Smarter ComputingCloud Computing ona Smarter Planet
2 Cloud Computing on a Smarter PlanetAs our planet gets smarter—more instrumented, interconnected and intelligent—the underly-ing infrastructure needs to capture and analyze increasing amounts of data, deliver results tomore users, and respond faster across all devices, without a corresponding increase in budget.In fact, most enterprises have reduced IT operating budgets by an average of 36% over thepast year. Many companies are exploring cloud computing, using resources only when andwhere needed, as a way to reduce the cost and complexity of IT services: 60% of CIOs plan touse cloud which is a dramatic increase from 33% just two years ago.This reality is driven by three major shifts: IBM has a different point of view The true promise of cloud isn’t just about advancing IT; it’s• Escalating customer, employee and partner expectations about reinventing business. Leading companies are unlocking around self-service, personalization, access to real time infor- the deeper potential of cloud as a way to manage not just their mation, and service innovation IT but also their businesses. They’re discovering that cloud can• An exponential increase in data, users, speed requirements, help them create new marketplaces, smarter business services and the number and variety of connected devices and profitable new revenue streams.• The imperative to deliver higher value products and services more rapidly than ever before in order to remain competi- Today consumers expect every touch point to be valuable, per- tive in a crowded, global market sonalized, self-serviced, and tailored to the device they’re us- ing. Companies can no longer remain competitive by launch-Harnessing cloud is one of the key ways companies can keep ing new products and services with incremental features andpace with ever increasing consumer expectations and competi- capabilities on a regular, phased schedule. They must delivertive pressures. Yet obtaining substantial benefits to address continual innovation, dramatic improvements or wholly newtoday’s marketplace realities is not a matter of simply imple- concepts with frequent updatesmenting cloud capabilities – but of how organizations strate-gically utilize. Too often this vast potential is unmet becausecloud technology is being used primarily to make IT easier,cheaper and faster. 36%in IT reduction operating budget
Smarter Computing 3Relationships between buyers and sellers are fundamentally Strategic Approach to Cloud Challengeschanging as well. The balance of power is shifting from provid- While cloud opens up immense opportunities, it also introduc-ers – the companies who provide goods and services – to the es challenges, especially in the areas of security, integration andindividual consumer and networks of consumers who procure business process management. To fully benefit from a cloudthose goods and services. Personalized pricing, real time con- computing, organizations must approach this shift strategicallysumption information, control and flexibility are the underpin- and focus on three key challenge areas:nings of today’s buyer-seller relationships. Companies mustadapt to the rules of this new world, or be left behind. • Integration Integrating traditional IT environments with cloud environ-Cloud, combined with other key technologies, enables compa- ments and integrating across multiple could environments.nies to radically change how they service consumers, run their Without a holistic approach, it’s all too likely that multiplebusiness and outpace competitors. We are at a critical inflec- groups in an organization will make independent decisionstion point in the cloud evolution. Enterprise clients are now to deploy services in clouds that are disconnected or can-moving from “sandbox” projects to full-scale production of not interact seamlessly with each other or the traditional ITimportant IT and business services. The market forecast bears environment. Integration must be forethought.this out: According to IDC, the market for cloud solutions isexpected to grow almost five times faster than traditional IT • Business Process(27% vs. 5%). To reap the true rewards of cloud computing the organi- zation has to move beyond incremental adjustments andOver half of business executives believe cloud enables business into modeling, simulation, what-if analysis and team-basedtransformation and leaner, faster, more agile processes. This process management.is strategic thinking. But organizations that approach cloud ina tactical fashion risk adding complexity and inefficiency due • Integrity and Securityto fragmentation, redundancy and operating silos. In contrast, Ensuring data or intellectual property is not leaked,organizations that embrace cloud strategically—from a busi- privacy is maintained and the data the business relies onness as well as IT perspective—can capture new business value can be trusted.through innovation, flexibility, and speed, with integrity andsecurity – while reducing cost and complexity. These challenges mean that, if not careful, companies could end up trading old problems for newer, bigger ones. For exam- ple, cloud projects that are “secure by design” apply the right60% level of security depending on the requirements of the work- load – the cloud has the potential to be more secure than tradi-of CIOs plan tional environments. With a strategic, well-managed approachto use cloud by IBM, it is possible to tackle these challenges and build an environment that is as solid as it is flexible and efficient.
