Download - Cloud Computing - Technologies and Trends
© 2012 IBM Corporation
Cloud Computing: Technologies and Trends
Marcelo SávioIT Architect – IBM
www.linkedin.com/in/msavio
© 2012 IBM Corporation2
Talking about trends....
© 2012 IBM Corporation
Some definitions …
© 2012 IBM Corporation4 Cloud Computing - Strategic View
Cloud is a new Consumption & Delivery Model that re lies on the industrialization of delivery for IT supported Serv ices
� a new consumption and delivery model inspired by consumer Internet services.
� Private, Public and Hybrid
� Workload and/or Programming Model Specific
� The Industrialization of delivery for IT supported Services
� Self-service
� Sourcing options
� Economies-of-scale
“Cloud” can be:“Cloud” represents:
“Cloud” enables:“Cloud” is:
© 2012 IBM Corporation5
IT and network capacity and capabilities are – ideally automatically, via Self Service capabilities – rapidly provisioned using Internet standards without transferring ownership of resources
Utility pricing, variable payments, pay-by-consumption and subscription models make pricing of IT services more flexible
Resources scale up and down by large factors as the demand changes
Uniform offerings readily available from a services catalog based on public interfaces
IT resources -from servers to storage, network and applications- are pooled and virtualized to provide an implementation independent,efficient infrastructure
Details
Elastic scaling
Advanced virtualization
Self service through Standardized offerings
Rapid provisioning
Flexible pricing
Cloud Characteristic
Cloud exhibits a set of well-defined characteristic s
© 2012 IBM Corporation6
Virtualized environments only get benefits of scale if
they are highly utilized
Drives lower capital requirements
Reduced complexity, increased automation possible; reduced
admin burden
Take repeatable tasks and automateLa
bor
Leve
rage
Infr
astr
uctu
re
Leve
rage
Clients who can “serve themselves” require less support and get services
Major factors driving cloud
Self Service
Automation of Management
Standardization of Workloads
Virtualization of Hardware
Utilization of Infrastructure
© 2012 IBM Corporation7
Banks use automated teller machines to improve
service and lower cost.
Manufacturers use robotics to improve quality and
lower cost.
Telcos automate traffic through switches to assure
service and lower cost.
Standardization, Automation and Self Service have c hanged many other industries become more efficient.
© 2012 IBM Corporation8
Cloud computing is more than the sum of the parts…
Virtualization Standardization Automation Self Service+ + +
Cloud Computing
With
� Enables flexibility
� Increase utilization
� Energy efficient
� Soft configuration
� Infrastructure abstraction
Without
� Physically constrained
� Capital intensive
� Hard configuration
� Linked to PO process
With
� Simplification
� Few configurations
� Enables automation
� Easier support
Without
� Physically constrained
� Many configurations
With
� Low human involvement
� Rapid deployment & mgt
� Repeatable configuration
� Improves compliance
Without
� Manually intensive
� Skill dependent
� Error prone
� Costly
With
� User in control
� Cost and usage choices
� Increased visibility
� IT/Business alignment
Without
� Dependency of availability of data centre staff
� Lack of awareness
Operational Exp Capital Exp Agility Timeline Compliance Customer Service
© 2012 IBM Corporation9
NoneSelf service
Fixed cost modelMetering/Billing
WeeksProvisioning
Payback period for new services
Release Management
Change Management
Server/Storage Utilization
Years
Weeks
Months
10-20%
Unlimited
Granular
Minutes
Months
Minutes
Days/Hours
70-90%
Legacy environments Cloud enabled enterprise
Cloud accelerates business value across a wide variety of domains.
Capability From To
So what’s different about Cloud?
© 2012 IBM Corporation10
Business Process-as-a-Service
Employee Benefits Mgmt.
