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April 2013 Navigating Cloud Management Robust IT management capabilities are critical to success in a cloud delivery model

Navigating Cloud Management - PwC's Accelerator · April 2013 Navigating Cloud Management Robust IT management capabilities are critical to success in a cloud delivery model

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April 2013

Navigating Cloud ManagementRobust IT management capabilities are critical to success in a cloud delivery model

Table of contents

April 2013

The heart of the matter 2

An in-depth discussion 4

Transforming IT into a service-oriented organization 6Managing the cloud provider lifecycle 7Managing the cloud consumer lifecycle 10Cloud management platforms 11

What this means for your business 12

The heart of the matter

To successfully deliver cloud services, IT organizations should proactively tackle management challenges stemming from the paradigm shift in IT service delivery and consumption.

3 The heart of the matter

Cloud is no longer a buzz word—increasing numbers of companies across every industry are leveraging the cloud to pursue business opportunities. Many of these organizations are quickly realizing the benefits they expected from cloud, such as shorter time-to-market, reduced capital expenses, and rapid scaling.

Organizations further along the cloud journey, however, are also beginning to uncover complexities that present new management challenges for IT or, in other cases, exacerbate long-standing ones. Traditional processes and traditional division of roles and responsibilities are being severely strained due to the adoption of the cloud.

These challenges are making it difficult for companies to sustain or fully realize the business value they hope to achieve through cloud. Indeed, even major public cloud providers have experienced high-profile outages related to cloud management glitches.

A root cause of the problem is the technology-centric approach to cloud that so many organizations have employed. They have focused on technical architecture, tools, migrations, integrations, and vendor evaluations, but underinvested in retooling management and operational strategies. Cloud has transformed the technology landscape and service delivery paradigm. Such radical change means that companies must reevaluate their service delivery model—from processes, controls and tools to governance, skills and culture.

This paper presents IT leaders with a perspective on managing internally and externally sourced cloud services effectively and efficiently. For line-of-business leaders who are bypassing IT and going directly to external cloud providers, we provide a preview of the downstream challenges they will face as their businesses subscribe to an increasing number of cloud services.

An in-depth discussion

Cloud architectures and service expectations have introduced new complexities into the IT management landscape, placing an enormous strain on traditional constructs and approaches.

5 An in-depth discussion

Traditionally, IT organizations have been structured by technology silos: data center, network, compute, storage, security, risk management and application platforms. Each discipline has developed deep competencies and customized processes within its own sphere. Over time, IT organizations have fine-tuned their responsibilities, processes, controls and tools with this organizational construct as the guiding principle.

Cloud architectures and service delivery needs introduce new complexities and dependencies into IT’s management landscape. While these complexities and associated management challenges naturally spring from an emerging service delivery and consumption paradigm, significant change is required to address them. IT silos should be torn down, business partnerships strengthened, new talents acquired, and new process competencies developed. The table below outlines some of these shifts:

Typical Traditional Landscape Typical Cloud Landscape

Technology silo–oriented delivery model Service-oriented delivery model

Operational management focused on IT appliance health

Operational management focused on end-to-end business service health

Business capability funding is driven primarily through projects

Business capability funding is driven primarily through service usage

Routine operational processes are largely manual

High degree of automation is leveraged to cope with the pace and scale

Well-established supply of talent and experience

Emerging, but scarce, pool of talent and experience

Resources (servers, operating systems, applications) are managed as separate units

Resources are managed in pools such as compute pools, storage pools, network containers, internal and external services

IT is the de-facto technology service provider

Public cloud vendors enable the business to bypass IT for technology enablement

Lengthy time-to-market for new or changing business capabilities

Shorter time-to-market for new or changing business capabilities

Very few self-service offerings and manual intervention by IT required

Most offerings are self-service, on-demand and automated

Largely static resources Dynamic resources, composed on-the-fly and on-demand

Dedicated resources per user or application Shared resources among users or applications

Distinct infrastructure technologies Converged infrastructure technologies

6 Navigating Cloud Management

To fully realize and sustain the value of a cloud delivery model, IT organizations should take a holistic approach to their cloud implementation, taking into consideration the downstream IT management impacts and needs.

