Challenge 1: How do I make the business case for private cloud. Sponsored by Canopy
Speaker: Faiz Parkar, Product Marketing Director - Private Cloud at Canopy
Moderated by Chris Bent, Production Manager, TechTarget
Chris Bent: Hello and welcome to today's presentation. My name is Chris Bent and I'll be your
moderator. Please quickly take note that your slides will be automatically advanced on your screen
and the audio will be streamed through your computer.
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Private Cloud brought down to earth
Today's presentation is being brought to you by Canopy. Canopy is a new company set up by Atos,
EMC, and VMware to focus exclusively on helping enterprise customers accelerate their journey to
cloud computing and realize the benefits.
This Webcast is part of a series of Webcast from TechTarget and Canopy to help organizations that
are considering a private cloud initiative to understand some of the challenges and complexities that
you may face and share some of the tips and best practices that Canopy has learned in overcoming
these challenges on behalf of all kinds of organizations around the world.
Today we see the traditional approaches to data center infrastructure, developing applications and
data analytics are inadequate to meet the changing needs of the business. In response, the IT
industry is in the midst of a once every 20-year shift to a new technology platform based on cloud
computing.
Joining us to present today, we have Faiz Parkar. Faiz Parkar is the Director of Product Marketing
for private cloud at Canopy and his current role at Canopy, he is helping organizations transform
the way they build, operate, and consume IT by moving to a more flexible and cost-effective
models based on private cloud.
As you can see here, there are three challenges we're going to cover in this series. Challenge one is
how do I make the business case for private cloud; challenge two, how do I overcome the
complexities of building my own private cloud; and challenge three, what kind of people and
process changes do I need to make in order to successfully operate a private cloud.
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Contents
Private Cloud brought down to earth
Challenge 1:
How do I make the business case for private cloud?
Challenge 2:
How do I overcome the complexities of building
my own private cloud?
Challenge 3:
What kind of people and process changes do I need
to make in order to successfully operate a private cloud?
As this is the first in the series, we will discuss -– I'll be asking Faiz, how do I make the business
case for private cloud? Well, let's get started with the first topic. Faiz, why have you chosen to talk
about this particular aspect of private cloud?
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Challenge 1: How do I make the business case for private cloud?
Faiz Parkar: So we're talking about making a business case for private cloud first because in our
experience, most of the organizations that we work with often struggle with their private cloud
projects if they approach them from a technology-like view rather than a business-like view. So
having a clear understanding of the business challenges that where we're trying to overcome as well
as we list the intangible goals about what you're trying to achieve for the business are really critical
to the success of your private cloud project.
Faiz Parkar: And what can the audience expect to learn during this session? What practical
elements will you covering?
Faiz Parkar: So in this session, I'm going to talk about some of the key things you need to think
about if you want to make the business case for private cloud in your organization.
First and foremost, you need to be clear on how the technology is going to benefit your business
now and in the future and that means identifying and agreeing tangible success metrics. So I'm
going to share with you some metrics that organizations that we've worked with have found to be
meaningful to illustrate the value of deploying a private cloud for their business. Second, you need
to understand how moving to a private cloud approach is going to affect key stakeholders within
your organization and how you can address their need. Finally, moving to a new private cloud is
going to involve change.
I'm going to talk about how you can be a change agent for your organization, how you can
transform the role of IT within your company for one of cost center or business inhibitor to one of
business enabler, helping to propel the business forward rather than holding it back.
Chris Bent: All right. Sounds like a very interesting agenda, Faiz, and very timely right now.
Maybe you can get us started by first setting the scene on why you think organizations are looking
at private cloud.
Faiz Parkar: Sure. Let's start by looking at how you're IT department might be perceived today
by the business. If you think about your own environment for a second, how the key stakeholders
within your organization perceive your IT department today?
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Making private cloud clear
What would they say about the responsiveness of IT to new or changing business request? Do they
see IT as controlling or bureaucratic or holding the business back for what it needs to do? Are they
happy with the level of CapEx and/or OpEx, expenditure, on IT? What's been happening to IT
budget say over the last few years? Each of IT funded well enough to deliver what your business
needs. What kind of confidence to they have that IT is actually delivering what the business needs
so that you can move forward?
If some of these questions are uncomfortable, then you're in the right place. I am going to talk
about how private cloud could help but rather just paint a rosy picture, I'm also going to share with
you some of the pitfalls and challenges that organizations that we've worked with that experience in
their journey to private cloud and what you can do to avoid those pitfalls.
