Challenge 1: How do I make the business case for private...

Challenge 1: How do I make the business case for private cloud. Sponsored by Canopy

Speaker: Faiz Parkar, Product Marketing Director - Private Cloud at Canopy

Moderated by Chris Bent, Production Manager, TechTarget

Chris Bent: Hello and welcome to today's presentation. My name is Chris Bent and I'll be your

moderator. Please quickly take note that your slides will be automatically advanced on your screen

and the audio will be streamed through your computer.

Private Cloud brought down to earth


Today's presentation is being brought to you by Canopy. Canopy is a new company set up by Atos,

EMC, and VMware to focus exclusively on helping enterprise customers accelerate their journey to

cloud computing and realize the benefits.

This Webcast is part of a series of Webcast from TechTarget and Canopy to help organizations that

are considering a private cloud initiative to understand some of the challenges and complexities that

you may face and share some of the tips and best practices that Canopy has learned in overcoming

these challenges on behalf of all kinds of organizations around the world.

Today we see the traditional approaches to data center infrastructure, developing applications and

data analytics are inadequate to meet the changing needs of the business. In response, the IT

industry is in the midst of a once every 20-year shift to a new technology platform based on cloud

computing.

Joining us to present today, we have Faiz Parkar. Faiz Parkar is the Director of Product Marketing

for private cloud at Canopy and his current role at Canopy, he is helping organizations transform

the way they build, operate, and consume IT by moving to a more flexible and cost-effective

models based on private cloud.

As you can see here, there are three challenges we're going to cover in this series. Challenge one is

how do I make the business case for private cloud; challenge two, how do I overcome the

complexities of building my own private cloud; and challenge three, what kind of people and

process changes do I need to make in order to successfully operate a private cloud.


Contents


Challenge 1:

How do I make the business case for private cloud?

Challenge 2:

How do I overcome the complexities of building

my own private cloud?

Challenge 3:

What kind of people and process changes do I need

to make in order to successfully operate a private cloud?

As this is the first in the series, we will discuss -– I'll be asking Faiz, how do I make the business

case for private cloud? Well, let's get started with the first topic. Faiz, why have you chosen to talk

about this particular aspect of private cloud?

Private Cloud brought down to earthPrivate Cloud brought down to earth

Challenge 1: How do I make the business case for private cloud?

Faiz Parkar: So we're talking about making a business case for private cloud first because in our

experience, most of the organizations that we work with often struggle with their private cloud

projects if they approach them from a technology-like view rather than a business-like view. So

having a clear understanding of the business challenges that where we're trying to overcome as well

as we list the intangible goals about what you're trying to achieve for the business are really critical

to the success of your private cloud project.

Faiz Parkar: And what can the audience expect to learn during this session? What practical

elements will you covering?

Faiz Parkar: So in this session, I'm going to talk about some of the key things you need to think

about if you want to make the business case for private cloud in your organization.

First and foremost, you need to be clear on how the technology is going to benefit your business

now and in the future and that means identifying and agreeing tangible success metrics. So I'm

going to share with you some metrics that organizations that we've worked with have found to be

meaningful to illustrate the value of deploying a private cloud for their business. Second, you need

to understand how moving to a private cloud approach is going to affect key stakeholders within

your organization and how you can address their need. Finally, moving to a new private cloud is

going to involve change.

I'm going to talk about how you can be a change agent for your organization, how you can

transform the role of IT within your company for one of cost center or business inhibitor to one of

business enabler, helping to propel the business forward rather than holding it back.

Chris Bent: All right. Sounds like a very interesting agenda, Faiz, and very timely right now.

Maybe you can get us started by first setting the scene on why you think organizations are looking

at private cloud.

Faiz Parkar: Sure. Let's start by looking at how you're IT department might be perceived today

by the business. If you think about your own environment for a second, how the key stakeholders

within your organization perceive your IT department today?


Making private cloud clear

What would they say about the responsiveness of IT to new or changing business request? Do they

see IT as controlling or bureaucratic or holding the business back for what it needs to do? Are they

happy with the level of CapEx and/or OpEx, expenditure, on IT? What's been happening to IT

budget say over the last few years? Each of IT funded well enough to deliver what your business

needs. What kind of confidence to they have that IT is actually delivering what the business needs

so that you can move forward?

If some of these questions are uncomfortable, then you're in the right place. I am going to talk

about how private cloud could help but rather just paint a rosy picture, I'm also going to share with

you some of the pitfalls and challenges that organizations that we've worked with that experience in

their journey to private cloud and what you can do to avoid those pitfalls.

