Case Study:Effective Strategies in Managing SLA Costs

Dr.Thanachart NumnondaBusiness Development Director

Sun Microsystems (Thailand)

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Agenda● Introduction to Sun Microsystems● ITIL● Sun Approach on SLA● Managed Services

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Guided by a Singular Vision:“The Network

is the Computer”

4

1995 2000 2005 2010

TIME

Our Vision: The Network Is the Computer

Internet Users

• 1 billion+ people on the Net today• 390 gigabytes of data created every second• 50% new data growth

1.5 Billion

Everyone and everything participates on the network

5

Innovation, Choice, Greater Value

Software Sั�ystems

StorageServices

Network.com

Providing the Ultimate in Flexibility and Choice

IT Service Management

IT Service Management = ITSM

ITSM is the use of best practices to manage services that meet customer requirements.

ITSM objectives are :• align IT services with business needs• Improve quality of service• Reduce service costs

ITIL History

19891990

19911992

19931994

19951996

19971998

19992000

20012002

20032004

1989 – publication of first ITIL elements

Early 1990’s – maturity and growth in Europe

Mid 1994’s – ITIL first introduced into SEA

Late 1997’s – ITIL revised and updated

Early 2000’s – Growth and acceptance in SEA

What is ITIL?

• ITIL = IT Infrastructure Library• A best practices framework used to

develop IT processes• Based on the experience of industry

experts worldwide• Consists of a series of books for

delivering quality IT services• Is the de facto standard for IT

service management

What ITIL is not?

• ITIL is not a step-by-step out of the box set of procedures

• ITIL is not intended for use as a single product or standard

• ITIL is not etched in stone! it is evolving

ITIL Mission

“to provide a comprehensive, consistent and coherent set of best practices for IT Service Management processes – promoting a quality approach to achieving business effectiveness and efficiency in the use of information systems”

ITIL Business Perspective

• Evaluate IT costs in business terms

• Map end user requirements to specific service level targets

• Balance service levels with true costs

• Manage problems based on business priority

• Improve communications between IT and business

ITIL Publication

Planning to Implement Service ManagementPlanning to Implement Service Management

The Business The Business PerspectivePerspective

Service Service supportsupport

ServiceServicedeliverydelivery

ICT ICT InfrastructureInfrastructureManagementManagement

Application ManagementApplication Management

SecuritySecurityManagementManagement

Service SupportService Support(Enable IT services(Enable IT services

to be providedto be providedto End Users by theto End Users by the

IT Service Organization)IT Service Organization)

Provideservices

to

Service DeskService Desk(Provide a single point of contact between customers, end users and the IT service provider)

End userEnd user

AvailabilityAvailabilityManagementManagement

(Ensure the (Ensure the Availability,Availability,Reliability,Reliability,Security)Security)

IT Service IT Service ContinuityContinuity

(Minimum service(Minimum serviceprovisionprovision

during disaster)during disaster)

Service Level ManagementService Level Management(Define, negotiate, coordinate, monitor and manage Service Levels)(Define, negotiate, coordinate, monitor and manage Service Levels)

FinancialFinancialManagementManagement

(Accounting,(Accounting,Budgeting,Budgeting,Charging)Charging)

CapacityCapacityManagementManagement

(Ensure IT (Ensure IT resources are resources are available as available as

needed)needed)

Service DeliveryService Delivery(Ensure that IT services are(Ensure that IT services are provided as agreed upon provided as agreed uponbetween the Business andbetween the Business and

the IT Service Organization)the IT Service Organization)

Onbehalf

of BusinessBusiness

Configuration ManagementConfiguration Management(DB of IT components & relationships)(DB of IT components & relationships)

Release ManagementRelease Management(Version control, grouping changes, plan & test to protect live environment)(Version control, grouping changes, plan & test to protect live environment)

Change ManagementChange Management(Ensure IT service component changes meet business needs)(Ensure IT service component changes meet business needs)

Problem ManagementProblem Management(Determine the root cause of disruptions)(Determine the root cause of disruptions)

Incident ManagementIncident Management(Ensure IT services are restored as quickly as possible)(Ensure IT services are restored as quickly as possible)