Chris Bent: I'm sure our audience will find your insights and best practices valuable. But before
we get in to how to avoid the pitfalls, can you talk little about what success looks like? If
organizations do follow your advice and are able to successfully adopt private cloud, what does that
actually mean to them?
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The common obstacles
Faiz Parkar: You know, we've heard with organization of all sizes, verticals, and geographies
around the world and the common theme we find is that their journey to cloud computing is
fundamentally all about how they can change both the perception and the reality of how they
deliver IT within their organization. Organizations that have successfully made the move to private
cloud find that their IT team is perceived very differently by the business. Many IT departments
see cloud as a threat to their own job security.
But by deploying their own private cloud and becoming an internal service provider, the business
can get the benefits of cloud computing without the risk of a public cloud. They can continue to
use their own trusted internal IT team to keep full control over compliance, security and service
levels. By moving from a legacy approach where you might be buying silos of technology for each
application or project to private cloud on which you can host multiple applications and projects for
your organization, your line of business stakeholders will perceive that you're dramatically
improving this responsiveness to IT to new and changing business request. You're changing your
focus on your conversations with them away from the underlying infrastructure to the services that
you provide.
And that helps you to build deeper relationships with line of business stakeholders because you can
communicate the value of IT not in technical terms but in business terms and help your IT be seen
as an enabler for the business rather than an inhibitor. So in essence, making the move to private
cloud will help your IT team to be perceived as agile, business focused and vital to your
organization's growth.
Chris Bent: Now you talked about how private cloud can change the way IT is perceived by the
business, but can you offer our audience any guidance on how they can actually build the business
case from moving their organizations to private cloud?
Faiz Parkar: Our experience at Canopy is that many organizations looking at private cloud circle
would have to quantify the saving as well as the cost since they’ve never deployed a private cloud
before. But unless you can quantify your goals and objectives, your private cloud question might
never get off the ground or where still you might go to the cost and effort of deploying a private
cloud but won't know if it's actually being successful.
So if you're organization hasn’t deployed a private cloud before, the key to making the business
case is to draw on the experiences of those who have. Canopy is a company that’s focused
exclusively on cloud computing. We talked to lots of organizations around the world on a daily
basis on exactly this topic.
When you’ve already found, there are four key areas that organizations that we've worked with find
meaningful in making the case and use the private cloud. The first area that I'm going to cover is
technology. What are the enabling technologies that you need to implement a private cloud?
This is confusing for many organizations that we speak to because there are so many vendors out
there who are just cloud washing. I think for many organizations, a helpful place to start is a
vendor-independent definition of cloud like the one offered by the U.S. National Institute of
Standards and Technology, NIST, in which they identify five essential characteristics.
The first of those is on demand self-service which means that a consumer view of private cloud
should be able to provision computing resources as needed automatically without requiring human
interaction. To meet this requirement, look at self-service portal technology. Workflows
authorized resource consumption and orchestration engines to automate the provisioning.
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The common obstacles
The second essential character I think that NIST talks about requires that the capabilities of your
private cloud should be available over the network for a broad range of different devices. This will
be an increasingly important requirement for you that’s more and more of your usage and now
you're using not only Windows-based PCs but also non-Windows-based PCs like Macs or even
non-PC devices like smartphones and tablets.
Resource pooling is the third essential characteristics and requires that the computer resources of
your private cloud be pooled to serve multiple consumers using a multi-tenant model with different
physical and virtual resources dynamically assigned and re-assigned according to consumer
demand. This requirement can be satisfied by shared virtual infrastructure for running multiple
applications rather than separate siloed infrastructure dedicated to each application.
Next, rapid elasticity means that the services that you got on your private cloud can be elastically
provisioned than released so that your services can be scaled up and down according to demand.
To consumers of your private cloud, it should appear as though the capacity of your private cloud is
unlimited.
Finally, the fifth essential characteristic which is require by NIST is measured service which means
that your private cloud should be able to automatically control and optimize resources through a
metering capability which allows resource usage to be monitored, controlled, and reported
providing transparency for both the provider and the consumer of the services. And this is all also
about providing financial transparency, understanding resource usage and associated cost for each
application or department.
Next, establishing a clear governance model is also going to be an important part of going into
private cloud. In simple terms, it means you need to be clear and explicit about the decision-
making criteria your organization is going to use in planning, designing, implementing, operating,
and supporting your private cloud.
