IBM Academy of Technology October 2010Thought Leadership White PaperCloud computing insights from110 implementation projectsIBM Academy of Technology Survey
2 Cloud computing insights from 110 implementation projectsContents In brief, our survey ﬁndings show that: 2 Executive summary ● IT efficiencies, consumer interfaces featuring ease of use, 2 Introduction and methodology and new charging models are the primary motivations for client cloud implementations. 4 How are clouds used? ● Conversely, security concerns, pricing strategies, system complexity, rapid technology advancements of cloud capabil- 5 How are clouds implemented? ities, gaps in standardization and a lack of clear value propo- 6 What are the challenges? sitions are seen as the biggest inhibitors to cloud computing. ● Integrated vendor offerings combined with ongoing support 8 What are the beneﬁts? (applying best practices) are in high demand. 9 Outlook and trends ● Service design is the most popular IT Infrastructure Library® (ITIL®) discipline, but other categories like10 Summary image management and security management are expected12 For more information to become critical. ● While noncritical workloads like development and test dominate cloud usage today, the survey participants believeExecutive summary that noncritical as well as critical production workloads willOver the past several years, IBM has gained valuable experi- be implemented on cloud in two years’ time.ence implementing cloud solutions within our clients’ envi- ● There is currently a 30 percent/70 percent split betweenronments and within IBM. Now, as the cloud computing public and private cloud engagements; however, over themarket matures, it is time to begin capturing the knowledge next two years, respondents see the use of data and informa-we have gained through these implementations. While cloud tion produced by cloud customers more than doubling, withadoption frameworks were developed early on to predict what a corresponding decrease in exclusive internal use.customers might do with cloud, we believe enough implemen-tations exist to validate those predictions and to recalibrate This paper examines our survey ﬁndings: where clients arewhere necessary. This white paper from the leadership of the with cloud computing, what challenges they face, how they areIBM Academy of Technology represents the ﬁndings from beneﬁting from their existing implementations and where they110 case studies of cloud computing implementations in a expect to be in two years’ time.survey conducted in August 2010. Introduction and methodologyThe case studies are mainly from mature markets and mainly To obtain our results, the IBM Academy of Technologyfrom companies with more than 5,000 employees. With the deﬁned a series of questions and sent them to IBM technicalexception of the chemical and petroleum industry and indus- employees with client-facing roles, most of whom are ITtrial products, virtually every industry is represented. The architects. The responders, who span the range of IBM busi-banking, government, telecom, insurance and ﬁnancial mar- ness units, including services, software, systems technology,kets industries represent over half of the case studies. and research and development, then solicited feedback from their cloud computing clients. In most cases, the feedback is from primarily large clients. While private clouds offering
IBM Academy of Technology 3 We should therefore anticipate larger numbers of small clients Business Consumer Consumer Consumer Consumer Consumer purchasing business process as a service (BPaaS) and software cloud services Integrator Integrator as a service (SaaS) via public clouds. (BPaaS) Provider Provider Provider Provider Provider Application Consumer Consumer Consumer Consumer Consumer With the exception of the chemical and petroleum industry cloud services Integrator Integrator and industrial products, virtually every industry is represented. (SaaS) Provider Provider Provider Provider Provider As Figure 2 illustrates, banking, government, telecom, insur- Platform Consumer Consumer Consumer Consumer Consumer ance and ﬁnancial markets industries dominate with more than cloud services Integrator Integrator 50 percent of the sample. (PaaS) Provider Provider Provider Provider Provider Infrastructure Consumer Consumer Consumer Consumer Consumer Our survey questions focused on how our clients’ existing cloud services (IaaS) Integrator Integrator cloud computing implementations are addressing speciﬁc Provider Provider Provider Provider Provider areas. These included: Exploratory Departmental Enterprise Exclusive Open cloud cloud cloud cloud cloud PRIVATE CLOUD PUBLIC CLOUD ● Overall cloud scenarios ● Cloud consumption modelFigure 1: Cloud adoption framework. ● Cloud infrastructure ● Cloud service management ● Organizational and skill requirements and gapsinfrastructure and platform services in large environments ● Cloud securityprovided the majority of the input for this paper, it should be ● Cloud information managementnoted that the cloud adoption framework predicts a secondlarge market segment at the other end of the spectrum, as We then asked the clients what they expect their answer to beshown in Figure 1. in two years. The next several sections of this paper discuss our survey results in detail. Industry proﬁle Travel & transportation Telecom Retail Media & entertainment Life sciences Insurance Industrial products Healthcare Government General business Financial markets Energy & utilities Electronics Education Consumer products Computer services industry Chemical & petroleum Banking Automotive Aerospace & defense 0 5 10 15 20 25 30 Number of residentsFigure 2: Industry proﬁles represented within the survey.
