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Achieving Business Value - Virtual Transformation Day Feb 2019

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AWS Transformation Day is designed for enterprise organizations looking to make the move to the cloud in order to become more responsive, agile and innovative, while still staying secure and compliant. Join us for this virtual event and we'll share our experiences of helping enterprise customers accelerate the pace of migration and adoption of strategic services.

We recommend this event for IT and business leaders who are looking to create sustainable benefits and a competitive advantage by using the AWS Cloud.

Speaker: Michael Chu, Jake Burns
It is well understood by the enterprise that cloud computing enables companies to host applications, mission critical workloads, and special projects on infrastructure that is built and managed by a third-party provider such as AWS. However, many customers find themselves having a difficult time in assigning value to the benefits of the cloud. In this session we will introduce a framework that can be used to identify the impact of moving to the cloud and the business value around areas such as cost savings, staff productivity, operational resilience, and business agility.

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Achieving Business Value - Virtual Transformation Day Feb 2019

  1. 1. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Achieving Business Value with AWS Michael Chu AWS Cloud Economics Jake Burns AWS Enterprise Strategist
  2. 2. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Live Nation is the world’s largest live entertainment company Annual revenue exceeding $10 billion Operations in more than 40 countries Issues over 500 million tickets, and promotes 30,000 events annually
  3. 3. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Session Agenda 1 Cloud Value Framework 2 Areas of Business Value Cost savings Staff productivity Operational resilience Business agility 3 Process & Best Practices
  4. 4. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cloud Value Framework Cost Savings (TCO) Staff Productivity Operational Resilience Business Agility What is it? Examples Infrastructure cost savings/avoidance from moving to the cloud 50%+ reduction in TCO (GE) Over 500 hours per year of server configuration time saved (Sage) Efficiency improvement by function on a task-by-task basis Critical workloads run in multiple AZs and Regions for robust DR (Expedia) Benefit of improving SLAs and reducing unplanned outages Launch of new products 75% faster (Unilever) Deploying new features/applications faster and reducing errors Most Compelling Cloud Benefits Typical Focus
  5. 5. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Examples of Value Realized Staff ProductivityCost Savings Operational Resilience Business Agility 80% reduction in software R&D times (Apeejay Stya & Svrán) Time to launch digital campaigns cut from weeks to 24 hours (91App) Calc and reporting time cut from 10 days to 10 minutes (Aon Benfield) Time to market cut from weeks to hours (FlyDubai) Clinical simulations 98% faster than on- premise (Bristol-Myers Squibb) Time to deploy IT compute reduced to <5 minutes (Alcatel-Lucent) R&D RFS times reduced from 6 months to 1 day (NewsCorp) Provisioning time cut from 3–4 weeks to 2 days (ENEL) Test-run time cut to 10 minutes, from up to 2 hours (Yelp) Launch new products 75% faster (Unilever) 5M financial investment policies recalculated in minutes instead of overnight (ABSI) DC footprint from 13 to 6 (The Weather Co.) DC footprint reduced from 8 to 3 by 2018 (CapitalOne) Storage costs reduced by up to 60% (ENEL) Migrated 500 servers, 1 PB storage, &100 DB servers in 3 months to AWS (Condé Nast) Over 50% reduction in TCO (GE) DC footprint from 45 to 6 (News Corp) 50% reduction in app costs (Time Inc.) Cost savings of $20M p.a. (FINRA) Computational cost reduced by 20%+ (ENEL) Cloud deployment has saved US$34 million in CAPEX and reduced OPEX by 85% (Samsung) Cost reduction of $40k p.a. (Dow Jones) Savings of $1.5M p.a. (Trainline) 30% reduction in OPEX (MacMillan) HBX is saving $1.8M annually in hosting costs + $250K annually in data-center space (DC Health Benefit Exchange Authority) 75% cost reduction in computation fluid dynamics simulations (TLG Aerospace) Scaled to handle a 400% increase in page views (Kurt Geiger) 8600 transactions/second (McDonalds) Transfer of over 750 TB of data from pipeline inspection machinery (GE) Processing over 75 billion market events daily (FINRA) Critical applications run in multiple AZs, x- Regions for robust disaster recovery (Expedia) Supports over 300,000 requests per minute to its API (Easy Taxi) 60% reduced downtime (Trainline) Migration of SAP on Oracle to AWS with zero unplanned downtime across five countries (Kellogg’s) SAP availability boosted to 100% (MacMillan) Remediation time reduced from 3 days to 80 minutes (GE Appliances) Automatic ISO27001, PCI DSS, and HIPAA certification (Medscheme) FedRAMP accreditation accelerated time to market (Healthcare.gov) Average annual staffing savings of $3M (Adroll) Energy Marketing business prepared for acquisition in only 6 months rather than 12 (Hess Corp) Reduced management time by 80% compared to prior cloud platform, and redeployed 3 IT staff to development efforts (iFit) Half the infrastructure team required to manage infrastructure (2C2P) IT Infra consolidation completed in 20% of expected time (Hearst) 60% of IT working on data proliferation, lack of standards, security hardening all of which AWS is addressing (Intuit) Over 500 hours per year of server configuration time saved (Sage) 39 years of Computational chemistry condensed into 9 hours (Novartis) "I haven't had a support callout in six months. Previously we'd have to work late at least once or twice a week. It's allowed us to refocus people's efforts onto more strategic tasks.” (Graze)
