The document provides an overview of Microsoft's cloud computing solutions and how they can help businesses navigate technological change. It discusses how Microsoft's cloud services allow businesses to scale applications, connect employees virtually, create collaboration hubs, and transform IT services. The document invites readers to explore more about how Microsoft's cloud solutions can help businesses be ready for change and take control through "cloud power".

1. Conversations
CHANGE
about
A Guide to findinG your Cloud Power

3. A Conversation about Change
Every business has unique and dynamic needs. I am sure yours is no different. Being constantly connected yet
maintaining security, increasing productivity and agility, reducing capital expenses – the demands from IT are
changing. Now, it’s not just about doing the same things in a new way but about a new way of doing new things.
A recent Gartner poll found that by 2012, 80% of Fortune 1000 enterprises will be using some form of cloud or off-
premises computing services, and 20% of businesses will own no IT assets. We believe that the answer is in the cloud;
and it’s going to change the way you do business.
Consider how fast we have shifted online as users – to store data, connect with friends and using apps on our personal
mobile devices. Your workplace undoubtedly stands to gain by integrating with this ‘consumerisation’.
With the most comprehensive IT solutions of the cloud on earth, we now bring you the power to take control of this
we believe change - develop and host applications with infinite scalability (Windows Azure), stay secure with your private cloud
that the (Windows Server Hyper-V), enable productivity and real-time collaboration (Office 365) and get better customer
answer is in connection (Microsoft Dynamics CRM Online). With investments worth US $2.3 billion in cloud infrastructure, over
30,000 dedicated engineers and more than 9000 Microsoft Partners, the Microsoft cloud is Enterprise-ready.
the cloud;
and it’s going I invite you to explore more of the cloud to experience the benefits of the change that the cloud brings - being ready
to change the for anything, but paying only for actual results; being able to scale as high or low as you want; save energy, space and
way you do yet be omnipresent.
business. As a technologist, our cloud opens up a world of choices for you. With solution-specific benefits, a whitepaper on the
‘Economics of the Cloud’ and business impact studies of organisations that have moved to the Cloud, this handbook
will help you start a conversation of change within your organisation.
This is an exciting journey for any business interested in being what’s next.
We call it cloud power, and it’s yours for the taking.
Warm Regards,
Sanket Akerkar,
Managing Director,
Microsoft India
www.cloudpower.in

5. contents
Your Guide to
NavigatiNg the Cloud
THE CLOUD POWER PACK 1 - 13 RESOURCES 14 - 61
Explore the areas in which IT can change your business for the better Explore and share the power of cloud in business with whitepapers and real-life case studies
SCALE Applications to near infinity 2 The ECONOMICS of the Cloud 15 - 35
Build applications flexibly on the familiar Windows Azure platform Read this Microsoft Whitepaper to understand the long-term vision of the underlying
economics of cloud computing
CONNECT PEOPLE without making them meet 4
Drive productivity by communicating with Microsoft Online Services in the Cloud CASE STUDIES of Cloud Power @ Work 36 to 61
CREATE a real-time collaboration hub 6 SEAMLESS MIgRATION @ 36
Enable people to work across time zones and locations with Microsoft Office 365 30,000 employees migrate to the Cloud without interrupting business or daily operations
DRIVE greater control and IT efficiency in your Private Cloud 8 Improved PRODUCTIVITY @ 44
Transform IT services for greater business intelligence with Microsoft System Center A simplified user experience improves collaboration and cuts IT costs by 30%
and Windows Server Hyper-V
EffICIENCY in the Private Cloud @ 49
KNOW what your customers want 10 120 servers become 20 with data center budgets getting cut by 40%
Respond faster with better customer intelligence with Microsoft Dynamics CRM Online
IT as a SERVICE @ 54
What Cloud Power holds for You 12 A global company builds an online Visual Attention service application on Windows Azure
Benefit from working with Microsoft Cloud Services

6. the most CompreheNsive
solutioNs for the Cloud. oN earth
the Microsoft Cloud for Businesses
SOfTWARE as a Service PLATfORM as a Service iNfRASTRUCTURE as a service
the Microsoft Cloud for Consumers
Windows Live
TM
TM
Hotmail
Windows Live TM
Windows
Messenger Update

7. piCK Your fOR IT PROfESSIONALS
Cloud poWer On-demand computing with the right
Infrastructure to actively host, scale and
manage all your services with ease and
Here’s what the Cloud means for everyone in your organisation
speed. Plus the choice to keep high-value
With the cloud, you can create a flexible IT ecosystem that addresses needs as they arise, backed applications on-premises and move
by the confidence that you always have the ability to do so. The Microsoft technologies that you commodity workloads to the cloud.
have already invested in is a great place to start.
SCALE Applications to near infinity | Pg 2
CONNECT without having to meet | Pg 4 fOR DEVELOPERS
Easy scalability and reduced time to
market for developing applications on the
Windows Azure Platform. Our family of
CREATE a Real-time on-demand services provides a familiar
collaboration hub | Pg 6 deployment experience that helps focus on
coding and reduces complexity.
fOR INfORMATION WORKERS
Productivity from any location from the PC,
phone and web with familiar Applications,
now on the cloud. Our powerful
communication and collaboration tools
provide security-enhanced connectivity
and federated access control.
TRANSFORM IT services in your Enterprise | Pg 8
KNOW what your customers want | Pg 10
1

8. sCale
APPliCAtionS easily scale your
develop
without boundaries
Creating in the cloud
Applications
to neAr infinity
means no more worries
While running applications about servers, storage or
Offer your developers a flexible and familiar in the Cloud, you don’t have hardware. Your developers
environment to easily create and host to worry about scalability or can focus on the code with
cloud-based applications with Windows Azure performance issues. If there a test bed always at hand
is a sudden demand or load and go from a test server
expected on the servers, the to a production server
performance can be boosted almost immediately.
easily by just increasing the
get the poWer to processing capabilities. Cloud Power @ Work
Analysts' View “By running manageCarbon
“Just as Windows played Cloud Power @ Work (HCL’s new carbon-data
a significant part in “Windows Azure helps 3M management application) on
earlier shifts, Windows customers take advantage of Windows Azure, our customers
Azure is poised to take an complex algorithms that encapsulate can be up and running in
important role in this new 30 years of research and get simple, one-quarter of the time that it
world. If you're responsible powerful results from their browser, took with an on-premises model.”
for charting your firm's almost instantly.” RAjESH BABU SURAPARAjU,
path, understanding and TERRY COLLIER, Marketing Manager, 3M Product Manager, HCL
evaluating the Azure on creating and launching a web-Based Visual
environment makes Attention service for customers on Windows Azure
good sense.”
David Chappell & Associates
2

9. Avoid training costs
The interoperable Azure A Secure
platform integrates with what Framework
no more data you already have. Visual Studio Use the security framework
maintenance developers can start building you are familiar with many of
With SQL Azure, you can easily applications in no time and the Windows Azure services
provision and deploy multiple also work across SOAP, REST, using the core .Net libraries,
databases without having to XML and PHP platforms from keeping much of the security
install, setup, parch or manage a single location. and encryption details the
any software. High-availability same. A firewall mechanism
and built-in fault tolerance Cloud Power @ Work enables you to allow or
makes physical administration “The software distribution system prevent connections from
obsolete. we built with Windows Azure is 10 various sources, right down to
times cheaper than our previous specifying IP addresses or IP
Cloud Power @ Work solution... Most of our developers range.
“By using these tools to rapid are experienced with Visual Studio
by build applications and services tools. That was a good argument for Cloud Power @ Work
and migrate them to the Windows using the Windows Azure platform, “Windows Azure gives IT
Azure platform, we will be able to because we can use the same departments, incredible flexibility
help our customers quickly react development environment.” and efficiency in deploying new
to market changes without major ELMAR STOECKER, Director Portfolio services. As a trusted third party,
capital expenditures.” Management, Siemens IT Solutions and Services VeriSign adds a layer of (online)
CHANDRA SURBHAT, Global Head of Microsoft security to those environments.”
Business Solutions, Wipro Technologies RYAN WHITE, Product Marketing Manager
for SSL, VeriSign on adding VeriSign® SSL
Certificates on Windows Azure.
3

10. CoNNeCt
PeoPle witHout
real-time meetings
without the travel
Connect with colleagues and
An always-connected
remote workforce
Employees on the move
MAkinG tHeM Meet
engage customers in real-time can easily stay in touch with
meetings, trainings or events presence, instant messaging
Help information workers meet and stay on Microsoft Live Meeting. (IM), and PC-to-PC audio
updated from any location with secure Interact by sharing applications and video calling with Office
online communication services for email, or desktops and using the Communications Online.
conferencing, chat and networking multiple video and VoIP audio Availability can also be shown
capabilities. Whiteboard tools through embedded presence
and high-fidelity recording also in Microsoft Outlook.
poWer up help keep notes.
CoNNeCtivitY With Cloud Power @ Work
Cloud Power @ Work
“We have improved our
Analysts' View “Our goal in the long term is to organizational efficiency by
“Exchange Server 2010 replace many of the PBX systems. 30 percent. We have senior
(is) an upgrade worth The enhanced voice capabilities management using Windows Mobile
considering. Look simplify everything, cost less, and devices who needs messages ‘on
for improvements in give people more functionality. I the go’, mobile users who need to
three areas: back-end don’t see a downside.” access email from any connectivity
improvements largely jOHN TSCHANNEN, Director of IT and User framework and sales personnel who
connected to storage; Services, Energizer, on deploy the voice over work from cyber cafes and access
benefits to information IP (VoIP) capabilities of Microsoft Office email using Outlook Web Access.”
workers; and built-in basic Communications Online MANI MULKI, Vice President-IT,
archiving capabilities.” Godrej Industries Limited
Forrester Research, Inc.
4

11. increased email
reliability and security familiar tools that
Moving to the cloud helps your can be used by all
IT team provide multiple filters Mobile access to Exchange
and virus-scanning engines Online is available from all
using Microsoft Forefront Online Seamless online email-ready phones, spanning
Protection to protect from migration Windows Phone, the iPhone,
spam, viruses and phishing With Exchange Online, users Android, Palm, Nokia, and
scams. A central administration can acess their familiar Outlook Blackberry devices. Choose
console helps manage account online without needing between on-premises and
subscriptions, provision users, a VPN connection. You can online mailboxes depending
reset passwords, and configure migrate all mailbox content on what users want.
services from any location with including e-mail, calendar
Internet access items, contacts, and tasks. Cloud Power @ Work
”I’ve been able to provide equal or
Cloud Power @ Work Cloud Power @ Work better email service at a much lower
”In moving from Exchange Server ”In a five-month timeframe, we cost, which is a big win for Godiva.
2007 to Exchange Server 2010, the big migrated roughly 30,000 people to a We’re looking at a $250,000 annual
driver will be the changes to service hosted solution, without impacting savings from eliminating Notes.”
availability…. We can design a system their business or interrupting their STEVE WHITELAM, Director of Information
that will have a much higher level of day-to-day operations.” Technology, Global Shared Services, Godiva
uptime.” ESAT SEzER, CIO, Coca Cola Enterprises Chocolatier on productivity gains from moving to
STEVEN PRESLEY, IT Engineer - Staff, Qualcomm on Microsoft Online Services
cutting email recovery time from 10 minutes to less
than 30 seconds
5

12. Create
A reAl-tiMe
Connecting
across
devices and versions
Making the most of
new opportunities
Ensure reliability and
CollABorAtion HuB
Make it easy to access, edit connectivity for all users - from
and share Office documents, colleagues located around
Connect your information workers presentations and spreadsheets the world, to temporary
across time zones and geographies to share from the PC, phone or browser employees to people from
information and work together in real time using Microsoft Office 365. a new acquisition. With
Users can collaborate across no server purchases or
different platforms (PC or deployments on SharePoint
Mac), different Microsoft Office Online, empower a small
poWer up versions and even without satellite office, interim staff,
CollaboratioN bY have Microsoft Office on their
computers (from any web
or a newly acquired business
to work better together right
browser). from the start.
Analysts' View
“Cloud-based email and Cloud Power @ Work Cloud Power @ Work
collaboration services will ”Infosys is going to use Office Web “Departments are getting
see 10% penetration of Apps extensively, and we expect it to information out to stores faster,
the enterprise email and drastically reduce the time it takes to because SharePoint Online is so easy
messaging market by complete RFPs and budgets.” to use. We are excited to start using
2012 and will near 65% VIVEK BHARATHAN, Lead Technology Specialist, workflows to automate common
penetration by 2020.” Infosys, on overcoming document version processes such as onboarding new
Gartner compatibility across 100,000 Microsoft Office users employees.”
RHONDA COBB, Information Technology
Manager, REEDS Jewelers
6

13. enabling knowledge
sharing quickly Sharing data
A unified enterprise content reliably without
management system can help infrastructure costs
employees easily share best All documents and files saved
practices and expertise with online are hosted on Microsoft
work with blogs, wikis, search, surveys servers maintained by our
what you know and RSS feeds. Users can also own trained experts. Patches
The familiar interface of Microsoft easily create and maintain and security updates are
Outlook and Office applications collaborative workspaces supplied in real time, ensuring
is now extended online with using meeting and team site that users always work on
Office 365 for Enterprises. templates. the latest, most up-to-date
Meaning no learning curve plus versions of applications.
now online productivity features Cloud Power @ Work
for your employees. “Together with Microsoft, we hit the Cloud Power @ Work
overall goal in 142 days and helped “Moving to Online Services
Cloud Power @ Work Aviva achieve the deployment in will enable us to reduce our IT
“The speech-to-text features will be around one half of the cost of the operational costs by roughly 30%
great for our 20,000 or so mobile original budget” of what we’re currently spending.
device users because they will be able TOBY REDSHAW, CIO, Aviva, on creating 1 The ability to introduce a variable
to access their voice-mail messages intranet in 12 languages for 60,000 employees cost subscription model for these
even if they can’t call into the system.” collaborative technologies allows us
DEAN SEPSTRUP, Product Manager for Exchange, to more rapidly scale or divest our
Boeing on the Voice-Mail Preview that’s helping investment as necessary.”
drive employee productivity ALASTAIR ROBERTSON,
VP, Information Workplace
7

