The Business Value of Hybrid Cloud: VMware vcloud Air

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1 IDC SOLUTION BRIEF The Business Value of Hybrid Cloud: VMware vcloud Air Sponsored by: VMware Inc. Melanie Posey July 2015 Matthew Marden IDC OPINION Organizations are reaching the IT breaking point, challenged by budget, datacenter capacity, and personnel constraints. In addition, business velocity demands continue unchecked, while enterprise IT's ability to deploy, manage, and update the infrastructure required to support business outcomes and innovation is hitting a wall. Hybrid cloud provides a solution to this problem, offering an IT transformation approach that takes into account the reality that not all applications and workloads can (or should) migrate to public clouds, at least not immediately. Approximately half of U.S. business IT spending is still traditional (i.e., non-cloud) or located onsite in enterprise datacenters. Therefore, concerns about the public cloud model (e.g., security, data protection, performance) and/or the inability of pre-cloud era applications to operate in a cloud environment are holding back a broader embrace of the approach. However, adoption of cloud-based IT is not an either-or proposition. Hybrid cloud can serve multiple roles in organizations' overall business and IT strategies as a transitional stage on the road to broader public cloud adoption, as an IT deployment model for applications that require distributed environments, or as an IT end-state destination that balances on-demand elasticity and usage-based pricing with localized control. The wall between public and private is coming down as automation and orchestration management technologies enable IT architects to leverage their enterprise datacenters, external cloud-based resources, and corporate WANs as a comprehensive hybrid environment. Tearing down this wall can mean enhanced flexibility for enterprise IT organizations, and hybrid cloud can accelerate the organizational convergence of enterprise IT and lines of business (LOBs) in ways that support the agile pursuit of business outcomes. VMware vcloud Air hybrid cloud services is an example of the type of IT solution required to effect this transformation. Organizations exploring hybrid cloud oriented strategies should consider the following: Which are the various IT constituencies in the enterprise, and how are their current needs being met (or not) with the existing IT environment? Transformation-oriented IT leaders can leverage hybrid cloud to position themselves as "enterprise architects" who ensure that IT resources are centralized, stable, and secure but dynamically available to serve both IT operations and IT-driven business requirements. Which applications are best suited for onsite private clouds, which can benefit most from operating in offsite public cloud environments, and which are ideally positioned to straddle both environments as needed, based on load/scalability, cost optimization, application life cycle, and end-user experience/proximity requirements? July 2015, IDC #257919

2 Do internal IT staff have the expertise and time to take on the transition as an in-house DIY project, or do CIOs need to bring on partners technology vendors, cloud service providers, or systems integrators for at least part of the process? This IDC Solution Brief provides insight to organizations looking to incorporate hybrid cloud into their IT environments, highlighting vcloud Air solutions. IDC interviewed three organizations currently using vcloud Air for a variety of workloads, including production environments and disaster recovery. These organizations are leveraging vcloud Air to increase their IT agility and better serve their businesses while also reducing the total cost of supporting workloads. Hybrid Cloud: Enabling Diversified IT Environments Cloud-based infrastructure as a service (IaaS) continues to expand beyond its original base of cutting-edge early adopters and has achieved mainstream status. According to IDC's 2014 CloudView Survey, 41% of U.S. businesses are currently using public cloud IaaS for production workloads and applications, indicating a significant (and growing) level of acceptance as a viable model for agile IT. However, the binary paradigms of cloud IT infrastructure public versus private and on-premises versus offsite limit the extent to which enterprises can fully leverage the benefits of public cloud while retaining the same security, reliability, performance, and management frameworks present in existing private cloud and traditional IT implementations. Hybrid cloud provides a converged or diversified IT environment encompassing public/offsite and private/onsite cloud resources. Virtual machines, applications, and workloads operate seamlessly across different types of IT environments private clouds residing in enterprise datacenters, private clouds located in service provider datacenters, and external public clouds. However, hybrid cloud is more than just the middle ground between public and private and involves more than merely running workloads across private cloud or in-house IT environments and multiple public clouds. Properly designed hybrid clouds bind together separate and distinct IT operating environments and integrate compute, storage, security, networking, applications, and management into a unified, highly orchestrated onsite/offsite IT operations "workspace" that supports data and application portability and capacity/resource bursting between the environments. Onsite and