On-Demand ServicesEnable on-demand access to IT services through a cloud service catalog and self-service portal

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On-Demand Services

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Table of Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

On-Demand Services and the Cloud Capability Model . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Differences from Traditional or Highly Virtualized IT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Value of the Hybrid Cloud Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Business Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Agility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Process Design and Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Step 1: Assess Needs and Readiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Step 2: Design Solution and Establish Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Step 3: Develop and Test Service Catalog and Self-Service Portal . . . . . . . . . . . . . . . 12

Step 4: Launch and Rollout Full Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Organizational Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Cloud Tenant Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

IT Business Management Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Build Capability in IT Financial Management for Cloud . . . . . . . . . . . . . . . . . . . . . . . . . .17

Manage Performance and Monitor Success via KPIs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Technology/Tool Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Service Catalog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Self-Service Portal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Cloud Service Models and Sequencing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Key Success Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Align Business and IT Executive Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Engage Users and IT Staff in Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Ensure Early and Visible Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Invest in Business User and IT Organization Education . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Next Steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Establish Pre-requisites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Determine Degree of Change Needed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Prepare the Organization for Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Why VMware for IT Transformation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

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PrefaceToday’s IT organizations are under increasing pressure to deploy private or hybrid clouds and become a service provider to their business users. In many cases, this change is motivated by the increasing prevalence of business users going outside of corporate IT to procure IT services direct from external cloud vendors. In other cases, IT organizations view cloud as the answer for enabling greater innovation in the business. Whatever the catalyst, those organizations that have started making the move to cloud have already realized real gains in efficiency, agility, and reliability.

Based on its extensive experience working with customers on their implementations, VMware has identified five capabilities that are key to unlocking the efficiency, agility, and reliability benefits of cloud:

•On-demand services: Service catalog with standardized offerings and tiered SLAs, actively managed and governed throughout its lifecycle, and with end-user access via a self-service portal.

•Automated provisioning and deployment: Automated provisioning, release and deployment of infrastructure, platform, and end-user compute services.

•Proactive incident and problem management: Monitoring and filtering of events, automatic incident resolution, and problem diagnosis.

•Cloud security, compliance, and risk management: Security, compliance, and risk management policies embedded into standard configurations enabling policy-aware applications and automation of security, audit, and risk management processes.

•IT financial management for cloud: IT cost transparency and service-level usage-based ‘showbacks’ or ‘chargebacks’ using automated metering and billing tools.

This white paper focuses on on-demand services, particularly the business value, implementation approach, and critical success factors of the IT front-end: the cloud service catalog and self-service portal. A detailed discussion of automated provisioning and deployment, the back-end capability of on-demand services, is contained in “Automated Provisioning and Deployment,” 2012, VMware White Paper.

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Executive SummaryDelivering IT as a service, through private or hybrid cloud, gives business users access to the dynamically scalable resources they need to meet today’s business challenges. Just as external cloud providers present customers with a selection of available services and pricing, internal IT must create and present consumable service catalogs and intuitive self-service portals as the front end of its cloud offerings.

On-demand services are essential for IT to contribute to and even drive the strategic goals of the business through efficiency, agility, and reliability. Cloud computing can meet these demands because it transforms the way that organizations consume and deliver IT services. Manual, slow, and error-prone processes and controls are replaced by automated and directly accessible resources, enabling a resource shift from IT maintenance to more strategic activities that innovate and create competitive differentiation. In other words, the cloud is about transformation, and on-demand services are a key enabler, supporting improved efficiency, agility, and reliability as the IT organization transforms from a reactive provider, to an engaged service broker, and finally a strategic partner for the business.

On-demand services deliver increased efficiency through the shift from interactive, manual processes to automated, self-service deployment of resources. Improved agility is the result of reducing the delay and cycle time from an identified business need to delivering the required IT resources. Reliability comes from a more standardized set of services and tools, with well-defined and -executed service-level agreements between IT and the business.

In this paper, we explore the “how” behind successful implementations of on-demand services. A four-step roadmap highlights the key decisions organizations will need to make along the way, framing the associated options and tradeoffs. Finally, we highlight the key success factors and changes needed in process, organization, and tools to implement on-demand services.

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ContextAs one of the key capabilities in cloud, on-demand services combine a service catalog and self-service portal to provide business users on-demand access to a set of standardized services and options. The service catalog offers a menu of predefined service offerings and options that is consumable by a business user. The self-service portal allows users to provision and deploy on-demand resources.

