The Myths And Magic Of Cloud Computing

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Confused about "The Cloud"? …

Confused about "The Cloud"?

Learn the basics of cloud computing and how you and your organization can benefit from it right now.

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  • 1. The Myths and Magic of Cloud Computing and How it is Revolutionizing the World Jay Roy Chief Executive Officer “Practical Intelligence for Ensuring Profitability” IMA DFW - Fall 2011 | Dallas, TX
  • 2. Cloud Computing Confusion at its Best… vs. 1
  • 3. What is Cloud Computing? – Learning Objectives1.  What is It and why has it suddenly become popular?2.  Why should our company move to the cloud?3.  As a financial or IT professional, why should I care about it?4.  What should I fear about the cloud and what are my risks?5.  What technical things do I need to know about it?6.  How can I add value to my organization using the cloud?7.  How do I use this as another tool in my tool box? 2
  • 4. Poll Question Poll Question 1 Do you think cloud computing is all hype about another technology fad OR really here to stay? 3
  • 5. Table of Contents … What Is Cloud Computing? – Basic Primer, Jargon and Technical details 7 The Myths (and Potential Downsides) of Cloud Computing 25 The Magic (and Potential Benefits) of Cloud Computing 29 The Implications of the Cloud 35 How the Cloud is Revolutionizing the World of the Finance Executive 39 How You can Add Value to Your Organization Using the Cloud 42 Examples of Cloud Computing in Daily Life 47 Conclusion and Key Takeaways 51 © 2011 Predictive Dashboards LLC 4
  • 6. Poll Question Poll Question 2 Do you care if your personal health information is being stored at a on- site premise or in the clouds?© 2011 Predictive Dashboards LLC 5
  • 7. Poll Question Poll Question 3 Do you care if your organization’s information (accounts receivable) is being stored at a on-site premise or in the clouds? 6
  • 8. What is Cloud Computing? – Basic Primer, Jargon and Technical Details 7
  • 9. What is “the Cloud”? Ø  The term “cloud” is used as a metaphor for the Internet representing infrastructureØ  Originally, a cloud drawing was used to depict a telephone network; Currently it isused to depict the infrastructure as the Internet on computer network diagrams 8
  • 10. What is Cloud Computing? - Primer “Cloud computing is the delivery of computing as a service rather than a product, whereby shared resources, software, and information are provided to computers and other devices as a utility (like the electricity grid) over a network (typically the Internet).” “A standardized IT capability (services, software, or infrastructure) delivered via Internet technologies in a pay-per-use, self-service way” 9
  • 11. What is Cloud Computing? - Primer Ø  Cloud Computing (“CC”) is a broad term for delivering hosted services over the Internet by service providersØ  Cloud computing has a few unique characteristics which separates it from traditional hosting: Ø  Services are sold on a unit basis (e.g. per minute/hour) – similar to buying services from a utility (pay for what you use) Ø  Services can be purchased on an on-demand or as-needed basis and scalable to adjust to customer needs Ø  Services are offered and fully managed by a third-party 10
  • 12. What is Cloud Computing? – A Snapshot of Configurations 11
  • 13. What is Cloud Computing? - Primer Ø  Cloud Computing has 3 main categories of service delivery: Ø  Software-as-a-Services (SaaS) Ø  Platform-as-a-Service (PaaS) Ø  Infrastructure-as-a-Service (IaaS) 12
  • 14. What is Cloud Computing? - SaaS Software-as-a-Service: A software (service) delivery model in which business applications and their data are hosted by a Cloud Provider in a cloud and accessed by users through a thin client (web browser). Examples: Google Mail or Salesforce.com 13
  • 15. Example of SaaS – Salesforce.com 14
  • 16. What is Cloud Computing? - PaaS Platform-as-a-Service: A service delivery model in which a Cloud Provider allows customers to rent virtualized servers and associated services for running existing applications or developing and testing new ones. Examples: Google Apps Engine or Force.com 15
  • 17. Example of PaaS – Google Apps Engine 16
  • 18. What is Cloud Computing? - IaaS Infrastructure-as-a-Service: A provisioning model in which Cloud Provider supplies all of the infrastructure including, offering the customer the ability to deploy and run software, including OSs and applications. The Cloud Provider owns the equipment and is responsible for maintaining and operating it. Examples: Rackspace, Amazon Web Services 17
