Quantifying the Value of Investments in HP Cloud Service AutomationAn ROI White Paper

Table of contents

Executive overview .......................................................................................3Benefit categories .........................................................................................3Effective Cloud Service Automation: Managing the life cycle of the cloud ..............4 The HP approach to Cloud Service Automation: A comprehensive solution ............4 HP Cloud Service Automation operational architecture .......................................5 HP Software & Solutions cloud initiative–overview ............................................6 HP Software ROI approach ............................................................................7Customer data and results .............................................................................8

Example A: IT service management in a Private Cloud–SLA compliance .............9 Example B: Business service automation in a Private Cloud– Server Automation ......................................................................................9Example C: Business service management in a Hybrid Cloud– Incident Management ................................................................................ 10Consolidating results ................................................................................. 11

Summary .................................................................................................. 12

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Executive overviewCloud Computing is a powerful new benchmark in information technology–one that enables your organization to access applications, resources, and services over the Internet on an as-needed basis via a “usage-based“ business model. With Cloud Computing, customers can significantly reduce costs and increase flexibility by avoiding the capital expenditure of “owning” the physical infrastructure and by “renting” usage from third-party providers. These customers consume resources as a service and pay only for the applications and services that they use.

Without question, the promise and innovation of the cloud–lower costs, enhanced agility, greater scalability, and the opportunity to adopt existing IT technologies in a secure, available manner–is both considerable and beneficial. However, the very nature of cloud computing raises new and considerable IT management challenges.

Organizations considering the cloud often underestimate the required effort and degree of difficulty associated with the deployment and ongoing management of cloud infrastructure and applications. If not managed efficiently, and without proper automation, cloud computing can actually add risks, time delays, and costly complexities to your IT organization’s ability to provide services more efficiently–effectively negating the overall benefits of the cloud.

HP Cloud Service Automation (CSA)—enables and enhances your organization by simplifying the management of your cloud infrastructure and

accelerating the deployment of applications and services into your cloud. With HP CSA, your IT organization increases efficiency, preserves cost control, improves time to market and elasticity, and effectively lowers the risks often associated with the adoption and management of cloud solutions–allowing your company to more easily add and adopt the new services and technologies required to drive innovation, enable technical advancement, and ensure competitive advantage.

This paper provides examples of the return on investment (ROI) for the HP Cloud Service Automation solution. These specific examples, coupled with an explanation of the HP ROI approach, are intended to help business managers develop an ROI analysis that quantifies the business benefits of HP Cloud Service Automation in their environment.

Benefit categoriesCloud Computing represents a vision in which everything is delivered as a service—from computing power to business processes to personal interactions–a paradigm that allows your IT organization to more resourcefully access and incorporate compute resources and required services.

The HP Cloud Service Automation solution, an integral part of the comprehensive HP Software & Solutions cloud computing initiative, benefits both line of business and IT functions. These benefits can be quantified in terms of cost reduction, risk mitigation, and faster time to value, as suggested by the examples listed in Table 1.

Table 1. Benefit categories for the HP Cloud Service Automation solution

Cost control

Enhance cost control by

•Automating and simplifying cloud management tasks to improve efficiency and reduce costs

•Decreasing the time and effort associated with the deployment and management of resources and applications in the cloud

•Expanding IT only “as needed”

•Lowering required hardware expenses and reducing IT administration costs

•Deploying system resources on a shared heterogeneous pool of distributed data centers

Risk mitigation

Mitigate risk by

•Using a proven set of best practices and planning services for automated cloud management and application deployment

•Allowing IT to more quickly react to changing business demands and adopt new IT technologies in a secure manner

•Providing availability and security to meet business requirements

•Improving the service levels of critical users and activities regardless of the source

•Provisioning systems based on service demands and policy

•Implementing a well defined and managed information management policy–reducing the business risk of information and data being compromised or stored in the wrong regime/regulatory realm

Elasticity

Respond rapidly to changing business needs by

•Implementing automated, standardized processes for cloud management that enhance coordination, planning, and productivity

•Accelerating the delivery of business applications and services (that is, from months to days)

•Deploying changes faster without user disruption

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Effective Cloud Service Automation: Managing the life cycle of the cloudEffective cloud service automation provides a heterogeneous, scalable and complete utility that allows you to successfully embrace and manage the life cycle of the private, public, or hybrid cloud (the complete three stage approach is described in Table 2).

