How Five Colleges (and a System Office) Arrived at a Decision to Go to Hosting/Cloud Computing

Tim CarrollRoane State Community College

Rick CumbyCleveland State Community College

Dana NailsJackson state Community College

Emily SicienskyColumbia State Community College

Eddie StoneMotlow State Community College

Thomas DanfordTennessee Board of Regents

April 11, 2:15 – 3:00p

AGENDA

Introductions

Overview – Timeline, Including RFI Process

Pros/Cons

Costing

Tangibles/Intangibles

Lessons Learned

Q&A

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Emily Siciensky, Associate Vice President for Information TechnologyColumbia State Community College

Overview – Timeline, Including RFI Process

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Why did we want the “journey” ?

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HOSTI NG

SERVERS

Ban

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High Speed ?

Dis

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RFI/RFP

Disk Space

Backu

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Resources

Lin

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Virtual

Historical Perspective – Timelines and RFI

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Jan 2005 Banner Implementations startRegional /centralized hardware discussions occurConnectivity costs were considered prohibitive

Feb 2009 Discussions on hosting begin again because of hardware retirements

September 2009 Call for an exploratory committee made up of several community colleges and universities;Motlow and University of Memphis share informationon services outline they developed

October 2009 Some potential hosting partners are identified

Timelines and RFI

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October – November 2009

Chancellor Manning calls for presidential level steering committee a working group with membership to include CFO’s and CIO’s from Cleveland, Columbia, Jackson, Motlow, Roane and the TBR; it is decided during this call an RFI is necessary to determine what is possible, and who potential partners could be

The Banner Hosting RFI Group

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Hosting RFI Development Group:Ken Horner, VP for Finance and Administrative Services (COSCC)Emily Siciensky, Associate VP for Information Technology (COSCC)Dana Nails, Director of Information Technology (JSCC)Hilda Tunstill, Vice President for Business Affairs (MSCC)Dr. Eddie Stone, VP for Information Technology (MSCC)Danny Gibbs, VP for Finance and Administrative Services (RSCC)Tim Carroll, Assistant VP for Information Technology (RSCC)Rick Cumby, Director of IT (CLSCC)Assist – Vice Chancellor Sims & CIO Danford 

RFI and Responders

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January 2010

Final draft of hosting RFI is completed

March 2010

Responses are received, 11 vendors responding CedarCrestoneCIBERConnectriaDell/Perot SystemsNorthwest Regional Data Center – Florida StateOIR – State of TennesseeOracleSecure-24SungardSystems AllianceUniversity of Memphis

Eddie Stone, Vice President for Information TechnologyMotlow State Community College

Rick Cumby, Director of Information TechnologyCleveland State Community College

Pros/Cons

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Pros

Access to better standardized computing infrastructure without large capital expenditures and overall lower hardware costs by pooling of resources (15-30%)

Normalization of budget costs for Banner hardware - reoccurring cost vs. large purchase approximately every 5 years

No longer directly responsible for Banner physical hardware procurement nor maintenance contracts

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Pros

A more robust disaster recovery (DR) strategy

Provide high availability of servers with over 99.9% uptime via redundant environmental systems (HVAC and power), virtual technology, two Internet service providers, physical security

Leverage OIR Enterprise services including storage, virtual servers, redundant network, and 7/24/365 support and scheduled maintenance

On site (OIR) 24/7/365 proactive monitoring of servers and network

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Pros

Provide state-of-the-art Storage Area Network (SAN) providing unlimited expandability to the TBR and the State Community Colleges’ growing data storage needs

Host (OIR) provided hardware refresh support to maintain current computing technology and up-to-date hardware

Oracle Real Application Clusters (RAC) configuration allows expansion of capacity and replacement of old hardware with little impact to Banner

Successfully transition from existing near end-of-life, out-dated platform to new virtual server technology

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Pros

Operating System (OS) and Oracle data base (optionally) are patched and maintained by OIR, lessening local staff workload

IT staff utilize freed time from OS/DB patch support for more value added job functions, such as, business & systems analysis or academic computing innovation

In sum, hosting offers benefits

budgetary

disaster recovery / business continuity

high availability

opportunity to repurpose IT staff time

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Cons

• The situation is new and unknown• Staff concerns about exactly how this will work• Initial staff concerns that this may result in

elimination of positions• There will be a learning curve in many areas• Although not directly related to hosting, LINUX

will be new to many• ORACLE RAC software will be new and require a

learning curve

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Cons (continued)

• Necessity to follow OIR maintenance window rather than our own

• Will be dependent on OIR to schedule special request like backups, restores, upgrades, etc.

• More dependence on NetTN• Perceived loss of control of Banner/data• In general, several unknowns about how everything

will actually work together

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Tim Carroll, Assistant Vice President for Information TechnologyRoane State Community College

Costing

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Costing Model

Why?

Establish Baseline

Cost Benefit Analysis

Results

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Why the analysis?