Transforming IT into a Service-Oriented Organization

As cloud computing drives the commoditization of technology, IT organizations will have to differentiate themselves within an enterprise on high-quality and value-added business services. At the core, effective cloud management is about transforming IT into a service—oriented organization that is closely aligned with the organization’s rapidly fluctuating needs. This does not mean reducing IT’s role to an order taker. On the contrary, IT will grow into a reliable service provider—the first step in becoming a trusted business partner for technology enablement.

The enterprise cloud will undoubtedly consist of a combination of internally and externally sourced cloud services. To manage this heterogeneous environment, IT organizations should master two distinct but tightly linked lifecycles: the cloud provider lifecycle and the cloud consumer lifecycle.

The cloud provider lifecycle covers work to procure, offer, manage and retire enterprise cloud services effectively and efficiently based on business needs. Within this lifecycle, critical success factors include:

• Business service orientation of operations

• Heavy standardization and automation of the technology and operations landscape

• Policy-based workload placement and decision making

• Proactive, flexible and agile management processes

• Robust reporting

• Unification within enterprise service management practices

The cloud consumer lifecycle covers business end-users or customers searching for, subscribing to and using enterprise cloud services. Within this lifecycle, critical success factors include:

• Unified and intuitive user experience across available service offerings

• Business-relevant services that can be personalized by end-users

• Rapid provisioning time

• Flexible self-management capabilities

• Robust consumption reporting

Service subscription Service usage Service termination

Cloud consumer lifecycle

Cloud provider lifecycle

A

Service operations

Serviceimprovement

Service design

Servicetransition Service

strategy

1

23

45

B C

7 An in-depth discussion

IT organizations can leverage existing management leading practices such as the Information Technology Infrastructure Library (ITIL) and Control Objectives for Information and Related Technology (COBIT) to build their cloud management capabilities.

Managing the Cloud Provider Lifecycle

The provider lifecycle has five key phases: service strategy, service design, service transition, service operations and service improvement.

Service Strategy: This lifecycle phase involves identifying, evaluating and prioritizing opportunities to enable the business through cloud services, well-defined objectives and service-level expectations. Some key management considerations within this phase include:

• Service deployment models: Not all services are appropriate to be delivered through the cloud, and not all cloud services need to be delivered by the IT organization. These decisions involve evaluating candidate services based upon predefined evaluation criteria. IT must work with the business to make strategic decisions about the best location (internal private cloud versus external public cloud) from which to run the service based on cost, quality of service, need for differentiation and risk.

This is also an opportunity for IT to determine how to add value to an externally sourced service—for example, by providing additional functionality, integration or service  unification.

• Service scope and operational objectives: It is crucial to have a clear and shared understanding of the business purpose and boundaries of any cloud service deployed within the enterprise. Defining business objectives, capabilities, user segments and geographies the service supports will enable IT to effectively deploy and maintain the service. It will also empower IT to make business-justified runtime decisions about performance, service levels, and so on.

• Business demand estimation: Even an on-demand, elastic cloud architecture requires IT organizations to perform some upfront capacity forecasting. Business processes are the primary source of demand for services, and the patterns of business activity influence the demand patterns that IT services will see. Evaluating the business process to identify, evaluate and model such patterns helps build a foundation for capacity planning. Additionally, visibility into capacity demands equips IT organizations to negotiate off-peak pricing and volume discounts with external cloud providers.

• Pricing and chargeback model: The cloud’s pay-as-you-go model has a significant impact on traditional approaches to budgeting, accounting and charging for IT services. To guide the sourcing discussions, as well as to determine how cloud services will be funded, key decisions need to be made about pricing tiers, chargeback policies and chargeback mechanisms.

