Presentatie John Hermans Cloud master class Nyenrode en RTL Z 2011

Orchestrating the

New Paradigm

Master class

Cloud Computing

Utrecht – 27 Juni 2011

John Hermans

1© 2011 KPMG Advisory N.V., the Dutch member firm of KPMG International Cooperative (―KPMG International‖), a Swiss entity. All rights reserved.

KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (―KPMG International‖), a Swiss entity.

Today’s Cloud Marketplace Perspectives

Gartner

Gartner estimates that global spending

on cloud services will hit $68 billion

this year, a gain of 16% over 2009,

which is more than triple the expected

growth rate for total IT spending.

CFO Magazine, December 2010

Savvis

70 percent of IT decision makers

are using or planning to use

cloud computing in their own

enterprises within 24 months.

Windows IT Pro Magazine,

February 1, 2011

China

China is going to see a cloud computing

market worth over RMB60 billion [~$9.1

Billion USD] in 2012.

News Track Daily, January 20, 2011

Microsoft

―For the cloud we are all in!‖ – Steve

Ballmer (CEO)

March, 2010



Understanding the Cloud Environment

Internet-based data

access & exchange

Internet-based access to low cost

computing & applications+Cloud

Environment =

On-Demand Self-Service

Internet Accessibility

Pooled Resources

Elastic Capacity

Usage-Based Billing

Cloud Environment

Characteristics:

Cloud Service Models

Software

as a Service

Business operations

over a network

Google Docs,

Salesforce.com

Platform

as a Service

Deploy customer-

created applications to

a cloud

MS Azure, Amazon

Web Services

Infrastructure

as a Service

Rent storage,

processing, network

and other computing

resources

Mozy, Rackspace

Cloud Deployment Models

Private Operated for a single organization

PublicAvailable to the general public or large industry group, owned by an organization selling cloud services

Community Shared by several organizations, supporting a specific community

“SaaS” “PaaS” “IaaS”

Discussion Topics

1. Cloud: A Game Changer

2. Cloud‘s Impact on Business

3. Cloud‘s Impact on IT

4. Impact of Cloud on Business Operations

Appendix: Understanding the Cloud

Environment

4Impact of Cloud on IT© 2011 KPMG Advisory N.V., the Dutch member firm of KPMG International Cooperative (―KPMG International‖), a Swiss

entity. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (―KPMG

International‖), a Swiss entity.

Cloud: A Game Changer Looking for Business

Leadership

The question is, how can you transform your business to

take advantage of this fundamental disruption?

Cloud virtualizes IT—but it transforms

business.

The Cloud conversation usually starts with IT.

The problem is, it often ends there, too.

It‘s easy to focus on how moving to the Cloud

helps a business cut costs, but it also creates

opportunities.

Cloud is in fact one of the most

disruptive forces in business in

20 years.




Not Just Cheaper, Better, Faster—

Cloud Enables Innovation

The Cloud has already changed how you work

and with whom you compete.

By virtualizing processes, the Cloud creates

new opportunities and business models.

By shattering barriers to entry, the Cloud

creates new competition. It gives ―two- guys-in-

a-garage‖ the scalability and infrastructure

access of an established player.

Being in the Cloud is quickly shifting from a competitive

advantage to an operational necessity.




Too Late to Wait Leaders are using the Cloud to improve business performance and increase shareholder value, not just cut costs.

How can you join them?

The Right CEO Questions to Ask:

How can Cloud help solve business

issues?

Where should you start your journey

towards Cloud?

Which Cloud models have the greatest

potential for improving your business?

What are the inhibitors for Cloud and how

do you mitigate risks?

Discussion Topics






Environment



Cloud Impact on Business

Virtualized Business Models to drive…

Opportunities to Leverage Commoditized Enterprise

Applications and Economies of Scale

Virtualized Technology

Virtualized ProcessesVirtualized

Organization

Internet-based data access &

exchange

Internet-based access to low cost computing &

applications+Cloud

Environment =

Increased Agility Greater Flexibility Faster Results Reduced Cost

© 2011 KPMG Advisory N.V., the Dutch member firm of KPMG International Cooperative (―KPMG International‖), a

Swiss entity. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International

Cooperative (―KPMG International‖), a Swiss entity.

Increased Agility

Greater Flexibility

Faster Results

Reduced Cost

Business Benefits of Cloud

Cloud provides businesses increased agility and greater flexibility, yielding faster results at a reduced cost.