  • 19. Example of IaaS – Amazon Web Services 18
  • 20. Why has the Cloud suddenly become so popular? Outsourcing Robust Apps & User Interfaces Services-based Economy Critical Mass Shrinking IT Shared Services Budgets Distributed Weak Economy Computing Cheap Pervasive Increased Rising Broadband Computing Licensing Costs Speeds 19
  • 21. What is Cloud Computing? – Types of CloudsØ  Cloud Computing has only one Internet but three deployment methods: Ø  Private – “Single tenant” – it is cloud infrastructure operated solely for a single organization (i.e. you), whether managed internally or by a third-party and hosted internally or externally. (e.g. Your Company Cloud) Ø  Public – “Many tenant” – An offering from a service provider to many clients who share the cloud processing power concurrently. The service provider’s public cloud clients share applications, processing power and data storage space communally. Client data are commingled, but segregation is provided through the use of metatags Ø  Hybrid – “Many tenant” is cloud infrastructure composed of two or more clouds, private or public, that remain unique entities but are bound together by standardized technology that enables data and application portability 20
  • 22. What is Cloud Computing? – Types of CloudsØ  Other Cloud Computing deployment methods: Ø  Virtual Private Cloud – is a private cloud existing within a shared or public cloud (e.g. Amazon Web Services) Ø  Community Clouds – A private-public cloud with users having a common connection or affiliation, such as a trade association, the same industry or a common locality. The community cloud business model allows a CSP to provide cloud tools and applications specific to the needs of the community. When the community is in a PaaS cloud, the SOA applets can be specific to communal requirements, e.g., business-process-specific, industry-specific. (e.g. ) Ø  Variety of Other Cloud Solutions in progress 21
  • 23. What is Cloud Computing? – Attributes Defining Clouds Source: ISACA – IT Control Objectives for Cloud Computing 22
  • 24. What is Cloud Computing? – A Visual of a Private Cloud Data Center Internet Private Cloud Your Enterprise 23
  • 25. Quick Comparison between Private vs. Public Clouds Public Cloud Private Cloud Public Cloud Private Cloud •  Hosted at Service Provider Site •  Hosted at an Enterprise or Service Provider Site •  Supports Multiple Customers •  Supports only one Customer •  Often utilizes shared infrastructure •  Does not utilize shared infrastructure •  Supports connectivity over the Internet •  Supports connectivity over private •  Suited for information that is not sensitive network or the Internet •  Can be cheaper than private cloud •  Suited for information that is sensitive and demands high security 24
  • 26. The Myths (and the Potential Downsides) of Cloud Computing 25
  • 27. The Myths (and Potential Downsides) of Cloud ComputingAre the following Myths or Truth?1.  CC can t handle my environment s security & privacy requirements2.  Migrating our work environment to the Cloud is just too hard3.  CC is too expensive and or potential savings is too good to be true4.  CC is an IT project & has no real business value5.  CC does not integrate well with on-premise or other clouds solutionsAll of these concerns have some level of validity but … Without doing your home work, the myth becomes reality! 26
  • 28. Debunking Myth 1 Cloud Computing can t handle my security and privacy requirementsFactsØ  50% or more of traditional security breaches are perpetrated by internal personnelØ  Not all cloud solutions are equally secure or insecure (reason for hybrids)Ø  Some security risks are very real and some are perceivedOvercoming the Myths – Your responsibilityØ  Perform a security analysisØ  Use encryption technologiesØ  Use federated identity management systems 27
  • 29. Debunking Myth 2 Migrating our work environment to the Cloud is just too hardFactsØ  The decision regarding which applications, infrastructure and data to migrate willbe one of the biggest technological hurdles not to mention latency and interoperabilityØ  Not all cloud provider do migration well, migration is still your responsibilityØ  Integration points are opportunities for failure – missing links (UI, data, functional)Overcoming the Myths – Your responsibilityØ  There are many ways to migrate: virtual machines, web-interfaces or porting to acloud platform but figure out how you will do this and by whomØ  Have your own migration plan and very solid back up plan 28
