Building the Private Cloud mex38l...Building the Private Cloud Gartner The Future of IT Conference October 4-6, 2011 Centro Banamex Mexico City, Mexico Stanley Zaffos Notes accompany

Building the Private Cloud

Gartner The Future of IT Conference

October 4-6, 2011 Centro BanamexMexico City, Mexico

Stanley Zaffos

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Key Issue: What are the trends in cloud and private cloud computing, and how will they evolve?

There are two dimensions that determine how private or how public a cloud service really is:There are two dimensions that determine how private or how public a cloud service really is:

• Sharing: There are two ends of a spectrum here: (1) complete implementation ownership and limited sharing to (2) complete lack of ownership, no control of implementation and sharing of everything. However, there will be many examples in between of partial control, shared ownership and others.

• Access: There are two ends to this spectrum — at one end, usage is extremely exclusive, while at the other end, anyone who chooses can access the service. Again, there will be many examples in between of limited

i d l ll d d haccess, industry-only access, controlled partner access and others.

These two dimensions are coupled at the extremes, but there are many variations in between. Each has different security/privacy, cost, customization and elasticity attributes.

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Strategic Guideline: The cloud computing market will expand from proprietary megaproviders (today), to ecosystems and supply chains of providers, to thousands of smaller providers that rely on agility and standards for interoperability to compete.Key Issue: What are the trends in cloud and private cloud computing, and how will they y p p g, yevolve?

Key Issue: What are the trends in cloud and private cloud computing and how will theyKey Issue: What are the trends in cloud and private cloud computing, and how will they evolve?The cloud computing service market is embryonic, and the future market will look nothing like the market of 2010. At a high level, there are three phases:• Phase 1: Monolithic (early). Early cloud computing services will be based on proprietary/internal

architectures — islands of cloud services delivered by megaproviders. This is what Google, salesforce.com and Microsoft look like today.y

• Phase 2: Vertical supply chain (two or more years). Over time, some cloud providers will leverage cloud services from other providers (for example, ISVs moving into SaaS on top of Microsoft's Windows Azure Platform; the use of Force.com and the use of Google App Engine). Proprietary islands still exist, but ecosystems are starting to build.

• Phase 3: Horizontal federation (four or more years). Smaller providers will federate horizontally to gain economies of scale (and efficient use of assets) — also, enterprises will leverage horizontal federation for

k i ( d f i d l d b i ) h ill b h i h l f l d

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peak capacity (overdraft protection and cloud bursting). There will be more choices at each layer of cloud computing, and standards will gain momentum. Monolithic providers will not go away, but they will be surrounded by more agile, focused competitors who rely on standards for interoperability.


Strategic Planning Assumption: By 2015, 20% of the applications that were migrated to infrastructure as a service will be rewritten to leverage a platform-as-a-service offering.

What is private cloud computing? "A style of computing where scalable and elastic IT enabled capabilitiesWhat is private cloud computing? A style of computing where scalable and elastic IT-enabled capabilities are delivered as a service to internal customers using Internet technologies." In practice, a private cloud computing service behaves just like an external (public) cloud computing service, except the implementation is internal to an organization, and access is limited to internal users. However, it still requires a services interface that gives it a similar look and feel to the end user of an external service. And the implementation, which is hidden from the user, still needs to be scalable, shared, automated and elastic.

What are the benefits of private cloud computing? Like public cloud services private cloud services areWhat are the benefits of private cloud computing? Like public cloud services, private cloud services are easy for customers to start using (a low barrier to entry) — startup time for the user of the service is short and the process is straightforward and does not require implementation details. It is scalable so that the end user does not perceive limits in physical scaling, and it is elastic, growing and shrinking with usage. The end user pays for a private cloud service based on usage (or the service is subsidized — for example, by advertisers), and is not based on fixed implementation costs. Finally, a private cloud service enables an easier migration to public cloud services at some point in the future.

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But private cloud is not be the right solution for all enterprises and all applications. An evaluation of service requirements, now and in the future, is required before starting down this path.


Strategic Guideline: For most enterprises deploying private cloud computing services, the most significant benefit will be speed of deployment for standard and common infrastructure requests.