Industry Specific Processes
Procurement
Business Travel
Software/ Application-as-a-Service
Financials
Industry SpecificApplications
CRM/ERP/HR
Collaboration
Platform-as-a-Service
Middleware
Database
Web 2.0 ApplicationsRuntime
DevelopmentTools
Desktop
Infrastructure-as-a-Service
Servers Networking StorageData Center Fabric
Consolidated, standardised, virtualised,shared, dynamically provisioned, automated
Cloud Service Models
© 2012 IBM Corporation11
Cloud deployment options
Private PublicHybrid
IT capabilities are provided “as a service,”over an intranet, within the enterprise and behind the firewall
Internal and external service delivery methods are integrated
IT activities / functions are provided “as a service,” over the Internet
Enterprise data center
Managed private cloud
� Third-party operated� Client owned� Mission critical� Packaged applications� High compliancy� Internal network
Enterprise data center
Private cloud
� Private� On client premises� Client runs/ manages
Public cloud services
Users
B
� Shared resources� Elastic scaling� Pay as you go� Public Internet
A
Member cloud services
A
Enterprise
B
� Mix of shared and dedicated resources
� Shared facility and staff� Virtual private network (VPN)
access� Subscription or membership
based
Hosted private cloud
Enterprise
� Third-party owned and operated
� Standardization� Centralization� Security� Internal network
© 2012 IBM Corporation12
Cloud Computing Reference Architecture (The Open Gr oup)
Governance
Security, Resiliency, Performance & Consumability
Cloud ServiceCreator
Cloud Service ProviderCloud ServiceConsumer
Cloud Services
IaaS
PaaS
SaaS
BPaaS
Common CloudManagement Platform
Cloud Service Integration
Tools
Consumer In-house IT
Infrastructure
Middleware
Applications
Business Processes
OSS – Operational Support Services
BSS – Business Support Services
Subscription Management Pricing
Entitlement Management
Metering Rating Billing
Clearing & Settlement
Accounts Payable
Accounts Receivable
Customer Account
Management
Service Offering Catalog
Service Offering
Management
Contracts & Agreement
Management
Service Request
Management
Order Management
TransitionManager
DeploymentArchitect
OperationsManager
Service Provider Portal & API
Consumer Administrator
Consumer BusinessManager
Consumer End user
Service Creation Tools
Service Management Development
Tools
Service Runtime Development
Tools
Software Development
Tools
Image Creation Tools
Service Component Developer
Inf rastructure
Security &Risk Manager
CustomerCare
ServiceManager
BusinessManager
Service Composer
OfferingManager
ServiceIntegrator
Service M
anagement
Service C
onsumer P
ortal & A
PI
Service D
evelopment
Portal &
AP
I
AP
I
AP
I
AP
I
AP
I
Existing & 3rd party services, Partner
Ecosystems
ProvisioningIncident & Problem
Management
IT Service Level
Management
Service Automation Management
Service Delivery Catalog
Service Request
Management
Change & Configuration Management
Image Lifecycle
Management
Monitoring & Event
Management
IT Asset & License
Management
Capacity & Performance Management
Platform & Virtualization Management
Infr
astr
uctu
reM
gm
t Int
erfa
ces
Pla
tform
Mg
mt
Inte
rfac
esS
oftw
are
Mg
mt
Inte
rfac
esB
P M
gm
tIn
terf
aces
© 2011 IBM Corporation
© 2012 IBM Corporation13
Summary so far
Infrastructure as a Service (IAAS)
Platform as a Service (PAAS)
Software as a Service (SAAS)
Business Process as a Service (BAAS)
Customers use processing, storage, networks, other computing resources with ability to rapidly and elastically provision & control resources without the need to own/manage assets
Customers use programming languages, tools and platforms to develop and deploy applications on multi-tenant, shared infrastructure without owning underlying resources
Customers use applications from multiple client devices through a Web browser on multi-tenant and shared infrastructure without the need to own the assets
Customers consume business outcomes (Back Office Acctg) via Web-centric Service Integration on multi-tenant and shared infrastructures, without the need to own the assets.
Hybrid Clouds
Private Clouds
Public Clouds
Cloud Architecture tailored to meet the needs of an enterprise. (i.e. some service like trade promotions validation executed in the firewall with external on demand services like graphics
A Cloud Architecture (end user provisioned, provider managed, consumption based) behind the firewalls of an enterprise
Service provider makes resources, such as applications and storage, available to the public over the Internet. (i.e. rented by the hour, month etc.).