  6. 6. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Sample Output Server Storage Network $1,093,514 $688,514 $154,640 Savings Staff ProductivityCost Savings Operational Resilience Business Agility Total $1,936,688 Infrastructure Facilities Network $405,000 $270,000 $337,500 Impr $1,012,500 Value 30% 80% 20% eCommerce1 After $1,432,343 Value 99.00% Before 99.50% $1,432,343 Time to Deploy Total Defects Customer NPS Employee NPS $656,232 $640,360 $1,302,274 $1,751,055 Impr $4,349,922 Value 22.0% 35.0% 50.0% 33.3% KPIUptime TOTAL ANNUAL BENEFIT $8,731,433 Typical Focus Most Compelling Cloud Benefits
  7. 7. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cost Savings: Economics of the Cloud Traditional hardware Actual demand AWS Predicted demand Key: Infrastructure cost $ Time Large capital expenditure Opportunity cost Lost opportunity
  8. 8. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cost Savings: Modeling On-Premises Facilities Cost Space Power Cooling Recurring ISP/bandwidth costs Network hardware—LAN switches, load balancer Facilities Cost Space Power Cooling Storage software costs (+ maintenance) Hardware—Storage disks, SAN/FC switches 1 2 3 Server Costs Storage Costs Network Costs Facilities Cost Space Power Cooling Software—OS, virtualization licenses (+ maintenance) Hardware—Server, rack chassis PDUs, ToR switches (+ maintenance) Diagram doesn’t include every cost item. For example, software costs can include database, management, and middle tier software costs. Facilities costs can include costs associated with upgrades, maintenance, building security, taxes, and others. illustrative
  9. 9. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cost Savings: AWS Benchmarking Insights Reduction in overall IT Infra Spend Reduction in overall IT Infra Spend Reduction in overall IT Infra Spend Reduction in overall IT Infra Spend 19.0% 22.4% 25.2% 29.1% Source: AWS Cloud Economics Benchmarking, n = 500 AWS Customers. August 2018 AWS reduces costs… This reduction grows with AWS maturity and exclusivity
  10. 10. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cost Savings: Case Studies “We’ve been able to seamlessly scale our infrastructure, better serve our customers across the globe, and reduce our fixed costs by 75% and operational costs by 83%.” — Valentino Volonghi, CTO “As a result of going all-in into the AWS Cloud, the company reduced costs by 40% and increased operational performance by 30–40%.” “Saved $1M in hardware refresh costs and $200K annually in opex costs.” “Estimated 15–20% annual opex savings; realized 35%.” “We’ve realized a 52% reduction in TCO. That stems from a number of factors... [a push for self-service, dynamic storage, using lower-cost VMs]. Ultimately, these savings are a byproduct of doing the right thing.” — Ben Cabanas, CTO “Three years on, we’ve saved over $100 million in avoided capital and are about 65% in the cloud.” — Dominic Shine, CIO
  11. 11. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Live Nation: Realized Value with AWS • 18% initial TCO savings • 40% reduction in TCO through Cost Optimization after 1st year • 58% reduction in TCO to date • 99.9% vs 99.999% availability • Improved security posture • Near zero performance complaints • 10x increase in innovation pipeline • Rapid experimentation • 90%+ business user satisfaction with Cloud Services • 50% reduction in traditional IT tasks • 10x improvement in # new of projects • Improved automation and backup processes with managed services Internal Migration Focus 17 Months 118 Apps in Cloud & 58% TCO Savings Cost Savings (TCO/CO) Staff Productivity Business AgilityOperational Resilience Progress
  12. 12. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Staff Productivity: Focus on Value-Add Work Tactical (undifferentiated) Strategic (differentiated) Current state “Lift & shift” to AWS High-level AWS services Activities Customer maturity on AWS
  13. 13. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Staff Productivity: AWS Benchmarking Insights Increase in number of VMs managed per administrator Reduction in total incidents Increase in number of TBs managed per administrator 2x 1.8x 43.4% Source: n = 500 AWS Customers. AWS Cloud Economics Benchmarking, August 2018
  14. 14. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Staff Productivity: Case Studies Pharma Services Provider “[Our staff] spends 60% of work on things like data proliferation, lack of standards, security hardening ... AWS is addressing these needs.” — Raji Arasu, SVP of Platform and Services $3M staffing cost savings; reduced operational costs by 83% 51% efficiency improvements in compute-related functions; 20% improvement in application development functions 50% reduction in administrative overhead, including server management and backup operations 50% improvement in IT efficiency. “Tasks around hardware troubleshooting and tuning have been eliminated while capacity planning and procurement have been reduced by 90%“ 50% reduction in infrastructure management “I haven’t had a support callout in six months. Previously we’d have to work late at least once or twice a week. It’s allowed us to refocus people’s efforts onto more strategic tasks.”
