20111206 Cloud Expo Nl Jaarbeurs 7 Dec


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Presentation on Cloud Conputing presented by Theo Slaats, partner at Deloitte, during 2011 Cloud Expo in Jaarbeurs Utrecht.

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20111206 Cloud Expo Nl Jaarbeurs 7 Dec

  1. 1. Ready-made Cloud solutions don’t exist Challenges in your journey to the cloudTheo Slaats - Cloud Expo NL - Jaarbeurs Utrecht - December 7th, 2011
  2. 2. The Cloud is to Computing, what the grid is to electricity In 1879, Edison invented the light bulb About a 100 years ago, companies ceased generating their own electricity and switched to using the power grid. And now...? Will IT also become a utility?1 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  3. 3. Yeah, right...?The horse is here to stay but theautomobile is only a novelty – a fad1903, the president of the Michigan SavingsBank advising Henry Ford‟s lawyer, HoraceRackham, not to invest in the Ford Motor Co. There is no reason anyone would want a computer in their home 1977, Ken Olson, president, chairman and founder of Digital Equipment Corp. (DEC) There’s no way that company exists in a year 2001, Tom Siebel, founder - Siebel CRM Systems [That company is Salesforce.com. Siebel doesn’t exist as a company anymore. In September 2005 it was bought by Oracle Corporation]2 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  4. 4. Cloud computing represents a major change in Information Technologysourcing and services deliveryCloud Computing is not a matter of definitions but a matter of characteristics “On-demand self- Service Types: service” “Rapid elasticity” Business Process-as-a-Service “Pay per use” Software-as-a-Service Cloud computing is based on the convergence of Platform-as-a-Service Internet technologies, Infrastructure-as-a-Service Virtualization and Service Sources: IT standardization Public cloud (External) “Location independent “Ubiquitous network Hybrid Virtual Private Cloud resource pooling” access” Private cloud (Internal) Business Models: Strategic and Operational Benefits: Cloud Service Subscriber √ Increased Business Agility Cloud Service Broker √ Cloud Service Provider Reduce the amount of IT capital spending (OpEx vs CapEx) Cloud Service Enabler √ Reallocation of resources3 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  5. 5. Yeah, right! With the cloud, individuals and small businesses can snap their fingers and instantly set up enterprise-class services. 2011, Roy Stephan, Director of IT architecture and engineering - Intelligent Decisions Our industry is going through quite a wave of innovation and its being powered by a phenomenon which is referred to as the cloud. 2010, Steve Ballmer, CEO - Microsoft Cloud computing is empowering, as anyone in any part of world with internet connection and a credit card can run and manage applications in the state of the art global datacenters; companies leveraging cloud will be able to innovate cheaper and faster. 2010, Jamal Mazhar, founder and CEO - Kaavo4 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  6. 6. IT Services will migrate to different cloud computing models at differenttimes, based on fit, maturity of services providers, availability of technology Mainstream Adoption of Workloads by Service Type New Core Apps SaaS High Engineering Apps IaaS Core ERP High Performance Computing / Clusters “Standalone” Apps Adoption High-End Servers Office Productivity Storage & Back-Up PaaS Standard Servers Collaboration Productivity Apps Dev & Test Rapid App Dev Websites, Intranet Low Today Future5 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  7. 7. There are significant near term benefits for IT of a comprehensiveCloud Strategy...• Significantly increased flexibility: reduced time to design, implement, and “go to market” with cloud-based software systems • Much faster time to develop, test, and deploy packaged software • “Encapsulating” single-tenant non-cloud software is a fast path to short-term value • Longer-term value in cloud will offer significantly higher benefits, but will require replatforming and replacement of “legacy” software – and that is a big hurdle• Cost Savings: reduced CapEx, at a lower amortized cash flow, using subscriptions • Reduction in total costs of software licenses and ongoing maintenance costs, through use of SaaS subscription models rather than on-site licensed software • Reduced physical infrastructure costs by moving to vendor cloud IaaS: reduced hardware, networking, data center, facilities, power, etc.• Positioning for major cloud architecture changes coming in the future: • By introducing cloud products and services into the complex IT architectures, you will be positioned for the major changes to reap the benefits of cloud Enterprises that adopt cloud computing delivery models have the potential to re- shape their competitive position – and the broader business landscape6 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  8. 