Rapidly respond to changing market conditions or needs

More options in combining people, process, and technology to deliver economic value

Faster time-to-value in achieving results that support more iterative solution design and delivery strategies

Lower total cost to deploy new solutions or to achieve new capability levels




Increased Agility

Cloud provides a business with increased agility to rapidly respond to changing market conditions or needs.

Business Responsiveness

Respond faster to gaps or deficiencies in capabilities

Increase speed in rolling out new offerings internally

Speed business innovation to the marketplace

IT Resource Availability

Reduce dependence on IT function to deliver new

capabilities

Rapidly provision computer & engineering resources

Scale to support the needs of business innovation




Unprecedented Flexibility to

Fill Gaps

Technology

People Process

Greater Flexibility

Cloud provides unprecedented flexibility and more options in combining people, process, and technology to

delivery economic value.

People

Makes virtual resources available internally

and externally

Offers ability to combine best-in-class

service providers (logistics, payroll, engineering, etc.)

Process

Provides access to providers of leading

practice process and service

Allows companies to leverage the

process improvements of a larger

user community

Technology

Enables organization to source an array

of IT capabilities (SaaS, IaaS, PaaS)

Offers IT resources on demand




Faster Results

Our experience demonstrates that Cloud provides faster time-to-value, supporting more iterative solution

deployments

Allows organizations to be more

experimental in delivering new

capabilities without significant

investment of time and money

Allows technology deployments

to be more iterative, delivering

incremental value to the organization

faster

Often eliminates technology

provisioning all together and significantly

reduces time to configure

4 to 6 Months 4 to 6 Months 4 to 6 Months

ROI ROI ROI

Cloud Enabled Solution Deployment

Scope Design Test Accept

Go Live

18 to 36 Months

ROI

Traditional Solution Deployment




Reduced Cost

In many instances, Cloud provides a lower total cost to deploy new solutions and to achieve new capability

levels

Software

Hardware

Hosting

Operations

Support

Possible 40% - 60% Reduction in TCO

Traditional

Deployment

Public Cloud

Enabled

Deployment

Lower upfront cost

May allow switch from fixed cost to

variable cost

May reduce total cost of ownership

Limits capital outlay to ―activate‖ a service

Provides ability to scale usage and

related costs as warranted

Cloud Model




© 2011 KPMG Advisory N.V., a Dutch limited liability company, is a subsidiary of KPMG Europe LLP and a member

firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‗KPMG

International‘), a Swiss entity. All rights reserved.

14

KPMG Survey May 2010

Conducted in the Netherlands – 120 CIOs/CISOs participated







Cloud into perspective: cloud computing is both marginal and significant

• Marginality of the cloud

• Europe < 5 percent of total IT spending

• US: 60 percent of total IT spending

• Significance of the cloud

• Growth of commercial cloud services 20 to

30 percent per year (2010-2015)

• Move towards centralization and

commoditization of IT

15




Cloud Can Be Implemented in Multiple Ways

Cloud can be delivered

through a variety of service

and deployment models

(i.e., SaaS, Public, Private)

It is often provided through a

hybrid of these options.

Community

Cloud

Public

Cloud

Private

Cloud




Where Do Most Organizations Begin?

Most organizations are investing in Software as a Service in both Public and Community deployment models

as well as investing in Private Clouds.

Software as a Service in the Public Cloud is a model for delivering cloud technologies to support specific business services over the Internet

Community Cloud brings together private networks with external partners to enhance the entire value chain across businesses, suppliers, and customers

Private Cloud extends existing internal efforts to virtualize IT by enabling the delivery of IT as a Service, going further in reducing long-term operational costs than just traditional virtualization. Infrastructure as a Service models are often core aspects of a private cloud.

Community Cloud brings together private

networks with external partners to enhance

the entire value chain across businesses,

suppliers, and customers

Community

Cloud

Public

CloudPrivate

Cloud



Community and SaaS – Maximizing the Benefit

Community ModelSaaS Model

in Public ModelPrivate Model

?

?

Increased Agility

Greater Flexibility

Faster Results

Reduced Cost

While all Cloud models deliver on the promise of agility and flexibility faster and cheaper, Private Clouds

pose short-term speed and cost considerations, especially when they are internally hosted. Use of IaaS

offerings (internally and externally) can mitigate cost and speed issues, but organizations must balance

those gains with the data privacy/security risks they are willing to take.



