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Your Cloud‐Based Services Business
Debra Osswald
Global Communications Industry
Strategy Leader
IBM Corporation
IBM Global Communications Industry
NEW
NEW
OPPOR-
THREATS
TUNITIES
SaaS & Cloud Computing Have Emerged as the Next Enterprise Computing Platform
Beyond Software‐as‐a‐Service: Cloud Computing
High
SaaS 1.0 SaaS 2.0 Cloud Computing
Wave I: 2001‐2006 Wave II: 2005‐2010 Wave III: 2008‐2013 Wave IV: 2011‐2016
Cost‐Effective Integrated Workflow‐Enabled Measured, Monitored, Managed
Software Delivery Business Solutions Business Transformation Business Processes
Post‐SaaS Adoption
Adoption
Ubiquitous SaaS Adoption • End‐to‐End Business Processes
• Optimized Business Ecosystems • Integrated with Services Anywhere
Mainstream SaaS Adoption • IT‐Targeted Ecosystems • Intelligent Hubs Linking Platforms
• Integrated w/ Business • SaaS Development Platforms • Mobile Device‐ and Sensor‐Controllable
Early SaaS Adoption • SaaS Integration Platforms • Inter‐enterprise Collaboration • SLAs for Composite Service Offerings
• Stand‐alone Apps • Business Marketplaces • IT Utility / SaaS Infrastructure • Dynamically Scalable Infrastructure
• Multi‐tenancy and SaaS Ecosystems • Customized, Personalized Workflow • Focus on Optimal Business Process
• Limited Configurability • Customization Capability • Focus on Business Transformation
• Focus on TCO / rapid • Focus on Integration
deployment
Low
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Saugatuck Technology
The focus of SaaS shifts over time from cost‐effective delivery of stand‐alone application services (Wave I), to integrated
business solutions enabled by web services APIs and ESBs (Wave II), to workflow‐ and collaboration‐enabled business
transformation (Wave III), leading to measured, monitored and managed business processes (Wave IV). By 2013, at least
20 % of enterprise IT workloads – that historically would have operated on‐premise – will be run in the cloud, providing
significantly enhanced functionality, lower costs, fewer staff, and a reduced carbon footprint.
This Model Creates Opportunities for CSPs to Use Cloud Computing to Deliver an Expanded Set
of Services Providing Greater Value with Potentially Lower Infrastructure and Operating Costs
Cloud enables:
Cloud Computing
Self-service Model
Sourcing options
Economies-of-scale
Key Attributes of Cloud Services
Shared, standard service – built for a market (public),
not a single customer
“Cloud” represents: Solution-packaged – a “turnkey” offering, integrates
The Industrialization of Delivery for IT required resources
Self-service – admin, provisioning; may require some
supported Services “on-boarding” support
Elastic scaling – dynamic and fine-grained
Multiple Types of Clouds will co-exist: Usage-based pricing – supported by service metering
Accessible via the Internet/IP – ubiquitous
Private, Public and Hybrid (authorized) network access
Standard user interface (UI) technologies –
Workload and / or Programming Model browsers, RIA clients and underlying technologies
Specific Published service interface/API – e.g., web services
APIs Key Attributes Source: IDC, Cloud Computing 2010 Update, Sept. 2009.
26%
CAGR
Business Process
Services as a Service (BPaaS)
Software
as a Service (SaaS)
Platform
as a Service (PaaS)
Hardware Infrastructure
as a Service (IaaS)
; Identify the market opportunity most relevant for your business and the best
service category to leverage core competencies and any unique assets
; Identify several plays (service offering areas) with the highest probability for
providing differentiated value and financial success (e.g., 15% target
market penetration with 32% net profit margins on average per services).
; Identify the most likely inhibitors to adoption and key counter measures.
; Analyze the market to identify attractive price points and service bundles, as
well as other distribution channels and go-to-market strategy aspects, etc.
Consumption model
Public Cloud
Infrastructure database
Services
computing
• Private cloud Enterprise
Supply
• Web, collaboration • Components Enterprise
Data Center
• Information WWW
Business • Government
Services WWW
WWW
1 CSP Users
Ecosystem Enabler
Anchor SaaS ISV,
other ISVs
Developer Cloud
Partners
Desktop Cloud
4 Platform ISVs
Single access to
Window
PaaS Tooling
Single
ISV
ISV
ISV
all services on
API
SDPs are often more complex than some CSPs are prepared to manage:
Large scale SDP deployments integrate many technologies across network, Internet
and partner interfaces and require capacity planning and performance monitoring.
After some first-hand experience with early SDP systems, some CSPs are finding they
do not have all the skills in-house to manage, grow and expand these platforms.
Many CSPs would prefer to partner and share the deployment risk with an experienced
vendor rather than take on the total project risk alone.
