Digital transformation and the role of cloud computing Capgemini Mark Skilton v1


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The impact of cloud computing on digital value chains and digital networks

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  • This is a survey currently from Capgemini in the Fall of 2012. The analysis defines a view of the cloud in terms of cost and adoption from a business user perspective.
  • Is the market the driver or being driven by different business and technology emerging drivers?
  • References:(1) How much data traffic is there on the Internet, will is grind to a halt? Global monthly Internet traffic In 2004 passed 1 exabyte for the first time. In 2010 it was estimated at 21 exabytes per month (source Cisco corp). Bret Swanson in 2007 coined the term exaflood for a supposedly impending flood of exabytes that would cause the Internet's congestive collapse.(Discovery Institute Just how big is 1 exabyte? How big is the Internet?, bigger than humanity. There are more things connected to the internet than there are people on the planet. Think about that for a second; that’s not just smart devices or computers, it’s everything that’s connected to the internet... The tipping point came about 2008....By 2020, 50 billion “things” will be talking to the internet. What kind of things? See infographic in link. The Internet is very different..(Source: Cisco corp) Exabyte is 1 billion, billion bytes , or 1 quintillion bytes. It is equivalent to 50,000 years of DVD quality video.(3) How big is Big data? 161 exabytes of data were created in 2006, "3 million times the amount of information contained in all the books ever written," with the number expected to hit 988 exabytes in 2010. (Source IDC, EMC Corp1 Zettabyte is 1000 Exabytes , 1 billion Terabytes (4) How is computing power increasing? When will computational power exceed the human brain?, Moores Law end in 2013. Sources in 2005 expected it to continue until at least 2015 or 2020.( However, the 2010 update to the International Technology Roadmap for Semiconductors has growth slowing at the end of 2013, after which time transistor counts and densities are to double only every three years.( But new models emerge?Transitor count 10 million 2000 1 billion 2010 FLOPS Floating Point Operations per second – for super computersMIPS Instructions per second - for general purpose computersTeraflops Petaflops – 1000 teraflops = 1 Petaflop is = 1 quadrillion FLOPS = 1000 trillion FLOPSExaflops - 1 quntillion FLOPS – 1 million teraflopsProcessing power of super computersUse of multicore and clustering, centeralized computing modelsMarch 2012 8.1 petaflops grid computingMay 2011 5.5 petaflops over 48000 networked active computers700 Teraflops over 33,000 active computersIntel Core i7 8M cache up to 3.9 GHz = 3.9 Billion cycles per second clock speedhttp://www.cpubenchmark.netIntel Xeon E5-2690 2.9GHZ 8 Cores 2012 AMD overclocked FX chip at 8.308 GHz 2011http// A6X chip powers the ipad 4It GPU cores and CPU cores the two cores running at 1.4 GHzThe A6X GPU using PowerVR SGX 554MP4 has a benchmark of 76.8 GFLOPS @300mhz3rd generation ipad 25 frames per second4th generation ipad 52 frames per secondA significant jump
  • There are risks and trade-offs with every new technology development. How do these tectonic scale forwards work locally , individually and in the macro sense?If personal data is growing, personal compute power available is growing, personal interactions and digitization of activities and resources growing , how does this change the value of those interactions. With the recent cyber security threats , how does this impact What Gartner call the nexus, these represent significant social and business change in information technological development within and between these technological changes
  • Digital transformation and the role of cloud computing Capgemini Mark Skilton v1

    1. 1. Digital Transformation and the role of Cloud Computing Mark Skilton Director, GBD, Global Infrastructure Services, Capgemini
    2. 2. 2 © Copyright Capgemini 2013 All Rights Reserved Agenda  Digital transformation – Cloud in Context  Challenges - case studies - SLAs & Cyber Security  Case Study – Pharmaceutical Company  Solutions – the Cloud Orchestrator and other patterns > Cloud Ecosystem and TOGAF CE > Session Architecting on Social , Mobility , Big data and Cloud
    3. 3. 3 © Copyright Capgemini 2013 All Rights Reserved Where have we got to ? Unprecedented pace of change
    4. 4. 4 © Copyright Capgemini 2013 All Rights Reserved Technology shift is not incremental How do we cope with new Business Model Realities?
