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The cloud is not just a change in technology but also a change in the economics of technology solutions. This session will dive deep into different models highlighting how leveraging cloud solutions not only shifts costs from capital to operational but also impacts time to market.
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Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Economics of the Cloud
Tom MoenDirector of Strategy and Innovation
@Cloudmovr
Avtex Customer Conference 2012 The Intersection of Technology and Customer Experience Hyatt Regency | Minneapolis |10.25.2012
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Gartner (yesterday) Top 10 Trends1. Mobile Devices2. Shift from Native Apps to Web Apps3. Personal Cloud Replaces Personal Computer4. The Internet of Things
5. Cloud6. Strategic Big Data7. Actionable Analytics8. In-memory Computing9. Virtual Appliances Integrated Ecosystems10. Enterprise App Stores
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Cloud Momentum Building Fast
Sources from top to bottom: 1. IDC; 2. Gartner; 3. Gartner; 4. ITU/Internet World stats; 5. comScore 6. Microsoft (Skype); 7. Microsoft;
TODAY 4 billion searches monthly
663 million users2 BillionInternet users
worldwide
369 million users
2012 of Fortune 1000 will use cloud computing80%
2014 market for cloud computing$150 Billion
2020of all data will live in or pass through the cloud30%
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
AMI-Partners (www.ami-partners.com) 2011
IT Cloud Spend (as a %) Increasing
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Total Cloud Revenue WorldwideBillions
2005 2010 2015 2020$0
$50
$100
$150
$200
$250
$300
$350
$400
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Total Mobile Units Worldwide
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Reasons They Migrated to Cloud
Reduce Upfront Costs
Flexibility
Agility
Focus on Core Business
Competitive Advantage
Don't Know
0 10 20 30 40 50 60 70 80
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
What I Hear…
What IT is saying:
• Email/Collab is Too Expensive• CapEx to OpEx• Need Capability/Feature NOW!• Consolidation of BUs• Upgrades/Updates Kill Us• New Sheriff in Town• Merger or Acquisition• Applications Too Costly• Scale/Performance/Capacity• Better Up-time• Regulatory/Compliance Issue
• We Hate Upgrading• We Lack Skills/Retention• Projects Require High ROI• Need Predictable Spend• Need Enhanced Reliability• Need Enhanced Security• Deliver New Capabilities • We Like to Sleep
What Business is saying:
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Why I Believe in Cloud
Improved customer responsiveness Increased employee productivity Reduced cost and increased IT agility More Secure infrastructure
IT is a cost center
Basic e-mail with no calendar
Public or no instant messaging (IM)
Sporadic Web conferencing; separate audio
PBX phone
IT is a more efficient cost
center Standard platform
for secure e-mail and IM
Presence in desktop applications
IP telephony pilots
IT is a business enabler
Increasing unification of communication channels
Mobile device access PC-IP Telephony Unified messaging
Software-powered VoIP
Seamless communication across the firewall
Federation of communication information and policy
IT is a strategic asset
Your Priorities
Cloud Helps Accelerate Your Journey
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Pay for access,not for
ownership!
Pay for shared
resources which cost much less!
Pay for speed/agility and become
dynamic!
Pay only for what you
need! Scale up/down
effortlessly.
There are Benefits of Cloud
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
There are many Clouds
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Private Clouds• Faster, simpler deployments of VMs in your
own data centers• Faster, simpler deployments of applications
with fewer errors• Automated discovery and remediation of
problems.
Private Clouds are a facet of improved systems management.
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Public Clouds• Faster, simpler deployment of VMs in external
datacenters• Deployment of packaged and custom
applications using pay-as-you-go compute resources
• Faster , simpler application development and enhanced management
• Lower-cost storage with blobsPublic Clouds allow you to scale your IT
environment on demand
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Think ANDNot OR
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
PaaS SaaS
Think of it as an IT Continuum…Evolution toward highly-virtual and beyond to cloud
Physical Virtual / Private IaaS
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
You Manage You Manage
Vendor Manages
You Manage
Vendor Manages
Platform(as a Service)
Storage
Servers
Networking
O/S
Middleware
Virtualization
Applications
Runtime
Data
Software(as a Service)
Storage
Servers
Networking
O/S
Middleware
Virtualization
Applications
Runtime
Data
Infrastructure(as a Service)
Storage
Servers
Networking
O/S
Middleware
Virtualization
Data
Applications
Runtime
You Manage
Vendor Manages
Cloud Services
On Premises
Storage
Servers
Networking
O/S
Middleware
Virtualization
Data
Applications
Runtime
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
HYBRID Cloud
Common Technologies:
Database Platform Infrastructure
BusinessApplicationsProductivity
PRIVATE CloudCustomer Hosted Or Partner Hosted
Microsoft Or Partner
Syndicated
PUBLIC Cloud
Microsoft’s Enterprise Cloud Offerings
AND happens HERE
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Let’s Get Economical!