14. traNsform end-to-end
Management
it SerViCeS Efficiency through
Rs. Control
Automation and migrating
in your enterPriSe automation online doesn’t mean loss
Drive efficiency through Build a flexible and efficient of control. In fact, you can
private cloud infrastructure now manage your entire
greater flexibility and control of IT services using Windows Server 2008 R2 IT infrastructure spanning
in your own private cloud Hyper-V and System Center. physical on-premises and
By automating data resources virtual cloud environments
management and following from a single screen.
a self-service model, you can
poWer up busiNess save on operational costs in Cloud Power @ Work
agilitY With physical administration and
troubleshooting.
“We chose Windows Server 2008
R2 Hyper-V because we have
Analysts' View standardized our IT setup on
“For most organisations, Cloud Power @ Work Microsoft technologies. Moving to
virtualisation will provide the ”We have trimmed our physical a new platform would have meant
foundation and the stepping- server holdings from 120 to merely lack of predictability and increased
stone for the evolution to private 20 servers. The expenses on server costs”
cloud computing… Security must boxes have dropped drastically by 40 SHYAM CHANDRAMANI, Unit Manager -
become adaptive to support percent of our data center budget.” Global Server Team, Mphasis Limited
a model where workloads are SANDEEP gANDHI, Sr. Manager, Data Center
decoupled from physical hardware Operations, KPIT Cummins
and dynamically allocated to a
fabric of computing resources.”
Thomas Bittman, Gartner analyst
8

15. faster
time to market
With its flexibile setup, private
cloud technology
accelerates development Maximise your it
freedom to focus times for custom applications investments
on business and lets IT respond quickly to Leverage your existing
Simplifying IT management and changing business needs. The assets and skill sets - across
the assurance of security means private cloud can integrate identity (Active Directory),
more time for you to focus on with existing toolsets and management (System Center)
developing solutions that would provide symmetry with your and developer technologies
have not been possible before. on-premises or cloud (.Net, SQL Server and
database. Visual Studio) - to work on
Cloud Power @ Work private and public cloud
“Microsoft has invested billions of Cloud Power @ Work environments.
dollars in cloud technologies, which “You simply plug in and use the
gives us peace of mind... confidence relevant resources... The ability to Cloud Power @ Work
at the Associated Press that our data receive these resources as a service “With Windows Azure, we didn’t
is secure, even though it is made it possible for us to have to make changes to the
off-premises.” considerably speed up the process architecture of our solution to get it
PRAMOD ANCHUPARAYIL, Software Architect, of reaching customers. Plus, we running. To start up quickly - that is
Associated Press on hosting its Breaking News API avoided spending US $50,000 on really big for us.”
on Azure hardware and a hosting facility.” RAIK DITTRICH, Innovation Manager, T-Systems
NIR HAgSHURY, Chief Technical Officer, TicTacTi
9

16. know wHAt your ensuring rapid
Customers
user adoption
Inflexible software and a poor Closing
user experience often hamper deals faster
wAnt usage of CRM applications.
Microsoft Dynamics CRM
Give sales professionals
Strengthen customer Online provides an entire suite
instant fast access to
interactions, improve marketing of marketing, sales and service
customer data and history
and boost sales with easy when connected to the In-
online access to information solutions within the familiar ternet and even when offline.
interface of Microsoft Office Sales prospects and
Outlook on the PC or when customers can be informed
accessed online, ensuring rapid of new product and service
poWer up Customer user adoption and fast results. offerings with wizard-based
relatioNs bY Cloud Power @ Work
communication tools.
Analysts' View “We know that salespeople find the Cloud Power @ Work
“Microsoft Dynamics CRM new system much easier to use. The “It would have taken 70 hours a
shines by offering flexibility rate of responses in our new system month to get the pre-opportunity
for large and midsized has increased by 30 to 45 percent data that now is just there in the
organizations… Offering over what it was in Salesforce.com.” system. Our efficiency has soared
buyers the ‘Power of Choice’ AISHA THOMAS, Marketing IT Manager, Unico by well over 100 percent with
so that companies may Microsoft Dynamics CRM Online.”
jEff KIELY,
choose how to deploy, how
Vice President of Sales and Marketing, Trion
to pay, and how to use the
application.”
The Forrester Wave
10

17. Generating Better information
great demand sharing
Understand your customers Ensure customer loyalty with
better and target your resources consistent, efficient service Growing with your
to the areas of highest return by empowering customer business needs
with a comprehensive set of service personnel with the right Easy-to-use wizards and
marketing capabilities. Marketing information. Customer data point-and-click customization
professionals can increase can be made available as and tools help you customise and
marketing effectiveness and when needed - through the connect your CRM data with
track key performance with user interface, online or as an existing business system data
intuitive data segmentation tools, exported web file. The intuitive in real-time. The pay-per-user
campaign management features configuration capabilities can model delivered online, makes
and marketing analytics, all be tailored to fit your business setting up quick to scale as
available online. needs by quickly adding or required without any server
modifying fields, forms, workflow setup or expensive hardware
Cloud Power @ Work and reports. upgrades.
“Using Marketing Automation in
Microsoft Dynamics CRM, we now Cloud Power @ Work Cloud Power @ Work
deliver over 5,000 birthday emails a “Microsoft Dynamics CRM has been “By switching to Microsoft Dynamics
day to participants, reminding them essential to helping us improve CRM Online from Salesforce.com,
to celebrate their birthdays with us.” our customer satisfaction levels we’re saving nearly $13,000 each
HEATHER DORR, Senior Manager of Marketing and implement an effective sales month with 160 users.”
Information Systems, Cold Stone Creamery which management process. It provides a jOEL fRIEDMAN, CIO, Century Payments
has enrolled over 15 lakh Birthday Club participants single version of our customer data
with thousands of new members joining everyday to all our sales staff.”
UMAIR CHAUDHARY, COO, Barclays Bank LP, UAE
and Gulf on increasing customer satisfaction
by 15 percent
11

18. What Cloud poWer
holds for You
Benefit from working with Microsoft Cloud Services -
the most comprehensive set of solutions for the cloud doN’t throW
aNYthiNg aWaY
Move only what you want
to the cloud with a hybrid
model of on-premises and
off-premises resources.
paY for What Build on your existing IT
happeNs assets and connect them to
IT costs are now online services.
flexible – just pay per
user per month on any
application as a service.
Different usage models
also help you accurately
predict costs.
12

19. 15 Years of
experieNCe develop faster
When you work in the Build applications faster than
No more Microsoft Cloud, you ever with a million-strong
maiNteNaNCe leverage the knowledge developer base writing to
Always use the latest and expertise of 15 years, Microsoft platforms and alWaYs available
software without worrying ranging from applications more coming through our All the resources needed for
about upgrades and (Hotmail) to search (Bing) interoperability support of a robust cloud computing
patches. The cloud and platforms (Xbox Live) third-party solutions. infrastructure - a global
automatically updates to reach, a commitment to
the latest versions. security, 99.9 percent uptime
SLA with 24/7 service and
support.
help at haNd staY seCure
Our ecosystem of 9,000 Your data is stored on a
No traiNiNg partners - spanning ISVs, global network of 200+
required value-added resellers and enterprise-class data centers
All your users can easily systems integrators - choose with SAS 70 and ISO 27001 loWer Costs
move to and from the from our ecosystem to help security certifications audited No more paying for
cloud, using their skill sets you in migration, hosting by an independent third hardware and facility
and familiarity with the services and creating party. expenses. Cut down on
products they currently use. customised applications. maintenance and operational
Get a consistent experience overheads by paying for
across all devices. service.
13

20. why the Cloud makes Business Sense
resourCes Thousands of companies are discovering why making their IT an enterprise-
ready service makes business sense. Explore more with our whitepaper and see
how global companies are seeing business benefits in the Microsoft Cloud.
The Economics of the Cloud | Pg 15 Seamless migration at Coca Cola Enterprises | Pg 36
Improved Productivity at GlaxoSmithKline | Pg 44
Efficiency in the Private Cloud at KPIT Cummins | Pg 49
IT as a Service at 3M | Pg 54
14

21. Computing is undergoing a seismic shift from
client/server to the cloud, a shift similar in importance and
the impact to the transition from mainframe to client/server.
Speculation abounds on how this new era will evolve in
eCoNomiCs of the coming years, and IT leaders have a critical need for a
clear vision of where the industry is heading. We believe
the Cloud the best way to form this vision is to understand the
underlying economics driving the long-term trend. In this
paper, we will assess the economics of the cloud by using
in-depth modeling. We then use this framework to better
understand the long-term IT landscape.
For comments or questions regarding the content of this paper,
please contact Rolf Harms (rolfh@microsoft.com) or
Michael Yamartino (michael.yamartino@microsoft.com)
15

22. Introduction
By the 1920s the number of cars had already reached 8 million, and today there
are over 600 million cars – proving Daimler wrong hundreds of times over.
W
hen cars emerged in What the early pioneers failed to realize was that profound reductions in both
the early 20th century, cost and complexity of operating cars and a dramatic increase in its importance
they were initially called in daily life would overwhelm prior constraints and bring cars to the masses.
“horseless carriages”. Understandably,
people were skeptical at first, and Today, IT is going through a similar change: the shift from client/server to
they viewed the invention through the cloud. Cloud promises not just cheaper IT, but also faster, easier, more
the lens of the paradigm that had flexible, and more effective IT. Just as in the early days of the car industry, it‘s
been dominant for centuries: the currently difficult to see where this new paradigm will take us. The goal of
horse and carriage. The first cars this whitepaper is to help build a framework that allows IT leaders to plan
also looked very similar to the for the cloud transition2. We take a long-term view in our analysis, as this is
horse and carriage (just without the a prerequisite when evaluating decisions and investments that could last for
horse), as engineers initially failed to Horseless Carriage Syndrome decades. As a result, we focus on the economics of cloud rather than on specific
understand the new possibilities of the new paradigm, such as building for technologies or other driving factors like organizational change, as economics
higher speeds, or greater safety. Incredibly, engineers kept designing the often provide a clearer understanding of transformations of this nature.
whip holder into the early models before realizing that it wasn‘t
necessary anymore. In Section 2, we outline the underlying economics of cloud, focusing on what
makes it truly different from client/server. In Section 3, we will assess the
Initially there was a broad failure to fully comprehend the new paradigm. implications of these economics for the future of IT. We will discuss the positive
Banks claimed that, The horse is here to stay but the automobile is only impact cloud will have but will also discuss the obstacles that still exist today.
a novelty, a fad”. Even the early pioneers of the car didn‘t fully grasp the Finally, in Section 4 we will discuss what‘s important to consider as IT leaders
potential impact their work could have on the world. When Daimler, arguably embark on the journey to the cloud.
the inventor of the automobile, attempted to estimate the long-term auto
market opportunity, he concluded there could never be more than 1 million Source: Horseless Carriage Thinking, William Horton Consulting
1
cars, because of their high cost and the shortage of capable chauffeurs1. Cloud in this context refers to cloud computing architecture, encompassing both public and private clouds.
2
16

23. Fig. 2: Cloud Opportunity
eCoNomiCs
of the Cloud
Economics are a powerful force in shaping industry transformations. Today‘s
discussions on the cloud focus a great deal on technical complexities and
adoption hurdles. While we acknowledge that such concerns exist and are
Source: Microsoft
important, historically, underlying economics have a much stronger impact
on the direction and speed of disruptions, as technological challenges are fig. 3: Beginning the Transition to Client Server Technology
resolved or overcome through the rapid innovation we‘ve grown accustomed
to (Fig. 2). During the mainframe era, client/server was initially viewed as a toy
technology, not viable as a mainframe replacement. Yet, over time the
client/server technology found its way into the enterprise (Fig. 3). Similarly,
when virtualization technology was first proposed, application compatibility
concerns and potential vendor lock-in were cited as barriers to adoption. Source: “How convention
shapes our market”
Yet underlying economics of 20 to 30 percent savings3 compelled CIOs to longitudinal survey,
overcome these concerns, and adoption quickly accelerated. Shana Greenstein, 1997.
The emergence of cloud services is again fundamentally shifting the economics Cloud also allows core IT infrastructure to be brought into large data centers
of IT. Cloud technology standardizes and pools IT resources and automates that take advantage of significant economies of scale in three areas:
many of the maintenance tasks done manually today. Cloud architectures • Supply-side savings. Large-scale data centers (DCs) lower costs per server.
facilitate elastic consumption, self-service, and pay-as-you-go pricing. • Demand-side aggregation. Aggregating demand for computing smooths
The massive aggregate scale of these mega DCs will bring considerable and overall variability, allowing server utilization rates to increase.
• Multi-tenancy efficiency. When changing to a multitenant application
3
Source: Dataquest Insight: Many Midsize Businesses Looking Toward 100% Server Virtualization. model, increasing the number of tenants (i.e., customers or users) lowers
Gartner, May 8, 2009 the application management and server cost per tenant.
17

