Cloud Computing, Business Models, Geilo April 2009

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Forretningsmodeller for skyen - Hva og Hvordan?Geilo, April 20-21 2009

Making cloud computing work … for provider and consumer

Objectives for the session

• Provide a context for discussing approaches to “cloud computing” in the marketplace

• Highlight a few Norwegian businesses offering some form of “cloud computing”

• Discuss implications for business value and for IT capabilities

2Copyright © 2009 Accenture All Rights Reserved.

Agenda

• Market context for “clouds”• Business models for Norwegian cloud businesses• Opportunities and challenges for succeeding with cloud• Questions & Comments


About me

• Business technology planner working with architecture and service modelling– Enterprise Architecture (the enterprise’s architecture)– Service Management

• Board member Norwegian Computer Society (Østlandsdistrikt)– Architecture communities – Information, SOA and Buiness– Business Intelligence community


“What on earth is Cloud Computing?”*


“What on earth is Cloud Computing?”*


ProcessesSoftware

Software platform

Infrastructure

A computing-based capability that is offered to a consumer in the form of services

The cloud capability serves enterprise users as well as consumers


ProcessesSoftware

Software platform

Infrastructure

Enterprise Web vs Consumer Web

1. Scale (Users vs Applications)2. Experience (Simplicity vs Functionality)3. Security (One for One vs One to Many)4. Transaction (Decoupled vs Complete)5. Integration (Loose vs Strict) 6. Search (Page vs Data)

7. Enterprises will pay, Consumers expect it free


http://www.bitsandbuzz.com/article/enterprise-web-vs-consumer-web-20-top-six-differences/

What then is a service?

Restaurant Chef home Take-away

A service is a task performed (by a provider) to produce a desired result (for a customer). Customer compensates provider based on degree of accountability.


Cloud Computing Survey: IT Leaders See Big Promise, Have Big Security Questions


http://www.cio.com/article/455832/Cloud_Computing_Survey_IT_Leaders_See_Big_Promise_Have_Big_Security_Questions

Scalability on demand/flexibility to the business 50%

Reduced hardware infrastructure costs 38%

Reduced IT staffing/administration costs 35%

Access to skills/capabilities we have no interest in developing in-house 28%

Not using or planning to use cloud computing offerings 19%

Capacity - data center 16%

Capacity - storage 11%

Frequent software updates 10%

Other 5%

Primary Reasons You're Using or Plan to UseCloud

Security 45%

Integration with existing systems 26%

Loss of control over data 26%

Availability concerns 25%

Performance issues 24%

IT governance issues 19%

Regulatory/compliance concerns 19%

Dissatisfaction with vendor offerings/pricing 12%

Ability to bring systems back in-house 11%

Lack of customization opportunities 11%

Measuring ROI 11%

Not sure 7%

Other 6%

Greatest Concerns Surrounding Cloud Adoptionat Your Company

*Respondents selected up to three criteria.SOURCE: CIO Research

confirmIT (www.confirmIT.com)

• Founded in Norway in 1996 as Future Information Research Management (FIRM) – Offices: Oslo, San Francisco, New York..– Provides Feedback management solutions on demand to some of the

largest global companies– Solution confirmIT is built on the Microsoft platform

• Offers web-based tools for authoring surveys, designing panels and analysis

• Commercial model– confirmIT is a SaaS-business (Rackspace provide the infrastructure)– Customers are enterprises and market research businesses– Market reach is through a partner and reseller model– Subscription-based tools for reporting, authoring and managing surveys

• Consumption-based fees (only completed surveys are charged)


Fronter (www.fronter.com)

• Founded in Norway in 1998 as Fronter– Provides a platform for virtual learning that serves over 6 million users– Flagship product is called Fronter and built on a Java platform

• Includes a number of tools including tools from 3rd parties for content creation, collaboration, plagiarism control, multimedia etc

– Acquired by Pearson Group in 2009

• Commercial model– Fronter is a SaaS-business targeting educators (University of Oslo

provides the data center)– Customers are primarily educational institutes (schools to universities)– Subscription-based fee with different service options – Market reach through a partner and reseller model


Mamut (www.mamut.com)

• Founded in Norway in 1994 as Mamut– Provides a PC-based solution for small and medium sized businesses (ca

400.000 businesses in Europe)– Flagship product is called Mamut One and built on a Microsoft platform

• Commercial model– Mamut is a Software + Services business– Customers are small and medium sized businesess– License fee (software) and subscription fee (service) with different service

options – Market reach through a partner and reseller model


Statens senter for økonomistyring(www.sfso.no)

• Established in 2004 as an agency within the Ministry of Finance– Provides accounting, payroll and invoice management services to all

government entities– Uses SAP for HR-service, Agresso for Accounting and Contempus for

invoice management

• Commercial model– SSØ operates as a not-for-profit senter– Customers are government entities– An annual fee for services rendered.