DELIVERY MODELS
CLOUD SERVICES
Delivery Services, Software and Hardware
Delivery services, technologies business services in support of cloud computing that are required to help companies build deploy and integrate cloud computing architectures within their existing IT infrastructure
ARCHITECTURAL COMPONENTS
© 2012 IBM Corporation
Trends for Cloud Computing
© 2012 IBM Corporation15
What is coming?
In 2021, cloud computing is simply computing, corporate office parks are senior housing facilities and the IT organization of the future has been absorbed by the business.
� Internal IT becomes an internal cloud.
� IT becomes a services broker.
� IT will become a function of the business.
Gartner, 2011
© 2012 IBM Corporation16
What are general trends in the IT industry?
GartnerTechnology
� Cloud Computing� Mobile
Applications & Media Tablets
� Next-GenerationAnalytics
� Social Analytics� Social
Communications & Collaboration
� Video� Context-Aware
Computing� Ubiquitous
Computing� Storage Class
Memory� Fabric-Based
Infrastructure and Computers
GartnerBusiness
� Increasing Enterprise Growth
� Attracting and Retaining New Customers
� Reducing Enterprise Costs
� Creating New Products and Services
� Improving Business Processes
� Implementing and Updating Business Applications
� Improving Technical Infrastructure
� Improving Enterprise Efficiency
� Improve Operations� Improving Business
Continuity, Risk and Security
Forrester
� Smart Computing� Empowerment� Cloud Computing� IT as Business
Technology� Mobile Enterprise
Apps� Disruption-as-a-
Service� HW-SW-
Appliances� Next-Gen
Analytics� IT and
Sustainability� Social Media
IDC
� Cloud Computing in theDatacenter
� Public Cloud Services
� Platform-as-a-Service
� Enterprise Mobility
� Free SW, Open Source
� BPM Platforms� BI and Analytics� Enterprise Data� Social Media� Smart Devices
Ovum
� IT Security� Data
Management� Business
Analytics� Mobility� Datacenter
Transformation� Cloud
Computing� Collaboration� IT and
Sustainability� Drive IT as
Business� Context-Aware
Computing
Source: Gartner, cio.de, IBM MD Germany, IBM MI, HorizonWatch
IBM Horizon Watch 2012
� Cloud Computing
� Virtualization � Social Business� Mobile
Computing� Big Data � Analytics � IBM Watson� Human /
Computer Interaction
� Security� Sustainability &
Green IT� Consumerization
of IT
© 2012 IBM Corporation17
13%
41%21%
28%38%
21%
Today 3 yrs
Nearly half (48%) of CIOs surveyed evaluate cloud o ptions first, over traditional IT approaches, before making any new IT investments
Cloud is recognized as an increasingly important te chnology; adoption is expected to accelerate rapidly in the c oming years
Source: (1) 2011 joint IBV/EIU Cloud-enabled Business Model Survey of 572 business & IT leaders; Q4. Which of the following most accurately describes your organisation’s level of cloud technology adoption today and which do you expect will best describe it in three years? Sizing the cloud , Forrester Research, April 21, 2011; http://www.cio.com/article/684338/Survey_CIOs_Are_Putting_the_Cloud_First
Piloting
Adopting
SubstantiallyImplemented
+215%
+33%
72%
91%
What is Your Organization’s Level of Cloud Adoption?
% of Respondents
The Global Cloud Computing Market is Forecast to Grow 22% per year through 2020
$0B
$50B
$100B
$150B
$200B
$250B
2011 2015 2020
$241B
$41B
$150B
Source: Sizing the cloud, Forrester Research, Inc., April 21, 2011
© 2012 IBM Corporation18
14% 10% 5%
21%22% 34%
32%44%
43%
<$1B $1B - $20B >$20B
Piloting
Adopting
SubstantiallyImplemented
67%
76%82%
Company Annual Revenues
Today, at least two thirds of companies of all size s are actively either experimenting with or implementing cloud
Source: (1) 2011 joint IBV/EIU Cloud-enabled Business Model Survey of 572 business & IT leaders, Q4, n=363
What is Your Organization’s Level of Cloud Adoption ?% of Respondents; Today
© 2012 IBM Corporation
The IT Perspective
© 2012 IBM Corporation20
IT and Business are attracted to cloud for differen t reasons.E
ffici
ency
Tra
nsfo
rmat
ion
Rethink IT.