24. Fig. 4: ECONOMIES OF SCALE (ILLUSTRATIVE)
2.1 Supply-Side Economies of Scale
Cloud computing combines the best economic properties of mainframe and
client/server computing. The mainframe era was characterized by significant
economies of scale due to high up-front costs of mainframes and the need to
hire sophisticated personnel to manage the systems. As required computing Source: Microsoft
power – measured in MIPS (million instructions per second) – increased, cost
declined rapidly at first (Fig. 4), but only large central IT organizations had The economies of scale emanate from the following areas:
the resources and the aggregate demand to justify the investment. Due to Cost of power: Electricity cost is rapidly rising to become the largest element of
the high cost, resource utilization was prioritized over end-user agility. Users‘ total cost of ownership (TCO),5 currently representing 15%-20%. Power Usage
requests were put in a queue and processed only when needed resources were Effectiveness (PUE)6 tends to be significantly lower in large facilities than in
available. With the advent of minicomputers and later client/server technology, smaller ones. While the operators of small data centers must pay the prevailing
the minimum unit of purchase was greatly reduced, and the resources became local rate for electricity, large providers can pay less than one-fourth of the
easier to operate and maintain. This modularization significantly lowered the national average rate by locating its data centers in locations with inexpensive
entry barriers to providing IT services, radically improving end-user agility. electricity supply and through bulk purchase agreements7. In addition, research
However, there was a significant utilization tradeoff was, resulting in the current has shown that operators of multiple data centers are able to take advantage
state of affairs: datacenters sprawling with servers purchased for whatever of geographical variability in electricity rates, which can further reduce
needed existed at the time, but running at just 5%-10% utilization4. energy cost.
4
Source: The Economics of Virtualization: Moving Toward an Application-Based Cost Model, IDC,
Cloud computing is not a return to the mainframe era as is sometimes November 2009.
5
Not including app labor. Studies suggest that for low-efficiency datacenters, three-year spending on
suggested, but in fact offers users economies of scale and efficiency that power and cooling,including infrastructure, already outstrips three-year server hardware spending.
exceed those of a mainframe, coupled with modularity and agility beyond what 6
Power Utilization Effectiveness equals total power delivered into a datacenter divided by critical power
– the power needed to actually run the servers. Thus, it measures the efficiency of the datacenter in
client/server technology offered, thus eliminating the tradeoff. turning electricity into computation.The best theoretical value is 1.0, with higher numbers being
worse.
7
Source: U.S. Energy Information Administration (July 2010) and Microsoft. While the average U.S.
commercial ratesome locations offer power for is 10.15 cents per kilowatt hour, as little as 2.2 cents per
kilowatt hour
18

25. Infrastructure labor costs: While cloud computing significantly lowers labor
costs at any scale by automating many repetitive management tasks, larger
facilities are able to lower them further than smaller ones. While a single
system administrator can service approximately 140 servers in a traditional
enterprise,8 in a cloud data center the same administrator can service Fig. 5:
thousands of servers. This allows IT employees to focus on higher value-add RECENT LARGE
activities like building new capabilities and working through the long queue of DATA-CENTER
PROJECTS
user requests every IT department contends with.
Source: Press Releses
Security and reliability: While often cited as a potential hurdle to public cloud ongoing R&D to bear on running them more efficiently, and make them more
adoption, increased need for security and reliability leads to economies of scale efficient for their customers. Providers of large-scale DCs, for which running them
due to the largely fixed level of investment required to achieve operational is a primary business goal, are likely to benefit more from this than smaller DCs
security and reliability. Large commercial cloud providers are often better able which are run inside enterprises.
to bring deep expertise to bear on this problem than a typical corporate IT
department, thus actually making cloud systems more secure and reliable.
2.2 Demand-Side Economies of Scale
Buying power: Operators of large data centers can get discounts on The overall cost of IT is determined not just by the cost of capacity, but also by the
hardware purchases of up to 30 percent over smaller buyers. This is degree to which the capacity is efficiently utilized. We need to assess the impact
enabled by standardizing on a limited number of hardware and software that demand aggregation will have on costs of actually utilized resources (CPU,
architectures. Recall that for the majority of the mainframe era, more than 10 network, and storage)9. In the non-virtualized data center, each application/work-
different architectures coexisted. Even client/server included nearly a dozen load typically runs on its own physical server10. This means the number of servers
UNIX variants and the Windows Server OS, and x86 and a handful of RISC scales linearly with the number of server workloads. In this model, utilization of
architectures. Large-scale buying power was difficult in this heterogeneous 8
Source: James Hamilton, Microsoft Research, 2006.
9
In this paper, we talk generally about resource utilization. We acknowledge there are important differences
environment. With cloud, infrastructure homogeneity enables scale economies. among resources.For example, because storage has fewer usage spikes compared with CPU and I/O resources,
Going forward, there will likely be many additional economies of scale that we the impact of some of what we discuss here will affect storage to a smaller degree.
10
Multiple applications can run on a single server, of course, but this is not common practice. It is
cannot yet foresee. The industry is at the early stages of building data centers very challenging to move a running application from one server to another without also moving
at a scale we‘ve never seen before (Fig. 5). the operating system, so running multiple applications on one operating system instance can create
bottlenecks that are difficult to remedy while maintaining service, thereby limitingagility.
Virtualization allows the application plus operating system to be moved at will.
19

26. servers has traditionally been extremely low, around 5 to 10 percent11. To meet service level agreements, capacity buffers have to be built in to
Virtualization enables multiple applications to run on a single physical server account for a certain probability that many people will undertake particular
within their optimized operating system instance, so the primary benefit of tasks at the same time. If servers are pooled, this variability can be reduced.
virtualization is that fewer servers are needed to carry the same number of
workloads. But how will this affect economies of scale? If all workloads had 2. Time-of-day patterns: There are daily recurring cycles in people‘s behavior:
constant utilization, this would entail a simple unit compression without consumer services tend to peak in the evening, while workplace services tend
impacting economies of scale. In reality, however, workloads are highly variable to peak during the workday. Capacity has to be built to account for these daily
over time, often demanding large amounts of resources one minute and peaks but will go unused during other parts of the day causing low utilization.
virtually none the next. This opens up opportunities for utilization improvement This variability can be countered by running the same workload for multiple
via demand-side aggregation and diversification. time zones on the same servers (Fig. 7) or by running workloads with
complementary time-of-day patterns (for example, consumer services and
We analyzed the different sources of utilization variability and then looked at the enterprise services) on the same servers.
ability of the cloud to diversify it away and thus reduce costs.
Fig. 7: TIME-OF-DAY PATTERNS FOR SEARCH
We distinguish five sources of variability and assess how they might be reduced:
1. Randomness: End-user access patterns contain a certain degree of
randomness. For example, people check their email at different times (Fig.6).
Fig. 6: RANDOM VARIABILITY (EXCHANGE SERVER)
Source: Bing Search volume over 24-hour period
11
Source: The Economics of Virtualization: Moving Toward an Application-Based Cost Model, IDC,
Source: Microsoft November 2009.
20

27. Fig. 9: MULTIRESOURCE VARIABILITY (ILLUSTRATIVE)
3. Industry-specific variability: Some variability is driven by industry
dynamics. Retail firms see a spike during the holiday shopping season while
U.S. tax firms will see a peak before April 15 (Fig. 8).
Fig. 8: INDUSTRY-SPECIFIC VARIABILITY
Source: Microsoft
While it‘s possible to adjust capacity by buying servers optimized for CPU or
storage, this addresses the issue only to a limited degree because it will
reduce flexibility and may not be economic from a capacity perspective. This
variability will lead to resources going unutilized unless workload diversification
is employed by running workloads with complementary resource profiles.
Source: Alexa Internet
5. Uncertain growth patterns: The difficulty of predicting future need for
There are multiple kinds of industry variability - some recurring and predictable computing resources and the long leadtime for bringing capacity online is
(such as the tax season or the Olympic Games), and others unpredictable (such another source of low utilization (Fig. 10).
as major news stories). The common result is that capacity has to be built for
Fig. 10: DIVERSIFYING RANDOM VARIABILITY
the expected peak (plus a margin of error). Most of this capacity will sit idle the
rest of the time. Strong diversification benefits exist for industry variability.
4. Multi-resource variability: Compute, storage, and input/output (I/O)
resources are generally bought in bundles: a server contains a certain amount
of computing power (CPU), storage, and I/O (e.g., networking or disk access).
Some workloads like search use a lot of CPU but relatively little storage or I/O,
while other workloads like email tend to use a lot of storage but little
CPU (Fig. 9). Source: Microsoft
21

28. For startups, this is sometimes referred to as the TechCrunch effect. Enterprises large, multi-geography organizations, the majority of employees and users
and small businesses all need to secure approval for IT investments well in will live in similar time zones, bringing their daily cycles close to synchrony.
advance of actually knowing their demand for infrastructure. Even large private Also, most organizations do not tend to have workload patterns that offset one
companies face this challenge, with firms planning their purchases six to another: for example, the email, network and transaction processing activity
twelve months in advance (Fig. 10). By diversifying among workloads across that takes place during business hours is not replaced by an equally active
multiple customers, cloud providers can reduce this variability, as higher- stream of work in the middle of the night. Pooling organizations and workloads
than-anticipated demand for some workloads is canceled out by lower-than- of different types allows these peaks and troughs to be offset.
anticipated demand for others.
A key economic advantage of the cloud is its ability to address variability in
resource utilization brought on by these factors. By pooling resources, variability
Fig.11:
is diversified away, evening out utilization patterns. The larger the pool of
DIVERSIFYING
resources, the smoother the aggregate demand profile, the higher the overall
RANDOM
utilization rate, and the cheaper and more efficiently the IT organization can
VARIABILITY
meet its end-user demands.
We modeled the theoretical impact of random variability of demand on server
utilization rates as we increase the number of servers12. Fig. 11 indicates that a Source: Microsoft
theoretical pool of 1,000 servers could be run at approximately 90% utilization Industry variability results in highly correlated peaks and troughs throughout
without violating its SLA. This only holds true in the hypothetical situation each firm (that is, most of the systems in a retail firm will be at peak capacity
where random variability is the only source of variability and workloads can around the holiday season (e.g., web servers, transaction processing, payment
be migrated between physical servers instantly without interruption. Note that processing, databases)13. Fig. 12 shows industry variability for a number of
higher levels of uptime (as defined in a service level agreement or SLA) become different industries, with peaks ranging from 1.5x to 10x average usage.
much easier to deliver as scale increases. 12
To calculate economies of scale arising from diversifying random variability, we created a Monte
Carlo model to simulatedata centers of various sizes serving many random workloads. For each
simulated DC, workloads (which are made to resemble hypothetical web usage patterns) wer
Clouds will be able to reduce time-of-day variability to the extent that they successively added until the expected availability of server resources dropped below agiven uptime of
are diversified amongst geographies and workload types. Within an average 99.9 percent or 99.99 percent. The maximum number of workloads determines the maximum
utilization rate at which the DC‘s servers can operate without compromising performance.
organization, peak IT usage can be twice as high as the daily average. Even in 13
Ideally, we would use the server utilization history of a large number of customers to gain more
insight into such patterns. However, this data is difficult to get and often of poor quality. We therefore
used web traffic as a proxy for the industry variability.
22

29. Microsoft services such as Windows Live Hotmail and Bing take advantage of Windows Azure because every frame of their movies takes eight hours to
multi-resource diversification by layering different subservices to optimize render today on a single processor, meaning it would take 272 years to
workloads with different resource profiles (such as CPU bound or storage render an entire movie. As they said, We are not that patient. With Azure,
bound). It is difficult to quantify these benefits, so we have not included multi- they can get the job done as fast as they need. The result is huge spikes
resource diversification in our model. in Pixar‘s usage of Azure as they render on-demand.
Some uncertain growth pattern variability can be reduced by hardware
standardization and just-in-time procurement, although likely not completely.
Based on our modeling, the impact of growth uncertainty for enterprises with
up to 1,000 servers is 30 to 40 percent overprovisioning of servers relative to
a public cloud service. For smaller companies (for example, Internet startups), Fig 12:
the impact is far greater. INDUSTRY VARIABILITY
Source: Microsoft
So far we have made the implicit assumption that the degree of variability will
stay the same as we move to the cloud. In reality, it is likely that the variability • Batch processes will become real time: Many processes — for example,
will significantly increase, which will further increase economies of scale. There accurate stock availability for online retailers — that were previously
are two reasons why this may happen: batch driven, will move to real-time. Thus, multi-stage processes that
• Higher expectation of performance: Today, users have become were once sequential will now occur simultaneously, such as a manufac-
accustomed to resource constraints and have learned to live with them. turing firm that can tally its inventory, check its order backlog, and order
For example, users will schedule complex calculations to run overnight, new supplies at once. This will amplify utilization variability.
avoid multiple model iterations, or decide to forgo time-consuming and
costly supply chain optimizations. The business model of cloud allows We note that even the largest public clouds will not be able to diversify away all
a user to pay the same for 1 machine running for 1,000 hours as he variability; market level variability will likely remain. To further smooth demand,
would for 1,000 machines running for 1 hour. Today, the user would likely sophisticated pricing can be employed. For example, similar to the electricity
wait 1,000 hours or abandon the project. In the cloud, there is virtually market (Fig. 13), customers can be incented to shift their demand from high
no additional cost to choosing 1,000 machines and accelerating such utilization periods to low utilization periods. In addition, a lower price spurs
processes. This will have a dramatic impact on variability. Pixar Animation additional usage from customers due to price elasticity of demand. Demand
Studios, for example runs its computer-animation rendering process on management will further increase the economic benefits of cloud.
23

30. 365-S to assess the impact. In dedicated instances, the same activities, such
Fig. 13: VARIABLE PRICING IN ELECTRICITY
as applying software patches, are performed multiple times – once for each
instance. In a multi-tenant instance such as Office 365-S, that cost is shared
across a large set of customers, driving application labor costs per customer
towards zero. This can result in a meaningful reduction in overall cost,
especially for complex applications.
Fig.14:
Source: Ameren Illinois Utilities UTILIZATION
OVERHEAD
2.3 Multi-tenancy Economies of Scale
Source: Microsoft
The previously described supply-side and demand-side economies of scale
can be achieved independent of the application architecture, whether it • fixed component of server utilization amortized over large number
be traditional scale-up or scale-out, single tenant or multitenant. There is of customers: For each application instance, there is a certain amount
another important source of economies of scale that can be harnessed only of server overhead. Fig. 14 shows an example from Microsoft‘s IT
if the application is written as a multitenant application. That is, rather than department in which intraday variability appears muted (only a 16
running an application instance for each customer – as is done for on-premises percent increase between peak and trough) compared to actual variability
application and most hosted applications such as dedicated instances of in user access. This is caused by application and runtime overhead, which
Microsoft Office 365 – in a multitenant application, multiple customers use a is constant throughout the day. By moving to a multitenant model with
single instance of the application simultaneously, as in the case of shared a single instance, this resource overhead can be amortized across all
Office 365. This has two important economic benefits: customers. We have examined Office 365-D, Office 365-S, and Microsoft
• fixed application labor amortized over a large number of customers: Live@edu data to estimate this overhead, but so far it has proven
In a single-tenant instance, each customer has to pay for its own technically challenging to isolate this effect from other variability in the
application management (that is, the labor associated with update and data (for example, user counts and server utilization) and architectural
upgrade management and incident resolution). differences in the applications. Therefore, we currently assume no benefit
We‘ve examined data from customers, as well as Office 365-D and Office from this effect in our model.
24

