Cloud: What cloud really means ? How it should help CEO transform their business ? How it should help CEO transform their IT department ? Prerequisite for a sucessful cloud project

1. Cloud :
A disruptive technology that CEO should
use to transform their business (and
their IT department)

2. Cloud :
What cloud really means ?

3. You are already using the cloud in your
everyday life:
Communicate Store
Back-upandsynchronise
acrossdevices
Accessdataand/or
Processtransactions

4. Cloud: definition
Cloud computing can be defined as a scalable and flexible shared computing solution
in which third party suppliers use virtualization(1) technologies to create and
distribute computing resources to customer on demand via the internet browser
©Alex Krikos – Disruptive Technology Business Models in Cloud Computing – MIT 2010
Cloud computing is a model for enabling ubiquitous, convenient, on-demand
network access to a shared pool of configurable computing resources (e.g.,
networks, servers, storage, applications, and services) that can be rapidly provisioned
and released with minimal management effort or service provider interaction
NIST (National Institute of Standards and Technology – US Department of Commerce) Special Publication 800-145
(1) Server virtualization is the idea of taking a physical server and, with the help of virtualization software, partitioning the server, or
dividing it up, so that it appears as several "virtual servers," each of which can run their own copy of an operating system.
About.com

5. Cloud: typology
Infrastructure as a service (IAAS) Platform as a service (PAAS) Software as a service (SAAS)
Definition
Providing basic server, processing or
network services.
The customer control the operating
system and applications on this
infrastructure
Platform provided to develop and
deploy applications.
The customer control the application
but not the hardware and the
operating system.
Utilisation of end-user application run
on the cloud.
The customer manage only limited
configuration settings and interface
with other applications.
Use Case
Storage
Back-up and recovery plan
Web-hosting
Big data projects requiring large
capacity to store and compute
Short-term peak workload: tests,
project resources,…
Development and run of end user
application both stand-alone or
applications that enhance an existing
SAAS offering
Utilisation of turn-key solutions
reducing drastically the time to
implement and the operation and
maintenance work.
Providers
Amazon, Rackspace, Dell, IBM,…
Telco providers,…
Microsoft Azure, Google Apps
platform, Amazon,…
Salesforces.com, Google Apps,
Office365.
SAAS version of Oracle or SAP
software
In addition, a new category of services appears: BPAAS: Business Process As A Services: this cover the provision of BPO services
(payroll, suppliers invoices, payment,…) based on a cloud technology.

6. Key advantages of cloud technologies
Drastically reduce
implementation
time
Cloud can significantly reduce the implementation time for large ERP, CRM or Big Data Projects.
These projects can be focused on key business issues and can be freed from most technical IT
issues. Large roll-out time can be measured in weeks instead of months.
Simplify
Scalability and
Reliability
Respond immediately to a significant increase in the work load: website experiencing a
significant increase in traffic, IT projects requiring large temporary server need, ..
Embedded back-up and disaster recovery process.
By relying on cloud, CEO can significantly simplify their organisation and their projects: simplified
IT architecture, reduced infrastructure and maintenance tasks, small project team can conduct
large global projects.
Cloud services enable access wherever you are on a 24 hours a day basis, 365 days per year
while reducing the need for large operation team. This will facilitate standardisation of process,
economies of scale and collaboration on a global basis.
Cloud SAAS offer a permanent seamless migration to the latest available version. This will reduce
the burden on IT teams to constantly run large migration projects. This will also have a positive
impact on staff motivation and retention.
Accessibility across
the globe and on
multi-device
Provide staff with
the most up to
date IT tools

7. Cloud :
How it should help CEO transform their
business ?

8. How the cloud should help CEO transform their business ?
« The widespread introduction on Mclean’s new system (the freight container) saw port costs plummet over
the next few decades.
If freight had been cheap before 1960, afterwards it became practically free – in the unlovely jargon of
economic “frictionless”. Freed of burdensome tariffs and shipping costs, good began circulating more freely
around the globe”. (2)
(1) Source: Alex Krikos, Disruptive Technology Business Models in Cloud Computing (MIT 2010)
(2) Source: (1) and William Bernstein, In a splendid exhange; how trade changed the world (Grove/Atlantic 2008)
The impact of Cloud on IT services and business strategy will be similar to the
impact that containers had on freight and international trade. (1)