• Rapidly deliver services• Integrate services across
cloud environments• Increase efficiency
• Initiate new revenue streams• Drive faster time to market for
new services• Meet changing customer expectations
Reinvent business.
**Source: Gartner, Cloud Computing Services, Virtualization Top CIO 2011 Wish Lists Jan 24 2011
© 2012 IBM Corporation21
IT is drawn to cloud’s cost, efficiency and control…
…while business users are drawn to cloud’s simplified,self-service experience and new service capabilities.
of CIOs plan to use cloud—up from 33% two years ago.
of business executives believe cloudenables business transformation and leaner, faster, more agile processes.
2011 IBM CIO Study, London School of Economics, December 2010
Effi
cien
cy
Tra
nsfo
rmat
ion
IT and Business are attracted to cloud for differen t reasons.
© 2012 IBM Corporation22
Cloud helps business and IT create and deliver valu e in fundamentally new ways.
Build enduring customer relationships Gain customer insight and use it to improve products and services, fostering trust and loyalty among constituents.
Deliver IT without boundaries Unlock the value of new IT and business processes that break down traditional silos, simplify access to information and connect people across your ecosystem.
Improved speed and dexterity Optimize and accelerate the delivery of IT computing resources and services and serve them with new, flexible business models.
Transform the economics of IT Speed delivery of new offerings and services with new models of self-service and deployment.
© 2012 IBM Corporation23
Meeting the insatiable demand for new services…
How does IT develop from a quantitative perspective ?
Between 2000 and 2010
Servers grew 6x (2000-2010)
Storage grew 69x (2000-2010)
Virtual machines grew 51% CAGR (2004-2010)
32.6 million servers worldwide
85% idle computer capacity
15% of servers run 24/7 without being actively used on a daily basis
Data centers have doubled their energy usein the past five years
18% increase in data center energy costs projected
Internet connected devices growing 42% per year
1.2 Zetabytes (1.2 trillion gigabytes) exist in the “digital universe”
50% YTY growth
25% of data is unique; 75% is a copy
… …while IT budgets are growing less than 1% per year...
© 2012 IBM Corporation24
Trigger for transformation
InternetWeb2.0
Web 3.0 (Cloud, Mobile, Social)
1964 20082003
January 11, 201224
19941981
Mainframe
Client Server/PC
Mobile Devices (Smartphones,
Tablets, etc)Generations ofComputing Platforms
Phases of theInternet
2012
2020...
Source: HorizonWatch: Top Technology Trends To Watch In 2012, Bill Chamberlin
The 3rd phase of the internet “colliding” with the 3rd generation of computing platform
© 2012 IBM Corporation25
IT as Service Provider “IT as a function of the business“
IT Strategy for the next decade: an evolution of today‘s focus topics
VirtualizationConsolidation
Cloud
AutomationAutomationAutomationAutomation
SOA
on demand
Service Management
Service QualityCyber CrimePrevention
Big Data
Analytics
Operational Excellence
MobilityCollaborationCollaborationCollaborationCollaboration
Open Source Social MediaData CenterOptimization
Appliances
Smart Devices
Cost Pressure
DataManagement
IT Security
...
...
© 2012 IBM Corporation26
Consolidate
Standardizeand automate
� Reduce infrastructure complexity
� Reduce staffing requirements
� Manage fewer things better� Lower operational costs
� Remove physical resource boundaries
� Increase hardware utilization
� Reduce hardware costs
� Simplify deployments
� Standardize services� Reduce deployment
cycles� Enable scalability� Flexible delivery
=Cost
Flexibility
Virtualize
Dynamic
Cloud Computing deployment became part of the existing IT optimization strategy and roadmap
© 2012 IBM Corporation27
Check Cloud readiness – do relevant processes, procedures as well as roles & skills exist to manage the expected hybrid cloud delivery models
Analyze workloads and select delivery models – which workload is suitable for which cloud model; which service levels are needed based on business requirements; what happens to “legacy“?