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The new perceptions
Chris Bent: All right. That sounds pretty reasonable but isn’t that just comment sense or do you
mean something more?
Faiz Parkar: In our experience at Canopy, we find that those organizations who jump straight into
deploying private cloud from it’s predominantly technology point of view without first taking the
time upfront to establish a clearly defined well structured and a great governance model tend to
face significant challenges with security risks, cloud proliferation and (inaudible) just like in the old
days we virtual machines pool, governance of applications as they're new to cloud and lack of
adoption and usage of the private cloud by the targeted audience. Shadow IT and hidden clouds are
also a big problem if you don’t get the governance processes right.
Chris Bent: All right. So in terms of governance, what do you consider are some of the key
considerations?
Faiz Parkar: Well, I definitely share with you some of the key things to think about based on
Canopy's engagements around the world.
First, I think you need to be clear about what the scope of your private cloud deployment is going
to be. Are you going to use private cloud across the whole organization for all of your applications
from the very beginning or are you going to take a more gradual or an evolutionary approach
starting with the subset of the applications maybe at the project level or business unit level and then
expand your private cloud from there?
Next, think about (inaudible) your private cloud is no longer infrastructure owned by each project
or by each application overall but a shared infrastructure usage for all of your applications and
projects. So who's going to be accountable for planning it, designing it, deploying it, operating it,
and supporting it?
Third, who are the key stakeholders in your organization that would have a vested interest in your
private cloud? When you look down the list of people that you’ve identified, are they all from IT
only or do you have adequate representation from the business? Think about how you going to
catch of their requirements and how you'll make sure that you can meet them. You'd also need
clarity around the decision criteria that you're going to use to define your strategy, road map
technology selection and operational processes to make sure that you can define and meet your
security, privacy and compliance requirements.
Chris Bent: I see that the next area you're going to cover is finance. Are the ROI considerations
for private cloud any different to other types of IT than a non-IT investment?
Faiz Parkar: You're right. It's a given that - if you're looking at deploying a private cloud, you
need to carefully evaluate the financial return and the investment of migrating from legacy IT
approaches. But in our engagement to the organizations looking to move from legacy IT
approaches to private cloud, a key part of their motivation is to also get better financial
transparency into IT costs against the business value that they drive and be able to do that on an
ongoing basis not just at the outset.
So how does a private cloud help you to achieve better financial transparency? The answer is as
simple as ABC. A is for accounting. So a properly designed and implemented private cloud will
allow you to define services, identify all the components of that service, allocate costly to those
components and actually track the cost of delivering each service.
B is for budgeting. This is the process of predicting, anticipating, and controlling your
organization's services investment on an ongoing basis and it's much easier with a centralized
private cloud platform rather than separate infrastructures for each application and see if it would
chargeback or showback. Showback means reporting cloud service consumption and costs back to
each department within the business whereas chargeback takes you back step further and actually
build each department for the IT services that they consume.
So you can see that in addition to technology and governance considerations, the success of your
private cloud budget is also going to depend on how well you develop the right financial models to
meet the needs of your organization moving away from project-based budgeting models to a
service-oriented approach. Finally, as you make the case for private cloud within your
organization, you're also going to need to think about what organizational changes might be needed
in order to maximize the benefits of your private cloud.
Chris Bent: Organizational changes, that kind of sounds like another way of saying you'll need to
get rid of people. Is that what you're saying here?
Faiz Parkar: Actually that’s a very common concern that we came across. People are
understandably concern about the job security.
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The new perceptions
This topic is so important that we've actually dedicated one of the Webcast in this series to go into
this in more detail. But the spoiler is, moving to private cloud doesn’t necessarily mean you'll be
getting rid of lots of people just that some of their roles might change. And that’s because those
organizations which are successful with private cloud are the ones who use private cloud as a
catalyst to change the role of IT and the relationship between IT and the business.
So if we look at organizations at how's made that successful move to private cloud, they're usually
the ones who are reinvented IT as internal service provider and actually behaving as a true service
provider. So things like defining SLAs, quality of service, terms, service contracts for internal and
business consumers, establishing intensive models to come to the private cloud, implementing
chargeback fees for service models, other cost-recovery models, provision resources to internal
budget teams, migrating legacy, applications and services to the private cloud so all of these you
can see that the transition from an IT shop to the private cloud provider isn’t an easy one.
Chris Bent: Well, I guess many IT teams are struggling right now to remain relevant in the age of
the cloud. What advice can you give to those IT teams who are concerned about being
disintermediated by the business going straight to public cloud providers and cutting them out of
the loop?