  • 30. The Magic and the Benefits of Cloud Computing 29
  • 31. The Magic and Benefits of Cloud ComputingAre the following Magic or just Illusions?1.  Cloud computing will provide dramatic savings in IT costs2.  Our organization will be able to execute strategies faster3.  Cloud computing will free up internal resources for strategic tasks4.  Cloud Computing will enhance performance and stability5.  Cloud computing will enhance our flexibility and usage of resources 30
  • 32. The Magic of Cloud Computing – Lucky Rabbits Foot Cloud Computing will provide dramatic savings in IT costsFactsØ  Cost Savings are as good as your projected usage. Minimum costs and hiddencharges need to be considered.Ø  Need to consider intangible costs of moving infrastructure and people s timeØ  Need to consider how you are going to save on what IT costs (hardware, software,etc.)Validating the Magic – Your responsibilityØ  Due diligence through adequate planning and up front discussions with cloudprovider is necessary to realize benefits.Ø  Develop a road map of workloads to be migrated and cost out the savings 31
  • 33. Accounting for IT Investments using Cloud Economics Source: Forrester Research, Inc. – Talking to your CFO About Cloud Computing 32
  • 34. Accounting for IT Investments using Cloud Economics Source: Forrester Research, Inc. – Talking to your CFO About Cloud Computing 33
  • 35. Accounting for IT Investments using Cloud Economics Source: Forrester Research, Inc. – Talking to your CFO About Cloud Computing 34
  • 36. The Implications of the Cloud 35
  • 37. Poll Question Poll Question 4 Do you think the average business person cares if his business information is in the clouds? 36
  • 38. The Implications of Cloud Computing – Who Cares? Yeah! I m Concerned Whatever!?! Some CIOs Some CIOs General Business Person And And Or IT Geeks Corp Attorneys Hip 20 Something Conversations @ Work 37
  • 39. The Implications of the CloudØ  To Cloud or Not to Cloud – Dealing with fear or lagging behind the curveØ  Organization structure and legal boundariesØ  Strategy and competitive advantage considerationsØ  Talent and People aspectsØ  Cost considerations including Service Level Agreements SLAs,Ø  Trusted vendors? – Standards to fall back on?Ø  Security, risks and business continuity considerations (What-if there is a breach?)Ø  Work-Life Balance considerations – Being On 38
  • 40. How the Cloud is Revolutionizing the World of the Finance Executive 39
  • 41. CC is Revolutionizing the World of the Finance ExecutiveCC impacts us in a variety of ways …Ø  Decision making about how the organization delivers its products and services tointernal customers will changeØ  The focus of Auditing and Accounting will move to the digital eraØ  Business Models will be in flux especially in the area of variable and overhead costsØ  Risk & Reputation Management will take precedence in the short-termØ  Talent & Knowledge – The CC Department?Ø  Success Metrics – Its working! Really?Ø  Outsource or Not Outsource – Impacts on you and your customersØ  Work-Life Balance – Being On 24/7 40
  • 42. CC is Revolutionizing the World of the Finance ExecutiveØ  Accounting for IT investments will be dramatically simplifiedØ  The Financial Executive will shift focus to a monitoring and benchmarking focusØ  The finance function will be scrutinizing the value of internal IT resources and costsversus outsourcing IT activities from the cloud.Ø  The finance team will be responsible for negotiating subscription fees instead oflicense feesØ  Cloud providers will have to justify and quantify their value in terms of security,compliance, service levels, compared to the marketplaceØ  Finance department will be monitoring: subscription fees/per-user fees, resourceusage and direct costs 41
  • 43. How You can Add Value to your Organization 42
  • 44. How You can Add Value to your Organization Educational PerspectiveØ  Educate your personnel of what the cloud is – Host a “Lunch & Learn” for yourteam to understand the technical, administrative, value-adds/detracts detailsØ  Research specific cloud offerings specifically to your industry or niche –Remember Caveat emptor – Buyer beware – Not all cloud services are equalØ  Understand the contractual arrangements i.e. Service Level Agreement ( SLA )and identify the gotchas for people involved with purchasing the serviceØ  Understand how your IT audit function will audit the Cloud – Review the latestrequirements from ISACAØ  If considering cloud adoption, understand and develop a road map forimplementation and migration of applications used in your function 43