    5. 5. 5 © Copyright Capgemini 2013 All Rights Reserved Capgemini Report on Global Cloud Adoption Nov 2012 460 detailed interviews with executives at a variety of enterprises (most with over 10,000 employees) from key sectors and from selected geographic regions. IT executives and line-of-business decision-makers publication/business-cloud-the-state-of-play-shifts-rapidly Responsibility for deciding Cloud strategy lies with business units in 45% of cases, and with IT departments only just ahead with 46%. Firms are increasingly taking a careful, step-by-step progression to Cloud maturity, rather than making an all- or-nothing decision – 80% respondents are saying they are maturity their adoption 78% respondents saying New applications and business initiatives are hitting the Cloud first, with many “edge” solutions going straight to the new platform, almost as a default; IT and Business aligned in that 52% and 51% stated Cost reduction as main cloud driver Cloud is now owned right across the business. A broad range of functions are now perceived to be involved in encouraging the use of Cloud – from the Board to Legal, in addition to IT.
    6. 6. 6 © Copyright Capgemini 2013 All Rights Reserved Context of Business Constructs - Service Orchestrating This FRONT END BACKEND END TRANSFORM DIGITAL BUSINESS MODELS TRANSFORM CUSTOMER EXPERIENCE TRANSFORM OPERATIONAL PROCESSES Search Subscribe Consume Process Publish Run CEO, CFO, COO, CIO.. MARKET ECOSYSTEM CONTEXT
    7. 7. 7 © Copyright Capgemini 2013 All Rights Reserved Use of Digital Technologies to transform Customer Experience The FRONT END
    8. 8. 8 © Copyright Capgemini 2013 All Rights Reserved Use of Digital Technologies to transform operational processes
    9. 9. 9 © Copyright Capgemini 2013 All Rights Reserved Technology drivers pushing New Digital Business Models
    10. 10. 10 © Copyright Capgemini 2013 All Rights Reserved Some key questions for Technologists and Business New models emerge….. How much data traffic is there on the Internet ? INTERACTIONS 21 exabytes per month 2010 How big is the Internet ? How big is 1 exabyte ? DIGITAL NETWORK SIZE 7 Billion “things” connected to Internet, tipping point 2008 By 2020 50 Billion “things” Smart phones, PCs, devices..(2) How big is big Data ? DIGITAL DATA SIZE 161 exabytes in 2006 globally 3 million times amount of Information contained in all the books ever written (3) 988 exabytes in 2010 1 exabyte = 1 million Terabytes 1 Zettabyte = 1000 exabytes How is computing power increasing? When will computation power exceed the human brain? DIGITAL COMPUTE POWER SIZE 1 Billion Transistors 2010 Had doubled per year but Moores Law ends in 2013 Density double only every 3 years (4). Now Multi-core. 16 Petaflops 1.6 million cores 2012 – Super computer (16,000 trillion flops) 76.8 GFLOPS GPU in A6X Apple ipad4 The “Exaflood” 2007(1)
    12. 12. 12 © Copyright Capgemini 2013 All Rights Reserved So where do we go from here? 2015 - 2020  Post cloud computing  Multiple device era  Ubiquitous presence  Ubiquitous potential access and choice  Changing population growth and dynamics  Changing Economics  Changing sustainable markets and resources Reimagining Extensions Todays World Enhancements Substitution Disruptions DIGITAL INNOVATION Incremental Warwick Business School - ISM Digital Entanglement
    13. 13. 13 © Copyright Capgemini 2013 All Rights Reserved Example Cloud Computing issues from IT perspective  Service Management – Google email outage 10 Dec 2012. 15 minutes – users-affected/ – crashes-7000008568/  Cyber Security – Go-daddy domain hosting Sept 10 2012. 50,000 sites affected. 6 hours down – down-hacker-takes-credit/ – US banks cyber attack Sept 2012.and again in Jan 2013 – new-weapon/
    14. 14. 14 © Copyright Capgemini 2013 All Rights Reserved Data of Everything - Search versus Big Data  How everyone can use Hadoop / map reduce directly on Amazon to run his / her own analysis of the web  So the question is…  Not whether you have data of everything but how old and accurate is this data ?  How to marry intuition + data insight ? may-spawn-the-next-google/
    15. 15. 15 © Copyright Capgemini 2013 All Rights Reserved Agenda The Pharmaceutical Industry in Context
    16. 16. 16 © Copyright Capgemini 2013 All Rights Reserved Competitive threats - New Competition Dynamics This example illustrates Industry Services in Cloud that a SME can access and compete in areas that larger Companies once had incumbent control due to own assets and services. This means that there are lower switching costs via Self Service Portals and 3rd party Cloud service providers. Because people can choose Self Service over other General Traditional Services
