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Page 1: Isv cloud business readiness assessment

Planning

Survey

Assessment

Cloud Readiness Assessment

TechStrategyLabs Inc.

Page 2: Isv cloud business readiness assessment

ISV Cloud Business Readiness AssessmentWelcome

Welcome, Cloud Computing ISVs

This multi-dimensional analyzer assesses key gaps in your current strategy, and aligns you to IBM's cloud offeringsthat will enable you to accelerate innovation. The recommendations are strategic steps in your journey to leveragecloud computing to successfully transform your business.

To get started please move to the next page…

Page 3: Isv cloud business readiness assessment

Flow of questions...

In order for us to assist you in this important transformation, you will be requested to provide somebusiness and technical information in the following sequence.

Enjoy!

Please tell us a bit about your business...

1. What is the key business goal behind your cloud initiative? *

2. What is the expected revenue/cost reduction goal for this initiative? *

Preserve market share Penetrate new market

Improve operational efficiency Capture market

Up to 5M USD 5M - 15M USD Greater than 15M USD

Page 4: Isv cloud business readiness assessment

3. What is the competitive situation of your product offering? *

4. What is the intent behind leveraging cloud computing? *

5. What phase of the transformation are you engaged currently? *

Now tell us a bit about your product...

If you are an Application Service Provider (ASP), and offering your productas a "per customer installation" in a cloud environment, please select the"ASP..." options.

6. What is the current status of your offering? *

7. What type of cloud infrastructure will your offering utilize? *

8. How do you plan to host your offerings? *

High - Fragmented market with no consistent leader

Moderate - Fragmented with 1-2 market leaders

Low - un-fragmented market

Build a cloud infrastructure Enable your application in the cloud

Extend your cloud application

Exploring options Planning Design and Architecture Execution

Operational Optimization

Not cloud ready ASP on public cloud ASP on private cloud

Public cloud Private cloud

Public cloud Private cloud ASP on public cloud

ASP on private cloud Hybrid (private and public cloud)

Page 5: Isv cloud business readiness assessment

9. In what units do you offer your product? *

10. In what units would you like to offer your product in future? *

11. What are your customers most sensitive to? *

12. What is your existing pricing strategy? *

13. What is basis for your existing pricing? *

14. How many direct-sales personnel are approximately involved in selling your offering? *

Some technical information about your offering...

15. How many "units of sales" does 1 unit of your production infrastructure support? *

Self hosted 3rd party Hybrid (self and 3rd party)

Enterprise license Users Seats Transactions

ASP-based customers Computing capacity

Users Seats Transactions ASP-based customers

Computing capacity

Price Service Security Integration

Single-segment - Single Price Single-segment - Tiered-Price

Multi-segment - Tiered-Price

Cost-plus pricing Value-based pricing Competition-based pricing

Customer-driven pricing

Page 6: Isv cloud business readiness assessment

16. What is the infrastructure (image and workload) management technology you currently use inproduction? *

17. What type of servers are you planning to utilize for this initiative? *

Please share some other business information...

18. How much do you approximately spend on software annually? *

19. What is your approximate annual software maintenance spend (as a % of total annualsoftware spend)? *

20. How much do you approximately spend on hardware annually? *

Home grown

Open View

Microsoft

VMWare

Amazon

Open Source (KVM, Xen)

IBM Tivoli

IBM Power Systems

IBM System z (mainframe)

Itanium

PA-RISC

SPARC

Ultra SPARC

Single core vanilla

Dual core vanilla

Less than 1M USD Between 1 - 2M USD Greater than 2M USD

Page 7: Isv cloud business readiness assessment

21. What is your approximate annual hardware maintenance spend(as a % of total annualhardware spend)? *

22. How much do you approximately spend annually on your sales and marketing activities? *

23. What is the approximate current annual revenue from your offering (that you want totransform)? *

24. What is your approximate anticipated annual growth rate (annualized)? *

25. What is the approximate price per unit of sale of your product offering (in USD)? *

Please tell us a bit about yourself...