4 Cloud computing insights from 110 implementation projectsHow are clouds used? Within our survey, the majority of clients began their cloudOrganizations today are implementing three primary delivery projects with infrastructure (74 percent) and/or developmentmodels for cloud: private, public and hybrid. In private clouds, and test environments (69 percent), areas where they wereIT activities or functions are provided “as a service,” over an able to minimize the risk associated with this new deliveryintranet, within the enterprise and behind the organization’s method and optimize their return. Many clients (59 percent)ﬁrewall. In public clouds, IT activities or functions are pro- were also focused on web infrastructure speciﬁcally. However,vided “as a service” over the Internet. For hybrid clouds, within two years, the picture changes dramatically, with theinternal and external service delivery methods are integrated, belief that they will have cloud projects signiﬁcantly deployedwith activities or functions based on security requirements, across all workloads analyzed, including transaction process-criticality architecture and other established policies. These ing, high-performance computing, decision support andimplementations can be undertaken for any number of rea- analytics, business applications and collaborative computing.sons, including a consumer interface featuring ease-of-use, IT This ﬁnding, demonstrated in Figure 3, indicates conﬁdenceefficiencies and new charging models. that anticipated values are being met, and, with experience developed from these early projects, rapid expansion will beCloud usage is currently dominated by development and test possible.as well as noncritical production workloads with 50 percent ofusage being for local pilots while only 20 percent of usage isat the enterprise level. Clouds are mainly applied to loosely Workload - Todaycoupled workloads and support content-centric workloadsfocusing on internal IT infrastructure, application develop- Application development and testment and test scenarios, and web infrastructure. This usage is Web infrastructuresplit between public and private cloud engagements with the IT infrastructure Yesvast majority in private clouds: Nearly 70 percent of engage- Collaborative computing Noments are private while only 30 percent are public with a Business apps High performance computingminimal usage of hybrid clouds.1 The 30/70 split between Decision support and analyticspublic and private cloud engagements running today is due Transaction processingprimarily to two factors. First, the survey respondents reﬂectprimarily large environments and are most interested in inves- 0 10 20 30 40 50 60 70 80 90tigating the potential beneﬁts of cloud computing. If smallerenvironments had been included, we believe the ratio would Workload - Two years from nowbe different. Second, since one of the primary inhibitors to Application development and testwidespread adoption of cloud computing is security concerns, Web infrastructureprivate clouds provide a means to experiment with cloud IT infrastructure Yestechnology without exposing the ﬁrm to security concerns. Collaborative computing No Business appsThere are key differences in the services provided in the pri- High performance computing Decision support and analyticsvate and public clouds. Public clouds are dominated by SaaS Transaction processingfollowed by infrastructure as a service (IaaS). Private clouds 0 20 40 60 80 100are dominated by IaaS followed by platform as a service(PaaS), while BPaaS is only represented minimally in both. Figure 3: Current and anticipated cloud deployments across workloads.
IBM Academy of Technology 5How are clouds implemented? processes, roles and responsibility deﬁnitions, tools forLooking beyond motivation, the survey addressed clients’ automation, required information and best practices that inte-scope and plans for cloud computing, focusing on the chosen grate and operate available resources to produce valued serv-implementation approach, patterns and steps. The survey ices, and respond quickly to the needs of a business and itsshows that 49 percent of clients have deﬁned their cloud customers—for both legacy and cloud environments. Thestrategy, whereas the second half of our sample began cloud roles that execute the processes, the tool functions and theprojects without having deﬁned their target state and cloud associated information are all based upon the process design.road map. This ﬁnding is supported by the results of the“scale of implementation” question, where 50 percent of proj-ects today cover a pilot scope. Only 20 percent are targeted atenterprisewide cloud deployment. A portion of our clientsstarted pilot projects to extract learning and experiences for a Peoplecloud road map and strategy creation.In parallel, the majority of the projects today are focused on Clouddevelopment and test and noncritical production workloads. Tools implementation ProcessesThis step seems to be in preparation for testing managementcapabilities and tools for critical production workloads. InformationThese ﬁndings are similar to our ﬁndings in service-orientedarchitecture (SOA) design and implementation, where bestpractices recommend testing design decisions in proof-of-concept and pilot implementations, as these decisions havelarge, long-term impacts on enterprise and IT architecture. A Figure 4: Cloud service management implementation framework.small, more affordable and quick test implementation can helpprovide the information necessary to make overarching strate- The survey produced several key ﬁndings related to thisgic decisions. framework:Cloud service management implementation framework Organizational change—Only 20 percent of projects report onThe basis of a cloud implementation is a set of well-deﬁned, organizational changes already implemented, although we canproven processes, illustrated in Figure 4. Vital to being able to derive clear requirements for changes in IT organizations.deliver, or even access, a cloud-based environment is service Two areas seem signiﬁcant: corporate IT organizations are notmanagement. ITIL V3 deﬁnes service management as “a set really managing the cloud implementation, operation of ITof specialized organizational capabilities for providing value to technologies and process management. Especially in largercustomers in the form of (IT) services.”2 When examined at a organizations, organizations sourced their IT services throughgreater level of detail than the ITIL V3 deﬁnition, service external service providers due to the lack of speed of theirmanagement comprises the whole of the governance, internal IT department to establish access to cloud services. Second, organizational silos can be a signiﬁcant inhibitor to adoption, as silo thinking prevents overall process optimiza- tion and automation.
