Mobile Revolution: By the end of 2011, smart phones and tablets will overtake PC shipments.2 Downloads of mobile applications, or “apps,” are expected to surge from 11 billion in 2010 to 77 billion in 2014.3 These applications use location sensors and cameras, coupled with broadband connectivity, to enable activities ranging from videoconferencing to real-time coupon delivery for nearby stores. People want more than music, movies and books on the go; they want all information (including from businesses) that way. Mobility has eliminated the boundaries of space and time. Customers are always connected, and companies can interact with them at any time. The implications cannot be overstated. With information about products becoming as important as the products themselves, almost every company is now in the business of creating and delivering “content” – information that is personal, relevant and timely when accessed by the customer. Social Media Explosion With 2 billion people connected to the Internet, social media is quickly becoming the primary means for communication and collaboration. Young people may have spearheaded the changes, but people of all ages have joined the virtual revolution: 89 percent of the millennial generation uses social networking sites, but so do 72 percent of baby boomers. And the gap is closing. Hyper Digitization Today’s world exhibits a fast-developing case of hyper-digitization. As much information is now being generated every two days, according to former Google CEO Eric Schmidt, as existed between the dawn of civilization and 2003. Demand for video, as well as constant connectivity, is expected to double the amount of mobile data traffic every year through 2014. Power of Analytics Advanced mathematical analysis, powered by intensive computing systems, provides unprecedented opportunity to unleash the value of interconnected data. Electronic tags on packages, pallets and transport vehicles can relay critical information about the location and quality of items ranging from pharmaceuticals to food. Sensors in electrical grids and water systems, intelligent buildings and congested roadways can optimize the use of scarce resources. Predictions based on information relayed from security cameras, satellites and soil can improve public health and safety.
IBM PureSystems are designed to help IBM clients achieve greater simplicity, speed and lower cost in their IT environments. Expert Integrated Systems reduce the time cost and risk of custom designing, integrated, tuning, managing and maintaining each intended purpose. For our clients, changing today’s status quo is critical for a number of reasons: to shift a higher % of budgets from operation expense to investment in projects that accelerate new value; to reduce dependency on scare expertise; and to enable greater IT agility that enables greater business agility.
Main Point: With management and admin costs taking the bulk of IT budgets, the most efficient datacenters will be the enablers for innovation. Speaker Notes: Based upon an annual IDC study, the pie charts on the left show the relative share of IT expense on servers (the dark blue wedge), energy and cooling (the green wedge), and management and administrations (the light blue wedge). The increase in management and administration expense from 29% in 1996 to 68% estimated for 2013, demonstrates a critical challenge faced by IT organizations around the world. We need to simplify complex IT environments to turn this trend around, so clients can shift management expense to growth investment Our global technology services group funded some additional primary research into the effectiveness of IT datacenters and discovered some interesting differences between the least and most efficient ones. Only 1 in 5 organizations are able to invest greater than 50% of their budget on new projects. The question is how can we help clients shift expense of operating existing systems, to investment in delivering new capabilities and value for their organizations? BACKGROUND DETAIL: Source: 2012 IBM Data Center Study: www.ibm.com/data-center/study ( http://www.ibm.com/data-center/study ) Data Source: IBM Data Center Study Conducted January 2012 Study conducted in seven countries worldwide – U.S., Canada, Brazil, Germany, France, China, India 65 questions 308 Respondents in the study: IT managers and CIO respondents IBM Report, IDC conducted research and helped write Study measured data center efficiency across the data center – including operations, facilities, server, storage, networking, applications and tool, governance, staffing Analyzed data to determine stages of data center efficiency Study Findings What we found is that one in five, or 21% or about 1 in 5 of the total respondents are operating at the Most Efficient level The Most Efficient data centers, are currently allocating about 53 percent of their total IT budget on new projects Least Efficient data centers are allocating much less to new projects that can help innovation – only 35% of IT budget on new projects Let’s look at some of the attributes that differentiate between the Most Efficient and the Least Efficient The Most Efficient Data Centers Early and fast adoption of new technology – 86% describe themselves as first or early adopters of new technology vs. 43% for Least Efficient data centers 58 percent use automation tools to move VMs automatically based on service level agreements (SLAs), without the need of manual intervention—versus 1 percent for Least Efficient data centers 93 percent of Most Efficient data centers use virtualized storage, versus 21 percent for Least Efficient data centers 87 percent use a services catalog approach for storage, leading to cost-effective storage placement, versus only 3 percent for Least Efficient data centers Definition of Storage Services Catalog: storage services catalog enables more efficient storage allocation and governance