31. Applications can be entirely multitenant by being completely written to take This raises the question: what impact will the Cloud Economics we described
advantage of these benefits, or can achieve partial multi-tenancy by leveraging have on the IT budget? From customer data, we know the approximate
shared services provided by the cloud platform. The greater the use of such breakdown between the infrastructure costs, costs of supporting and
shared services, the greater the application will benefit from these multi- maintaining existing applications, and new application development costs (Fig.
tenancy economies of scale. 16). Cloud impacts all three of these areas. The supply-side and demand-side
savings impact mostly the infrastructure portion, which comprises over half of
2.4 Overall Impact spending. Existing app maintenance costs include update and patching labor,
The combination of supply-side economies of scale in server capacity end-user support, and license fees paid to vendors. They account for roughly a
(amortizing costs across more servers), demand-side aggregation of workloads third of spending and are addressed by the multi-tenancy efficiency factor.
(reducing variability), and the multi-tenant application model (amortizing costs Fig 16: IT SPENDING BREAKDOWN
across multiple customers) leads to powerful economies of scale. To estimate
the magnitude, we built a cost scaling model which estimates the long term
behavior of costs.
Fig. 15 shows the output for a workload that utilizes 10 percent of a traditional
server. The model indicates that a 100,000-server datacenter has an 80% lower
total cost of ownership (TCO) compared to a 1,000-server datacenter.
Source: Microsoft
New application development accounts for just over a tenth of spending14, even
though it is seen as the way for IT to innovate. Therefore IT leaders generally
Fig 15: ECONOMIES OF
want to increase spending here. The economic benefits of cloud computing
SCALE IN THE CLOUD described here will enable this by freeing up room in the budget to do so. We
will touch more on this aspect in the next paragraph as well as in Section 3.
14
New application development costs include only the cost of designing and writing the application and
excluding the cost of hosting .them on new infrastructure. Adding these costs results in the 80% / 20%
split seen elsewher
Source: Microsoft
25

32. a bit of a horseless carriage in that the underlying platform and tools were
2.5 Harnessing Cloud Economics not designed specifically for the cloud. The full advantage of cloud computing
Capturing the benefits described above is not a straightforward task with today‘s can only be properly unlocked through a significant investment in intelligent
technology. Just as engineers had to fundamentally rethink design in the early resource management. The resource manager must understand both the status
days of the car, so too will developers have to rethink design of applications. of the resources (networking, storage, and compute) as well as the activity of the
Multi-tenancy and demand-side aggregation is often difficult for developers applications being run. Therefore, when writing new apps, Platform as a Service,
or even sophisticated IT departments to implement on their own. If not done most effectively captures the economic benefits. PaaS offers shared services,
correctly, it could end up either significantly raising the costs of developing advanced management, and automation features that allow developers to focus
applications (thus at least partially nullifying the increased budget room for new directly on application logic rather than on engineering their application to scale.
app development); or capturing only a small subset of the savings previously
described. The best approach in harnessing the cloud economics is different for
packaged apps vs. new/custom apps.
Packaged applications: While virtualizing packaged applications and moving
them to cloud virtual machines (e.g., virtualized Exchange) can generate some Fig.17 CAPTURING
savings, this solution is far from ideal and fails to capture the full benefits CLOUD BENEFITS
outlined in this Section. The cause is twofold. First, applications designed to
Source: Microsoft
be run on a single server will not easily scale up and down without significant
additional programming to add load-balancing, automatic failover, redundancy, To illustrate the impact, a startup named Animoto used Infrastructure-as-a-
and active resource management. This limits the extent to which they are able to Service (IaaS) to enable scaling - adding over 3,500 servers to their capacity in
aggregate demand and increase server utilization. Second, traditional packaged just 3 days as they served over three-quarters of a million new users. Examining
applications are not written for multi-tenancy, and simply hosting them in their application later, however, the Animoto team discovered that a large
the cloud does not change this. For packaged apps, the best way to harness percentage of the resources they were paying for were often sitting
the benefits of cloud is to use SaaS offerings like Office365, which have been idle - often over 50%, even in a supposedly elastic cloud. They re-architected
architected for scale-out and multi-tenancy to capture the full benefits. their application and eventually lowered operating costs by 20%. While Animoto
is a cloud success story, it was only after an investment in intelligent resource
New/custom applications: Infrastructure-as-a-Service (IaaS) can help capture management that they were able to harness the full benefits of cloud. PaaS
some of the economic benefits for existing applications. Doing so is, however, would have delivered many of these benefits out-of-the-box without any
additional tweaking required.
26

33. impliCatioNs
In this section, we will discuss the implications of the previously described
1. Elasticity is a game-changer because, as described before, renting 1
machine for 1,000 hours will be nearly equivalent to renting 1,000 machines for
1 hour in the cloud. This will enable users and agencies to rapidly accomplish
economics of cloud. We will discuss the ability of private clouds to address complex tasks that were previously prohibited by cost or time constraints.
some of the barriers to cloud adoption and assess the cost gap between Being able to both scale up and scale down resource intensity nearly instantly
public and private clouds. enables a new class of experimentation and entrepreneurship.
2. Elimination of capital expenditure will significantly lower the risk premium
3.1 Possibilities & Obstacles of projects, allowing for more experimentation. This both lowers the costs of
The economics we described in section 2 will have a profound impact on IT. starting an operation and lowers the cost of failure or exit – if an application no
Many IT leaders today are faced with the problem that 80% of the budget is longer needs certain resources, they can be decommissioned with no further
spent on keeping the lights on, maintaining existing services and infrastructure. expense or write-off.
This leaves few resources available for innovation or addressing the never- 3. Self-service Provisioning servers through a simple web portal rather than
ending queue of new business and user requests. Cloud computing will free up through a complex IT procurement and approval chain can lower friction in
significant resources that can be redirected to innovation. Demand for general the consumption model, enabling rapid provisioning and integration of new
purpose technologies like IT has historically proven to be very price elastic services. Such a system also allows projects to be completed in less time with
(Fig. 18). Thus, many IT projects that previously were cost prohibitive will now less risk and lower administrative overhead than previously.
become viable thanks to cloud economics. However, lower TCO is only one of 4. Reduction of complexity. Complexity has been a long standing inhibitor of
the key drivers that will lead to a renewed level of innovation within IT: IT innovation. From an end-user perspective SaaS is setting a new bar for user
friendly software. From a developer perspective Platform as a Service (PaaS)
greatly simplifies the process of writing new applications, in the same way as
cars greatly reduced the complexity of transportation.
These factors will significantly increase the value add delivered by IT. Elasticity
enables applications like yield management, complex event processing,
Fig 18:
logistics optimization, and Monte Carlo simulation, as these workloads exhibit
PRICE ELASTICITY
nearly infinite demand for IT resources. The result will be massively improved
OF STORAGE
experience, including scenarios like real-time business intelligence analytics
Source: Coughlin Associates and HPC for the masses.
27

34. However, many surveys show that significant concerns currently exist around • Compliance and Data Sovereignty – Enterprises are subject to audits and
cloud computing. As Figure 19 shows, security, privacy, maturity, and compliance oversight, both internal and external (e.g. IRS, SEC). Companies in many
are the top concerns. Many CIOs also worry about legacy compatibility: it is often countries have data sovereignty requirements that severely restrict where
not straightforward to move existing applications to the cloud. they can host data services. CIOs ask: which clouds can comply with these
systems and what needs to be done to make them compliant?
Fig 19: PUBLIC CLOUD CONCERNS While many of these concerns can be addressed by cloud today, concerns
remain and are prompting IT leaders to explore private clouds as a way of
achieving the benefits of cloud while solving these problems. Next, we will
explore this in more detail and also assess the potential tradeoffs.
3.3 Private Clouds
Microsoft distinguishes between public and private clouds based on whether
the IT resources are shared between many distinct organizations (public cloud)
or dedicated to a single organization (private cloud). This taxonomy is illus-
Source: Gartner CIO survey
trated in Fig. 20. Compared to traditional virtualized datacenters, both private
and public clouds benefit from automated management (to save on repetitive
labor) and homogenous hardware (for lower cost and increased flexibility). Due
to the broadly-shared nature of public clouds, a key difference between private
• Security and Privacy CIOs must be able to report to their CEO and other and public clouds is the scale and scope at which they can pool demand.
executives how the company‘s data is being kept private and secure.
Financially and strategically important data and processes often are pro-
tected by complex security requirements. Legacy systems have typically Fig 20:
been highly customized to achieve these goals, and moving to a cloud COMPARING
architecture can be challenging. Furthermore, experience with the built- VIRTUALIZATION,
in, standardized security capabilities of cloud is still limited and many PRIVATE CLOUD, AND
CIOs still feel more confident with legacy systems in this regard. PUBLIC CLOUD
• Maturity and Performance Cloud requires CIOs to trust others to provide Source: Microsoft. Shaded
reliable and highly available services. Unlike on-premises outages, cloud checks indicate an
optional characteristic
outages are often highly visible and may increase concerns
28

35. • Private clouds move beyond virtualization. Resources are now pooled A variety of performance levels will be available in both public and private form,
across the company rather than by organizational unit,15 and workloads so there is little reason to expect that one will have an advantage over another.16
are moved seamlessly between physical servers to ensure optimal While private clouds can alleviate some of the concerns, in the next paragraph
efficiency and availability. This further reduces the impact of random, we will discuss whether they will offer the same kind of savings described
time-of-day, and workload variability. In addition, new, cloud-optimized earlier.
application models (Platform as a Service such as Azure) enable more
efficient app development and lower ongoing operations costs. 3.4 Cost Trade-Off
• Public clouds have all the same architectural elements as private clouds, While it should be clear from the prior discussion that conceptually the public
but bring massively higher scale to bear on all sources of variability. cloud has the greatest ability to capture diversification benefits, we need to
Public clouds are also the only way to diversify away industry-specific get a better sense of the magnitude. Fig. 21 shows that while the public cloud
variability, the full geographic element of time-of-day variability, and addresses all sources of variability the private cloud can address only a subset.
bring multi-tenancy benefits into effect. For example, industry variability cannot be addressed by a private cloud, while
growth variability can be addressed only to a limited degree if an organization
Private clouds can address some of the previously mentioned adoption concerns. pools all its internal resources in a private cloud. We modeled all of these
By having dedicated hardware, they are easier to bring within the corporate factors, and the output is shown in Fig. 22.
firewall, which may ease concerns around security and privacy. Bringing a private
Fig 21: DIVERSIFICATION BENEFITS
cloud on-premise can make it easier to address some of the regulatory, compliance
and sovereignty concerns that can arise with services that cross jurisdictional
boundaries. In cases where these concerns weigh heavily in an IT leader‘s decision,
an investment in a private cloud may be the best option.
Private clouds do not really differ from public cloud regarding other concerns,
such as maturity and performance. Public and private cloud technologies are Source: Microsoft.
developing in tandem and will mature together.
15
Aggregation across organizational units is enabled by two key technologies: live migration, which
16
Private clouds do allow for a greater degree of customization than public clouds, which could
moves virtual machineswhile remaining operational, thereby enabling more dynamic optimization; enhance performance for a certain computational task. Customization requires R&D effort and
and self-service provisioning and billing. expense, however, so it is difficult to make a direct price/performance comparison .
29

36. .
Fig 22: COST BENEFIT OF PUBLIC CLOUD
In addition to the increase in TCO, private clouds also require upfront
investment to deploy - an investment that must accommodate peak demand
requirements. This involves separate budgeting and commitment, increasing
risk. Public clouds, on the other hand, can generally be provisioned entirely on
a pay-as-you-go basis.
Source: Gartner CIO survey
3.5 Finding Balance Today: Weighing the Benefits of Private
Cloud against the Costs
We‘ve mapped a view of how public and private clouds measure up in
Figure 23. The vertical axis measures the public cloud cost advantage. From
the prior analysis we know public cloud has inherent economic advantages
The lower curve shows the cost for a public cloud (same as the curve shown that will partially depend on customer size, so the bubbles‘ vertical position is
in Fig. 15). The upper curve shows how the cost of a private cloud. The public dependent on the size of the server installed base. The horizontal axis
cloud curve is lower at every scale due to the greater impact of demand represents the organization‘s preference for private cloud. The size of the
aggregation and the multi-tenancy effect. Global scale public clouds are likely circles reflects the total server installed base of companies of each type. The
to become extremely large, at least 100,000 servers in size, or possibly much bottom-right quadrant thus represents the most attractive areas for private
larger, whereas the size of an organization‘s private cloud will depend on its clouds (relatively low cost premium, high preference).
demand and budget for IT.
Fig. 22 also shows that for organizations with a very small installed base of
servers (<100), private clouds are prohibitively expensive compared to public
cloud. The only way for these small organizations or departments to share
in the benefits of at scale cloud computing is by moving to a public cloud.
for large agencies with an installed base of approximately 1,000 servers,
private clouds are feasible but come with a significant cost premium of Fig 23: COST AND BENEFITS
about 10 times the cost of a public cloud for the same unit of service, due OF PRIVATE CLOUDS
to the combined effect of scale, demand diversification and multi-tenancy. Source: Micrisoft
30

