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Journey to the Cloud Operating Model

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  • 1. Journey to the CloudOperating ModelJim Cooke, CiscoSenior Director, IT Transformation PracticeInternet Business Solutions Group (IBSG)March 22, 2012
  • 2. IT is Following a Common Evolutionary Pattern Bespoke Consolidation Utility Evolutionary Pattern Individual Industrial Farming Farming Farms Farming Conglomerates Factory Steam Local Power Electricity Electrical Grid Engines Plants Cloud Service Enterprise Data IT providers IT Service Grid Centers (CSP‟s) ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 2
  • 3. Why Now? – Macroeconomic Drivers Compute & network speeds Storage costs Service-Oriented Architectures Standardization General acceptance of ITaaS Virtualization Global economic crisis Accelerated cloud adoption Source: Technology Avalanche; Dave Evans, Jim Cooke Cisco IBSG ITMGEN-2014Cisco Confidential © 2011 Cisco © 2012 its affiliates. All rights reserved. and/or Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 33
  • 4. What Makes Cloud Different? Traditional Cloud Computing Computing Consumption Dedicated Shared Traditional hardware Ease of Use procurement Self service New services added Automated, scale on-demand Scalability manually Manual repair of Availability Self-Healing system failure Provisioning Months Minutes Incremental CapEx Pay per use Cost purchasesSource: Cisco CMO SP Mktg - Data Center Solutions ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 4
  • 5. Why Now? - Business Drivers1. Clouds‟ flexibility and economics provide certainty in uncertain times Clouds encourage transition from CapEx to OpEx, conserving cash2. Clouds enable new business and technology capabilities At least 12% of enterprise workloads will run to support emerging on clouds globally by 2013 digital workforce, Workload Shift by 2013 (by Vertical) workplace 20% SaaS3. Competition is IaaS aggressively adopting 15% cloud services 10% • At least 12% of enter- prise workloads will run on clouds globally by 5% 2013) 0% • SMBs will spend over Professional Public Retail, Healthcare Financial Manufacturing 1/3 of their IT budgets Services Sector Wholesale, Services and on cloud/managed Distribution services by 2013Sources: Cisco IBSG, CBA, SMO, Commercial Sales, CSG, 2011 ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 5
  • 6. Why Now? – IT Drivers Reduce Time to Market and Improve Margins on Services:1. Addresses unpredictable application demand on Faster Provisioning the data center 3 Months2. Fuels top-line growth Average Improve business agility, reach, scalability Enable new services innovation Differentiate with new technologies Enhance business resiliency by improving data From 90 days to minutes (Savvis) center/application uptime3. Improves bottom-line economics Reduce TCO by Pay only for what you consume, when you need it Up to 50%+ Improve employee productivity with consistent experience, access to state-of the-art cloud ~$3,500/ -54% applications month Deliver key IT benefits: reduce TCO by 50%+; utilize resources more efficiently (Cisco on Cisco – from 9% to 37%, targeting 50%); reduce collaboration ~$1,610/ applications IT TCO by 15% to 23% (Cisco CSG) monthSources: Cisco IBSG, CBA, SMO, Commercial Sales, CSG, 2011 ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 6
  • 7. We Are at the Very Beginning of a Major Shift Adoption Curve Traditional Cloud Computing Data Centers Public or Private 2000 2006 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 7
  • 8. Everything as a Service in the Cloud Content and ApplicationsBusiness ConsumerServices Services Virtual Infrastructure (Compute, Storage, Networking) On-Demand, At Scale, Multitenant ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 8
  • 9. A World of Many Clouds Government Media Financial Services Healthcare Games Pharma Seamlessly Connected Public Securely Accessed Private ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 9
  • 10. The Cloud Computing JourneyConsumption models for IT,applications and services arechanging dramatically and will be ahybrid mix – available both Inter- Cloudon-premise with private clouds and Hybridfrom service providers in public Cloudclouds. Public Cloud Private Cloud Automation PRESENT Virtualization Consolidation Source: Jim Cooke - Cisco IBSG Innovations ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 10