in-the-cloud systems must be orchestrated to work together as a single system, and workloads should be able to run in the public cloud domain without the need to rewrite the application code or redesign the network architecture, security policies, or business logic. In enterprise IT environments, hybrid clouds bring the "outside in" and let the "inside out" by extending the enterprise datacenter into the cloud. This approach allows organizations' various IT constituencies (enterprise IT, developers, LOB) to leverage the speed and agility of public cloud IaaS in concert with the existing tools, systems, and policies being used in the enterprise datacenter. Hybrid architectures allow organizations to place workloads in appropriate environments based on factors such as data criticality, compliance mandates, application behavior characteristics, usage patterns, and security/performance requirements. In a hybrid cloud environment, such workloads can be moved back into the enterprise datacenter if data security concerns or regulatory mandates require an in-house production environment. Hybrid cloud also enables mix-and-match deployment environments for different components of composite applications. For example, back-end elements such as databases containing sensitive company or customer information might remain on physical hardware housed on-premises in the enterprise datacenter, while the Web front end would go into a public cloud to take advantage of rapid scale-up/scale-out capabilities. Bonding or federation between the two creates a common, orchestrated IT operations workspace IDC #

3 Hybrid Cloud Benefits: IT and Business Transformation The wall between public and private is coming down as automation and orchestration management technologies enable IT architects to consider their enterprise datacenters, corporate VPNs, and external cloud-based resources as a unified IT resource environment. Tearing down this wall means enhanced flexibility for enterprise IT organizations to provide on-demand compute and storage resources to support LOB users' increasingly rapid delivery timelines. Hybrid cloud can also help transform the organizational dynamics of enterprise IT and lines of business for the better by elevating IT operations to the more strategic role of optimizing end-user access to the internal and external IT resources that are needed for the business. As a result, IT can enable, instead of thwart, the move toward more agile cloud-based IT. Hybrid cloud implementations enable a number of business benefits, including the following: Leveraging existing IT systems investments. While cloud-native start-ups can leapfrog traditional IT architectures and jump straight into the cloud, enterprises cannot. Investments in equipment, software, personnel, and datacenter facilities cannot simply be written off in favor of "asset light" public cloud services. However, hybrid cloud provides self-service "stretch" resources that augment what's already in the enterprise datacenter, delaying or even eliminating the need for additional capex in favor of an opex approach. Centralized IT governance, decentralized IT infrastructure. The benefits of public cloud are undeniable: on-demand resources, elastic scaling, consumption-based pricing, and self-service implementation. But these characteristics can also create "rogue IT" purchasing and deployment, resulting in fragmented enterprise IT environments as well as security and compliance risks. Hybrid clouds that tightly link the enterprise datacenter with public cloud resources, along with well-defined policies and processes governing access and usage, ensure consistent IT governance while enabling location-agnostic flexibility. The right environment for the right workload at the right time. Public clouds generally mean a one-size-fits-all approach for each workload, regardless of the individual application profile (e.g., life-cycle stages, usage patterns, application behavior characteristics, data criticality, and data compliance). Hybrid cloud means a common architecture for both legacy and net-new cloud-native applications, with the ability to mix and match deployment environments based on specific performance, security, and compliance parameters, as well as scale-up/scale-out needs and requirements around dependency on/tethering to onsite systems. In addition, the life-cycle timing of the workload is important. Applications at the proof-of-concept or development/testing phase benefit greatly from public cloud's rapid provisioning capabilities and consumption-based pricing. In a hybrid cloud environment, these applications can be moved back into the enterprise datacenter if data security concerns or regulatory mandates require an in-house production environment. Bridging the divide between IT and line of business. Hybrid cloud helps give each group what it wants: security and control for IT operations and speed and agility for LOB operations. To the extent that IT can incorporate external public cloud services into formalized IT procurement, implementation, and governance processes, IT becomes a facilitator of, rather than a roadblock to, more dynamic business-ready IT. According to IDC, more than 40% of U.S. organizations have already implemented some form of "inside out/outside in" hybrid cloud IT. As cloud implementation approaches become increasingly solutions and application driven, "cloud" can no longer be viewed as a standalone IT sourcing and consumption model. Technology industry vendors offer a staggering array of cloud deployment options that allow organizations to "have cloud their way." The biggest long-term requirement for this ideal 2015 IDC #

