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Cloud Computing and Smarter IT Delivery Carlos Passi As sistant Controller, Business Transformation

June 18, 2010. Cloud Computing and Smarter IT Delivery Carlos Passi As sistant Controller, Business Transformation. Industry Buzz: Moving to the Cloud….

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Cloud Computing and Smarter IT Delivery Carlos Passi As sistant Controller, Business Transformation

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  1. June 18, 2010 Cloud Computing and Smarter IT DeliveryCarlos PassiAssistant Controller, Business Transformation

  2. Industry Buzz: Moving to the Cloud… “CIOs are warming up to the Cloud, according to the following trends from our recent survey of 50 CIOs. … Virtualization is moving into production environments as CIOs become more comfortable with the stability and reliability of shared resources. …” - Morgan Stanley (May 20, 2010) “We view cloud computing as really “server virtualization with a purpose”, … We believe that most large enterprises are intrigued with cloud computing but will choose to deploy “internal clouds” rather than tap into the “public cloud.” - Barclays Capital (May 18, 2010) “Cloud Computing has the potential to change all aspects of the retail value change, resulting in advancements that could create a dramatic shift in the cost model of the modern retail community.” - Association for Retail Technology Standards (Dec. 12, 2009) “While definitions, taxonomies and architectures are interesting, it is important to understand the value proposition for cloud computing.” - Open Cloud Manifesto

  3. CIOs are warming up to the Cloud… • The 2010 CIO Survey (of 50 CIOs) conducted by Morgan Stanley indicates that: • CIOs plan to virtualize 55% of their production server environment next year, up from 42% today. • By next year, half of the CIOs surveyed plan to virtualize >10% of their PC environment, which could translate to a doubling of the number of virtualized PCs. • 56% of CIOs plan to increase storage spend next year based on their virtualization plans, while only 16% plan to reduce spend.

  4. Disruptive Technologies and the Internet Revolution Cloud Computing Web 2.0 Grid Computing E-business E-mail World Wide Web TCP-IP Internet Unix-based Workstations Personal Computer , Distributed Client-Server Supercomputers Mainframe Centralized Computing

  5. Cloud Computing: Evolution: Physical Consolidation Sprawl Virtualization Cloud • Standardization • Automation • Virtualization

  6. Global Annual Server Spending (IDC) 300 Power and cooling costs Management and admin costs 250 New system spend 200 150 100 50 $0B 1997 1996 1998 1999 2000 2001 2004 2002 2003 2010 2005 2006 2007 2008 2009 A Crisis of Complexity. The Need for Progress is Clear. Unceasing management and energy costs Steady CAPEX spend To make progress, delivery organizations must address the server, storage and network operating cost problem, not just CAPEX Source: IBM Corporate Strategy analysis of IDC data

  7. What is Cloud Computing? It’s often defined from the consumer’s value viewpoint Convenient, on-demand access to standardized offerings … Rapidly provisioned … Flexibly priced … Elastically scaled • And often … • “It’s cheaper” • Rent vs. buy • You manage the data center for me

  8. Factors That Drive Cloud Economics Infrastructure Leverage Virtualization of Hardware Drives lower capital requirements Virtualized environments only get benefits of scale if they are highly utilized Utilization of Infrastructure Self Service Clients who can “serve themselves” require less support and get services Labor Leverage Automation of Management Take repeatable tasks and automate Standardization of Workloads Less complexity allows increased automation

  9. Enterprise Benefits of Cloud Computing Capability From To Cloud accelerates business value across a wide variety of domains. Legacy environments Cloud enabled enterprise

  10. Cloud Computing Delivery Models Flexible Delivery Models • Public … • Service provider owned and managed. • Access by subscription • Delivers select set of standardized business process, application and/or infrastructure services on a flexible price per use basis. • Private … • Privately owned and managed. • Access limited to client and its partner network. • Drives efficiency, standardization and best practices while retaining greater customization and control Cloud Services Cloud Computing Model • Hybrid … • Access to client, partner network, and third party resources .… Customization, efficiency, availability, resiliency, security and privacy .…Standardization, capital preservation, flexibility and time to deploy ORGANIZATION CULTURE GOVERNANCE

  11. Key Currently Using/Planning to Use Would Consider In The Next 12 Months/12+Month A market assessment panel indicates Private Cloud has more near term appeal than Public Cloud across IT activities and workloads Private Cloud (64% Appeal on Avg.) Public Cloud (30% Appeal on Avg.) Ordered based on current/planned usage Source: MAP Cloud Computing Study August 2009 I IBM Confidential MAP Cloud Computing Report 12

  12. Cloud Delivery Models Private Cloud Public Cloud Shared Private Cloud 1 Customer/Provider owned and operated (single tenant) Provider owned and operated(multi-tenant) Provider owned and operated(multi-tenant) Enterprise owned and operated Enterprise owned; Provider operated 1 2 4 5 3 Enterprise Data Center Enterprise Data Center Enterprise Enterprise A User A User B User C Enterprise B Provider Operated User D User … Private Cloud Managed Private Cloud Enterprise C Hosting Center Hosted Private Cloud Public Cloud Shared Private Cloud Cloud Cloud Cloud Services delivered privately to Enterprises / virtual separation of tenants Cloud Services delivered publicly to end users / secure, enterprise-class Service provider owns infrastructure and customer has shared access and pays by usage Customer owns and pays for infrastructure and has unlimited exclusive access

  13. Delivery Models & Economic Model Implications Cloud Economic Drivers

  14. Enterprises will connect to many clouds Public Cloud Community Cloud Enterprise Data Center On–premise Private Cloud • Federated Identity • Federated ESB • Event Infrastructure • Secure Data Pipe Dynamic Infrastructure Trusted Provider Cloud Open Standards enable Cloud Ecosystem

  15. Workloads have different technical affinity to the cloud model • Virtualized Traditional - Extensions of Java Application Servers, Support for ‘Traditional’ Transactional Workloads • Moving existing workloads to the cloud • Requires best practices, patterns, tooling • Database Centric - data driven + small computation on small data • With multi-tenancy attractive for enterprise and service providers • Content Centric - computation needs to be close to data + large computation on large data • Data Mining, Analytics, Data Warehouse, • Loosely Coupled - computation and data are separate • Can be addressed by existing middleware, but ‘relaxed consistency’ models emerging • Storage Analytics - Data and Storage Integration

  16. “Database Centric” Architecture Some workloads are better suited for cloud than others Higher Gain From Cloud Collaboration SME ERP/SCM/CRM Numerical [Low Data/Compute] Web Serving Data Warehousing Data Mining Start Here Higher Pain To Cloud Delivery Numerical [High Data Transfer] Virtual Desktop Application Dev’t. & Test Systems Mgmt. File & Print Lower Pain To Cloud Delivery LE - ERP/SCM/CRM LE - Transaction Processing “Virtualized Traditional” Architecture “Content Centric” Architecture “Loosely Coupled” Architecture “Analytics” Architecture Lower Gain From Cloud

  17. Cloud is at the pinnacle of Gartner’s Hype Cycle expectations for Emerging Technologies … The Hype Cycle provides a cross-industry perspective on the technologies and trends IT managers should consider in developing emerging-technology portfolios State of the Art

  18. In summary… • Technology has changed the computing landscape – cloud next evolution • Cloud offers the promise of a new delivery model for IT, one that is scalable and on demand • The industry still in its infancy – concerns about security • Benefits are workload dependent • Competition for cloud computing will be fierce given the growing market opportunity

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