DCD RR Migrating Core Apps to Cloud

BULLETPROOF YOUR CORE APP MIGRATION TO THE CLOUD:

AN ESSENTIAL READINESS CHECKLIST

Joe Schwartz Chief Revenue Officer

RampRate

KEY POINTS

•  Friction Comes From Confusion •  The Data-driven Business Case •  Cloud Operating Model •  Reference Architecture •  App-centric Approach •  Foundational Questions •  Cloud Readiness Checklist •  Work Breakdown Structure •  Post Migration •  Eliminating Waste

ENTERPRISE CLOUD ADOPTION PROCESS =FRICTION

CONFUSION

Uncertainty surrounding key questions about true •  cost, •  risk, and •  total economic impact …of moving core applications to the cloud

CRITICAL STEPS Assessing and selecting the right: •  cloud migration path, •  transition approach, •  operating model, •  and service provider(s) …for core enterprise apps

THESE ARE THE MOST STRATEGIC DECISIONS THAT IT AND BUSINESS LEADERS UNDERTAKE.

TO GET THERE …

…YOU NEED A ROCK SOLID, DATA-DRIVEN BUSINESS CASE.

YOU NEED: CLOUD READINESS

•  You must articulate business impact of migrating mission-critical apps, legacy systems, and costly infrastructure services to a cloud-based delivery model.

•  Any non-trivial cloud-based transformation initiative must be founded on a clear and quantifiable economic analysis that compels business stakeholders to accept the changes they often perceive as disruptive to business as usual.

CLOUD READINESS: NO-FAIL APPROACH

•  Many practitioners and service providers are ready and anxious to help.

•  But without a definitive framework, you will follow, not lead, fail, not succeed on the battlefield of enterprise IT operations.

•  First, some important building blocks. •  Then, the checklist!

YOUR OPERATING MODEL IS THE FOUNDATION

•  You need to establish a new IT operating model for cloud: plain and simple.

•  If you have not, you will find yourself lost in a sea of organizational and operational discontinuity.

•  This is cloud readiness 101.

IT OPERATING MODEL: ESSENTIAL ELEMENTS

•  Processes – how we perform activities that deliver predictable and

repeatable business results through competent people using the right tools. •  Core App Migration •  Governance – how we make and sustain important decisions about IT. •  Sourcing – how we select and manage the sourcing of our IT products

and services. •  Services – our portfolio of IT products and services. •  Measurement – how we measure and monitor our performance. •  Organization – how we structure and organize our IT capabilities.

IT OPERATING MODEL: ESSENTIAL ELEMENTS (CONT’D)

SAMPLE CLOUD OPERATING MODEL: METRICS AND MEASURES

CLOUD OPERATING MODEL IS CRITICAL

•  Framework for aligning business and IT stakeholders around a target set of process metrics that will be favorably impacted by the transformation to a highly automated cloud operating model.

•  Essential means of communicating the value proposition for moving operations to a cloud-based delivery mode.

•  Presents stakeholders with a set of business and IT operational metrics that will be used for ongoing monitoring and measurement of performance, risk, and ongoing OpEx.

THE TECHNOLOGY IS MURKY

•  Difficult to “unplug” core apps and legacy systems from their native hosting environments.

•  Many of these apps are bespoke in nature and represent a tangled web of software, hardware, hosting network, and support contracts.

•  Legacy platform, middleware, and service support dependencies frequently pose significant technical hurdles.

•  Many of these apps are mission-critical to the enterprise and support key processes and functions, such as order and inventory management, finance, payments, and a variety of core business operations.

•  Myriad of critical factors that must be weighed before moving core app workloads to the cloud, e.g., which workloads are tied to end-of-life platforms, the impact of re-platforming older Unix-based systems to Linux, and open-computing technologies.

REFERENCE ARCHITECTURE

•  Guides teams and features elements such as deployment standards, processes, and tools.

•  Provides essential standardization to support operational consistency and service quality.

•  Defines various flavors of IaaS, PaaS as well as the service management and automation layers of your cloud.

•  Articulates high-level technical requirements, high-level use cases, and defines the foundation components needed to support the service lifecycle of core apps once they are in the cloud.

EXAMPLE: HIGH-LEVEL REFERENCE MODEL FOR OPERATIONS IN SHARED SERVICES

AND/OR CLOUD ENVIRONMENT

BUSINESS CASE UNCLEAR

•  Many organizations lack a single, consistent, objective framework to guide informed, technically, AND economically sound decision-making.

•  To make matters worse, service providers supply varying degrees of the right data.

•  IT planners often have difficulty quantifying their baseline costs, efficiency levels, and requirements, let alone methodically scoring supplier options.

•  IT planners need an objective, data-driven process to properly guide decision-making.