4 state is a seamless application, data, and management environment across in-house IT and "outside" resources. This situation is a precondition for accelerating the enterprise journey to the cloud and unlocking the benefits of cloud computing, such as flexibility and scalability, while mitigating the impact of the inhibitors, particularly workload interoperability and portability concerns. VMware vcloud Air Crossing the chasm between the internal datacenter environment and the off-premises cloud service provider world can be challenging for many IT organizations. Public cloud is rapidly becoming an extension of IT environments as LOB managers, application developers, and IT leaders seek greater business and IT velocity, scalability, and efficiency. At the same time, most of enterprise IT still lives behind the corporate firewall. Faced with this reality, IT leaders need solution partners that can not only support but also transform the current IT environment with hybrid cloud solutions that seamlessly extend existing datacenters into the cloud with end-to-end interoperability, security, performance assurance, visibility, control, and governance. VMware is an example of this type of partner, and the vcloud Air cloud offerings provide an integrated solution for location-agnostic cloud IT resource provisioning, management, migration, and usage. Based on VMware software-defined datacenter technologies, including VMware vsphere, vcloud Air provides organizations with a path to the public cloud, leveraging the management framework and tools they already have in place to support existing applications and workloads. Built on trusted, time-tested enterprise-grade technology, vcloud Air enables the seamless "inside out" datacenter extension needed to run and manage both legacy and new cloud workloads onsite or in the cloud without recoding the application or rearchitecting the internal IT environment. vcloud Air also supports "outside in" cloud-native applications that need to connect back into the enterprise datacenter. While it is not impossible to achieve hybrid cloud integration with different platforms on either side, it is costly and time consuming, forcing IT personnel to focus on building and rework rather than performance management, application development, IT transformation, and other more strategic tasks. VMware also brings a broad ecosystem of partners to its infrastructure-as-a-service value proposition. This ecosystem includes technology, consulting, and integration partners as well as the VMware vcloud Air Network of nearly 4,000 service/solution provider partners that offer a range of additional management and support options for vcloud Air deployments. More than 5,000 applications, 90+ operating systems, and infrastructure software tools have already been optimized and certified for VMware environments and are available via the vcloud Air service catalog or the vcloud Air Marketplace, ensuring compatibility and convergence with existing IT investments. vcloud Air supports virtual private cloud (subscription and on-demand consumption models) and dedicated cloud deployments. The service offerings come packaged with built-in redundancy, high availability, firewalls, load balancers, IPsec VPNs, NAT, DHCP, and disk I/O at no additional charge. Customers can leverage the vcloud Air user interface or use the vcloud Director portal to manage their hybrid cloud environment onsite. The VMware vcloud Air Disaster Recovery offering provides a dependable failover and recovery environment in the event of operational disruptions. Asynchronous replication at the hypervisor layer facilitates simplified configuration of virtual machines in vsphere for disaster recovery. Additional features include native failback support and bi-directional replication between internal and vcloud Air environments as well as multiple point-in-time recovery points and recovery plan automation. The current vcloud Air global footprint includes datacenters in the United States, the United Kingdom, Japan, Australia, and Germany IDC #

5 Business Benefits of Hybrid Cloud with VMware vcloud Air IDC interviewed three VMware customers using vcloud Air as their hybrid cloud solution to understand the types and scope of business benefits organizations can achieve with it. These interviews were conducted with the following individuals: Shawn Wiora, CIO at Creative Solutions in Healthcare, which owns and operates 49 skilled nursing and 13 assisted-living facilities in Texas Mark Otter, COO, and Mark Haney, Senior Systems Engineer, of VIF International Education, a United States based organization that partners with schools and school districts to support global learning with a learning center platform that includes teacher professional development, curricular resources, and a social learning community Bryan Graven, CEO of National Physician Services, a nationwide organization in the United States supporting physicians, hospitals, and healthcare organizations by providing them with enterprise technology solutions to support their workflows and efforts to provide the best possible patient care These VMware customers described choosing to use vcloud Air as a hybrid cloud solution because they needed more scalable and efficient infrastructures. They realized that as their businesses and customer bases expanded, they could not afford to let IT impede the speed or quality with which they serve their customers. They