On-Demand Services and the Cloud Capability ModelIn working with global enterprises and service providers, VMware has found distinct patterns of IT organizations and their capabilities as they move to embrace cloud computing. VMware has used this insight to establish a Cloud Capability Model, helping IT identify opportunities for growth and evolution of technologies and architectures, organizational models, operational processes and financial measures. This Cloud Capability Model provides a path for IT to take greater advantage of existing systems, teams and resources, embrace third-party cloud assets and providers, and extend IT standards for security, governance and performance into this new model for IT. Across the Cloud Capability Model, customers are able to break free from a situation where resources are exhausted by simply maintaining existing systems to an environment where IT is a clear strategic business partner, delivering new services and capabilities aligned to and in support of business goals.

As with many other aspects of cloud, there are several levels of capability in on-demand services. The benefits of implementing on-demand services differ depending on the capability level companies aspire to reach (Figure 1).

Figure 1. Cloud Capability Model

•Standardization: In this most basic level of cloud capability, the IT organization has a minimal service catalog or multiple disparate catalogs. Business users typically demand some level of customization or tailoring of the service catalog offerings, rendering a self-service portal ineffective and dramatically increasing IT effort to provide services.

•Service Broker: At the next capability level, the organization has rallied around a single service catalog for business-impacting public and private cloud services. In addition, a subset of these services is available for provisioning and basic management via a self-service portal targeted to internal IT customers.

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•Strategic Partner: At the highest capability level, IT has transitioned to become a true partner to the lines of business. IT and the lines of business share governance responsibilities for the service catalog, jointly assess cost, quality of service, and risk trade-offs when determining the appropriate service offering to meet business requirements, and continuously evolve the catalog to meet changing needs. The service catalog is expanded to include business-critical services and best-of-breed offerings from external cloud providers while self-service capabilities are extended to business users.

Differences from Traditional or Highly Virtualized ITOn-demand services represents a new front-end for most IT organizations. Typically, in the virtualization world, the initial process for procurement of virtual machines follows the same model that is applied to physical infrastructure. Although this approach works, it is not the most efficient mechanism for providing services, and cloud benefits cannot be fully realized unless this process is changed. A logical representation of the evolution of the IT front-end from this current state to the desired end state is illustrated in Figure 2.

Figure 2. Evolution of the IT front end

Value of the Hybrid Cloud ApproachHybrid clouds—interoperable combinations of public and private clouds—can enable the IT organization to deliver on-demand services without building internal capacity before there is internal demand. In addition, the IT organization can improve its understanding of that demand while allowing business users to access desired resources, often leveraging cost models that may not be directly available within the organization. For example “pay by the drink” and “spot” consumption models are typically available for public cloud services while internal IT resources may not have the same level of flexibility.

Variable consumption models can reduce barriers to business adoption of innovation solutions and approaches, and improve agility of the organization. Business value is driven by reduced risk of new projects, reducing the chance the business loses differentiation or other competitive advantage due to constraints of in-house IT.

Over time, as the IT organization gains more insight into demand and which consumption models are most favored, it can make plans to offer similar services from the in-house cloud environment.

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Business ImpactEfficiency IT staff freed-up from routine request fulfillment IT staff today still spends a large portion of their available time on routine and often manual tasks related to service requests. In an on-demand world, business users require little or no assistance from IT staff to request a service. A service catalog provides descriptions of predefined services that users can select via a self-service portal. This eliminates the back and forth between IT and the requester around specificity and feasibility of requirements, while preserving the option for a more consultative approach where warranted. Based on analysis of sample IT support ticket data, VMware estimates that 90 to 95 percent of request volume can be submitted via self-service access to a service catalog.

This approach creates efficiencies on both sides of the equation: users control their own destiny without having to schedule time with busy task-oriented IT staff, while IT managers can now reassign their staff members to higher-value activities. In our observations, a fully-developed on-demand services capability can free-up 5 to 10 percent of overall IT staff time by eliminating these inefficiencies in the request fulfillment process.

Increased adoption of standard services/configurations Predefining consumable services leverages design investments, elevates technology standards, lowers support costs, increases the consistency of service delivery, and drives up utilization rates for IT assets. Users are motivated to leverage the predefined services because they can be more rapidly provisioned and, if priced appropriately, are more cost-effective than custom configurations. The bottom line is that the time to value is shortened and IT resources are shifted from routine tasks to innovation.

Agility Faster responsiveness to business needs Service catalogs and self-service portals, when coupled with automated provisioning and deployment, effectively take the IT support team out of the provisioning cycle. Business users can consume services as needed, accelerating their ability to respond to changes in the marketplace. Scaling on-demand services becomes a straight-forward task building on the capacity and performance of the platform, not the availability of IT staff to respond to individual requests.

Elasticity to scale up or down with business cycles On-demand services can encompass internal-only IT resources (i.e., private cloud) or expand beyond the enterprise (i.e. hybrid cloud) to take advantage of the scalability and functionality available from public cloud service providers. A hybrid approach helps ensure that needed capacity is available to manage spikes from internal or external events. It also allows IT architects to build a platform that can handle expected demand effectively and leverage service provider resources to meet unforeseen peaks.