Your name *

26. Job title *

Less than 250K USD Between 250k - 1.5M USD Greater than 1.5K USD

Less than 1M Between 1 - 5M USD Greater than 5M USD

0 - 1M USD

1M - 5M USD

5M - 20M USD

20M - 100M USD

Greater than 100M USD

Less than 15% Between 15 - 25% Greater than 25%

Less than 100 USD Between 100 - 500 USD Greater than 500 USD

Page 8: Isv cloud business readiness assessment

Email *Please provide a valid email address, as the report will be sent to this email address.

27. Company *

28. Send a copy of the report to IBM to enable them assist you better? *

Thank You!

Thank you for your input. We now have a better idea on what you need. We will now conduct an in-depth analysisof your need, and create a detailed report base on your input. The report will be emailed to you within the next fewhours.

Thanks

TechStrategyLabs Inc.

President/CEO

COO

CFO

CMO

Senior Director

Director

Senior Manager

Manager

Senior Associate

Associate

Yes

No

Page 9: Isv cloud business readiness assessment
Page 10: Isv cloud business readiness assessment

The contents of this report have been prepared exclusively for Sample Company and may not be used for any reason by any other party. The conclusions contained herein represent TechStrategyLabs’ analysis of the data provided by Sample Company. TechStrategyLabs is not responsible for the authenticity of the data provided by Sample Company. TechStrategyLabs has utilized all reasonable care in conducting its analysis. TechStrategyLabs is not responsible or liable for any action taken by Sample Company based upon this report.

Cloud Readiness Planning

Sample Company

TechStrategyLabs Inc.

October 12, 2011

Page 11: Isv cloud business readiness assessment

TechStrategyLabs Inc.

Copyright © TechStrategyLabs Inc. 1

Executive Summary In the planning phase of preserving market share for your company, with a revenue goal of 5M – 15M USD, by building cloud application, you may want to consider IBM’s Cloud Application Enablement Project mentioned below in the “Accelerating your cloud transformation” section. Please feel free to take this assessment once you are about to embark on your transformation to get a more specific set of recommendations to accelerate the entire process, and leverage IBM as your cloud business partner.

In order to accurately plan the transformation of your offering to leverage a cloud-based delivery channel, it is imperative to stay focused on the ultimate business goal of your corporation. The business goals may vary from company to company. The most common ones may be preserving your market share, penetrating a new market, creating an alternate revenue channel or just improving operational efficiency of your existing delivery channel.

The key elements to measure your “cloud readiness” consist of business and technical factors. IBM’s WebSphere and Workload Deployer suite of technologies are key catalysts to enable you to transform successfully by influencing these factors. It is useful to consider these factors while planning to transform your offering to a cloud-enabled delivery channel.

Business Factors The key business factors influencing your transformation are:

• Unit of Sale refers to the unit of your offering that you would sell using the cloud-delivery channel. Since you are transforming into a cloud-based delivery mode, it is imperative to

deliver your offering using a level of granularity that signifies value to your customers. Since licensed software and hardware add to the fixed cost of your customer, you may want to think about using a unit of sale that would scale with your customers business. Example: seats, transactions and named users.

• Pricing Strategy refers to how you would like to segment your customers and price your offering. Usually, companies offer a price-feature variation and let the customer decide on the features they need leading to the price offered. Transforming to leverage a cloud-delivery channel involves taking a closer look at your target customer base, segmenting it based on features, affordability, and growth, and subsequently assigning a price that works best for each segment.

• Price Basis refers to the basis of pricing each customer segment. Usually, companies use cost-based pricing (where the price is determined by adding a markup percentage to the cost of a unit of sale of the offering) or competitive pricing (where a price is determined by analyzing the price of the prevailing competition in the market). Due to the competitive nature of the cloud offering business, it may be necessary to assess the inherent “value” of the offering to ascertain the price. This leads to a more compelling value-proposition of the offering denoted by the price dimension.

While planning to transform into a cloud-based delivery model, you may want to consider each of the above factors to ensure that the business

Page 12: Isv cloud business readiness assessment

TechStrategyLabs Inc.