8. ...but there is a bigger Cloud promise Cloud Computing Improve Increase Improve Product Innovation Revenu Operational Efficiency• Accelerate compute intensive product • New revenue streams from wrapping • More efficient coordination of development services around products disparate supply networks• Reduce up-front investment • New services by mashing information • Accelerate market penetration• Reduce error rates/risk across ecosystem • Faster scalability• Increase open • Broader customer relationships, • Best-of-breed supply chain innovation/collaboration leading to richer/more profitable • Reduce risk and lead-time interactions (e.g., analytics) • Life Sciences & Chemicals (e.g., • Manufacturing (e.g., insights on • Financial Services (e.g., create drug and chemical discoveries) crop productivity by aggregating extended supply chain platform • Oil & Gas, Energy and Mining (e.g., data from farm equipment • Travel & Tourism (e.g., coordinate site selection modeling manufacturers) complex activities networks) • Manufacturing & Automobiles (e.g., • Automobiles (e.g., cars bundled • Manufacturing (e.g., supply chain farm equipment or automobile with services delivered through planning) prototyping and technology testing) Cloud) • Technology (e.g., open innovation • Healthcare (e.g., wellness and collaboration) programs) Cloud Computing has the potential to disrupt existing operating models and business economics. Deep industry knowledge is needed to highlight these disruptions and guide organizations in reacting to and capitalizing on them.7 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  9. 9. Moving to the cloud is not just migrating some applications How do I successfully manage the transition? How will cloud computing Future impact my IT landscape? Current situation • Everything-as-a-Service • In-house IT• Client - Server orchestration• In-house IT department • Flexible costs• Fixed costs, upfront dependent on usage investments • IT and business• Low IT agility collaborate in harmony What benefits can I How will cloud computing get from leveraging impact my (IT) organization? cloud computing? Rather than moving just some application „to the cloud‟. Finding answers to these questions will be the key to successfully integrate Cloud Computing into your organisation. 8 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  10. 10. Enterprises should understand the unique benefits and the challengesdeploying cloud computing services, and its potential for significantbusiness advantages Business Organization Benefits:  Business can assume roles traditionally reserved for IT, from solution ownership to administration  Users can play an active role in creating new applications Challenges:  Limited ability to customize some solutions may challenge cultures accustomed to bespoke solutions Adoption of SaaS and PaaS will abstract the data center from the  SaaS vendors tend to underplay the investment in process enterprise, resulting in fundamental optimization, change management, integration and data changes to the business and IT organizations, and costs of software migration required to realize value services IT Organization Finance OrganizationBenefits: Benefits: Can reallocate resources to more strategic initiatives and  Costs will be allocated to operational expenses (OPEX) solutions over maintenance rather than capital expenses (CAPEX) – enterprises can Simplified and free upgrade process allocate more of the CAPEX budget to revenue generatingChallenges: activities The transition from a waterfall to an iterative / agile  Unlike on-premise applications, large upfront license fee is development lifecycle and the speed of delivery will not required challenge traditional IT delivery processes Challenges: Need to upgrade skills of staff, particularly around web-  SaaS Contracts are loosely defined with little consistency services and web technology amongst vendors– better transparency and structure in the Standards / policies around disaster recovery and security / overall sourcing process is required privacy as it relates to SaaS vendors will need to be  Need careful Total Cost of Ownership (TCO) analysis to developed truly understand potential savings over longer time horizons and with larger user bases9 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  11. 11. Cloud Computing has a significant impact on IT StrategyCloud offers major benefits of flexibility, cost savings, and improved IT capabilities. To gainthese advantages, enterprises should:• Establish new IT application and technology architectural principles and standards which are necessary to reap cloud benefits.• Revisit current major system architecture and design principles and evaluate fit with cloud suitable design concepts• Understand the timing of major system software architecture changes, and plan for adjustments to enable „cloud friendly‟ application delivery models• Identify new usage models, considering new options for SaaS, IaaS “encapsulation”, mobility apps, and “Big Data” analytics, to enable highly efficient and flexible products and services• Quantify the benefits that cloud will bring to your company, while assessing all affected roles and functions to gauge organizational and business impacts and risks New cloud software is fundamentally different, and improvements to “legacy” software often require complex software engineering and architecture refactoring.10 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  12. 12. Enterprises should take a comprehensive approach to cloud strategy,integration, migration, and monitoring, to manage the risks and maximizebenefits of adoption Cloud computing opportunity assessment Cloud Computing Strategy  Evaluate vendor capabilities, mapped to requirements, Understand the future business needs & capabilities that with financial benefits need IT enablement  Assessment of cloud computing providers security Assessment of application portfolio to select applications capabilities, control, and monitoring suitable for cloud migration  Assess tax Implications and evaluate strategic alternatives Impact to regulatory compliance, data privacy and protection standards, data location/segregation standards  Define cloud computing architecture, migration, and operations plan Impact to organizations security posture and likelihood of  Create processes to integrate cloud computing into increased vulnerabilities security framework Ongoing monitoring Implementation of cloud computing Periodic security activities for cloud related components to  Assist in conducting cloud proof of concepts (POC) and evaluate for vulnerabilities pilots to mitigate risk Conduct review of logs/audit monitoring,  Assist with installation, configuration, and testing; vulnerabilities/controls mitigation/remediation migration, and operational transition11 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  13. 