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Presented at InnoTech Dallas on May 17, 2012. All rights reserved.
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Transforming Your Business ManagementWith Cloud Computing
May 17, 2012
Agenda
• What is Cloud Computing
• Key Drivers for Cloud Solutions
• Benefits vs. Risks of Going to the Cloud
• Cloud Computing Trends
• How to Assess a Cloud Solution
IT Options
ApplicationSW
Compute
Storage
Networking
Co-location
ApplicationSW
Compute
Storage
Networking
Space, PowerCooling
On-Premise“DIY”
Cloud& SaaS
"By 2012, more than 66% of independent
software vendors (ISVs) will offer some of their applications
optionally or
exclusively as SaaS.”
On-Premise
• Software developed internally or purchased via a perpetual license
• An up-front capital expense
• Software that runs entirely within the hardware systems of its owner or licensee
• The consumer is responsible for the management of the software installed
• Customers may be on many different releases of the software
Co-Location
• Provisioning of computing services in a third-party co-location center
• Software developed internally or purchased via a perpetual license
• An up-front capital expense
• The consumer is responsible for the management of the software installed
• Customers may be on many different releases of the software
Cloud Computing
Cloud computing is Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand, like the electricity grid. Requires no end-user knowledge of the physical location or configuration of the system that delivers the service.
―Source: Wikipedia
Cloud Deployment Models
• Community Cloud – Shares infrastructure between several organizations from a specific community with common concerns (e.g., security, compliance, jurisdiction), whether managed internally or by a third-party and hosted internally or externally.
• Public Cloud – The cloud infrastructure is provisioned by the cloud provider for open use by the general public. It may be owned, managed, and operated by a business, academic, or government organization, or some combination of them.
• Private Cloud – Infrastructure provisioned solely for a single organization, whether managed internally or by a third-party and hosted internally or externally.
• Hybrid Cloud – A composition of two or more clouds (private, community, or public) that remain unique entities but are bound together, offering the benefits of multiple deployment models. It can also be defined as multiple cloud systems that are connected in a way that allows programs and data to be moved easily from one deployment system to another.
Cloud Service Models
• Software as a Service (SaaS) – Employs the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through either a thin client interface, such as a web browser (e.g., web-based email), or a program interface. The provider manages or controls the underlying cloud infrastructure with the possible exception of limited user-specific application configuration settings.
• Platform as a Service (PaaS) – Consumer-created or acquired applications supported by the provider are deployed onto the cloud infrastructure which the provider manages or controls. The consumer has control over the deployed applications and possible configuration settings for the application-hosting environment.
• Infrastructure as a Service (IaaS) – The consumer provisions processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The provider manages or controls the underlying cloud infrastructure while the consumer has control over operating systems, storage, and deployed applications; and possible limited control of select networking components (e.g., host firewalls).
Compound Annual Growth Rate
The Advent of the Business Cloud
#1Technology
affecting financeand IT
54Planning or interested in Cloud
%
GROWTH
6X
Source GartnerUser Adoption Survey, Sep 2010
SaaS Financials Adoption for 2011
Typical IT Budget Allocation
91% Maintenance
9% Innovation
12
Current
66% on old
versions
Source: ERP in SME, Aug 2010
On-Premise Holds the Business Back
Greater need for business
visibility
Local sales tax changes
Increasingly distributed business
More selling channels
Shrinking IT resources
Launching new subs and
geos
New businessmodels
Changing financial
reporting
Version Locked Business Management Software is a Liability in a Sea of Change
What Businesses Are Looking for in TheirNext ERP
Reduce overall IT maintenance costs
23%
Better support a distributed orga-
nization 17%
Need to Stream-line cross func-tional business
processes32%
Require more sophisticated functionality
12%
Need a system with better scalabil-
ity7%
Improve business visibility9%
N=809
Productivity Benefits Cited as Key Drivers for Cloud ERP
Speed of deployment3%
Lower cost of ownership
14%
Access data from anywhere at any-
time38%
Instant access to new functionality
10%
Lower upfront expenditure
4%
Streamlined business pro-
cesses31%
N=805
Why Run Your Business in the Cloud?
© NetSuite 2010
Stay abreast of latest accounting and regulatory changes
More easily scale a distributed, global organization
Reallocate IT budget from maintenance to innovation
Get automated upgrades and eliminate “wasted” maintenance
Benefits from economies of scale for security and data mgt.
Use a modern, more easier to integrate solution
Typically get more tightly integrated analytics
Todays organizations are increasingly distributed
Ideal for inherently distributed activities:– Financial Planning– Selling and Order Taking– Distributed finance team
Facilitates off-shoring / shared services
Easily supports temporary and home workers
Real time view into centralized data
#1 Benefit of Cloud ComputingReported by Finance
Executives
Cloud Enables the Distributed Organization
Trait Business Benefit
Quote to cash integration Reduce cycle time and overhead
Procure to pay integration Eliminate spreadsheets
Web based T&E management Improve employee productivity
Comprehensive audit trail Reduce audit times and improve compliance
Self service dashboards & reporting
Reduce time spent “hunting”Collaboration and “actionable
One view of the customer Improve team collaboration, reduce redundancy
Keys to Cloud ERP Success:ERP that Improves Organizational Efficiency
Trait Business Benefit
Support multi-sub and COAs Manage consolidation times as business grows
Country specific tax and accounting regulations
Eliminate need to add ERP to support local needs
Automated sales tax management Calculate sales taxes across channels and geos
Drill down from corporateto subsidiaries
Ensure straight line visibility from HQ to geos
Multi-language management Ensure you can localize solution to geo needs
Keys to Cloud ERP Success: ERP that Supports Growth
Trait Business Benefit
Comprehensive web services integration
Integrate with suppliers, channels, and services
Graphical workflow management Empower line of business to automate business process
Managed customization layer Ensure that customizations will not “version lock” application
Mobile and anywhere access Support the distributed organization
Industry functionalityand ecosystem
“Future proof” application
Keys to Cloud ERP Success:ERP that Supports Business Flexibility
Software as a Service
Ideal for the Downturn/Upturn
Low CostLow Cost
Subscription-based Pricing
Eliminates IT Costs
Rapid DeploymentRapid Deployment
Deploys in WeeksOption to Self-Implement
TransparencyTransparency
Pricing, Uptime, Training, Support and Trials All
Online
Ease Of UseEase Of Use
24x7 Web-based AccessBrowser-based Interface
InnovationInnovation
More Frequent Product Releases, Automatic
Upgrades
Renewal-Based ModelHigh Customer Satisfaction
AccountabilityAccountability
Challenges and Opportunities
• Compliance/Governance
• Availability and Reliability
• Performance
• Security/Data Privacy
• Cloud Lock In
• Software Licensing
Today’s Regulatory EnvironmentAnd it just keeps coming!!!