Key Issue: What are the trends in cloud and private cloud computing and how will they evolve?Key Issue: What are the trends in cloud and private cloud computing, and how will they evolve?

In some cases, the public cloud services exist, and enterprises should migrate there soon. But for the majority of these IT services, cloud services do not exist, are not proved, do not meet service-level requirements, do not meet regulatory or legal requirements, and are not secure enough, or all the above. It may be many years before some of these cloud services meet enterprise requirements.

Why should large IT organizations invest in private cloud services when cloud computing providers are creating services themselves? (1) Cloud computing is evolving rapidly, but it is immature; there is little competitive pressure in the market ( ) p g g p y, ; p pso far, and services are limited in scope and depth. (2) For many enterprises, the IT service levels that their customers have come to expect are not yet commonly supported by public cloud providers, introducing an element of risk that may far exceed the reward. (3) Many of the investments in private cloud computing will prepare the enterprise for public cloud computing. These investments are not just technology changes — they are also process, cultural and business interface changes. Changes such as building a service catalog and a service interface to the business, and moving to a chargeback model, will help enterprises understand their real service needs and their real service costs. These changes will help enterprises make better cloud sourcing decisions and potentially make for an easier transition to public cloud computing

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in the future.


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Key Issue: How should private cloud computing architectures be built?

Many vendors have jumped onto the bandwagon of private cloud hoping to ride the hype curve Some of theseMany vendors have jumped onto the bandwagon of private cloud, hoping to ride the hype curve. Some of these vendors (for example, Surgient, recently acquired by Quest Software; VMLogix, recently acquired by Citrix, and VMware) have been in the private cloud business for years, with products positioned for test lab automation. Others are relative newcomers to the market (for example, BMC Software, CA Technologies and DynamicOps). While there are many vendors that have come to market with private cloud offerings, the market is early, and most customers will have a significant amount of prework to do to ready themselves for implementation. For example, private cloud has an expectation that services are predefined and can be ordered online and delivered dynamically. Because most enterprises struggle with standardization and do not have standard cataloged IT services, they will have to invest here prior to implementing private cloud services. We recommend implementing nonproduction use cases first, such as in demonstration or training labs or test lab automation prior to implementing for production use cases. This way, experience will be gained and used for production use cases.

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Strategic Planning Assumption: By 2015, six vendors will account for at least 50% of private cloud computing revenue.

Key Issue: How should private cloud computing architectures be built?Key Issue: How should private cloud computing architectures be built?

Private cloud computing has its own set of megavendors, and they come from many different heritages.

The Big Four traditional management vendors, BMC Software, CA Technologies, HP and IBM have rich service and data center management tools to bring to the market. All four were latecomers to the server virtualization market from which private cloud is emerging, but all four have a rich set of assets (and consulting services) to be major players. Where there are gaps, these four vendors will fill them with acquisitions (such as CA's acquisition of 3Tera).

VM d Cit i t ti f th it d f th k t i f i h b f i t li ti dVMware and Citrix are starting from the opposite end of the market — growing from a rich base of virtualization and virtualization management capability. While VMware has the larger installed base, it still has a long way to go up the stack in terms of service automation. Citrix has made its own acquisitions (such as VMLogix), and they have an interesting portfolio that includes NetScaler.

Cisco is focusing on expanding its infrastructure influence, and is filling its gaps through alliances with VMware, BMC and EMC. Microsoft was late to virtualization, but is closing the capability gap quickly. Also, it traditionally has been slow to focus on management, but the priority of System Center has been rising.

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Eucalyptus Systems is an interesting player — focused on a complete private cloud computing infrastructure, with a focus on interoperability with Amazon, VMware and others.


Strategic Guideline: Assess vendor claims of a private cloud service solution against the suggested, and ideally independent, components of private cloud services.