37. We acknowledge that Figure 23 provides a simplified view. IT for is not 3.6 The Long View: Cloud Transition Over Time
monolithic within any of these industry segments. Each organization‘s IT opera- As we pointed out in the introduction of this paper, it is dangerous to make
tion is segmented into workload types, such as email or ERP. Each of these has decisions during the early stages of a disruption without a clear vision of the
a different level of sensitivity and scale, and CIO surveys reveal that preference end state. IT leaders need to design their architecture with a long term vision in
for public cloud solutions currently varies greatly across workloads (Figure 24). mind. We therefore need to consider how the long term forces will impact the
position of the bubbles on Fig. 23.
We expect two important shifts to take place. First, the economic benefit of
public cloud will grow over time. As more and more work is done on public
clouds, the economies of scale we described in Section 2 will kick in, and the cost
premium on private clouds will increase over time. Customers will increasingly
be able to tap into the supply-side, demand-side and multi-tenancy savings as
discussed previously. As shown in Fig. 27 this leads to an upward shift along the
Fig 24: CLOUD READY vertical axis.
WORKLOADS (2010)
Fig 27: EXPECTED PREFERENCE SHIFT FOR PUBLIC AND PRIVATE CLOUD
Source: Microsoft Survey Question 'In the next 12-24 months, please indicate if a cloud
offering would augment on-prmise offering or completely replace it
An additional factor is that many app portfolios have been developed over the
past 15-30 years and are tightly woven together. This particularly holds true for
ERP and related custom applications at larger companies who have more sizable
application portfolios. Apps that are more isolated‘ such as CRM, collaboration,
or new custom apps may be more easily deployed in the cloud. Some of those
apps may need to be integrated back to current on-premises apps.
Before we draw final conclusions, we need to make sure we avoid the horseless
carriage syndrome and consider the likely shift along the two axes (economics
and private preference).
Source: Microsoft.
31

38. At the same time, some of the barriers to cloud adoption will begin to fall. e-signatures became more acceptable. Today, most contracts (including those for
Many technology case studies show that, over time, concerns over issues like opening bank accounts and taking out loans) can be signed with an e-signature.
compatibility, security, reliability, and privacy will be addressed. This will likely also The large group of customers who are rapidly increasing reliance on public
happen for the cloud, which would represent a shift to the left on Fig. 27. Below clouds—small and medium businesses (SMBs) and consumers of Software as a
we will explore some of the factors that cause this latter shift. Service (SaaS)—will be a formidable force of change in this area. This growing
constituency will continue to ask governments to accommodate the shift to cloud
Cloud security will evolve by modernizing legislation. This regulatory evolution will make public cloud a
Public clouds are in a relatively early stage of development, so naturally critical ar- more viable alternative for large enterprises and thus move segments along the
eas like reliability and security will continue to improve. Data already suggests that horizontal axis toward public cloud preference.
public cloud email is more reliable than most on-premises implementations. In
PaaS, the automatic patching and updating of cloud systems greatly improves the Decentralized IT (also known as ‘rogue IT’) will continue to lead
security of all data and applications, as the majority of exploited vulnerabilities take the charge
advantage of systems that are out-of-date. Many security experts argue there are Many prior technology transitions were led not by CIOs but by departments, busi-
no fundamental reasons why public clouds would be less secure; in fact, they are ness decision makers, developers, and end users – often in spite of the objections
likely to become more secure than on premises due to the intense scrutiny provid- of CIOs. For example, both PCs and servers were initially adopted by end users
ers must place on security and the deep level of expertise they are developing. and departments before they were officially embraced by corporate IT policies.
More recently, we saw this with the adoption of mobile phones, where consumer
Clouds will become more compliant adoption is driving IT to support these devices. We‘re seeing a similar pattern in
Compliance requirements can come from within an organizational, industry, or the cloud: developers and departments have started using cloud services, often
government (e.g., European Data Protection Directive) and may currently be without the knowledge of the IT group (hence the name rogue clouds). Many
challenging to achieve with cloud withouta robust development platform designed business users will not wait for their IT group to provide them with a private cloud;
for enterprise needs. As cloud technologies improve, and as compliance require- for these users, productivity and convenience often trump policy.
ments adapt to accommodate cloud architectures, cloud will continue to become It is not just impatience that drives rogue clouds; ever-increasing budgetary
more compliant, and therefore feasible for more organizations and workloads. constraints can lead users and even departments to adopt cheaper public cloud
This was the case, for example, with, e-signatures, which were not accepted for solutions that would not be affordable from traditional channels. For example,
many contracts and documents in the early days of the Internet. As authentication when Derek Gottfrid wanted to process all 4TB of the New York Times archives
and encryption technology improved and as compliance requirements changed, and host them online, he went to the cloud without the knowledge of the Times‘
32

39. Fig 28: INCREASING ADOPTION OF SOFTWARE AS A SERVICE (SAAS)
IT department17. Similarly, the unprecedented pricing transparency that the public
cloud offers, will put further pressure from the CEO and CFO on CIOs to move to
the public cloud.
CIOs should acknowledge that these behaviors are commonplace early in a
disruption and either rapidly develop and implement a private cloud with the
same capabilities or adopt policies which incorporate some of this behavior, where
appropriate, in IT standards.
Source: Gartner.
Perceptions are rapidly changing
Strength in SaaS adoption in large enterprises serves as proof of changing Revisiting our horseless carriage analogy, we see that cars became a huge
perceptions (Fig. 28) and indicates that even large, demanding enterprises are success not simply because they were faster and better (and eventually more
moving to the left on the horizontal axis (i.e., reduced private preference). Just a affordable) than horse-drawn carriages. The entire transportation ecosystem
few years ago, very few large companies were willing to shift their email, with all had to change. Highway systems, driver training programs, accurate maps and
the confidential data that it contains, to a cloud model. Yet this is exactly what is signage, targeted safety regulation, and a worldwide network of fueling infra-
happening today. structure all had to be developed to enable this transition. Each successive de-
velopment improved the value proposition of the car. In the end, even people‘s
As positive use cases continue to spur more interest in cloud technology, this virtu- living habits changed around the automobile, resulting in the explosion of the
ous cycle will accelerate, driving greater interest in and acceptance of cloud. suburbs in the middle part of the 20th century. This created net new demand
for cars by giving rise to the commuting professional class. This behavioral
In summary, while there are real hurdles to cloud adoption today, these will likely change represented a massive positive feedback loop that inexorably made the
diminish over time. While new, unforeseen hurdles to public cloud adoption may automobile an essential, irreplaceable component of modern life.
appear, the public cloud economic advantage will grow stronger with time as
cloud providers unlock the benefits of economics we discussed in Section 2. While Similarly, we believe cloud will be enabled and driven not just by economics
the desire for a private cloud is mostly driven by security and compliance concerns and qualitative developments in technology and perception, but by a series of
around existing workloads, the cost effectiveness and agility of the public cloud will shifts from IT professionals, regulators, telecom operators, ISVs, systems inte-
enable new workloads. grators, and cloud platform providers. As cloud is embraced more thoroughly,
http://open.blogs.nytimes.com/2007/11/01/self-service-prorated-super-computing-fun/
17
its value will increase.
33

40. This future won‘t materialize overnight. IT leaders need to develop a new 5- to
the JourNeY 10-year vision of the future, recognizing that they and their organizations will
play a fundamentally new role in their company. They need to plot a path that
to the Cloud connects where they are today to that future. An important first step in this is
to segment their portfolio of existing applications (Fig. 29). For some apps the
economic and agility benefits may be very strong so they should be migrated
Because we are in the early days of the cloud paradigm shift, there is much quickly. However, barriers do exist today, and while we outlined in section 3
confusion about the direction of this ongoing transformation. In this paper, that many of them will be overcome over time, cloud may not be ready for
we looked beyond the current technology and focused on the underlying some apps today. For tightly integrated apps with fairly stable usage patterns, it
economics of cloud to define the destination - where all of this disruption and may not make senseto move them at all, similar to how some mainframe apps
innovation is leading our industry. Based on our analysis, we see a long-term were never migrated to client/server. While new custom apps don‘t have the
shift to the cloud driven by three important economies of scale: (1) Larger legacy problem, designing them in a scalable, robust fashion is not always an
datacenters can deploy computational resources at significantly lower cost than easy task. Cloud optimized platforms (Platform as a Service) can dramatically
smaller ones; (2) Demand pooling improves the utilization of these resources, simplify this task.
especially in public clouds; and (3) Multi-tenancy lowers application main- This transition is a delicate
tenance labor costs for large public clouds. Finally, the cloud offers unparal- balancing act. If the IT or-
Fig 29: SEGMENTING IT PORTFOLIO
leled levels of elasticity and agility that will enable exciting new solutions and ganization moves too quickly
applications. in areas where the cloud is
For businesses of all sizes, the cloud represents tremendous opportunity. It not ready, it can compromise
represents an opportunity to break out of the longstanding tradition of IT business continuity, security,
professionals spending 80 percent of their time and budget keeping the lights and compliance. If it moves
on, with few resources left to focus on innovation. Cloud services will enable too slowly, it can put the
IT groups to focus more on innovation while leaving non-differentiating company at a significant
activities to reliable and cost-effective providers. Cloud services will enable competitive disadvantage
IT leaders to offer new solutions that were previously seen as either cost pro- versus competitors who do
hibitive or too difficult to implement. This is especially true of cloud platforms take full advantage of cloud
(Platform as a Service), which significantly reduce the time and complexity of capabilities, giving up a cost,
building new apps that take advantage of all the benefits of the cloud. Source: Microsoft agility, or value advantage.
34

41. Moving too slowly also increases the risk that different groups or individuals customer by ignoring the complexities of this transformation.
within the company will each adopt their own cloud solution in a fragmented and
uncontrolled fashion (rogue IT), wresting control over IT from the CIO. IT leaders At Microsoft, we are all in on the cloud. We provide both commercial SaaS (Office
who stay ahead of the cloud trend will be able to control and shape this transi- 365) and a cloud computing platform (Windows Azure Platform). Office 365
tion; those who lag behind will increasingly lose control. features the applications customers are familiar with like Exchange email and
SharePoint collaboration, delivered through Microsoft‘s cloud. Windows Azure
To lead the transition, IT leaders need to think about the long term architecture is our cloud computing platform, which enables customers to build their own
of their IT. Some see a new role emerging, that of a Cloud Services Architect, who applications and IT operations in a secure, scalable way in the cloud. Writing
determines which applications and services move to the cloud and exactly when scalable and robust cloud applications is no easy feat, so we built Windows Azure
such a move takes place based on a business case and a detailed understand- to harness Microsoft‘s expertise in building our cloud-optimized applications
ing of the cloud capabilities available. This should start by taking inventory of like Office 365, Bing, and Windows Live Hotmail. Rather than just moving virtual
the organization‘s resources and policies. This includes an application and data machines to the cloud, we build a Platform as a Service that reduces complexity
classification exercise to determine which policy or performance requirements for developers and IT administrators.
(such as confidential or top secret data retention requirements) apply to which
applications and data. Based on this, IT leaders can determine what parts of their Microsoft also brings to the cloud the richest partner community in the world. We
IT operation are suitable for public cloud and what might justify an investment have over 600,000 partners in more than 200 countries servicing millions of busi-
in private cloud. Beginning in this manner takes advantage of the opportunity of nesses. We are already collaborating with thousands of our partners on the cloud
cloud while striking balance between economics and security, performance,
transition. Together we are building the most secure, reliable, scalable, available,
and risk.
cloud in the world.
To accomplish this, IT leaders need a partner who is firmly committed to the Over the last three decades, Microsoft has developed strong relationships with
long-term vision of the cloud and its opportunities, one who is not hanging on to IT organizations, their partners, and their advisors. This offers us an unparalleled
legacy IT architectures. At the same time, this partner needs to be firmly rooted understanding of the challenges faced by today‘s IT organizations. Microsoft is
in the realities of today‘s IT so it understands current challenges and how to both committed to the cloud vision and has the experience to help IT leaders on
best navigate the journey to the cloud. IT leaders need a partner who is neither the journey.
incentivized to push for change faster than is responsible nor to keep IT the same.
Customers need a partner who has done the hard work of figuring out how
best to marry legacy IT with the cloud, rather than placing that burden on the
35

42. CoCa-Cola Coca-Cola Enterprises (CCE)
employs approximately 72,000
eNterprises
selects Microsoft SharePoint Online
people in 431 facilities around
the globe. Much of its workforce
is mobile with 55,000 vehicles
to advance productivity and 2.4 million coolers, vending
machines, and beverage
dispensers. With increasing
OVERVIEW competition in the marketplace,
Country or Region: Worldwide CCE needed a more effective way
Industry: Consumer goods Retail Microsoft gave to collaborate with its employees,
us an incredible to increase its productivity, to
Customer Profile Solution platform that allows enable better flow of information
Coca-Cola Enterprises (CCE) is the CCE implemented a Microsoft-based us to do a number and to create more time for
world’s largest marketer, producer, and hosted worldwide intranet with of things, beyond sales persons to engage with
distributor of nonalcoholic beverages, messaging and collaboration tools, hosting our portal. customers. Its worldwide
which it delivers with the industry’s which are accessible to all employees It provides workflow presence required employees and
most effective marketplace execution. from any device, enabling employees management and executives to spend numerous
to boost productivity and time with team collaboration hours on the road every week,
Business Situation customers. across geographies travelling to internal meetings.
CCE’s increasing competition was and time zones. With Microsoft® Online Services
resulting in declining revenues. Benefits JoHn key, technologies, CCE can save
This required company executives • Productivity andcustomer focus Assistant Director travel expenses through online
to launch a new strategic • Companywide intranet Communication meeting tools and collaboration
direction, mandating a platform to • IT transformation and Collaboration platforms that span time zones
communicate and engage with all • Effective remote teams Technologies, CCE and geographies.
employees. • Deskless worker access
36

