2017

IT Sourcing towards the cloud

2

Profound changes in behavior and attitudes are bothering us for quite a long time

2013 2017

3

What is the Impact of Technological Changes on Business Activity

DIGITAL CUSTOMER

1 In new ways of relating to other people

2 In the operating and business processes

DIGITAL ENTERPRISE

DIGITAL BUSINESS

4

• x86 architecture• Virtualization• Communications Improvement

Technological perspective

Visibilityperspective

What is cloud?

• Open software• Mobility

Enterprise IT as a Service

Hybrid Cloud

PrivateCloud

Public Cloud

DRIVERS

5

Reliability AgilityScalability

DisasterRecovery

Cost Optimization

What cloud is for?

6

Standard IT - TCO

Name Type

Government Opex

Operation Opex

Software Manteinance Capex

Software Capex

Hardware Manteinance Capex

Hardware Capex

Datacenter: Floor + electricity + Refrigeration

Capex + opex

Name Type

GovernmentOpex

Cloud Service

Cloud

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Government

Operation

Manteinance Software

Software

Manteinance Hardware

Hardware

Datacenter

Business evolution (BE)

Technical innovation (TI)

The actual business leads the expenses

The prevision of business leads the expenses

Cloud – Cost analysis

BE BE BEBE BE BE

BE BE BE

BE BE BE

TI

TI

7

Some information about cloud

8

The ICT market is seeing a huge transformation to the Cloud space and players are moving quickly

Cloud

Service

Provider

Managed

ServicesSW

Providers

Out-

sourcers

HW

Providers

TraditionalIT

9

Telefonica value proposal. From current infrastructure until hyper scalars providers

Outsourcing CloudGestión Completa

Gestión Seguridad

Command Center

10

A global leader in communications and ICT_

More than 315 million accesses• > 100 million in Europe• > 200 million in Latin America

Strong financials (2016 - Mn €)• Revenues: 52.036• OIBDA: 15.118• Inversion: 8.928

Operations in 21 countries• 21 full network operations• Global Datacenters network• 129 countries extended MPLS• Startups accelerators: Wayra and

Telefonica Open Future

121,000 employees• 31% in Europe• 68% in Latin America• 1% in other countries

11

1 Almost 25 years in Cloud

2 More than 400 Enterprise

clients

3References in all the sectors

4Some figures about usage

…delivering IT services to our customers

1Activity volume

2 IT consumption

…and in our self consumption

3 Digital transformation

QualityThe best quality standards and the best partners

Pecal 2110ER-0305/1995

GA-2005/0319

We have experience…

12

TEF has the best-of-breed assets such as DataCenters and local and global Communication Networks in its footprint

Miami

Madrid - Alcalá

Owned Data Center

3rd Party & Partners

Spain

Brazil

ArgentinaChile

Peru

Colombia

México

Ecuador

UK

>55 .000 m2

for external

consumers

Miami

São Paulo

2014 Awards – Uptime Institute – Alcalá DataCenter“TEF prioritized efficiency, financial viability, a system of accountability, and a world-class result for its internal and external clients…”

13

The Alcalá DataCenter is one of the largest and most powerful DataCenter in Europe for end customers

EfficiencyFlexibility SecurityReliabilityCapacity1 2 3 4 5

14

Telefonica Position in Spanish market

44%

The top ten IT companies

Represent an Income share of

Variation on Ranking 2014-15

Ingr

eso

s 2

01

5 (

M€

)

Major IT companies by incomes. IT Sector 2015

+1 -1 +1 -1 +1

• Source: Gartner

15

Cloud is changing the face of IT Departments

Cloud ischanging

the face of IT Departments

Business processBusiness process

…

Communications

Applications

Infrastructures

Services for customers

Employees Workplace

“run the business”

A significant challenge to CIOs

“change the business”

Adapt to adopt

16

Outsourcer partner needs an end to end vision of the projects

Government models

Presales Offering Transition / Transformation Running

Global management

End to End vision

Knowledge, skills, experience, empowerment, and based in probed methodology to create

an ad hoc solution, with a transition and transformation phase designed to minimize the

risks.