Copyright © TechStrategyLabs Inc. 2

model of your offering addresses the overall business goal. It is then a mandatory exercise to address the technology factors and align them to address the overall business goal.

Technology Factors The key technology factors influencing your transformation are:

• Virtualization is a key tenet to transform your offering to a cloud-delivery model. It is imperative that your offering can be virtualized into the target delivery hardware platform. If your offering has been virtualized already, it makes it easier to transform into a cloud-based delivery channel. IBM’s Workload Deployer and Tivoli suite of technologies accelerate the setup and management of a fully automated virtualized environment for your cloud-enabled offering.

• Tenancy is the second important factor that governs the ability to scale your offering across multiple customers. The ability to scale across customers, allows you to spread your fixed costs (if any) across multiple customers, and provides a better per customer operational cost ratio as your offering migrates from a single-tenant to a multi-tenant form for deployment. IBM’s Workload Deployer suite of technologies accelerates migration of your offering to a multi-tenant deployment format.

• Infrastructure Management includes an automated management of your virtualized offering. Automation increases reliability and repeatability leading to economies of scale. Reduction of fixed cost and attaining elasticity in cost management is an

important aspect of delivering your offering using a cloud channel. IBM’s Tivoli suite of technologies helps setup and manage a fully automated virtualized environment for your cloud offering.

• Cloud Platform refers to the choice of the specific cloud delivery channel. These may include public cloud, private cloud, 1ASP on public/private cloud. The choice of the delivery platform indicates the security and integration considerations of your customers. IBM’s SmartCloud environment facilitates a higher “time to market” for your offering by accelerating your transformation.

These key technology factors must be considered first prior to other ones that may be specific to your business model. These factors must also be aligned to the state of your business factors to ensure that your cloud strategy addresses your ultimate business goals.

Accelerating your cloud transformation IBM has designed cloud projects to help enable your offerings by aligning to the specific IBM technology suites. The alignment is based on the type of your offering. These are categorized into the following initiatives that you undertake.

Cloud Infrastructure Build Project If you are an infrastructure provider you are aligned to this project. If you are looking to building and optimally managing infrastructure to host cloud-based offerings by building out a

1 Application Service Provider

Page 13: Isv cloud business readiness assessment

TechStrategyLabs Inc.

Copyright © TechStrategyLabs Inc. 3

cloud infrastructure to deliver 2IaaS/PaaS/SaaS solutions and looking to make a capital investment in hardware and software.

Cloud Application Enablement Project If you are an application provider and interested in developing a new SaaS application or migrating an existing on-premise application to a cloud delivery model, you are aligned to this project. This will also enable you to add multi-tenant function to your existing ASP delivered applications. It also enables you to extend your application to integrate with other SaaS applications using IBM Cast Iron. In this context if you are looking to use a 3rd party (IBM/Other) to provide cloud infrastructure services, this enables you to successfully build and deploy your application.

2 IaaS – Infrastructure as a Service; PaaS – Platform as a Service; SaaS – Software as a Service

Cloud Application Extension Project If you are an existing SaaS Provider, may or may not be running on IBM technology or infrastructure today and looking to grow the functionality/attractiveness of your cloud application in order to enrich your value proposition, you are aligned to this project. This enables you to successfully extend your applications to add more competitive advantage to your offering.

1. Hardware Virtualization

2. Image Virtualization

3. Workload Virtualization

Infrastructure Management• Virtualization of hardwareresources in the data center• Management of virtualizedinfrastructure

Image Management• Virtualized infrastructure leads

to creation of “virtual” software images

• Proliferation of virtual software images leads to management challenges

Integrated Middleware• Images are combined

into patterns representing middleware workloads

• Workloads encapsulate well defined combinations of integrated middleware

Cloud Infrastructure Build Project

Project Stage IBM Technology AlignmentHardware Virtualization • IBM Workload Deployer

• IBM Tivoli Service Automation Manager• IBM Service Delivery Manager• Workload Optimized Systems

Image Virtualization • HyperVisor Edition Images• Tivoli Provisioning Manager

Workload Virtualization • IBM Workload Deployer• WebSphere Virtual Enterprise• IBM Middleware

