Ho w t o For m u l a t e Yo u r C lo u d St r a t e gy A m e t ho d o lo gy f o r mi gra ti ng IT servi ces to the cl o u d A WHITE PA PER BY CLO UD CRU ISER

E xec ut i v e S u m mary

As cloud computing accelerates, and its value becomes better known and understood, both the hype and the economic need pressure IT to begin migration of some applications or utility services to cloud platforms. Moving the wrong services could result in huge and expensive troubles, but failing to move the right services could mean lost opportunities. So, how do you evaluate and select the right IT services to move? In this paper, we’ve put together a methodology to pick the right services for migration to cloudbased platforms. We’ll consider the major service categories, such as data and applications, as well as how they rank in importance to the business. This paper is business case-focused, meaning the migration to the cloud should have a clear business benefit. We’ll provide concepts to better understand the value proposition for the use of cloud-based platforms, as well as suggest approaches and tools that will help you understand the existing state of your IT assets. You’ll also learn how you can benefit from moving some or most of these services to public, private, and hybrid cloud platforms, and how to monitor that value once your cloud-based systems are in production.

I nt roducti on

Many in IT find it hard to translate their existing business needs into a true migration plan. We’re quickly reaching a point in time when a migration plan will be a requirement, one that includes financial considerations and strong metrics. Those who have kicked the cloud computing can down the road for the last several years now face situations where cloud computing can provide some unique strategic and economic advantages that can no longer be ignored. The first trick is to understand how to define the business value. The second trick is to define the business case for the migration, as well as the prioritization of services, and then develop an ongoing strategy to monitor and optimize the financial value to the business. This means leaving nothing to chance. You need complete visibility into what drives your cloud solution, and how that cloud solution is measured in terms of operations, as well as the strategic value to the business. The concepts provided in this paper will guide you through the process of selecting the right IT services for migration to the cloud. We will also provide a model in the form of an Excel spreadsheet that you can leverage for your

own enterprise to do a self-evaluation. The examples in this paper use that tool, and we’ll walk you through a use case using the same concepts, process, and model. This model should provide the knowledge and methodology you’ll need to get through the initial analysis, and put you on the right path toward enterprise service migration to the cloud. The model is meant to be modified to meet your exact needs. As such, it will provide a sound foundation to get you started on the right path to move your IT services to cloud computing, or give you an understanding as to why certain services should not move to the cloud. This approach provides the ability to understand the technology benefits of leveraging cloud computing for certain IT services, as well as how to form business cases that will typically guide you toward the right services selections. It’s a matter of understanding what goes where, and then following a process to create the right prioritization of service migration (when it goes), and how this all translates into a master plan (how it goes).

S e l e c t i n g I T Servi c e s f or C l oud There are a few fundamental issues to consider when selecting which IT services should move to the cloud, including the business use case, the demand for the service, and the patterns of usage. During the selection process, we evaluate the services as potential private or public cloud services, and approach this problem from the business to the technology. As an accompaniment to this white paper, we provide you with a basic model in the form of a spreadsheet that you can leverage as-is, or modify to meet the exact requirements of your organization. You now have the guidelines and the basic tool you’ll need to make the right initial calls. >> Open spreadsheet here The process we suggest is basic, but effective, if followed correctly. There are two major steps: First, create a list of IT services that should be considered for relocation to the cloud. These services will be categorized and evaluated for the purposes of understanding their relevance to the business and their dependencies on other key factors, as depicted in Figure 1. Second, consider these services in relationship to different cloud models, and understand the patterns of the IT services in the process, as depicted in Figure 2. Note that the output from one, feeds into the other.

Figure 1: The process of selecting IT services for the cloud results in the initial services catalog, which defines the services that should move to new platforms, including cloud-based platforms.

T h e Proces s Und ers tand th e Bu sines s The first step in the process is to understand the core business IT assets. What systems are already in place, including applications, data, services, processes, security and governance? We do this to form a fundamental understanding of what exists before we move through the process of creating the services catalog. Lacking this information, we can’t identify the services that are best to relocate to the cloud. The idea here is to gain a good understanding of the application architectures, use of data, governance, security, etc., and thus know the best way to turn core application services into cloud services. This includes having an understanding of the structure and workings of the database, how the database is accessed, the use and execution of business logic, integration with user interfaces and perhaps other core business processes.

