IT by the pound: The pay as you go IT department


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This session looks at the shift towards pay-as-you-go computing models and examines their cost effectiveness
and whether they can deliver the best value for money.

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  • IT by the pound: The pay as you go IT department

    1. 1. Julian Box<br />Chief Technology Office<br />20th October, 2010<br />IT by the Pound: The pay as you go IT Department?<br />Copyright © 2010 by Virtustream, Inc. All rights reserved worldwide. “Actualize the Enterprise Cloud™” is a trademark of Virtustream, Inc. All other trademarks are property of their respective owners. No part of this publication may be reproduced, transmitted, transcribed, stored in a retrieval system, or translated into any human or computer language in any form or by any means without the express written permission of Virtustream, Inc.<br />
    2. 2. Agenda <br /><ul><li>What is driving Cloud Adoption
    3. 3. What is the “Cloud”
    4. 4. Cost models in the Cloud
    5. 5. Summary
    6. 6. Questions?</li></li></ul><li>What is driving Cloud adoption?<br />
    7. 7. What is Driving Cloud Adoption?<br />It is estimated that the CO2 emissions of the IT industry alone exceeds the carbon output of the entire aviation industry<br />By 2008, IT emissions accounted for 4% of the world’s carbon emissions, and at least 10% of most G20 energy bills<br />By next year around 33% of a corporation’s IT Budget will be spent on energy<br />80% of IT departments do not know what their electricity consumption is<br />86% of ICT departments do not know what their carbon foot print is<br />There was a six fold annual Information growth from 2006 to 2010, to 988 Exabyte's (988 Billion Gigabytes), up to 8X network, 16X storage & 20X compute capacity needed<br />85% of all computer information will be in your corporate networks<br />Only 25% of the world population is currently connected to the Internet with some predicting an additional Billion users by the end of 2015<br />
    8. 8. What is Driving Cloud Adoption?<br />Currently 80% of connected devices are PC’s or Phones, up to 2.5x additional devices will be connected by 2015 including Cars, TVs, and other households devices<br />YouTube on its own consumes more bandwidth today as the entire internet did in 2000<br />Energy costs are higher now than they have been for 50 years and predicted to grow approximately 20% per annum over the next 5 years (Many predictions have oil at $200 a barrel within the next few years)<br />Under utilised Compute power even when virtualized within a private Cloud<br />The growing demand for true utility based compute and storage pricing<br />Increasing demand for true flexibility to meet future demands <br />
    9. 9. What is the “Cloud”?<br />
    10. 10. Cloud Market Overview<br />Cloud Computing is generally segmented into three distinct service categories:<br />3<br />User Access & Interface<br />SaaS<br />Software as a Service<br /><ul><li>Applications delivered via Internet
    11. 11. Typically offer configurable options
    12. 12. Examples: Salesforce, Google Apps</li></ul>Business Process<br />2<br />Application<br />PaaS<br />Platform<br />as a Service<br />Application Framework<br /><ul><li>Cloud application development platforms
    13. 13. Provides software development kit (SDK) with APIs exposed for developers to use
    14. 14. Examples: Microsoft Azure, Amazon</li></ul>Web Service<br />Database<br />1<br />Operating System<br />Management and Security<br />IaaS<br />Infrastructure as a Service<br />Virtual Machine<br />Server<br /><ul><li>Remote computing, storage and/or virtual machines
    15. 15. Typically self-service provisioning & pay-per-use billing
    16. 16. Targets users seeking empty compute “containers”
    17. 17. Examples: Virtustream, Rackspace, Terramark, Savvis</li></ul>I/O<br />Storage<br />Data Center<br />Network<br />7<br />