If ”cloud computing” is the answer, what was the question?

Consumers and Business Users

CIOs and IT Managers

Technology Industry

IT Service Providers

Past Future

Interviewed for requirements

Activity monitored User generated content & app’s

Spend time managing IT

Integration and compliance

Spend time creating new app’s

Mostly on-shore and on-site

Global delivery and

CMM

Rapid concurrent development

2-3 year product upgrades

Consolidating and SOA-izing On-demand

services

Mainstream

New Model

A new model in the value stack is emerging

A provider perspective (SaaS) – Revenue growth and market reach with a manageable cost base


SaaSOffer

ReducedCosts

IncreasedRevenue

Development

Operations

Time to Market

Offers

• Standardized application platforms and interfaces reduces service creation costs.

• Reusable components reduce effort to build new services.

• Well-architected operations platforms reduce support costs

• Infrastructure optimized to meet SLA requirements

• Dramatically reduced service creation costs allows testing of new services and increases service profitability

• Quicker service creation process gets products to market faster.

• Greater flexibility in integrating, bundling and packaging features and applications to create new services, thereby increasing subscribers

• Extends digital value chain to third party application and content providers.

• Accelerates the ability to operationalize and scale services.

Subscribers

A service delivery framework (solution) provides a mechanism to address technology challenges.


• A service delivery platform– Technology architecture that enables efficient and

rapid creation and support of new services / applications

– Provides self-provisioning services• Service Management

– Control of underlying services, including provisioning and activation, inventory/resource management, etc.

– Incorporates existing Security offering• Application Architecture

– Design and configuration of software to run in a hosted / managed service

• Metering and Billing - Usage– Tracking of licenses and usage

• Infrastructure– Design and layout of physical components to meet

performance / volume requirements• Operations

– Systems and processes to ensure quality of service

Technology Solution

Application Architecture

Infrastructure

Network

Met

erin

g an

d Bi

lling

Ope

ratio

ns

Service Management

Service Delivery Platform

Telephony

Hardware

Software

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Key success factors for SaaSimplementation

Establish a quantifiable business case and qualitative user experienceRapidly course correct leading and lagging metrics (compared to on-premise, SaaS can enable value faster if executed properly)

Avoid the SaaS “trap” of designing entity-by-entity vs the end-to-end business processAlign incentives and adapt to the culture (SaaS has a strong fit to the 80/20 rule to drive iteration)

3. Simplify and extend integration

Agree integration roadmap for optimized agile developmentAddress trade-off decisions for integration within business processes in high flux

2. Drive the behavioral

change

1. Maintain a value focus

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Key considerations for a SaaSimplementation

19

1. What are the implications for multi-tenancy around the SaaS application for your organization?

2. How do you exploit the ‘viral’ take-up of SaaS at a user/departmental level and avoid ‘unwinding’ tacticaldeployments?

3. How do you use SaaS to drive greater standardizationand still manage SaaS customization (platform or plug-ins) where necessary?

4. What new governance processes are necessary to manage a SaaS program? Indeed, how do the business and IT organizations need to adapt to the new approaches that SaaS can enable?

5. What implications does SaaS have for master data management?

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References

• Above the Clouds: A Berkeley View of Cloud Computing– http://www.eecs.berkeley.edu/Pubs/TechRpts/2009/EECS-2009-28.pdf

• Corporate websites: Mamut, confirmIT, Fronter, SSØ• Trivergence

– http://www.accenture.com/Global/Accenture_Blogs/Trivergence_Blog/default.htm

• Enterprise Web vs Consumer Web– http://www.bitsandbuzz.com/article/enterprise-web-vs-consumer-web-20-

top-six-differences


Takk for meg!

Francis D’SilvaEnterprise Architecture Planning & Nordic Innovation [email protected]+ 47 908 26 049