6 Cloud computing insights from 110 implementation projectsProcesses and integration—About half of the projects started Technology—Although standardization of technologies andwithout service management integration, which relates to the software stacks is one of the main drivers of cloud beneﬁts,nature of projects with regard to maturity, scale and criticality. 39 percent of the projects lack technology standardization.Public cloud projects typically reported lower levels of service Approximately 53 percent of projects reported standardizationmanagement integration compared to private cloud imple- for some technologies. This is a surprising result in our surveymentations. While with a public cloud, the assumption is that as the level of standardization for the services served by a pub-the solution is based on integrated service management by the lic cloud is high and deﬁned by the cloud service provider. Forcloud service provider, within private cloud environments, private cloud implementations, the level of standardization isservice management integration is even more critical to one of the main success factors.achieve cloud automation and cost targets. In addition, a levelof integration between public and the customer’s on-premises As an additional note, there were no signiﬁcant differencesinfrastructure is required. This leads into the domain of across industries and geographies in the results from the sur-hybrid clouds, where application-level integration is required vey questions for this section.when running both public, private and traditional infrastruc-tures as well. What are the challenges? We found that for our surveyed clients, developing a strongOn a weighted average rating, the majority of the respondents value proposition, plus funding, security and managing com-rated service design as the most important ITIL discipline fol- plexity were the major barriers to getting started, as shown inlowed closely by service operation, service strategy, service Figure 5 below.transition and service improvement. Inhibitors to cloud computing Security Lack of clear value proposition Lack of standardization Funding Complexity Reliability and high availability Market and technology immaturity Lack of skills Software licensing Loss of internal control 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00Figure 5: Inhibitors to cloud computing.
IBM Academy of Technology 7Similar factors have been corroborated in many analyst Virtualizationreports. For example, IDC reports that security concerns are While it was clear that virtualization was the ﬁrst and largestthe most important fear among IT decision-makers for both component of cloud computing implemented, it is harder forpublic and private cloud, especially public cloud. Other fac- clients to apply these technologies to other areas such astors, such as lack of technology, maturity, lack of personnel network (18 percent), applications (18 percent) and desktopskill sets, organizational challenges and difficulty integrating (16 percent), and clients continue to see this as a challengewith existing infrastructure will likely decrease over time as over the next two years. While automatic provisioning hascloud success stories circulate.3 been widely implemented in this client set, de-provisioning resources and reassigning those resources to other projects isSecurity more difficult, with other factors such as organization andSecurity is a critical issue largely in public or shared environ- culture coming into play.ments, where the cloud provider needs to make sure that dataprivacy and compliance is guaranteed. Secure and efficient Standardizationdata exchange across the enterprise and clouds, as well as When discussing clouds, you also need to talk about the abil-secure application connectivity are the major security con- ity to reduce variations in implementation patterns on thecerns. Image management is important both in private and cloud provider side, while at the same time keeping consumerspublic clouds, as images are fast becoming the core object for happy with a right-sized offering. Standardization of bothdeployment in data centers as a way to bypass installation processes and all technical layers of the solution stack wasproblems. In this context, organizations need a way to identiﬁed in the surveyed projects as a major challenge. Fororganize, secure, manage and deploy images to the various example, despite the fact that a speciﬁc hypervisor often domi-virtualized platforms in a scalable manner. Once deployed, nates the pilot/departmental installations today (start simple),organizations need a way to manage the virtual images, which clients anticipate a move toward a diverse set of virtualincludes monitoring, updating, tracking, change management machine standards for enterprise-level clouds before beingand auditing. able to consolidate. On one hand, consumers expect their favorite hypervisor technology to be supported in a ﬁrstThe clients surveyed in our study are currently focused prima- production step; on the other hand, they want to migraterily on implementing technologies to enable cloud functional- as quickly as possible to a standard when they have seen theity in a private environment. By focusing ﬁrst on private beneﬁts of cloud delivery and are looking for even higherclouds, these clients were able to overcome their security con- efficiency and reduced costs.cerns. As shown in Figure 6, the building blocks for a privatecloud include consolidation, virtualization, standardization and There are gaps in both industry-speciﬁc and IT standards thatautomation, including self-service. make it more difficult to standardize and automate, which is needed in order to reduce the complexity involved. Just as the adoption of HTML as a standard language accelerated the adoption and expansion of the Internet, cloud standards will Reduced Self Service Virtualization Standardization Automation Cost need to emerge to promote widespread adoption. In particu- lar, the adoption of IT service level deﬁnition standards that Business & Service Industry Agility IT Alignment Flexibility Standards Optimized Business can be dynamically negotiated between consumer and provider will be necessary before a true open cloud becomes reality.Figure 6: Building blocks for a private cloud.
