Cloud Computing Overview. The Business and Technology Impact. October 2013

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1 Cloud Computing Overview The Business and Technology Impact October 2013

2 Cloud Computing offers new types of IT services and models On-demand self-service Rapid elasticity Pay per use Increase Agility Reduce capital spending Focus on Core Competency Service Type Business-as-a-Service Software-as-a-Service Platform-as-a-Service Infrastructure-as-a-Service Service Source Vendor cloud (External) Virtual Private Cloud Location independent resource pooling Ubiquitous network access Private cloud (Internal) Business Model Cloud Service Subscriber Cloud Service Provider 1 Cloud computing workshop

3 Cloud Computing is transforming and disrupting the Information Technology industry Cloud computing gives users on-demand access to large scale, elastic, shared computing capabilities Cloud Computing is a disruptive technology comparable to client/server architectures 25 years ago Cloud computing allows businesses to deploy new competitive weapon in the marketplace IT product suppliers business models are disrupted as customers move to cloud subscription services 2 Cloud computing workshop

4 Cloud Computing patterns of industry disruption Address users unmet needs Disruption of IT industry Disruption of other industries New delivery models 3 Cloud computing workshop

5 Cloud Computing service types and key vendor positioning Software-as-a-Service (SaaS) Platform-as-a-Service (PaaS) Infrastructure-as-a-Service (IaaS) Applications delivered as s subscription service, for both consumers and business Platforms and tools for development, testing, deployment, delivered as a subscription service Virtualized infrastructure (Database, CPUs, network, storage) delivered as services NetSuite Workday Salesforce Box, DropBox Taleo, RightNow Google Microsoft Azure Force.com AT&T EngineYard Amazon Web Services Eucalyptus GoGrid Verizon Rackspace 4 Cloud computing workshop

6 Cloud Computing subscription service types Software-as-a-Service (SaaS) Customers run finished applications from the cloud service provider on a subscription basis Platform-as-a-Service (PaaS) Customers load and run software on cloud platforms through a subscription service Infrastructure-as-a- Service (IaaS) Customers provision servers, storage, and database services on cloud infrastructure 5 Cloud computing workshop

7 Cloud Computing primary business models Vendor cloud Private cloud Cloud computing services provided by vendors. May be multi- tenant or dedicated to a single enterprise Cloud computing services owned and operated on-site by a single enterprise. Hybrid cloud Community cloud A mixed environment combining vendor clouds and private clouds. A public or private cloud shared by an industry group, government agency, or other association. 6 Cloud computing workshop

8 But What Exactly is Cloud Computing, and Why is it Different? Cloud is on-demand scalable and elastic pay-as-youuse Cloud is not simply virtualization just applying SOA principles traditional hosting Provides almost immediate access to IT applications and services, platforms, or a pool of hardware resources that can be allocated and provisioned on-demand Provides the ability to dynamically provision and de-provision, and automatically scale capacity up or down Vendor-provided cloud services are not licenses products or purchasable assets. Services are billed by user, quantity of resources consumed, or similar consumption-based metric. Cloud provides pooling of resources across massive infrastructure. Some services advertised as cloud are just virtualization designed to support the traditional enterprise IT stack Service Oriented Architecture (SOA) is a set of design principles; cloud capabilities are most powerful when their software and services are designed from the beginning using SOA Unlike traditional hosting cloud services do not dedicate hardware to a single customer; the advantages of agility, scalability, and cost are possible only through resource pooling Cloud computing offers increased agility, faster time to market, lower capital costs, and the ability to easily scale up / down and reallocate resources 7 Cloud computing workshop

9 The evolution from traditional systems to multi-tenant cloud Cloud computing use a highly virtualized shared computing environment Stages of Computing Architectures 4 Multi-Tennant Cloud Computing Cust A App Cust A App Cust A App Cust A App Cust B App Cust B App Cust B App Cust B App Cust C App Cust C App Cust C App Cust C App 3 Large Scale Hypervisors 2 Virtualized O/S App App App App App App OS OS OS OS OS OS Virtualization Virtualization App App App App App App OS OS OS OS OS OS Virtualization Virtualization App App App App App App OS OS OS OS OS OS Virtualization Virtualization Hardware Hardware Hardware Hardware Hardware Hardware 1 Traditional Architectures App OS Hardware App OS Hardware App OS Hardware App OS Hardware App OS Hardware App OS Hardware Function A Function B Function C Cloud computing brings higher capacity utilization, scalability, and flexibility at each stage of increased virtualization and multi-tenancy 8 Cloud computing workshop

10 Possible usage models for enterprise cloud computing Enterprise Data Center External Clouds SaaS Cloud Other Clients Data Centre Core Systems Vendor Data Center Private Cloud IaaS Cloud Other Clients Data Centre Vendor Data Centre Hybrid Cloud PaaS Cloud Other Clients Data Centre Vendor Data Center Private Cloud Other Clients Enterprise Users Vendor Data Center 9 Cloud computing workshop

11 This could be any Cloud anywhere in the world 10 Cloud computing workshop

12 Enterprises key operational and governance issues Data Controls Security and Privacy Audit and Assurance Tax and Legal Disaster Recovery Vendor Lock-In IT Operations IT Readiness Who owns the data? How is it be used? Are controls in place? How is security achieved? What is the level of privacy protection? Are there risk management controls to applications and data? Can you meet needs for legal compliance and tax issues? Are backup, retention, and disaster recovery practices sufficient? Is the vendor limiting interoperability or access to your data? What IT services and applications are best suited for the cloud? Are internal IT architecture and organization structures ready? Alignment with Enterprise Risk and Governance strategy will help organizations address the operational hurdles to cloud adoption 11 Cloud computing workshop