Experimentation with new cloud services The hybrid approach also enables IT to deliver on-demand services without relying on a “build it and they will come” model. For example, business users can access on-demand services from a public cloud provider, while IT assesses the demand, architecture, and financial model for delivering those same services through the private cloud. A pay-for-consumption model can be piloted with an external cloud service provider, buying the IT organization time to implement the financial management system needed to deliver a similar service offering in-house.

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Reliability More consistent and predictable service delivery More consistently defined services increase business confidence that the IT organization can deliver as expected. This consistency stems from a modular approach to service definition. The business can plan for new functionality for internal or external consumption, and can build the IT support design from standardized service ‘building blocks’ rather than developing specifications through a blank-sheet process. Each building block consists of defined quantities of computing power, memory, storage, and network bandwidth. Variations can be achieved by combining different configurations of availability, performance, recoverability, and security in the form of service levels. More complex capabilities such as web service, database tier, and load balancing can also be defined as on-demand services.

Building on straightforward and clearly defined elements, the user experience becomes more consistent and predictable. Predictability is further improved due to the rigorous testing, characterization, and summation underlying the catalog and portal. Reliable scaling can be obtained through a simple order from the self-service portal. The user need not worry about the underlying technology or capacity that delivers the resources. This predictability gives business users the confidence to select appropriate SLAs to match the business needs, with lower financial costs for lower tiers of service.

Stronger governance and policy enforcementThe IT organization can define policies to govern resource deployment though the catalog and portal, incorporating budget constraints, security requirements, and resource capabilities. This governance can apply to both the original allocation as well as manage scalability of resources when demand increases, whether relying on internal or external resources. These boundaries can be managerial driven and relate to minimum performance requirements or maximum financial allowances. The boundaries can flow from central risk management and compliance, for example confining certain workloads to private cloud resources due to internal policy or external regulation. In any case, the delivery mechanism is invisible to the user -- the boundaries are built-in to the system and consistently enforced.

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Process Design and ImplementationEach organization’s journey to deliver on-demand services should be uniquely tailored to the objectives and resources of the enterprise. At the same time, VMware has identified a common set of approaches that span different sectors and business sizes (Figure 3).

Figure 3. Approach for designing and implementing on-demand services

Step 1: Assess Needs and ReadinessThis first step involves getting buy-in from senior executives in IT and the lines of business, gathering requirements for the service catalog and self-service portal, forecasting demand for services and planning the required capacity and sourcing approach, and developing the business plan for implementation.

Get senior executive buy-in from IT and the lines of business Executive buy-in is the first step on the journey to full deployment of on-demand services. The shift to standardized, self-service access to IT resources will require changes from business users and IT, and executive support is required to achieve the needed shifts in mindsets and behaviors. The initiative should be approved and steered by the relevant C-level officers and an exploratory team designated with representatives from both IT and the lines of business.

Gather requirements for service catalog and self-service portalNext, the exploratory team should conduct a needs and readiness assessment to inform requirements for the service catalog and self-service portal. End-user input should be gathered through interviews, behavioral observation, and broad-based surveys. A few examples:

•The portal may need to be compatible with a broad range of devices, platforms, and browsers.

•The user population may prefer standardize service blocks resembling composite virtual machines, or a “mix-and-match” approach with more flexibility to custom-design combinations of compute, memory, and storage.

•For hybrid environments, security and governance requirements for specific workloads may inhibit use of public cloud resources for those workloads.

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Reporting requirements should be obtained from the organization’s finance, compliance, and audit functions, including needs for the portal to interface with governance, risk management, and compliance (GRC) software or tools. Governance and policy requirements should be incorporated from the start. This avoids a “bolt-on” approach later, which can lead to timeline delays, budget cost increases, and enforcement gaps.

Forecast demand and plan capacity and sourcing approachFor each major user group, the team should develop forecasts for demand and understand the implications of on-demand service on capacity planning and delivery requirements. Internal cloud resources should be reviewed, particularly for scalability and the need and potential for utilizing public cloud resources for baseline or spike capacity. The forecasting and capacity planning process should be applied for each resource type to be included in the service catalog, as well as for the self-service portal itself.

Develop business plan for implementationOnce the user, technical, and financial requirements are known, a business plan should be developed, socialized with senior executive leadership, and formally approved and integrated into the CIO’s roadmap and budget plans.

Step 2: Design Solution and Establish RoadmapThe service catalog and self-service portal should be designed based on the requirements-gathering effort and business plan. The design should incorporate the need for new systems and greenfield platforms, and a staged rollout plan, with specific user groups and resource types to be prioritized, as the organization builds towards the full solution.