8 Cloud computing insights from 110 implementation projectsIn addition, the standardization of hardware and operatingsystem/software stacks required in cloud environments needs Otherto be driven from development and test into productionenvironments. Highly scalableValue proposition Internet/web basedThe survey indicates that cloud computing value is best Consumer ease of use, self service,achieved with a speciﬁc business goal in mind and tools are with rapid deliveryavailable to assist with return on investment (ROI) and value Pay-as-you-goassessments. Multiple clients shared that the job of justifying a charging modelcloud solution became much easier when focused on solving a Highly virtualized infrastructurebusiness need versus the beneﬁts of reducing the cost of IT. 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%Complexity and integrationClients are looking for cloud providers to assist them with Figure 7: Beneﬁts gained from cloud computing.complexity and integration issues, as indicated when askedwhat they would like to see in cloud computing. Outside of Several of the responders commented that their clients areprice, almost all of the answers were in areas designed to realizing beneﬁts in the area of ﬂexibility, such as by enablingreduce the complexity to implement cloud, such as providing developers and testers to give up servers more readily whenadditional pre-integrated offerings, improved functionality and they are ﬁnished with them as compared to “manual” serverdecreased complexity for current offerings, and improved ﬂex- builds, or through the ability to exploit services available onibility and integration techniques. The recognition is strong the public/Internet cloud more rapidly, either singularly or inthat implementing cloud computing is a complex task, and combination.only 24 percent of current clients have implemented cloud inan integrated fashion today. Another group of clients is achieving beneﬁts from cloud com- puting in the area of storage and data, by replacing existingWhat are the benefits? on-premises storage or by providing storage and content man-Cloud computing is offering a wide range of beneﬁts—from agement capabilities.high-resource utilization and ﬂexibility to increased respon-siveness. Approximately 80 percent of the clients are realizing A promising beneﬁt of cloud computing is in the area of ana-signiﬁcant sharing of IT resources through a highly virtualized lytics and sense-and-respond capabilities. A sense-and-respondinfrastructure, and approximately 60 percent are achieving organization is one that recognizes change early and is able toease-of-use through self-service with rapid delivery. This is the analyze and act in response to the change. An example ofcase regardless of the industry or geography. For those clients sense-and-respond from our case studies is the ability ofusing public clouds as opposed to private clouds, ease of use is clients to disrupt their competition by enabling a spectacularhigher at 85 percent, followed by 68 percent beneﬁting from jump in the amount and accuracy of available business infor-pay-as-you-go charging and 63 percent beneﬁting from mation, helping them to re-engineer their business and reactInternet/web-based clouds. Forty-seven percent of the public to individual customer situations in new ways.cloud clients are beneﬁting from a highly virtualized infra-structure. Figure 7 illustrates the results.