A qualified team for leading this kind of projects

17

With critical assurance of the T&T phases

IT Services

Due Diligence Control Operacional

Delivery and continuous improvement

Contract duration

Due DiligenceTransition and

operational controlRunningTransformation

Detailed transformation plan Transformation

Transition

Government model

Service catalogue

E2E ITC solution

Initial state

audit1 Service control2 Service

optimization3 Regular service4

18

Looking for the optimal transformation projects

TO BEAS IS

Plat. Virtual

CPD1 CPD2

CPD6

CPD4 CPD5

Plat. Virtual

SAP

Madrid Miami

PaaS

IaaS

82 VMs

47 VMs

44 VMs

36 VMs

VMs

Zerto para VMs

Zerto para VMs

Zerto para VMs

CPD1

CPD2

CPD3

CPD4

Madrid

Miami

TEM

P

VMConverter Virtualización

S. Operativo

Aplicaciones

Storage/BKup

Serv. Físicos

Comunic. LAN

Infraes. CPD

VD

C

Virtualización

S. Operativo

Aplicaciones

Storage/BKup

Serv. Físicos

Comunic. LAN

Infraes. CPD

VD

C

Techniques and tools used with

success in previous projects, and

always adapted to the business

needs

Technology and business define “services blocks” to

transform to reference architectures

209

38

19

You need a detailed global plan with specific projects

Planning has to be defined to minimize the impact in the businness

20

T&T Projects: they must have a structure of project plan

Project management

structure

1. Objectives and scope

2. Phases and activities

3. Schedule and milestones

4. Effort and tools

5. Costs

6. Dependencies

7. Risks

8. Critical factors of success

9. Assumptions and exclusions

10. Benefits and outputs

21

And to define a customized government and relationship model

Understandable structure of the working groups, aligned with the catalogue of services

Integration with service management

• Hierarchical organization of work team with all the roles involved defined

• Work groups based on their specialization, defined by technical towers and their interactions

• Locations and schedules aligned with customer needs

• Roles and responsibilities suited to the organizational structure of the client

• Value chain management of service integrated with the structure of delivery processes

• Global delivery model adapted with the functions of the offices of management service (SMO), demand (BMD) and projects (PMO)

Support tools• Support processes

• Support to governance of the service

The global delivery model is

based on a well defined structure,

integrated with the management

of the service and the tools

needed

22

Governance Model

Operational

Strategic

Tactical

Levels

Service Manager

Cloud Product ManagerInfrastructure Technical Manager

LAN Technical Manager

Specialists (Centers of expertise)

Chief Executive

Service Manager

Operational Manager

Technical Responsible

Specialists

CIO

Responsible Contract manager

Technical Committee

Steering Committee

Monitoring CommitteeCrisis Committee

CommitteesClient

23

Governance Model

24

Operational Model

Authorized Users

N0

N1

N2

N3 Providers

Centers of expertise

Customer Management Center

SGSD

SGSD

IT Portal IT Portal

LAN Technical CenterSGSD

SGSD

Command Center

Sto

rage

Bac

kup

Vir

tual

ize

d

syst

em

s

Win

do

ws

Syst

em

s

Un

ix a

nd

Lin

ux

Syst

em

sC

olla

bo

rati

veSe

rvic

es

No

n-

SQL

Dat

abas

e

Mid

dle

war

e

Too

ls

Infr

astr

uct

ure

Dat

ace

nte

r C

om

mu

nic

atio

ns

SOC

AdvancedManagement

Center

LAN

25

26

New tendencies: Agile IT Management – Dev Ops - Containers

27

New tendencies: edge and fog computing

29

Microsoft

68 productos

30

AWS

31

SalesForce