13. Enterprises should consider several dimensions when evaluating strategicoptions for applications and services to be delivered through cloudcomputing Considerations For Building a Cloud Strategy Technology Business and Financials  Do the workloads exhibit characteristics that can derive  What are the anticipated usage patterns for the application real benefits from scalability and elasticity? and will it be cost effective to move to the cloud?  Will the application be built to run on a cloud supported  What is business sponsors preference for CapEx vs platform (e.g., commodity hardware, supported OS) OpEx?  Can the application components be architecturally  How will designing for cloud readiness impact my designed to be suitable for deployment to a cloud implementation cost and timelines? Can I achieve based solution? overall lower TCO?  What design trade-offs will be needed to make this  Will moving to cloud help me capture new sources of application cloud-ready? value for the business?  Are internal IT architecture and organization structures  Are cloud offerings mature enough for these workloads? “ready”? Operational Regulatory and Compliance  What are the availability requirements for this  Are there any risk management or compliance application and can those be met by cloud? requirements for this application? Will cloud be able to  How will support model for this application change if it satisfy those requirements? is moved to the cloud? Are the potential changes  Does the application hold confidential or customer data? acceptable? Can this data be easily masked in the future?  How will cloud impact my chargeback model for this  Does the application data need to reside within application? Can I support the new model? Will organization? Will we be prohibited from moving data business accept the changes? outside of the country?  Can cloud meet my business continuity and disaster  Who owns the data? How is it used? Are controls in place? recovery requirements for the application?  How is security achieved? What is the level of privacy  Is the vendor limiting interoperability or access to your protection? data?  Can you meet needs for legal compliance and tax issues?12 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  14. 14. To successfully make the transition, enterprises must address keyoperational and governance issues during the adoption of cloud computingservices models Data Controls Who owns the data? How is it be used? Are controls in place? Security and How is security achieved? What is the level of privacy protection? Privacy Audit and Are there risk management controls to applications and data? Assurance Tax and Legal Can you meet needs for legal compliance and tax issues? Back Up and Are data backup, retention, and disaster recovery practices sufficient? Disaster Recovery Vendor “Lock-In” Is the vendor limiting interoperability or access to your data? IT Operations What IT services and applications are best suited for the cloud? IT Readiness Are internal IT architecture and organization structures “ready”? Alignment with Enterprise Risk and Governance strategy will help organizations address the operational hurdles to cloud adoption13 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  15. 15. Summary• Leveraging the cloud for your organisation can have huge benefits by: ‒ Significantly increasing flexibility of IT quickly meeting business requirements. ‒ Saving Cost, reduced CapEx because of pay-per-use or monthly subscriptions. ‒ Pooling resources, flexibility of shifting resources on demand. However, just migrating applications to the cloud will not be sufficient• Organisational change lies at the heart of the success of cloud computing. ‒ Create a roadmap to the cloud that fits the organisation‟s needs. ‒ Make this roadmap an integral part of the IT strategy. ‒ Anticipate changes in IT department activities, moving from execution to orchestration. ‒ Allow the business the flexibility to harness the possibilities of cloud computing on- demand. Ready-made Cloud solutions do not exist, to harness the full power of cloud computing, cloud should be regarded as a strategic opportunity.14 © 2011 Deloitte The Netherlands
  16. 16. Questions? Theo Slaats Deloitte Consulting BV Partner Laan van Kronenburg 2 CRM, Social Media, Cloud Computing 1183 AS Amstelveen The Netherlands Tel: +31 88 2882531 Mobile: +31 6 52672525 tslaats@deloitte.nl Member of Deloitte Touche Tohmatsu @theoslaats15 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands
  17. 17. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms,each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure ofDeloitte Touche Tohmatsu Limited and its member firms.Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globallyconnected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clientssucceed wherever they operate. Deloittes approximately 170,000 professionals are committed to becoming the standard of excellence.This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities(collectively, the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision ortaking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the DeloitteNetwork shall be responsible for any loss whatsoever sustained by any person who relies on this publication. © 2011 Deloitte The Netherlands