David S. Linthicum founded Blue Mountain Labs (BML) to provide leadership in the areas of cloud computing and service-oriented architecture. BML was later acquired by Bick Group, a large data center services company, to help BML grow. Linthicum discusses different types of infrastructure as a service cloud platforms and challenges the traditional views of measuring cloud return on investment only in terms of cost savings. He argues that the true value of cloud computing is in increased agility and the ability to quickly adapt IT systems to changing business needs. Linthicum provides formulas for estimating the value of reusing services across systems and of increased agility. He advocates understanding current IT assets and how cloud computing could help align technology with business

1. Finding the True Value of Cloud Computing David S. Linthicum [email_address] www.bluemountainlabs.com

2. BML was founded by David S. Linthicum, a thought leader in the cloud computing and service-oriented architecture (SOA) space, and the author of the best-selling "Cloud Computing and SOA Convergence in your Enterprise...a Step-by-Step Guide." As CTO, Linthicum is focused on expanding BML's leadership within the emerging cloud computing space. In early 2010, BML became part of Bick Group, a leader in data center services, to enable BML's growth with an industry veteran. For more than 45 years, Bick Group has been innovating on everything in and around the data center and puts best practices to work in more than 1,000 data centers each year.

3. New Book

4. Three types of IaaS cloud platforms Source: Forester Research

5. How Real is All This?

6. The Traditional View of Cloud ROI

7. Why cloud? The existing trajectory is not good $ Capability

8. UNDERSTANDING THE ROI

9. $500,000 $1,000,000 On-Premises

10. Cloud Delivered

11. The New View of Cloud ROI

12. The Value Proposition of Cloud Computing: Agility We implement Cloud Computing for two major reasons. First is the ability to save development dollars through reuse of services (public or private). Second is the ability to change the IT infrastructure faster to adapt to changing needs of the business, or agility . Enhance, not replace, existing IT.

13. Reuse…Yes Again Under the concept of cloud (private and public) service reuse, we have a few things we need to determine to better define the value. These include: The number of services that are reusable. Complexity of the services. The degree of reuse from system to system. The number of reusable services is the actual number of new services created, or, existing services abstracted, that are potentially reusable from system to system. The complexity of the services is the number of functions or object points that make up the service. Finally, the degree of reuse from system to system is the number of times you actually reuse the services. We look at this number as a percentage.

14. So, What do you Do? In order to determine their value we must first determine the Number of Services that are available for Reuse (NSR), the Degree of Reuse (DR) from system to system, as well as the Complexity (C) of each service. The formula to determine value looks much like this: Value = (NSR*DR) * C

15. Cloud Computing=Agility Agility is a strategic advantage that is difficult to measure in hard dollars, but not impossible. We first need to determine a few things about the business, including: The degree of change over time is really the number of times over a particular period that the business reinvents itself to adapt to a market. The ability to adapt to change is a number that states the company’s ability to react to the need for change over time. Finally, the relative value of change is the amount of money made as a direct result of changing the business.

16. What Does this All Mean? The ROI of cloud computing is problem domain dependent. Your mileage will vary. There are few best practices. The concept of agility typically provides more value than “traditional” cloud computing ROI metrics. Hard to measure, but worth trying.

17. Clouds are a fit when: Processes, applications, and data are largely independent Points of integration are well defined Lower level of security is fine Core internal enterprise architecture is healthy Web is the desired platform Cost is an issue Applications are new

18. Path to the clouds Path to clouds: start with the architecture Understand: Mission drivers Information under management Existing services under management Core business processes

19. Stepping to the Clouds

20. Final Words of Advice

21. OBJECTIVES Consider and understand all IT assets, including applications, services, and information. Consider the objectives of the business going forward, and the ability for IT to align to the needs of the business. Consider the existing IT inefficiencies and cost of those inefficiencies. Consider the use of computing, including the technological and business benefits. Understand all applications and data sets, and the potential benefits of having those assets exist on cloud computing platforms, public and/or private. Create a path forward, including a long-term migration and deployment plan around the potential use of cloud computing resources Let Us Help You CLOUD COMPUTING QUICK ASSESSMENT DELIVERABLES Cloud computing ROI model, including direct and indirect business benefits around the use of cloud computing resources. A high level data, services, application and process model around the existing business. A high level data, services, application and process model using cloud computing resources. A high level security and governance model. A high level roadmap to cloud computing, including costs, risks, and platform recommendations.

22. Don’t Forget

23. thanks! David S. Linthicum [email_address]