    17. 17. 17 © Copyright Capgemini 2013 All Rights Reserved Pharmaceutical Industry Global pharmaceutical market • Worldwide • Many segments: Consumer healthcare products, advanced medical devices, • biotechnical research… • Dynamic interconnected marketplace • Local / Regional / Global Segmentation • Multiple channels • FDA / HIPAA compliance • Patent Expiration • Erosion of existing or expired brands • Price cuts (lower operating costs) • Reimbursements Industry is heavily regulated • Regional and global governance standards • Patent Laws • Products and drugs licensing • FDA (US Food & Drug Administration) as well as specific health data protection laws such as HIPAA (Health Insurance Portability and Accountability Act).
    18. 18. 18 © Copyright Capgemini 2013 All Rights Reserved The Pharmaceutical Company Global pharmaceutical company Healthcare Products and Pharmaceutical 250 Operating Companies operating across Americas, Europe, Middle East, Asia Pac, South American Markets + Wider Partner channel Ecosystem network 100,000 employees Research & Development Design Manufacturer Brand Management Sourcing Support Compliance Market Trials LaunchesInvestment Distribution Values Family of Companies Business Segment Business Segment Business Segment Consumer Health care Medical Devices & Diagnostics Pharmaceuticals Franchises TherapeuticFranchises TherapeuticFranchises Therapeutic Product range : • Consumer products • Medical Devices & Diagnostics • Prescription Products • Product Coupons, Promotional offers from the Family of Companies Citizenship Corporate Governance People & Diversity Business Processes Organization Categories Strategic Business Units Operating Companies
    19. 19. 19 © Copyright Capgemini 2013 All Rights Reserved Pharmaceutical Industry – Operating consequences Dynamic distributed Business Workloads • Research • Collaboration • Regulatory Compliance (FDA, HIPAA..) Operating Model Pressures • Constant Research • Rapid Market trials • Dynamic scaling up and down of collaborative product design /manufacturing • Diverse distribution supply chains to deliver residential , wholesaler and retailer marketplaces
    20. 20. 20 © Copyright Capgemini 2013 All Rights Reserved Family of Companies Business Segment Business Segment Business Segment Consumer Health care Medical Devices & Diagnostics Pharmaceuticals Franchises TherapeuticFranchises TherapeuticFranchises Therapeutic Categories There are many internal and external stakeholders - The Formal Organizational Tree Technical Assessment Planners Strategic Planners Competitors Own BUIs - Business Leaders Own BUsBU CIO’s Global CIO Investment Funding Planners Strategy Planners Investment Fund Planners Global CIO Suppliers & Intermediates Technical Assessment Planners
    21. 21. 21 © Copyright Capgemini 2013 All Rights Reserved How to you deal with the many internal and external stakeholders and investors ? Suppliers Customers Customers & Channels Geographies Own BUs Competitors Intermediates CIO CIO CIO Business Leaders Business Leaders Business Leaders HQ Global CIO Investment Fund Planners Technical Assessment Planners Strategic Planners Virtualization Consolidation Programs Competitors – SME can get cloud services and get into our market space. It can attack our customer base through lower entry from using 3rd party cloud resources which we previously enjoyed incumbent strengths from ownership of our own asset infrastructure. Own BUIs - Business Leaders are buying Cloud services direct with external cloud vendors Own BUs – BU CIO’s are pushing request for own Cloud projects Global CIO - Wants to define a Cloud Strategy having seen the impact of the above trends in own business – IT needs to respond Investment Funding Planners – How do I execute and build foundations for cloud investment to meet business needs?. What do I need to do? What do I need to build ? What is the 2 to 5 year roadmap? Technical Assessment Planners – How do I compare different cloud vendor offerings ? – The comparing apples problem Strategy Planners – How does the business investment need to change ? How does the Business itself need to change? Virtualization Consolidation Programs – “..We are building our own Private Cloud and developing Projects to consolidate Servers into virtualization with Benchmarking ..”