Chris Bent: I'm sure our audience will find your insights and best practices valuable. But before

we get in to how to avoid the pitfalls, can you talk little about what success looks like? If

organizations do follow your advice and are able to successfully adopt private cloud, what does that

actually mean to them?


The common obstacles

Faiz Parkar: You know, we've heard with organization of all sizes, verticals, and geographies

around the world and the common theme we find is that their journey to cloud computing is

fundamentally all about how they can change both the perception and the reality of how they

deliver IT within their organization. Organizations that have successfully made the move to private

cloud find that their IT team is perceived very differently by the business. Many IT departments

see cloud as a threat to their own job security.

But by deploying their own private cloud and becoming an internal service provider, the business

can get the benefits of cloud computing without the risk of a public cloud. They can continue to

use their own trusted internal IT team to keep full control over compliance, security and service

levels. By moving from a legacy approach where you might be buying silos of technology for each

application or project to private cloud on which you can host multiple applications and projects for

your organization, your line of business stakeholders will perceive that you're dramatically

improving this responsiveness to IT to new and changing business request. You're changing your

focus on your conversations with them away from the underlying infrastructure to the services that

you provide.

And that helps you to build deeper relationships with line of business stakeholders because you can

communicate the value of IT not in technical terms but in business terms and help your IT be seen

as an enabler for the business rather than an inhibitor. So in essence, making the move to private

cloud will help your IT team to be perceived as agile, business focused and vital to your

organization's growth.

Chris Bent: Now you talked about how private cloud can change the way IT is perceived by the

business, but can you offer our audience any guidance on how they can actually build the business

case from moving their organizations to private cloud?

Faiz Parkar: Our experience at Canopy is that many organizations looking at private cloud circle

would have to quantify the saving as well as the cost since they’ve never deployed a private cloud

before. But unless you can quantify your goals and objectives, your private cloud question might

never get off the ground or where still you might go to the cost and effort of deploying a private

cloud but won't know if it's actually being successful.

So if you're organization hasn’t deployed a private cloud before, the key to making the business

case is to draw on the experiences of those who have. Canopy is a company that’s focused

exclusively on cloud computing. We talked to lots of organizations around the world on a daily

basis on exactly this topic.

When you’ve already found, there are four key areas that organizations that we've worked with find

meaningful in making the case and use the private cloud. The first area that I'm going to cover is

technology. What are the enabling technologies that you need to implement a private cloud?

This is confusing for many organizations that we speak to because there are so many vendors out

there who are just cloud washing. I think for many organizations, a helpful place to start is a

vendor-independent definition of cloud like the one offered by the U.S. National Institute of

Standards and Technology, NIST, in which they identify five essential characteristics.

The first of those is on demand self-service which means that a consumer view of private cloud

should be able to provision computing resources as needed automatically without requiring human

interaction. To meet this requirement, look at self-service portal technology. Workflows

authorized resource consumption and orchestration engines to automate the provisioning.


The common obstacles

The second essential character I think that NIST talks about requires that the capabilities of your

private cloud should be available over the network for a broad range of different devices. This will

be an increasingly important requirement for you that’s more and more of your usage and now

you're using not only Windows-based PCs but also non-Windows-based PCs like Macs or even

non-PC devices like smartphones and tablets.

Resource pooling is the third essential characteristics and requires that the computer resources of

your private cloud be pooled to serve multiple consumers using a multi-tenant model with different

physical and virtual resources dynamically assigned and re-assigned according to consumer

demand. This requirement can be satisfied by shared virtual infrastructure for running multiple

applications rather than separate siloed infrastructure dedicated to each application.

Next, rapid elasticity means that the services that you got on your private cloud can be elastically

provisioned than released so that your services can be scaled up and down according to demand.

To consumers of your private cloud, it should appear as though the capacity of your private cloud is

unlimited.

Finally, the fifth essential characteristic which is require by NIST is measured service which means

that your private cloud should be able to automatically control and optimize resources through a

metering capability which allows resource usage to be monitored, controlled, and reported

providing transparency for both the provider and the consumer of the services. And this is all also

about providing financial transparency, understanding resource usage and associated cost for each

application or department.

Next, establishing a clear governance model is also going to be an important part of going into

private cloud. In simple terms, it means you need to be clear and explicit about the decision-

making criteria your organization is going to use in planning, designing, implementing, operating,

and supporting your private cloud.


