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IT is no longer the onlygame in town.The cloud can be a life jacket for your IT organization.If you embrace it, it can help you get out of the fog andinto a new mode of business. However, organizationsthat dont realize they are entering this new and some-what foggy time might be in for rough seas ahead.

The new reality for all IT organizations is that they areno longer the only game in town. Even if your IT organi-zation is the only provider for your line-of-business (LOB)customers, your customers are comparing you to whatelse is out there. They know alternatives exist, and unlessyou are providing the service and prices they see else-where, its just a matter of time before they find someonewho does.

The new IT reality:

The IT landscape is reshaping to fit the cloud.

LOB customers are comparing your prices and servicesto other providers.

New efficiencies and new potential are out there.

New competition is out there, too.

With cloud computing, internal IT departments now facecompetition from the outside. Business users who needcompute capacity can just get it from a public cloud pro-vider for just pennies per hour, automatically when theywant it. Even if internal IT is free, its usually not avail-able instantly today.

New competitiontheexample of deregulationThe impact of cloud computing on IT is similar to theimpact of deregulation on previously monopolistic indus-tries. Take telecoms, for instance. In many countries,telecommunications services used to be available fromonly one source. Over time, and based partially onchanging technologies, the government decided toopen up markets to competition by removing regula-tory barriers to entry. For example, in the U.S., theTelecommunications Act of 1996 was designed to pro-vide a pro-competitive, de-regulatory national policyframework. In theory, anyone can enter any communica-tions business, and any communications business cancompete in any market against any other. As a result, thetelecoms market has become highly competitive, offeringcustomers unprecedented choice. But what happened tothe companies that used to run the industry? Some arestill there but dont have the same market power theyonce did. They now compete with wireless, cable, andeven Internet-based phone services.

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HP CLOUD DISCOVERY WORKSHOP

The HP Cloud Discovery Workshop simplifies thecloud by using human-sized displays, which lay outstrategies to utilize this complex new computing envi-ronment. Our experts will discuss explanations ofthe possibilities, risks, and business implications ofthe cloud. They also make recommendations forusing the cloud as part of a service provider andportfolio strategy for your business.

This workshop targets C-level decision-makers, ITmanagers, strategists, architects, and key businessstakeholders. It helps organizations quickly getstakeholder buy-in and make decisions about cloudopportunities while getting everyone on the same

page and level of understanding. The workshop isdesigned to be highly interactive and visual. It pro-vides attendees with an opportunity to discuss sharedservices transformations, cloud concepts, serviceportfolio concepts, governance, security, businesscase issues, and HP solutions.

New choices and newresponsibilitiesLines of business have new choices. They can outsourtheir IT needs to a variety of providers for a variety ofservices.

New choices require new responsibilities, too.

Buyers tasks are now more complicated. They must da better job of understanding and selecting services.

IT departments have to do a better job of figuring ouwhat their LOB customers need and how to meet thosneeds quickly and efficiently.

The opportunity to rethink ITIts time for the ah-ha moment of realization. Its acompetitive environment out there. IT must now understand what others are doing, and make changes tostay competitive.

In some cases, its LOB customers will choose between and public services. When this happens, then a publiccloud may become your direct competition. In other

cases, the LOB cannot go to the public cloud for securior other reasons. Even so, your IT organization will stillbe compared to a public cloud service costs. IT needsto be able to respond. You need to know if publiccloud costs $0.10/hour, and if you cost $0.15/hour. Ifso, whats the additional $0.05 for? The cost of securityIf so, let your customers know. The cloud gives IT a newplatform to rethink how to deliver services, save moneybe competitiveand most importantdrive improvedinnovation back into its business area.

The way IT departments are run must change to keepup with the way LOB customers demand service.

If they want to beat the competition, IT groups must

figure out where and how to differentiate themselvesWhen are they a better choice for LOB customers, anwhen are they not.

IT needs to convince its customers of the value it bringto a project. What is it?

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Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The onlywarranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing hereinshould be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

4AA3-6824ENW, Created October 2011

HP CloudSystem provides IT with a unified way to offer, provision, and manage services across private clouds,public cloud providers, and traditional IT. It enables the flexibility to scale capacity within and outside the datacenter, its extensible to existing IT infrastructure, and it can support heterogeneous environments.

HP CloudSystem enables businesses to build and manage cloud services across private, public, and hybridcloudswithout having to know, or care, whether those services come from the CloudSystem on-premisesresources, from your existing infrastructure, or from the public domain.

HP CloudSystem makes it easy for IT to present cloud services to internal customers in a way that makesresources (such as services, applications, servers, storage, and networks) flexible, dynamic, and on demand.It makes it easier to take on outside competitors in a way that is secure, scalable, and extensible.

The work will change,but it doesnt go away.No matter where your business purchases services andsolutions, the IT department will ultimately remain respon-sible for upkeep. This is a tremendous opportunity forthe CIOs role to change from being a builder of IT to abroker of IT. This can be a huge change in the way an ITdepartment works, but it can also provide a real benefit.IT, in conjunction with the LOB, can guide which services

are delivered internally, and which are most effectivelydelivered by service providers.

Not all IT services are exposed to competition from thecloud. For example, some highly secure applicationswill never be sourced from the cloud. However, even ifthere is no threat of being replaced by outside competi-tion, the internal IT departments will be compared to thecost and agility of cloud offerings. This will encourageinternal IT groups to better understand their costs, under-stand the cost of public cloud services, and be able tojustify the cost differences.

Even when there is no real threat of being replacedby public cloud, public cloud services will be com-

pared to internal services. IT needs to be preparedto respond to this.

Key takeaways LOB groups are beginning to look outside of tradi-

tional IT departments to find better deals on IT services.

To stay relevant, IT departments must change the waythey do business.

IT must be run as a proactive and competitively awarebusiness unit.

IT does bring significant value to internal projects.

Cloud is an opportunity for IT to focus on its core

value. If IT can source public services for less thanwhat it costs internally, and still meet the SLAs, itshould. This allows IT to focus resources and budgeton the areas where it adds significant value.

Take the first step toward defining your cloud futureby visiting http://www.hp.com/go/cloud.

Talk to your HP representative to sign up for anHP Cloud Discovery Workshop.

http://www.hp.com/go/getconnectedhttp://www.hp.com/go/cloudhttp://www.hp.com/go/cloudhttp://www.hp.com/go/getconnectedhttp://www.hp.com/go/cloud