13 The market for enterprise cloud computing is growing Gartner 58.6 billion worldwide market for public cloud services (2009) By 2014, $148.8 billion Five-year forecast annual growth rate: 20.5% Five-year enterprise spend: $112 billion Largest global market: North America (60%) Deloitte Major impact on enterprise strategy for IT architecture Sourcing Service delivery Driven by need for flexibility Services to consumers Services to enterprises Cloud Computing services align to enterprise needs and risk tolerance Technology companies are investing heavily to establish market share As used in this document, Deloitte means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. 12 Cloud computing workshop

14 Cloud Market Snapshot Enterprises moving to Cloud Cloud computing continues to grow faster than other IT sectors: Global cloud spending is forecast to grow 22% annually to US$241 billion by 2020* More and more organizations evaluate cloud options first before making any new IT investments Organizations are embracing cloud to reduce the complexity and costs of traditional IT Organizations are not only relying on cloud to enhance internal efficiencies, but also to target more strategic business capabilities The full business potential of cloud computing has yet to be realized or even understood by most enterprise organizations * 13 Cloud computing workshop *Source: IBM Institute for Business Value: The power of cloud Driving business model innovation, 2012

15 Enterprise Plans for : Cloud Adoption Forecasts Organization s level of Cloud Adoption 21% Piloting 38% +33% 28% Adopting 21% 13% +215% 41% Substantially implemented Today Three years Objectives for Adopting Cloud Flexible pricing models 26% 17% Rebalanced mix of products and services Competitive differentiation through specialization New/enhanced revenue streams New delivery channels/markets Competitive/cost advantages through vertical integration 31% 29% 25% 30% 28% 15% 22% 29% 26% 29% Increased collaboration with external partners 35% 27% 14 Cloud computing workshop Source: IBM Institute for Business Value: The power of cloud Driving business model innovation, 2012

16 The Most Important Things to Know about Cloud today: Enterprises now consider cloud services to be mainstream and normal Cloud computing is a means to business advantage through capabilities, not through capacity or horizontal infrastructure services Cloud thinking has become embedded in business and technology strategy, and is changing assumptions on how services are delivered Industry sectors vary widely in their cloud adoption: very fast in technology, moderately in Financial Services, rapidly in Health Care Planners have a reduced ability to predict the future based on the past Cloud computing workshop

17 What is Happening Now: Enterprise Cloud Adoption Patterns Value of Adoption Current Adoption Boundary Supply Chain Management Enterprise ERP Mobile Apps Systems of Record Analytics Custom Applications Human Resources Data Storage Finance/ Accounting CRM Systems of Engagement Web Services Collaboration Development and Testing Level of Adoption 16 Cloud computing workshop

18 Current Thinking for Considering Enterprise Cloud Strategy Promote business advantage to drive cloud adoption: cloud computing is a potential strategic tool for business advantage, agility, and customer relationships Monitor IT supplier business models which are at risk: Anticipate potential future disruptions to both current vendors and new services suppliers Understand external ecosystems: Cloud computing will involve a changing set of core vendors, with an evolving ecosystem Recognize the wide-ranging internal changes required: current IT architectures, business processes, and personnel strategies will need to change Set principles and stay flexible: The market is young and fluid: establish general principles, set planning options for the near term, and stay flexible 17 Cloud computing workshop

19 Deloitte Point of View: Cloud Computing is transforming IT Cloud computing is changing the IT economic model for Enterprises: Restructuring economics of innovation: Cloud accelerates IT innovation, reducing research and product development cycles Restructuring the economics of growth: Cloud computing provides much more flexible and rapid scaling capability, enabling growth Restructuring customer relationship economics: Companies can form deeper relationships with customers at much lower costs by leveraging cloud technologies Examples: Facebook marketing, Twitter, Google, Dropbox, Salesforce, Workday, mobile apps, micro-apps, etc. Cloud Computing is a disruptive technology allowing businesses to rapidly and efficiently deploy new products and services in the marketplace 18 Cloud computing workshop

20 Interested in learning more about Deloitte? Join us for our events on campus and find out why Deloitte Consulting is the right place to start your career! We are recruiting for full-time Business Technology Analysts this fall Event Location When Cal Poly Rec Center Building 53 Room 217 October 10 th, 9:30am-1:30pm Deloitte Info Session Building 192 Room 120 October 10 th, 6:00-8:00pm 19 Cloud computing workshop

21 How do I apply? Resume drop deadline is Thursday 10/17 at 11:50 PM for the Business Technology Analyst position Submit your resume, cover letter and transcript to both Cal Poly s Recruitment Site and the Deloitte website at (under the Students section) You may only apply to one of our analyst programs, and you must submit your application in both places to be considered If you have any questions, please feel free to contact BTA Recruiter (lroughsedge@deloitte.com) with questions pertaining to the Business Technology Analyst position 20 Cloud computing workshop

22 This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright 2012 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited 21 Cloud computing workshop

23 Contact Information Chris Weitz Spencer Chin Cloud computing workshop

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