Process - Service Delivery

AvailabilityAvailabilityManagementManagement

CapacityCapacityManagementManagement

IT Service ContinuityIT Service ContinuityManagementManagement

Service LevelService Level ManagementManagement

Financial Financial Management Management

Ongoing Quality Improvement

Quality heavenQuality heaven

Quality ImprovementQuality Improvement

PlanPlan

DoDo

CheckCheck

ActAct

Documentation StandardDocumentation Standard

Deming CycleDeming Cycle

Service Level Management

Goal

• To maintain and gradually improve business aligned IT service quality through a constant cycle of agreeing, monitoring, reporting and reviewing IT service achievements

Definition

Negotiationprocess

Service LevelRequirement(SLR)

ServiceCatalogue

ServiceLevelAgreements(SLA)

Customer Service LevelManager

Definition

Operational LevelAgreement (OLA)

UnderpinningContracts (UC)

ServiceLevelAgreements(SLA)

Customer

Internal Service Provider External Service Provider

Service Level Management

Level of Expectation

OutstandingOutstandingExceptionalExceptional

ExpectedExpectedGenericGeneric

level of servicelevel of service

Customer expectationCustomer expectation

SLASLA

Activities

• Planning• Implementation• Ongoing Management• Reporting

Activities

• Planning› Scope, objective and Mission statement› Awareness Campaign› Plan monitoring capabilities› Establish initial perceptions› Review or implement UCs and OLAs

Activities

• Implementation› Produce the Service Catalogue› Manage expectations› Pilot (in an easy area)› Establish monitoring capabilities› Review UCs and OLAs› Define reporting and review periods› Publicise the existence of the SLAs› Establish SLA, draft SLA› Choose words carefully (independent QA)› Seek agreement (with the right person!)

Activities

• Ongoing management› Monitoring and reporting (e.g. RAG charts)› Service review meetings› Service Improvement Program (SIP)› Maintain SLA, OLA, and UC

• Reporting

SLM Process

Contract/Contract/NegotiationNegotiation(draft, amend,(draft, amend,conclude)conclude)

DevelopmentDevelopment DeliveryDelivery

identifyidentify

Customer demandCustomer demand

definedefine monitormonitor

reportreport

reviewreview

Service levelService levelAchievementAchievement

Service levelService levelReportReport

Service ImprovementService Improvementprogramprogram

Service levelService levelRequirementRequirement

ServiceServiceCatalogCatalog

SLASLA

OLAOLA

UCUC

SpecSpecSheetSheet

ServiceServiceQuality planQuality plan

Service Level RequirementEmailEmail CalendarCalendar OfficeOffice

Service HoursService Hours 7 x 247 x 24 7 x 247 x 24 7 x 247 x 24

Availability / reliabilityAvailability / reliability Can afford downtime of Can afford downtime of • Half a day Half a day • 2hrs for credit 2hrs for credit

controlcontrol

Can afford downtime Can afford downtime of of •A dayA day

Can afford downtime Can afford downtime of of •A dayA day

Support HoursSupport Hours 7 x 247 x 24

2 hours resolution2 hours resolution7 x 247 x 24

2 hours resolution2 hours resolution7 x 247 x 24

2 hours resolution2 hours resolution

Throughput / Transaction Throughput / Transaction response timeresponse time

Send & receive within 2 Send & receive within 2 minsmins

Don’t careDon’t care Don’t careDon’t care

SecuritySecurity Mail data should be Mail data should be securesecure

ChargingCharging Fix Cost for 5MB per userFix Cost for 5MB per user

All mails should be backup weekly and archive All mails should be backup weekly and archive for 5 year durationfor 5 year duration

Service Reporting and Service Reporting and ReviewingReviewing

Volumes of emailVolumes of email

EmailEmail CalendarCalendar OfficeOffice

Sun Managed Service

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Do You Want to Be Free to Take Your Business to a Remarkable Place?

• Address IT challenges while stayingfocused on strategic initiatives?

• Maintain control of business-criticalsystems with flexible services thatfit your requirements?

• Improve business service levels?

• Extend staff capabilities withouthiring extra staff?

• Reduce IT operating costs?

Would You Like to...

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Understanding and Serving Our CustomersSun Offers Flexible, Yet Holistic Solutions for Your IT Sourcing Needs

• Use predictive management techniques • Ebay: “They (Sun Managed Services) keep the

infrastructure running smoothly so we can be thinking about the next big thing.”

