YOUR PATH TO CLOUDEssential considerations for adopting cloud: A European perspective

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ABOUT THIS PAPERThis paper, commissioned by Verizon and EMC, examines the current state of cloud usage in Europe, focusing on the factors that are driving adoption and the key considerations you’ll face when planning your own cloud initiative.

This work would not have been possible without the contribution of four European cloud experts: Michiel de van der Schueren, James Cadwell and Gavan Egan from Verizon, and Ian Massingham from EMC.

CONTENTSCloud gathers momentum in Europe .......................................................3

What’s driving cloud? .....................................................................................4

The industry view ............................................................................................6

Taking your first steps ..................................................................................8

Choosing the right provider .................................................................... 10

Your partners of choice for cloud solutions...................................... 12

Cloud: the key to your competitive edge ............................................ 14

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CLOUD GATHERS MOMENTUM IN EUROPEEurope has been slower than other regions to embrace the potential of cloud. Research shows the average company in Latin America already has 39% of its total applications in the cloud. US companies average 19% of their applications in the cloud. In Europe it’s just 12%.1

That’s not to say that cloud adoption in Europe is stalling. The EU public cloud market is growing three times faster than other IT, and already 64% of EU businesses use cloud in some form, from initial trial to adoption.2 So the migration wave is well and truly building momentum.

A 2012 IDC study found there was a sharp rise in private cloud deployments among European organisations. 20% of respondents reported that they had implemented private cloud in 2012, compared with 6% in the 2011 survey — a significant jump.3

We expect this acceleration to continue following the launch of the European Commission’s pan-European cloud strategy4 in 2012. The strategy will help European enterprises adopt cloud services with greater confidence by harmonising technical standards, simplifying interoperability and data portability across European borders, and defining standardised SLAs for cloud contracts in the region.

Increasingly enterprises will be looking to cloud not just for today’s “low-risk” applications like development and testing environments, content delivery and commodity services such as email and CRM. Executives are increasingly investigating how cloud can contribute to mission-critical workloads that produce step changes in business operations and performance.

WHAT DO WE MEAN BY ‘CLOUD’?In this paper we’re focusing on what cloud means for your business, and the broader considerations you need to make when planning your strategy, so we won’t be discussing the various types of cloud or associated infrastructure in technical detail.

We’re following the globally accepted NIST definition of cloud’s characteristics and divisions into public, private, community and hybrid deployment models, in PaaS, IaaS and SaaS service models.

READ MORE AT http://csrc.nist.gov/publications/nistpubs/800-145/SP800-145.pdf

64%

of EU businesses use cloud in some form, from initial trial to adoption.

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WHAT’S DRIVING CLOUD?What’s pushing European enterprises to investigate cloud? Our experts cite three key benefits.

1. BUSINESS AGILITYNearly every business activity and process depends on access to IT. And when business needs change, IT has to respond quickly: whether it’s a sudden spike in ecommerce traffic demanding extra capacity, new product launches needing the support of specialised applications and resources, or entry into a new market requiring the IT systems of an entire office to be set up in a weekend. Whenever the business is left waiting for IT, opportunities are being missed.

You may have experience of IT taking weeks to deploy a new server or months to approve deployment of a new application. Often these delays are as much down to staff shortages as to technical constraints.

The primary benefit of cloud is to help meet business goals for faster innovation through greater responsiveness to changing needs. With cloud, a new server instance, additional storage capacity or hundreds of new user accounts are easily provisioned. There is no need to specify and order hardware, or configure OS and applications on physical infrastructures to execute a project within defined time frames. At a time when data storage and processing demands are growing faster than headcount, cloud enables rapid and easy scalability.

Time previously spent by IT staff on routine administration tasks can instead be invested in innovation activities. For example, one of our customers freed up six of its 15-strong IT team by adopting cloud — and could immediately put those people to work supporting the organisation with strategic business initiatives.

“Over the next decade, the number of servers (virtual and physical) worldwide will grow by a factor of 10, the amount of information managed by enterprise datacenters will grow by a factor of 50, and the number of files the datacenter will have to deal with will grow by a factor of 75, at least.”5

SCALING CAPACITY, NOT WORKLOAD

“In January and February and in June and July there are two big peaks in excess of 100,000 unique visitors a day per site on our four main websites. That leaves eight months a year when we don’t need this big capacity at all. And for those four peak months we need to be able to scale quickly and with sizeable resources… [Verizon] Terremark allows us to add 40 percent of our web server capacity without problem and in no time.” IT Manager, travel agency, Benelux.