Define and develop Cloud Computingarchitecture ; design blueprint(processes, technology, organization)
Establish management procedures to manage the different cloud models like a homogeneous environment
Define and publish a service catalogue for all relevant services to enable simple access to all services and disguise complexity of service delivery for customers / end users
Efficiency
Cloud
Key IT aspects for a Cloud strategy
1
2
3
4
5
Governance
Security, Resiliency, Performance & Consumability
Cloud ServiceCreator
Cloud Service ProviderCloud ServiceConsumer
Cloud Services
IaaS
PaaS
SaaS
BPaaS
Common CloudManagement Platform
Cloud Service Integ ration
To ols
Consumer In-house IT
Infras tructure
Middleware
Applicat ions
Bus iness Processes
OSS – Operational Sup port Services
BSS – Business Support Serv ices
Subscription M anag em ent Pricing Entitlem ent
Management
Metering Rating Billing
Clearing & Settlement
Accounts Payable
Accounts Receivable
Customer Account
M anag em ent
Service Offering Catalog
Service Offering
Management
Contracts & Ag reement
M anag em ent
Service Req uest
M anag em ent
Order Management
Transit ionManager
DeploymentArchitec t
OperationsM anager
Service Provider Portal & API
Consumer Adm inistrator
C onsumer Bus inessM anager
Consumer End user
Service Creation Tools
Service Managemen t Development
To ols
Service Runtime Development
Tools
Software Development
Too ls
Imag e Creation Too ls
Service Component Developer
Infrastructure
Security &Risk Manager
C ustomerC are
ServiceM anager
Bus inessManager
Service Composer
OfferingManager
ServiceIntegrator
Se
rvice M
ana
gem
ent
Service Consum
er Portal & AP
I
Service D
evelopment P
ortal & API
API
API
API
API
Existing & 3rd party services, Partner
Ecosystems
ProvisioningIncident & Problem
M anag em ent
IT Service Level
Management
Service Automation Management
Service Delivery Catalog
Service Request
M anag ement
Change & Configuration M anag ement
Imag e Lifecycle
Management
M onitoring & Event
M anag ement
IT Asset & License
M anag ement
Capacity & Performance Management
Platform & Virtualization Management
Infra
stru
ctur
eM
gmt I
nter
face
sPl
atfo
rm M
gmt
Inte
rface
sS
oftw
are
Mgm
tIn
terfa
ces
BP
Mg
mt
Inte
rface
s
© 2012 IBM Corporation28
The realities of cloud versus hype
Source: Market Insights and Gartner
Reality Today
Internal IT plus 3rd party for some things
Everything in the cloud and all at once
Cloud Hype
Sourcing mixture -retain legacy, plus
private/hybrid, public
Future Reality
Trad. SO Trad. SO
So, no “BIG BANG” !
≠
© 2012 IBM Corporation29
Ready for Cloud
Some workloads are ready for cloud delivery
Sensitive Data
Complex Processes & Transactions
Regulation Sensitive
Not yet Virtualized
3rd Party SW
Highly Customized
Analytics
Collaboration
Development & Test
Workplace, Desktop & Devices
Infrastructure Storage
Infrastructure Compute
Business Processes
Industry Applications
Pre-Production Systems
Information Intensive
Isolated Workloads
Mature Workloads
Batch Processing
May not yet be ready
for migration
© 2012 IBM Corporation
A Survey …http://www.ibm.com/services/c-suite/cio/study.html
© 2012 IBM Corporation31
28%
33%
31
The CIO Vision
Note: Growth Markets include Latin America, Asia Pacific (excluding Japan), Central and Eastern Europe, Middle East and Africa
39% 1,000 to 10,000 employees22% Financial Services
71 countries
28% <1,000 employees
33% >10,000 employees
6% Japan
16% North America
35% Europe
43% Growth markets
12% Communications
15% Public
25% Industrial
26% Distribution
18 industries All organization sizes
39%
22%
26%
15%
12%
43% 6%
16%
35%
Results from more than 3,000 face-to-face CIO interviews
© 2012 IBM Corporation3232
CEO focus over the next 5 years
Source: 2010 CEO Study Q13: “Which of the following dimensions will you focus on more to realize your strategy in the new economic environment over the next 5 years?” (n=1,523); 2011 CIO Study, Q13: “Where will you focus IT to help your organization’s strategy over the next 3 to 5 years?” (n=3,018)
CIO focus over the next 5 years
CEOs and CIOs are both focused on insights, clients and people skills
“Business Intelligence will provide information to the company that no one in the industry has ever seen, and will open up opportunities that were not previously considered.”