By automating the cloud service environment, customers optimize the deployment of applications and resources into both public and private clouds to improve efficiency, increase resources and productivity, and lower the risks associated with the adoption and management of the cloud. By adopting application-optimized cloud solutions, and supporting them throughout with cloud service automation, organizations launch services faster and improve time to market to support business innovation.

Table 2. Life Cycle of the private cloud, public cloud or hybrid

Phase Description

Plan and design

•Assess and define the right cloud strategy to match business requirements

•Design a custom road map for deployment

•Implement and adopt public and private cloud environments quickly and successfully with comprehensive consulting and design services

Automate and manage

•Automate deployment and management of resources and applications of the cloud

•Effectively manage cloud-ready solutions, including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS)

•Build and maintain a flexible productive environment that is architected for change

Assure

•Guarantee that the cloud service is available and secure to meet business needs

•Monitor and control the variable costs associated with adopting cloud services

•Help optimize and add predictability to these costs while continuing to fully realize the benefits of the cloud

The HP approach to Cloud Service Automation: A comprehensive solutionThe HP Cloud Service Automation solution consists of software products and services, as well as third-party integrations, that help clients manage and maintain secure and available private, public, or hybrid cloud solutions, from infrastructure through applications. The HP CSA solution automates key IT processes for cloud environments, resulting in one consistent approach to IT resource management, regardless of the environment.

With HP CSA, you can improve overall efficiency, free up resources, and lower the risks associated with the adoption and management of cloud services. This allows you to capitalize on new cloud-based services to accelerate time to market for new business services, reduce costs by automating the deployment and management of resources in the cloud, and mitigate risks by utilizing a proven set of best practices and planning services.

Figure 1: HP Cloud Service Automation–Functional Architecture and Product Mapping

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Service Presentation LayerEnterprise Service Portal

Service Request Service Access

HP BSASA, NA, OO

HP BSMSiteScope

HP Cloud Resource Manager

Virtual Capable InfrastructureServ

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BillingInteraction

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Service HealthBAC

Service UsageMOAB, IUM

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HP Cloud Service Automation operational architectureHP Cloud Service Automation enables you to architect your IT environment for change by quickening the deployment and automated management of your cloud initiative.

As shown in Table 3, the HP CSA operational architecture employs a comprehensive set of software

products and services to help ensure the success of your cloud strategy, regardless of whether the infrastructure or application is on-premise, on a private cloud, leveraging the public cloud or a hybrid model. With HP CSA solutions, products and services in place, integration points within the operational architecture of the cloud are closely linked to significantly reduce the time and effort your team expends.

Table 3. Value offered by each of the functional components of the HP CSA Operational Architecture

HP Solution Component Capabilities

HP IT Service Management automates, manages, and enforces key IT processes; manages the full lifecycle of IT assets; and enables the complete financial management of IT

HP Service Manager

HP Service Manager is a comprehensive and fully integrated IT Service Desk suite that helps you decrease the time it takes to resolve service problems; HP SM increases visibility with a consolidated view into all change activity - automating impact analysis, risk assessment, and collision detection

HP Asset ManagerHP Asset Manager delivers asset tracking and financial management so IT can better understand what they have, where the assets are located, how much they cost, and who is using them from procurement to disposal

HP Discovery and Dependency Mapping

HP Discovery and Dependency Mapping solutions provide real-time visibility into the dynamic relationships between applications and the underlying infrastructure. It maintains a topology map that enables you to quickly assess the business impact of IT issues. As a result, you can reduce the costs and risks of managing new services and making changes to existing services

HP Release Control Manager

HP Release Control links the change planning and analysis process with operational change execution to help you make informed approval decisions and gain real-time visibility throughout all change activity, which together reduce the risk of service downtime

HP Business Service Automation automates routine manual tasks and processes; provides an integrated service-centric solution suite that enables you to create a common view, automate change management, connect IT processes, coordinate disparate teams, and integrate with monitoring and ticketing tools for a completely holistic business service management solution

HP Operations Orchestration

HP Operations Orchestration helps reduce operational costs and improve service quality by automating routine IT processes, such as repetitive maintenance, change provisioning, and incident resolution

HP Client AutomationHP Client Automation software automates critical IT processes throughout the PC lifecycle. It provides the tools you need to simplify, efficiently deploy, and maintain client devices—including mobile and virtual environments

HP Server AutomationHP Server Automation software provides lifecycle management for enterprise servers and applications–from establishing a baseline to provisioning; patching to configuration management; and script execution to compliance assurance

HP Network Automation HP Network Automation software tracks, regulates, and automates configuration and software changes across globally distributed, multi-vendor networks

HP Storage Essentials

HP Storage Essentials Storage Resource Management (SRM) suite provides a comprehensive and heterogeneous storage management solution that lets you visualize all of your storage infrastructure resources from an application-centric point of view.