• 24x7 continuous management ofyour operations all year round

• Minimize outages & reduce the threat of financial loss

• Vodafone España: Achieve 99.9% system availability• Choose selective sourcing rather than outsourcing• Hire Sun to manage only what you want managed• National Grid Wireless: Built trust and confidence

with senior management

Retain Control ofIT InfrastructureTo support heterogeneous environment

Maintain ITService ContinuityTo maximize system availability

OptimizeIT InfrastructureTo stay focused on strategic initiatives

Business Drivers Benefits of Sun Managed Services

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Understanding and Serving Our CustomersAdditional Business Drivers that Sun Addresses . . .

Business Drivers Benefits of Sun Managed Services• Meet regulatory and compliance requirements • Protect entire IT environment from security breaches

and leaks using Sun’s ITIL-compliant framework • Chicago Public Schools: Improved security and

firewall protection

• Extend staff and fill gaps with skilled Sun resources • Shorten learning curves with knowledge transfer

from Sun when bringing operations back in-house• Coventry Building Society: Saved 100 staff hours

• Reduce annual operating costs by hundreds of thousands of dollars

• Lower engineering and integration costs• Callidus Software: Passed 50% cost savings to

customers through subscription services

Manage IT Infrastructure CostsTo reduce operating expenses

Address Staff ShortfallsTo extend capabilities without hiring extra staff

ReduceSecurity RisksTo minimize business impacts

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Selectively Sourcing: An Alternative Way to Outsource

• Extend your IT staff with Sun talent

• Maintain a single point of accountability

• Cover heterogeneous, end-to-endoperations of your IT infrastructure

• Minimize business risks withISO 27001 Org Security Certification(2008) combined with ITIL-basedStaff Certification

• Gain efficiencies and reduce costsby leveraging Sun Managed Servicesresources and delivery solutions

You Maintain Flexibility and Control,While Using Sun's Deep Pool of Cross-Functional Talent

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What Can Sun Do for Your Business?

Example Efficiency Gains• 75% server utilization and 99.96% availability for increased efficiency

and availability

• 100 hour per year reduction in staff time

• 77% expansion in available IT service hours

Example Cost Reductions• $1.3 million dollar savings in five years

• 70% reduction in technical support for platform monitoring and management

• $1 million per year savings from new optical networkCustomer Snapshots: http://www.sun.com/customers/index.xml?t=service

Customer Testimonials: http//www.sun.com/customers/testimonials/services.jsp

The Value to Customers of Selectively Sourcing with Sun

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The Overall Sun Services PortfolioInfrastructure Services for the Customer Life Cycle

Build

Support

Transform

Connected and

Integrated

ProfessionalServices

LearningServices

ManagedServices

SupportServices

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Sun MANAGED Services At a Glance

Sun Operations Management

• Sun Onsite Operations Management

• Sun Remote Operations Management

• Combined Onsite & Remote Options

Sun Transformational Services

• Help enable your IT services to:

> Support the business in respondingquickly to competitive changes

> Rapidly deploy new technologies

> Better utilize resources

Adaptable IT Sourcing Approaches

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Rem

ote

Del

iver

yO

nsite

Del

iver

y

Break/Fix Support as Needed Day-to-Day Management Specialized Engagements

Sun Managed Services - A Closer LookUnderstanding the Fundamentals of Our Offering

SupportServices

ProfessionalServices

Processes Tailored toCustomer's Solution

Sun StandardProcesses

MANAGED SERVICES

Sun Remote Operations

Management

Sun OnsiteOperations

Management

SunTransformational

Services

Both Onsite & Remote

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Sun Onsite Operations Management

• Targeting potential areas for improvedservice levels

• Faster time-to-business benefit whenadopting new technology

• Bridge skill gaps and transferknowledge of management of newtechnologies to your IT staff

• Helps operate, manage, and transformwithout adding long-term, fixed coststo the IT budget

• Sets the basis for other cost-effectiveoperational management choices

Customized, Onsite Services to Mitigate Business Risks

Sun’s onsite operations management

services enable efficient, predictable IT services and operations by combining

innovative technology, skilled resources

and proven methodologies

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Onsite Phases and DeliverablesDeliverables• Service Initiation Documents: Project Plan,

Infrastructure Plan, Staff Plan

Phase

1. Service Initiation

2. Assessment

3. Service Definitionand Planning

4. Operations

5. Transition

6. Service Closure

• Assessment Report: Documents customer requirementsand positions client on a service model maturity matrix