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Do You Consider Investment In Technology as a Means to Cut Costs?
•A majority of CFOs considered investment in technology as a means of cutting costs.
•Those who thought otherwise considered investment in technology as a means to improve processes.
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Normal Project Cost Benefit/Reduction
• Reduction in Storage• Improvement in Server Consolidation• Problem Resolution Savings• End User Savings• Application Development Savings• Space and Utilities
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Cloud Economics
Demand Side
Multi Tenant
Supply Side
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Estimated Annual Costs Data Center*
• Sioux Falls, S.D. $9,684,282 • Winston-Salem, N.C. $9,799,928 • San Antonio, Texas $10,314,249 • Birmingham, Ala. $10,340,534 • Ames, Iowa $10,378,916 • Charlotte, N.C. $10,440,123 • Indianapolis, Ind. $10,451,796 • Tulsa, Okla. $10,452,228 • Des Moines, Iowa $10,480,298 • Columbus, Ohio $10,499,091
*125,000 sq feet, employing 75 peopleSource: Boyd Company, Princeton, NJ
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Over 85%
Staffing
Downtime
IT Staff Training
Server Hardware
Server Software
Services
IT Costs
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Worldwide Spending On Servers
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Time Effect On Servers
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Electricity
“If a CIO has not had to build a new data center recently, electricity is likely to be a huge surprise”
Ken BrillFounder and Executive Director
Uptime Institute
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Electricity Costs
• .6% in 2000• 1.5% in 2010• 3% in 2012
40% of this bill is for cooling!
$42,000,000$135,000,000$330,000,000
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
On-Prem Email/User/Month – SaaS ModelHardware $0.60 1.37%Client Software $3.49 7.98%Server Software $3.61 8.26%Storage $2.40 5.49%Email & Hygiene/Filter $2.99 6.84%Archiving & Compliance $8.99 20.57%Staffing $5.16 11.81%Mobility $8.88 20.32%Financing $1.08 2.47%Real estate $0.84 1.92%Utilities $0.63 1.44%HA/DR $5.04 11.53%Total Costs /User /Mo $43.71 100.00%
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Cloud Email/User/Month – SaaS Model
Hardware $0.60 1.37%Client Software $3.49 31.47%Server Software $3.61 8.26%Storage $2.40 5.49%Email & Hygiene/Filter $3.92 35.35%Archiving & Compliance $3.68 33.18%Staffing $5.16 11.81%Mobility $8.88 20.32%Financing $1.08 2.47%Real estate $0.84 1.92%Utilities $0.63 1.44%HA/DR $5.04 11.53%Total Costs /User /Mo $11.09 100.00%
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Forrester Research Inc
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
TEI Exchange 2010 - Forrester
$237,797 per Year1,500 Users
$158 /yr/user
$13.21/mo/user
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
GroupWise
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Total Cost ComparisonOn-premises cost
General costs
Hardware and maintenance $174,814
Software $1,496,893
Operations $2,668,100
Deployment and migration $212,663
Running total $4,552,470
High availability
Hardware and maintenance $104,150
Software $101,985
Operations $8,800
Deployment and migration $14,209
Running total $4,781,614
25% over-allocation for future growth
Hardware and maintenance $34,301
Software $168,901
Running total $4,984,816
Included $104,150
Included $101,985
Included $8,800
Included $14,209
$2,046,617 $2,734,997
Microsoft Online cost Savings
Included $174,814
$1,196,726 $300,167
$741,960 $1,926,140
$107,931 $104,732
$2,046,617 $2,505,853
n/a $34,301
n/a $168,901
$2,046,617 $2,938,199
TOTAL $4,984,816 $2,046,617 $2,938,199
Per user per month $55.39 $22.74 $32.65
For 2,500 total users:• 2,250 using e-mail,
collaboration, IM/presence
• 250 using Kiosk e-mail & collaboration
• 275 E3 Plan• 600 using web
conferencing
45% savings over 3 years
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Windows Azure Comparison – PaaS Model
The first scenario included initial one time costs. In this scenario, we determined that CUSTOMER could realize a cost savings of 91.7% with adoption of the proposed Windows Azure Platform architecture.