  • 11. Factors to Consider Private Cloud Public Cloud  Security & other compliance  Private Cloud considerations + factors  Security & other compliance Govt. mandates, Sarbanes-Oxley, factors Gramm-Leach-Bliley, HIPAA, IaaS vs. PaaS. vs. SaaS SAS 70 Type-I and Type-II certification Application licensing  Application Performance  Operational/Administrative requirements – what is allowed Latency, protocol chattiness, by the service provider volume of data exchanged, etc. Other technical feasibility criteria to consider • Application‟s run time environment needs -- • Instruction set (x86 vs. SPARC vs. Power), OS (Linux, Solaris, AIX, Windows, etc.) • Sizing / Scalability – What is the maximum atomic unit of compute power available at cloud • If not adequate does the cloud architecture lend itself for horizontal scaling? • Architectural constraints – Does the Cloud infrastructure provide necessary architectural features to facilitate smooth application migration? • Need for specific clustering (e.g. Unisys Safeguard 30 m solution) • SSL off-loading (need for server based encryption / decryption) ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 11
  • 12. Q&AITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 12
  • 13. Thank you.ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 13
  • 14. Moving to a Cloud Operating Model1) Understand where you are2) Determine where you want to be3) Understand the pros and cons4) Develop your roadmap5) Begin execution6) Track progress to objectives7) Course correct as necessary ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 14
  • 15. We tested the potential for workloads / applications to migrate to IaaS & SaaSHow likely are you to migrate these workloads to IaaS / SaaS by 2013? From raw data to cloud potential: Estimate BC/DR total spendProcess Test & stage per workload / applicationDesktop Desktop Applications and OS - Software (Datamonitor) Other - Infra n/a - Servers (IDC) & Desktops - Network & Storage (Estimate) File & Print - Maintenance & Support (Estimate) - Application Customization (Estimate) Systems ManagementInfrastructureSoftware Application Development x Other n/a EstimateOther migration % Scientific/Engineering per workload / application Data Analysis/Data MiningDecision SaaS PaaS IaaSSupport Data Warehousing/Data Mart PaaS migration % calculated based on Web Serving & Streaming - “Application Development” score in SaaS Workgroup - Typical % of custom developed applicationsCollaborative& Web Email x CRM Take into account Batch increased resource utilization and OLTP SaaS IT efficiencyBusinessProcessing ERP IaaS in the cloud vs. enterprise DC - General workloads: -30%; Batch: -50% 0% 5% 10% 15% 20% 25% 30% 35% 40% - Test & Stage: -70%; BC/DR: -80% - Desktop: -99% Source: Cisco IBSG SP ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 15
  • 16. Business Drivers Impact Applications Strategy Primary Bus Drivers for Cloud* Workloads Explanation Business CRM Commodity: Standardization on SaaS will reduce cost Processing Batch Processing Requirements seasonal – systems over-dimensioned OLTP Limited cloud potential ERP Run ERP on IaaS to handle spiky resource demand Collaborative Web & eCommerce Unpredictable demand & scale are major cost drivers & Web Workgroup / Collaboration Considered too complex to run in-house Email Running outside firewall improves access Decision Data Analysis Seasonal variations and short-term projects Support Data Warehousing Large data sets (TBs) are expensive to manage Scientific / Grid Non-core app with huge, short-term requirements Infrastructure Unstructured Data Non-critical, with unpredictable, user-driven demand Software Systems Management Myriad of ITSM tools in need of standardization Application Development Developers make unplanned / last-minute requests Desktop Desktop OS & Apps Standardization drives security, while decreasing cost Process BC/DR DR equipment lies idle 99% of the time Test & Stage Testing requirements very volatile Note: *Drivers 6 (Capex-to-Opex) and 7 (Fixed to Variable Cost) do not play on a workload level. They rather impact overall IT and financial management. Source: Cisco IBSG Enterprise Interviews 2010 ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 16