1. Workload Virtualization

2. Infrastructure Selection

3. Hybrid Integration

Integrated Middleware•Use of middleware andtopology patterns to enablemulti-tenant delivery•Leverage IBM cloud blueprintsand assets for creating cloudapplications

Scalable Delivery• Identify Cloud Infrastructure

Providers for scalable & secure delivery

• Cloud Infrastructures Providers assist with BSS functions as required

Application Integration• Provides SaaS-to-

SaaS and SaaS-to-on premise application integration

• Flexible deployment options

Cloud Application Enablement Project

Project Stage IBM Technology AlignmentWorkload Virtualization • IBM Workload Deployer

• WebSphere Virtual Enterprise• IBM Middleware

Infrastructure Selection • IBM SmartCloud• Other cloud infrastructure providers

Hybrid Integration • IBM Cast Iron

1. Hybrid Integration

2. Analytics

3. Collaboration

Application Integration

• Provides SaaS-to-SaaS and SaaS-to-on premise application integration

• Flexible deployment options

Business Insights•Enhance your

application value through inclusion of analytic capabilities

•Expands user base within clients.

Social Business•Add Social Business

capability to existing SaaS applications.

Cloud Application Extension Project

Project Stage IBM Technology AlignmentHybrid Integration • Cast Iron

Analytics • Cognos• SPSS

Collaboration • LotusLive

Page 14: Isv cloud business readiness assessment

TechStrategyLabs Inc.

Copyright © TechStrategyLabs Inc. 4

Summary IBM offerings help you align your technology choices to your business factors in order for you to address your overall business goal in leveraging cloud computing. Please feel free to take this assessment with your specific needs once you have decided on your cloud trajectory to receive a more specific set of recommendations that aligns your specific needs to IBM technologies to accelerate your transformation.

Key terms • Unit of Sale: The form in which the offering

is sold to the end-customer i.e. seats, names users, transactions etc.

• Pricing Strategy: Refers to the customer segmentation and pricing e.g. whether the offering is sold using the same price for all types of customers or different price for different types of customer

• Pricing Basis: This refers to the mechanism used to derive the price i.e. using cost as a basis to derive price or other factors such as value to customer, competitive landscape etc.

• TCO (Total Cost of Ownership) – total Cost of owning and operating any IT asset

• NPV (Net Present Value) – Difference between the future value of revenue and expenses, discounted at the present value using a discounting factor (mostly a Weighted Average Cost of Capital for a company)

Key IBM Technologies/Offerings • IBM Workload Deployer (previously

WebSphere CloudBurst Appliance) is a hardware appliance that provides access to IBM middleware virtual images and

patterns to easily, quickly and repeatedly create application environments

• IBM PowerVM provides a secure and scalable virtualization environment for AIX, IBM i and Linux applications

• IBM Integrated Service Management (Tivoli) provides solutions to design, build and manage a dynamic infrastructure that enables you to improve service, reduce cost and manage risk

• IBM WebSphere Cast Iron cloud Integration enables companies to rapidly connect their hybrid world of public clouds, private clouds, and on-premise applications

• IBM LotusLive offers online integrated collaboration tools, e-mail and social networking services

• IBM Cognos is an integrated business intelligence and performance management solution

• IBM Global Technology Services (GTS) provide cloud and other infrastructure services

• IBM SmartCloud Enterprise + is cloud infrastructure and services delivered via an IBM owned & architected, multi-tenant, secured, hosted infrastructure in an IBM Data Center or in a dedicated environment or 3rd party site.

• IBM SmartCloud Application Services provides a comprehensive set of services including full strength development tools and integration services. Built for enterprises that want to leverage existing skills and assets but effectively deploy them in the cloud

• IBM Starter Kit for Cloud is an entry cloud management software for IBM Systems (System x and Power) which complements platform management and service

Page 15: Isv cloud business readiness assessment

TechStrategyLabs Inc.

Copyright © TechStrategyLabs Inc. 5

management offerings, enabling clients to simply and quickly build private clouds.