Many of the decisions outlined here should be made by a governance committee comprising both business and IT leadership.

Service Design: In this lifecycle phase, strategic objectives are translated into a portfolio of services. Each service must be designed to address the continuity of the business, achievement of service levels and conformance to standards and regulations. Some key management considerations within this phase include:

• Serviceofferdefinition: The business service offering for consumers must be defined and described in business language rather than as a list of technical components. That definition must also include the consumer segments entitled to consume the service, the associated service levels, support options and pricing. In some cases, multiple services may be offered as a

8 Navigating Cloud Management

pre-integrated bundle to address a common business use case. For example, a team may require a project collaboration service to include a wiki, project management tools, discussion board, live feeds and integration with an internal knowledge management system—each of which may be delivered through separate underlying application services.

• Service blueprint: Based on the service definition, the cloud provider must define a service blueprint that contains the functional and technical components and specifications of the service. This blueprint enables the orchestration and provisioning of resources and must be maintained by the cloud provider on an ongoing basis. It is important that this definition is consistent with the enterprise’s architecture standards.

• Service governance: To enable a cloud environment to be highly automated, IT organizations must define the key aspects of governing the service: approval workflows to request or consume the service, decision criteria for workload placement and optimization, software licensing requirements, compliance requirements, security requirements and permissible service configurations based on enterprise standards and policies. Through appropriate governance, IT organizations ensure that deployments are compliant, easier

and faster by enabling actions that take place automatically in the runtime environment.

• Service management: To ensure that the quality of service is proactively managed, IT organizations should define profiles and thresholds related to service capacity, availability, performance, security, and disaster recovery and service continuity. They should work with business process and application owners to enable elasticity through horizontal scaling and cloud bursting. Additionally, they should be aware of project service demand in order to plan for capacity. While trending data is important to capacity planning, the dynamic nature of cloud makes forward-looking demand equally important. Finally, to ensure that end-to-end SLAs for the service are met, IT organizations should define the operational level agreements (OLAs) between the internal and external teams delivering and supporting the service.

• External supplier operations alignment: In a hybrid delivery model, IT organizations will likely find themselves orchestrating services from multiple vendors, each with its own operational processes and policies. To ensure that the quality of service is consistent with the enterprise’s standards and needs, IT organizations should align the supplier’s operational policies associated with incident resolution, maintenance windows, disaster recovery, data ownership, data

protection and escalation paths with their own. Additionally, they should put in place monitoring mechanisms to know when service disruptions occur so that they can notify the provider to initiate recovery activities as well as to ensure that agreed performance requirements are met consistently.

These activities enable IT organizations to align with the business on expectations and then translate those expectations into the mechanisms required to meet or exceed them.

Service Transition: This lifecycle phase involves rolling out cloud services into a production environment while managing the risks of failure and disruption. Some key management considerations within this phase include:

• Automated deployment orchestration: In the service design phase, a service governance framework was defined for the cloud service. This framework outlined key approvals needed to deploy a cloud service, business rules to determine where a workload is placed, and so on. These parameters, combined with an automated orchestration and deployment process, are a necessity to enable efficient service delivery in a cloud environment. Additionally, by applying agile development methods to infrastructure automation, IT organizations can build repeatable and iterative configuration and deployment processes.

9 An in-depth discussion

• Self-service support resources: To truly enable self-service, cloud services should also be intuitive to use. That means consumers should have access to self-support provisions. During this phase, IT organizations ensure that the service is well documented for support staff and for end-users and that they have access to the required tools and knowledge bases.

• Dynamic resource tracking: To manage sprawl, cloud providers should establish robust processes for tracking service deployments, usage, ownership, and evolution as patches, clones and new services are built and deployed for each user.

