Welcome to Architect Insight 2010

Cloud as a business differentiator? Ulrich Homann Chief Architect, WW Enterprise Services Microsoft Corp

The Cloud - Overwhelming Choices Consumer’s Perspective Describe what they want, not how it is achieved Require a standard interface to the service Want a transparent, utility-like delivery of their service Want a clearly defined cost model Want to easily measure delivery They think in terms of business, not IT Want unlimited availability and capacity on demand Provider’s Perspective They are concerned with providing service efficiently They want to drive standardisation to reduce costs and simplify operations They want to use contracts to agree requirements They aim for reliable, scalable, repeatable and predictable Public Cloud Platform as a Service Software as a Service ? Outsource In House Infrastructure as a Service Dynamic Data Center Private Cloud

Defining Cloud Computing Sourcing IT capabilities Introducing an IT supply-chain IT as a ‘Service” 3 basic types: In-house Out-sourced “Cloud” sourced

Defining Cloud Computing Application runs In-house Buy my own hardware, and manage my own data center Application runs In-house Bring my own machines, connectivity, software, etc. Complete control and responsibility Upfront capital costs for the infrastructure

Defining Cloud Computing Application runs on-premises Buy my own hardware, and manage my own data center Application runs In-house Bring my own machines, connectivity, software, etc. Complete control and responsibility Upfront capital costs for the infrastructure Application is Outsourced Pay someone to host my application using hardware that I specify Application is Outsourced Rent machines, connectivity, software Less control, but fewer responsibilities Lower capital costs, but pay for fixed capacity, even if idle

Defining Cloud Computing Application runs on-premises Buy my own hardware, and manage my own data center Application runs In-house Bring my own machines, connectivity, software, etc. Complete control and responsibility Upfront capital costs for the infrastructure Application runs at a hoster Pay someone to host my application using hardware that I specify Application is Outsourced Rent machines, connectivity, software Less control, but fewer responsibilities Lower capital costs, but pay for fixed capacity, even if idle Application runs using cloud platform Pay someone for a pool of computing resources that can be applied to a set of applications Application runs using cloud platform Shared, multi-tenant environment Offers pool of computing resources, abstracted from infrastructure Pay as you go

Why Customers are Embracing the Cloud Reduce CAPEX & OPEX Predictable & Pay per Use Subscriptions Focus on Market Differentiation Energy Efficiency Latest Versions with No Server Upgrades Choice, Flexibility, & Resource Agility Merger, Acquisition & Divestitures Up and Running Quickly The bottom line: Early adopters are finding serious benefits, meaning that cloud computing is real and warrants your scrutiny as a new set of platforms for business applications.” – Forrester, August 2009 “By 2012, 20% of businesses will own no IT assets.” Gartner, Gartner Highlights Key Predictions for IT Organizations and Users in 2010 and Beyond, January, 2010 This is the Gartner & Forrester Approved Slide Garter 2012 quote is public. http://www.gartner.com/it/page.jsp?id=1278413 Survey of 318 customers on satisfaction with SaaS noted “top 3 pros were no in-house maintenance(57%), shorter rollout(49%), usable anywhere via internet(46%).” Burton Group, “Gartner and Burton Group SaaS Surveys: Same High-Level Findings, Different Conclusions.” Craig Roth July, 2009.

Why customers are embracing the cloud GlaxoSmithKline Microsoft Online “Enables us to reduce IT operational costs by roughly 30%” “Introduce a variable cost subscription model for collaboration technologies” “Allows us to more rapidly scale or divest our investment as necessary” City of Carlsbad “Having the servers live elsewhere is about initial capital savings” “We would have had to hire more administrators” “We expect a savings of approximately 40 percent annually” Large Coffee Retailer Employee store portal used by retail field and corporate teams to collaborate Portal provides timely access to business analysis reports, news, & training Increased operational effectiveness for employees and partners Aviva One Aviva Intranet & Collaboration tools two-year project delivered worldwide in 142 days at half the estimated cost Reed Jewelers Reduced infrastructure costs by 90 percent Reduced e-mail support work by 80 percent Improved the availability of critical messaging systems Kelley Blue Book Windows Azure Save U.S.$100,000 annually in hosting costs moving web site to Windows Azure Reduce capital expenditures for new hardware & use IT resources more strategically Increase its competitive advantage by focusing on delivering new features Domino’s “Daily peaks for Friday night’s. Super Bowl drives 50% increase of online orders! Windows Azure allows us to focus on customer functionality, not hosting capacity Help Us Save Money and Gain Efficiencies Help Us Drive Innovation Help Us Grow Our Business