  • 17. Scenarios for Cloud BenefitsScenario Drivers of Cloud adoptionGreenfield Applications • Applications such as Collaboration, Unified Communications have no pre-existing legacy to complicate cloud adoption → SaaS (Internal or Public) enables cost reduction, rapid deployment and managed deployment costs.Disaster Recovery • Customer DR equipment / DC are idle and under-provisioned → IaaS (Public –Virtual Private) enables cost reduction: DR Servers on a pay-per-use basisApplication Development • IT departments get unplanned resource requests from developers& Testing • Requirements on testing environments are very volatile → IaaS & PaaS (Internal or Public) can improve speed, quality and cost of dev & testDecision Support • Seasonal variations and short term projects: significant peak-to-troughSystems • Large data sets (TBs) are expensive to manage → IaaS (Internal or Public-Virtual Private) With adequate security and low latency (I/O), cloud can improve DSS efficiencyGrid / High-Performance • Huge, short-term requirements: “1000‟s of servers for a couple of hours”Computing • Non-core business for most enterprises → IaaS (Internal or Public) can reduce cost of parallel compute jobs in many industry verticalsERP/ CRM • Seasonal (end-of-month / quarter) resource demand of financial packages • Sunk cost of customizing financial applications → IaaS and SaaS (Internal or Public) can deliver financial packages that are customized and seasonalDesktop Virtualization • Upfront server investment reduces ROI of VDI projects • Variable resource utilization due to temp projects & day-night fluctuations → IaaS (Internal or Public-Virtual Private) with low latency access, takes away upfront server investmentUnstructured Storage • Data volumes on file-systems, wiki‟s, ... are driven by end-users: unpredictable → IaaS (Internal or Public) can accommodate sporadic growth of user-generated storage Source: Cisco IBSG SP ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 17
  • 18. Variables Drive Likely Adoption PathsCisco IBSG‟sprimary researchindicates thatthere are severalvariables that canbe examined thatare indicativedrivers of whatadoption path thecustomer will taketo migrate to acloud operatingmodel. Source: Cisco IBSG 2011 ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 18
  • 19. Hypothesis Overview of Likely Adoption PathsExample Adoption Path: Internal SOA / WOA Internal IaaS / PaaS – Web Development on (tbc) Development 1 Development built on standard stack Hybrid IaaS / PaaS Internal Ent Apps Apps Deployed in Enterprise I/PaaS – (tbc) Deployment 2 Managed Hosting with SaaS enablement Internal Ent Apps Internal Web Servers Internal IaaS – Web Hosting done on 3 (often LAMP stack) built on standard stack Hybrid IaaS Web Hosting Web Hosting done on 4 (often LAMP stack) Public IaaS Internal Grid Internal IaaS Burst / Hybrid IaaS (tbc) Deployment 5 For Simulation / R&D For Simulation / R&D to offload Grid Ent Batch Jobs No Grid Public IaaS (tbc) Deployment 6 (no skills / scale) For Simulation / R&D Ent Batch Jobs SaaS Private Cloud IT = Cloud Broker 7 For non critical apps (incl. SaaS) (Internal + Hosted) 8 SaaS IT = Cloud Broker For non critical apps (Hosted – focus SaaS) Private Cloud 9 Internal Enterprise IT On-Demand 10 Cloud as Part of Internal Enterprise IT IT Outsourcing Outsourcing Deal Note: Current adoption status of example company Source: Cisco IBSG 2011 ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 19
  • 20. ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 20
  • 21. Cisco’s ApproachPut the User at the Center, Turn the Network into a Platform ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 21
  • 22. Why Cisco? We Have Done This Before Data Network Cloud Token Ring SAAS/PAAS Heterogeneity: SNA Netware Heterogeneity: MOM CICS Custom Apps APPN SOA DECNet VTAM RJE NetBeUI Wireless Mobile AppleTalk Internet Video Web Services Inter-Cloud MQSeries SONET Voice BAM XML (IP) Legacy (Cloud Exchange) SIP 2G/3G/4G Scalability Availability Performance Availability Performance ScalabilityRequirements Security Pervasiveness Manageability Requirements Security Pervasiveness Manageability Economics Distributed Economics Distributed  20 years ago:  Today: SERVICE HETEROGENEITY NETWORK HETEROGENEITY  „Application Internet‟ will change the physics  Internet changed both the physics and and economics of IT economics of COMMUNICATION  Step function in cost, flexibility  Step function in cost, ease of use  Cisco is leading the way  Cisco led the way Source: Cisco IBSG Innovations ITMGEN-2014 © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public 22