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Cloud vs On-Premise Software: And the Winner is…
• Moderator, Micah Myers, Information Technology Director, City of St. Cloud, MN
• Speakers:• Greg Jonsen, SaaS Leader, State of Minnesota• David Dukes, Asst. Finance Director, Williamson County, TX• Wayne Hayden‐Moreland, Director Data Center, State of South
DakotaMay 21, 2014
State of Minnesota Cloud Experiences
Greg JonsenSoftware as a Service Leader5/21/14
Agendao Quick Bioo Overview State of Minnesota ITo What is “SaaS”?o What is “The Cloud”?o SMN Enterprise Cloud Portfolioo Benefits of the Cloudo Myth of On Prem versus Cloud Securityo Where is this all going?
Quick Bio on Greg Jonsen
o 7 Years at Dish Network (formerly Echosphere Corporation) in a variety of roles (mostly IT)
o 17 Years at HealthPartners in a variety of IT roles including CISO, with deep dives into HIPAA, Sarbanes Oxley, COBIT, SAS70, etc.
o Currently the Software as a Service Leader at the State of Minnesota – MN.IT Services
Overview of State of Minnesota
o Have embarked on Consolidationo About 2,000 IT Workerso Consolidation involves Exec Branch Onlyo About 2 years into Consolidationo Hybrid Model, Slow Processo Approx 5,000 servers “on‐prem”, In cloud?
o 76 different Agencies, Boards, and commissions
What is “SaaS”?o SaaS = Software as a Serviceo Not IaaS (Infrastructure as a Service)o Not PaaS (Platform as a Service)o Generally (but not always) it is “end user” software provided at an enterprise level and/or in a multi‐tenant delivery model
o In bigger IT shops, it could be delivered “on‐prem”, but generally, it is cloud based
o Multi‐tenant is becoming more and more prevalent, partly because it lowers the operational costs (economies of scale)
What is “The Cloud”?o Private and Public Cloudso Public Clouds are generally delivered by private sector companies, serving a wide variety of customers or tenants
o Private Clouds are generally limited to one company or entity
o Private Clouds can be delivered either on‐prem or in a “hosted solution”
o Clouds are just combinations of hardware and software, providing IaaS, PaaS, SaaS, XaaS…
SMN Enterprise Cloud Portfolioo Cisco ScanSafe (Web Filtering)o Microsoft Office 365 Dedicated (E‐mail, SharePoint, Instant Messaging, looking at ITAR)
o Microsoft FOPE/EOP (e‐mail virus protection)o AirWatch (Mobile Device Management)o AWS (Amazon Web Services, SaaS)
Benefits of “The Cloud”o Less Expensive (Economies of Scale, Economies of Scale, Economies of Scale)
o No capital outlay for upgrades, less “bumpy” expenditures
o More Secure (not universally accepted … yet)o Less painful upgradeso Faster access to new featureso Faster to “stand up”
Myth of On-prem vs Cloud Securityo Just because you own your own data center does not mean it is more secure. In fact, generally it is not
o For instance, SMN has a very secure data center, but the Microsoft Data Centers for O365 are much more physically secure
o My experience with cloud providers is that their policies and procedures are, in general, more mature than what I’ve seen in IT shops that I know about, or have worked at
o Just because I know where my data center is, and I know who my employees are, doesn’t mean I think we can do a better job fighting the bad guys or preventing accidental or insider breaches
Where is this all going?o Kids do everything in the cloud (they are your future employees)
o Some IT Functions (E‐mail for example) are already disappearing from on‐prem (Microsoft has announced that SharePoint will only be available in the cloud in the future)
o All “commoditized” functions will disappear from on‐prem in the next 5‐10 years (ERP? CRM? Collaboration?)
o Non‐commoditized functions will be candidates for IaaS and PaaS
o Lots of new functions will never have on‐prem equivalents, only delivered in the cloud (things like Google Apps, Yammer, YouTube, etc.)
THANKS!
GO CLOUD!