43. SituAtion Coca-Cola Enterprises faces CEO John Brock and CIO Esat
Coca-Cola Enterprises strong competition from Sezer agreed that in order to
(NYSE: “CCE”) is the world’s other beverage companies evolve the company culture
largest marketer, producer, and needed a way to work and improve customer
and distributor of Coca- more effectively with its relationships at CCE, the
Cola products. Coca-Cola customers and partners. This leadership team needed the
Enterprises’ growing required innovation and a ability to communicate with
product portfolio includes new way of communicating all CCE employees, especially
the world’s greatest brands within the corporation. In those managing day-to-day
and beverages which it 2008, CCE acknowledged that operations in the field. Most
delivers with the industry’s its current communications of the diverse CCE personnel
most effective marketplace platforms were no longer work in a distributed manner.
execution. Today, it serves enabling the innovation and Employees in manufacturing
419 million consumers, collaboration required to facilities had limited access Our CEO challenged
throughout North America, take it to the next level to to the corporate network. us to find better ways
the U.S. Virgin Islands, other compete in an increasingly Its mobile, customer-facing to connect all of our
Caribbean islands, Belgium, demanding economic employees, who are on the employees…. SharePoint
France, Great Britain, environment. front line, making sales and Online addressed those
Luxembourg, Monaco, and positioning the CCE products challenges and helped
the Netherlands. It employs CCE required a centralized in store environments, us launch from a legacy
approximately 72,000 people platform on which to also lacked convenient infrastructure to a
and operates 431 facilities, promote the company’s access to company solution which provided
55,000 vehicles, and 2.4 initiatives. Its messaging content. Additionally, CCE better business value to
million coolers, vending was based largely around needed to drive action and all of our people.
machines, and beverage e-mail, which was unable information to all employees keVin flowerS,
dispensers. to reach its largely mobile in its business by role. Director of Enabling
workforce. Chairman and CCE’s infrastructure did Technologies, CCE
37

44. not allow for this, making journey. IT considered using Communications Online,
it difficult for employees to partners to address its and Microsoft Office Live
locate appropriate content messaging needs and wanted Meeting, CCE consolidated
in a timely manner. Kevin to expand this to include and streamlined its IT
Flowers, Director of Enabling development of its corporate partnerships and enhanced
Technologies, says, “John intranet. Both solutions its focus on providing
Brock, our CEO, challenged needed to support mobile value to the business. CCE
us to find better ways to devices to reach employees in deployed its corporate
connect all of our employees. manufacturing facilities and intranet on SharePoint Online
He asked us to create a the field. as its primary collaboration
unified way to reach all of platform, which included
the field resources for more Solution content management,
We had a massive than 400 locations in the With many older systems, enterprise search, workflow,
change agenda that U.S. alone. SharePoint Online CCE had several partners line of business integration,
we were trying to addressed those challenges providing dozens of and rights management
communicate to the and helped us launch from communication and capabilities.
organization….We had a legacy infrastructure to collaboration solutions.
a lot of objectives, but a solution which provided CCE saw an opportunity to In its assessment of whether
the two primary ones better business value to all of optimize its infrastructure by to upgrade its current
were a better way to our people.” broadening its relationship platform or transform
communicate with our with Microsoft. With the company to a hosted
employees while at Taking on a new project like the implementation of model, CCE considered
the same time driving building a corporate intranet Microsoft Online Services, options presented by several
effectiveness and was exciting yet daunting as which includes Microsoft major software and service
efficiency. IT resources were engaged SharePoint® Online, providers. CCE desired a
lAuren SAyeSki, on many other initiatives as Microsoft Exchange partnership where it could
Communications, CCE part of their transformation Online, Microsoft Office utilize its enterprise software
38

45. on premises with integrated SeCurity CCE’s, gave us a great sense
software services in the cloud, Initially, Tim Smith, the of comfort that Microsoft
and turned to Microsoft to Chief Information Security has thought of all the right
execute upon its objectives. Officer at CCE needed to be things.”
Planning for the project convinced that Microsoft
began in mid January 2008 would provide security A fundamental shift occurred
and was completed by mid measures that matched or in how CCE viewed Microsoft
May. Microsoft Exchange exceeded CCE’s stringent services and capabilities
Online and Microsoft requirements. Visiting the running in Microsoft data
SharePoint Online received Tukwila data center, Smith centers, not as an outsourcing
“service acceptance” by July was impressed by the arrangement, but as a
and user migration for both virtual and physical security security-enhanced extension To have one source
began in September. By provided by Microsoft, of CCE’s own enterprise of the truth is very
the end of 2008, 23,000 as well as the third-party network. important as teams
users had been migrated SAS 70 audit reports that start to form across the
to Exchange Online, 30,000 Microsoft uses to monitor the right information at globe. You want to be
users were on SharePoint security compliance. Tim the right time sure you always have
Online, and 10,000 users Smith, CCE Chief Information CCE decided to use Microsoft the latest version of
had migrated from IBM Security Officer, says, “Step integrated communication the document you’re
Sametime to Microsoft Office one in getting comfortable and collaboration tools to working on. SharePoint
Communications Server with giving our data to streamline communication Online makes that
for instant messaging. It Microsoft was visiting one across its entire organization. possible.
added Microsoft Office Live of their data centers. To A critical component of the JoHn key,
Meeting for Web and video understand the physical corporate intranet portal at Assistant Director
conferencing in April 2008. nature of what they’re doing CCE was the integration of Communications
to safeguard not only their SAP user role information and Collaboration
own information, but also into its on-premises Active Technologies, CCE
39

46. Directory® service and ease and effectiveness of of which enable seamless
its Microsoft SharePoint Collaboration collaboration across
Online environment. This Seeing the business need geographies and time zones.
will allow CCE to target and the ability to increase John Key, Assistant Director
the right information to its communication and of Communication and
the right employee based collaboration capabilities, Collaboration Technologies,
on roles outlined in SAP. CCE was able to move says, “To have one source of
By integrating SAP data very quickly to execute the truth is very important as
into SharePoint sites, CCE the migration. Lauren teams start to form across the
employees can access Sayeski, Public Affairs and globe. You want to be sure
data through recognizable Communications Manager, you always have the latest
Microsoft Office programs, says, “We had a massive version of the document
giving employees the ability
change agenda that we were you’re working on. SharePoint
to make information for
There was huge trying to communicate to Online makes that possible.”
business operations easy
excitement and the organization. We had
to find, share, and update.
energy around the Previously, CCE did not
a lot of objectives with this knowledge Sharing and
CCE partnership with have a common solution
project, but the two primary Social networking
Microsoft. This has that enabled document
ones were a better way CCE’s executive
been one of the best management. Documents to communicate with our communication prior to its
IT partner projects CCE that needed to be shared employees while at the same new corporate intranet was
has experienced and we with colleagues were housed time driving effectiveness historically top-down. With
have the added value in shared folders on network and efficiency.” Content its Microsoft SharePoint
of a longer IT roadmap drives, sent via e-mail, or management features on Online intranet solution, it
with Microsoft.... stored in team rooms, all SharePoint Online include now has open dialogue with
keVin flowerS, of which were limited in version management, employees communicating
Director of Enabling access, version control, and workflow management, to leadership and with each
Technologies, CCE searchability. and rights management, all other. Sayeski says,
40

47. “We focused on ways for them with the information that we can get it
employees to comment they need, where and when very quickly.”
back to the organization as they need it most. Microsoft
well as communicate with SharePoint Online has been worldwide Collaboration
each other. Now we have embraced by employees CCE now has a robust
the ability to post comments across the company. Within intranet portal to support
on the intranet and create four weeks of enabling users worldwide collaboration and
team sites. We’re finding that to create team sites, there communication of corporate
employees are talking to each were over 800 requests for strategy. Sapient Consulting
other and using each other’s sites focused on business and Slalom Consulting
resources, sharing knowledge. priorities and customer- designed the custom intranet
We launched our first CEO facing business teams. Tom and collaboration solution on
blog last year and in the first Barlow, Vice President of top of Microsoft SharePoint
five minutes had more than Business Transformation, Online. Sapient created the
40 responses back. That’s just N.A., says, “From a business compelling visual design
the beginning; we know that transformation perspective, with a user-based enterprise
the intranet can be so much we have a lot of projects portal workflow. Slalom
more powerful as a place underway which focus on designed and developed
of action.” revenue generation and cost custom SharePoint features
savings. Through the use of in accordance with Microsoft
BenefitS SharePoint Online, we’re able development standards and
Productivity and to educate our team so that best practices, as well as
Customer focus they can find information and provided guidance to CCE
The Microsoft solution establish interdependencies regarding the deployment
enabled CCE to bring new across the different projects. and configuration options
technologies to everyone SharePoint allows us to code available in SharePoint
in the company, providing and manage information so
41

48. Online. Sayeski says, “When things like CCE’s HR process Through the intranet, CCE
you have a workforce like improvement and self-service employees are eager to be
ours, 72,000 strong and HR portal and provides a part of the company direction
geographically dispersed, that communication platform for and dialogue. Brett Kirkland,
may or may not have access CCE’s desk-based workers. Collaboration Architect,
to technology, it can be a CCE has also increased says, “The SharePoint Online
challenge to ensure that the employee engagement search engine is ten times
message of the organization and education around better. It allows us to make
is getting through with the corporate responsibility items more discoverable, to
clarity and the speed that and sustainability through check them in and out, and
you want it to. We focused the portal content, thereby surface particular items that
SOfTWARE & SERVICES heavily on the use of video, addressing the cultural we consider pieces of content
Microsoft Exchange Online particularly with our CEO, change initiative. Sayeski that should rise to the top.
Microsoft SharePoint Online to ensure that some of our says, “There have been The SharePoint solution
Microsoft OfficeCommunications most critical messages were some particular areas where also gives IT more control
Online being captured in a way that we’ve seen that concept of and governance over what
Microsoft Office Live Meeting the audience immediately two-way dialogue playing content is published and how
understood. So combining out very well. One is in our it is ranked and profiled in
SERVICES the power of video with the corporate responsibility search.”
Microsoft Services intranet gave us the ability to and sustainability efforts
touch many more people.” where employees are Key says, “Microsoft gave us
PARTNERS sharing—actively sharing an incredible platform that
Slalom Consulting Powerful Search with their own ideas and their allows us to do a number of
Sapient enterprise Content own solutions within their things, beyond hosting our
Binary Tree Management own facilities about ways portal. It provides workflow
cococola The corporate intranet also they’re generating energy management and team
serves as a central location for effectiveness.” collaboration across
42

49. geographies and time zones.” desktop voice and video for
multi-user applications and
the road Ahead adding more than 10,000
In phase II, CCE will be BlackBerry users.
expanding the Microsoft
footprint to reach an Kevin Flowers concludes,
additional 42,000 deskless “There was huge excitement
workers who work in the and energy around the CCE
field or in sales/distribution partnership with Microsoft.
facilities. These employees This has been one of the best
do not have computers but IT partner projects CCE has
will be enabled in phase II to experienced, and we have
have access to the intranet the added value of a longer
via Microsoft SharePoint IT roadmap with Microsoft
Online through computer than if CCE had built the www.slalomconsulting.com
workstations at their facilities. solution on premises. This
Additionally, Microsoft is project has exceeded our
co-developing a sales force expectations from an IT
automation system that will standpoint, showing how
further take advantage of well an organization can lay a www.sapient.com
SharePoint Online and enable foundation and transform the
local merchandisers to be way people communicate in a
more efficient in getting the large company.”
things they need into the
outlets and stores. CCE will www.binarytree.com
also be using Microsoft Office
Communications Server
43

50. glaxosmithKliNe
leads the Way With Microsoft
GlaxoSmithKline (NYE: GSK)
is a pharmaceutical industry
leader: supplying a quarter of
Online Services the world’s vaccines, spending
over $13 million each day to
research new medicines, and
providing many of the world’s
OVERVIEW leading prescription medicines and
Country or Region: Global We have chosen consumer healthcare products. It
Industry: Pharmaceuticals Microsoft Online is estimated that GlaxoSmithKline
Services because makes up seven percent of the
Customer Profile Solution it promises to world’s pharmaceutical market,
Second largest pharmaceutical GlaxoSmithKline chose to deploy deliver a simple and it is one of the few companies
company in the world, GlaxoSmithKline Microsoft Business Productivity intuitive Information committed to researching vaccines
supplies a quarter of the world's Online Suite – including Microsoft® Workplace that for the World Health Organization’s
vaccines and produces some of the Exchange Online, Microsoft® Office should not only three priority diseases – HIV/
leading prescription medicines and SharePoint Online, Microsoft® Office bring value to the AIDS, tuberculosis, and malaria.
consumer healthcare products. Communications Online, Microsoft® company through Yet, an internal strategic review
Office Live Meeting and the simplification, but of their IT systems outlined a
Business Situation Microsoft® Deskless Worker Suite. provide an improved need to take a new approach to
GlaxoSmithKline needed to improve user experience and collaboration, support growing
collaboration with partners, to Benefits ultimately create a markets, and address costs.
improve effectiveness in growing • Reduce Operational Costs more productive Illustrating its industry leadership,
markets, to move away from • Drive Innovation GSK. GlaxoSmithKline found its solution
customized solutions, and to lower the • Improve Collaboration Bill louV, in pioneering Microsoft Online
cost of operations and investments. • Simplify User Experience Chief Information Officer, Services solutions.
GlaxoSmithKline
44

51. SituAtion After an internal Solution
In 2001, after the merger strategic review in 2007, GlaxoSmithKline evaluated
of GlaxoWellcome and GlaxoSmithKline recognized a number of data points
SmithKline Beecham, several points of needed before making a decision.
GlaxoSmithKline had to improvement: the ability to “The team reviewed, in
integrate two complex collaborate with external detail, what services were
IT systems. In order to partners, effectiveness at being offered at what service
successfully make this supporting growing markets levels around the globe, how
merger, they chose the Notes outside of the UK and USA, our existing technologies
platform SmithKline had a requirement to move away were used as application
strongly invested in over the from customized solutions, platforms,” says Ingo Elfering,
Exchange platform Glaxo and a decrease in the VP of Information Technology
utilized. This provided a single operating and investment Strategy, GlaxoSmithKline,
communications channel costs. The review also noticed “and how the various tools
and B2E platform across the that the current Notes worked together to create
global company. By using platforms were reaching their an integrated collaboration
several in-house developed refresh cycles, necessitating environment now and in
solutions, GlaxoSmithKline action and renewed the future.” GlaxoSmithKline
supported collaboration investment for the next conducted several user We wanted to build
and Lotus Notes Sametime three years. To research their studies, but the focus the business case first
for instant messaging. In options, GlaxoSmithKline wasn’t just on the present. so that it would really
conjunction with the Lotus constructed a cross-functional The future of changing be a slam dunk in the
Notes and Domino system, team of representatives pharmaceutical user profiles, approval process
GlaxoSmithKline also used from the various global IT devices, and software was Bill louV,
Google’s Postini mail filtering organizations, partners in also a strong factor. Chief Information Officer,
service. the business units, and major GlaxoSmithKline
growth markets.
45

