and hype slows adoption, and increases skepticism– Trust, security, and unclear ROI are chief issues

• Cloud computing is coming, make no mistake– Part of the IT externalization movement– Now is the time to prepare, comprehension is key to unlocking

business value

• IT's role is shifting from technical expert to strategic adviser. 35

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Be an Architect

Value Add

Innovate

Be part of the Future

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Thank You

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