    22. 22. 22 © Copyright Capgemini 2013 All Rights Reserved Many competing Strategies
    23. 23. 23 © Copyright Capgemini 2013 All Rights Reserved Security, GRC Governance , Risk and Compliance  In the Cloud everything is perceived as untrusted and insecure  Many enterprises have company policies requiring data and access to be stored behind the Corporate firewall; transport between geographies are not allowed  Industrial certifications require physical isolation, audit and authentication processes Trust ? Internal Private Hybrid Public Physical Resources/ locations Edge IDAM Network Encryption Trust Zones Contract Law Compliance Law …
    24. 24. 24 © Copyright Capgemini 2013 All Rights Reserved Changes Competitive Advantage Barriers? Critical Success Factors CSFs Asset Investment Switching Costs Self Service Alternative Channels of Service Access to Services Sourcing Asset Operations Provisioning Intermediates Brokerage/ Aggregation Innovation Innovation Sourcing Lowers Lowers Lowers Lowers Lowers Relative Cost Of Entry Competitive Advantage Levers Avoidance Utilization Optimization Access Time Loci of risk Responsibility B2C B2B Collaborative Responsibility Convenience Leverage Speed of Transformation Growth / Margin Rate of Change One to many Speed Economics of Scale
    25. 25. 25 © Copyright Capgemini 2013 All Rights Reserved How Technology develops Differentiation Relative Cost Of Entry Barriers to Copying Service Barriers to Horizontal Investment Scaling Barriers to Horizontal Geographic Scaling Barriers to Brand Awareness Horizontal geographic Scaling Bundling / Cross-selling Brand Awareness Mimicking Copying Service Horizontal Investment Scaling Barriers to Vertical Integration Supply chain Vertical Integration Barriers to Augmented Intelligence Collaboration, Knowledge Augmented Intelligence Barriers to Augmented capabilities Content, insight, BPO, LPO Augmented capabilities Barriers to being faster Barriers to being more secure Speed to market Speed of service flexibility Speed of operation performance Dedicated Compliance Assurance Substitutable canibalization How does this change for Each Industry ? Integration Barrier versus legislation/openness ? Does this suggest access and speed are key ? easierharder
    26. 26. 26 © Copyright Capgemini 2013 All Rights Reserved Cloud Computing impact on the On Shore – Off Shore Model • Redefines onshore • Moving to Cloud Computing redefines the need for each region and business unit to develop certain types of IT service onshore. • Common services • Common services hosted in a secure private cloud Data center provides the possibility to move to an off-shore shared model for many business units. • Front end Agility • Individual market and business unit agility is still essential for competitive response but this can be supported by targeting cloud computing services for specific business activity needs. • Off-shore Governance • The off-shore move also enables service management and capabilities to be invested in shared regions to further improve the operating model organizational efficiency.