    18. 18. Cloud Computing Reference Model<br />Presentation<br />Modality<br />Presentation<br />Platform<br />APIs<br />SAAS<br />Applications<br />Data<br />Metadata<br />Content<br />Integration & Middleware<br />PAAS<br />APIs<br />Core Connectivity & Delivery<br />Abstraction<br />IAAS<br />Hardware<br />Facilities<br />8<br />
    19. 19. Infrastructure as a Service in the Security Model<br />Cloud Model<br />SDLC, Binary Analysis, Scanners<br />WebApp Firewalls, Transactional Sec.<br />Application<br />Presentation<br />Platform<br />Presentation<br />Modality<br />PCI<br />HIPAA<br />GLBA<br />SOX<br />JFirewalls<br />JCode Review<br />JWAF<br />JEncryption<br />JUnique User Ids<br />JAnti-Virus<br />JMonitoring/IDS/IPS<br />JPatch/Vulnerability <br /> Management<br />JPhysical Access Control<br />JTwo-Factor Authentication<br />DLP, CMF, Database Activity<br />Monitoring, Encryption<br />Information<br />APIs<br />Compliance <br />Model<br />Security Control Model<br />Applications<br />GRC, IAM, VA/VM, Patch Management,<br />Configuration Management, Monitoring<br />Management<br />Data<br />Metadata<br />Content<br />NIDS/NIPS, Firewalls, DPI, Anti-DDoS,<br />QoS, DNSSEC, OAuth<br />Network<br />Integration & Middleware<br />Hardware & Software RoT & API’s<br />APIs<br />Infrastructure as a Service (IaaS)<br />Trusted Computing<br />Host-based Firewalls, HIDS/HIPS,<br />Integrity & File/Log Management,<br />Encryption, MAsking<br />Platform as a Service (PaaS)<br />Software as a Service (SaaS)<br />Core Connectivity & Delivery<br />Compute & Storage<br />Abstraction<br />Physical Plant Security, CCTV, Guards<br />Hardware<br />Physical<br />Facilities<br />Cloud Security Alliance 2009<br />9<br />
    20. 20. CloudOptions<br />Off-Premise<br /><ul><li>Full Off Premise Cloud Solution
    21. 21. Medium risk
    22. 22. Simplified On-Boarding Process but longer duration
    23. 23. Reduced costs
    24. 24. Highly flexible
    25. 25. Highly Scalable</li></ul>On-Premise<br /><ul><li>Private Cloud
    26. 26. Small risk
    27. 27. Reduced costs
    28. 28. Complicated On-Boarding Process
    29. 29. Limited flexibility </li></ul>Hybrid<br /><ul><li>Best of Both Solutions
    30. 30. Small risk
    31. 31. Reduced costs
    32. 32. Simplified On-Boarding Process
    33. 33. Flexibility including option to migrate to an Off–Premise solution
    34. 34. Limited Scalability </li></ul>DR Only<br /><ul><li>Enhanced linked version – Private Cloud to Off-Premise
    35. 35. Small risk
    36. 36. Reduced costs
    37. 37. Simplified On-Boarding Process
    38. 38. Limited flexibility </li></li></ul><li>Cost models in the Cloud<br />
    39. 39. Overview<br />An evolution in IT pricing and delivery made available through self service based portals via the Internet or direct connection with a flexible, pay as you go business model<br />Requires a highly scalable, flexible and efficient architecture<br />Data resides within Multi-Tenanted, dynamically scalable resource pools<br />Based on virtualisation and/or scale-out application environments<br />Multiple stakeholders have varied expectations of cloud….<br />CEOwants IT to support business growth<br />CIO wants IT to impact business value<br />CFO wants effective IT asset utilization<br />Shareholders want IT to support business flexibility<br />
    40. 40. Computing Paradigm's Business Value Model<br />A particular computing style or paradigm can be evaluated based on how well it satisfies demand for particular business values. <br />The cloud computing paradigm offers capabilities that hold the potential to deliver higher business values than the on-site paradigm. <br />The business values against which the cloud computing and on-site paradigms are compared are listed in the "Value Category" column in figure 1.<br />Optimization<br />Figure 1. Value Model<br />The model measures the value delivered by a particular paradigm by its proximity to the ideal (i.e. in that case, the maximum desired value). It awards that ideal, maximum value with a score of 1.0. <br />Respectively, a 0.0 score awards the minimal value. The business values assigned to the two paradigms are listed in the "Cloud, Value's Score" and " On-Site, Value's Score" columns in figure 1.<br />Some business values are more important than others. Therefore, we define the relative importance of business values in the model by assigning them weights that total 100%. Weights are listed in the column "Category's Importance (Weight)" in figure 1 and are graphically represented in Figure 2.<br />