said that vcloud Air has made their IT services more agile, allowing their IT teams to better support evolving business demands while also providing very high reliability and enabling cost and operational efficiencies. As a result, they are moving more of their business applications to the cloud with vcloud Air and view having the flexibility and cost-effectiveness of the cloud as integral to their growth strategies. Enabling the Business The three VMware customers interviewed by IDC reported that running applications in vcloud Air enables them to better support their businesses. Because these customers are putting applications in the cloud, infrastructure limitations cease to be a constraint to business growth, and their IT teams are able to meet business demands more consistently and in less time. Specifically, the customers cited: Agility. They are more agile with vcloud Air because they can provision infrastructure resources faster and respond to new technologies and evolving business demand. Scalability. Their IT operations are more scalable with vcloud Air, which is especially important as they grow their businesses and resources must be provisioned to support growth. Time to value. They have reduced the time to market for their applications and services with vcloud Air, meaning that users and customers obtain value sooner. Helping Meet Industry-Specific Business Challenges The interviewed VMware customers described how vcloud Air helps them meet industry-specific business challenges, which is a benefit as they navigate regulatory and compliance requirements in moving workloads to the cloud. For the two organizations in the healthcare industry, this includes rapidly changing and complex compliance requirements. Specifically, these VMware customers referenced the visibility and strong datacenter performance that they obtain with vcloud Air, along with the quality of VMware's industry-specific support. As a result, they expend less effort and use fewer resources to meet regulatory requirements, and they can focus on developing applications and services that serve their customers, constituents, and employees IDC #

6 Enabling Users and Supporting Customers with Reliability and Performance VMware customers also reported that they are achieving improved availability and performance of applications that are running on vcloud Air. This limits the impact of outages on their users and business, improves user and customer satisfaction, allows more IT staff time to be devoted to proactively supporting the business, and leaves these IT teams in a better position to establish themselves as business partners within their organizations. Cost and Operational Efficiencies of Supporting Workloads VMware customers have reduced costs by running business applications on vcloud Air. By migrating existing applications to and deploying new applications in the VMware cloud, they have reduced and avoided spending on servers and other datacenter hardware and lowered the costs of operating their datacenters on a day-to-day basis. In addition, these VMware customers reported that migrating workloads to vcloud Air has enabled their IT teams by limiting the amount of time they must dedicate to infrastructure upkeep and responding to problems. In addition, they cited the high quality of support they are receiving from VMware for vcloud Air and acknowledged that they would be challenged to bring in or create a business case for maintaining such IT talent in-house. vcloud Air Case Studies Creative Solutions in Healthcare Creative Solutions in Healthcare (Creative Solutions), which is headquartered in Fort Worth, Texas, operates skilled nursing and assisted-living facilities across the state of Texas. The mission of Creative Solutions is to provide the highest possible quality of life for its residents, and it strives to treat them with respect, dignity, and compassion. According to CIO Shawn Wiora, Creative Solutions expects its IT services to help it carry out these core company values. Wiora explained that Creative Solutions first embarked on a migration to cloud several years ago. The organization concluded that it could no longer rely on on-premises and hosted infrastructure to provide the quality and scope of IT services its business required in a cost-effective manner. In particular, strong growth to Creative Solutions' business, which brought about expansion to new geographic areas, meant that the company had to be able to scale its IT infrastructure more easily to meet evolving demands from its business. Like most organizations, Creative Solutions found that its first step away from physical infrastructure was through the virtualization of certain workloads and applications with VMware virtualization software. Pleased with how this went, Creative Solutions then decided to take the next step to begin running certain workloads in the public cloud. It initially chose another cloud services provider but moved those workloads to vcloud Air after concluding that it was not getting the support it required. According to Wiora, the company is pursuing a "structured approach" in terms of lifting up applications to vcloud Air by prioritizing migration of core applications that drive its business, as well as many new workloads. Wiora said that running business applications on vcloud Air has changed the economics for his team of providing IT services for the company. He explained that like many small and midsize organizations, Creative Solutions finds it challenging to attract and maintain IT talent. As a result, the company has benefited greatly from the expertise and support it obtains from VMware, he said. This support enables Creative Solutions to not only provide better services but also reduce the total cost of ownership (TCO) for providing these services. Wiora said that he views this as a 2015 IDC #