The best way to deal with this situation is to decompose the application into functional primitives, typically data, services, processes, user interfaces, processes, etc. However, this is no easy task, taking months for larger enterprises. From there we can understand each primitive, and then recreate a logical architecture for the application that best fits the needs of the cloud service we’re looking to expose or migrate. Then it’s a matter of mapping the new logical architecture into a physical architecture, and then you can define the work to create that physical architecture. The output from this process is typically a list of IT assets, what they do, how much they cost, ownership, and other details you can gather that will provide a better understanding as we move through the remainder of the process.

T h e Process Def ine Service C ategorie s In the first step, we begin to place the candidate services into service categories, including:

Da t a

Services that are primarily concerned with producing and consuming data. While these are typically databases, they could be data services that exist on top of existing data as well.

Ap p l i c a t i o n s

Services that provide core solution functionality, such as business processes. They are typically bound to data or data services, as we’ve previously defined. However, it’s helpful to break them out into their own category to better understand services as separate and more primitive concepts.

Inf r a s t ru c t u r e

Services that provide core infrastructure services, such as storage and compute, which are not specifically bound to an application or data service. Think of this category as providing all of the foundational services that allow applications and data to exist.

Ma na ge m e n t

Services that manage other services. For example, the ability to monitor applications, data, and infrastructure operations. They provide a “single pane of glass” view into the other IT services, which may become cloud services. All services, no matter if they are legacy or cloud-based, require some type of management.

De v O p s

Services that are focused on the development, deployment, testing, and operations of an application. The term refers to development and operations working together, as well as core services that support both development and operations. This also includes newer and emerging concepts, such as continuous integration and continuous delivery, which are directly associated with the use of on-demand cloud-based platforms.

T h e Proces s D ef ine C andidate Service s In this step, we take the IT services we’ve listed, and evaluate them based on dependencies and other core concepts listed below:

D a t a B i n d in g s

How the service is linked to the data defined in the previous step. For instance, a customer edit service would obviously work on customer data

A p pl i c a t i o n Bi n d i ngs

Defines how services are linked to applications

Inf r a s t ru c t u r e Bi n d i ngs

How the services is bound to infrastructure services, such as storage

Owners

Refers to who owns the service(s), including people, organizations, cloud providers, etc.

Perf o r m a n c e

How the service will likely perform during operations. Complex services can perform poorly due to dependencies upon external system services, while simple services typically perform well considering that not much is going on.

S e c u ri t y

The service’s security services, such as encryption.

C o m pl i a nc e

The compliance issues the service must handle. For example, the need to comply with emerging healthcare regulations.

Orga ni za t i o n

The aspects of organizational policy that are parts of the service. For example, accounting policies around accounts payable leverage the accounting organization.

M a na ge m e n t

How the service should be managed. For example, management interfaces the service may provide.

Pro f ile

T he Process Create Initial Services Catalog The value of services catalogs is to provide a single access point for discovery, as well as access to any number of services that provide application functionality or data for use by end users or applications. The value is that we’re able to reuse these services across applications, and they may exist on any number of platforms, including private and public clouds. Cloud services catalogs are a centralized resource to both discover and leverage private or public cloud services. Growing from the service registries and repositories from the days of SOA, this technology is now new and improved to provide a single

gateway for service access for applications and end users. The initial services catalog feeds into the next part of the process. This is basically a list of services that we’ve identified through the processes and steps defined in this section of the paper. They become the initial starting point, a list of services that are relevant to the business, and thus services that should be considered for cloud-platforms. The catalog defines what these services do, their current operating, and the costs of operating these services in private or public clouds.

