While cloud is fast becoming the new normal for organisations of all sizes, many IT executives & budget owners still struggle to articulate the business value of moving to the cloud in terms that resonate with the Board and Broader C suite. In this session, we will talk through the impact cloud computing is having on the overall IT cost base, not just the infrastructure layer. We will also cover what the typical non-cost benefits are, how they can be measured and communicated. Finally we will provide a framework that can be used to calculate the transformation costs associated with moving to the cloud. Blair Layton, Business Development Manager – Database Services, Amazon Web Services, APAC

1. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Blair Layton – Business Development, APAC
April 2016
Demystifying Cloud Economics
How to build an investment case for scale migration to the cloud

2. Repositioning IT in the corporate landscape
Reduction in IT Cost Base
Increasing profitability of
existing products and services
Business Growth
Consumption Based Pricing & Automation
Elimination of upfront CAPEX requirements
Real-time access to declining prices
Increased Business Process Automation
Incremental Innovation
Reduction in Rework
Organic and Inorganic Growth
Reduced cost of entry
Global Reach
Reduction in time to market for
new products and services
Customer centricity
Value

3. But how do I quantify this?

5. The migration approach is dependent on the specific
drivers and constraints of the organisation
Current State DC in AWS Right-sized on AWS Well Architected on AWS
Transformation Effort
Traditional
enterprises
Old world
enterprise in
the cloud
Exploring
the new
normal
Next-gen
operating
model
Benefits
Profile

6. Why the economics of cloud
are different

7. What are the key benefits categories?
Operational Costs
Workforce Productivity
Cost Avoidance
Operational Resilience
Business Agility

8. What are the key benefits categories
• Unit Price of Infrastructure
• Ability to match supply & demand
• Reinvention is continuous – a true efficiency dividend
• A pathway to optionality
• An elastic Cost Base
• Transparency drives a lean mindset
Operational Costs

9. What are the key benefits categories
Workforce Productivity
• Automation drives maintenance efficiencies
• Reduced cost of planned and unplanned outages
• Increased Developer Productivity

10. What are the key benefits categories
Cost Avoidance
• Elimination of hardware refresh programs
• Elimination of maintenance programs

11. What are the key benefits categories
Operational Resilience • Reduced Risk Profile/Reduced cost of Risk
Mitigation
• Revenue & margin improvements due to
reduced outages

12. What are the key benefits categories
Business Agility
• Reduced Time to Market
• Increased operational agility (new market
penetration, divestiture, acquisition)
• Reduced cost & increased Pace of
Experimentation

13. AWS TCO support to date

14. AWS TCO Calculator (https://awstcocalculator.com)

15. What’s missing?

16. Economic Criteria Category
Infrastructure Comparison
Capacity Planning benefits
Financial Benefits of Innovation
Cost Avoidance
Workforce Productivity
Application centric TCO
Cost to Achieve (Migration, Platform, Training)
Legacy Constraints

17. Why do a Mass Migration?

18. If I were you, I wouldn’t start
from here…

19.  Utility pricing model across entire technology stack
 Reduced maintenance costs & ability to refocus your staff
 Access to innovation platform
 Low Risk Migration Pathway
 Provide direct cost control to the lines of business
 Remove the depreciation “hole” & eliminate capital commitments
 Eliminate hosting technology debt.
ok, on a serious note…

20. Am I ready for a mass migration?

21. The Adoption Journey & the role of Mass Migration
Year 1 Year 2 Year 3 Year 4
• Early Discovery
• Learning
• POCs
• TCO/ROI Analysis
• Security & Risk Preparation
• Cloud Strategy
• Foundational Architecture
• New Application
Patterns (MSA, CI/CD)
• Dev/Test
• Production
Application Migration
• Operational Integration
• Billing Optimization
Value
• Portfolio Mass
Migration
• DC Shutdown
• Horizontal Solutions
(VDI, Back-
up/Archive, Broad
storage)
• Advanced
Operational Patterns
(CI/CD)
• Optimization
• Infrastructure fully automated
• App/Dev owns full solution stack with
tools and service catalogs
Time
Year 5

