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  • 1. 1
    Cloud Computing Seminar Cambridge 1st February 2011
    Using The Public Cloud To Reduce Cost
    Morgan Hill Consultants Ltd
    12 Melcombe Place
    NW1 6JJ
    +44 (0)203 174 0393
  • 2. Some Views on Cloud Computing
    So what is it all about?
  • 3. Terms You Will Come Across
    There is overlap between these but essentially there are three terms in use today:
    SaaS Software as a Service eg. Salesforce
    PaaS Platform as a Service eg: Microsoft Azure
    IaaS Infrastructure as a Service eg: AWS, Amazon Web Services
    What is the big change from what we used to have?
  • 4. The Big Change is Not Technical it is Largely Approach
    The retailer approach to IT Infrastructure
    The key things about a retailer:
    • Cost transparency, the price is marked on the product
    • 5. Cost is actionable, it can be compared and if it is too much you can go somewhere else
    • 6. You buy what you need, not what you might need
    • 7. Customer loyalty is earned, if you don’t like the experience you go somewhere else next time. You are not usually locked into any single retailer.
    Now consider this approach in an IT environment.
  • 8. AWS Rate Card
    Here are the clear and transparent prices for Amazon EC2 (elastic compute) servers.
    How does an organisation take advantage of this transparency and retail approach?
  • 9. Organisational Information
    The information available to most organisations is not usually in a form that lends itself to getting the most from this level of cost transparency.
    What other barriers might exist?
  • 10. The Organisational IT Environment
    Up to now the IT organisation has been hampered by the difficulty in achieving on going internal cost transparency and a complex array of costs and contracts from big IT vendors:
    • Cost transparency
    • 11. no - difficult to be clear about what all the real costs are
    • 12. Cost is actionable
    • 13. no - subject to lock in contracts with vendors
    • 14. no – subject to depreciation run off
    • 15. Customer loyalty is earned, if you don’t like the experience you go somewhere else next time
    • 16. no – subject to lock in contracts with vendors
    • 17. no – subject to technical lock in eg. “we are a Microsoft shop here”
    Nearly all large IT vendors try to lock their customers in using contracts or technology.
    So how does the organisation take advantage of a retailer’s approach to IT?
  • 18. Act Like a Customer of a Retailer
    Internal costs need to be transparent and consequently actionable. If costs are transparent we can consider actions in light of them. For example:
    • Consider the impact of change
    • 19. See where to apply that change
    • 20. Track costs to ensure we are at a “market rate”
    • 21. Hold vendors to account
    • 22. Control organisational demand by showing the real cost of services consumed
    Cost transparency used to be hard to achieve. When this is done the financial benefits of some cloud services will be much easier to see and then achieve. So how do we make costs transparent?
  • 23. Cost Transparency
    We need an ability to describe the real costs of the services provided. With this information we have the means to take action.
  • 24. Making Cost Actionable
    When costs are actionable then it is easier to consider the applications of new strategies and delivery models.
    The example below is based on our experience of using this approach to reduce IT opex by 11% with no degradation of service.
    So where does the AWS cloud help to reduce these costs?
  • 25. AWS Cloud – Impact on Costs
    The previous example saw AWS used to reduce the following costs:
    Data Centre
    • Servers, fewer servers required to provision for theoretical maximum loads
    • 26. Storage, a wider choice of storage devices some very in-expensive
    • 27. WAN, removal of high cost fibre links for in house redundancy
    • 28. Buildings, release of lease costs for “dark site”
    • 29. Utilities and security, release of buildings related costs
    • 30. People, contactor costs for system maintenance tasks
    Specific Applications
    • Pan European central application 1, provisioned in the cloud
    • 31. Removed capex requirement for 9 regional data centre deployments of hardware
    • 32. Pan European central application 2, provisioned in the cloud
    • 33. Switch from proprietary database on Unix to open source database on Linux in the cloud
    • 34. Removed all licence costs and hardware maintenance contracts
  • Summary
    • The big change is not technology
    • 35. It is around a retailer mentality towards customers and costs, this means cost transparency and paying for what you actually need
    • 36. This is often in contrast to the approach of typical large IT vendors
    • 37. To benefit it is necessary to have effective cost transparency over existing services
    • 38. This is much easier to achieve now than in the past
    • 39. Once achieved then a range of options exist to reduce cost an important one of which is cloud based Infrastructure as a service.