• Migration: Relative to current applications/systems, IT organizations should answer these questions: 1) Can my current application/system migrate to a cloud environment? 2) What would the migration cost in development/time/resources? 3) For purchased applications and systems, are there newer versions that support cloud? 4) For internally developed applications and systems, should we rewrite or replace with another package? 5) Are there additional costs for training/support and education? 6) With the cloud, will new processes and workflows be required for applications and systems support?

Service Operations: During this lifecycle phase, IT organizations conduct the proactive and reactive operational activities necessary to deliver and support cloud services. Some key management considerations within this phase include:

• Proactive event detection and response: In the service design phase, key performance, capacity and service level–related thresholds were defined for the cloud service. In this phase, these thresholds are monitored to ensure that the service is responsive to changing business demands and that service issues are being detected and automatically responded to prior to their impact on service levels. There are more constructs in cloud environments—instead of the traditional servers, OSs, and applications, we now have compute pools, storage pools, network containers, internal and external services and tenants. These new constructs are tightly coupled, and performance and capacity data should be managed holistically rather than viewed in silos. The dynamic nature of these constructs adds to the complexity. This operational capability is foundational to enabling the on-demand and elastic characteristics of a cloud service and should be driven top-down, from an end-user experience standpoint.

• Automated operations management: To operate in a cloud environment, IT organizations should ensure that common operational tasks are highly repeatable and that changes are managed consistently and efficiently. These tasks include administration, capacity management, job scheduling, backups and restores, patching and upgrades, license management, and more. Automating these tasks helps IT cope with the scale and pace of a cloud operation while minimizing failure due to human error. Additionally, many operational process such as back-up and recovery will need to be reengineered for a cloud environment.

• Consumption metering and billing: A metering capability measures service usage. This data is required to enable service billing and chargeback. But more importantly, as it relates to external cloud services, it provides IT organizations with insight into the actual consumer demand for specific features and functionalities. This data is very valuable when determining how to optimize contracts with external providers so IT organizations no longer continue to pay for capabilities the business does not consume.

10 Navigating Cloud Management

• Resource optimization: Cloud operations involve maintaining visibility into all services and resources so that inefficiencies can be identified and managed. Capacity monitoring across cloud resources enables organizations to optimize new service placement or rebalance services across clouds. This operational capability also helps ensure that the cost of service delivery is optimized.

Service Improvement: This lifecycle phase involves identifying and driving opportunities to improve the service quality, management capabilities, or external supplier delivery quality. Some key management considerations within this phase include:

• Service consumption information: To avoid business risks, IT organizations have always over-provisioned technology services—witness spanned licenses to capabilities within enterprise applications and storage to compute within infrastructure. Traditionally there has been a large gap between what the technology service is capable of doing, versus what consumers are actually doing with the service. As cloud monitoring and metering technologies mature, IT organizations will adopt service consumption metrics and leverage this data to improve vendor negotiations and service capacity decisions.

• Operational management information: As cloud drives the commoditization of technology and the focus shifts to the quality and value of service delivery, IT organizations should maintain robust operational and management metrics associated with the quality of service delivery. This information will not only help IT improve its own management capabilities, but also effectively manage the external supplier’s quality.

• Voice of the Customer information: To ensure that the services offered by IT are relevant, intuitive and meet service level expectations, IT should employ Voice of the Customer tools (e.g., surveys, user groups) to gather user feedback and preferences.

Managing the Cloud Consumer Lifecycle

The consumer lifecycle has three key phases: service subscription, service usage and service termination.

Service Subscription: In this lifecycle phase the consumer browses for, requests and agrees to the terms and conditions of the service. Key management considerations within this phase include:

• Service browsing: Depending on their role, consumers should be able to browse through the set of services to which they are entitled. An

enterprise-wide self-service catalog or online store provides consumers with an online shopping cart experience. The service catalog may be accessed through multiple form factors such as the desktop, mobile, or tablet. The services themselves should be described in business language, intuitive to navigate, and aligned with the user’s needs. As already noted, multiple services may be offered as a pre-integrated bundle to address a common business use case.