Company Information TechStrategyLabs provides executive advisory services to IT executives helping them formulate quantitatively-based strategies.

Led by a team of highly experience principals, expert advisors and subject-matter experts, the firm differentiates by using predictive analytics and applied research to deliver their services.

Contact: TechStrategyLabs Inc. Phone: +1.973.447.4161 | Fax: +1.973.447.0916 Email: [email protected] Website: www.TechStrategyLabs.com

Page 16: Isv cloud business readiness assessment

The contents of this report have been prepared exclusively for Sample Company and may not be used for any reason by any other party. The conclusions contained herein represent TechStrategyLabs’ analysis of the data provided by Sample Company. TechStrategyLabs is not responsible for the authenticity of the data provided by Sample Company. TechStrategyLabs has utilized all reasonable care in conducting its analysis. TechStrategyLabs is not responsible or liable for any action taken by Sample Company based upon this report.

Cloud Readiness Assessment

Sample Company

TechStrategyLabs Inc.

October 12, 2011

Page 17: Isv cloud business readiness assessment

Executive Summary IBM tools and technologies will enable a smooth migration of your offering to the public cloud. Business and technology adjustments will ensure that the migration is successful from both revenue and cost perspectives. Overall the offering is approximately 56% cloud-ready when migrated in its current state. The business drivers account for 40.4% of this readiness, whereas the technology drivers account for the remaining 59.6%. This is highlighted in the cloud-readiness scale that outlines both business and technology drivers.

IBM WD and GTS Application Services provide cloud application resources and cloud application development services for rapid application development. This will help mitigate the technology gaps. The financial implication of this is highlighted in the financial projection section.

1Current-state Gap Analysis The current-state opportunities are categorized into business and technology. The recommendation section provides the appropriate IBM tools and technology that will provide a sustainable and effective way to address these opportunities and migrate the offering to a public cloud.

1 A higher percentage indicates a lower gap to become “cloud ready”

Business Gap Analysis

Key areas to focus to enhance your offering are:

• Unit of Sale • Pricing Basis

Addressing these areas will enable the offering to be more competitive from a revenue perspective. In order to maximize the benefits of a cloud delivery channel, it is imperative to focus on important aspects such as customer segmentation and overall pricing strategy.

Technology Gap Analysis

Key areas to focus to enhance your offering are:

• Virtualization • Tenancy

In order to be more cost elastic, the offering must address these areas. Cloud computing allows ISVs to leverage a more elastic cost structure. Selecting the appropriate IBM tools and technology will ensure operational efficiency leading to a more elastic cost- structure to fully leverage a cloud-based delivery channel for your offering.

IBM Cloud Project Alignment The current state of the offering aligns it to the following IBM Cloud Application Enablement Project.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Unit of Sale PricingStrategy

Pricing Basis Virtualization Tenancy InfrastructureManagement

CloudPlatform

Read

ines

s

Cloud Readiness Scale

Business Gap Analysis 40.4%Unit of Sale Pricing Strategy Pricing Basis

Score 33.33% 100.00% 25.00%

Technology Gap Analysis 59.6%Virtualization Tenancy Infrastructure

ManagementCloud Platform

Score 50.00% 33.33% 75.00% 75.00%

Page 18: Isv cloud business readiness assessment

Copyright © TechStrategyLabs Inc. 1

The gaps are adequately addressed by aligning to the Workload Virtualization and Infrastructure Selection decision points in this project. The tools and technology aligned to these decision points will address the Virtualization and Tenancy challenges thereby leading to the appropriate infrastructure selection of public cloud. These will accelerate the migrate decision of the existing offering and will be key catalysts to achieving the time line of 1 year.

Business Recommendation The key areas to focus in this area are:

• Unit of Sale: Aligning the unit of sale to your customers’ consumption unit will enable you to sell your offering at units that provides a higher value. Introducing a unit of sale that is more granular in nature such as per seat, or per business transaction will enable your customer to scale their cost structure with consumption.

