Omagh Enterprise Company

6th September 2011

Prepared for:

Cloud Computing – A Strategy Guide For Your Business

Background to Loughtec

Loughtec provide a range of IT products and services to commercial and

public sector organisation’s across Ireland – primarily in NW.

Loughtec are the IT experts for all of our clients – offering hardware, software, technical support and consultancy services.

Trading for 6 years with approx 110 active customers.

The business has a team of highly skilled engineers with a number of

specialist skills.

Loughtec has special partnerships and alliances with some leading

suppliers in the IT sector and an exclusive agreement with Eircom.

Business is in a competitive market place but it has a number of USPs

What is the cloud?

“Cloud computing is an emerging approach to shared infrastructure in

which large pools of systems are linked together to provide IT

services.”

– IBM press release on “Blue Cloud”

• “…a hosted infrastructure model that delivers abstracted IT resources over the Internet” – Thomas Weisel Partners LLC from “Into the Clouds: Leveraging Data Centers and the Road to Cloud Computing”

• “Cloud computing describes a systems architecture. Period. This particular architecture assumes nothing about the physical location, internal composition or ownership of its component parts.” – James Urquhart blog post

Loughtec’s Definition of the Cloud

We like the Gartner definition which defines cloud computing as “a style of computing where massively scalable IT-enabled capabilities are delivered ‘as a service’ to external customers using Internet technologies.”

PUBLIC CLOUD VERSUS PRIVATE CLOUD

• In the normal cloud scenario organisations run application’s in a data centre provided by a third party.

• The provider is responsible for providing the infrastructure, servers, storage and networking necessary to ensure the availability and scalability of the applications.

• A private cloud is a proprietary computing architecture, owned or leased by a single organisation, which provides hosted services behind a firewall to “customers” within the organisation.

• Private clouds will be the route chosen by many enterprises and that there will be substantial investment in this area.

Reasons to Consider Adopting Cloud Computing

Scalability

• Scalability is a key aspect of cloud computing.

• The platform can expand and contract automatically based on capacity needs – known as elasticity.

• Cloud computing provides resources on-demand for many of the typical scaling points that an organisation needs including servers, storage and networking.

• The on-demand nature of cloud computing means that as your demand grows (or contracts) you can more easily match your capacity (and costs) to your demand.

• No need for over provision.

• Smaller companies are able to punch well above their weight in terms of the technology they can access.

Cost Saving

• There are mixed views on this.

• McKinsey recently published a report claiming that there was no cost saving to be had and that, on the contrary, it could work out more expensive.

• On the other hand, a report by Forrester emphasises the fact that use of cloud computing matches cash flow to system benefits more appropriately than the traditional model.

• Old way of doing things, a large investment is made early in the project prior to system build out, and well before the business benefits.

• With cloud computing you move from a capital investment to an operational expense.

How to calculate the real cost?

• Companies tend to home in on the cost of provisioning a server internally (including software licences) and end up comparing that with the cost of a cloud-based solution – that’s not correct.

• The problem with this type of costing is that it omits a whole range of costs that are often not assigned to the internal server’s costs such as

technical personnel necessary to keep system’s up and running.

extra personnel necessary to manage server procurement.

electric bills and capital expense investments for power and cooling.

internal technical people to do assessments and trials of different hardware offerings.

procurement people to do the negotiating for hardware purchase

internal and external costs for system design.

contract and account people to keep track of all the various licenses, leases, etc.

Business Agility

• The speed at which new computing capacity can be requisitioned is a vital element of cloud computing.

• Adding additional storage, network bandwidth, memory, computing power etc can be done rapidly and often instantaneously.

• Cloud computing allows organisations to react more quickly to market conditions and to scale up and down as needed.

• New applications can be quickly released with lower up-front costs.

• if you’re starting a new line of business, you can launch with a robust, state-of-the-art infrastructure without tying up limited capital.

Built In Disaster Recovery

• The burden of managing technology is placed on the technology provider.

• Their responsibility to provide built-in data protection, fault tolerance, self-healing and disaster recovery.

• Typical disaster recovery costs are estimated at twice the cost of the infrastructure.

• With a cloud-based model, true disaster recovery is estimated to cost little more than one times the costs, a significant saving.

• Because cloud service providers replicate their data, even the loss of one or two data centres will not result in lost data.

• Now every business can put a plan in place to ensure they are able to continue their business in the face of radical environment changes.

Device & Location Independence

• Cloud computing is already enabling greater device independence, greater portability, and greater opportunities for interconnection and collaboration.

• With applications and data located in the cloud it becomes much easier to enable users to access systems regardless of their location or what device they are using.

• Teleworkers can be quickly brought online, remote offices can be quickly connected, temporary teams can be easily set up on site, mobile access can be easily enabled.

• With the growing use of smartphones, netbooks and other hand-held devices there is also an increasing need for data access on the go.

BONUS REASON: It’s Greener!

• Most servers run significantly below capacity (real world estimates of server utilisation in data centres range from 5% to 20%) yet they still consume close to the same amount of power and require the same amount of cooling as a full capacity machine.

• In a cloud computing environment resources are shared across applications (and even customers) resulting in greater use of the resources for a similar energy cost.

• With cloud computing virtual offices can be quickly set up. Employees can easily work from home. Travelling salespeople can have all their data available in any location without needing to visit the office. These are just some of the other examples of how the carbon footprint can be reduced.

Reasons to Consider Avoiding Cloud Computing

Security

• In nearly every survey that has been done about cloud computing the top reason given for not adopting it is a concern over security.

• Putting your business-critical data in the hands of an external provider still sends shivers down the spines of most business owners.