T h e Model Once we have the initial services catalog, it’s time to select the right cloud-platform model or models to leverage. Figure 2 depicts this process, through the creation of service profiles and service bundles, and then using that information to select a cloud model (IaaS, PaaS, and SaaS), as well as a delivery model (private, public, hybrid, or community). You can think of this as selecting the right platform based upon the requirements we’ve previously gathered, and the analysis in the model we provided.

Figure 2: Selecting the appropriate cloud model to host enterprise services requires an understanding of the services, the cloud models, and the delivery models. Using this process, we can determine where the enterprise services should best reside.

To select the right services to move to the cloud, you should define the categories of services that are most important to the business. These are typically services that cost the most to operate, and thus should be considered first when you’re looking to move to cloud platforms. The next steps are to define the cloud models to deploy on. This is rarely a single selection, such as just IaaS. More likely, you’ll pick a few if not all models of clouds, including IaaS, PaaS, and SaaS, for use within your enterprise. This multi-cloud approach, or, leveraging several cloud models and cloud brands, is common. Finally, you need to select a delivery model. Your choices are private, public, hybrid and community. Again, most enterprises will leverage a mix of public and private, thus hybrid is the most popular approach. Indeed, there may be many brands of private and public clouds in play at most enterprises. Your approach is completely dependent upon the business problems you want to solve, as well as the analysis in the model we’ve provided.

T he Model Let’s continue with understanding the model. Table 1, from our spreadsheet model, drives a ranking approach for the service categories by considering their relevant importance to the business. Note that the ranking will change based upon the types of organizations, including the business objectives, that are currently in place. S e r vi ce Categ ory

Re la t iv e Im p o r t a n ce t o t h e B u sin e ss

Da t a

35%

A ppl i c ation

35%

Inf r a struc ture

10%

Manag ement

10%

De vOps

10%

S um

100%

Table 1: To select the right services to move to the cloud, define the categories of services that are most important to the business. This table drives a ranking approach that allows you to pick what service categories are most important to your business.

Figure 3 shows the ranking via a spider diagram. Note that in our example, data and application service categories are most important to this business. This the typical case for most enterprises, but some place a greater emphasis upon infrastructure and management than data and applications. Newer organizations may stress services related to DevOps, considering that they are typically building new applications at a much greater rate.

Figure 3: This is how the ranking looks when we compare service categories using our example’s data. Your organization may look very different, and that’s okay.

T he Model Additionally, we will need to rank each service category with other factors, including “Agility,” “Time to Market,” “Cost,” etc. (see Table 2). This allows us to figure the relative advantages each service category brings to the business, and thus allows us to better prioritize the ranking of types of services that should move to the cloud. Again, the potential benefits that are ranked against the service categories include:

A gi l i t y

The organization’s ability to change to accommodate new requirements, such as changes in the market. Cloud computing can provide resources on-demand, as well as change those resources, which provides the value of agility.

T i me t o M ar ke t

Related to agility, time to market speeds business solutions into production. For example, applications can be quickly created and updated to accommodate new product lines, or changes to product lines.

Cost

An obvious benefit is reducing the amount of IT services costs. The less the better.

S c a l i ng

The solution can scale up to support more users and higher processing loads. Cloud computing typically can self- or autoprovision, and has access to a massive amount of resources, which results in the ability to scale.

R i sk

In typical cloud architectures, we avoid risk by shifting that risk to public cloud providers. They invest in hardware and software infrastructure, not your enterprise, and thus there is less cost of risk to your organization.

B u si ness Valu e

The ability to increase the value of the business with the use of cloud-based platforms as way to drive innovation and grow revenue.

Ot her

Other things that you may want to consider include compliance, organizational culture, customer management, etc. Keep in mind that you will have to adjust this model to meet the exact needs of your organization; these are just general guidelines.

T he Model Table 2: Rank each service category with other factors. This allows us to figure the relative advantages of each service category, and thus allows us to better prioritize the ranking of types of services that should move to the cloud.