The new perceptions

Chris Bent: All right. That sounds pretty reasonable but isn’t that just comment sense or do you

mean something more?

Faiz Parkar: In our experience at Canopy, we find that those organizations who jump straight into

deploying private cloud from it’s predominantly technology point of view without first taking the

time upfront to establish a clearly defined well structured and a great governance model tend to

face significant challenges with security risks, cloud proliferation and (inaudible) just like in the old

days we virtual machines pool, governance of applications as they're new to cloud and lack of

adoption and usage of the private cloud by the targeted audience. Shadow IT and hidden clouds are

also a big problem if you don’t get the governance processes right.

Chris Bent: All right. So in terms of governance, what do you consider are some of the key

considerations?

Faiz Parkar: Well, I definitely share with you some of the key things to think about based on

Canopy's engagements around the world.

First, I think you need to be clear about what the scope of your private cloud deployment is going

to be. Are you going to use private cloud across the whole organization for all of your applications

from the very beginning or are you going to take a more gradual or an evolutionary approach

starting with the subset of the applications maybe at the project level or business unit level and then

expand your private cloud from there?

Next, think about (inaudible) your private cloud is no longer infrastructure owned by each project

or by each application overall but a shared infrastructure usage for all of your applications and

projects. So who's going to be accountable for planning it, designing it, deploying it, operating it,

and supporting it?

Third, who are the key stakeholders in your organization that would have a vested interest in your

private cloud? When you look down the list of people that you’ve identified, are they all from IT

only or do you have adequate representation from the business? Think about how you going to

catch of their requirements and how you'll make sure that you can meet them. You'd also need

clarity around the decision criteria that you're going to use to define your strategy, road map

technology selection and operational processes to make sure that you can define and meet your

security, privacy and compliance requirements.

Chris Bent: I see that the next area you're going to cover is finance. Are the ROI considerations

for private cloud any different to other types of IT than a non-IT investment?

Faiz Parkar: You're right. It's a given that - if you're looking at deploying a private cloud, you

need to carefully evaluate the financial return and the investment of migrating from legacy IT

approaches. But in our engagement to the organizations looking to move from legacy IT

approaches to private cloud, a key part of their motivation is to also get better financial

transparency into IT costs against the business value that they drive and be able to do that on an

ongoing basis not just at the outset.

So how does a private cloud help you to achieve better financial transparency? The answer is as

simple as ABC. A is for accounting. So a properly designed and implemented private cloud will

allow you to define services, identify all the components of that service, allocate costly to those

components and actually track the cost of delivering each service.

B is for budgeting. This is the process of predicting, anticipating, and controlling your

organization's services investment on an ongoing basis and it's much easier with a centralized

private cloud platform rather than separate infrastructures for each application and see if it would

chargeback or showback. Showback means reporting cloud service consumption and costs back to

each department within the business whereas chargeback takes you back step further and actually

build each department for the IT services that they consume.

So you can see that in addition to technology and governance considerations, the success of your

private cloud budget is also going to depend on how well you develop the right financial models to

meet the needs of your organization moving away from project-based budgeting models to a

service-oriented approach. Finally, as you make the case for private cloud within your

organization, you're also going to need to think about what organizational changes might be needed

in order to maximize the benefits of your private cloud.

Chris Bent: Organizational changes, that kind of sounds like another way of saying you'll need to

get rid of people. Is that what you're saying here?

Faiz Parkar: Actually that’s a very common concern that we came across. People are

understandably concern about the job security.


The new perceptions

This topic is so important that we've actually dedicated one of the Webcast in this series to go into

this in more detail. But the spoiler is, moving to private cloud doesn’t necessarily mean you'll be

getting rid of lots of people just that some of their roles might change. And that’s because those

organizations which are successful with private cloud are the ones who use private cloud as a

catalyst to change the role of IT and the relationship between IT and the business.

So if we look at organizations at how's made that successful move to private cloud, they're usually

the ones who are reinvented IT as internal service provider and actually behaving as a true service

provider. So things like defining SLAs, quality of service, terms, service contracts for internal and

business consumers, establishing intensive models to come to the private cloud, implementing

chargeback fees for service models, other cost-recovery models, provision resources to internal

budget teams, migrating legacy, applications and services to the private cloud so all of these you

can see that the transition from an IT shop to the private cloud provider isn’t an easy one.