52. In the conservative industry Online Suite – including to its entire spectrum of
of pharmaceuticals, Microsoft® Exchange Online, information workers. This
GlaxoSmithKline was looking Microsoft® Office SharePoint suite offers those who don’t
to put together the facts. Online, Microsoft® Office have a laptop the ability
While GlaxoSmithKline was Communications Online, to go to a Web kiosk. It’s a
looking for a productivity and Microsoft® Office Live lighter version and a more
collaboration increase from Meeting and the Microsoft® manageable option for the
the switch, the first priority Deskless Worker Suite to sales force at a lower cost
was to build a strong business deploy to all of its employees to GlaxoSmithKline. The
case. “We wanted to build the worldwide. Everything would Deskless Worker Suite will
business case first so that it be hosted by Microsoft be deployed for 15,000 of
would really be a slam dunk at Microsoft data centers GlaxoSmithKline’s employees,
Moving to Online in the approval process,” says around the globe. and unlike Google Apps,
Services will enable Bill Louv, Chief Information this enables both the full-
us to reduce our IT Officer, GlaxoSmithKline. The Through Online Services, service Online Services and
operational costs approval process considered Microsoft offers the ability Deskless Worker Suite to be
by roughly 30% of the risk of patient safety to have fully functioning managed in a central location
what we’re currently and confidential data, but a applications with a lean determined by the
spending…. A variable strong business case led to presence. The software will company itself.
cost subscription model the approval of innovative operate in the same capacity
for these collaborative cloud services with Microsoft. in a hosted solution as it BenefitS
technologies allows us would if it were implemented The global implementation of
to more rapidly scale or GlaxoSmithKline chose to on-premise. By deploying the Microsoft Online Services at
divest our investment as replace the Lotus Notes, Business Productivity Suite GlaxoSmithKline is intended
necessary Domino, and Postini with the Deskless Worker to have numerous advantages
AlAStAir roBertSon, services with the Microsoft Suite, GlaxoSmithKline is able for the company including:
VP of Information Workplace Business Productivity to offer total functionality reducing operational costs,
46

53. driving innovation and Information Workplace. around communication
collaboration, expanding The difference for and collaboration to
external collaboration, GlaxoSmithKline means Microsoft. This ensures that
and simplification of user putting more money back we can focus on our core
experience. This solution is into the business. competencies and also that
much more effective than we have an ‘evergreen’ IT
the Notes and Google Apps drive innovation strategy where the latest
combination in driving lower While GlaxoSmithKline is able technologies are always at
costs, more collaboration, and to reduce costs with Microsoft our disposal via the cloud,”
greater accessibility. Online Services, productivity says Elfering.
is not harmed, but enhanced.
reduce operational Costs Through Microsoft Online The Microsoft Online Services
The use of Microsoft Online Services, GlaxoSmithKline model drives this innovation GlaxoSmithKline has
Services offers a dramatic can utilize the IT department as well as allows the increased approximately 100,000
yearly reduction in costs. for key projects instead of flexibility in moving forward. employees, hundreds
“Moving to Online Services tasking them with managing The subscription service can of business partners,
will enable us to reduce our IT the infrastructure software be tailored to fit growing and locations around
operational costs by roughly or servers. and changing needs. So that the world, so effective
30% of what we’re currently when GlaxoSmithKline adapts collaboration is critical to
spending. The ability to The model allows for to changing market, its our business. We have
introduce a variable cost increased innovation software adapts too. chosen Microsoft Online
subscription model for these where it counts. “The team Services…
collaborative technologies needed the ability to focus expand external Bill louV,
allows us to more rapidly internal IT on driving further Collaboration Chief Information Officer,
scale or divest our investment innovation that differentiates GlaxoSmithKline is GlaxoSmithKline
as necessary,” confirms GSK in the market while aggressively driving a more
Alastair Robertson, VP of offloading innovation externally collaborative
47

54. business through all Simplification of User because it promises to
practices: research and experience deliver a simple intuitive
development, manufacturing, Moving away from Information Workplace that
and sales. With Microsoft the customized should not only bring value
Online Services, this solutions environment, to the company through
effort can be maximized GlaxoSmithKline was looking simplification, but provide
without compromises in for a simple solution that an improved user experience
the security and integrity would effectively extend and ultimately create a more
of sensitive information. to the many branches, productive GSK.”
The information is stored regions, and employee types
in the cloud, allowing internally. The company
for a more direct form of needed a solution that would
access than if it were stored also translate externally to
directly on an internally increase collaboration and
SOfTWARE AND SERVICES maintained server. Also, as the resulting innovation. That
Products Louv notes, the Microsoft is why GlaxoSmithKline chose
Microsoft Data Centers Services brand is more common and the Microsoft solution.
SERVICES therefore easily interfaced
Microsoft Exchange Online than its competitors. This “GlaxoSmithKline has
Microsoft SharePoint Online supports collaboration approximately 100,000
Microsoft Office Communications between partners and employees, hundreds of
Online GlaxoSmithKline, allowing business partners, and
Microsoft Office Live Meeting for a more innovative and locations around the world,
Online competitive business. so effective collaboration
Microsoft Deskless Worker Suite is critical to our business,”
says Louv, “We have chosen
Microsoft Online Services
48

55. Headquartered in Pune, India, KPIT
Cummins is an emerging leader
in providing consulting, solutions
Kpit servers to 20, reduces costs
shrinks 120
CummiNs and services in the fields of finance,
accounts and manufacturing. It is
one of the world’s first few companies
and cuts energy usage with virtualization to achieve the BS25999:2007,
ISO9001, ISO 27001:2005,
OVERVIEW CMMI- level 5 certifications. With
Country or Region: India accumulation of servers, it was
Industry: IT Services becoming increasingly difficult for
Virtualization has the company to manage costs and
Customer Profile Solution helped to reduce the handle issues like high expenditure
KPIT Cummins is a global IT To optimize the growing data provisioning time for on technology hardware, software
consulting and product engineering centers operations, KPIT Cummins new applications by licensing, power consumption, and
partner company focused on the implemented a virtualization solution almost 6-8 weeks physical space. Hence, KPIT Cummins
Manufacturing (Automotive, Industrial centered on Windows Server® 2008 helping us to deploy decided to migrate operations
and Hi-Tech) and Diversified Financial Hyper-V™ technology to consolidate applications within to Windows Server® 2008 with
Services industries. hardware, minimize rack space and 4 hours on the Hyper-V™ technology to take
ownership and software cost. virtualized platform. advantage of server virtualization
Business Situation MAndAr MArulkAr, efficiencies. With its new optimized
KPIT Cummins wanted to cut Benefits Head, Technical Infrastructure infrastructure, the company can grow
capex and opex expenses, reduce • Consolidates multiple servers Management Services, KPIT faster and dramatically reduce IT
the number of physical servers it • Reduces power consumption Cummins costs. The company has virtualized
operated, and optimize system • Reduces opex and capex cost 120 of its physical servers to 20
flexibility and maintenance to best • Improves service quality servers and thus has optimized space
serve its business requirements. and power use.
49

56. SituAtion India. Besides, it has onsite operations centre that takes
Founded in 1990, KPIT presence in United States, care of network and perimeter
Cummins specializes in United Kingdom, Germany, security and client services
consulting in Governance France, Japan, Singapore, which takes care of desktop
and Regulatory Compliance, South Africa and Poland. and peripheral devices
high end transactional BPO/ support.
KPO and Enterprise Support KPIT Cummins operates
to global customers. The multiple data centers in KPIT Cummins realized that
company is focused on co- its Pune and Bangalore more than 150 servers had
We have trimmed innovating domain intensive centers. To help meet the reached the end of their life,
our physical server technology solutions for needs of more than 5000 they had hardware which
holdings – from 120 manufacturing corporations users across the globe, the was older the 3 years. At the
to merely to servers. in automotive, industrials, hi- company manages more same time, there were more
Currently the entire tech verticals and diversified than 200 servers, storage than 50 servers that had less
setup is running on 20 financial services. It has area networks and business than 30 percent utilisation.
infrastructure servers established state of art eco applications such as SAP Initially the managers planned
virtualized on Microsoft friendly facility equipped R/3 ERP, Microsoft Exchange to replace some of them by
Hyper-V Server 2008. with advanced technologies, Server 2007 with unified new hardware and renew the
The expenses on server processes, and equipment - communication. In addition, annual maintenance contract
boxes have dropped complying with international it manages configuration (AMC) of remaining servers,
drastically by 40 percent standards. management servers, project but these options required
of our data center management applications, considerable capital and
budget. With 4500 employees intranet and portal operating expenses. “Our
SAndeeP GAndHi, worldwide and more than applications, development goal was to deploy Green
Sr. Manager, Data Center 95 active global clients, the and testing servers IT solutions, reduce and
Operations, KPIT Cummins company has offshore centers supporting customer projects. opex expenses by at least
in Pune and Bangalore in The company has a network 15 percent and improve
50

57. asset utilization by 20 maintenance to best serve its The IT team at KPIT Cummins
percent,” explains Mandar business requirements. evaluated several products,
Marulkar, Head, Technical including the Hyper-V™
Infrastructure Management Solution technology included with
Services, KPIT Cummins. “The KPIT Cummins recognized the Windows Server® 2008
growing number of servers, that it could use virtualization operating system, VMware,
however, was resulting in technology to reduce the and others. Considering
more energy consumption number of physical servers in the business requirement,
and increased data centre its data center, and enhance licensing model, cost factor
energy consumption.” the availability of applications and technical support
and services. Shrikant available, the company
With growing server network, Kulkarni, CIO, KPIT Cummins ultimately decided to deploy
the company was incurring concluded that rather than Hyper-V as it provides all the
huge costs for technology paying for many under- functionality needed and
hardware, software licensing, utilized server machines or meets all the requirements.
and power consumption. less efficient server machines, By reducing the number
It recognized that its IT each dedicated to a specific Deployment took place in of physical servers with
environment had become workload, server virtualization Pune and Bangalore centers. the help of Microsoft
too large and complex to would allow consolidating all The process commenced Hyper-V solution, we
be managed effectively and the workloads onto a smaller in April 2009 and was 90 are able to reduce the
efficiently in a traditional number of more fully used percent completed by Oct power consumption
manner. The company also machines. Not only this, 2009. The implementation enormously and thus
wanted to cut back on the he convinced the business dramatically prune its physical helped the company
number of physical servers users the benefits of this server holdings, from 120 to going green.
it operated, improve server technology. 20 systems. The company can SAndeeP GAndHi,
performance, and optimize now efficiently deploy, scale, Sr. Manager, Data Center
system flexibility and and manage a virtualized Operations, KPIT Cummins
51

58. server infrastructure without Management Services, KPIT system by eliminating
the extra cost of a third-party Cummins. some of the servers. By
solution. using Hyper-V to virtualize
BenefitS servers, the company is
Initially the team faced By using Hyper-V able to significantly reduce
some issues to understand technology to virtualize hardware costs and decrease
the technology, manage its physical servers, KPIT the hardware footprint at
virtualized setups and Cummins optimized its its data centers. Now the
convince the business users server environment, cut IT department can support
to move the application on hardware costs and power the business with less
Server virtualization has virtualized platform. But consumption, enhanced hardware, which means lower
brought in significant later on, after 3-4 application server reliability and equipment costs, reduced
reduction in capital migrations, the team utilization, and reduced electrical consumption for
expenditure. We have was quite comfortable in maintenance and support server power and cooling,
consolidated physical migrating the applications costs. and less physical space.
servers by more than without any down
40 percent, reduced times and dynamically Consolidates “We have trimmed our
physical rack space by allocating appropriate Multiple Servers physical server holdings
60 percent resulting in resources. “Virtualization KPIT Cummins decided - from 120 to merely 20
savings of more than 40 has helped to reduce the to use Microsoft Hyper-V servers. Currently the
percent in data center provisioning time for new solution for virtualization entire setup is running on
budget. applications by almost 6-8 instead of paying for 20 infrastructure servers
MAndAr MArulkAr , weeks helping us to deploy many under-utilized server virtualized on Microsoft
Head, Technical Infrastructure applications within 4 hours machines. Consolidations Hyper-V Server 2008. The
Management Services, on the virtualized platform,” helped in running multiple expenses on server boxes
KPIT Cummins says Mandar Marulkar, Head, applications on the same have dropped drastically by
Technical Infrastructure server in single operating 40 percent of our data center
52

59. budget,” elaborates Sandeep footprint in turn giving cost “Server virtualization has The time taken in tracking
Gandhi, Sr. Manager, Data savings as a part of reducing brought in significant the AMCs and other issues
center operations, KPIT energy consumption. Along reduction in capital with servers is now brought
Cummins. with reduced power expenditure. We have down considerably. Fewer
requirements, lesser cooling consolidated physical servers people are required to
reduces Power facilities need to be deployed by more than 40 percent, mange the lesser number of
Consumption for the servers. reduced physical rack space by servers.
The significant reduction in 60 percent resulting in savings
servers contributes hugely reduces opex of more than 40 percent in During the consolidation
to KPIT Cummins “green” and Capex Cost data center budget,” says process, the IT team got
initiatives. “By reducing the The operating and capital Mandar Marulkar, Head, TIMS, a chance to review all the
number of physical servers cost of deploying new servers, KPIT Cummins. existing applications and this
with the help of Microsoft and maintaining and running helped in deactivating some
Hyper-V solution, we are more than 200 servers is improves Service Quality of the old development and
able to reduce the power much higher than fully “Consolidation and testing servers, thus improving
consumption enormously and utilizing 20 servers for all the virtualization reduced the time the service. Consolidation,
thus helped the company in applications. Virtualization needed to provision servers virtualisation and deactivation
going green,” says Sandeep has helped consolidating from several months to just 4 of the applications helped
Gandhi, Sr. Manager, Data practically 10 servers into a hour, restored data in 10% of in reutilisation the existing
center operations, KPIT single virtual server. Loading the time previously required, servers more efficiently for
Cummins. different operating systems and created a highly reliable critical applications avoiding
and applications on a single environment, improving new hardware investments.
Consolidation and virtual server has resulted its quality of service,” says With reduced hardware,
virtualization has aided the into improving the utilisation Mandar Marulkar, Head, TIMS, lesser operating cost, the
company in its objective to up to 70 percent of the less KPIT Cummins. company can offer better
deploy green data centre utilised servers. and competitive prices to its
solutions by reducing carbon customers.
53