• Service Catalog Entries, Service Improvement Plan,Measurement Plan, Transition Plan, Operational Process Plan, Operations Process Manual, Standard Edition iRunBooks

• Summary Reports, On-site Service Management• Re-Assessment Report, On-site TOI Sessions

• Detailed Completion Report, Service Completion Form

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Sun Remote Operations Management

Remote operations managementservices deliver predictive,

adaptable,cost-effective solutions to improve

operational efficiency in heterogeneousIT environments

Remote 24x365 Monitoring and Management of Any Platform

• Adaptable solutions customizedfor your business requirements

• Services extend to all areas of IT,such as the Operating System, Servers, Storage, Network, Database, Applications, and much more

• ITIL-based best practices

• Assigned account managers and engineers

• Operational efficiency ensures fast implementation and response time

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Remote Implementation Phases

Implementation Time Frame is Dependent onScope and Customer

Initiation Phase Build Phase Test andValidation Phase

Operations andSupport Phase

Sun Remote Operations

Solution Goes LiveBuild Validationand Customer

TrainingPhysical Setupof SolutionHandover to

ImplementationTeam

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Comprehensive ExpertiseITIL Framework with a Predictive Approach to Service

HETEROGENEOUS

CAPABILITIES

24x7MONITORING

ENHANCED SERVICES

Networks

Security

Storage

Databases

Applications

Web Servers

Operating Systems

REGULAR REPORTING

WEB ACCESS

AR

EAS

OF

EXPE

RTI

SE Process Disciplines• Incident Mgmt.• Change Mgmt.• Inventory Mgmt.• Problem Mgmt.

Proactive Services• Administrative Mgmt.• Patch Mgmt.• Code Release

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Monitoring Capabilities: Baseline ServiceOur People Make the Difference

Incident Ticketing and Tracking

Event Qualification(Filtering and Classification)

Event Receipt

Event Detection

Incident Notification(15-minute SLA)

Severity 1: immediate action requiredSeverity 2: preventative action required

There’s always someone on the other end of that alert waiting to prevent technical problems before they impact business

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Monitoring Capabilities: The Sun Advantage

PLEASE NOTE: Data points provided reflect average daily totals based on system information from July-August, 2008.

SUPPRESSION METHODDAILY EVENT TOTALS

~6500 Alarms to ControlCenter Reduction of 99.99% from Raw Events~4,500 ControlCenter

De-Duplication/Discards

~197,000 Informational

~5,100 Maintenance Alarms

3.8M NetworkManagement

System

127M EventsSuppressed by

Appliances4M Events (+ 70M Reporting)Data Points to Systems Core (CTS)

131M Raw EventsInbound to Appliances

~209,000 Events Analyzed

~2000 Ticketed Events (of which ~670 are correlated to existing incidents)

Ticketed Events represent ~30% of Actionable Alarms

Sun’s Method of Filtering and Prioritizing Events Reduces “the Noise” by 99%

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Management Capabilities: Robust OptionsFrees up IT Staff to Focus on More Strategic Tasks

Problem Management / Resolution of Incidents

Planning and Support for Change Controls

Proactive and Administrative TasksTrack Inventory of IT Systems

Management of Third-party VendorsPerformance and Availability Reporting

Specialized Areas of Expertise

A Wide-Range of Management Services

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Sun's Global ReachWhen we say anytime, anywhere . . . we really mean it.

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Sun Operations Management

• Flexible payment structures withno up front capital costs

• Improved operational efficiencyof existing infrastructure

• Ability to include secure off-site hostingfor full infrastructure options

• Sun as your single point of accountability

• Focus on core business initiatives whileSun takes care of your day-to-dayoperational needs

Right Mix of Onsite and Remote Management Services

*Innovative leasing options available on request

Sun provides the options to enable our

customers to plan and deliver on their

multi-sourcing strategies with improved

operational efficiencies and increased

service levels

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• Establish efficient, predictableIT services and operations

• Combining expertise, technologiesand proven methodologies

• Help enable your IT services to:

> Support the business in respondingquickly to competitive changes

> Rapidly deploy new technologies

> Better utilize resources

> Ensure predictable and measurableservice levels, with consistent andglobal processes

> Extend your IT staff with expert resources

Sun Transformational Services Turn Your IT into a Strategic Business Advantage

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For Example:• Consolidating your resources