“[Thanks to cloud], two employees manage all of our IT infrastructure worldwide from the headquarters. This allows us to be very cost-effective.” IT & Business Applications Manager, manufacturer, Europe.

75x

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2. COST MANAGEMENTCloud is often held up as an example of a way to cut IT costs, and as Europe is still experiencing economic uncertainty, cost management is a critical consideration. IDC found that most European businesses using cloud saved 10–20%. Cloud does not just represent a simple like-for-like CAPEX vs OPEX saving. Where cloud really excels is in the ongoing optimisation of cost aligned to consumption, providing an easier way to manage cash flow and risk.

Even more importantly, cloud gives you complete visibility into the true cost of IT. Whether it’s the number of users assigned to a SaaS application like Salesforce, or usable gigabytes and CPU cores in use in IaaS, you get an accurate picture of your consumption with a clear price per unit. That usage is easy to track and charge back to particular teams or business initiatives. With cloud, IT can offer billable, cross-chargeable resources to the business, business leaders can make more informed decisions about their IT budget, and IT leaders can demonstrate a tangible contribution to business results.

3. APPLICATION PORTFOLIO OPTIMISATIONAfter years of growth, mergers and acquisitions, many enterprises find themselves with a sprawling portfolio of applications that they have to maintain. The IT organisation is challenged with establishing a complete application inventory — yet it’s acutely aware of duplicated functionality, poor integration, performance issues and proliferating licencing costs. This drives the urgency for application portfolio modernisation.

Cloud has become an important tool in modernisation, promising an application future that’s more scalable, modular and portable. In the traditional software world, there’s a spectrum of ways to access application functionality, from off-the-shelf packages to custom prototyped code. Similarly, there are different cloud delivery models that provide migration destinations for applications at each stage of their lifecycle (see Figure 1).

For example, public cloud is an ideal place to try out new functionality, by spinning up new test configurations. Private cloud provides a more familiar environment, suiting more mature and mission-critical applications. SaaS is a convenient way to get hold of commoditised services, such as email or CRM, without managing it yourself.

“We don’t buy virtual machines at [Verizon] Terremark but bundles of gigahertz of processor speed, RAM memory and hard disk space. And we can also buy ‘bursts,’ e.g. 5 gigahertz of processing power. We buy them, allocate them to certain servers and activate them. We need not worry about what is behind it,” IT & Business Applications Manager, manufacturer, Europe.

COMPETITIVE APPLICATIONS

COMMODITY APPLICATIONS

NON MISSION

CRITICAL

MISSION CRITICAL

INVENT

Public cloud

OFFLOAD

SaaS

MANAGE SCALE

Private cloud

DEPLOY TO SCALE

Managed hosting services

Figure 1

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THE INDUSTRY VIEWEvery industry faces demands for flexible computing capacity, cost-efficient IT and easy access to data, so cloud is relevant for them all.

MANUFACTURING: DRIVING COLLABORATION ALONG THE VALUE CHAINWhether it’s accessing prototyping and test data during the early stages of product development, or tracking information on sales and marketing performance once the product is launched, collaboration with suppliers and distributors is key for any manufacturer’s success.

Thanks to cloud, data that was previously held in unconnected silos can be easily accessed. Cloud also makes it cost-effective to increase analytical capacity in response to variable needs. Manufacturers are increasingly embracing the flexibility that cloud offers to enhance their production value chains.

MEDIA AND ENTERTAINMENT: SUPPORTING INCREASED STORAGE DEMANDSIn the media and entertainment sector, new data formats such as HD and 4K have driven up content volumes. Old content is being digitised and moved off traditional tape archives. On-demand media services also mean that content needs to be accessed from a secure location that can deliver high-performance streaming. For an industry that monetises its content, user experience is crucial.

The computational, storage and performance demands are huge. An increasing number of companies in this sector are turning to cloud solutions to accelerate their content delivery networks.

The manufacturing sector is already adopting cloud, and the trend is set to continue. SaaS-based applications represent 22% of all manufacturing and distribution software installed today, and this is expected to grow to 45% by 2023.6

With increasing integration between consumer devices such as smart TVs, set-tops, games consoles and streaming devices, the demand placed on content delivery networks is forecast to grow. Real-time entertainment applications are expected to account for two thirds of total data usage by 2018.7

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RETAIL: APPLYING BIG DATA FOR COMPETITIVE ADVANTAGEWhether selling through online or offline channels — or both — retailers know that success starts with understanding the customer inside and out.

The key to retail competitive advantage lies in big data analytics. Retailers are tapping in to social networks to understand how consumers are interacting with their brands and their competitors. They are even tracking the movements of customers within stores to help them improve the effectiveness of displays. Analysing this data will allow retailers to profile and segment their customers better, improve targeting and deliver a more personalised shopping experience.