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Making the case for Private Cloud
Faiz Parkar: That’s the way to get question, (Chris) and the answer is all about better aligning IT
to the business so that you can deliver higher value. So avoid being disintermediated, IT is going to
behave more as an integrator of IT resources and capabilities. You got to know where to use
external cloud resources, outsourcing and managed services and when to continue using internal IT
services. IT is going to transition into a true business relationship manager working to deliver best
thing cloud services, solutions, and resources regardless of provider.
And don’t be afraid of external service provider comparisons. Benchmark is held against them. To
survive and thrive, be a change agent, lead the move to private cloud and become a true tested
advisor to the business. The new role of IT needs to be not only a provider but also a broker and
business relationship manager.
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Making the case for Private Cloud
Chris Bent: Well, again, you mentioned the organizational changes earlier. Can you elaborate on
what you mean you by this might be needed?
Faiz Parkar: Sure. So what I meant by that is that this new role of IT may need organizational
changes in order to support it. Most organizations that we worked with will establish an IT
executive team to ensure IT governance and oversight of their private cloud into end. Then they
also create a cloud working group to take care of the initial source of activities related to the private
cloud designing it, building it, running through the concept activities, and maybe even begin the
private cloud adoption process in a pilot mode prior to formalization of their strategy.
Establishing a consumer stakeholder border of cloud steering group is really important to pay input
for business requirements, cloud services, pricing, accounting and chargeback models and how you
want to do those within your organization.
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Making the case for Private Cloud
And finally, you'll also need a cloud operations team to handle the day to day operation,
management, resource management, provisioning the structure of your private cloud. As I said
earlier, tune in to a separate Webcast that we're running in this series to learn more about how
existing roles may need to change and what new roles you may need.
Chris Bent: All right. Thank you. You’ve painted a pretty clear picture of how private cloud can
help completely transform the way IT is perceived by the business. But what are some of the key
metrics that our audience can use to quantify the benefits of moving to a private cloud?
Faiz Parkar: If your organization hasn’t deployed a private cloud before, the key to making the
business case is to draw on the experiences of those who have. Since Canopy is a company that’s
focused exclusively on cloud computing, we talked to lots of organizations around the world on
exactly this topic on a daily basis.
What you see here on the slide are some of the key elements that organizations that we worked with
have found meaningful in quantifying the business value of private cloud.
Chris Bent: All right. Well, where do you see some of the quick wins where it's pretty
straightforward to quantify the benefits of private cloud?
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Elements of a Private Cloud Business Case
Faiz Parkar: Three main areas, compliance, cost reduction, and cash flow. So by components,
when you deploy a private cloud rather than a public cloud, what it basically means is that you can
retain full control over who has access to what data, where it's located, and how it's secured. This
means you can assure that your organization is always operating in accordance with the relevant
compliance, privacy, sovereignty, and regulatory requirements. Think about the value to your
organization, all compliance versus cost of noncompliance, right? So if you are found to be
noncompliant because you moved applications to the public cloud, what are the implications in
terms of financial penalties or damage to your corporate reputation or loss of business?
Another key thing to think about is cost reduction. So in the short term, it's pretty straightforward
to actually (inaudible) on cost savings by moving to private cloud and that usually comes from
moving from silo to infrastructure for each application or project to a private cloud of which you’re
going to host to all your applications and projects and that reduces the amount of physical
infrastructure that you need to buy which is relatively straightforward and easy for you to work
how the savings associated with that are but (inaudible) about the associated reduction in
(inaudible) cost or the software management and support cost because you have less hardware in
your data center.
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Call to Action
And then the third area is to do with the cash flow, right, the move from CapEx expenditure to
OpEx expenditure. So if you can quantify the benefits to your CFO or paying for your private
cloud on an OpEx basis rather than the CapEx basis is really going to appreciate that the cash flow
is going to be freed up by doing that which you can reinvest in other projects that generate revenue
for the business.
Chris Bent: All right. Well that with short term, how about in the midterm?
Faiz Parkar: In the midterm, you should start reaping the benefits of better alignment between the
IT and the business. And one of the key ways of measuring that is speed to market. With a
properly manage private cloud, you have to pay capacity to be able to cater the new business
requirements without having to initiate the procurement cycle. This means you can deliver new
business requirements much more quickly.
But how do you actually quantify the value of being quicker to market? Well, if you can roll out a
new revenue-generating IT service in one month instead of six months, it's relatively
straightforward to calculate the value of being able to start taking revenue five months earlier.