> Reduce IT costs, while deliveringhigher levels of services

• Migrating to virtualization

> Drive cost and complexity out of yourdata center to meet today’s needsand prepare for tomorrow

• Adopting new technologies rapidly

> Maintain IT service continuity withminimal disruption to your business

• Relocating data center

> One-stop solution for relocationand migration needs

Sun Transformational Services Expertise to Help Maintain Flexibility and Control During Change

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Delivery Now and Ready for the Future

LAMPSAMP

Java EnterpriseSystem (JES)

VirtualizedSystems

OpenSource

VolumeServers

IdentityManagement

x64

10Containers

Thinking Ahead for Our Customers’ Challenges

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Why CustomersChoose Sun

ManagedServices

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Callidus On-Demand Chooses Sun

“ The combination of Sun technology and Sun Managed Services has been invaluable. The Sun technology is a very solid base for our business, and the services team has worked as a fully invested partner since the beginning, helping us launch in five months and responding quickly as we innovate and grow. ” — Jeff Saling, Vice President of Callidus OnDemand, Callidus Software

• Focus internal resources on developing software

• Deploy a reliable technology platform to add value and reduce costs

• Eliminate the need to re-architect the solution for use in a subscription environment

Challenge

• Callidus relied on Sun services and technologies to successfully bring a subscription software solution to market.

Solution

• Achieved 99.97 percent solution availability and 75 percent server utilization

• Launched new subscription business in five months

• Grew from 0 to 25,000 subscribers in 18 months

• Passed 50 percent cost savings to customers through subscription services

Results

Industry:Software

Sun Products and Services:Sun Managed Operations

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Vodafone Espana Chooses Sun

“Sun Managed Services not only provide us with high quality service, but they have also enabled us to optimize system performance and increase the return on our investment in technology. ”

— Miguel Angel Vázquez, Director of Systems Management and Implementation, Vodafone España

• Deliver reliable, high-quality mobile services

• Assure availability of critical applications and data

• Reduce operating costs

• Maximize IT productivity

Challenge

• Vodafone España engaged Sun Managed Services for remote monitoring and management of more than 400 critical application and database servers

Solution

• 99.8% average system availability

• 51% reduction in incidents reported

• 36% reduction in Operational Risk Index (ORI)

• 70% reduction in IT staff hours for platform monitoring and management

Results

Industry:Communications

Sun Products and Services:Sun Managed Services, Sun Learning Services, Sun Professional Services

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Coventry Building Society Chooses Sun

• Keep Internet, Core Banking and Automatic Teller Machine (ATM) services available 24x7

• Address technical issues rapidly to minimize downtime

• Identify root causes of technical problems

Challenge

• Management and monitoring of critical systems supporting Coventry’s core business, rapid technical issue remediation, root cause analysis 24x7

Solution

• Saved 100 staff hours for out-of-hours patching of critical servers

• Reduced downtime related to system failures

• Proactively prevented system failures through root-cause analysis of performance issues

Results

“Sun Managed Operations Services provides us with the round-the-clock alerts and technical support expertise we needto put our members first and deliver exceptional service. The out-of-hours patching service provided bySun Managed Operations saves us 100 staff hours per year.”

- Karen Humphrey, Technical Support Team Lead, Coventry Building Society

Industry:Financial Services

Sun Products and Services:Sun Managed Operations

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Sun Remote Operations Management

Did You Know Sun Supports 400+ Technologies?AREAS OF SUN EXPERTISE SAMPLE SUPPORTED TECHNOLOGIES

Operating SystemsNetworking

Security

Storage

Databases

Applications

Web ServersOrg Certifications

- ISO 27001 Security Certified in Americas, Europe, & Asia - ITIL Certified Staff

TCP/IP

VPN

PIX

LDAP

IIS

Content Switching

WAN

LAN

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When IT and Business Goals Are in Balance, Remarkable Things Happen ...

• Free-up IT staff so you can focus on strategicbusiness initiatives

• Gain control over your processes using an ITIL-based approach to gain better efficiencies

• Create a flexible operating infrastructure – one that adapts readily to new technologies

• Accomplish day-to-day IT tasks securely and more effectively to ensure that crucial data is protectedand available

• Achieve a balanced ecosystem where IT capabilities and business strategies are aligned and working as one

Thank you

Dr.Thanachart Numnondathanachart.numnonda@sun.com