7 competitive advantage for the company: "We understand what it takes to attract and retain the top technology employees... so we're really benefiting from having the best human capital available." In addition, Wiora reported that vcloud Air has helped make Creative Solutions' IT services more scalable and agile. These qualities mean that IT can better support the business. He provided several examples: Creative Solutions can now deploy services and applications in much less time and more efficiently. Wiora said that applications that used to take months to reach users now take only an average of one week. For example, he cited the fast development and deployment of a business-enabling data analytics dashboard deployed on vcloud Air that provides business metrics to management and users on a daily basis. "This dashboard created one of the first wow factors with vcloud Air," he said. "It's a strong analytical tool for us, and we use it for all kinds of daily activities that involve patient information." Creative Solutions has improved the performance of critical applications with vcloud Air. Wiora described how latency for kiosks used by hundreds of caretakers numerous times per day at its facilities has decreased with vcloud Air. He described this as a substantial business benefit from a productivity standpoint, as well as important for employee morale: "Beyond improving the productivity of hundreds of employees, you have the employee morale issue. Not making people wait as they use these kiosks is important if you care about how the employee feels about their job." Creative Solutions also benefits from the visibility vcloud Air provides in terms of infrastructure changes, which has supported its HIPAA compliance efforts. Wiora said that this has been particularly advantageous in helping the company maintain a proactive stance in terms of regulations despite migrating applications to the cloud: "We're taking a leadership perspective in terms of HIPAA high-tech compliance with vcloud Air, which as a solution has been very helpful for us because of what they do from an infrastructure, process, and communications perspective so that we've been able to further our position in terms of compliance." VIF International Education VIF International Education is a family-owned company based in North Carolina that began operations in 1987 by recruiting international professors and teachers to U.S. universities and schools. More recently, as the company grew and sought new business opportunities, it developed an online Learning Center for U.S. teachers for professional development courses and materials. By mid-2015, its Learning Center platform was being used by more than 13,000 teachers to achieve what VIF International Education terms "global-ready professional development." According to Mark Otter, COO, and Mark Haney, Senior Systems Engineer, the organization was struggling to support this growth to the Learning Center platform before moving to the cloud with vcloud Air. VIF International Education, which was using virtual servers maintained on-premises to support the platform, knew that it had to find a better way to support this key platform because it had neither the reliability nor the scalability the company required. VIF International Education chose to go with vcloud Air as its cloud solution based on its experience with VMware in server virtualization. Otter and Haney described an immediate and positive impact on reliability and performance upon moving the Learning Center platform to vcloud Air. They said that uptime increased immediately as a result of putting less stress on the compute supporting the platform. Improved reliability and greater confidence in the underlying infrastructure for the 2015 IDC #

8 Learning Center platform have given VIF International Education confidence that it can place more users on the platform as it grows without having to worry about overburdening it. According to Otter and Haney, improved reliability of the Learning Center platform is the most obvious benefit of migrating it to vcloud Air. They described expending substantial time and effort before migrating the platform to vcloud Air in trying to ensure its availability but still having to take it offline frequently to make needed repairs and changes. Haney contrasted this environment of constant fixes and outages with solid and consistent performance with the vcloud Air platform: "We've had less than 20 minutes of downtime for the Learning Center with vcloud Air in a year and a half, whereas we were having to reboot the virtual machine running it once a week or more before." VIF International Education is also leveraging vcloud Air to better support its operations and business in several other ways: Teachers using the Learning Center platform have provided positive feedback about its improved uptime and performance, which is improving their experience with VIF International Education and improving customer satisfaction. Updates to the Learning Center can now be completed in less than one hour on average compared with four hours because the complexity of provisioning and ensuring infrastructure resources to run updates has been substantially reduced with vcloud Air. VIF International