Chris Bent: Well, I guess many IT teams are struggling right now to remain relevant in the age of

the cloud. What advice can you give to those IT teams who are concerned about being

disintermediated by the business going straight to public cloud providers and cutting them out of

the loop?


Making the case for Private Cloud

Faiz Parkar: That’s the way to get question, (Chris) and the answer is all about better aligning IT

to the business so that you can deliver higher value. So avoid being disintermediated, IT is going to

behave more as an integrator of IT resources and capabilities. You got to know where to use

external cloud resources, outsourcing and managed services and when to continue using internal IT

services. IT is going to transition into a true business relationship manager working to deliver best

thing cloud services, solutions, and resources regardless of provider.

And don’t be afraid of external service provider comparisons. Benchmark is held against them. To

survive and thrive, be a change agent, lead the move to private cloud and become a true tested

advisor to the business. The new role of IT needs to be not only a provider but also a broker and

business relationship manager.



Chris Bent: Well, again, you mentioned the organizational changes earlier. Can you elaborate on

what you mean you by this might be needed?

Faiz Parkar: Sure. So what I meant by that is that this new role of IT may need organizational

changes in order to support it. Most organizations that we worked with will establish an IT

executive team to ensure IT governance and oversight of their private cloud into end. Then they

also create a cloud working group to take care of the initial source of activities related to the private

cloud designing it, building it, running through the concept activities, and maybe even begin the

private cloud adoption process in a pilot mode prior to formalization of their strategy.

Establishing a consumer stakeholder border of cloud steering group is really important to pay input

for business requirements, cloud services, pricing, accounting and chargeback models and how you

want to do those within your organization.



And finally, you'll also need a cloud operations team to handle the day to day operation,

management, resource management, provisioning the structure of your private cloud. As I said

earlier, tune in to a separate Webcast that we're running in this series to learn more about how

existing roles may need to change and what new roles you may need.

Chris Bent: All right. Thank you. You’ve painted a pretty clear picture of how private cloud can

help completely transform the way IT is perceived by the business. But what are some of the key

metrics that our audience can use to quantify the benefits of moving to a private cloud?

Faiz Parkar: If your organization hasn’t deployed a private cloud before, the key to making the

business case is to draw on the experiences of those who have. Since Canopy is a company that’s

focused exclusively on cloud computing, we talked to lots of organizations around the world on

exactly this topic on a daily basis.

What you see here on the slide are some of the key elements that organizations that we worked with

have found meaningful in quantifying the business value of private cloud.

Chris Bent: All right. Well, where do you see some of the quick wins where it's pretty

straightforward to quantify the benefits of private cloud?


Elements of a Private Cloud Business Case

Faiz Parkar: Three main areas, compliance, cost reduction, and cash flow. So by components,

when you deploy a private cloud rather than a public cloud, what it basically means is that you can

retain full control over who has access to what data, where it's located, and how it's secured. This

means you can assure that your organization is always operating in accordance with the relevant

compliance, privacy, sovereignty, and regulatory requirements. Think about the value to your

organization, all compliance versus cost of noncompliance, right? So if you are found to be

noncompliant because you moved applications to the public cloud, what are the implications in

terms of financial penalties or damage to your corporate reputation or loss of business?

Another key thing to think about is cost reduction. So in the short term, it's pretty straightforward

to actually (inaudible) on cost savings by moving to private cloud and that usually comes from

moving from silo to infrastructure for each application or project to a private cloud of which you’re

going to host to all your applications and projects and that reduces the amount of physical

infrastructure that you need to buy which is relatively straightforward and easy for you to work

how the savings associated with that are but (inaudible) about the associated reduction in

(inaudible) cost or the software management and support cost because you have less hardware in

your data center.


Call to Action

And then the third area is to do with the cash flow, right, the move from CapEx expenditure to

OpEx expenditure. So if you can quantify the benefits to your CFO or paying for your private

cloud on an OpEx basis rather than the CapEx basis is really going to appreciate that the cash flow

is going to be freed up by doing that which you can reinvest in other projects that generate revenue

for the business.

Chris Bent: All right. Well that with short term, how about in the midterm?

Faiz Parkar: In the midterm, you should start reaping the benefits of better alignment between the

IT and the business. And one of the key ways of measuring that is speed to market. With a

properly manage private cloud, you have to pay capacity to be able to cater the new business

requirements without having to initiate the procurement cycle. This means you can deliver new

business requirements much more quickly.

But how do you actually quantify the value of being quicker to market? Well, if you can roll out a

new revenue-generating IT service in one month instead of six months, it's relatively

straightforward to calculate the value of being able to start taking revenue five months earlier.