• To answer the following questions:—What was our current operational andadministrative

cost —Would the move from an on site model to a hosted

model be cost effective (affordable)—Would the cost of tangible and intangible benefits

worth the incremental costs (if incurred)

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Establish Baseline Costs - Hardware

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Existing Administrative Hardware Participant Totals1. Administrative Computing Platform(s) A. Production $339,930 B. Development $99,047 C. Test $177,533 D. Other (e.g. Training) $15,000 2. ODS/EDW (Data Warehousing) Computing Platform(s)/Workflow $0 A. Production $100,305 B. Development $0 C. Test $40,021 D. Other (e.g. Training) $0 3. Luminis (Portal) Computing Platform(s) $0 A. Production $65,566 B. Development $20,767 C. Test $9,799 D. Other (e.g. Training) $0 4. Administrative Computing Disk Storage (SAN) $360,999 5. Dedicated Communications & Security Equipment (Firewalls, Switches, Routers, etc.) $131,711 6. Other sunk costs related to administrative purposes (UPS, etc.) $83,991 7. Workflow Server $20,000 8. Eprint server $2,500 9. Backup system and software $55,000 Tape Library Replacement $0

10. Disaster Recovery $100,000

Total $1,622,169

Sun Replacement Cost for all five Community Colleges is$1.49 million

Establish Baseline – Administrative Costs

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Budgeted Recurring Administrative Costs  Participant Totals

1. Total IT Personnel Costs for Administrative Computing  

A. Network and Network Security Support $44,709

B. Solaris/Linux/Hardware Support $79,768

C. Database Administration (DBA) $375,068

D. Banner Application (programmers, analysts, etc.) $448,275

E. ODS/EDW (Data Warehousing) $49,044

F. LuminisWeb (Portal) $104,139

G. Other Applications (TouchNet, Housing, etc.) $257,606

H. Helpline and User Support $130,607

F. Application(s) Training $9,700

F. Administration and Planning $142,178

2. Contractual and Consulting (Strata Info Group, SunGard HE, etc.) $90,000

3. Hardware Maintenance and other Costs $140,540

4. Software - Purchases/licenses, Maintenance (Compilers, TOAD, Linux, etc.) $799,366

5. Professional Development and Training $17,350

Total $2,688,350

Cost Benefit Model

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      Option 2 (Hosting - Linux - Oracle RAC -0 FTE)

Organization's Operational Costs per Option FY FY FY FY  

      2010-11 2011-12 2012-13 2013-14 TOTAL

1. Staffing Costs (Operational Costs) $0 $0 $0 $0 $0

i. Full-time IT Staff (Salaries & Benefits) $0 $0 $0 $0 $0

ii. # of Full-time IT Staff Required 0.00 0.00 0.00 0.00 0.00

iii. Other Full-time Staff (Salaries - for FT staff from depts other than IT) $0 $0 $0 $0 $0

iv. # of Other Full-time Staff Required 0.00 0.00 0.00 0.00 0.00

v. Contract Staff (Costs - PT or contract staff) $0 $0 $0 $0 $0

vi. # of Contractors Required 0.00 0.00 0.00 0.00 0.00

2. Third-party Costs (Operational Costs) $517,460 $517,460 $427,860 $427,860 $1,890,639

i. Vendor/External Consultant Services

    $0 $0 $0 $0 $0

ii. Maintenance & Support Services

    ($160,540) ($160,540) ($160,540) ($160,540) ($642,161)

iii. Hosting Services

    $518,000 $518,000 $518,000 $518,000 $2,072,000

iv. Telecommunications Services

    $0 $0 $0 $0 $0

v. Other   Oracle RAC license (See assumptions) $160,000 $160,000 $70,400 $70,400 $460,800

3. Infrastructure Costs (Operational Costs) ($1,723,011) $0 $0 $0 ($1,723,011)

i. Data Center   $0 $0 $0 $0 $0

ii. Hardware   (1,723,011) $0 $0 $0 ($1,723,011)

iii. Software   $0 $0 $0 $0 $0

iv. Other   Specify $0 $0 $0 $0 $0

4. Miscellaneous Costs (Operational Costs) $0 $0 $0 $0 $0

i. Training     $0 $0 $0 $0 $0

ii. Travel     $0 $0 $0 $0 $0

iii. Supplies   $0 $0 $0 $0 $0

iv. Other   Specify $0 $0 $0 $0 $0

Subtotal of Operational Costs   ($1,205,552) $517,460 $427,860 $427,860 $167,628

Cost Benefit Continued

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Cost/Benefit and Return on Investment Analysis Summary Report for

Option 2 (Hosting - Linux - Oracle RAC -0 FTE)

      1 2 3 4

TOTAL

      FY FY FY FY

      2010-11 2011-12 2012-13 2013-14

Capital Cost (Enter your organization's capital cost) 3.00% 3.00% 3.00% 3.00%

Cost Benefit Analysis

(a) Net savings for implementing this option $1,205,552 ($517,460) ($427,860) ($427,860) ($167,628)

(b)Total Project Cost for this option

  $0 $0 $0 $0 $0

(c) Year to Year Staffing Change 31.30 31.30 31.30 31.30  

               Return on Investment Analysis 

(d) Return on Investment (a) - (b) $1,205,552 ($517,460) ($427,860) ($427,860) ($167,628)