Community Cloud

Collaboration: Allows organizations to leverage and access services used by other participating organizations creating unprecedented synergies.

Common Standards: Allows related companies to share common IT capabilities such as data services, security services, and testing services.

Extended Organization: Supports processes and solutions that span multiple business partners including suppliers, providers, and customers.

Flexibility: Offers shared investment and setup costs and the ability to work with trusted suppliers who are part of the community.

Faster Time-to-Market: Speeds innovation as all organizations benefit from advances made by others in the cloud.

Community Cloud

Brings together private networks with

external partners

Enhances the entire value chain

across businesses, suppliers, and

customers

Community clouds allow businesses with common interests to leverage shared services to support new

business models offering the greatest potential for transformational impact.




Community Cloud (continued)

As an example, Community Clouds allow companies to synchronize business processes across multiple

tiers of business partners

Supplier Manufacturer Distributor Retailer

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Collaborative Forecasting

Point of Sale Based Replenishment

Order Management

Forecast-based Replenishment

Procure to Pay Processes

New Product Introduction

Transportation Management

Vendor Managed Inventory

Buy / Sell Procurement

Collaborative Design

Community Cloud Platform



Software as a Service (SaaS)

Best Practices: Offers opportunity to leverage best practice processes and technologies in use across the organization‘s industry.

Time and Cost Savings: Saves time and costs compared with traditional client server model that deploys software on internal infrastructure

Scalability and Elasticity: Allows access to IT solutions from best-in-class providers quickly and as needed

Flexibility: Enables faster change management cycles and access to technology advances made by the solution provider.

Faster and Better: Offers security and functionality at lower costs and with faster results

Software as a Service

Delivery of specific business services

over a network, most commonly the

Internet

The applications are accessible from

various client devices through web

browsers.

SaaS speeds up the realization of business benefit of IT solutions at lower up-front costs.



Community

Cloud

Public

Cloud

Private

Cloud

Private Cloud

Convenience: Offers a way to deliver internal applications through a thin customer web interface providing an internal Software as a Service capability

Control: Provides those with data sensitivity concerns with the most control and least risk of any of the cloud options

Minimum Risk: Provides the benefits of accessing IT as a service while minimizing the risks associated with using public cloud solutions

Expensive: Requires high initial set-up investments, but long term operational costs may be less.

Infrastructure as a Service: IaaS tends to be the primarily service model used in private deployment models (over PaaS and SaaS) because it is a natural evolution of virtualization of IT infrastructure

Private Cloud

Extends existing internal efforts to

virtualize IT by enabling the delivery of

IT as a Service,

Enables reduction in long-term

operational costs

Private clouds reduce operational costs through virtualization and delivery of IT as a service. They are currently popular due to regulatory, data security/privacy, and performance concerns.

Discussion Topics






Environment




Too Late to Wait

Too Late to Wait

Leaders are using the Cloud to improve

business performance, not just cut costs.


The Right CIO Questions to Ask Now:

How will the adoption of Cloud within my

enterprise impact our IT delivery

capabilities?

How do I transform my IT organization to

effectively support Cloud enabled business

models?

25© 2011 KPMG Advisory N.V., the Dutch member firm of KPMG International Cooperative (―KPMG International‖), a Swiss



Increasingly, CIOs are shedding the support persona and

taking a seat at the strategy table.

Cloud forces IT organizations to evolve from a

traditional services provider model to a highly agile

services integrator model. The results?

Those who resist are seeing their business leaders

move to the Cloud on their own.

Leaders are focused on enhancing internal capabilities

and integrating multiple IT service offerings from

internal and external providers.

Vendor management, IT governance, and information

architectures are critical.

Rethinking their enterprise architectures to leverage the value cloud can bring to key business processes

IT Leaders Are Responding

Now







Cloud Computing is here to stay !