HP BSA Essentials HP BSA Essentials Network delivers up-to-date compliance policies and security vulnerabilities directly to the infrastructure automation solution

HP Business Service Management maintains the availability and enhances the performance of servers and application components that support your company’s business processes as well as prioritize incidents based on its impact on the business

HP Business Availability Center

HP Business Availability Center (BAC) allows you to reduce downtime and improve the quality of user experience by enhancing the availability and performance of your business services and applications. With HP BAC, you quickly pinpoint the area and root cause of problems–creating IT domain collaboration and efficiency

HP Operations CenterHP Operations Center (OC) automates operations and helps you reduce costs while improving service quality. HP OC consolidates events into a single console, increasing visibility for faster resolution of issues related to organizational silos

HP Network Management Center

HP Network Management Center provides automation solutions that enable you to lower the cost of meeting service-level agreements - increasing network availability and achieving compliant networks

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HP Software & Solutions cloud initiative–overviewHP Cloud Service Automation is part of the “larger” HP Software and Solutions Cloud Initiative, focused on the design, adoption, and management of cloud services. This wide-ranging initiative draws on the industry-leading HP IT management software portfolio, combined with consulting services and expertise, to

help you successfully assume and administer the entire life cycle of the cloud.

As shown in Table 4, HP Software and Solutions delivers solutions for each stage of the cloud life cycle–a combination of functional solutions that allow your organization to move beyond the mere potential of the cloud and into a world of completely realized business benefits.

Table 4. Value offered by the functional components of the HP Software and Solutions Cloud Initiative

Life Cycle Stage HP Solution Features and Benefits

Plan and design a robust cloud strategy and architecture

HP Cloud Discovery Workshop

HP Cloud Discovery Workshop helps you learn more about the Cloud and cloud computing - how it fits as part of a service strategy and then by providing a high-level roadmap and prescriptive recommendations for how to best leverage the Cloud

HP Cloud Roadmap Service

HP Cloud Roadmap Service helps you plan for cloud adoption as part of your service strategy - including service portfolio roadmap, business benefits and what you can achieve in incremental steps

HP Cloud Design ServiceHP Cloud Design Service helps create the right cloud services - delivering cloud infrastructure design based on the HP Reference Architecture for Cloud for scalable, secure, available, and rapid service provisioning

HP Service Management Consulting Services

HP Service Management Consulting Services improve efficiency through standardization and automation of IT operations; improve service quality by consistently meeting service levels; manage IT operations proactively to reduce the risk of service disruptions

Automate and manage infrastructure and applications in the cloud

HP Cloud Service Automation

HP Cloud Service Automation (as described in this document) provides the solutions needed to plan and design your cloud plan and provides the automation tools to reduce the time and cost burdens of ongoing management of applications in the cloud

HP BTO Services for Cloud Infrastructure

HP BTO Services for Cloud Infrastructure provides the strategies, design, and implementation services and expertise you need to create the right infrastructure–using HP BTO management and automation software–for delivering cloud services

Assure cloud based services are secure and will perform to scale to meet business requirements

HP Cloud Assure

HP Cloud Assure helps your organization take advantage of the speed, flexibility, scalability, and cost effectiveness of cloud services. Leveraging a decade of Software as a Service (SaaS) expertise and advanced service-level performance, this solution delivers four of the attributes analysts believe are key to reliable cloud computing—security, performance, availability, and cost control

HP Elastic Test HP Elastic Test on SaaS is the ultimate solution for your large load testing needs. By bringing cloud compute concepts to load testing, Elastic Test provides the ability to scale up to very large loads in a utility-based, on-demand fashion

The remainder of this paper provides an overview of the HP ROI approach followed by examples of customer ROI-benefit scenarios that show the impact on business and IT for several functional areas of the HP Cloud Service Automation solution.