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Azure Savings – IaaS Model
Ideas Imaging Insight PAS0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
AzureOn-premise
Azure On-Premise$867,889 $2,282,072
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Cloud Economics
Demand Side
Multi Tenant
Supply Side
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Demand Side – Workloads Ideal Cloud
tCom
pute
InactivityPeriod
On and OffOn & off workloads (e.g. batch job)Over provisioned capacity is wasted Time to market can be cumbersome
t
Unpredictable BurstingUnexpected/unplanned peak in demand Sudden spike impacts performance Can’t over provision for extreme cases
Com
put
e
t
Predictable BurstingServices with micro seasonality trends Peaks due to periodic increased demandIT complexity and wasted capacity
Com
pute
t
Growing FastSuccessful services needs to grow/scale Keeping up w/ growth is big IT challenge Cannot provision hardware fast enoughCo
mpu
te
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Demand Side EconomicsRandomness
Time of Day
Multi-Source
Uncertain Growth
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Cloud Economics
Demand Side
Multi Tenant
Supply Side
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Top Data Centers in 2006
• Disney• Shell Oil• P&G• Others names and logos you’d recognize
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Multi Tenancy -Top 10 DCs 20111. 350 East Cermak
/ Lakeside Technology Center (Digital Realty) 2. Metro Technology Center, Atlanta (Quality Technology) 3. The NAP of the Americas, Miami (Terremark) 4. NGD Europe, Newport Wales (Next Generation Data) 5. Container Data Center, Chicago (Microsoft) 6. Microsoft Dublin (Microsoft) 7. Phoenix ONE, Phoenix (i/o Data Centers) 8. CH1, Elk Grove Village, Ill. (DuPont Fabros) 9. Microsoft Data Centers in San Antonio (Microsoft) 10. Microsoft Data Centers in Quincy (Microsoft)
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Multi Tenancy • Fixed labor costs shared• Server utilization shared
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
WHY HASN’T EVERYBODYMOVED TO Cloud??
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Impediments to Cloud Adoption
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Gartner – Impediments to Cloud
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Impediment - Disbelief of Savings
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Impediment Who Takes the Lead???
CEOCFOCIO
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Impediment – Big Questions That I Get
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
SERVERSERVICE
GAP
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Compliance Adherence in Business Productivity Online Suite
EU Safe HarborSAS-70 Type I (SSAE SOC 1 Type I)
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Compliance Adherence in Office 365
SAS-70 Type II(SSAE SOC 1 Type II)
Access to our “Trust Center”
EU Model ClausesFISMA
HIPAA/BAAData Processing Agreement
EU Safe Harbor
ISO 270001
SAS-70 Type I (SSAE SOC 1 Type I)
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
SharePoint Online 2007 – Customer’s Requirements
• Infrastructure• Document management• Search• Legal
Holds/Retention/eDiscovery• Social Collaboration• Bandwidth / Network• Language Packs• Workflows• Records Center Management• ISO• Anywhere access• AD Integration• OSC Presence
• GB Limits• Dev/Test/Training Environments• Internal/External Access• EU Privacy• BI• Platform• Dashboards• People Search• Security• Upgrades• Architecture Flexibility• Up Front Costs• Support Costs
• Maintenance Costs• Intranet Roadmap• Login(s)• 3rd Party Tools• Upgrade Roadmap• Resource Needs
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
SharePoint Online 2010 – Customer’s Requirements
• Bandwidth / Network
• BI• 3rd Party Tools
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Exchange Online 2007 Concerns
Customize OWA login page
Outlook 2003 support
Public folders
POP/IMAP
“Send as” capabilities
Server-side auto-forwarding
Free/busy calendar sharing
Unified Messaging
Post-processing of outbound mailOWA multi-factor authentication
Journal to on-premise archive
Messaging Records Management
Cross-mailbox search
Application connectivity via older APIsAllow SMTP relay
On-premise OCS voice/UM integration
PowerShell access
Exchange Management Console access
Transport rules
Custom mobile device policies
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Exchange 2010 OnlineOutlook 2003 support
Public folders
Application connectivity via older APIs
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Where Can I Find More?
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Silver Lining Planning Services! Understand your current environment Gain a thorough understanding of your requirements.
• Deliver a SAW and SAW Report• Deployment Planning Tools and Report• Other tools to uncover potential hurdles
Generate a very accurate SOW Artifacts include
• Complete project plan• SOW,• ROI/TCO for your project.
This is work includes up to four days on site and two days of documentation depending on your requirements.
Avtex Customer Conference 2012The Intersection of Technology and Customer ExperienceHyatt Regency | Minneapolis |10.25.2012
Than
k
You!