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ARC's Ralph Rio Easy IT Presentation @ ARC Industry Forum 2010

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ARC's Ralph Rio Easy IT Presentation @ ARC Industry Forum 2010 in Orlando, FL. …

ARC's Ralph Rio Easy IT Presentation @ ARC Industry Forum 2010 in Orlando, FL.
Easy IT, Cloud Computing, SaaS
Cloud Hosted:
•Access via Internet
Virtualization:
•Multiple instances per server
•Economies of Scale
Software as a Service:
•Improved Pricing Model

Published in Technology , Business
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  • 1. This presentation is copyrighted by ARC Advisory Group (ARC). The information isproprietary to ARC and it may be not be reproduced without prior permission from ARC.Easy ITCloud Computing, SaaSRalph RioResearch DirectorARC Advisory Grouprrio@arcweb.com
  • 2. 2© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.Before ITFord’s River Rouge Plant in 1927Big and Vertically Integrated• 75,000 employees and 53,000 machine tools on 2,000 acres• 27 miles of conveyors and 90 miles of railroad tracksInflexible• 1+ year to convert fromModel T to Model A• GM grew to #1 whileFord fell to #2
  • 3. 3© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.Increasing need for IT More:• Products & SKUs• Lots or Batches• Change• Regulation Less:• TimeDynamic TrendProducts and options IncreasingProduction lot or order size SmallerQuantity of lots and orders IncreasingProduct Lifecycle ShorterTime for New Prod. Intro. ShorterDynamic global market IncreasingSchedule changes IncreasingGovernment Regulations IncreasingCost control pressures IncreasingMake to Order IncreasingMore / Less Time =Faster Speed of Business
  • 4. 4© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.SalesMarketingLogisticsManufacturingFinanceProductDevelopmentITIncreasing need for IT Stovepipes manage similar skills & resourcesBusiness ProcessesStovepipes Major Business Processes are cross-functional
  • 5. 5© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.Best Practices: IT Does HelpHow are Business Processes Managed?(routing, procedures, setup, etc.)Leaders Use IT Systems for BPM9%23%32%59%86%0% 20% 40% 60% 80% 100%Ad HocVerbalInstructionInstitutionalKnowledgeWrittenDocumentsIT SystemsLeaders16%28%53%41%16%0% 20% 40% 60% 80% 100%Ad HocVerbalInstructionInstitutionalKnowledgeWrittenDocumentsIT SystemsFollowers106 survey respondentsfrom manufacturing companies
  • 6. 6© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.CollaborativeManufacturingDistributed ManufacturingLogisticsProvidersDistributorsRetailersContractManufacturersLogisticsProvidersManufacturingPlantManufacturingPlantManufacturingPlantCustomersCollaboration
  • 7. 7© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.Dilemma: Systems Have Not Kept PaceOlder Applicationsand IT InfrastructureLimit PerformanceSource: ARC Advisory Group
  • 8. 8© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.HostingHow do we accelerate?Easy IT: Cloud & SaaSCloud Hosted:• Access via InternetVirtualization:• Multiple instances per server• Economies of ScaleSoftware as a Service:• Improved Pricing ModelLogisticsContract Mfg.PlantPlantDistributionSuppliersUsersUsersUsersUsers
  • 9. 9© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.SaaSCosts Traditional License:• Large up-front licenseand implementation• Maintenance fee Cloud and SaaS:• Small set-up charge• Periodic service fee• Variable usage costLicense + ImplementationHigh Initial Cost withFixed Maintenance FeeSaaSVariable Based on Usage$Time Periods0 1 2 3 4
  • 10. 10© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.SaaSHosting Benefits: Less Technical Risk IT Infrastructure Support• Patch management• Application configuration• Server optimization• Network management• Security• Back-up & recovery• 24x7 availability Scalability for demand Shorter implementation Obtain new applicationswith limited IT resourcesLicense + ImplementationHigh Initial Cost withFixed Maintenance FeeSaaSVariable Based on Usage$Time Periods0 1 2 3 4
  • 11. 11© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.SaaSFinancial Benefits: Less $ Risk Conserve cash Expense rather thancapital for tax benefits Lower Risk• Cost varies with businessactivity• Financially easier to switchif wrong application• High incentive for supportfrom service providerLicense + ImplementationHigh Initial Cost withFixed Maintenance FeeSaaSVariable Based on Usage$Time Periods0 1 2 3 4
  • 12. 12© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.Further Consideration Application Integrationand Managing Upgrades• Supplier owns upgrades• Integration to applicationson-premises via internet Who Owns the Data?• Data with provider• Extortion when switching Consider SaaS whenbenefits are risky May need to ask for SaaS• Sales commission planLicense + ImplementationHigh Initial Cost withFixed Maintenance FeeSaaSVariable Based on Usage$Time Periods0 1 2 3 4
  • 13. 13© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.SaaS SupplierAT&T Services AT&T Hosting andApplication Management• Oracle• SAP• More … AT&T Synaptic Hosting• A Pay-As-You-Go• Utility-Based Use-cases during today’slunchLicense + ImplementationHigh Initial Cost withFixed Maintenance FeeSaaSVariable Based on Usage$Time Periods0 1 2 3 4
  • 14. 14© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.Easy ITCloud Computing, SaaSBusiness Benefits Drive Rapid Adoption
  • 15. 15© ARC Advisory GroupThis presentation may be not be reproduced without prior permission from ARC.Acronyms Used in This PresentationBPA Business Process AutomationBPM Business Process ManagementCMM Collaborative Management ModelIT Information TechnologySaaS Software as a ServiceSKU Stocking UnitA complete list is available on ARC’s website: ARCweb.com