Why customers are embracing the cloud Connecting suppliers: Pharma company: drug component purchasing via cloud-hosted supplier network saves USD 100 million/year Connecting customers: Fashion company: early design feedback via Facebook application and integration with in-house PLM system Help Us Save Money and Gain Efficiencies Help Us Drive Innovation Help Us Grow Our Business

Why customers are embracing the cloud Connecting customers: SMART electric car: ‘metering’ for customers [how much power is left] Help Us Save Money and Gain Efficiencies Help Us Drive Innovation Help Us Grow Our Business

Workload Patterns Optimal for Cloud “On and Off “ “Growing Fast“ Inactivity Period Compute Compute Average Usage Average Usage Time Time On and off workloads (e.g. batch job) Over provisioned capacity is wasted Time to market can be cumbersome Successful services needs to grow/scale Keeping up w/growth is big IT challenge Complex lead time for deployment “Unpredictable Bursting“ “Predictable Bursting“ Compute Compute Average Usage Average Usage Time Time Unexpected/unplanned peak in demand Sudden spike impacts performance Can’t over provision for extreme cases Services with micro seasonality trends Peaks due to periodic increased demand IT complexity and wasted capacity

Macro-economic impact: growth engine for Small & Medium businesses There are about 23 million small and medium businesses in Europe accounting for: 99% of all firms 100 million jobs UK examples: Huddle WAYN Dezineforce Cognidox EU examples Lokad (France) TradeFacilitate (Ireland)

What are the choices? Location Business model Choices Ownership On Premises Location Off Premises Heterogeneous Infrastructure Homogeneous Business model CapEx OpEx Own Ownership Lease/Rent Self Management Third Party Fundamentals Application Programming Scale Out Automated Service Management High Availability Multi-Tenancy

“Side” benefit: robust application architecture (examples only) Application Development Externalized Authentication / Authorization Loosely-Coupled Components Operations-Friendly (Instrumented, etc) Infrastructure Automation everywhere Scale-Unit based Deployment Auto-Scaling (proactive, on-demand, event driven) Management “Virtual” Administration Continuous deployment / “no” upgrade deployment Separation of Deployment and configuration

Side benefit: “standardization” Defined layers and interaction: IaaS PaaS SaaS Transparency around resources and pricing VM’s cost Storage costs etc Standardized IT capabilities & “workloads: Unified communication Collaboration CRM etc

‘Side’ benefit: Security, Privacy and Compliance standardization Microsoft Cloud environments: SAS 70 Type II attested data centers and services ISO 27001 certified data centers ISO 27001 certified services, FISMA DCs and services, etc Public initiatives: Digital Due Process (Google, Microsoft, et al) Global Network Initiative (GNI) others

“Side” benefit: Modular DC technology Capacity Density and Deployment Time to Market Lower TCO Scalable Datacenter Scalability and Sustainability Servers Rack ITPAC Containers

Pre-assembled containers (PAC) Pre-manufactured buildings (PMB) Generation 4: Key Characteristics Pre-assembled containers (PAC) Pre-manufactured buildings (PMB) Modular Scalable Plug-and-play infrastructure Factory pre-assembled PACs & PMBs Rapid deployment Demountable "Fail Small“ Reduce TTM Reduced construction Sustainable measures Class A Class C Class S

4/17/2017 12:11 AM © 2010 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION. © 2009 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.