Key Issue: How should private cloud computing architectures be built?Key Issue: How should private cloud computing architectures be built?To deliver on the five attributes of cloud services (service-based, scalable and elastic, shared, metered by use, and Internet technologies), a private cloud-computing service has several tiers of components. Each of these tiers has technological, process and organizational implications.Private cloud services will require a cultural and political change inside IT to see the role of operations move to being more proactive — requiring predefined policies, service levels and automated actions to take on the runtime environment as opposed to the manual initiation of scripts or workflows This requires different skillsruntime environment, as opposed to the manual initiation of scripts or workflows. This requires different skills over time — a shift away from rote work toward more planning, service analysis and a better understanding of service users to continually improve how the service is ultimately delivered. It also requires a business model in which capacity is acquired in anticipation of demand. This is difficult for the IT organization that does not charge back to its customers; however, some enterprises will find that project-based funding can increase the size of the pool for each project — and at a lower cost than the project sponsor would have otherwise paid.The architecture of a private cloud service ideally will not be monolithic (or tightly integrated), to enable IT

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organizational flexibility and choice. Start small, with a limited span of control, but build private cloud and RTI architectures for expandability — more services, broader governance and more shared resources.


Strategic Guideline: Technology is one of the least challenging concerns with private cloud computing; much more important are processes, funding models, service requirements, culture and politics.

Key Issue: How should private cloud computing architectures be built?Key Issue: How should private cloud computing architectures be built?Too often, inquiries and discussions concerning private cloud computing start with, "What technology should I buy?" Just as with virtualization, the real challenges with private cloud computing lie with processes and people. Private cloud computing is primarily a change in the relationship between IT and the business, and a change in how IT is managed and funded. Technology is not a panacea. Enterprises that are interested in pursuing a private cloud computing strategy in the next few years should start evaluating nontechnology changes now including working closer with IT customers on relationship changes A good starting point ischanges now, including working closer with IT customers on relationship changes. A good starting point is building or refining the IT service catalog, and improving communications with IT customers on service-level requirements.

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Key Issue: How should enterprises change their processes, skills and organization structures to support private cloud computing?

Building a private cloud service is much more than a simple technology effort Private cloud computingBuilding a private cloud service is much more than a simple technology effort. Private cloud computing fundamentally changes how IT operates, and how IT's customer's work with IT. Processes will change, roles will change, and organization structures will change. The change is so pervasive that the most important element of any private cloud computing strategy is leadership, crossing both the IT organization and the business. Because it will require an investment, and because it involves a change in the relationship with the business, a solid business case needs to be put together, with customer involvement. The customers should also help define service offerings. Alternatives should be examined including public cloud offerings now and in the near futureshould be examined, including public cloud offerings, now and in the near future.A strategic plan for private cloud computing will require a plan for people (describing what private cloud means to them, and getting their buy-in), a plan for process change, a plan for technology change, and a business management plan (especially including a change in the funding model).A strategy for private cloud computing needs measureable metrics that relate both to the IT organization, and to the service customer. The metrics are their to ensure that the goals of the project are being met, and to objectively prove results to the business.

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object ve y p ove esu ts to t e bus ess.Finally, and with any such major endeavor, starting small to learn as you go is an effective strategy.


Strategic Guideline: Develop a list of measurable benefits and specific metrics for each category — economics, quality, and agility.

Key Issue: How should enterprises change their processes skills and organization structuresKey Issue: How should enterprises change their processes, skills and organization structures to support private cloud computing?

Private cloud computing isn't useful or appropriate for every enterprise. The primary benefit of private cloud computing is often agility (see "The Drivers and Challenges of Private Cloud Computing," G00210705). However, there are economic and quality of service benefits as well. Before embarking on a private cloud strategy, understand the return on investment in at least three areas: economics (cost, skills, assets), quality of service (meeting enterprise requirements based on business priorities) and agility (provisioning services fasterservice (meeting enterprise requirements based on business priorities), and agility (provisioning services faster, reacting to changing requirements, and lowering the barrier to entry/exit). IT organizations are often focused on economic return. However, evaluating the value of quality of service and agility requires engagement with the business, and will enable (and require) a change in how the business leverages IT. The value of these benefits — and therefore the business case — depends completely on the enterprise.The cloud computing style separates the concerns of the customers from the concerns of the provider, and therefore, suggested metrics are given that could be used to evaluate the benefits to (1) IT operations

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, gg g ( ) p(internally), and (2) service users.