IBM Academy of Technology 9Outlook and trends Charging modelsThe experiences of these implementation projects conﬁrmed Flexible pricing or charging models ranked lower comparedcommonly discussed challenges associated with cloud comput- to the typical market hype in cloud publications. We thereforeing such as security, value proposition, funding and complex- analyzed the feedback we received on the importance of futureity. However, it is important to note that these organizations pay-as-you-go capabilities, and we see a difference betweenhave found signiﬁcant value as reﬂected in plans to expand private cloud implementations versus public cloud implemen-their use of cloud computing. There is also strong optimism tations. Public clouds appear to have already a good propor-that within two years, the marketplace will have overcome tion of pay-as-you-go charging models compared to privatemany of the issues faced today. clouds, but this will not always be the case. Participants strongly believe that pay-as-you-go models will also haveIt is always useful to understand what motivated a major to be implemented in private cloud settings between the ITendeavor in implementing new IT delivery methods in a large organization and lines of business. This ﬁnding suggests thatenterprise context. We have discussed speciﬁc ﬁndings based we will see an interesting challenge in integrating public andon today’s market maturity, the technology and available best new private cloud charging schemes in hybrid cloud scenarios.practices or methods, and the associated challenges. The nextnatural step is to leverage the insights from the implementa- Another clear survey trend is based on the observation thattion projects to determine how the area will evolve so that you we will see ﬂexible charging concepts to address sustainablemight align it with speciﬁc planning horizons in your enter- value-for-money relationships between cloud providers andprise. The following section discusses survey questions based consumers.on future trends. As previously mentioned, these predictionsare based on the assumption that security concerns, both real Data managementand imagined, can be adequately addressed. In terms of additional content provided by a cloud two years from now, we saw two major evolutions: (1) Decision supportAs Figure 8 shows, clients strongly believe they will reverse and analytics services had the highest jump in adoption, andthe 80/20 ratio between departmental/pilot efforts today and (2) The estimate of the number of consumers contributing toenterprise/production readiness within two years. In other the creation of new information through the cloud is dou-words, clouds will become mainstream. bling. Cloud becomes a new platform for data management and creation, especially in private cloud scenarios where our survey showed an even higher adoption of analytic cloud serv- ices (three times). Over the next two years, respondents see Scale - Today Scale - Two years from now the use of data and information produced by cloud customers Pilot Pilot Departmental Departmental more than doubling with a corresponding decrease in exclu- Enterprise Enterprise sive internal use. Exclusive (public,but Exclusive (public,but closed community cloud) closed community cloud) Open (public) Open (public)Figure 8: Overall cloud scenarios.
10 Cloud computing insights from 110 implementation projectsService management SummaryIf cloud services become as critical as indicated in the next two After evaluating the analysis of 110 implementation projects,years, we need to look at the maturity status and evolution of we identiﬁed ﬁve key conclusions:service management tools. While many clients consider theirexisting tool landscape as slightly better equipped to cope with ● Clients are ﬁnding value today either implementing charac-the new challenges ahead, we see at least a doubling of the teristics of cloud or ﬁnding workloads that are best suitedneed to have better automation, control and visualization serv- for public and private cloud, and in the process, they areice management tooling implemented by 2012. Service secu- gaining knowledge of what’s needed for the future.rity and the ability to control data/information access and ● Clients using cloud understand the importance of standardi-usage is a must today and will be followed by an increased zation and integration for a successful and more rapid adop-focus on identity management in 2012. (An exception to that tion of cloud computing.general ﬁnding applies to public clouds, where compliance was ● Clients have also learned they will need to make organiza-ranked higher.) tional and process changes and reach a higher maturity level of integrated service management to get the full value ofOrganizations from these cloud implementation projects cloud computing.have realized that signiﬁcant advantages do take place with ● Clients believe many of today’s current obstacles such asautomation and self service, and most have started down this security, value and funding will be overcome within twopath. While today there is a focus on the traditional ITIL years.disciplines—with service design being the most popular— ● Clients plan to increase dramatically their use of cloud com-there is a growing need for new service management disci- puting, both to incorporate more mission-critical applica-plines to address the challenges and opportunities in cloud tions and to expand their use of public cloud services.computing, including image management and security. Bothof these disciplines are included in IBM’s extensions to ITIL, With the knowledge and insights captured through thesethe IBM Process Reference Model for IT™ (PRM-IT) and implementations, IBM can offer a full spectrum of assistance,the IBM Component Business Model™ for the business of IT from business consulting to implementing an operational(CBM-BoIT). cloud computing environment. A deep understanding of requirements is key to creating lasting value, and IBM hasImplementing tools and processes associated with the service extensive experience performing this type of analysis as part ofmanagement disciplines does have the potential to reduce the our capability development process to drive new products andcomplexity involved by a lot, and within two years, almost services.75 percent of these clients plan to have new disciplines ofservice management integrated in their cloud solutions. Thesenew disciplines will need to automate many of the tasks andprocesses involved in deploying IT resources, and they willneed to be integrated into traditional service managementtasks such as capacity planning and change management.