    41. 41. Technology Maturation<br /><ul><li>Security
    42. 42. Lack of Automation
    43. 43. More Power Efficiency
    44. 44. Standards </li></ul>Cultural Shift<br /><ul><li>IP Protection
    45. 45. Interoperability and Lock-In
    46. 46. Compliance and Audit
    47. 47. Guaranteed Quality of Service</li></ul>The Challenges to Cloud Adoption<br />
    48. 48. Expected Savings From A Move to the Cloud<br />Virtustream has performed in-depth TCO and ROI calculations to estimate the savings that would be achieved moving from a physical and/or a virtualised environment to our xStream Platform over a five year period:<br />Government Body<br />Financial Organisation<br />Legal Firm<br />
    49. 49. Government Body<br />Total Cost of Ownership – Cumulative 5 Year Comparison<br />
    50. 50. Legal Firms - Costs for Current Strategy<br />
    51. 51. Legal Firms - Costs for a Cloud Strategy<br />
    52. 52. Financial Organisation – Costs for Current Strategy <br />Collins Stewart Total Cost of Ownership – 5 Year cost for a IAAS Model<br />
    53. 53. Financial Organisation – Costs Private Cloud Strategy<br />
    54. 54. Financial Organisation – Costs for a Cloud Strategy<br />
    55. 55. Summary<br />
    56. 56. Summary<br /><ul><li>What is driving Cloud Adoption
    57. 57. What is the “Cloud”
    58. 58. Example Cost models in the Cloud</li></ul>Is the Cloud cost effective and can it deliver the best value for money? <br />
    59. 59. A Final Word<br />Virtualisation Technology is the most significant shift in the delivery of Information Systems to business since the inception of the microprocessor – Virtustream 2004<br />Cloud - the next step in the evolution of virtualisation and a paradigm shift in IT application development and infrastructure deployment generating even greater efficiency, reductions in costs, less complexity, more flexibility, and faster time to market – Virtustream 2009<br />
    60. 60. Questions?<br />
    61. 61. Thank you<br /><br />
    62. 62. 1.IDC ―Server Workloads Forecast‖ 2009<br />2.IDC ―The Internet Reaches Late Adolescence‖ Dec 2009, extrapolation by Intel for 2015 <br />3.ECG ―Worldwide Device Estimates Year 2020 -Intel One Smart Network Work‖ forecast<br />4.<br />5.<br />6.<br />7.8x Network: 800 Terabytes / second of IP traffic estimated on Internal Intel analysis ―Network Supply/Demand 2010-2020‖ forecast . 16x Storage: 60 Exabytesof data stored from Barclays Capital ―Storage Bits‖ Sept 2009, extrapolation by Intel for 2015; 20x Compute: Intel Internal LRP forecast. Extrapolated to 1 billion virtual servers using 1 vm/core<br />8.<br />9. <br />10. <br />11.Jonathan Koomey, 6/09.<br />12.Data Center Knowledge, 4/09<br />13.Summary of spending between 2010 and 2014. Intel commission analysis with Bain Consulting based on: IDC ―Server Workloads Forecast‖ 2009, AMI US SB/MB Overview and Market Opportunity Assessment 2006 Gartner ―WW IT Services Forecast‖ 2009; Cowen & Co ―VMware‖ (July 2009); IDC 2009 ―Optimizing Infrastructure and Service Management in Tough Economic Times‖, analyst reports, IDC storage & networking reports, Gartner 2009 WW IT Services Forecast, BLS, Computer Economics, PrincipledTechnology, expert interviews, Bain analysis<br />14.Winston Bumpus, DMTF 6/09 <br />15.Intel, 2010 review of performance and performance efficiency benchmarks -SPECintand SPECpower-across multiple server generations and forecast for future improvement of future generation products<br />16.Baidu whitepaper, 2009 posted at<br />17.<br />Sources used in this presentation<br />