  • 45. How You can Add Value to your Organization Administrative/Contractual PerspectiveØ  Perform a Risk and Cost/Benefit Analyses on Cloud Computing for yoursituationØ  Understand the contractual arrangements i.e. Service Level Agreement ( SLA )and identify the gotchas for people involved with purchasing the serviceØ  Assist in the development of the project plan to migrate to cloud if you own thefinancial applicationsØ  Improve your budget - Stop paying for services that you may use for freeØ  Find out what your recourse would be if cloud computing isn t for you – i.e.what things do you own (e.g. data, applications, etc.) and how to move off from thatcloud provider 44
  • 46. How You can Add Value to your Organization Security and Technological PerspectiveØ  Review and update your IT governance and IT change management processeswith new cloud policies and practices into your Sox and compliance requirementsØ  Perform and hire capable professionals to advise, develop and test cloud securityregardless of the delivery model you utilizedØ  Incorporate potential cloud failures into your business continuity and disasterrecovery planning requirementsØ  Keep abreast of changes through governance committees including cloudcomputing issues and identify a resource for providing regular briefingsØ  Attend security and technological conferences, webinars and user groups toensure your business and IT personnel are competent in this domainØ  Get familiar about costs to maintain an appropriate level of security – see it as aninvestment not an expense 45
  • 47. How You can Add Value to your Organization Business Process and Internal Controls PerspectiveØ  Understand how your business processes will change and affect financial reportingØ  Understand how your IT audit function will audit the Cloud – Review the latestrequirements from ISACAØ  Identify and incorporate into your Enterprise Risk Assessments the new risksresulting from using cloud computingØ  Discuss with your Audit Firm how changes will affect your audit 46
  • 48. Examples of Cloud Computing in Daily Life 47
  • 49. Case Study: The New Start-Up (Cloud Computing Start-Up)Ø  A next-generation start-up that nearly used all cloud services to begin its operations48
  • 50. Examples of Cloud Computing that we may be familiar with 49
  • 51. Case Study: Business Intelligence (BI) in the Clouds 50
  • 52. Case Study: Business Intelligence (BI) in the CloudsChallenges Predictive Dashboards had to Overcome:Ø  Choosing an infrastructure provider was challengingØ  Understanding the jargon, technologies and the varied offerings was overwhelmingØ  Defining the minimum and appropriate standards was vexingActions Taken:Ø  Talked to as many providers and other SaaS-based Cloud Providers to make sense ofand compared the offerings and figured out the Do’s and Don’tsØ  Punted on the standards issue and felt we could wait a while but ensured ourselvesthe minimum amount of securityResults:Ø  Learned not only the technology issues and but also the business issues of the cloudØ  Learned that technology constantly evolves and you’re always in development mode 51
  • 53. Conclusion & Key Takeaways 52
  • 54. Conclusion & Key Takeaways Conclusion: Cloud computing has the potential for revolutionizing the ways businesses and individuals operate. However, be a skeptic! At its core, CC is another outsourcing mechanism and must be monitored. Don t forget, it’s still your responsibility. Takeaway: Cloud Computing has many positives but the learning curve can be steep both technologically and administratively. The benefits can far outweigh risks. There are huge opportunities and potential for financial professionals to add value to this area and to your organization Takeaway: Cloud computing is not without risk. Do your due diligence. Unforeseen disasters may await you including security breaches, cost overruns, technological challenges, privacy issues, etc. 53
  • 55. Poll Question Poll Question 5 Now, do you think cloud computing is Myth or Magic? 54
  • 56. Sources, References, and TrademarksØ  Forrester Research, Inc. – Talking to your CFO About Cloud ComputingØ  ISACA – IT Control ObjectivesØ  The Lego Minifigure is a trademark of The Lego Group 55
  • 57. The Myths and Magic of Cloud Computing and How it is Revolutionizing the World Jay Roy, Chief Strategy Officer www.PredictiveDashboards.com Jay.Roy@PredictiveDashboards.com T: 214-621-7612 56