Utilities CIO, USA
Getting closer to customer
People skills
Insight and intelligence
Enterprise model changes
Risk management
Industry model changes
Revenue model changes
Insight and intelligence
Client intimacy
People skills
Internal collaboration & Communications
Risk management
Enterprise model changes
Industry model changes
Revenue model changes
88%
81%
76%
79%
71%
66%
57%
55%
54%
54%
64%
50%
48%
39%
35%
© 2012 IBM Corporation3333
CIO visionary plans are evolving
Source: 2011 CIO Study, Q12: “Which visionary plans do you have to increase competitiveness over the next 3 to 5 years?”(n=3,018)2009 2011
Business Intelligence and analytics 83%83%
Mobility solutions 74%68%
Virtualization 68%75%
Cloud computing 60%33%
Business process management 60%64%
Risk management and compliance 58%71%
Self-service portals 57%66%
Collaboration and Social Networking 55%54%
Most important visionary plan elements(Interviewed CIOs could select as many as they wanted)
© 2012 IBM Corporation3434
CIOs are focusing on the benefits of global integrat ion
Changing the mix of capabilities, knowledge and ass ets within the organization
Partnering versus doing everything in-house
Source: 2011 CIO Study, Q7: “To benefit from global integration will your organization do the following?”(n≤1,214); some responses may add to over 100% due to rounding up
“Our focus is on best of breed partners and strategic alliances rather than outsourcing.”
Government CIO, UK
“Gradually, the insight has grown that the organization cannot continue doing everything in house.”
Media and Entertainment CIO, Belgium
Maintain thecurrent mix
Deeply changethe mix
Do everythingin-house
Partnerextensively
Both
Both
66%20%14%
65%18%17%
© 2012 IBM Corporation35
CIOs are changing the delivery….
35
� Enable state-of-the-art collaboration Evaluate and adopt tools to strengthen enterprise-wide collaboration and exchange of data.
� Tighten business and technology integration Increase two-way transparency by involving internal clients in planning and decision-making.
� Focus on the core Rely on trusted partners to handle non-strategic IT functions.
� Simplify, automate, integrate Implement advanced business process management.
� Advance the metrics Provide sophisticated dashboards through more advanced types of analytics.
� What leading edge collaboration tools have you implemented across the enterprise to help integrate technology with business?
� How deeply are your internal customers involved in your key planning and decision processes?
� What is your plan to engage partners to outsource information technology functions?
� Which persistently inefficient processes can you eliminate or improve to increase customer satisfaction?
� How do you work with internal customers to ensure dashboards measure enterprise-wide key performance indicators?
How to excel Are you essential?
© 2012 IBM Corporation
The Business Perspective
Cloudnomics: The Power of CloudDriving Business Model Innovation
© 2012 IBM Corporation37
In addition to enhancing internal efficiencies, org anizations clearly intend for cloud to improve their business capabilities
35%
28%
30%
25%
29%
31%
26%
27%
29%
26%
29%
22%
15%
17%
Increased collaboration with external partners
Competitive/cost advantages thru vertical integration
New delivery channels/markets
New/enhanced revenue streams
Competitive differentiation thru specialization
Rebalanced mix of products/ services
Flexible pricing models
Important Very Important
How Important are the Following Objectives for Adop ting Cloud?% of Respondents
Source: 2011 IBM/EIU Cloud Survey Results, Q5: How Important are the Following Objectives for Adopting Cloud?, n= 572
62%
57%
56%
54%
51%
46%
43%
Business Capabilities Internal Efficiencies
© 2012 IBM Corporation38
While only a few visionary businesses today are usi ng cloud for business innovation, the number will multiply in three years
What is the Primary Focus of Your Organization’s Cl oud Adoption Strategy?% of Respondents
Close to half (42%) of organizations surveyed plan to harness cloud for radical business model innovation within three years
8%
16%3%
17%
2%
5%
3%
4%
Today 3 yrs
16%
42%
Change industry role
Redesign industry
New industry
New business
Source: 2011 IBM/EIU Cloud Survey Results, Q8 : What is the primary focus of your organization's cloud technology adoption strategy ? n (today) = 572; n (in 3 years) = 572
© 2012 IBM Corporation39
Mobility, social media, increasing digitization and new analytics capabilities are conspiring to drive broad business change
Mobile revolution� Connectivity, access and participation are growing rapidly� Smart devices are becoming the primary route to get connected� Devices are getting smarter as they are increasingly enriched by mobile apps
Major Technology Trends driving Business Change