Strategic Guideline: Some IT services are destined for the cloud-computing style — others are destined for more integration and intimacy with the business. IT services should each have their own strategic plan.

Key Issue: How should enterprises change their processes skills and organization structuresKey Issue: How should enterprises change their processes, skills and organization structures to support private cloud computing?Some IT services are business differentiators and should become tightly integrated with the business. They change often. You aren't just turning knobs, you are adding new ones that are unique to the business. You make this as efficient, virtualized and automated as you can, but, by necessity, more manual and custom intervention is involved. Being well-run means better integration (process, skills, analytics and strategies) and intimacy with the business. They become an extension of the business. They may incorporate a range of standardized cloud services (for example payment processing) or use some lower level cloud services but the resultingcloud services (for example, payment processing), or use some lower-level cloud services, but the resulting aggregate service will be enterprise-unique. These will not be cloud service candidates.Other IT services might be valuable and might be important, but they are standard across businesses and are not differentiators. The data they manipulate might be business- and security-critical, but the services are not unique to the business. There are knobs to turn, and they are turned often, but you aren't adding new knobs, and they are common with other enterprises. A well-run service focuses on creating a self-service, easy-to-use, relatively static interface. With standardized knobs, you can automate everything behind the interface. These

i t d f th b i i d d t t t i d d t i t t d Th lti t

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services are separated from the business — independent, not customized and not integrated. The ultimate destination for these services is the public cloud — the only question is when.


Strategic Planning Assumption: By 2015, the cloud services brokerage (CSB) landscape will have grown from dozens to hundreds of providers. By 2015, at least 20% of all cloud services will be consumed via CSBs, rather than directly, up from less than 5% today.

Key Issue: How should enterprises change their processes skills and organization structures toKey Issue: How should enterprises change their processes, skills and organization structures to support private cloud computing?

IT organizations today have built architectures over decades that manage a broad array of heterogeneous resources of servers, storage, networks and software to deliver IT services. They have built management processes and architectures to enable them to monitor and, in some cases, automate the management of the IT environment.

The hype around cloud computing is that all of that can simply be replaced by "the cloud." As cloud offerings come in the form of services, this really means replacing the IT organization with relationships to dozens or hundreds of cloud , y p g g pcomputing service providers, each for one or a handful of services.

The reality of the future IT organization is something of a combination. Larger enterprises will continue to have an IT organization that manages and deploys IT resources internally. Some of these will be "private clouds," but not all. IT will also take on IT services sourcing responsibility — determining when to leverage external providers, when to deploy internally, and when to leverage both for specific services.

Private cloud services will be a stepping stone to future public cloud services and, over time, will span both private and

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public cloud resources in a hybrid manner. For many large enterprises, private cloud services will continue to be required for many years, perhaps decades, as public cloud offerings mature.


Strategic Guideline: Developing private cloud computing services is a question of ROI —does it make more business sense to wait for mature cloud services to appear, or can the enterprise get more value by developing private cloud services sooner?

Key Issue: How should enterprises change their processes skills and organization structuresKey Issue: How should enterprises change their processes, skills and organization structures to support private cloud computing?Many client questions recently have focused on how to start building private clouds. Vendors are at their doorstep selling private cloud computing. Clients are asking about, for example, what technologies to use, which vendors to choose, and how to build a private cloud. Gartner's view is that this is exactly the wrong approach.

"If b ild i h ill " i bl f i l d i"If you build it, they will come" is not a reasonable strategy for private cloud computing.

Instead of focusing on products and technologies and even architectures first, you should focus on understanding service requirements first.

Start by understanding your service catalog (most organizations do not have one). Understand the SLAs and costs for each service (most do not know that, either). Build strategic plans for each of those services (does anyone have these?). Determine which ones might go to the cloud in the future and when that cloud service

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will be "ready" (all right, this takes some work). Make your ROI decision about building a private cloud service, and then you can start looking at architectures, products and technologies.


Strategic Guideline: Private clouds should be designed with interoperability and hybrid cloud computing in mind.