Service Categories Relative to Benefit (1-5 scale) 1=less advantaged, 5=most advantaged Agility

T ime to Market

Cost

Scaling

Risk

Business Value

Other

3

2.5

3

2

2.5

3

3

3.5

3

3

3

2

2.5

2

Infrastructure

4

3

3.5

3

2.5

2

2.5

Management

3

2.5

2

2

3

2

2

Operations

3

2.5

4

3

2

21

2

Data Applications

Weighted Scoring, Service Positioning Weighting

Agility

Time to Market

Cost

Scaling

Risk

Business Value

Other

Data

35%

1 .1

0.9

1.1

0.7

0.9

1.1

1.1

Applications

35%

1.2

1.1

1.1

1.1

0.7

0.9

0.7

Infrastructure

10%

0.4

0.3

0.4

0.3

0.3

0.2

0.3

Management

10%

0.3

0.3

0.2

0.2

0.3

0.2

0.2

Operations

10%

0.3

0.3

0.4

0.3

0.2

0.2

0.2

100%

3.3

2 .7

3.1

2.6

2.3

2.5

2.4

Index Score

So, using our example data in the Table 2 model, we can rank each benefit relative to our business for each service category (the data entry area is green), in this case, from 1 to 5. The idea is to rank the true benefits to your organization, and this goes against the weighting around the service categories (see Table 1), and is also stated in Table 2 as well. The calculations on the lower table, are the weighted scores as to how much weight you put on each service category (from Table 1), as related to the benefits and the ranking you provided from 1 to 5. The index score on the bottom line is telling, considering your input, and should be leveraged to determine priorities as to which services to move first to the cloud.

T he Model A n Example For example, a retailer wants to prioritize the initial services that should be relocated to the cloud. In their ranking of service categories, “Data” is most important for our retailer, say, 60%. As an aspect of the “Data” service category, “Agility” and “Time to Market” are the most important benefits, and thus are rated as 4 out of 5 each. After filling out the other rankings around service categories, the index score will reveal the calculation that provides suggested prioritization of service migration. In this case its “Data” services that provide the core benefits of “Agility” and “Time to Market,” which will typically be at the top of this list. Again, this is to be leveraged as a structured approach to selecting services for migration. Consider that this process will take years for most businesses. It’s important to migrate the services that provide the most value first. Moving in correct priority order means that the benefit of cloud computing will be effective sooner. Moreover, leveraging a cloud financial management system, such as discussed later in this paper, will provide validation of the value that the migration of these services to the cloud will, or are, actually bringing. Figure 4, below, is a spider diagram that depicts the top three benefits (agility, time-to-market, and cost), as ranked against the service categories in our example. This helps you understand how the benefits map to specific service patterns that are important to the business.

Figure 4: This is a graphic representation of the top three benefits, as ranked against the service categories.

Levera g i ng Tool s a n d Tec hnol ogy t o Def i ne Demand

BEST

BETTER

GOOD

In order to understand and quantify the demand for IT services, you need visibility into cost analysis, both past and future. As depicted in Figure 5, you can see that we have good, better, and best approaches, where the best approach is an understanding of the detailed consumption of all resource units by department, as well as detailed costs by resource unit. Resource units are the way we measure the use of cloud on traditional IT resources. WHAT YOU NEED

WHAT YOU’LL GET

• An aggregate of existing consumption and costs

• Tops down look at costs at the server or instance level compared to a total forecasted number

• Existing consumption by major resource group (CPU, memory, storage, network)

• ‘T-shirt’ sizing comparison data

• Costs by major resource group

• Demand counts for build or buy decisions and improved ability to estimate public cloud costs

• Detailed consumption of all resource units

• Understanding of biggest consumers and why

• Detailed consumption of all resource units by department

• Unit cost data for baselines and benchmarking Dashboard level reporting and tracking

• Detailed costs by resource unit

• More credibility in business cost analysis

Figure 5: In order to determine costs, you’ll need a good understanding of consumption.

In gathering this data, we need to identify the largest consumers, and understand why they are the largest. Also, define the unit cost of data for baselines and benchmarking. Finally, we need a dashboard for reporting and tracking, and the ability to track this data back to the IT resource. These tools enable you to make the right calls, in terms of IT services that should be considered for relocation to cloud-based platforms. Without this data, you could select IT services that are actually more costly to run in the cloud, or perhaps don’t provide the business value to even be considered for a move to the cloud. Moving the wrong services to the wrong platform is a common, and costly, problem for enterprises.