26







The hybrid environment as new paradigm

• On premise IT, serviced by

local, ―own‖ organization

• Outsourced IT, serviced by

limited number of outsourcing

partners

• IT in the Cloud, services by

growing numbers of cloud

service providers

Users

Organization

Hardware, software + data

Managed hosting

Private-External


Third-Party Vendor (Multi-Tenant)

Public


Internal Data Center

Private

Organizations Internal IT Service providerService provider

Internet

or LAN

Services

Users

Other Cloud

Customers

Internet


Service provider

Combined Public + Private Cloud

Hybrid

27




IT Risk Management• Risk identification and

analysis across

different CSPs

• Risk library

• Vendor/CSP Audits

IT Finance

Management• Business case

• Service Costing and

Chargeback

• SLA penalty-bonus

calculation

IT ―Service Integrator‖ Model: ability to ―Orchestrate‖

Successful adoption of a Cloud delivery model depends on an organization’s ability to establish a robust

Enterprise IT Service Integration model.

Vendor

Manager

IT Risk

Manager

Service

Owner

Rackspace

Google

Amazon Web Services

Internal IT

Organization

(retained IT Services)

Service Ownership:• Single Point of Contact

with the Cloud Service

Providers (CSP) & IT

• Demand Capture

• Services Standards

• Service Level

Monitoring

Vendor Management:• Vendor certification

• Contract Negotiations

IT Finance

Manager

The Business

Discussion Topics






Environment




Too Late to Wait Leaders are using the Cloud to

improve business performance,

not just cut costs.


The Right COO / CRO Questions to Ask

Now?

Does adopting cloud impact my financial

processes?

What are the tax implications of adopting

cloud?

How will I control and manage my data?

How do I manage cloud related security

and privacy risks?

How do I still comply with regulations while

sending my data to cloud providers?







Considerations

Dependency of the cloud

• External data storage and processing

• Sharing of IT resources (multi tenancy)

• Dependency on the public internet

Complexity of the hybrid environment

• Multiple concepts regarding:

• Data management

• Contracts

• Technology

Assurance

• Complexity to ensure compliance

• Lack of industry standards and certifications for

cloud providers (ISAE3400 / ISAE3000)

• Emerging government schemes like FEDRAMP

Financial

Vendor

Security

Business

Risks

Regulatory

ComplianceTechnology

Operational

31







Risk and security is seen as major concern for cloud adoption

32







Dimensions of Risk

Operating in a cloud environment presents risks in six key dimensions

Financial

Underestimated start-up costs

Exit costs

Contract complexity

Run-away variable costs

Financial

Vendor

Security

Business

Risks

Regulatory

ComplianceTechnology

Operational

Security

Data segregation, isolation, encryption

Information security

Identity and access management

Intellectual property protection

Vendor

Vendor lock-in

Service provider reliance

Performance failure

Vendor governance

Regulatory Compliance

Complexity to ensure compliance

Lack of industry standards and certifications

for cloud providers

Records management / records retention

Regulatory change control, reliant on vendor

timeliness

Data privacy

Operational

Business Resiliency/Disaster

Recovery

Service reliability and uptime

SLA Compliance

Technology

Cross-vendor compatibility

Proprietary lock-in

Customization limitations

Inadequate change control capabilities

Technical security risks

33




Key Risks & Challenges in Adopting Cloud

Cloud adoption requires a careful examination of the potential operational risks and challenges in addition to

the technology questions.

Financial Management and Tax

Movement from CapEx to OpEx model impacts existing budgeting, forecasting, and reporting processes

CapEx to OpEx model and changes in the character and source of service impacts tax considerations

Outdated tax laws and regulations create uncertainty when characterizing the various cloud transactions

Cloud ROI and cost/benefit analysis are complicated by need for knowledge of existing cost of delivery and future use of service

Data may be stored in cloud (1) without proper customer segregation allowing possible accidental or malicious disclosure to third parties

and/or (2) in a legal jurisdiction where the rights of data subject are not protected

Loss of governance of critical areas, e.g., vulnerability management, infrastructure hardening, or physical security

Weak logical access controls due to cloud vendor‘s IAM immaturity

Cloud adoption introduces rapid change in the organization

Cloud sourcing may impact existing organizational roles and could require new skills or make others redundant

Business resiliency/disaster recovery needs and plans will change and require updating

Security and Privacy

Operational

Regulatory and Compliance

Vendor Management

Data & Technology

• Lack of clarity of ownership responsibilities between cloud vendor and user company• No prevalent standards for vendor interoperability• Extensive reliance on CSPs

Lack of visibility into the Cloud Service Providers (CSPs) operations inhibits analysis of its compliance with pertinent laws and

regulations

Complexity of records management/records retention creates challenges

Lack of industry standards and certifications for cloud providers creates risks

Risk of creating independent silos of information perpetuate the problem of data integrity, quality, and insight