Key Issue: How should enterprises change their processes skills and organization structuresKey Issue: How should enterprises change their processes, skills and organization structures to support private cloud computing?While this is a relatively small poll, the attendees tend to be data center decision-makers and IT executives in larger enterprises — the results in this poll also match information from client inquiries. These results show a surprisingly rapid ramp-up to private cloud computing, but for at least the larger and more leading-edge enterprises, it seems to provide a reasonable indication that private cloud computing is rapidly moving from strategy to implementation very, very quickly. Roughly half of the respondents who said they had implemented something already had implemented in a non-production mode This is very similar to how larger enterprisessomething already had implemented in a non production mode. This is very similar to how larger enterprises tended to introduce virtualization — first in development and test (where rapid provisioning and deprovisioning was important), then with less critical workloads, etc. The other data point in this poll is the fact that 30% of the respondents plan to implement starting in 2011. Given the fact that vendors have ramped up their marketing around private cloud computing — in many cases, around technologies that simply can't deliver on the promise yet — there is plenty of danger here. Clients should be very cautious of vendor claims of turnkey private cloud solutions, and ensure that any deployment has a proactive plan for operational processes, management, expansion, and interoperability with public cloud

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has a proactive plan for operational processes, management, expansion, and interoperability with public cloud providers at some point in the future. A strategy, executive buy-in, strong leadership, and excellent communications with end customers are critical success factors.


Strategic Planning Assumption: Through 2015, more than 90% of private cloud computing deployments will be for infrastructure as a service.

Key Issue: How should enterprises change their processes skills and organization structuresKey Issue: How should enterprises change their processes, skills and organization structures to support private cloud computing?Interest in private cloud computing is especially high for larger enterprises, but, somewhat surprisingly, midsize enterprise interest also tends to be high. Private cloud computing is rapidly moving up the Gartner Hype Cycle, as vendor marketing around the term increases. Many enterprises consider private cloud computing to be the next stage of virtualization — and, because they are virtualizing, it is the natural next step. Other enterprises consider private cloud computing a term for shared services or just a modern ITOther enterprises consider private cloud computing a term for shared services, or just a modern IT infrastructure. As more enterprises learn about the specifics of private cloud computing, and as the hype is replaced by serious deployments in the marketplace, private cloud computing will find a more pragmatic role in the marketplace.

Gartner believes the private cloud computing hype will peak by the end of 2010, and reality will set in through 2012, as more technologies become available and more enterprises deploy private cloud computing services. Gartner continues to believe that the majority of IT investments in cloud computing through 2014 will be

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j y p g gtoward private, rather than public, cloud computing services.


Strategic Planning Assumption: Through 2014, IT organizations will spend more money on private cloud computing investments than on offerings from public cloud providers.

Key Issue: How should the choice be made between public and private cloud computing?Key Issue: How should the choice be made between public and private cloud computing?While inquiries and surveys consistently support a projection that enterprise investment in private cloud computing will be high for several years — and higher than IT investment in public cloud services —intentions do not always become reality. Gartner believes that IT organizations will invest more on the private cloud through at least 2014. However, there are a number of alternative scenarios to watch:

(1) Private cloud computing is evolving from existing server virtualization efforts. While enterprises may id h i i li i i b b ildi i l d h h f l illconsider their virtualization investments to be building private clouds, they may stop short — for example, will

midsize enterprises necessarily track usage metrics, and how important will a self-service interface become as opposed to a lightly managed request process? Virtualization is being used primarily to help manage legacy workloads — but to truly leverage cloud computing flexibility, applications need to be designed for cloud computing. That will drive a growth in SaaS and PaaS — public cloud computing.

(2) If vendors (such as VMware with vCloud) are successful in making interoperability with public cloud id i l t i i ht i t d l iti l kl d ( h d l t

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providers simple, more enterprises might experiment and move less critical workloads (such as development and test) to public cloud providers rapidly.


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Documents

Building the Private Cloud mex38l...Building the Private Cloud Gartner The Future of IT Conference October 4-6, 2011 Centro Banamex Mexico City, Mexico Stanley Zaffos Notes accompany