Cloud provides the elasticity to deal with the peaks and troughs in all kinds of retail systems, whether it’s the Christmas ecommerce sales rush or the extra load caused by a new store opening.

HEALTHCARE: IMPROVING CAPACITY AND PERFORMANCEThe healthcare industry has to store and provide access to a significantly higher volume of electronic patient information than ever before, including data collected via M2M for remote patient monitoring and from new, data-intensive imaging exams and image-guided surgical procedures.

Cloud offers healthcare providers a scalable infrastructure capacity to handle this volume. It also offers the network performance to support data-intensive healthcare applications and deliver a reliable user experience across geographical regions. Aggregating patient data in the cloud not only reduces operational costs; it provides clinicians with easier access to information so they can make better decisions about patient care.

The variable demand for computing capacity during a typical day means that retailers only use about 10–15% of the capacity in their data centres. Hosting applications on a shared infrastructure in a cloud-computing architecture could produce huge savings.8

Even as one of the most compliance-driven industries, healthcare is beginning to move to cloud-based platforms. The market is set to grow to $5.4 billion by 2017.9

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TAKING YOUR FIRST STEPSThere’s no denying that cloud represents a big shift in the way you run IT. Before you start using cloud extensively or migrate application workloads to it, there are several factors that you’ll need to address.

TECHNOLOGY AND BUSINESS DEPENDENCIESYour core applications don’t operate in isolation — they can’t be simply ‘lifted and shifted’ without due care and attention. You need to assess which applications and workloads are suitable to run in the cloud, and which ones are not portable. There may be a technical reason or compliance requirement for your data to be held in a particular location.

There are commercial concerns associated with migrations, too. You might be tied into support contracts for hardware and software; or you may find that outdated software licencing models based on a dedicated server setup don’t translate well into multi-tenant environments.

You’ll also have to consider application performance and the impact of putting applications in the cloud has on your local and wide-area network links. Will you need to upgrade equipment or increase bandwidth to handle increased traffic? Do you need to put in place redundant links or other backups to maintain business continuity in the event of downtime?

ADAPTING THE ROLE OF THE IT DEPARTMENTThe CIO is increasingly measured on business objectives, such as supporting revenue growth, improving margins, increasing shareholder value and delivering better customer service. Yet in a typical enterprise, around 80% of IT budgets (and staff time) still go to simply keeping the lights on rather than delivering initiatives that can make a difference to the bottom line10.

A third-party cloud provider can take care of all the routine IT infrastructure delivery, thereby allowing the IT function to take on new projects. For many CIOs, this shift in the role of the IT department is an opportunity to show strategic value and play a larger, more impactful role in the organisation.

IT becomes the function responsible for evaluating and selecting the right service provider and solution, as well as making insourcing and outsourcing decisions. IT also plays a key governance role: setting policies, specifying and tracking performance against SLAs, managing budgets, making contingency plans, defining enterprise architectures, evaluating contracts, forecasting capacity requirements and more.

80%

of IT budgets (and staff time) still go to simply keeping the lights on rather than delivering initiatives that can make a difference to the bottom line.10

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SECURITY, RISK AND CONTROLFigure 2 shows the results of an IDC survey into the barriers for European cloud adoption.2

Figure 2

Many of these factors are associated with perceptions of risk and uncertainty: who is responsible for your data and its integrity? What happens in the event of a security breach? These issues are complicated by the nature of the European market, where regulations and legal implementations vary on a country-by-country basis. This complexity should be simplified by the proposed new EU data protection regulation, which will come into effect in 2014. It seeks to harmonise regulation throughout the EU, thereby making it easier for non-European companies to comply.

Aside from regulatory and security issues, there are concerns around relinquishing control, defining responsibilities and protecting against lock-in. How easy is it to move your data to another provider, or connect one application to another that is held with a different provider? Who governs change and upgrades?

Security and data protection 30%

25%

24%

23%

22%

21%

18%

18%

18%

17%

Trustworthiness

Data location

Local support

Change control

Ownership of customisation

Evaluation of usefulness

Slow internet connection

Local language

Tax incentives on capital spending

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CHOOSING THE RIGHT PROVIDEROnce the organisation has set policies and performed due diligence, many of these concerns are directly dependent on the choice of cloud provider. It’s especially important to make sure that the provider can give you clear reassurance about the following factors.

SECURITY, JURISDICTION AND DATA RESIDENCYCan the provider meet the organisation’s requirements for data residency, security and compliance? And can they prove that your data assets — including backups — will not be moved across borders without your authorisation? Look for a provider with truly global delivery, and one that meets high security standards.