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HP Software ROI approachThe HP Software ROI approach is based on third-party, validated models and industry and customer research by leading IT consultancy IDC, and their ROI tool partner, leading ROI and TCO consultancy Alinean. The ROI Analysis process, models, and metrics were developed by researching overall IT

spending and key performance indicators (KPIs) worldwide in over 37 different industries, interviewing selected customers to determine specific realized and proven value, and in directly engaging with customers with the methodology and tools to further refine the modeling and value estimates. This work resulted in the definition of a customer-centric ROI framework and process as illustrated in Figure 2 and described below.

Figure 2: The HP ROI Model Approach

1. Discover: A credible Business Case/ROI must be anchored in a customer’s “business reality.” This schematic suggests four categories of discovery to hone in on. It is during this initial discovery stage that it is helpful to document challenges and specific problems. These challenges can be collected as “Business Value/ROI Anecdotes.”1

2. Align: The key to a successful ROI study is converting this somewhat abstract understanding of a customer’s business context and Business Value Anecdotes into a set of quantifiable value propositions. A value proposition is a specific, customer-centric statement of expected business or IT value–ideally, quantifiable in monetary terms.

3. Model: Two types of models are crafted. The Benefits Model consists of a set of Benefit Worksheets. Each ROI-benefit scenario is a quantified value proposition representing the most granular unit of annualized business or IT value. HP has compiled a collection of ROI-benefit scenarios from our work to date that customers may find helpful in launching their ROI projects. Investment Models provide HP Software-related costs as well as any incremental staffing or infrastructure costs associated with the HP solution.

4. Deliver: The Benefit and Investment Models are compiled into an ROI Business Case Package.

1 A Business Value Anecdote is a brief statement of a pain, or the observed or expected benefit of an HP solution from the customer’s perspective.

Challenges (anecdotes) Initiatives

Businessapplications Infrastructure

Value proposition

Benefits and investment

+ =Business

casepackage

Customer data

ROI result

√

√√

Discover

Align

Model

Deliver

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A clear understanding of the business perspective helps ensure that a meaningful set of value propositions are characterized.

Value propositions fall into two distinct categories: business value and IT value. Business value propositions describe how using the HP Cloud Service Automation solution contributes to reduced business costs (for example, improved end-user productivity or headcount containment) or revenue protection (for example, faster delivery of customer-facing or revenue-generating applications). Similarly, an IT value proposition demonstrates how HP Cloud Service Automation contributes to IT cost reduction. This is often expressed in terms of headcount containment, reduction in costs, or deferral of infrastructure capital expenses.

A properly stated value proposition should clearly connect an IT management process with a business objective and a measurable benefit; for example, “an integrated data center automation platform providing enterprise-wide visibility reduces costs by displacing software and support costs associated with maintenance of redundant products, custom in-house developed solutions, custom integration, multi-interface training, and multi-vendor sourcing and purchasing.” Value propositions stated in this way can be transformed into ROI-benefit scenarios, the HP term for the most granular building blocks of IT or business value.

ROI-benefit scenarios provide a consistent way to quantify value propositions. Taken together, a set of ROI-benefit scenarios can be aggregated to represent the value of existing or planned HP Cloud Service Automation investments. ROI-benefit scenarios provide a consistent way to characterize value and incrementally quantify solution benefits. They can also be combined to look at higher-level ROI-benefit scenarios, such as IT service quality improvement, or visibility for decision making. The ROI result, or the total benefit to the business, can be calculated by

quantifying the value and the investment associated with all of the relevant ROI-benefit scenarios. By breaking the problem down into smaller, more manageable ROI-benefit scenarios, the HP ROI approach simplifies ROI projection and removes some of the uncertainty associated with collecting and analyzing ROI data.

Customer data and resultsAfter discovering and assessing the current environment, the next step is to align how the HP solution can strengthen both IT and business processes to reduce costs, mitigate risks, improve time to value, or increase revenue. Quantifiable benefits can be estimated using ROI-benefit scenarios that transform high-level value propositions into benefits that can be measured.

The following real world customer examples, selected for this paper from a significant pool of likely ROI scenarios for cloud computing, explain how to build ROI-benefit scenarios for HP Cloud Service Automation. In each scenario, annualized savings values are calculated for three levels of projected improvement: conservative, probable, and optimistic. Using a range of projected improvement values empowers each company to customize results to best fit their business situation and expectations.

For the following scenarios, each of the three corporations profiled recently introduced cloud computing into its production environment. The first two represent “private” cloud initiatives, while the third established a “hybrid” cloud (where an organization provides and manages some resources in-house and has others provided externally).