•  The process needs to take into account the business, technology, organizational, and operational requirements that are unique to the organization.

APPLICATION-CENTRIC APPROACH

•  Experience tells us that an application-centric approach to assessing the feasibility and TCO implications of moving core apps to a cloud deployment model is the best practice in virtually all cases.

•  An objective planning and decision-making

process must be predicated on accurate supplier data.

•  Answers foundational questions before

undertaking your core app-to-cloud transformation initiative.

FOUNDATIONAL QUESTIONS:

•  What are the overarching drivers for migration, e.g., cost, agility, speed of change, elimination of the data center?

•  Which applications are suitable candidates for a move and have you fully assessed the impact of any re-platforming, and/or architecture evolution and change?

•  “Public cloud” versus “private cloud:” Will one offer the same cost, scalability, regulatory compliance, risk tolerance, and flexibility as the other?

•  What aspect of a cloud deployment should be managed internally or taken on by a managed cloud partner?

•  What operational, cultural, and service-level issues and risks will I encounter as result of a move, and what are the best ways to address and mitigate these?

•  What are the total economic impact and TCO implications of a move — for specific applications, for a range of applications? Which cloud service provider or managed cloud partner offers the best SLAs, performance, risk profile, and cost benefits?

RELY ON A DATA AND ANALYTIC FRAMEWORK

•  To assist in the decision-making process, best practice is to leverage a data and analytic framework (data, process, tools) to drive workload-level optimization planning.

•  The right decision-making tools will allow planners to

assess the cost of compute for application workloads in various supplier and operational scenarios.

•  Factors such as which platform stack, e.g. LAMP vs.

Microsoft; supplier pricing and terms, e.g., AWS vs. SoftLayer; and other operational dimensions can be analyzed.

CLOUD READINESS CHECKLIST FOR CORE APP MIGRATION

Once you have defined your target operating model, reference architectures, and TCO analysis framework you are ready to begin effectively planning for core app migration to the cloud.

1.  Develop a standardized Cloud Services Profile that includes baseline data for application workloads.

2.  Develop standardized Cloud Services Criteria for external providers that includes, at minimum the following:

•  Operational health – does the provider have a consistent track record of meeting its SLAs? Is the service designed in such a way as to maximize resiliency?

•  Technology fit – do the services offered match existing platforms, go-forward strategy, and technical maturity level or is it a “square peg in a round hole”?

•  Industry and community fit – will the solution have proper adaptations to function within real-world constraints (e.g., special uptime/latency needs or time-shifted working hours)? Does the supplier comply with corporate social responsibility goals on things like emissions and working conditions.


2.  (Cont’d) Develop standardized Cloud Services Criteria for external providers that includes, at minimum the following:

•  Cost – will the new solution provide ongoing operational savings within usage patterns and workload classification? When will transition costs be paid back? Is there cost certainty and has risk been quantified for unexpected contingencies?

•  Contract terms – are core commitments of the supplier guaranteed in writing? How enforceable are they? Do you have sufficient flexibility to adjust the contractual framework as its business and the cloud market evolves?

•  Scale up – can you scale the solution easily to match growth forecasts? Will you achieve meaningful economies of scale in doing so?

•  Scale out – can you buy adjacent services from the same provider to build a more strategic partnership?


3.  Develop a standardized Cloud Services Provider Profile that includes, at minimum, the following:

•  Supplier attributes – ranging from date founded to financial ratios, these stay constant and are largely fixed over longer periods of time.

•  Solution attributes – including design and architecture criteria, resiliency measures, latency to key hubs and end-consumer populations, intra-solution latencies (e.g., between DB and app servers), variety of configurations and ability to customize them further, scalability characteristics/burstable capacity, and many other dimensions. Solution attributes can be customized for a particularly large deals, but typically evolve more slowly with the overall strategy of the supplier.

•  Offer attributes – including price, SLA, and contract terms, which can be highly customized.


4.  Develop a standardized Cloud Services Sourcing Framework that

includes:

o  *Normalize* - convert business unit/application owner data and any modeled assumptions into industry-standard metrics:

a.  Volume metrics

b.  CapEx/OpEx metrics

c.  Cost per unit of supply (e.g., kilowatt, server, or Mbps)

d.  Cost per unit of demand workload (e.g., cost per transactions)

e.  SLA commitments

f.  SLA performance

o  *Compare* - normalized client data to: a.  Previously-configured Provider solutions (listing only top 1-3 options if multiple

solutions are configured) Provider-configured offers for the above solutions

b.  Market medians for potential competitive alternatives

c.  Client-designed scenarios (e.g. “we think we can cut our costs by 10% and improve our performance by 15% next year without you”)

o  *Validate and recommend* – use third-party reputation and industry expertise to confirm that the Provider solution is likely to provide improvements; providing a broad or narrow range of estimates based on proportion of ingested

ONE APPROACH: CLOUD HYPERSOURCING

Capture current-state for service workload(s): •  Terms •  Dependencies •  Support profile (e.g., ITSM) •  Lifecycle (e.g., EOL) •  Workload capacity allocation and

utilization •  Contracted capacity and actual

consumption •  Agility and transition requirements •  Service community roles and

preferences

Execute sourcing strategy based on target-state service profile: •  Generate service policy profile •  Validate price tolerance for

candidate suppliers •  Generate Target Service Supplier

Priorities •  Generate Target Service Supplier vs.

