Morgan Hill presentation Tayor Wessing Cambridge

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1 Cloud Computing Seminar Cambridge 1 st February 2 Using The Public Cloud To Reduce Cost Morgan Hill Consultants Ltd 12 Melcombe Place London NW1 6JJ +44 (0)203 174 0393 www.morganhill.co.u k

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Transcript of Morgan Hill presentation Tayor Wessing Cambridge

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Cloud Computing Seminar Cambridge 1st February 2011

Using The Public Cloud To Reduce Cost

Morgan Hill Consultants Ltd12 Melcombe Place

LondonNW1 6JJ

+44 (0)203 174 0393www.morganhill.co.uk

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Some Views on Cloud Computing

So what is it all about?

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Terms You Will Come Across

There is overlap between these but essentially there are three terms in use today:

SaaS Software as a Service eg. Salesforce

PaaS Platform as a Service eg: Microsoft Azure

IaaS Infrastructure as a Service eg: AWS, Amazon Web Services

What is the big change from what we used to have?

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The Big Change is Not Technical it is Largely Approach

The retailer approach to IT Infrastructure

The key things about a retailer:

Cost transparency, the price is marked on the product Cost is actionable, it can be compared and if it is too much you can go

somewhere else You buy what you need, not what you might need Customer loyalty is earned, if you don’t like the experience you go

somewhere else next time. You are not usually locked into any single retailer.

Now consider this approach in an IT environment.

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AWS Rate CardHere are the clear and transparent prices for Amazon EC2 (elastic compute) servers.

How does an organisation take advantage of this transparency and retail approach?

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Organisational InformationThe information available to most organisations is not usually in a form that lends itself to getting the most from this level of cost transparency.

What other barriers might exist?

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The Organisational IT Environment

Up to now the IT organisation has been hampered by the difficulty in achieving on going internal cost transparency and a complex array of costs and contracts from big IT vendors:

Cost transparency no - difficult to be clear about what all the real costs are

Cost is actionable no - subject to lock in contracts with vendors no – subject to depreciation run off

Customer loyalty is earned, if you don’t like the experience you go somewhere else next time

no – subject to lock in contracts with vendors no – subject to technical lock in eg. “we are a Microsoft shop here”

Nearly all large IT vendors try to lock their customers in using contracts or technology.

So how does the organisation take advantage of a retailer’s approach to IT?

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Act Like a Customer of a Retailer

Internal costs need to be transparent and consequently actionable. If costs are transparent we can consider actions in light of them. For example:

Consider the impact of change See where to apply that change Track costs to ensure we are at a “market rate” Hold vendors to account Control organisational demand by showing the real cost of services consumed

Cost transparency used to be hard to achieve. When this is done the financial benefits of some cloud services will be much easier to see and then achieve. So how do we make costs transparent?

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Cost Transparency

We need an ability to describe the real costs of the services provided. With this information we have the means to take action.

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Making Cost ActionableWhen costs are actionable then it is easier to consider the applications of new strategies and delivery models.

The example below is based on our experience of using this approach to reduce IT opex by 11% with no degradation of service.

So where does the AWS cloud help to reduce these costs?

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AWS Cloud – Impact on CostsThe previous example saw AWS used to reduce the following costs:

Data Centre

Servers, fewer servers required to provision for theoretical maximum loads Storage, a wider choice of storage devices some very in-expensive WAN, removal of high cost fibre links for in house redundancy Buildings, release of lease costs for “dark site” Utilities and security, release of buildings related costs People, contactor costs for system maintenance tasks

Specific Applications

Pan European central application 1, provisioned in the cloud Removed capex requirement for 9 regional data centre deployments of hardware

Pan European central application 2, provisioned in the cloud Switch from proprietary database on Unix to open source database on Linux in

the cloud Removed all licence costs and hardware maintenance contracts

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Summary

The big change is not technology

It is around a retailer mentality towards customers and costs, this means cost transparency and paying for what you actually need

This is often in contrast to the approach of typical large IT vendors

To benefit it is necessary to have effective cost transparency over existing services

This is much easier to achieve now than in the past

Once achieved then a range of options exist to reduce cost an important one of which is cloud based Infrastructure as a service.