Case Study:Williamson County, Texas
David M. DukesAssistant Financial DirectorWilliamson County, Texas
Cloud vs On‐Premise
Williamson County, Texas
Tremendous Growth
Development of Economic BaseHigh Tech IndustryManufacturing CompaniesHealthcare IndustryHigher Education
Evolution of County GovernmentNeed for meaningful data to empower County government planning and decisionsInternal reporting needs to provide Business Intelligence and Internal TransparencyData Growing by 50% annuallyIncreased demand from taxpayers for external reporting
24/7 instant reportingBanking, investing, credit rating incentivesImproved accountability at all levels
County Government in need of Respect
Cities and states develop a brand name and market themselvesCounties serve as a foundation to grow other programsAccurate and timely internal and external reporting will improve respect
Our 2012‐2014 Goals
GoalsUpgrade older Oracle ERP version to current releaseImprove Timeliness of ReportingProvide Information through TechnologyImprove County‐wide CommunicationProvide Understanding of County Operations to all Audiences‐ Executives to Constituents for better collaboration and unification of goalsLeverage Mobile and Cloud Technologies
ObstaclesGrowing population demands information and technical advancementsInfrastructure of supporting data growth“Old Guard” was resistant to changeIdea that if people don’t know how much money they have, they won’t spend itCounty was transforming from rural to urbanCounty business very fragmentedBuild vs Buy and try to Configure a Reporting Solution for Government.
Leveraging Innovative Technologies
Cloud Is it secure? What is the cost? Will it work with an on‐premise ERP Are there set‐up / hardware costs? What about on‐going costs? What is the Benefit vs. On‐Premise?
Cloud Considerations Low Up‐Front Costs Quicker implementation Provider Hosts and Maintains
Upgrades / Updates Made Simple Minimal Disruption and Increased Value IT can focus on innovation rather than
Maintenance Pay as You Go‐Predictable Subscription
Costs Mobile
On‐Premise Considerations
• Internal IT team to maintain• Greater control and flexibility for accessing the application database
• Extensive hardware needed• More control about when and if to upgrade• Own the ERP Software
Our Specific Issues (ERP):Current ERP system was recently upgradedRecent purchase of new virtual serversWanted to Maintain ERP customizationWanted to Maintain control of databasesIT personnel and hardware already in placeAlready owned the ERP software
Our Decision:
• Hybrid Approach• On‐Premise ERP• Cloud‐Based Business Intelligence
and Reporting with the Performance Center Suite of Services
Public / Private Partnership
Williamson County and Mo’mix Solutions joined forces in a collaboration to deploy a Cloud based SaaS Solution that will serve others.Long‐time technology partner
Helped Wilco to implement OracleSupported Wilco’s Vision of Internal and External TransparencyCollaborated on a Solution by and for Government.
Improving Government Performance and Transparency
Performance Center SuiteCloud‐based Business IntelligenceCloud‐based TransparencyCloud‐based Budget Reporting and AnalyticsSelf‐Service Reporting & Analysis as well as Pre‐built reporting
Step 1: Performance Center Business IntelligenceDashboardsSelf Service AnalysisAd Hoc ReportingStandard Reports
Step 2: MyGovCenter External Transparency PlatformAdheres to State RequirementsSupports Content PublishingDynamic and Drillable Dashboards to TransactionsEncourages Citizen Engagement‐One Site for all information.
Software as a Service (SaaS):This Software as a Service solution has allowed us to upgrade our reporting and analytical products while decreasing costs for the County. This hybrid approach enables us to provide quality, low‐cost,
state‐of‐the art products to our employees, taxpayers and citizens.
Improving Government Performance and Transparency
ResultsReduced reporting costs by 75%Eliminated the need for double‐entry and shadow systemsProvides Detailed and Accurate Data for Publication and Transparency.Provides Pre‐Built Government Intelligence for all Audiences.
Meaningful External TransparencyMyGovCenter: • Problem: Data Dumps are hard to understand• Problem: Searching pdf files is cumbersome and inefficient• Problem: Typically, transparency is not funded• Solution: Williamson County continued its award winning
collaboration with Mo’mix Solutions to develop a Transparency Software as a Service application.
• Solution: Performance Center data storage allows for easier publication of dynamic data sets.
• Solution: Design of system will be geared to government reporting requirements as a minimum requirement.
We’re very proud that our Public / Private Partnership with Mo’mixSolutions to build a Cloud Based Business Intelligence tool for enhanced Reporting, Analytics and Transparency has been awarded the Louisville Award for Innovation in Government Finance as part of the GFOA’s 2014 Award for Excellence in Government Finance program. Thank you for allowing me to share our story with you.