Social media explosion� Social media is quickly becoming the primary communication and collaboration format� GenY’s or “digital natives” use of technology and social media platforms is accelerating adoption� Enterprises are adopting social media but are struggling to realize the value and manage risk
Hyper digitization� Digital content is produced and accessed more quickly than ever before� Internet traffic is growing globally driven by consumer use of video, mobile data, interconnectedness� An increasing number of connected devices and sensors is further driving growth
The power of analytics� New capabilities for real time analysis, predictive analytics and micro-segmentation are emerging� Top performing companies use analytics to drive action and business value� Analytics are making information “consumable” and is transforming all parts of the organization, from
customer intimacy to supply chain management
Source: IBV Analysis
© 2012 IBM Corporation40
Cloud harnesses the capabilities borne out of these trends to empower six potentially “game changing” business ena blers
Source: IBV Analysis
Cloud’s Business Enablers
Cost Flexibility1
� Shifts fixed to variable cost� Pay as and when needed
Business Scalability2
� Provides limitless, cost-effective computing capacity to support growth
Masked Complexity4
� Expands product sophistication� Simpler for customers/usersContext-driven
Variability5
� User defined experiences� Increases relevance
Ecosystem Connectivity 6
� New value nets� Potential new businesses
Market Adaptability
� Faster time to market� Supports experimentation
3
© 2012 IBM Corporation41
Customer Value Proposition
What is my customer value proposition?
� What mix of products and services?
� Which customer needs are being satisfied?
How will I do what I do?� What kind of delivery structures?� Which operating model?� What is the cost structure?
What is my role in the value chain?� What to do and when to rely on
others?� Where to specialize and how
to set up interdependent networks?
Val
ue C
hain
Which customers am I serving?� Which customer segments?� What type of relationships to
maintain?� Which channels?
How do I generate revenue?� Which pricing models?� How and where to capture
value?
Cloud business enablers are already driving innovat ion across company/industry value chains and customer value pr opositions
41
Cloud Enablement Framework
© 2012 IBM Corporation42
Enterprises are leveraging cloud to enhance, extend and invent new customer value propositions
Customer Value Proposition
Enhance Extend Invent
Enhance� Improve current value
proposition to retain/attract customers for existing products and services
� Appeal to existing customer segments
� Garner incremental revenue
Extend� Extend value proposition to
attract customers to different products and services
� Attract existing or adjacent customer segments
� Generate significant new revenues
Invent� Construct radically different value
proposition to create a new “need” and own the market
� Form new customer segments � Generate entirely new revenue
streams
42
Cloud Enablement Framework
© 2012 IBM Corporation43
Cloud is also being leveraged to improve, transform and create new organization and industry value chains
Impr
ove
Tra
nsfo
rmC
reat
e
Improve� Increase efficiency and effectiveness of the
organization� Increase partnering, sourcing, and collaboration
Transform� Change organizational role within the industry or
enter a different industry value chain� Develop new operating capabilities� Enter adjacent industries
Create� Build a new industry value chain or
disintermediate an existing one� Radically change industry economics
Val
ue C
hain
Cloud Enablement Framework
© 2012 IBM Corporation44
Organizations can be classified according to the exte nt to which their use of cloud impacts value chains and value proposit ions
Disruptors create radically different value propositions, generate new customer needs and segments. They disintermediate existing industries or even create new ecosystems
Innovators significantly extend customer value propositions resulting in new revenue streams and transform their role within their industry or enter a different industry ecosystem
Optimizers use the cloud to incrementally enhance their customer value propositions while improving their organization’s efficiencyIm
prov
eT
rans
form
Cre
ate
Enhance Extend Invent
Val
ue C
hain
Customer Value Proposition
Optimizers
Disruptors
Innovators
Organizations should determine how and to what degr ee cloud can be used to enable their business model
Cloud Enablement Framework
© 2012 IBM Corporation45
These categories map closely to IBM ’s innovation classifications, which characterize the spectrum of business innovatio n
Optimizers
Disruptors
Innovators
Product and Service Innovation
Operational Innovation
Revenue Model Innovation
Enterprise Model Innovation
Industry Model Innovation
Pro
duct
and