4 Cloud Computing on a Smarter PlanetBusiness Value of Cloud ComputingWith a strategic approach to cloud computing, including managing the integration, businessprocess and security obstacles mentioned, cloud opens up fundamentally new ways of doingbusiness. Ways that are not just more efficient and lower cost, but would be impossible with-out cloud. Ways that enable companies to keep pace with ever increasing consumer expecta-tions, competitive pressures and capture business value in new ways. The true promise ofcloud isn’t just about rethinking IT; it’s about reinventing business.There are three core IT without boundaries By removing the barrier of location, cloud enables tasks andareas where the value of workloads to be delivered with massive economies of scale andcloud computing can be by experts best capable of undertaking them – whether theymore readily seen: are within the company, or beyond. By empowering custom- ers, suppliers and employees to self-serve based on their own specifications – to bypass traditional layers of process and to get what they need more readily – cloud step-changes satisfac- tion. Cloud helps enable new IT and business processes that break down traditional silos and simplify access to information in order to deliver better business outcomes. This breaks down the boundaries of traditional IT allowing individuals to man- age their own resources. True Value used cloud to help transform the management of its supply chain across 5,000 hardware stores in 54 countries, reducing lead time by 56% and back orders by 85%— a leap forward in its ability to deliver products to its customers.
Smarter Computing 5Speed and Dexterity Creating new business valueIn a recent McKinsey survey, when asked about the most By enabling broader collaboration, cloud helps companiessignificant value drivers for cloud, 70% of respondents identi- to innovate collectively. Computing in the cloud is fundamen-fied “increased business flexibility” 55% identified “increased tally different because it’s largely about providing technologyability for IT to scale up (or shrink) to meet business needs,” services and making them available to a community of users toand only 29% indicated “lower unit cost of IT.” Cloud enables combine and consume in ways that the provider likely hasn’torganizations to deliver new offerings far more rapidly and even thought of, this puts an unprecedented power to innovategives end-to-end visibility into the business revealing insights and deliver business in the hands offrom data, no matter where it sits. computing consumers.Through a development cloud, China Telecom The City of Wuxi creates an engine for eco-is offering customers new revenue-generating nomic growth by using a cloud infrastructuresmartphone applications faster by reducing time for local government projects and providingto market from more than three weeks to less flexible cloud environments for start-ups,than three days. The company is growing its thereby lowering barriers to entry for innova-customer base while cutting IT costs by 50%. tion and accelerating the growth of the region.
6 Cloud Computing on a Smarter PlanetCloud Computing Adoption PatternsAs cloud computing becomes pervasive, clear and well-defined approaches that consistentlydeliver tangible results are emerging. These patterns of adoption emerge as repeatable formu-las for success that deliver tangible value to organizations in the most efficient manner possi-ble. Their common underpinning is cloud computing, and range from using applications fromanother company’s cloud over the internet, cutting expenses by cloud-enabling your datacen-ter, accelerating time-to-market with cloud platform services, all the way to sharing and mon-etizing your applications as cloud services and becoming a cloud service provider. Cloud enabled data Cloud platform services Cloud service provider Business solutions on center addresses immedi- solve the need for accel- patterns are for organiza- cloud is about gaining ate needs for cutting IT erating time to market tions that want to capital- immediate access to enter- expense and complexity for new services and ize on new business models prise class solutions while while improving efficiency increasing profitability and and revenue sources by of- minimizing risk and capital of service delivery. Typi- competitive advantage. fering cloud-based services expense. Some solutions cally these projects include Typically these projects to others. Examples range include collaboration, significant elements of are characterized by stan- from core cloud service business process manage- consolidation, virtualiza- dardized and automated delivery to industry- ment, analytics, applica- tion, standardization and provisioning of topologies specific integrated service tion management, email, automation. for pre-defined workloads. management with storage, integration, order-to-cash, networking and security. B2B, dev/test, service desk, and marketing.
Smarter Computing 7 IBM SmartCloud Business Process as a Service, Software as a Service Platform as a Service Infrastructure as a Service Design Deploy ConsumeWhy IBM? ment. We offer world-class public cloud capabilities acrossIBM’s comprehensive capabilities make the cloud promise a infrastructure, platform, software, and business process as areality. We have helped thousands of clients reap the benefits of service categories. And we offer a range of business and tech-cloud computing – With over 2,000 private cloud engagements nology professional services across the full lifecycle of cloudin 2010, we manage billions of cloud based transactions every initiatives from design to deployment to consumption.day and million public cloud users. IBM itself is using cloudcomputing extensively and experiencing tremendous benefits – What we do is simple: Bring together key cloud technologies,such as accelerated deployment of innovative ideas and $15M deep process and industry knowledge, a broad portfolio ofa year in savings from their development. cloud services and solutions and a network of global delivery centers – All focused on your success. But what makes it reallyWhether you are searching for a way to take your organization interesting… what makes it smarter… what matters most toto an established cloud, create a smart cloud inside your orga- our clients, is that IBM helps leading companies use cloud tonization, or integrate across clouds, IBM can lend its expertise go beyond improving efficiency and cost-effectiveness. Weand technology. help them use cloud to transform business models and capture new business value. Seize the opportunity to rethink IT – andGetting started with IBM is easy no matter what your needs reinvent your business.and priorities are. We can supply the resources you need tobuild your own private cloud, the expertise and skill to build it To learn more about Cloud Computing , visit:for you, or the option to host a private cloud in our environ- www.ibm.com/cloud