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Cloud Businesses: Strategic Considerations
The document discusses strategic considerations for cloud businesses, emphasizing the shift from traditional IT infrastructure to cloud computing models such as IaaS, PaaS, and SaaS. It highlights the benefits of cloud migration including cost reduction, improved scalability, and increased operational efficiency, while providing examples of organizations that successfully transitioned to the cloud. Additionally, it outlines key drivers for migration and essential factors for establishing success criteria in cloud adoption.
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Cloud Businesses: Strategic Considerations
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- 2. Docker's Registry Hub,Trello, Travis CI, GitHub and GitLab, Quora, Medium, Signal, Slack, Imgur, Twitch.tv, Razer, Adobe's cloud, Zendesk, Heroku, Coursera, Bitbucket, Autodesk's cloud, Twilio, Mailchimp, Citrix, Expedia, Flipboard, Yahoo! Mail … What’s Common Among…
- 4. Typical IT Infrastructure RealEstate Utilities (Power, AC, Fire, Security,…) Networking Infrastructure Hardware (Servers, Storage, N/W,…) Virtualization Layer App-Specific S/W (Database, …) Application Data Middleware System Software (OS,…) Application Software
- 5. Your “Costs” Acquisition Rentals Usage Licenses Storage Backup Idle Fixed Manpower Performance Recovery Delays Lead TimeExpertiseUpgrades EOL Stagnation Limited Opportunities Revenue Erosion
- 6. Forget Cloud ForNow, Let’s Talk Something Else…
- 7. Traditional • Cultivation: •Fixed Location (River) • Fixed Time (Monsoon) • Consumption: • Immediate (Perishable) • Sameplace (Limited) • Self (Farmer family) Farming Modern • Cultivation: • Any Location (Canals) • Multiple Times (Dams) • Consumption: • Anytime (Processing) • Anywhere (Transport) • Anyone (Trade)
- 8. 19th Century • Power •Private Gensets • Costly • Capex • Opex • Manpower • Pollution • Proximity Factories 20th Century • Power • Utility Company Supply • Anytime • Anywhere • Reliable • Metered • Cheaper
- 9. • Production: Automobile,Manufacturing • Utilities: Power, Water, Gas, Heating • Entertainment: Concerts, Streaming • Professional Services: Legal, Accounting, PR, HR, IT/ITES,… • Information: Research, WWW,… • Services: Transport, Leasing, Restaurants, Rental Housing, And Many More…
- 10. Common Pattern? Creation Consumption CreationConsumption AnyTime AnyWhere AnyOne AnyTime AnyWhere AnyOne SameOne. SameTime. SameWhere Disaggregation. Unbundling
- 11. What Can WeDo Here? Acquisition Rentals Usage Licenses Storage Backup Idle Fixed Manpower Performance Recovery Delays Lead TimeExpertise Upgrades EOL Stagnation Limited Opportunities Revenue Erosion
- 12. Pizza As AService!
- 13. Outsource Infra Real Estate Utilities(Power, AC, Fire, Security,…) Networking Infrastructure Hardware (Servers, Storage, N/W,…) Virtualization Layer App-Specific S/W (Database, …) Application Data Middleware System Software (OS,…) Application Software
- 14. Outsource Platform Real Estate Utilities(Power, AC, Fire, Security,…) Networking Infrastructure Hardware (Servers, Storage, N/W,…) Virtualization Layer App-Specific S/W (Database, …) Application Data Middleware System Software (OS,…) Application Software
- 15. Outsource Service Real Estate Utilities(Power, AC, Fire, Security,…) Networking Infrastructure Hardware (Servers, Storage, N/W,…) Virtualization Layer App-Specific S/W (Database, …) Application Data Middleware System Software (OS,…) Application Software
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- 17. Cloud computing, oftenreferred to as simply “the cloud,” is the delivery of on-demand computing resources—everything from applications to data centers—over the internet on a pay-for-use basis. • Elastic resources—Scale up or down quickly and easily to meet demand • Metered service—so you only pay for what you use • Self service—All the IT resources you need with self-service access The Cloud https://www.ibm.com/cloud-computing/learn-more/what-is-cloud-computing/
- 18. • Traditional ITInfrastructure is • Capex-Heavy • Time-Intensive • Resource-Intensive • Inefficient • Stagnant / dated • Not Agile Enough Why Cloud?