Education now has the scalability it needs to support its growing user base. Otter described this as very beneficial to the organization: "Growth for us sitting on the cloud is basically unlimited, and we know that we're not going to hit a hardware ceiling. We're really limited only by systems design because we can put as many resources as we want to on vcloud Air and not worry about points of failure, support, all those kinds of things, so this makes life a lot easier for us. vcloud Air exceeded my expectations in these regards." National Physician Services National Physician Services supports thousands of physicians across the United States with enterprise technology solutions. According to CEO Bryan Graven, the organization is physician driven and provides services that include infrastructure as a service, clinical and business application support, technical support, and CIO advisory, help desk, and cloud services. He explained that, especially in the healthcare industry with changing and complex regulatory requirements and rapid technological advancements, the organization provides needed support to physicians, hospitals, and other healthcare organizations in their efforts to align technology with providing patient services and care. Graven explained that National Physician Services initially decided to use IaaS with vcloud Air in He said that at that time, the organization viewed vcloud Air as a cost-effective means of provisioning data recovery and backup services. Beyond cost advantages, he also cited the benefit to the organization of working alongside VMware engineers in the context of VMware's HIPAA-specific services. Graven said that National Physician Services soon moved beyond using vcloud Air for disaster recovery workloads and began deploying new applications and moving existing applications to the VMware cloud. He said that National Physician Services is achieving value with vcloud Air in areas that it expected, such as capex and opex efficiencies, scalability, and greater compute power, but that it is also benefiting from being able to layer its own support services on top of the vcloud Air offering. According to Graven, the combination of scalability and customization with vcloud Air has enabled National Physician Services to provide timely, cost-effective, and individualized services for its customers. Because of positive outcomes, National Physician Services now has a general policy of 2015 IDC #

9 putting new applications in the cloud with vcloud Air and is gradually migrating its existing application base to the cloud. Graven described several ways that the organization is better serving its constituents and achieving efficiencies with vcloud Air: National Physician Services can provide new applications and services in less time, thanks to increased agility and compressed development life cycles. This is particularly beneficial in the healthcare industry where technology is advancing so rapidly. Graven estimated that the application development life cycle for the organization has gone from an average total of roughly 3-6 months with on-premises infrastructure to 2-3 months with vcloud Air. This means that physicians and their patients benefit from having new applications and services much sooner. National Physician Services' compliance efforts are more robust because the organization obtains support from VMware's HIPAA compliance department and healthcare vertical team. This reduces the overall risk associated with providing services for physicians and healthcare organizations and means that Graven's team can spend more time focusing on developing services for constituents. vcloud Air has served as a highly reliable infrastructure for the business applications and disaster recovery workloads running on it. According to Graven, National Physician Services is benefiting from improved application reliability, having more confidence in the infrastructure supporting key workloads and knowledge that it will be able to restore application and service availability sooner if problems do occur. THE FUTURE OF IT: DIVERSIFIED HYBRID CLOUD ENVIRONMENTS IDC expects continued growth in overall cloud adoption, which will complicate enterprise IT management as multiple deployment models will remain in place for most business organizations. While some organizations will go all-in on public cloud (particularly small businesses and born-in-the-cloud SaaS providers and consumer-focused companies such as Netflix), enterprises with pre-cloud business models will rationalize and automate their internal IT estates via using private cloud and leverage public cloud IaaS for certain internal applications and workloads and for customer-facing operations. Hybrid cloud IaaS may be the endgame for some organizations, while others may shift more and more of their IT to public clouds as legacy applications and datacenter systems reach the end of their life cycles and as agile application development approaches take hold within the enterprise. In any case, hybrid cloud offers a way to satisfy the resource requirements of LOB managers, application developers, and IT operations personnel, with on-demand access, self-service rapid provisioning, and scalability combined with the need to maintain a secure, reliable, policy-driven IT infrastructure IDC #

10 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA USA idc-insights-community.com Copyright Notice External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2015 IDC. Reproduction without written permission is completely forbidden.