9. How the cloud should help CEO transform their business ?
A new
entrepreneurial
spirit
Increase speed and
agility
Time to implement IT projects is
significantly reduced
Simplify
Organisation and back-office can be
significantly simplified and will
focus more on application and
business related projects vs.
infrastructure and maintenance
Enhance
collaboration
among staff using the latest tools
available
Increase innovation
Cloud reduce the need for large
upfront investment and therefore
facilitate the launch of small
innovative projects
Deliver globally
Cloud services are available globally
and will reduce the need for large
roll-out projects
Reduce costs
Capex and Fixed costs are
significantly reduced
Total costs are reduced with a high
variable portion

10. Cloud :
How it should help CEO transform their
IT department ?

11. Reduce and transform your IT costs
Projects
Operateandmaintain
CloudcanreducetheoverallITspendandincreasethesharededicatedtoprojectsvs.operationand
maintenance.
ShareoftotalITspend
30/40%
60/70%
50/60%
40/50%
ITcostswithouttheuse
ofcloudsolutions
ITcostswithamixofcloudand
legacysolutions

12. Where will the saving come from?
0
10
20
30
Year 1 Year 2 Year 3 Year 4 … Year 5 to 8
Cloud based SAAS pricing
IT providers offer generous discount on list
price on hardware or licences. But:
- Project costs to implement are high,
- Maintenance costs (5 to 15% of list
price per year) are expensive.
- After a 4 to 8 year period IT providers
discontinue their maintenance and
support on their hardware or software
putting customers under strong
pressure to upgrade to new version.
0
20
40
60
80
100
120
Year 1 Year 2 Year 3 Year 4 … Year 5 to 8
Traditional IT pricing model (hardware or software)
Discounted price List price
Cloud based SAAS price will vary
depending on usage with no up-front
purchase price and no upgrade price.
Implementation costs will be significantly
lower.
Upgrades to new versions are provided as
part of the SAAS cost.

13. What will be the other benefits for the IT function?
Disaster Recovery / Back Up
/ Compliance
Mid-size companies often have poor
disaster recovery process. These require
significant CAPEX. Cloud can simplify these
tasks, reduce drastically their costs and
increase the efficiency of these plans.
Reduce the risk of the use of
non-authorised cloud
solutions
When no group wide cloud solutions are
provided, staff use they own private
solutions (Dropbox, Skype,…). This creates
a high risk of a security breach.
Drastically reduce
implementation time of new
projects
Some tasks such as the provisioning of a
new server are reduced from days to
minutes. The overall workload of new
project is reduced and the maintenance
work is drastically reduced
Migration work
The workload of migrating hardware or
software on a regular basis to newer
versions is drastically reduced.
Skills
Enable the IT team to focus on core
business related skills. Cloud reduce the
need for specialist infrastructure or
maintenance skills

14. Cloud :
A successful cloud project

15. Prerequisite for a successful cloud project
Assessment of the
provider
- A financial and technical assessment of the provider must be made
- What is the pricing strategy of the provider: do you have some assurance on how current pricing will evolve
over the next few years?
Confidentiality,
Legal and Security
issues
Interoperability
- Using the cloud should not result in creating new IT silos: the interoperability of the cloud offer is critical as
the Cloud will not be suitable for all systems (old legacy system)
- The long term product strategy and the depth of the offer of the provider should be assessed: is your
provider using open standard ? Does it support the full spectrum of cloud offers (IAAS, PAAS, SAAS)?...
- Compliance to laws on private or sensitive data have to be assessed.
- Legal and Security issues have to be assessed bearing in mind that they also exits with internal IT structure and
that Cloud providers might be better equipped to mitigate these risks.
- The capacity to change from one cloud provider to another should be assessed and tested.
- Vendors lock-in must be avoided.
- Managing a cloud environment requires specific skills that your company might not currently have.
- IT teams are often reluctant to embrace cloud technologies. They often see this has a threat to their power,
jobs and budget: CEO and CFO should therefore be involved in supporting a cloud strategy
Reversibility
IT Team

16. Data storage
Web hosting
Development
and Testing
Where to start ?
Project
difficulty
DIFFICULT SIMPLE
Benefit from
the transfer
HIGH
LOW
Email and
collaborative
tools
Legacy systems
(old ERP,…)
Back-up and
Disaster
Recovery
New ERP
projects
Existing data-
warehouse

17. Bertrand Maes
CFO
fr.linkedin.com/in/bertrandmaes
bertrandmaes@gmail.com