Each firm is now looking to HP–and the benefits of HP Cloud Service Automation–to help address the new challenges presented by cloud computing, and deliver “proven” cloud solutions, with on-demand scalability and shared management capabilities.

Table 5. Key components of an ROI-benefit scenario Key Component Description Example

Pain Point A customer challenge that can be addressed by an HP solution

Network downtime materially affects business continuity and availability

Value Proposition

A specific statement of business or IT value that links a specific BTO function with a business objective and a measurable benefit.

Automated network and provisioning management mitigates risk by enabling a rapid response to incidents, which decreases business costs by reducing the number and duration (MTTR) of outages - thereby reducing end-user minutes lost

Solution Benefit SummaryA description of the HP BTO solution that explains how the value proposition claim is achieved.

HP Network Automation software helps organizations accelerate time-to-repair by increasing network stability and uptime by preventing the inconsistencies that are at the root of most problems

CalculationThe specific metrics, assumptions, and data values used to quantify the value proposition.

Average hours of network downtime per month; average cost per hour of network downtime; expected percent reduction (conservative to optimistic) in network downtime with HP; projected total cost of network downtime

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Example A: IT service management in a Private Cloud — SLA ComplianceA mid-size telecommunications company headquartered in the United States deployed a private cloud environment to help the IT organization provision new servers and applications more quickly. “We were trying to improve our time to value,” an IT Director said, “but unfortunately, after we implemented the cloud, we actually found it more difficult to effectively manage our services and applications–and stay in compliance with service-level agreements. It was costing us a fortune.”

When service-level agreements (SLAs) are breached, the business can be negatively impacted by SLA penalty clauses, as well as lost revenue due to application downtime. Proactive management of

service levels can improve application availability to help alleviate SLA non-compliance penalties. For this firm, responding to missed SLAs was costing the company in excess of $1.7 million annually. The company needed a solution that could manage internal and external provided services, based on their customer SLAs.

HP Service Manager Service Level Management enables IT managers to translate line of business service expectations into measurable SLAs, and proactively manages application services for better availability.

In this case, the company elected to use a probable SLA improvement of 50%—leading to a potential cost savings of about $867 thousand per year as shown in Table 6.

US-based telecommunications: ROI through implementation of service level management

Value Proposition Automated service level management reduces costs by implementing tools across the organization that lower the level of time and effort associated with responding to missed SLAs, and increase the responsiveness of the support organization.

Solution Benefit Summary

The solution manages internal and external provided services based on customer-focused SLAs; leverages previous stage service data to define and correlate services to SLA; provides integrated customer-focused holistic service based service level management.

Applications All business-critical applications

ROI Example

Metrics AssumptionsBefore HP Software

Expected improvement in SLAs associated with HP Service Manager Service Level Management solution

Conservative Probable Optimistic

Cost to the organization for responding to missed SLAs for low priority incidents $412,225

Cost to the organization for responding to missed SLAs for medium priority incidents $595,025

Cost to the organization for responding to missed SLAs for high priority incidents $725,775

Expected percentage improvement in SLAs associated with HP Service Manager Service Level Management solution 40% 50% 60%

Total costs for responding to missed SLAs $1,733,025 $1,039,815 $866,513 $693,210

Total projected ANNUAL COST SAVINGS $693,210 $866,513 $1,039,815

Table 6. ROI example—quantifying the service level management process efficiency value of HP CSA

Example B: Business service automation in a Private Cloud–Server AutomationA global manufacturer with headquarters in Europe supports almost 300 UNIX® servers, 500 Windows® servers, and 475 network devices. With the introduction of a private cloud environment, IT quickly realized that the manual methods in place for server application, configuration, and provisioning management were insufficient, and the root cause behind increasing IT costs. An analysis revealed that the deployment of server software, patches and configuration updates was taking longer; troubleshooting and repairing was suddenly more complex, reporting was more difficult, and incident volumes had increased.

HP Server Automation software provides lifecycle management for enterprise servers and applications—from discovery to provisioning, patching to configuration management, and script execution to compliance assurance. HP Server Automation automates operations and processes across disparate IT teams and systems–resulting in reduced risk and lower costs.