Another thing to think about in the midterm is asset utilization. In a traditional IT approach, you
bought dedicated infrastructure for each application or project and you have to size each of set of
the infrastructure for the peak workload of that application or project. That meant that you have to
have spare underutilized and raise the capacity within the infrastructure of each application or
project. By moving to a private cloud to host all of your applications and projects, you only need
global space capacity which all applications and projects can take advantage of and that reduces the
amount of underutilized capacity and the increased asset utilization and ROI.
Chris Bent: And how about way down the road long term?
Faiz Parkar: So quantifying the value of transforming IT from a business inhibitor to a business
enabler may not be as straightforward as it seems at first glance since it involves working at cost
avoidance of future unexpected cloud projects that you're able to deliver faster.
If you’ve got visibility into specifics of future IT projects which are in the pipeline, then you might
be able to quantify the benefits of delivering them earlier rather than later. Alternatively, you can
take a retrospective look at IT projects that you have delivered in the past and calculate the value of
delivering them faster with the private cloud than what they actually took with your current IT
approach.
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What to look for in a private cloud partner
Ultimately, by enhancing the relationships between IT and the business, you translate IT innovation
into business innovation gaining competitive advantage and delivering better customer service.
Chris Bent: Again, thanks. That’s all been really useful. Now, how about what practical steps do
you think organizations are looking for - better looking at private cloud can take next?
Faiz Parkar: I think first, recognize that the IT industry in the midst of once every 20-year shift to
a new technology platform based on computing. You said that in the introduction to the Webinar
and that’s validate by a number of analysts which are out there.
And what that means is, you know, for you as an individual, this is your opportunity to become a
change agent and lead your organization's transformation to private cloud. Think carefully about
the people and process changes that you need to make in order to be successful not only the
technology changes.
Make sure that your cloud partner can help you develop the internal competencies that you'll need.
Focus on the business outcomes and don’t get bumped down by complexity or inertia. Remember
that change means change for all not just for IT. Involve your line of business stakeholders from
the answer and get everybody working together towards a common goal. And finally, work with a
trusted partner, one who can support you in every step of your journey to private cloud and can
support the choices that you need with your own private cloud.
Chris Bent: All right. And to finish off, can you say a few words about what organizations who
are looking to move to private cloud should look for from a potential cloud partner?
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The next steps
Faiz Parkar: Sure. The key things to look for is a partner that can guide and work with you to
ensure your private cloud initiative is going to be successful. As well as looking for the obvious
SLAs and track record, et cetera. Always keep in mind that your chosen partner should have
private cloud as a core competency. If their knowledge is only marginally better than your own,
you're not absorbing any of the risk of implementation.
Canopy is focused exclusively on cloud computing which means we build out very specific
expertise in helping customers ensure that their cloud projects are successful. We not only offer
best-of-breed technology solutions powered by VMware and EMC but also offers a complete range
of cloud-specific services to help you from the initial stages of planning your journey to the cloud
to every step of the way to a successful deployment and migration and even beyond the ongoing
hosting, management, and support.
You can check us out at www.canopy-cloud.com.
Chris Bent: All right. Thank you, Faiz. And, of course, thank you to our audience for joining the
Webinar. Again, you can find more information about Canopy at www.canopy-cloud.com. And if
you have any specific queries, please do not - do get in touch by E-mail at contact@canopy-
cloud.com.
Just as a reminder, this Webcast is part of a series of Webcast from TechTarget and Canopy to help
organizations that are considering a private cloud initiative to understand some of the challenges
and complexities that you may face and also share some of the tips and best practices that Canopy
has learned in overcoming these challenge on behalf of all kinds of organizations around the world.
If you missed the other Webcast in the series, please be sure to check them out.
Private Cloud brought down to earth
Thank you
Canopy, an Atos company powered by EMC and VMware technology, is a one-stop-shop that offers cloud services focussed exclusively on bringing the
benefits of cloud delivery to large public and multinational private sector organizations. The anticipated benefits are substantial – IT cost reduction and capex avoidance through flexible pricing models plus access to innovative and agile technology that can enable rapid cloud implementation and faster time to market for products and services. The Canopy offerings are based on open standards so customers can choose their preferred technology and decide whether to run solutions off- or on-premise to best meet their business needs. Headquartered in London (UK) Canopy currently operates in 6 countries across 3 continents.
This is Chris Bent signing off. Everyone, have a great day.
END
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