22. The Adoption Journey & the role of Mass Migration
Year 1 Year 2 Year 3 Year 4
• Early Discovery
• Learning
• POCs
• TCO/ROI Analysis
• Security & Risk Preparation
• Cloud Strategy
• Foundational Architecture
• New Application
Patterns (MSA, CI/CD)
• Dev/Test
• Production
Application Migration
• Operational Integration
• Billing Optimization
Value
• Portfolio Mass
Migration
• DC Shutdown
• Horizontal Solutions
(VDI, Back-
up/Archive, Broad
storage)
• Advanced
Operational Patterns
(CI/CD)
• Optimization
• Infrastructure fully automated
• App/Dev owns full solution stack with
tools and service catalogs
Time
Year 5

23. Challenges of a mass migration
investment case

24.  Lack of sufficient data re. legacy estate to plan or build a business case
 Sunk costs associated with legacy contracts and/or existing DCs/Co-Los inhibit
short term saving potential
 Uncertainty as to level of investment required to migrate and build future state
platform
 Lack of clarity as to future state benefits profile (cost savings++)
 Short term cost spike due to running old and new world in parallel
 Cash constraints and shareholder pressure often means there are capital
constraints

25. good news - we can help!

26. • Data Discovery Support (Tooling + Competency)
• Full Benefits Assessment via AWS Value Engineering
• Migration Methodology + Transformation Cost Estimates
• Tailored AWS & Partner Investment Programs

27. Cost to Achieve - Application Transformation Patterns
Migration Pattern
Name & Label
Pattern Description
Retain  Client will keep host / application in their source environment
Retire*  Application and host decommission on source
Re-Hosting*
 Like for Like application migration to target cloud
 Minimal effort to make the application work on the target cloud infrastructure
(Minimal appl layout change)
Re-Platform*
 Up-Version of the OS and/or Database onto the target cloud
 Storage migration will be needed (without conversion)
 Application reinstallation on the target
 Database to AWS RDS
Re-Factoring*
 OS and/or Database porting
 Middleware and application change to cloudify an application
 Data conversion; Database transition to MySQl, Aurora, etc.
 UAT required
Re-Architect**
 Application architecture changes may also require Up-Version or Porting
 Middleware, data modernization; application consolidation / stacking
 UAT required; HPC Grid, No ITIL
R1
R2
R3
R4
R5
R6

28. Customer Case Study
Ben Cabanas – CTO, General Electric, Transportation

29. GE Digital Industrial Portfolio
POWER
~$30B
66K
EMPLOYEES
OIL & GAS
$18.7B
46K
EMPLOYEES
AVIATION
$24B
45K
EMPLOYEES
ENERGY
MANAGEMENT
~$11B
47K
EMPLOYEES
RENEWABLE
ENERGY
~$9B
13K
EMPLOYEES
APPLIANCES
& LIGHTING
$8.4B
25K
EMPLOYEES
CAPITAL
VERTICALS
$1.5B*
*Net income
** Revenue by year end 2016
TRANSPORTATION
$5.7B
13K
EMPLOYEES
HEALTHCARE
$18.3B
55K
EMPLOYEES
GE DIGITAL
~$6B**
2014 REVENUES

30. 32
Data Centers
300K
Employees
90K
Servers
$149B
2014
Revenue
170+
Countries
9K
Apps
10K
IT
employees
500+
Cloud
Migrations
137
Years Old
$3+B
Annual IT
Spend
GE scale @ 2015

31. Jeff Immelt, GE Chairman & CEO
“If you went to bed last night as an
industrial company, you’re going to
wake up this morning as a software
and analytics company.”
A Year of Transformation
1 GE Digital
2 GE Capital Divestiture
3 Alstom Acquisition
4 IT/OT Convergence
5 Cybersecurity
6 Cloud

32. A Re-focused IT Strategy
Brilliant Factory
Model-Based Enterprise
Predix
GE for GE GE for Customer GE for the World
Productivity Apps Platform
GE Software
Customer Outcomes
Predix
Predix
Cloud For Industry
Secure
Weaving a Digital Thread with the GE Store
• Plant automation
• 3D with PMI
• CAD-CAM-CMM
• Industrial analytics
• Rapid Time to Value
• Monetize the platform
• Predix Machine
• Partner/ISV ecosystem
$15B software business by 2020
™
™™