• In deciding on the trade-off some of the questions to consider are:

- What happens if the data stored or processed on a cloud machine gets compromised?

- Will we know?

- If we do not know, how will we notify our customer’s?

- How will we know to improve our security?

Security

• One school of thought that says that holding your data in the cloud is not much more insecure than having it on internal servers connected to the Internet.

• Be realistic about the level of security you achieve inside your business, and how that might compare to a cloud provider. It’s well known that more than 70% of intellectual property breaches are a result of attacks made inside the organisation.

• There is still some work to be done before more formalised standards are in place. Organisations like the Cloud Security Alliance are at the forefront of addressing these security worries.

• In the same way that some banks took longer than others to offer internet banking facilities so it will be with cloud computing. Some organisations will evaluate the risks and adopt cloud computing quickly.

Data Location & Privacy

• Data in a cloud computing environment has to exist on physical servers somewhere in the world and the physical location of those servers is important under many nations’ laws.

• This is especially important for companies that do business across national boundaries, as different privacy and data management laws apply in different countries.

• For example, the European Union places strict limits on what data can be stored on its citizens and for how long. Many banking regulators also require customers' financial data to stay in their home country. Many compliance regulations require that data not be intermixed with other data, such as on shared servers or databases.

• In another example, Canada is concerned about its public sector projects being hosted on U.S.-based servers because under the U.S. Patriot Act, it could be accessed by the U.S. government.

Data Location & Privacy

• Some of the larger cloud providers (e.g. Microsoft, Google) have recognised this issue and are starting to allow customers to specify the location of their data.

• What if you miss paying a bill, or decide not to pay a bill for various reasons, like dissatisfaction with the service? Do you lose access to your data?

• This is something that can be addressed at the contract stage to ensure that the right safeguards are be put in place to prevent a provider from withholding access to your data.

Internet Dependency, Performance & Latency

• A concern for many organisations is that cloud computing relies on the availability, quality and performance of their internet connection.

• Dependency on an internet connection raises some key questions:

- What happens if we lose our internet connection?

- How long can we run our business?

• Organisations considering investing in cloud computing will certainly have to factor in costs for improving the network infrastructure required to run applications in the cloud.

• On the plus side, bandwidth continues to increase and approaches such as dynamic caching, compression, pre-fetching and other related web-acceleration technologies can result in major performance improvements for end users, often exceeding 50%.

Availability & Service Levels

• One of the most common concerns regarding cloud computing is the potential for down-time if the system isn't available for use.

• Every minute of down-time can not only affect revenue but can also cause reputation damage.

• Few company IT infrastructures are as good as those run by major cloud providers.

• Many companies thinking of adopting cloud computing will look to the service-level agreements (SLAs) to give them some comfort about availability. Surprisingly, some cloud providers don't even offer SLAs and many others offer inadequate SLAs (in terms of guaranteed uptime.)

• But SLA doesn't necessarily assist in obtaining high quality uptime, but provides the basis for conflict negotiation when things don't go well

Current Enterprise Applications Can't Be Migrated Easily

• Moving an existing application to a cloud platform is not as easy as it might first appear.

• Every cloud provider will have dissimilar infrastructure and different ways of configuring that infrastructure. Its unlikely any will match your setup.

• In reality most organisations that adopt cloud computing will end up doing it with new applications.

• So if you are thinking about a new system or system re-development the cloud will be worth considering.

• Whilst the lack of a convenient migration path for existing applications might hinder cloud computing adoption, in the longer term it is not going to be a permanent barrier. As more vendors build applications for cloud deployment so will the uptake of cloud computing grow.

Cloud Summary

• There is still a lot of hype surrounding Cloud Computing.

• This is a trend that is not going to go away.

• Gartner have said that “Cloud computing heralds an evolution of business that is no less influential than e-business”. It does add though that “cloud computing is very much an evolving concept that will take many years to fully mature”.

• Loughtec believe the way forward is in a mix.

Loughtec’s Private Cloud Offering

• Remember in this “cloud scenario” you keep all the hardware on your side of the firewall – you are in complete control.

• Loughtec use a product called Ericom Webconnect to deliver your applications anywhere in the world or even on a local virtual desktop. We are the only company on the Island that are qualified to sell and install the product. There are 7 million users worldwide and 15,000 here.

• What is a virtual desktop?

• A virtual desktop is an individual user's interface in a virtualized environment. The virtualized desktop is stored on a remote server rather than locally.

• Desktop virtualization software separates the physical machine from the software and presents an isolated operating system for users.

Ericom Webconnect how does it work?

Ericom Webconnect – The Portal

Ericom Webconnect – The User Interface

Microsoft Exchange – Traditional Approach

• Server and Software Onsite.

• You take care of the backs up and admin yourself.

• Mailbox size is very restrictive.

• Upgrades are due every few years for hardware and software.

• For a small business Exchange is too much of and overhead admin wise and cost wise.

• Therefore they will opt for POP3 mail being pulled down to PC which is a high risk strategy.

• Actions in Outlook are not synced from device to device.

Loughtec Putting Microsoft Exchange In The Cloud

Microsoft Exchange In The Cloud – The Pros

Reduced IT infrastructure costs Exchange 2010

Instant deployment Massive 25GB per mailbox

Enhanced security Mobile email ‘push’ technology

No upgrades or repairs Shared calendars and contacts

Easy mailbox control Public folders and subfolders

Instant scaleability Redundant networks

Workforce mobility Award-winning Anti-Spam

Questions?

Sean McDermott

Business Owner

6th September 2011

Prepared by: