1. IBM DEVELOP, NETWORK, PROMOTE & GROW Cloud Transformation: What are the risks, pitfalls and challenges to be addressed? Steve Strutt, CTO Cloud Computing, IBM UK & Ireland

2. IBM The future is cloudy with a risk of …….. © D. Fletcher for CloudTweaks.com

3. IBM Major change in our relationship with IT technology The starting pointThe present

4. IBM Cloud computing offers a number of game changing enablers Source:IBV Analysis External Forces Mobility Social Media Big Data Hyper- Connectivity Clouds Business Enablers Cost Flexibility Business Scalability Market Adaptability Masked Complexity Context- Driven Variability Ecosystem Connectivity Shifts fixed to variable cost Pay as and when needed Provides limitless, cost-effective computing capacity to support growth Faster time to market Supports experimentation User defined experiences Increases relevance New value nets Potential new businesses Expands product sophistication Simpler for customers/ users Supply Chain Collaboration Customer life-time value analysis Federated Cloud Services Social Media Responsiveness Adopt Streaming Media Dynamic Service Provisioning

5. IBM Cloud computing is an IT service delivery approach that often brings a challenging set of decisions which require a structure and framework to address Service Delivery Framework providing structure to complexity Strategic Decisions Considerations Business Design Service Level Deployment Characteristics Outcomes Economics AccountabilityPerformance SecurityShared Location FlexibilityAvailability Cloud Computing is an evolving delivery approach outcomes economics accountability availability security performance flexibility location Decisions Shared Multi-tenant Deployment models Hybrid Governance Migration Management Roadmap Ownership Planning Computing Considerations Business Design Service Level Deployment Characteristics Cloud

6. IBM There are three areas of strategic decisions that need to be considered during transformation Aligning business strategy to expected service delivery outcomes while optimizing the economics and risks / rewards of delivery What type of availability is required and what are the associated security assurances that are essential while maximizing performance Balancing the choices relative to the flexibility of deployment models, shared environments as well as the location of infrastructure and application assets IBM has developed a Service Delivery Framework aggregating these considerations Strategic Decisions Business Design Service Level Deployment Characteristics

7. IBM Strategic Decisions Considerations Business Design Service Levels Deployment Characteristics Outcomes Economics AccountabilityPerformance SecurityShared Location Flexibility Availability During transformation the IBM Service Delivery Framework extends the strategic decisions by further defining the requirements, preferences and optimization.

8. IBM Innovation drives Business Design, which in turn, aligns to expected service delivery outcomes, economics and accountability. Economics OpEx CapEx Fixed Cost Variable Cost Balancing the tradeoffs of OpEx with CapEx against the benefits of fixed/predictable contracts to more variable/pay as you go approaches Accountability Infrastructure Middleware Application Process Who Manages Managed Services Aligning levels of support and associated risks and rewards from the management of infrastructure environments to entire processes. Business Outcomes Aligning the Business and IT strategy and associated outcomes from optimization to industry disruption Improve Transform Create EnhanceExtendInvent Value Chain Customer Value Proposition Optimizers Disruptors Innovators Cloud Enablement Framework Business Design

9. IBM The Cloud Service Layers depict increasing use of business functions, solutions and services redefining traditional accountability. Infrastructure as a Service Accountability Increasing Service Provider Roles Platform as a Service Software as a Service ServersNetworkingStorage Middleware Collaboration Business Processes CRM/ERP/HR Industry Applications Data Center Fabric Database Web 2.0 Application Runtime Java Runtime Development Tooling Business Process as a Service Procurement HR Accounting E-mail Managed services across security, backup and recovery to support multiple environments SAP SmartCloud Application Services SCE BAO Sterling Smarter Cities Social Core Metrics SC Archive SC Managed Backup SC Virtual Server Recovery Hosted App Security Mgmt Hosted Mobile Security Mgmt Managed Security Services Mgmt SCE+

10. IBM Workloads drive the Service Levels aligning the type of availability required and the associated security assurances that are essential while maximizing performance. Availability PackageAvailability 98.5% 99.9% 99.7% 99.9% $ $$$ Resilience Selecting the right availability support for target applications is critical to maximizing the economics of service delivery Performance WeeksHoursMinutes Traditional Hosted Cloud Responsiveness Dynamic Static Balancing the need for rapid provisioning of new applications such as mobile, with the need for more stable, static environments related to traditional applications Security Considerations related to security stem from a clear governance process that manages risk associated with data, users and underlying architectures Secure by Design Service Enabled Innovation Powered Workload Driven Security Framework Service Levels

11. IBM Performance has a broader meaning with new cloud flexibility which is as much service performance as response time. Performance WeeksHoursMinutes Traditional Hosted Cloud Responsiveness Dynamic Static Balancing the need for rapid provisioning of new applications such as mobile, with the need for more stable, static environments related to traditional applications Performance Install DB2/Oracle 1 Day 12 Minutes Maintain database libraries ½ Day 8 Minutes Clone database 2-3 days 20 – 180 Minutes Install operating system 1 Day 30 – 60 Minutes Provision SAP environment 2-3 days ~ 40 – 200 Minutes Add additional application server 1 Day 10 Minutes Refresh SAP systems 1-4 Days ½ - 3 Minutes Value Delivered: From traditional To cloud Setting up a development environment Days 30 minutes Test provisioning Weeks Minutes Release management Weeks Minutes Change management Months Days or hours Application delivery management 1 operator /10 apps 1 operator /100 apps Application Development

12. IBM You need to balance choices relative to the flexibility of Deployment Models, shared environments including location of infrastructure and application assets. Location Client Site Vendor Site Location of assets are key to aligning requirements to the purchase / control of infrastructure versus leveraging a third party infrastructure with less control but greater scalability Shared Dedicated Enterprise Shared Enterprise More control Different service delivery models can leverage dedicated environments versus shared environments – trading off control, cost, performance and scalability Less control $$$ $ Flexibility Elasticity Public Private Service delivery models can be designed to support highly elastic applications, while allowing for portability across delivery models to maximize utilization and economics Portability Deployment Characteristics

13. IBM Summary Aligning with business strategy Workloads drive service levels Balancing choices Business Design Service Level Deployment Characteristics Three areas of strategic decisions that need to be considered during transformation