33. Our Cloud Journey
2014 2016+
Experiment Execute Iterate & Win
Business Case Measure & Pivot

34. Demonstrated Results
Dec ‘14
128
O&G – Cloud Aware
Apr ‘15
206
Mar ‘15
177
Feb ‘15
163
Jan ‘15
131
Nov
‘14
115
Month with Migration Party
Q2 ‘14
24
Q3 ‘15Jun ‘15
229
Built Core Services &
Automation
May
‘15
221
Q3 ‘14
63
Oct ‘14
82
Jul ‘15
245
325
Q4
‘15
311
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Q2 '14 Q3 '14 Oct '14 Nov '14 Dec '14 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 Jul '15 Aug '15 Sep '15 Oct '15 Nov '15 Dec '15

35. Cloud-enabled Simplification
Operational CostsWorkforce ProductivityCost AvoidanceOperational ResilienceBusiness Agility
• 98% reduction in
P1/P0’s
• 77% faster to deliver
business applications
• 52% average TCO
savings
• 35% reduction in
compute assets (792)
• 15 automated bots
developed
• 80% cloud first
adoption
• 15 cloud services
created
• 50 applications
decommissioned
• 8 cloud migration
parties
• Improved security
posture
• Shift to self-service
culture
• Rapid
experimentation
• Reduced technical
debt
• 14M YOY Savings
• Improved
Performance
• Streamlined M&A
Activity
• DevOps in Practice
Progress
14.2M
Investment
Focus
18
Months
325 Apps
in Cloud &
14M YOY
Savings

36. Lessons Learned
Automate, then Automate More
Everything we do is with automation in
mind, from deployment to operations. This
is the only way to survive at scale.
Security at Every Layer
Fully utilizing the security provided in
the public cloud allows us to have
confidence in a multi-tenant world.
Embrace Agile
From organization structure to project
management, everything we do is with
agile principles in mind.
Bias toward action
Everyone has a reason not to move to
cloud. Our mission is to find more
reasons why we should.
Work Instead of Workflow
Embracing automation has allowed our
employees to concentrate on doing work,
instead of filling out workflows.
Encourage (calculated) Risks
Celebrate failure. Talk about pivots.
Continuously examine new tools. This
leads to rapid innovation resulting in
progress.
Transformation – Rebuild technology skill
sets, encourage diversity and embrace “hands-
on”
Pipeline – A pipeline of 50+ will ensure
consistent velocity
Collaboration - Embed Security & Risk
teams, CIO + CTO + Corp partnership
Cloud Aware – Rehosting is OK if it
maximizes margin, agility, resilience &
performance
Enablers

37. So what can we learn from GE’s story to date?

38. ….Organisations all over the world are using AWS
to retire their legacy technology debt
Kaplan Closes 8 Data Centers.
By Migrating Data Centers, Wilmar Saves 50% in CAPEX.
Delaware North Moves Data Center to Save $3.5M Over
Five Years.
Hess Uses AWS to Streamline Data Center Migration in 6
Months.
News UK Shortens Time to Market by 6 Months by Migrating
60% of its Data Centers.

39. ….and learnings are leading to an
accelerated migration pace
In just three months, Condé Nast was able to migrate over
500 servers, one petabyte of storage, various mission
critical applications (such as HR, Legal, and Sales), and
over 100 database servers into the AWS Cloud.

40. So What’s Next?
Migration
Planning
Workshop
• Select a
Migration Partner
• Define Scope
• Establish Team
Structure
• Plan for
Assessment
• Desired
Outcomes
Joint Assessment &
Planning
Plan Go-No-
Go
Project
Launch
1-2 Days 4 Weeks*
• Cross Group
Dedicated Effort
• Define High Level
Scopes
• Patterns for
Migrations
• High Level Estimates
for Migration and
Value
Decision
Meeting
• Review
Outcomes
• Determine
Next Steps to
Go Forward
*Depends on Scope
• Typically
Phased
Approach

41. Are you ready?
Existing production AWS workloads, trained teams, and Enterprise Support.
A focused objective that includes 500+ applications and a clear timeline.
Strong Executive sponsorship, a clear value proposition, and commercial terms in place.
Willing and able to invest resources and make financial commitment.
Clear security and compliance plans that support this change in their business.
Customers who are ready have established a foundation of experience and
have both the “Will” and “Skill” to succeed.