(f) Breakeven Fiscal Year NO PAYBACK This is the year in which the project's investment costs are recovered

(g) Net Present Value (NPV) ($125,325) NPV accounts for the time value of money. It is more appropriate for long projects

Results

• Cost Effective… initially break-even… should drop when others join

• Gains (Tangible and Intangible) added value that could not be duplicated on campus

• Will add two more institutions under current hardware configuration at OIR which will further reduce costs

• Sparked interest from other Community Colleges who may join later

• Will explore more advanced technology as it comes on line to further reduce costs in the future

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Thomas Danford, Chief Information OfficerTennessee Board of Regents

Tangibles/Intangibles

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Tangible & Intangible Benefits

Categories of Tangible Benefits— Physical Plant — Infrastructure— Service Levels (staff multipliers)

Categories of Intangible Benefits— Consternation — Opportunity Lost

Four Types of Value— Latent Value— Market Value— Value Added— Perceived Value

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Tangible Benefits

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Physical Plant • Intruder Secruity (Guards, Locks, Cameras, etc.) (State Audit concern) • HVAC & Environmental Controls (Closed system, Redundant, Excess capacity) • Power (N+1 Redundant, 2 circuits, Independent path, PDU, UPS/Battery) • Diesel Generator (Redundant, 5 days operation w/o refueling) • F-4 Tornado Rated Facility, Not on a floodplain • Fire Detection & Suppression (State Audit concern) • Bandwidth & Connectivity (Multiple providers, Independent path)Infrastructure • Offsite Data Replication (Disaster recovery/Business Continuity) • Network Management (Firewalls, Load balancing) • Server Failover • Enterprise SAN with commodity disk space (fiber vs. SATA) • Enterprise Backups (Disk 2 Disk 2 Tape, 30 day onsite disk recovery, Deduplication) • 4 Year Hardware Refresh • System and Security Monitoring Appliances & Software (HP OpenView, Security)Service Levels (Represents Increases in Staff Capability Presently Unavailable) • Deep bench of Technicians (Networking, Server Admin, DBA) • Network/Servers/Databases monitored 24 X 7 • Patches and upgrades are managed (State Audit concern) • Strict Change Control Policy is enforced (State Audit concern) • Help Desk is available 24 X 7 • Disaster Recovery Plan and Testing (State Audit concern) • Full-time Security Officer & Staff of 30

Intangible Benefits

• Consternation— Superiors — Internal clients— External factors (audit, press, etc.)

• Opportunity Lost

 “Things which matter most must never be at the mercy of things which matter least” – Goethe

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Types of Value

Latent Value – Potential but not presently evident or realized (i.e. obvious or explicit)

Market Value – Estimated (highest) price that a product or service will sell for in a competitive market

Value Added – Bundling or packaging features and benefits that leads to greater customer acceptance in order to create a competitive advantage

Perceived Value – Customer's opinion of a product's value to him or her

“Collaborative hosting narrows the margin in both the market value, and the value being perceived”

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Tangible & Intangible Value Proposition

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Physical Plant Perceived Value • Intruder Secruity (Guards, Locks, Cameras, etc.) (State Audit concern) 10,000 • HVAC & Environmental Controls (Closed system, Redundant, Excess capacity) 25,000 • Power (N+1 Redundant, 2 circuits, Independent path, PDU, UPS/Battery) 20,000 • Diesel Generator (Redundant, 5 days operation w/o refueling) 25,000 • F-4 Tornado Rated Facility, Not on a floodplain 10,000 • Fire Detection & Suppression (State Audit concern) 10,000 • Bandwidth & Connectivity (Multiple providers, Independent path) 10,000Infrastructure • Offsite Data Replication (Disaster recovery/Business Continuity) 10,000 • Network Management (Firewalls, Load balancing) 10,000 • Server Failover 10,000 • Enterprise SAN with commodity disk space (fiber vs. SATA) 10,000 • Enterprise Backups (Disk 2 Disk 2 Tape, 30 day onsite disk recovery, Deduplication) 9,180 • 4 Year Hardware Refresh 1,000 • System and Security Monitoring Appliances & Software (HP OpenView, Security) 10,000Service Levels (Represents Increases in Staff Capability Presently Unavailable) • Deep bench of Technicians (Networking, Server Admin, DBA) 10,000 • Network/Servers/Databases monitored 24 X 7 10,000 • Patches and upgrades are managed (State Audit concern) 5,000 • Strict Change Control Policy is enforced (State Audit concern) 5,000 • Help Desk is available 24 X 7 45,000 • Disaster Recovery Plan and Testing (State Audit concern) 10,000 • Full-time Security Officer & Staff of 30 70,000

TOTAL VALUE ADDED: $325,180

Dana Nails, Director Information TechnologyJackson state Community College

Lessons Learned

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What Worked for Us

Project lead was not an IT person

Project lead was from a campus not TBR Office

Executive committee consisting of Presidents

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Recommendations

Define the full scope of your project in the beginning of the process

Campus technical people and hosted facility technical people should work together early on in the project.

Q&A

We all greatly appreciate you joining us!

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