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vice
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nova
tion
Bus
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s M
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In
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IBM’s Innovation Classifications
© 2012 IBM Corporation46
There are strong correlations between cloud business en ablers and types of innovation identified on the cloud-enablem ent framework
Revenue Model
Innovation
------- Business Model Innovation -------Operational Innovation
Product and Service
Innovation
Market Adaptability� Faster time to market� Supports innovative ideas
Business Scalability� Elastic resource provisioning � No scale economy limitations
Cost Flexibility� Shifts fixed to variable cost� Faster payback & higher ROI
Ecosystem connectivity� New value nets� Potential new businesses
Context-driven Variability� User defined experiences� Increases relevance
Masked Complexity� Expand product sophistication� Simpler for customers/users
Industry Model Innovation
Enterprise Model
Innovation
Business Model Enablers
Types of Innovation
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© 2012 IBM Corporation47
Optimizers, innovators and disruptors each face strategic opportunities and significant risks
� Untested business models may not succeed
� Fast followers are often more successful than first movers
� Rapid replication of innovation by competitors
� Value capture may not be sustainable
� Realization of limited revenue or market share gains
� Increased dependency on partners
� Potential industry disruption from less risk averse player
Major Risks
� Capture unique competitive edge through creation of new or disruption of existing industry
� Invent new customer needs or define entirely new markets
� Take advantage of and sustain first mover advantage
� Expand ability to move into adjacent market or industry spaces
� Combine previously unrelated elements of the value chain and value proposition to increase total value
� Gain competitive advantage
� Deepen customer relationships by expanding value
� Increase partnering by applying cloud� Reduce costs by leveraging cost
flexibility� Increase overall efficiency
Major OpportunitiesOrganizational Classification
Optimizers
Innovators
Disruptors
© 2012 IBM Corporation48
Cloud’s business enablers are fuelling innovation an d empowering organizations to optimize, innovate and disrupt busin ess models
Impr
ove
Tra
nsfo
rmC
reat
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Enhance Extend Invent
Val
ue C
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Customer Value Proposition
Optimizers
Disruptors
Innovators
Customer Value Proposition
Val
ue C
hain
Cloud Enablement Framework
Context-driven Variability
5
Masked Complexity4
Market Adaptability
3
Business Scalability
2
Ecosystem Connectivity
6
Cost Flexibility
1
Cloud’s Business Enablers
Cloud offers six “game changing”business enablers …
…that are fuelling innovations across enterprise value chains and customer value propositions…
…empowering organizations to optimize, innovate or disrupt business models
Organizations need to assess themselves using the C loud Enablement Framework and examine the potential to innovate by leveraging the cloud’s business enablers
Summary so far…
© 2012 IBM Corporation49
There are three initiatives you can start today to capture valuefrom cloud-enabled business models
1. Establish shared responsibility for cloud strategy and governance across the Business and IT;
2. Look beyond your organization’s borders to maximize value derived from your cloud adoption;
3. Strategize whether your organization will be an Optimizer, Innovator or Disruptor through the use of cloud-enabled business models.
Recommendations…
© 2012 IBM Corporation50
Envisioning the full potential of cloud requires or ganizations to challenge existing approaches in their business and industry
Organizations that maximize the potential of cloud’ s business enablers can position themselves to capture significant value an d sustainable advantage
… you could reach hitherto unaddressed customers or
markets and target them based on their individualized preferences
through analytical insights?
Reflecting on your business, question yourself – “Wh at you would do if…
… you had access to unlimited computing
resources to scale your business?
… you could easily and seamlessly connect and
collaborate with business partners and customers?
… you could inexpensively and rapidly develop and
launch new product & service offerings?
…you could give any of your customers access to any of your products and services anytime, anywhere, on any
device?
…you could redefine your role in your industry and change your competitive
positioning?
© 2012 IBM Corporation51
Thanks for your time and attention
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