  15. 15. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Live Nation: Realized Value with AWS • 18% initial TCO savings • 40% reduction in TCO through Cost Optimization after 1st year • 58% reduction in TCO to date • 99.9% vs 99.999% availability • Improved security posture • Near zero performance complaints • 10x increase in innovation pipeline • Rapid experimentation • 90%+ business user satisfaction with Cloud Services • 50% reduction in traditional IT tasks • 10x improvement in # new of projects • Improved automation and backup processes with managed services Internal Migration Focus 17 Months 118 Apps in Cloud & 58% TCO Savings Cost Savings (TCO/CO) Staff Productivity Business AgilityOperational Resilience Progress
  16. 16. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Operational Resilience: Downtime Costs Annual Fortune 1000 application downtime costs (IDC) $1.25 to $2.5B Cost/hr. of a critical application failure (IDC) $500K to $1M Average cost of a data breach (Ponemon) $3.6M Average cost per lost or stolen record (Ponemon) $141 Average cost/hr. of downtime (Ponemon) $474K
  17. 17. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Operational Resilience: AWS Benchmarking Insights Reduction in overall incidents 43.4% Reduction in P1/P0 incidents 48.7% Reduction in security incidents 36.1% Reduction in MTTR 27.7% Source: n = 500 AWS Customers. AWS Cloud Economics Benchmarking, August 2018
  18. 18. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Operational Resilience: Case Studies Using AWS, Travelstart has seized opportunities in emerging markets and has cut operational costs by 43% and downtime by 25% With its on-premises setup, the availability of its system ran to 98%, but on its cloud infrastructure, this has risen to 99.965% Migrated all workloads to AWS to reduce downtime by 60% with an annual savings of £1.2M Rebuilt patient engagement portal on AWS and reduced downtime from 120 to <5 min/month Migrated to AWS in 6 weeks with no downtime and improved availability to 99.99%+ 3 9’s to 5 9’s “We no longer need to worry about data center, server, or hypervisor security…which allows us to focus our attention on securing our applications.”
  19. 19. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Live Nation: Realized Value with AWS • 18% initial TCO savings • 40% reduction in TCO through Cost Optimization after 1st year • 58% reduction in TCO to date • 99.9% vs 99.999% availability • Improved security posture • Near zero performance complaints • 10x increase in innovation pipeline • Rapid experimentation • 90%+ business user satisfaction with Cloud Services • 50% reduction in traditional IT tasks • 10x improvement in # new of projects • Improved automation and backup processes with managed services Internal Migration Focus 17 Months 118 Apps in Cloud & 58% TCO Savings Cost Savings (TCO/CO) Staff Productivity Business AgilityOperational Resilience Progress
  20. 20. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Business Agility: Track & Measure KPIs KPI New applications launched per year Mean time to resolution Time to market for new applications Response time to defects (hrs) % of new applications launched on-time % of failed deployments Time to provision new environments (days) Customer retention (%) Deployment frequency (revs/yr) Adoption of new features (%) Time to deploy to production (weeks) “Value” per release ($ revenue potential) Time to deploy to test (days) Employee retention (%) Features per release Employee absenteeism (%) Total # of incidents/defects Employee NPS/satisfaction % of total defects found in test Customer NPS/satisfaction
  21. 21. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Business Agility: AWS Benchmarking Insights Accelerated time to market 18.8% More features & fixes per release 26.4% Increase in Application Revenue per User 33.8% Source: n = 500 AWS Customers. AWS Cloud Economics Benchmarking, August 2018
  22. 22. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Business Agility: Case Studies “More than 80% of IT expenditure at AFG was consumed by IT operational costs… Today, 60 percent of our IT expenditure is dedicated to innovation.” “We are able to use AWS to reduce the time required to deploy infrastructure from weeks to days or hours.” 10x more experiments. “When you know you have the ability to quickly deprovision, it makes you bolder to say yes and try new things.” Deploy instances 90% faster Provisioning time reduced from four weeks to two days “Our projects no longer last years— they last months. Which means that we can deliver new features to our customers much faster than we had before."
  23. 23. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Live Nation: Realized Value with AWS • 18% initial TCO savings • 40% reduction in TCO through Cost Optimization after 1st year • 58% reduction in TCO to date • 99.9% vs 99.999% availability • Improved security posture • Near zero performance complaints • 10x increase in innovation pipeline • Rapid experimentation • 90%+ business user satisfaction with Cloud Services • 50% reduction in traditional IT tasks • 10x improvement in # new of projects • Improved automation and backup processes with managed services Internal Migration Focus 17 Months 118 Apps in Cloud & 58% TCO Savings Cost Savings (TCO/CO) Staff Productivity Business AgilityOperational Resilience Progress
  24. 24. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Resources to Get You Started AWS TCO Calculator https://awstcocalculator.com AWS Economics Center aws.amazon.com/economics/ Case Studies and Research aws.amazon.com/solutions/case-studies Live Nation Value Realization Study aws.amazon.com/blogs/media/tag/live-nation/
  25. 25. © 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Thank you!

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