Tech Projects Require Technologists • You have three here today
Support our Clients• Good investments in technology
Location is a part of the investment • Perspectives on hosting location…
Tech Projects Need Techs
• However, off‐premises is not off limits• Sometimes there’s no alternative• And sometimes it’s the best option
• Our decision processes consistently demonstrate the value of on‐premises hosting for our state
• However, off‐premises is not off limits• Sometimes there’s no alternative• And sometimes it’s the best option
• Our decision processes consistently demonstrate the value of on‐premises hosting for our state
SDBIT is pro on‐premises
Our Preference
Medium sized organization – 370 staff
Deep skills
Stable work force
Common standards
Stable client base
Who We Are
I/T Centralized and Consolidated since 1996
Legislative
Executive
Judicial
Elected Offices / Boards / Commissions
K‐12 / Higher Education
Standards• Provide buying leverage• Reduce staffing needs• Support deeper skill development
Lease vs Buy• Strategic leasing for core systems
• Purchase where it makes $ or licensing sense
Aggressive Negotiation • Price • Terms
Funding Technology(How we compete on cost)
• The system will store and exchange confidential / sensitive information
• The data is valuable and a target for criminals and hostile governments
• The system will be an important part of the process of doing business
• The costs of a security breach are large
• The business functions being supported are the same regardless of hosting location
• The system will store and exchange confidential / sensitive information
• The data is valuable and a target for criminals and hostile governments
• The system will be an important part of the process of doing business
• The costs of a security breach are large
• The business functions being supported are the same regardless of hosting location
Assumptions our processes and standards make:
Assumptions
• Business case• Financial • Technical (business and technical)• Legal (licensing experience) • Depending on size and risk: add a professional project manager
• Business case• Financial • Technical (business and technical)• Legal (licensing experience) • Depending on size and risk: add a professional project manager
Assessment Team
Team‐work Required
Hosting Decision
Who When How
Our Decision Model
Hosting Decision
Who
On‐PremisesProject team
decides
Off‐PremisesSenior Mgmt.
decides
Our Decision Model
Hosting Decision
When
After establishingRequirements
Integration needs
After researching Options available and
costs
After determining risk (Legal; Licensing; $$$;
Security. . .)
Our Decision Model
Hosting Decision
How
Team reviews each option Pros & Cons using established
processAcceptable terms are negotiated
Service is tested for security level Executive team makes decision
Our Decision Model
Risk
• Security / Services • Legal • Backup / Recovery• Support
• Security / Services • Legal • Backup / Recovery• Support
Cost
• Hardware Licensing• Software Licensing• Interdependencies • Standards
• Hardware Licensing• Software Licensing• Interdependencies • Standards
On‐Premises Focus is Driven by the Need to Control
On‐Premises Goals
• Pricing model • Shared infrastructure uses all resources to capacity • Leveraged pricing and terms benefits everyone• Leasing maintains modern systems at consistent cost
• Pricing model • Shared infrastructure uses all resources to capacity • Leveraged pricing and terms benefits everyone• Leasing maintains modern systems at consistent cost
Over 5‐20+ Year Timeframes costs are competitive
• Organizational knowledge• System history • Regulatory knowledge
• Organizational knowledge• System history • Regulatory knowledge
Staff Develop Deep skills shared across the state
• Defined and well understood• Support staff for all sides of the interdependencies work together • Defined and well understood• Support staff for all sides of the interdependencies work together
Interdependencies are centrally managed
• All systems benefit from the same audit processes • All systems benefit from the same security investment• All systems benefit from the same audit processes • All systems benefit from the same security investment
Security focus built in at all levels and integrated
Centralization and Standards Control Cost
• Bank of 280 vendor questions• Meetings with Tech + Management to review• Company• Tools • Infrastructure • Processes • Licensing
• Security scans required
• Bank of 280 vendor questions• Meetings with Tech + Management to review• Company• Tools • Infrastructure • Processes • Licensing
• Security scans required
Standard Discovery Process Identifies Risk
Centralization and Standards ControlRisk
• All contract and licensing terms reviewed for risk by:• Legal staff • Technologists experienced in working with lawyers regarding technology issues
• Interviews with other clients • Final approval includes BIT management team
•All contract and licensing terms reviewed for risk by:• Legal staff • Technologists experienced in working with lawyers regarding technology issues
• Interviews with other clients • Final approval includes BIT management team
Standard Discovery Process (cont.)
Centralization and Standards ControlRisk
Focusing standardized processes
on cost and risk
• Maximizes value add • Makes on‐premises the best choice in most cases
• Maximizes value add • Makes on‐premises the best choice in most cases
In all cases standardized processes (regardless of
hosting location)
• Reduce long‐term costs • Reduce risk/weed out problem vendors
• Reduce long‐term costs • Reduce risk/weed out problem vendors
What we Consistently Find
Thank You & Questions