• Pricing Basis: Moving to a value-based pricing basis will improve the ability to price better. A cost-plus pricing will increase pressure on the cost-side of the earnings equation which may not yield a higher earning after a period of time. Customers must perceive the offering to add “value” instead of just

“another product” with non-differentiating substitutes.

These recommendations will prove to be highly useful considering that migrating an existing offering from an enterprise license to cloud must create an alternate lucrative channel that addresses the customers’ price sensitivity, at the same time makes the offering affordable to other prospective customer segments.

Technology Recommendations The key areas to focus are:

• Tenancy – Utilizing IBM IWD suite of tools will address the tenancy issues by: • Enable topology patterns to ensure

multi-tenant or similar delivery patterns • Allowing a customer-based instance

segregation leading to better management of customer demand

• Migrate to a full multi-tenant over a period of time leading to completely elastic operating structure

• Virtualization – IBM IWD and as IBM Tivoli Service Automation Manager suite of tools will enable you to achieve the following: • Provide virtualization capabilities at the

infrastructure, platform and application layers

Utilizing IBM’s public cloud as a delivery channel will ensure economies of scale, lower vendor management costs leading to an overall reduction in 2TCO.

Projected Financial Impact The following pro-forma financial comparison takes into account the savings in Capital Expenses (CAPEX) and Operating Expenses (OPEX) as a result of leveraging IBM IWD and 2 Total Cost of Ownership – the total cost of owning and operating the offering

1. Workload Virtualization

2. Infrastructure Selection

3. Hybrid Integration

Integrated Middleware Scalable Delivery Application Integration

Cloud Application Enablement Project

Page 19: Isv cloud business readiness assessment

Copyright © TechStrategyLabs Inc. 2

other IBM technologies mentioned. The comparison determines a projected net-savings as a result of “standard industry” savings patterns observed across various ISV types.

This analysis takes standard savings and does not guarantee the net-savings in specific cases. It represents the net-savings experienced by ISVs closest to your profile with certain assumptions. The NPV of net-savings is determined using standard industry average cost of capital between 10%-15%.

Based on the technologies recommended, the NPV of the projected net-savings over a 5-year time horizon is approximately 5.8M USD at an average industry cost of capital.

Assumptions • There is no CAPEX investment necessary to

deploy the offering. • Increase in OPEX as the cost-structure

transforms to an elastic operational cost strategy correlated to the growth in revenue. If revenue reduces, the OPEX will reduce as well, resulting in stable earnings proportions.

Current StateProjected Cost

SoftwareCAPEX 1,000,000$ 1,150,000$ 1,322,500$ 1,520,875$ 1,749,006$ OPEX 150,000$ 172,500$ 198,375$ 228,131$ 262,351$

HardwareCAPEX 250,000$ 266,250$ 283,556$ 301,987$ 321,617$ OPEX 37,500$ 39,938$ 42,533$ 45,298$ 48,242$

Staff 610,938$ 662,867$ 719,211$ 780,344$ 846,673$ Sub-total 2,048,438$ 2,291,555$ 2,566,176$ 2,876,636$ 3,227,889$ SG&A 2,500,000$ 2,812,500$ 3,164,063$ 3,559,570$ 4,004,517$ Total Cost - Current State 4,804,492$ 5,390,499$ 6,051,010$ 6,795,785$ 7,635,892$

Projected Earnings 4,195,508$ 5,859,501$ 8,011,490$ 10,782,340$ 14,336,764$ Net Present Value of Earnings ( 5 - year time line) 28,673,042$

Transformed StateProjected Cost

SoftwareCAPEX -$ -$ -$ -$ -$ OPEX 569,113$ 654,480$ 752,652$ 865,549$ 995,382$

HardwareCAPEX -$ -$ -$ -$ -$ OPEX -$ -$ -$ -$ -$

Staff 610,938$ 555,953$ 458,661$ 355,463$ 239,937$ Sub-total 1,180,050$ 1,210,433$ 1,211,313$ 1,221,012$ 1,235,319$ SG&A 2,500,000$ 2,812,500$ 3,164,063$ 3,559,570$ 4,004,517$ Total Cost - Transformed State 3,680,050$ 4,022,933$ 4,375,375$ 4,780,582$ 5,239,835$