- 19. • Infrastructure AsA Service (IaaS) • Computing, Networking, Storage • Platform As A Service (PaaS) • Development Environment • Software As A Service (SaaS) • Business Applications Delivery Models
- 21. • Depending onwho you are and what you do, there could be several migration scenarios • While technology is important, even more important to understand business context • Let’s see some examples… Cloud Migration
- 22. • Drivers: • StagnantBusiness with Perpetual Licensing • Raising Prices Was’t Sustainable Approach • 18-25month Release Cycles • Low Recurring Revenue 19% (2011) • Approach: • 2012: Started Offering Both • 2013: Only Add Features to Subscription • Agile Model Of Development • Changes in Sales Process, Compensation, etc. • Communication Internally, Wall St • Move from ARPU to ARR • Once Downloaded, Cloud is only for Update and Storage, But No Processing • Business Impact: • Stock Price 3x • Double-Digit Revenue Growth, More Predictable Revenue Stream • Recurring Revenue up to 70% Adobe http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/reborn-in-the-cloud
- 23. • Drivers: •Problems with on-prem infra • Tough to keep pace with digital demands / innovate • Approach • Start small, quick wins, demonstrate benefits • 2015: From zero cloud usage to BAU in just 8months • Results • 3,500 GBP / 3mon => 66 GBP a month / 1wk • Cost of hosting a page 13p/month TESCO Bank
- 24. • Drivers: • Bigenough to have own infra! • Perhaps move from SaaS to PaaS??? • 2016: Moved 90% of files from Amazon to own cloud Dropbox
- 25. • Drivers: • Old,outdated systems • Approach: • 2014: Moved 65 apps and NASA.gov to AWS cloud in 22wks with no downtime • Results: • Web update from 20min => 2min • CPU utilisation only 1% even at peak levels, resulting in 25-30% cost savings • Able to avoid data silos NASA
- 26. • Why: ThePurpose • What: The Goal • How: The Plan Migration Strategy
- 27. • Why areyou undertaking migration to cloud? • Cost Reduction? • New Markets? • Faster Innovation? • … • Build a Business Case Why: The Purpose
- 28. • Security 93% •Performance 85% • Scalability 74% • Support 65% Top Considerations
- 29. • What wouldthe success look like? • Capex DOWN 60% • Headcount DOWN 40% • Release UP 1000% • … • Establish Success Criteria What: The Goal
- 31. • How wouldthe migration be performed? • Public / Private / Hybrid Cloud? • IaaS / Paas/ Saas? • Cloud Provider / Own DC? • Rearchitecture apps? • … • Plan migration strategy and execute How: The Plan
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- 36. • Consumption Based •Subscription Based • Advertising Based • Market-Based • Value-based • … Pricing Models
- 37. • Pay WhatYou Consume, And As You Go • Ex: Disk, CPU, Network Traffic • Common for IaaS Consumption Based
- 41. • Pay forTime, Irrespective of Usage • Common For SaaS Subscription Based
- 43. • Free orLow-Priced But Must Accept Ads Advertising Based
- 44. • Fluctuates Basedon Demand / Supply • You can Buy on Current Price and Use Rightaway, Or • Bid for Lower Price and If Market Reaches That Price, You Get It Market Based
- 48. • Cloud isBusiness: It’s not just about IT infrastructure but the TCO of Business! • Identify the key drivers: why are you migrating to cloud? • Establish the success criteria: what will success look like? • Evaluate your migration strategy: your context is unique to you! Recap
- 49. • IaaS vs.PaaS vs. SaaS, https://youtu.be/KgL3BfAc9Cs • The Present And Future Of Cloud Pricing Models, https://www.ibm.com/ blogs/cloud-computing/2013/06/present-future-cloud-pricing-models/ • Cloud Computing Pricing Models: A Survey, http://www.sersc.org/ journals/IJGDC/vol6_no5/9.pdf • https://www.engadget.com/2013/05/09/adobe-creative-or-cloudy/ • http://nvlpubs.nist.gov/nistpubs/Legacy/SP/ nistspecialpublication800-145.pdf • http://www.computerworlduk.com/cloud-computing/how-tesco-bank-has- adopted-aws-cloud-as-business-as-usual-in-eight-months-3629767/ • https://www.wired.com/2016/03/epic-story-dropboxs-exodus-amazon- cloud-empire/ • https://www.g2techgroup.com/nasa-migrates-to-aws-cloud/ • https://aws.amazon.com/solutions/case-studies/all/ References