Business can bypass the IT function to implement technology solutions, posing challenges for IT governance

Cloud delivery models dramatically change how IT delivers technology services to support business requirements

Cloud adoption opens the four Data Center walls to external IT Services providers, creating new risks







To conclude

Orchestration of the hybrid environment is a critical success factor

35







Key messages

36

APPENDIX

UNDERSTANDING THE CLOUD

ENVIRONMENT



Understanding the Cloud Environment

Internet-based data

access & exchange

Internet-based access to low cost

computing & applications+Cloud

Environment =

On-Demand Self-Service

Internet Accessibility

Pooled Resources

Elastic Capacity

Usage-Based Billing

Cloud Environment

Characteristics:

Cloud Service Models

Software

as a Service

Business operations

over a network

Google Docs,

Salesforce.com

Platform

as a Service

Deploy customer-

created applications to

a cloud

MS Azure, Amazon

Web Services

Infrastructure

as a Service

Rent storage,

processing, network

and other computing

resources

Mozy, Rackspace

Cloud Deployment Models

Private Operated for a single organization

PublicAvailable to the general public or large industry group, owned by an organization selling cloud services

Community Shared by several organizations, supporting a specific community

“SaaS” “PaaS” “IaaS”




Understanding the Cloud Service Models

Infrastructure

as a

Service

Software as a

Service

Platform as a

Service

Less End User

Management

Less End User

Management

More End User

Control

More End User

Control

Description

Provider applications are accessible through a thin client interface

such as a web browser

Provider manages/controls the infrastructure including network,

servers, operating systems, storage, or individual application

capabilities

E.g., Google Apps, MS Office Live, Netsuite, Salesforce

Provider offers quick deployment of computing resources such

as processing, storage, and network

Developers can write applications that run on the cloud

E.g., Amazon.com, Rackspace, Terremark, IBM

Enables customer to deploy onto the cloud infrastructure

consumer-created or acquired applications created using

programming languages/tools supported by the provider.

Consumer does not manage/control cloud infrastructure but

has control over deployed applications and possibly application

hosting.

E.g., Windows Azure, Force.com, Google App Engine




Understanding the Cloud Deployment Models

Each service model can be deployed leveraging several different deployment models: Private, Public, or

Community

Private Cloud: A ―closed‖ environment

for a single organization hosted internally

or by a third party

Allows an organization to act like a cloud

provider internally

Provides organization the flexibility to

rapidly scale internal IT resources

Provides organization with full control

over data

Often requires high initial investment

but helps reduce long term costs

Offers elastic capacity

May exist on or off premise




Understanding the Cloud Deployment Models (continued)

Public Cloud: Infrastructure is owned by a cloud

services provider, which makes it available to

the general public or a large industry group

Uses pay-as-you-go, utility pricing

Provides high agility and speed-to-market

Less upfront cost

May allow switch from fixed costs to variable costs

Offers less customer control over data and

service levels

Provides the opportunity to leverage the leading

practices of an industry vertical or functional

area




Understanding the Cloud Deployment Models (continued)

Community Cloud: Infrastructure is shared by

several organizations with common interests—

offering potentially the greatest

transformational value of any of the Cloud

deployment models.

Supports organizations with common

interests such as supply chain, mission,

security requirements, policy, or

compliance considerations

Often defined by industry, supply chains,

or geography

Supports the emergence of new business models

and working relationships

May be managed by the community or a

third party

May exist on or off premise







KPMG Key Contact Details

John Hermans

Partner

KPMG Advisory N.V.

Tel: +31 6 51 366 389

Email: [email protected]

43

© 2011 KPMG Advisory N.V., registered with the trade register in the

Netherlands under number 33263682, is a subsidiary of KPMG Europe

LLP and a member firm of the KPMG network of independent member

firms affiliated with KPMG International Cooperative (‗KPMG

International‘), a Swiss entity. All rights reserved. Printed in the

Netherlands. The KPMG name, logo and ‗cutting through complexity‘

are registered trademarks of KPMG International Cooperative.

The KPMG name, logo and ‗cutting through complexity‘ are registered

trademarks or trademarks of KPMG International Cooperative (KPMG

International).

Presentatie John Hermans Cloud master class Nyenrode en RTL Z 2011

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Transcript of Presentatie John Hermans Cloud master class Nyenrode en RTL Z 2011