Current Scorecard •  Initiate Target Service Supplier

bidding process •  Initiate Target Service Supplier

Smoke Test •  Validate Service Transition Cost

Forecast •  Execute Target Service Supplier

contract

Populate service baseline profile: •  Service workload capacity

(high-level capacity analysis)

•  Service cost (total cost of compute)

•  Service efficiency (operational margin and waste)

•  Forecasted cost recapture from unused capacity

Generate target-state service profile and compare for best-fit supplier based on weighted buyer criteria: •  Populate service transition

cost forecast •  Weighted buyer target

service profile (reflecting ideal state for the service post-transition)

•  Perform supplier options pool identification via SPY Index

INFORM INTERPRET

OPTIMIZE EXECUTE

EXAMPLES OF ATTRIBUTES CAPTURED

Terms Dependencies Lifecycle Support Capacity Alloca8on

MSA/SLA, targets for security, breach, performance, resilience/uptime/DRP/service continuity.

Dependency map identifying all dependent system components for service workloads.

ITSM profile, e.g., asset & config. management, dev. ops, service catalog mappings, incident volume, incident response times and mean-time to fix.

Maintainability, platform EOL considerations, service workload projected useful life.

Contracted compute, storage, bandwidth, network firewall, monitoring Capacity.

Agility Transi8on Requirements

Preferences Roles

Workload interoperability, portability, and ability to scale-up/scale-out.

Anticipated development and operational effort associated with porting, P2V and move of service workload to a new environment.

Identification of service stakeholder community representatives based on roles, used later in preference weighting/score-carding.

Weighting of buyer criteria related to “soft” factors such as culture fit, corporate social responsibility (CSR), risk profile, data residency and information security, regulatory compliance, and tax preferences.

Consump8on

Actual compute, storage, bandwidth, network firewall, monitoring Capacity, and power consumed, including allocated, used, unused, zombie levels of consumption, waste levels (surplus).

SAMPLE DASHBOARD

SAMPLE OUTPUT SAVINGS ANALYSIS

Produc8on Spend Staging/Dev Spend VPC Spend Total Annual Spend $966,877.56 $529,504.92 $236,924.52 On Demand to Reserved $165,559.92 $1,004.73 $1,070.98 Elimina8ng Idle Instances $14,779.48 $2,978.34 $25,463.82 Aggressive Savings Strategies $161,922.94 $45,553.40 $71,966.21 Target Spend $624,615.22 $479,968.45 $138,423.51

$966,877.56

$529,504.92

$236,924.52

$-‐ $100,000.00 $200,000.00 $300,000.00 $400,000.00 $500,000.00 $600,000.00 $700,000.00 $800,000.00 $900,000.00

$1,000,000.00

28% Poten8al Annual Savings

• 10% savings from switching from on demand pricing to reserved instances • 2% savings from elimina8ng idle instances • 16% savings from more targeted op8ons like instance re-‐sizing and workload packing

SAMPLE SUPPLIER SCORECARD DRILL-DOWN

POST MIGRATION:: QUANTIFY AND ELIMINATE

WASTED CAPACITY

•  Consume, pay for, and monetize unused cloud capacity. •  RampRate employs a number of metering tools to quality check and

accurately measure hourly usage and CPU utilization. •  Based on usage data, RampRate considers all pricing scenarios from on-

demand, reserved, to term utilization weight, to instance sizing, and provides the most cost effective recommendations without compromising performance.

•  We examine Workload Packing options for further cost optimization (especially mature workloads).

•  Targeted savings and efficiency recommendations are customized in an in-depth analysis of the cloud environment.

•  Vital QoE (Quality of Experience) implications that justify cost are identified and QoS contractual inefficiencies are highlighted in the analysis.

•  The chart on the next slide is one example of the savings analysis with savings resulting from efficiencies generated by smarter cloud capacity consumption.