“Because we maintain close ties with all kinds of public bodies, it was important to substantiate our trust with well-founded data. [Verizon] Terremark was able to provide this in the form of the required security certificates.” Manager, marketing software vendor, Netherlands.

RELIABILITY AND PERFORMANCEWhen the infrastructure supporting your applications are outside of your direct control, it’s even more important that the service provider can deliver end to end: from WAN connections to your global sites to the data centres themselves. Trying to establish root cause and the impact of downtime when multiple providers are involved can leave organisations exposed in their core business functions. Look for providers that own their own wide-area networks, not just peering interconnections, for improved reliability and end-to-end service management.

“The performance is excellent and the access flexible, too. There is no way to tell that our SAP platform runs virtually.” IT & Business Applications Manager, manufacturer, Europe.

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CONTROL AND FLEXIBILITYLook for a provider that allows you to maintain an acceptable level of control. This control can come from a choice of flexible delivery models, competitive pricing, and the ability to manage and configure your services yourself, 24x7.

“[Verizon] Terremark’s data centre concept is phenomenal. The company has developed extensive expertise in setting up secure IaaS platforms.” IT Manager, travel agency, Benelux.

SERVICE LEVELS AND SUPPORTMoving to cloud is a transformation process that requires careful planning and a thorough assessment of your application workloads and infrastructure needs, today and in the next three to five years. Look for a provider that can help you assess your cloud readiness at a strategic level, size and scope the right solution for you, perform the migration and give you assistance after your solution goes live with onboarding, change management, and incident response.

“Usually you have no contact with the infrastructure partner after the system is up and running. But [Verizon] Terremark took the initiative to stay in close contact with us throughout the entire process and afterwards. They want to know how we, as an end customer, experience their solution to offer even better support.” IT & Business Applications Manager, manufacturer, Europe.

DATA AND APPLICATION PORTABILITYCloud providers, like any other organisation, can go out of business, get bought, or change their strategies — with direct impact on your organisation. Make sure that you can not only get your data and applications out, but that your provider supports a wide range of platforms and applications, and helps with interoperability between local and cloud applications and between multiple cloud providers.

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YOUR PARTNERS OF CHOICE FOR CLOUD SOLUTIONSVerizon and EMC bring together cutting-edge solutions that support your journey to the cloud. We understand that your business needs are unique, and we tailor solutions to fit.

CLOUD SECURITY FOR PEACE OF MINDThe biggest concerns about cloud are security and compliance. Verizon and EMC operate to the highest security standards to meet the stringent demands of the most compliance-focused industries. We ensure that both the technical and organisational aspects of your cloud solution are secure and offer a wide range of services that you can draw upon as and when needed.

We maintain the highest competencies in governance, security and compliance to always stay ahead of changing cyber vunerabilities. Each year we produce our unique Data Breach Investigations Report, which collates and analyses facts about data breaches from all over the world. It shows our commitment to understanding security threats and providing the best response to protect your data, wherever it resides.

MEASURED, RELIABLE PERFORMANCEVerizon has the scale and coverage to deliver performance that you can rely on. We have 35 data centres in Europe alone (200 worldwide) offering the choice of shared, private, dedicated and isolated resources, all backed by competitive SLAs. When you partner with us you draw upon our global network and pool of resources, including five IP application smart centres, over 400 cloud experts and more than 3,100 servers.

EMC enables businesses and service providers to transform their operations and deliver information technology as-a-service. With coverage in 86 countries, cloud solutions powered by EMC help businesses identify and overcome business challenges by reducing risk and improving time to value from their information infrastructures.

CONTROLLING YOUR COSTSCloud is a cost-effective solution to meet your variable IT demands, but that doesn’t mean that all suppliers offer the same value for money. Our pricing options allow you to choose between paying a monthly cost for a dedicated pool of resources, or adopting a pay-as-you-go model based on your hourly usage of pre-configured virtual machines. Whichever option you pick, you only pay for services — we handle all equipment, maintenance and repair costs. And with Verizon, you have the simplicity, accountability and transparency of a single supplier for all elements of your cloud solution — the data centre, infrastructure, equipment and network access.

We work hard to make sure we’re fully accredited to provide the highest levels of security in the industry. We’re a PCI DSS 1.2 certified cloud provider and are compliant with VISA CISP, MasterCard SDP and SSAE 16.

Our SLAs guarantee 99.9% uptime for your cloud platform and infrastructure, and for dedicated devices.