SOX (Sarbanes Oxley) – IT General Controls
HIPAA (Health Insurance Portability and Accountability Act) – Data Security
Graham-Leach-Bliley Act – Financial Privacy Rule
S&P (Standard & Poor’s) – Risk Assessment
PCI (Payment Card Industry) – Data Security Standards
IFRS (International Financial Reporting Standards) – Updated reporting standards
Etc, Etc, Etc!!!!!
SAS 70 / SSAE 16 Reports
• Report issued by a CPA firm that attests to the internal controls implemented at the service provider and their operating effectiveness
• The cost is incurred by the service provider
• Provides reasonable assurance that the required IT General Controls required for compliance are met
Applications: Pros
• Cost Savings– Lowers the upfront cost
to buy the application• Lowers upfront implementation costs and time to deploy
• Less complex processes
• Monthly licenses fees
• Savings on software maintenance costs
– SaaS pricing models provide great flexibility• Easy to start small and grow with your needs
Applications: Cons
• Cost Increases– Doesn’t lower overall cost of ownership
• Additional cost to integrate onsite applications
• Additional training for mandatory upgrades – one code base
– SaaS pricing models based on users/transactions• For larger entities, pricing model may not provide
required bandwidth
– Reporting across SaaS and on premise data sources can require additional reporting tools and data sets
Infrastructure: Pros
• Cost Savings– Reduces upfront cost to
purchase hardware
– The management, support, and upgrading of the software and the infrastructure that supports it is the responsibility of the solution provider
– Employs highly sophisticated security technology and spreads the cost over all customers
Infrastructure: Cons
• Cost Increases– Loss of productivity due to:
• Internet going down without notice
• Solution provider outages
– Difficulty in integrating to applications and data sources that are on premise due to:
• Mandatory upgrades
• Lack of integration tools
Additional Advantages
• Secure data access through Web Access – anytime, anywhere without the IT hassle
• Great for Collaboration-internal & external
• One code base means fewer bugs
• Ability to standardize processes
• Built-in backup for your applications and infrastructure
• Can be part of your disaster recovery plan
Additional Disadvantages
• Many SaaS applications offer fewer built-in features than comparable non-SaaS applications
• Building and maintaining interfaces to other applications can be costly
• Mandatory upgrades
• Loss of unique processes or data requirements
• 100% dependent on the Internet
• Speed and response time dependent on Internet
Important to Note
• Most of the solutions are geared towards small/medium entities but moving upstream
• Share common processes with multiple entities
• 100% reliant on the internet; have a backup pipe/plan
• PC must be sufficiently equipped
• Good implementation is required for good results– DON’T skimp on professional services and support
IDG Enterprise 2012
2012 Cloud Computing
Key Trends and Future Effects
Purpose and Methodology
Survey Sample
Field Work Dec. 20, 2011 –Jan. 12, 2012
Total Respondents
1,682
Margin of Error +/- 2.19%
Audience Base CIO, Computerworld, CSO, Network World, InfoWorld and ITworld sites
Survey GoalTo measure cloud computing trends among technology decision-makers including usage and plans across various cloud service and deployment models, investments, business drivers and impact on business strategy and plans.
Survey Method
Collection Online Questionnaire
Number of Questions
53 (incl. demographics)
Private Cloud Most Readily Adopted Rapid Growth Expected to Continue
Q. Approximately, how much of your organization’s data presently resides in the public, private and hybrid clouds, and will in 18 months?
Long-Term Outlook Shows One Quarter Will Have Majority of IT Ops in the Cloud
Q. Which of the following best describes your long-term expectations for cloud computing at your organization over the next 5 years?
Long-Term Savings Anticipated but Calculating a Challenge
Q. Please rate your level of agreement with the following statements.
Hurdles for Cloud Computing: Security, Access and Governance
Q. What are the top three challenges or barriers to implementing a cloud computing strategy at your organization?
How to Assess SaaS Providers
1. True Multi-Tenancy
2. Regularly Delivered, Vendor-Managed Updates
3. Seamless Integration on Demand
4. Business Driven Configurability
5. World-Class Data Center and Security
6. High-Performance Sustainable IT Infrastructure
7. Predictable Total Cost of Ownership (“TCO”)
8. Faster Deployment
9. Complete Control of Data
10. Liberation from Non-Strategic IT Issues
How to Assess SaaS Providers
• Require a SAS70/Type II or SSAE16 SOC1/Type 2 report
• Try before you buy – it’s in the cloud!
Questions?
Carolyn Duffy, CPADirector, Business Advisory ServicesOffice: 303-298-9600Cell: [email protected]