Projected Earnings 5,319,950$ 7,227,067$ 9,687,125$ 12,797,543$ 16,732,821$ Net Present Value of Earnings ( 5 - year time line) $34,517,667

Net Savings 1,124,442$ 1,367,566$ 1,675,635$ 2,015,203$ 2,396,057$

Net Present Value of Net Savings (5-year time line) $5,844,625Improvement in Earnings (5-year time line) 20.38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1 2 3 4 5 6

(% o

f TCO

-ne

t of S

G&

A)

Year

Software Cost Comparison

Current State

Transformed state

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

1 2 3 4 5 6

(% o

f TCO

-ne

t of S

G&

A)

Year

Hardware Cost Comparison

Current State

Transformed state

0

0.1

0.2

0.3

0.4

0.5

0.6

1 2 3 4 5 6

(% o

f TCO

-ne

t of S

G&

A)

Year

Operational Staff Cost Comparison

Current state

Transformed state

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Copyright © TechStrategyLabs Inc. 3

• Reduction in staff costs are projected over the 5-year time horizon due to process automation, reduction in human errors and service delivery speed. This may be improved more by using smarter sourcing strategies.

Overall, it is a financially rational decision to consider leveraging the IBM suite of technologies mentioned in the recommendation section to transform into an elastic cost and operational structure.

Key terms • Unit of Sale: The form in which the offering

is sold to the end-customer i.e. seats, names users, transactions etc.

• Pricing Strategy: Refers to the customer segmentation and pricing e.g. whether the offering is sold using the same price for all types of customers or different price for different types of customer

• Pricing Basis: This refers to the mechanism used to derive the price i.e. using cost as a basis to derive price or other factors such as value to customer, competitive landscape etc.

• TCO (Total Cost of Ownership) – total Cost of owning and operating any IT asset

• NPV (Net Present Value) – Difference between the future value of revenue and expenses, discounted at the present value using a discounting factor (mostly a Weighted Average Cost of Capital for a company)

Key IBM Technologies/Offerings • IBM Workload Deployer (previously

WebSphere CloudBurst Appliance) is a hardware appliance that provides access to

IBM middleware virtual images and patterns to easily, quickly and repeatedly create application environments

• IBM PowerVM provides a secure and scalable virtualization environment for AIX, IBM i and Linux applications

• IBM Integrated Service Management (Tivoli) provides solutions to design, build and manage a dynamic infrastructure that enables you to improve service, reduce cost and manage risk

• IBM WebSphere Cast Iron cloud Integration enables companies to rapidly connect their hybrid world of public clouds, private clouds, and on-premise applications

• IBM LotusLive offers online integrated collaboration tools, e-mail and social networking services

• IBM Cognos is an integrated business intelligence and performance management solution

• IBM Global Technology Services (GTS) provide cloud and other infrastructure services

• IBM SmartCloud Enterprise + is cloud infrastructure and services delivered via an IBM owned & architected, multi-tenant, secured, hosted infrastructure in an IBM Data Center or in a dedicated environment or 3rd party site.

• IBM SmartCloud Application Services provides a comprehensive set of services including full strength development tools and integration services. Built for enterprises that want to leverage existing skills and assets but effectively deploy them in the cloud

• IBM Starter Kit for Cloud is an entry cloud management software for IBM Systems (System x and Power) which complements platform management and service

Page 21: Isv cloud business readiness assessment

Copyright © TechStrategyLabs Inc. 4

management offerings, enabling clients to simply and quickly build private clouds.

Company Information TechStrategyLabs provides executive advisory services to IT executives helping them formulate quantitatively-based strategies.

Led by a team of highly experience principals, expert advisors and subject-matter experts, the firm differentiates by using predictive analytics and applied research to deliver their services.

Contact: TechStrategyLabs Inc. Phone: +1.973.447.4161 | Fax: +1.973.447.0916 Email: [email protected] Website: www.TechStrategyLabs.com