Another thing to think about in the midterm is asset utilization. In a traditional IT approach, you

bought dedicated infrastructure for each application or project and you have to size each of set of

the infrastructure for the peak workload of that application or project. That meant that you have to

have spare underutilized and raise the capacity within the infrastructure of each application or

project. By moving to a private cloud to host all of your applications and projects, you only need

global space capacity which all applications and projects can take advantage of and that reduces the

amount of underutilized capacity and the increased asset utilization and ROI.

Chris Bent: And how about way down the road long term?

Faiz Parkar: So quantifying the value of transforming IT from a business inhibitor to a business

enabler may not be as straightforward as it seems at first glance since it involves working at cost

avoidance of future unexpected cloud projects that you're able to deliver faster.

If you’ve got visibility into specifics of future IT projects which are in the pipeline, then you might

be able to quantify the benefits of delivering them earlier rather than later. Alternatively, you can

take a retrospective look at IT projects that you have delivered in the past and calculate the value of

delivering them faster with the private cloud than what they actually took with your current IT

approach.


What to look for in a private cloud partner

Ultimately, by enhancing the relationships between IT and the business, you translate IT innovation

into business innovation gaining competitive advantage and delivering better customer service.

Chris Bent: Again, thanks. That’s all been really useful. Now, how about what practical steps do

you think organizations are looking for - better looking at private cloud can take next?

Faiz Parkar: I think first, recognize that the IT industry in the midst of once every 20-year shift to

a new technology platform based on computing. You said that in the introduction to the Webinar

and that’s validate by a number of analysts which are out there.

And what that means is, you know, for you as an individual, this is your opportunity to become a

change agent and lead your organization's transformation to private cloud. Think carefully about

the people and process changes that you need to make in order to be successful not only the

technology changes.

Make sure that your cloud partner can help you develop the internal competencies that you'll need.

Focus on the business outcomes and don’t get bumped down by complexity or inertia. Remember

that change means change for all not just for IT. Involve your line of business stakeholders from

the answer and get everybody working together towards a common goal. And finally, work with a

trusted partner, one who can support you in every step of your journey to private cloud and can

support the choices that you need with your own private cloud.

Chris Bent: All right. And to finish off, can you say a few words about what organizations who

are looking to move to private cloud should look for from a potential cloud partner?


The next steps

Faiz Parkar: Sure. The key things to look for is a partner that can guide and work with you to

ensure your private cloud initiative is going to be successful. As well as looking for the obvious

SLAs and track record, et cetera. Always keep in mind that your chosen partner should have

private cloud as a core competency. If their knowledge is only marginally better than your own,

you're not absorbing any of the risk of implementation.

Canopy is focused exclusively on cloud computing which means we build out very specific

expertise in helping customers ensure that their cloud projects are successful. We not only offer

best-of-breed technology solutions powered by VMware and EMC but also offers a complete range

of cloud-specific services to help you from the initial stages of planning your journey to the cloud

to every step of the way to a successful deployment and migration and even beyond the ongoing

hosting, management, and support.

You can check us out at www.canopy-cloud.com.

Chris Bent: All right. Thank you, Faiz. And, of course, thank you to our audience for joining the

Webinar. Again, you can find more information about Canopy at www.canopy-cloud.com. And if

you have any specific queries, please do not - do get in touch by E-mail at contact@canopy-

cloud.com.

Just as a reminder, this Webcast is part of a series of Webcast from TechTarget and Canopy to help

organizations that are considering a private cloud initiative to understand some of the challenges

and complexities that you may face and also share some of the tips and best practices that Canopy

has learned in overcoming these challenge on behalf of all kinds of organizations around the world.

If you missed the other Webcast in the series, please be sure to check them out.


Thank you

Canopy, an Atos company powered by EMC and VMware technology, is a one-stop-shop that offers cloud services focussed exclusively on bringing the

benefits of cloud delivery to large public and multinational private sector organizations. The anticipated benefits are substantial – IT cost reduction and capex avoidance through flexible pricing models plus access to innovative and agile technology that can enable rapid cloud implementation and faster time to market for products and services. The Canopy offerings are based on open standards so customers can choose their preferred technology and decide whether to run solutions off- or on-premise to best meet their business needs. Headquartered in London (UK) Canopy currently operates in 6 countries across 3 continents.

This is Chris Bent signing off. Everyone, have a great day.

END

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