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FULL SERVICE SUPPORT FOR YOUR NEEDS

Operating in 120 countries, Verizon has the global scale to provide all the cloud options and infrastructure services you want. We’ll deliver a solution to fit your requirements, based on a thorough evaluation of your application portfolio and operational dependencies.

We can also offer flexible support options, aligned to the availability of skills in your organisation. We’re happy to take on the full responsibility for managing your resources, or can provide you with easy-to-use tools that allow you to manage the solution directly yourself. Thanks to our 24x7 service desk support, we work towards predictable SLA response times.

END-TO-END GUIDANCEWe can take you through the whole process of moving to cloud, from planning to delivery, ongoing management and scale-out. Our cloud services professionals are Cloud Security Alliance (CSA) accredited and can help you to:

• Define your cloud strategy and build a business case for adoption that draws upon our best-practice insight and global experience.

• Turn the business case into a roadmap for implementation, so you can maintain business productivity and remove the risk of unplanned operational disruption.

• Evaluate your compute and storage demands to create a tailored solution for your business.

•Migrate your applications to cloud and manage them on an ongoing basis.

•Maintain the highest standards of data security throughout the infrastructure lifecycle.

PARTNERSHIPS FOR SUCCESSOur global ecosystem of technology partners, including EMC, helps us to deliver the right cloud solution for you. We manage the logistics, so you can focus on running your core business. We’ll work with our partners to give you a best-of-breed solution, whether by expanding our network reach across the globe, or providing equipment, devices and cloud services. We can even take over your existing service contracts for you so you have fewer suppliers to manage, and we’re flexible enough to meet a particular preference for a technology provider within your solution.

Our cloud services are backed by a wealth of solutions covering managed security, disaster recovery and backup, unified communications, device management, networks and more.

We offer a range of assessments to help you understand which applications are most suitable for cloud and manage the operational dependencies of migration, so you stay in control at all times.

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Find out about Verizon’s dynamic cloud solutions at: www.verizonenterprise.com/cloud/

CLOUD: THE KEY TO YOUR COMPETITIVE EDGECloud can help you become a leaner, more agile and cost-efficient organisation: one in which IT is a strategic enabler. As expected, cloud adoption in Europe is taking off despite potential concerns around the regulatory environment and data security, and the maturity of service provision.

With the promise of increased agility and organisational flexibility that can support business effectiveness, the restructuring of core application portfolios onto new platforms is the natural next step.

But not all applications are suited to the cloud today — or may not be suited to specific types of cloud. You’ll need to work with your chosen partners to understand the implications of migrating business-critical applications. It’s more than just lifting and shifting — you need support with planning, migrating and then managing those applications in the cloud.

Working with the right cloud provider will allow you to change your application hosting environment with minimal disruption to the business. Make sure you are working with a partner that understands how cloud can help you meet your core business objectives.

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ABOUT VERIZON ENTERPRISE SOLUTIONSVerizon Enterprise Solutions provides intelligent networks, cloud, mobility, managed security and machine-to-machine (M2M) solutions to the world’s most successful companies. With industry-specific solutions and a full range of global wholesale offerings, Verizon Enterprise Solutions helps open new opportunities around the world for innovation, investment and business transformation. Visit verizonenterprise.com or the Verizon Enterprise Solutions News Room to learn more.

ABOUT EMCEMC is a global leader in enabling businesses and service providers to transform their operations and deliver information technology as a service (ITaaS). Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset — information — in a more agile, trusted and cost-efficient way.

REFERENCES1. http://sites.tcs.com/cloudstudy/tcs-cloud-study-key-findings#.UcryUT54Y29

2. http://cordis.europa.eu/fp7/ict/ssai/docs/future-cc-2may-gcattaneo-presentation.pdf

3. http://www.idc.com/getdoc.jsp?containerId=prUS23632112

4.http://www.computing.co.uk/ctg/news/2208661/ec-launches-cloud-computing-strategy-in-bid-to-create-25-million-new-jobs

5. http://uk.emc.com/collateral/analyst-reports/idc-extracting-value-from-chaos-ar.pdf

6. http://www.forbes.com/sites/louiscolumbus/2013/05/06/ten-ways-cloud-computing-is-revolutionizing-manufacturing/

7. http://news.cnet.com/8301-1023_3-57584535-93/video-streaming-is-on-the-rise-with-netflix-dominating/

8. http://www.wired.com/insights/2013/05/sunnier-days-ahead-for-retailers-that-use-cloud-computing/

9. http://www.infoworld.com/d/cloud-computing/health-care-and-the-cloud-are-finally-coming-together-212581

10. http://news.idg.no/cw/art.cfm?id=511BE956-9154-B811-277967456CCF50BB

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