The six cloud business enablers are applicable whether your cloud strategy involves becoming a consumer or a provider of cloud-based offerings – or includes elements of both Cost flexibility – 1) Shift capex to opex; - IT CapEx is money spent on acquiring physical assets for the purpose of running business. Examples of IT CapEx: printers, servers, laptops, networking equipment, etc. OpEx is money spent on the operational aspect of running business. Examples of IT OpEx: telephone service, leased network lines, printer cartridges. Enterprise software licenses are typically treated as CapEx, along with the servers and networking equipment required to host the software. IT CapEx also tends to be less fluid and much more expensive than routine IT OpEx. CapEx spending also tends to be harder to forecast than OpEx. OpEx typically represents a real cost of doing business: your business needs an internet connection to exist, and you pay for what you use. CapEx in general is often more fuzzy in relation to its impact on a company’s operations, especially when it comes to IT CapEx. Sure, you need a server to run your business, but do you really use it 100% for the entire duration of its life? Even with virtualization tools like VMWare, you’re probably not using it 100%. Plus, CapEx also has maintenance and “unexpected events” overhead that OpEx doesn’t. Cloud enables the shift from CapEx to OpEx. ii) Pay-per-use software and services; - With cloud applications there is no longer a need to install software or pay software license fees. This pay-per-use model provides greater flexibility and eliminates the need for significant capital expenditures 2) Business Scalability : Businesses can scale operations very easily based on requirement. If you need new servers because the number of hits to your website has increased, then you can easily do so. If you need to get rid of the extra servers, you can do that easily as well 3) Market Adaptability : Cloud enables a f aster time to market and helps in rapid prototyping, development and deployment; 4) Masked complexity : The c omplexity becomes hidden from end-user; There is user independence from IT or other operational issues like upgrade & maintenance. 5) Context-driven variability : Supports user defined preferences. Cloud can be used to store information about user preferences and enable the customization of product or service which is being delivered. 6) Ecosystem connectivity : Creation of new value nets including SMEs Shared infrastructure and services from cloud service providers Enhanced productivity through customer / partner interaction For example, cloud based platforms support sharing of resources, processes and workforce between companies in Pharmaceutical value chain, hence enabling joint research and collaboration
Enhance –Use cloud to improve products and services and gain incremental revenue Improve existing products/ services, add new features Enhance customer experience Deliver through broader array of channel Extend – use cloud to create new products and services or utilize new channels or payment models Create new products or services Deliver via new channels Develop new payment models Invent - use cloud to “create a need” and own a new market Introduce new revenue models, generate new revenue streams
As discussed earlier, Optimizers are organizations which utilize Cloud to IMPROVE their role in the value chain and ENHANCE their value proposition further. North Carolina State University (NCSU) In collaboration with IBM, NC state looked to a new virtualization based ‘Cloud Computing’ model—known as Virtual Computing Lab (VCL) – for flexible and intelligent provisioning that offers a quantum improvement in access, efficiency, and convenience over the traditional approach for managing resources that it previously relied on. It allowed NCSU to enhance user experience while optimizing operational efficiencies. Innovators: Organizations, which in addition to the above, also actively utilize Cloud to EXTEND or TRANSFORM and create or invent to an extent have been categorized as INNOVATORS 3M Visual Attention Service (VAS) offers Cloud-based scientific analysis of product and marketing design effectiveness, predicting visual impact. 3M offers VAS in a Cloud-based, pay-as-you-go model that is fast, affordable, flexible, user-friendly, and fits easily into a designer’s existing process. The new Cloud-based offering allows 3M to transform its role in the product development value chain by closely integrating with a global network of designers. The offering enables 3M to extend into adjacent customer segments, including brand owners, marketing professionals, and creative designers beyond 3M’s target market segments. Disruptors: CREATE a new industry ecosystem or disintermediate an existing value chain or INVENT by constructing a radically different value proposition to create a new ‘need’ and own the market Comcast In 2011, Comcast piloted Xcalibur, its next generation cloud based TV platform that aims to revolutionize the way people watch TV. Xcalibur moves the company beyond the delivery of channels and video via set-top boxes that use digital television technology to leveraging cloud architecture that delivers live TV service directly to any Internet-connected device. The cloud-based platform shifts the ability to control content into the cloud. It enables live video feeds that serve the ever-growing numbers and types of mobile and connected devices. Customers can find content tailored to their needs in new ways, for example, by using an iPad app to choose channels, on demand videos and Xfinity online streaming videos. They can then watch their selected content when and where they want – whether on TV, tablet or other device. This personalized TV experience, combined with a powerful search engine and Internet apps to access non-TV content, as well as the ability to share via social media channels, allows Xcalibur to create a radically different customer value proposition.
Nearly half (48%) of CIOs surveyed evaluate cloud options first, over traditional IT approaches, before making any new IT investments We asked the respondents regarding their plans around the organization's level of cloud technology adoption today and the expected level in 3 years. 72% of the respondents were either piloting, or had adopted or substantially implemented cloud in their organization, and this number is expected to increase to more than 90% in 3 years with a rate of growth touching 215% for organizations which intend to substantially implement cloud. Further, forecasts around cloud predict the cloud market to reach up to $241bn by 2020. Today, at least two thirds of companies of all sizes are actively either experimenting with or implementing cloud Survey results reveal that organizations are experimenting with cloud regardless of the size. Although, larger organizations are more likely to adopt or are piloting in cloud when compared to smaller organizations.