    27. 27. 27 © Copyright Capgemini 2013 All Rights Reserved Technology of the Cloud processes Moving to a Cloud Computing Environment involves a number of new IT and Business Processes Hosting Networks Virtualization External Services Physical Virtual Cloud Services Services ROADMAP JOURNEY… IT PORTFOLIO Business PORTFOLIO Internal Services
    28. 28. 28 © Copyright Capgemini 2013 All Rights Reserved Operating Roadmap concept Refurbishment of Infrastructure / Data Centers Modular Data Centers Mix of Common and Specific Business Services Alignment of Business Services with Modular Cloud Services Business Processes Infrastructure Software Applications The workloads that run on the Infrastructure But , is this a Technical Roadmap…? Workload Analysis
    29. 29. 29 © Copyright Capgemini 2013 All Rights Reserved Self- Service and On-demand Collaboration Service model Self-Service • enables business and IT users to select the cloud hosted services to expand or change as the business needs change rather than go through a provisioning cycle with local or central IT. On-demand Collaboration Service Model • Quality of Service • Aims to improve the quality of service and support in cloud hosted services • Catalog based • a Catalog and an Account Management process enabling business and IT users to get better visibility and control of usage and requests. • Variants versus / and maverick buying / usage • Conversely it enables variations and maverick buying to be monitored to encourage the development of further common IT service reuse and specific development of new capabilities based on actual usage demand patterns. • Flexibility / Swaps • Hitherto commercial contract locking customers and vendors into longer term contractual solutions limited options for change. Cloud computing catalogs and services aim to create a looser coupling between buyers, consumers and users of IT services.
    30. 30. 30 © Copyright Capgemini 2013 All Rights Reserved Defining the Right Type of Cloud Computing Operating Model Modular Data Centers • Strategic Decision • Strategic decision to move to Private Cloud Computing • Existing Investment in Virtualization • Pharmaceutical company already invested in infrastructure virtualization technology and a Global Data center Network. Enabled storage, compute, network, blades, switches and entire Data Center to be developed with the potential to be treated as an “appliance” – a “data Center in a Box” • Refurbishment • Modernize the Data center and infrastructure • New Target Infrastructure • Offer Modular Data Centers and Networks • Enable a New Operating Model for IT Resources and Software Applications • Align business capacity needs across global Operation to meet specific business unit needs
    31. 31. 31 © Copyright Capgemini 2013 All Rights Reserved The Business needs driving new capabilities in Business and IT What are the Role Needs ? What are the Solutioning needs?
    32. 32. 32 © Copyright Capgemini 2013 All Rights Reserved Typical Workloads Today 2013 Vertical Workloads • Data Analytics • Master Data Management • Simulation • Business Intelligence Horizontal Workloads • Email • Storage • Office Productivity • VOIP comms , video • Shared Business Apps for Diagonal Workloads • Social Network collaboration Enterprise Workloads • ERP • CRM • MRKT • SCM • Finance • ... • IT Service Management • Apps Store Management • Business Process Management • Mobile Management • Partner Management • Security & Governance Monitoring Management • SLA and QoS Management • Usage Capacity Management, Metering
    33. 33. 33 © Copyright Capgemini 2013 All Rights Reserved Market Workload - Services Systems Workloads Move to Cloud IaaS SaaS -Move discrete Apps Workloads Apps Portfolio Non-Platform services (Client specific service) Apps Platform Workloads SaaS - Application Portfolio Services Business Platform Workloads BPaaS - Business Portfolio Services Platform enabled Services PaaS Dev /Test Development Business/ ITStack Service Service Service ISV Source Market Catalog Integrated Information Services Process Integrated Platform Ecosystem Management
    34. 34. 34 © Copyright Capgemini 2013 All Rights Reserved Challenges  Shift in Revenue and Monetization models  Shift in funding models  Changing Sales Value and Platform sales automation  Changing Sales Channel methods to Cloud  Competitor versus Partner Cloud Ecosystem  Interoperability and Portability standards to support hybrid cloud agility function  Skills and competencies in house versus partners  Data synchronization and Ecosystem workload partition management e.g. Social Enterprise, Big Data,  Cost reduction shift versus new Innovation demand  Speed of change – hyper competition forces