SAVINGS RESULTING FROM EFFICIENCIES GENERATED BY SMARTER

CLOUD CAPACITY CONSUMPTION

SAMPLE WORK BREAKDOWN STRUCTURE -‐ HYPERSOURCING

Appendix

WORK BREAKDOWN

1.  PROJECT KICKOFF MEETING 2.  VERIFY AND VALIDATE PROGRAM GOALS AND OBJECTIVES 3.  CAPTURE CURRENT STATE

•  Capture Current Contract and/or SLA Terms •  Determine Terms Risk •  Capture Service Dependencies •  Capture Service Support Profiles •  Capture Service Lifecycle •  Capture Service Roles •  Capture App Owner Preferences on Service Providers •  Capture Service Workload Capacity Allocation •  Capture Service Contracted Capacity

4.  CAPTURE CURRENT WORKLOAD STATE •  Capture Service Workload Consumption •  Capture Service Workload Capacity Utilization •  Capture Service Workload Behavior •  Capture Service Workload Economic Modeling •  Capture Service Workload Historical Data •  Capture Service Workload Agility •  Capture Service Workload Portability •  Capture Service Transition Requirements

WORK BREAKDOWN

NOTE: •  Once you capture the data in steps 3 and 4 and have performed

current state needs analysis, structure output into a set of profiles to be used for optimization.

•  Perform macro analysis of workloads on assets that are candidates for migration to determine optimal target state cloud deployment environment.

•  Output of this work will be suggested mapping of workloads to IaaS flavors based on optimal operational requirements and costs.

5.  INTERPRET CURRENT STATE •  Populate Service Capacity Profile •  Populate Service Efficiency Profile •  Populate Service Cost Profile

6.  OPTIMIZE SERVICE WORKLOAD PLACEMENT •  Create new Architecture Based on Capacity, Cost and Efficiency Analysis •  Populate Service Transition Cost Forecast •  Populate Weighted Buyer Target Service Profile •  Perform Supplier Option Pool Identification

WORK BREAKDOWN

7.  EXECUTE CLOUD SERVICE PROVIDER CONTRACT PROCESS •  Generate Service Policy Profile •  Validate Price Tolerance for Candidate Suppliers •  Generate Target Service Supplier Priorities •  Generate Target Services Supplier vs Current Scorecard •  Initiate Target Service Supplier Bidding Process (Single Supplier Only) •  Initiate Target Service Supplier Smoke Test (If Needed) •  Validate Service Transition Cost Forecast •  Initiate Target Service Supplier Contract Negotiation •  Execute Target Service Supplier Contract

GET IN TOUCH… •  I create playbooks to help my clients systematically

attack their toughest operational challenges.

•  If you are interested in receiving an advance copy of “A Playbook for Migrating Core Enterprise Apps to the Cloud,” or in being a reviewer, please drop me a line at [email protected].

•  For more on RampRate, see the following slides.

CORPORATE BACKGROUND INFORMATION

RAMPRATE AT A GLANCE Year Founded: 2000

Clients Served: 200+, Multiple Industries Headquarters: Santa Monica, CA Offices: New York, Boston, Vancouver, India

Key Metrics: "  500+ Sourcing Transactions "  170 Restructures "  99% Success Rate

$24+ Billion in Contract Value 23.8% Average Cost Savings Delivered

"  Data on 1,194 Suppliers, 2,718 Sites in 400+Metros, 119 Countries "  Over 140,000 RFP Line Items 2.1 Million+ Unit Costs Given

Differentiation: HyperSource.IT! Decision Execution Platform

TM

Decision Execution Suite

Realtime Infrastructure Sourcing Exchange (RISE)

Service Provider Intelligence Index

Supplier Ecosystem

"  Team of Expert Analysts/ Solutions Architects

"  400+ Supplier/Buyer Relationships

"  Coverage: Data Center/Colo, Cloud, Hosting, CDN, Network, Telecom, and Mobility

"  RampRate Provides a Pay-for- performance Fee Structure

"  Project Fee Of 1%-2.5% of 1 Year Total Contract Value

"  Guaranteed Savings of At Least 300% of Project Fee; 25% Savings Fee Over Deal Term

Software Enabled Professional Services For Optimizing and Sourcing IT: Low Risk and Guaranteed ROI

CLIENT PORTFOLIO Media/Broadcast Finance E-commerce/SaaS

Gaming Telecom/CDN/Hosting/Cloud

High Tech Social Networks/Web 2.0 Publishing

Services

RAMPRATE SUPPLIER ECOSYSTEM

Data Center

Managed Hosting

Cloud

Network, CDN, Telecom

Infrastructure Management

Desktop Support

With more than 1,100 suppliers in our sourcing system, we have transaction data, price books and are actively engaged in quote processes that represent a multi-billion dollar aggregate client spend for data centers, circuits, voice, RIM, CDN, Cloud, and desktop services with virtually all tier one suppliers.