The company projected that with the implementation of HP Server Automation, the company would reduce costs–and in turn realize the full benefits of a private cloud–by reducing the time, effort, and errors associated with manual tasks such as provisioning servers, software updates and configurations, patch testing and deployment, troubleshooting and

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repairing, and so on. Table 7 shows the annual cost reduction associated with each of these tasks. As a result, for this scenario, the conservative percentage improvement was determined “most realistic.” This level projects a first year savings of $2.0 million.

Example C: Business service management in a Hybrid Cloud–Incident Management The Director of IT Operations at an automotive manufacturer located in Europe was very concerned about his organization’s increase in downtime and decrease in application availability since the company’s adoption of cloud technology. “We moved to a hybrid cloud environment to become more efficient, get new technologies faster, reduce costs, and improve our overall performance,” he said. “Instead, we’ve had an increase in the duration of IT infrastructure, application and service failures.”

HP Business Availability Center provides fast and accurate performance problem detection, identification and diagnosis with event management integrations to the unified data repository, and embedded run-book automation. Furthermore, it links service health information with service desk processes that manage incidents, problems, and change, which helps IT staff learn about incidents and problems (and even resolve them) before they become apparent to end users, or negatively impact end user productivity.

IT felt strongly that the deployment of HP Business Availability Center would significantly improve incident management, reduce costs, and increase application availability by reducing the level of effort associated with IT management tasks such as incident detection, classification, diagnosis, resolution, recovery, reporting, and cross team collaboration.

Global manufacturer: ROI through automation of server application, configuration, and provisioning management

Value Proposition

Integrated and automated policy-based server application, configuration, and provisioning management reduces costs by reducing time, effort, and errors associated with manual tasks - such as provisioning servers from bare metal, deploying server software, patches and configuration updates, troubleshooting, repairing, server monitoring and health checks, server discovery, audits and change management, and reporting and compliance monitoring

Solution Benefit Summary

The solution provides lifecycle management for enterprise servers and applications - from discovery to provisioning, patching to configuration management, and script execution to compliance assurance—and automates operations and processes across disparate IT teams and systems

Applications Procurement; Order Processing; Manufacturing; Stock Control; Business Critical Applications

ROI Example

MetricsBefore HP

(as is)

Expected improvement associated with HP Server Automation

Conservative Probable Optimistic

Expected Improvement Associated with HP SA

Provisioning 30% 50% 70%

Software Updates and Configurations 50% 60% 80%

Business Application Code Promotion 5% 10% 20%

Patch Testing and Deployment 60% 70% 80%

Change Management Process and Documentation 15% 20% 25%

Monitoring and Alert Management 30% 40% 50%

Troubleshooting and Repairing 60% 70% 80%

Audits and Compliance 50% 65% 80%

Producing Reports and Data Analysis 50% 60% 70%

IT Activity Cost Profile

Provisioning $324,445 $227,112 $162,223 $97,334

Software Updates and Configurations $676,810 $338,405 $270,724 $135,362

Business Application Code Promotion $199,805 $189,815 $179,825 $159,844

Patch Testing and Deployment $724,339 $289,736 $217,302 $144,868

Change Management Process and Documentation $357,833 $304,158 $286,266 $268,375

Monitoring and Alert Management $288,554 $201,988 $173,132 $144,277

Troubleshooting and Repairing $1,001,809 $400,724 $300,543 $200,362

Audits and Compliance $455,380 $227,690 $159,383 $91,076

Producing Reports and Data Analysis $322,008 $161,004 $128,803 $96,602

Projected Annual COSTS $4,350,983 $2,340,630 $1,878,200 $1,338,099

Projected Annual BENEFIT $2,010,353 $2,472,783 $3,012,884

Table 7. ROI example–quantifying the server automation process efficiency value of HP CSA

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Therefore, IT elected to use the optimistic percentage improvement values for this scenario–a potential benefit of $713 thousand in the first year, as calculated in Table 8.

Consolidating resultsROI-benefit scenarios (such as those shown above) can be combined to provide an overall ROI analysis for the HP Cloud Service Automation solution. The total savings from multiple ROI-benefit scenarios are aggregated to give a longer-term view of the benefits provided by the full implementation. Assume for this exercise that Table 9 shows the results from a single corporation. The table illustrates how the company

could summarize the financial analysis of the three ROI-benefit scenarios.