All cloud services categories will continue to outpace the overall IT market growth over the next several years. In fact, for every cloud service, 40% or more of Europeans SMBs report that they are considering adding the service in the next 3 years. Here are some of the highlights: Web hosting will continue to be the cloud service with the highest penetration rate. Already more than 50% of the SMBs in Europe have websites and many more SMBs will be adding websites in the near term. Business applications (aka SaaS) will be the largest category of SMB cloud service spending by 2015 at over 7B euros. Hosted infrastructure with be close behind. Hosted Communication and collaboration, as mentioned, will be the fastest growing with a 3 year CAGR (compound annual growth rate) of nearly 60%.
While the SMB cloud services market is growing across Europe, the growth will be much faster in Eastern and Southern Europe than in Northern and Western Europe, where the cloud services market is already quite mature. Today Northern and Western Europe make up 58% of the SMB cloud services market. However they will grow at half the rate of Eastern and Southern Europe over the next 3 years and will make up 45% of the cloud services market in 2015.
While Parallels did not create a country SMB Cloud insights report for Denmark, we can estimate the size of the market and its growth rate from the model we build of the European region. We estimate that the current market size about 830 million kroner and will grow 75% over the next 3 years to about 1.6 billion kroner. This points to strong growth in Denmark as more and more SMBs become aware of the cloud and its benefits for their business, particularly in the micro SMB size segment. Hosted infrastructure, communication and collaboration, and business applications will all grow about 30% or more year-over-year, while web presence is a bit slower at 9% (a typical growth rate for mature cloud markets in Europe). For speakers: CAGR = compound annual growth rate, you can explain it by saying it represents “the year over year growth rate” that we expect for the next 3 years
Firstly IBM offers 3 products to build a private Cloud Infrastructure for SAP either by using the exiting infrastructure or building a new one Tivoli Service Automation Manager Product to enable existing infrastructures for cloud deployment IBM Service Delivery Manager providing a pre-installed image for rapid deployment of a comprehensive Cloud management environment for existing infrastructures. Available as VMWare/Linux and PowerVM/AIX image IBM Cloudburst, the cloud-in-a-box appliance which provides certified stacks for SAP out of the box and a complete private cloud infrastructure IBM implementation services that support customers in setting up their specific SAP automation on an IBM Private Cloud infrastructure IBM Private Cloud Management Services for SAP providing support and operation services for SAP on a private cloud IBM Cast Iron, an appliance to connect the on-premise private cloud applications like SAP with a large variety of external cloud based SaaS applications like e.g. Salesforce.com IBM GTS also offers SAP hosting services on customer dedicated cloud infrastructures, which are also considered as private clouds by SAP IBM GTS also offers SAP solutions on shared private cloud environments, i.e. Customer workloads are separated on their own virtual networks and virtual machines, but share the same physical infrastructure (model 4). Such environments require SAP certification for cloud services to be supported for SAP production workloads. IBM completed that certification and SAP customer can run SAP production on this service environment Last but not least IBM also offers the IBM SmartCloud Enterprise a public cloud service. At this time SAP does not support production workloads on such public cloud environments. However, customers can deploy development, demo or prototype workloads on that environment.
Our delivery model balances risk, cost and operational efficiency by: Enabling the right mix of delivery alternatives to achieve the optimum combination of quality, stability and savings Providing consistent worldwide processes and tools Utilizing a cohesive risk mitigation strategy across business continuity plans, assets and people, security resources IBM’s Global Delivery Model includes the following elements to meet our clients’ requirements and mitigate risks: Parallel and faster ramp-up, delivering savings quicker. Access to the world’s largest experienced services skill pool with extensive industry and technology expertise, in 173 countries worldwide. Access to the world’s largest business consulting and research organization. Multilanguage support with native speakers across the globe (English, French, Dutch, Portuguese, Mandarin, etc.) Our Global delivery model also enables flexibility in each delivery location: “ follow the sun” without a night shift 24x7 support for mission-critical applications, infrastructure, testing Working-day overlap between countries Multisite solution in different economic zones, protecting against: Wage inflation Currency risk Political and economic uncertainty
We utilize three key levers to drive quality and productivity… The first, standardization, is all about industrializing service delivery. We have embarked on the quality journey long time ago and have made significant progress with our quality methods, focusing on process simplification and eliminating non-value add steps. We have broadened our continuous quality roll-out across all geographic locations ... The second lever is Automation. Here we leverage IBM hardware, software and Research assets extensively. A great example is our deployment of Maximo to implement standard best practice workflows ... leveraging this tool from SWG allows us to pool delivery resources and drive skill depth for quality and productivity gains… Lastly, skills are critical in a delivery business ...and as over 50% of our delivery costs are labor, leveraging the right talent globally, at the best cost, is vital. Equally as vital is continually looking at the skills we have, where we may have gaps and the training/certifications that are needed to fill those gaps ... I'll also cover this in a little more detail... So, let's look at some specifics on how we execute on these three levers…
The 3750 questions were related to the EU CoC see next page Next cohort is to include another 12-ish DC in Europe
CBS February 2013 Cloud Computing in the context of outsourcing