• Service requests: Due to the scale and pace of operations, manual processes that might have sufficed in a physical world are no longer feasible in a cloud environment. The entire service fulfilment and on-boarding process should be standardized and automated to allow for consumers to follow a consistent request workflow, have the right and approval to deploy the service, and agree to the terms and conditions of usage. Besides being generated by a consumer from a service catalog, requests may also be initiated through API calls from cloud applications requiring to scale.

To be successful, IT organizations should bolster their ability to build intuitive consumer interfaces, market services, and understand business operations challenges that users face.

11 An in-depth discussion

Service Usage: In this lifecycle phase the consumer configures, uses and manages the service to which they subscribed. Some key management considerations within this phase include:

• Subscription management: Once a consumer has subscribed to a service, mechanisms should be in place to allow that consumer to manage the subscription on an on-going basis. Depending on the specific service, this may involve: renewing and terminating subscriptions; modifying a subscription to specific features or functionality; modifying the duration of a subscription; modifying usage volume, storage, service levels; and modifying support tiers and options.

• Service personalization: Once a consumer has access to a service, that consumer may be allowed to personalize the service within the configuration bounds determined by the provider. While personalization does not include changes to source code, or customizations, a consumer may be allowed to handle such tasks as change the look-and-feel, turn on or off specific features, and set up access.

• Reporting: Consumers should have a unified portal to gain visibility into the status of their service requests, support requests, service usage and billing.

Service Termination: At this point in the lifecycle, the consumer terminates his use of the service. Some key management considerations within this phase include:

• Sprawl management: To avoid sprawl and drive economic value, cloud environments should have a continuous cleanup process in place. The key here is to establish policies for service termination. For example, consumers may be required to include the termination date at the time of subscribing, or be required to manually renew the subscription on a periodic basis. Alternatively, services can be monitored for usage and, if they are found to be idle for extended periods of time, they can be terminated automatically after consumer notification.

Cloud Management Platforms

To operate at the scale and pace of the cloud, IT organizations should have management tools to orchestrate, automate and optimize service delivery. To drive operational efficiency and effectiveness, they should unify the management of physical and virtual as well as internally and externally sourced services.

Over the past three years, the cloud management vendor landscape has been in flux but has also witnessed a tremendous upsurge in maturity and innovation. Several veteran players are expanding their capabilities to support cloud management, while boutiques designed from the ground up to manage cloud services have arrived on the scene. Discussing cloud management platform capabilities is beyond the scope of this paper, but the cloud management market space can be broadly segmented as follows:

• Traditional IT service management vendors

• Operating system and hypervisor vendors

• Pure-play cloud solution vendors

• Converged infrastructure vendors

To select the most suitable vendor to support an enterprise’s cloud management needs, an IT organization should consider factors such as:

• The enterprise’s cloud management requirements and use cases

• Cloud architecture, standards and technologies

• Existing tools in the environment

• Cost considerations

• Skills available and work force plans

• Integration with existing systems

What this means for your business

Cloud computing represents a major opportunity for IT—but one that requires a shift in the service delivery model.

13 What this means for your business

IT organizations that are serious about leveraging the cloud as a means to deliver IT services should build robust management capabilities. That means they should make proactive decisions and investments in building stronger business partnerships, driving service orientation, driving process standardization and automation, hiring new skills and competencies and building a management platform that unifies cloud and traditional IT management.

That’s where PwC can help. Our deep knowledge and experience across multiple industries, business trends, and cloud architectures have equipped us to successfully help organizations plan, implement and optimize a cloud management program, while addressing the business imperatives they set out to address.

www.pwc.com

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© 2013 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PM-13-0268 SL

For a deeper conversation about cloud management and what it means for your business, contact:

Michael Pearl Principal, Advisory Services US Cloud Computing Leader 408 817 3801 [email protected]

Rohit Antao Director, Advisory Services Technology Consulting 408 284 9480 [email protected]