The table shows one row for each of the calculated ROI-benefit scenarios above. For each scenario HP calculates the Net Present Value (NPV) of the annualized projected savings using a discount rate of ten percent and assuming a five percent annual increase in the benefit. The annualized savings values reflect the company-selected levels of projected improvement–conservative, probable or optimistic–described in the ROI-benefit scenarios. In this case, the net present business value of the three scenarios is approximately $9.3 million over 3 years.

Table 8: ROI example–quantifying the incident management process efficiency value of HP CSA

Europe-based automotive manufacturer: ROI through automation of incident management

Value Proposition Effective business service monitoring with end user monitors, detailed diagnostics, and embedded run-book automation lowers incident management costs by reducing the level of effort associated with incident detection, classification, diagnosis, resolution, recovery, reporting, and cross team collaboration

Solution Benefit Summary

The solution provides fast and accurate performance problem detection, identification, and diagnosis with event management integrations to the unified data repository, and embedded run-book automation. Furthermore, it links service health information with service desk processes that manage incidents, problems and change, which helps IT staff learn about incidents and problems (and even resolve them) before they become apparent to end users

Applications All Business Critical Applications

ROI Example Expected improvement associated with HP Business Availability Center

MetricsBefore HP

(as is) Conservative Probable Optimistic

Expected Improvement Associated with HP BAC

Incident

Classification

Diagnosis

Resolution

Recovery

Reporting

Cross Team Collaboration

36%

36%

36%

36%

36%

36%

25%

45%

45%

45%

45%

45%

45%

30%

54%

54%

54%

54%

54%

54%

35%

IT Activity Cost Profile

Incident

Classification

Diagnosis

Resolution

Recovery

Reporting

Cross Team Collaboration

$148,882

$74,441

$255,247

$427,063

$148,882

$204,479

$96,016

$95,284

$47,642

$163,358

$273,320

$95,284

$130,867

$72,012

$81,885

$40,943

$140,386

$234,885

$81,885

$112,463

$67,211

$68,486

$34,243

$117,414

$196,449

$68,486

$94,060

$62,410

Projected Annual COSTS $1,355,010 $877,768 $759,658 $641,548

Projected Annual BENEFIT $477,242 $595,352 $713,462

SummaryHP Cloud Service Automation provides software products and services that can help you to be successful with your cloud strategy, regardless of whether the infrastructure or application is on-premise, on a private cloud, a public cloud or a hybrid. The solution also offers out-of-the-box integration with third-party applications–an integration that further helps you productively manage your complete cloud life cycle. With HP CSA, you can effectively plan your private, public, or hybrid cloud environment, design

a custom roadmap for deployment, automate and manage your cloud infrastructure and applications efficiently and cost-effectively, and assure that your cloud service is secure enough to meet business needs.

Quantifying the benefits of HP Cloud Service Automation can be done systematically, using an approach and methodology that HP has designed and refined over the years with your peers. The examples presented in this paper may serve as a starting point for an HP Cloud Service Automation ROI analysis in any business organization.

Table 9: Consolidating results from ROI-benefit scenarios for HP Cloud Service Automation

Consolidated ROI benefits from the HP Cloud Service Automation Solution

Scenario Value Category Value Proposition NPV (Three Years) Year 1 Year 2 Year 3

1Service Level Management Process Efficiency

Automated service level management reduces costs by implementing tools across the organization that lower the level of time and effort associated with responding to missed SLAs, and increase the responsiveness of the support organization.

$2,257,425 $866,513 $909,838 $955,330

2 Server Automation Process Efficiency

Integrated and automated policy-based server application, configuration, and provisioning management reduces costs by reducing time, effort, and errors associated with manual tasks - such as provisioning servers from bare metal, deploying server software, patches and configuration updates, troubleshooting, repairing, server monitoring and health checks, server discovery, audits and change management, and reporting and compliance monitoring.

$5,237,339 $2,010,353 $2,110,870 $2,216,414

3Incident Management Process Efficiency

Effective business service monitoring with end user monitors, detailed diagnostics and embedded run-book automation lowers incident management costs by reducing the level of effort associated with incident detection, classification, diagnosis, resolution, recovery, reporting, and cross team collaboration.

$1,858,701 $713,462 $749,135 $786,592

Cumulative Benefits Total $9,353,464 $3,590,328 $3,769,844 $3,958,336

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© 2010, Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

Microsoft is a U.S. registered trademark of Microsoft Corporation.

UNIX is a registered trademark of The Open Group.

4AA3-1080ENW, Created August 2010

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