Service Exposure
SDP Third Party Access OSS/BSS
OSS/BSS
Portals / Web 2.0
Mobile Retailing /
Payments Service
Fulfillment
Services
Services Service Service Business
Creation Processe Service
Execution Assurance
s
Desig
Service
Service n Billing
Legacy Services
Platform
Platform Build Dynamic Mediation
Next Gen Services SOA
Deplo Analytics
y
Network
Network Information
Managemen
Network t
Adaptation
Security
NGN // Legacy
A Cloud-based SDP can provide these same functions in close coordination with the existing
CSP model; in some cases to replace functions, in other cases to enhance or extend them.
Service Delivery Platform
• Enables development of innovative services
Provisioning Workload Mgmt Billing & Metering
• Decreased time to market for new services Services Services Services
Business Services
Solution Overview
Developing the Cloud services strategy & implementation plan is the first step.
Without a solid strategy, attempting to offer Cloud-based services can be a huge
resource drain and an initiative that does not achieve its intended objectives
– Wasted time, energy and money resulting in poor customer perception of the CSP’s Brand
– Customer churn resulting from dissatisfaction with the service experience (QoE)
– Poor control of the services delivered; risk of security threats and data/privacy vulnerabilities
With a sound strategy, Cloud computing can be a huge opportunity for many CSPs
– The effort results in a lower cost, more responsive, dynamic infrastructure better able to
serve both internal and external user requirements
– Optimized service delivery model enables CSP to offer a broader range of services resulting
in higher ARPU, and improved customer satisfaction and loyalty
– Greater flexibility in business models and billing arrangements
5 Steps to Cloud
IT Roadmap Workload Enterprise & Public
Architecture Implementation
Assessment Cloud Mix
Standard
Service
Hybrid Role Definition Bus
Based Platform Tools Email
Cloud Access Apps
Service Data
Private Infrastructure Publishing Test and Pre-
Tools Intensive
Cloud Production
Processing Trad Sys
e
BPM
Custom
Systems Storage
m
Service
Catalog
Cloud Platform Fulfillment & IT
IT Config Tools
BSS
Service
Operational
Console Reporting & Hybrid Info Web
OSS Analytics Database ERP Mgmt Server
Network
Capital Rent
Financial
1997 Today
IBM IT From 2002 through 2007, IBM's own IT CIOs 128 1
Transformation
investments delivered a cumulative Host data centers 155 7
benefit yield of approximately $4 billion.
Web hosting centers 80 5
For every dollar invested, we saw a
$4 cumulative benefit. Network 31 1
Project The virtualized environment will use 80% less energy and
Big Green 85% less floor space.
2X existing capacity, no increase in consumption or impact
by 2010.
Cloud-enabled Self-service for 3,000 IBM researchers across 8 countries.
on demand IT
Real time integration of information and business services.
delivery solution
ROI Analysis
Impact
Reduction of Total Cost of Ownership of
Data Center Infrastructure
New
100% Development Reduced Capital Expenditure
Liberated Improved utilization reduces requirement for
Software funding for new new capital purchases
Costs development, Strategic
transformation Change Reduced Operations Expenditure
investment or Capacity Lower facilities, maintenance, energy, IT
Power direct saving service delivery and labor costs
Costs
Additional Benefits
Reduced risk, less idle time, more efficient use
Current Deployment (1-time)
Labor Costs of energy, acceleration of innovation projects,
IT enhanced customer service
Spend (Operations and Software
Maintenance) Costs
Business Case Results
Power Costs Hardware, Annual savings: $3.3M (84%)
(88.8%) labor &
power Costs went from $3.9M to $0.6M
Hardware Labor Costs savings Payback Period: 73 days
Costs ( - 80.7%) reduced Net Present Value (NPV): $7.5M
(annualized) annual cost
Hardware Costs of operation Internal Rate of Return (IRR): 496%
( - 88.7%) by 83.8% Return On Investment (ROI): 1039%
Note: 3-Year Depreciation Period with 10% Discount Rate
Accelerated time to market and provides rapid access to Physical and Virtual Resources
application services and virtual resources
Servers Network Storage Collaboration
Provided business flexibility and lowered costs with an Software
In Summary …
THANK YOU!
Deb Osswald
Global Communications Industry Strategy Leader
djosswald@us.ibm.com
BACKUP CHARTS
Standards Based Interfaces Service
Publishing
Role-based Infrastructure Services Tools
Access
Service
Cloud Platform Fulfillment &
Configuration
Tools
Service
Business Support Systems
Catalog (BSS)
Standards Based Interfaces
– Other workloads, such as collaboration and development and test, will move faster and
can provide rapid return-on-investment and productivity gains.