Le vera g i ng Tool s a n d Tec hnol ogy t o D ef i ne Demand Tools and technology that are useful here include those that provide cloud financial management capabilities, such as those by Cloud Cruiser. Cloud Cruiser offers a funding model for your cloud investment, based upon measurable, defensible IT service usage, not arbitrary accounting allocations. You can now make calls around the migration of IT services based upon real business need, and eliminate wasteful spending caused by selecting the wrong services to move that don’t provide the best impact to the business (see Figure 6).

Figure 6: Cloud financial management systems provide dashboards for use by cloud providers and cloud consumers that offer an immediate look at the state of the business, in terms of usage, cost, billings, etc.

Other features you should consider include:

Automated IT cost collection across hybrid IT which provides automated collection of all your IT cost data from any private cloud, public cloud, and traditional IT computing platform. This data is leveraged as foundational analysis to understand the true value of moving services into private, public, or hybrid clouds.

Universal heterogeneous IT cost metering allows complete cost transparency by collecting any measurable IT service cost from web services, APIs, databases, spreadsheets, log files, and more. Considering the issues covered in this paper, this tool helps us understand existing costs prior to migration of IT services to cloud-based platforms, as well as understand the value they deliver, or not, when hosted on cloud-based platforms.

Hierarchical IT cost resource mapping allows you to align your IT budgets with business goals by providing finance and management with cost visibility by department, IT service, business function, technology tower, or any other accounting structure.

C on c l us i on

This paper provides basic guidance to form an understanding of your existing state of IT, and how the use of cloud-based platforms may benefit your business, or not. The intent was not to present just a bunch of decoupled concepts, but to provide you with the steps you need to make good decisions about the use of cloud computing, and even a model that provides a mathematical approach to make your decisions. While no approach is foolproof, having a foundation of understanding increases your chances of success. Enterprises re-focused these days on migration to public and private clouds, but often have no clue how the process works. Many just follow the hype. Smarter organizations understand that the business case is where the focus should be. This includes an understanding of existing legacy IT assets, and then following a process to determine which IT assets provide a good business case for their movement to a cloud platform. A surprising number of enterprises do not use this business-driven approach to cloud computing migration. Most lack visibility into existing assets and operational costs, and few understand the true costs to relocate to and operate on public and private cloud platforms. It’s unacceptably common for enterprises to move major business processes and other IT services to cloud-based platforms that actually cost more than traditional platforms, and add risk to the business. You don’t want to face these issues.

A bout t he Author

D a v i d L i nt h ic u m

Leading technology publications frequently name David S. Linthicum among the top 10 enterprise technologists in the world. He is a true thought leader in the industry, and an expert in complex distributed systems, including cloud computing, data integration, service oriented architecture (SOA), and big data systems. As the author of over 13 books on computing with over 3,000 published articles, as well as radio and TV appearances as a computing expert, he is often quoted in major business and technology publications. In addition, David is a frequent keynote presenter at industry conferences, with over 500 presentations given in the last 20 years. David’s industry experience includes tenures as CTO and CEO of several successful public and private software companies, and upper-level management positions in Fortune 100 companies. Dave has delivered over $2 billion dollars in value by transforming companies from traditional to innovative technologies, moving them to lucrative exits that benefitted investors, employees, and customers.

C l o ud Cru is e r

Founded in 2010 and headquartered in Silicon Valley, California, Cloud Cruiser offers an innovative cloud financial management solution that was built from the ground up to support the cloud economy. It maximizes freedom of choice for enterprises and service providers by providing dynamic financial intelligence, chargeback, and billing across heterogeneous IT environments. The company’s key strategic partners include: Microsoft, HP, Cisco, VMware, Amazon, Openstack, and Rackspace.

www.cloudcruiser.com [email protected] +1 844-223-9737 (USA) +316250-66-463 (EMEA)