60. 3m lauNChes A recognized world leader
Web-based in technology research and
development, 3M wanted to
visual make its decades of expertise in
the workings of the human visual
atteNtioN system available as a service to
customers. Using the Windows
OVERVIEW
Country or Region: United States
Industry: Manufacturing - High tech
serviCeimpact
to heighten design
Azure™ platform, 3M created a
Web-based application that gives
designers the ability to invoke
and electronics complex algorithms to analyze
the effectiveness of a design,
Customer Profile Solution based on how the human eye will
With 75,000 employees and operations 3M used the Windows Azure™ Windows Azure respond. By hosting its application
in more than 60 countries, 3M develops platform to deliver the VAS solution helps 3M customers in Microsoft® data centers, 3M
an extensive range of consumer to customers, taking advantage of take advantage of has made an innovative service
and industrial products. Well-known Microsoft® data center infrastructure complex algorithms available to a global audience,
3M brands include Scotch, Post-it, and service management to keep that encapsulate 30 while minimizing its investment in
Thinsulate, and Scotch-Brite. performance high and costs low. years of research hardware infrastructure and ongoing
and get simple, administration. The solution,
Business Situation Benefits powerful results which permitted developers to
3M wanted to make its Visual • Easy, efficient deployment from their browser, evaluate frequent iterations of the
Attention Service (VAS) available • Lower costs, high scalability almost instantly. application, helped the company
to customers as a Web-based • Excellent customer solution terry Collier, speed time-to-market for its
application, with high performance, Marketing Manager, 3M service and achieve higher quality
scalability, and low infrastructure and results, faster than in a traditional
management costs. development environment.
54

61. SituAtion of research that is used in make the process for designing
From well-known brands such many 3M products - such as things that people interact with
as Post-it products, Thinsulate reflective materials used in visually more science-based
insulation, and Nexcare first roadway signage, emergency and iterative to bring about
aid, to high-strength bonding exit markings, and display more effective results."
tapes, industrial abrasives, and graphics technologies - is
and traffic safety systems, the understanding of how Terry Collier, Marketing
3M products are ubiquitous the human visual system Manager at 3M, adds, "In our
around the world. Founded in works. The company’s vision market research, we found
1902, 3M is a science-based scientists, working in its that designers spend a lot of
company and has developed corporate research labs, time creating, honing, and
thousands of innovative study how the human brain optimizing their images but
products for a broad range processes visual information they can be challenged by the
of markets. The company and have developed complex fact that they don’t ever truly We knew there was
now operates in 60 countries algorithms for predicting what know how people are seeing a a need to make the
and its worldwide sales in a person will notice in a visual design before it’s completed." process for designing
2008 were more than U.S.$25 scene. things that people
billion. 3M’s goal was to provide interact with visually
Bill Smyth, Business Manager designers with predictive more science-based and
3M supports more than at 3M, says, "Our job, on the measurements about how iterative to bring about
40 different technology business and marketing side, their creations - from a logo more effective results.
platforms and has invested is to make the most of these design, to a Web site layout, Bill SMytH,
years of scientific research capabilities." To this end, to the placement of an Business Manager, 3M
in developing them. In fact, Smyth and his colleagues electronic screen in a hotel
7,000 of the company’s identified a use for these lobby - would be perceived
employees are dedicated predictive algorithms. "We by their audience. Also, it was
solely to research. One area knew there was a need to critical that this information
55

62. be immediately available. remember. The prototype, markings such as those seen
"We needed to be able to a Web-based application on a heat map, which areas
provide designers with access that was hosted on 3M data of the image were most likely
to this information directly center servers, enabled users to attract a viewer’s attention.
from their computer desktop, to upload photographs of a (Figure 1.)
multiple times throughout the physical environment or a
design process, so they could graphic design to the VAS. But 3M wanted the
alter their designs in direct The application’s processing application to work efficiently
response to the analyses, engine then evaluated the as part of its customers’
rather than engaging in image for its 'visual saliency' existing design processes. To
lengthy focus group sessions and returned a map of the become a viable offering, the
that happen after a design image that indicated, using VAS application had to be
reaches a near-final state of
completion," says Collier.
The similarities between The company developed a
Windows Azure and our prototype of a Web-based
current development application, called the 3M
environment gave us Visual Attention Service
a huge advantage and (VAS). The service makes
made the decision easy. it possible for designers to
JiM GrAHAM, test the effectiveness of their
Technical Manager, 3M content using visual attention
models, which are based on
algorithms that predict the
elements of a scene that a
viewer is likely to see and to
figure 1. 3M VAS image map indicating areas most likely to attract viewers’ attention
56

63. available to customers in real Solution Windows Azure provides
time, be capable of processing 3M believed that the most developers with on-demand
images and returning near- effective approach would be compute and storage to
immediate results, of scaling to operate the VAS application host, scale, and manage Web
rapidly during peak design from a "cloud computing" applications on the internet
times, such as just prior to environment, in which the through Microsoft data
holiday advertising deadlines, solution would be hosted centers.
and it had to carry a low and managed on the Internet
up-front investment risk for and reside in an external From its experience with
3M. "Especially in the current partner’s data centers. The the Community Technology
economic environment, we company evaluated hosted Preview (CTP) of Windows
have to be very careful about infrastructure offerings from Azure, a Microsoft program
how we invest our capital," Microsoft and others, but, says for early adopters to
says Smyth."We didn’t want Graham, "3M has for a long experiment with prerelease
to invest in costly data center time relied on Microsoft® technology, Graham’s team SQL Azure is of great
infrastructure and capacity tools and technologies to thought that the solution value to 3M because
that, much of the time, would support the development was a good fit for 3M. "The it takes the database
sit idle and unused." of our technology. For similarities between Windows management piece off
this reason, 3M chose the Azure and our current our plate.
Jim Graham, Technical Windows Azure™ platform development environment JiM GrAHAM,
Manager at 3M, adds, from Microsoft." Windows gave us a huge advantage Technical Manager, 3M
"We needed to be able to Azure is a cloud services and made the decision easy,"
provide a high-performance operating system that says Graham. 3M relied on
application to customers serves as the development, the Microsoft Visual Studio®
everywhere, without service hosting, and service 2008 development system to
deploying data centers management environment for produce the VAS application,
around the world." the Windows Azure platform. including Microsoft Visual
57

64. Studio Team System 2008 Azure specifications. "We environment," explains
Team Suite and Microsoft developed the whole user Graham. The VAS interface,
Visual Studio Team System experience, from the ground and the Web site where
2008 Team Foundation up, on Windows Azure," users go to access it, was
Server. It also used Microsoft says Graham. His team also developed using Microsoft
Expression Blend™ 3 design used the Windows Azure ASP.NET 2.0, part of the
software and Microsoft development fabric, which it Microsoft .NET Framework.
SQL Server® 2008 data used to simulate the Windows Graham’s team used the
management software. "We Azure environment on local Microsoft Silverlight™ browser
saw that Windows Azure computers, making it easy plug-in to build controls into
would work well with our to run and test the VAS the application that enable
Visual Studio development application before users to edit and modify
environment. We also saw the deploying it. images they submit to the
opportunity to take advantage VAS processing engine. The
We will be able to of a new technology platform VAS incorporates a Silverlight-enabled controls
deploy much faster on that would allow us to deploy number of unmanaged, are embedded into the ASP.
the Microsoft technology in different countries, with high-performance image- NET application framework,
platform through rapid scaling capabilities processing software libraries creating a seamless experience
Windows Azure than and no up-front capital developed by 3M. "The for users. "Users don’t have
with any other cloud investment," says Graham. Windows Azure development to switch between different
solution we evaluated. To prepare the VAS application fabric helped us perform interfaces to perform certain
JiM GrAHAM, for commercial release, 3M quick iterations of code, functions," explains Graham.
Technical Manager, 3M built a new user. interface. allowing us to overcome
The timing coincided with many of the hurdles we The VAS application relies on
the CTP of Windows Azure, might not have seen until the Access Control Service
so Graham’s team developed we had deployed to a more feature of Windows Azure
the interface to Windows formal staging or production to authenticate users to the
58

65. system, providing access to image processing engine. SQL off our plate," says Graham.
various components of the Azure, as part of the Windows 3M uses Windows Azure
service based on a user’s Azure platform, provides data storage services to 3M VAS and Windows
credentials. 3M used Microsoft automated management store image files and analysis Azure will help our
SQL Azure, a cloud-based capabilities, including built-in generated by the engine, customers spend their
relational database platform data protection, self-healing, and it uses the Queue service marketing dollars more
that is built on SQL Server and disaster recovery - crucial feature to provide users with wisely.
technologies, to manage the for protecting customers’ data. high-performance and near- Bill SMytH,
images that users upload. SQL "SQL Azure is of great value immediate response times Business Manager, 3M
Azure also is used to deliver to 3M because it takes the even when the application is
analytical results from the database management piece inundated with high traffic
during peak load times.
figure 2. Diagram of 3M VAS deployed on Windows Azure
In short, explains Graham,
"With Access Control, we can
create a pipeline from the ASP.
NET-based interface, to the
Queue service, to the VAS
engine where the analysis
is performed using the
algorithms our scientists have
developed." (Figure 2.)
Currently, VAS helps customers
evaluate any number of
graphical or photographic
images that they choose to
59

66. upload to the application. responds. By using a cloud fully supported in Windows
In future versions, 3M plans service, 3M experienced an Azure. And, the Windows
to provide customers with efficient deployment and Azure development fabric
the ability to create entire lowered its infrastructure costs. provided a great simulation
databases of test images, The highly scalable Web- environment in which we
enabling users to experiment based service will make it could see our work in progress
with, for example, the content possible for 3M customers to and incorporate feedback-
of an advertisement in a optimize designs in response early and often. We rapidly
SOfTWARE AND SERVICES variety of design scenes - or, to scientific analysis, thereby deployed interim releases
Windows Azure Platform conversely, a number of helping to make the most of to stakeholders within the
Windows Azure different types of advertising their marketing dollars. company. The Windows Azure
Access Control Service content in one particular development fabric has been
Microsoft SQL Azure scene. 3M plans to release Easy, Efficient Deployment a significant time savings."
Microsoft Server Product Portfolio a final version of the VAS The close connection between
Microsoft SQL Server 2008 application running on Windows Azure and the 3M In addition, once the VAS
Microsoft Visual Studio Windows Azure to customers Visual Studio development application development is
Microsoft Visual Studio Team by mid-November 2009. environment helped the complete and the service is
System 2008 Team Foundation company achieve a rapid made publicly available on
SERVER BenefitS deployment of the VAS Windows Azure, 3M will be
Microsoft Visual Team System Using the Windows Azure application. "We were able able to quickly release product
2008 Team Suite updates and enhancements.
platform, 3M developed a to wrap our core technology
Microsoft Expression
highly innovative Web-based into Windows Azure in less "We will be able to deploy
Microsoft Expression Blend 3
service that can dramatically than eight weeks. It was very much faster on the Microsoft
Technologies
alter and improve the process fast, "says Graham. "The tools technology platform through
Microsoft ASP.NET 2.0
for designing images and and technologies we were Windows Azure than with
Microsoft .NET Framework
environments that rely on already using, for instance any other cloud solution we
Microsoft Silverlight
how the human visual system forms authentication, are evaluated," says Graham.
60

67. lower Costs, data from one region to viewer’s response to a scene. impact of the designs," says
High Scalability another, without having to "Windows Azure helps 3M Graham.
With Windows Azure, 3M replicate databases, and customers take advantage
capitalizes on a pay-as-you- without all of the service of complex algorithms that "3M VAS and Windows Azure
use pricing model to minimize management we would encapsulate 30 years of will help our customers spend
hosting costs and maximize otherwise have to engage in." research and get simple, their marketing dollars more
profits. "With Windows Azure, Graham compares the time powerful results from their wisely," explains Smyth. "In
we get a highly scalable and cost savings that result browser, almost instantly," our research, we found that
environment, pay only for from the use of Windows says Collier. customers value having an
the resources we need, and Azure as a cloud services analytical, science-based
relieve our IT staff of the platform to other endeavors Graham says, "We wanted to assessment of their designs. It
systems management and at 3M. "We have full-time make it so simple for our users takes it out of the ego space
administration responsibilities staff members who are solely that they didn’t even have to of subjective evaluations
of supporting a dynamic dedicated to managing our step outside of the workflow from colleagues or from their
infrastructure," says Graham. hosted solutions. Were we they are used to. With the own clients. We believe that
to host the VAS application VAS application running on with the Windows Azure -
3M found SQL Azure to ourselves, we would have to Windows Azure, users can based solution, we can have
be especially beneficial increase our support staff." open a Web browser and a significant impact on the
because it can use it to offer analyze any number of files, financial aspects of marketing-
the VAS application to a excellent straight from their computer." based design."
global audience, without the Customer Solution As VAS becomes an integral,
expense of establishing and Most importantly, 3M used natural element of the design
maintaining regional data Windows Azure to deliver a process for 3M customers,
centers. Graham explains, new technology that could the company expects to
"With SQL Azure, we can change the design process "significantly reduce the time
deploy internationally without paradigm, especially in areas and cost of design iterations
having to migrate customer where success hinges on a - while improving the overall
61