This second step in implementing on-demand services includes defining the offerings in the service catalog, designing the self-service portal user interface, selecting tools and vendors and determining future of legacy systems, and vetting the solution design and finalizing plans.

Define the offerings in the service catalogKey design elements of the service catalog include:

•Compartmentalization: At a minimum, the service catalog should provide user-level “containers” for user resources, defined by the default service configuration, which can be further divided into virtual data centers for specific workloads. The offers can be made available to the full organization in the “public” catalog or have access limited to specific departments (or specific users) only.

•Scope of offers: Many organizations struggle to find the right balance between having enough offers in the service catalog to address the diversity of business requirements and having a service catalog that is easy to consume and maintain. As a rule of thumb, the catalog’s standard offerings should cover 80 percent of business user needs. Of the remaining 20 percent of business requirements not met by the standard offers, 80 percent should be covered by custom combinations of the existing catalog components. The final 20 percent (or approximately 4 percent of the total volume of requests) will require truly custom solutions from outside of the service catalog.

•Options around catalog offerings: The catalog can also include a number of options for each offering. Common options include sizing, provisioning mechanics (e.g., resources are not provisioned until called by the user vs. pre-provisioned resource pools), and pre-configured software packages (e.g., infrastructure offerings can be listed standalone and agnostic as to workload vs. pre-configured as platforms).

•Service levels: SLAs should be defined and implemented within the service catalog and presented to users through the portal. Typical metrics include Recovery Time Objective (RTO), Recovery Point Objective (RPO), and incident response times, and can be applied to the different offerings within the service catalog. At the start, these service levels may mirror those for non-virtualized IT resources. As the cloud environment matures, adoption can shift to new elements (e.g., transportability of workloads across virtual data center boundaries). To the extent possible, SLAs should be commonly defined across internal and external resources.

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•Technology services: These are not presented directly to the end user, but represent the translation of the user-facing catalog terms into the IT-relevant resource requirements. Technology services can include automation requirements, specifications for which sets of physical resources should be applied to user requests, and policy requirements (e.g., security, availability) applicable to the specific user and resource. Service definitions should also enforce relationships between metrics where necessary (e.g., minimum memory required for a particular level of compute or storage).

•Pricing: Service pricing should be driven by the IT financial management system and reflect the costs of services provided. Prices should be tied to both the baseline resource (e.g., storage, compute), the options around the baseline resource, and the SLA tier selected. Pricing should be used as a lever to drive adoption of standard offers.1

Design the self-service portal user interfaceTo realize the benefits of on-demand services, business users must start submitting requests via the self-service portal rather than through the legacy service request process. It is therefore critical that the self-service portal be intuitive and easy to navigate. The front-end portal interface should be developed with particular attention to how users will and do interact and subscribe to services. The portal must ensure clear translation of business needs into IT resources. Finally, it should appear superior to other internal methods of acquiring IT resources and on a par with methods of acquiring services directly from an external cloud provider.

The solution design team for on-demand services should over-invest in gathering business user feedback through interviews, behavioral observation, and broad-based surveys. The self-service portal design should be prototyped and undergo multiple iterations and continuous refinement to improve usability.

Select tools and vendors and determine future of legacy systemsTools and vendors to enable and deliver the designed solution should be selected based on fulfillment of functionality, financial, and security, governance, and compliance requirements. The standard purchasing and vendor assessment processes should be followed where needed. Finally, existing solutions should be evaluated to confirm continued usage is aligned with needs.

Vet solution design and finalize plansBuilding on the readiness assessment, an internal marketing and communication plan should be developed, addressing all affected constituencies. One of the first steps is the socialization of the design and implementation plan itself. Greater transparency will improve alignment on the approach, and begin the educational process of how to use the new solution.

As a last step before implementation, the design and roadmap should be finalized and approved by senior leadership, including any adjustments to the original budget and timeline.

Step 3: Develop and Test Service Catalog and Self-Service PortalDeploy automation engine and volume testThe service catalog definitions are complete and should be built into the back-end of the self-service portal, with IT deploying the automation engine and volume and policy governors. The engine should be stressed at high call volumes to ensure capacity to deliver on spikes in self-service portal utilization.

Test solution and incorporate feedbackThe initial deployment should enter user testing with the initial population and resources, including enterprise functionality and applications. The existing quality assurance process can be used if appropriate. User (and IT) feedback should be incorporated into the design and revised deployment. The initial population can be self-identified on a volunteer basis to help ensure a set of users who are inclined toward helping improve the nascent offerings.

1 A complete description of service costing and pricing considerations is contained in “IT Financial Management for Cloud,” 2012, VMware White Paper.

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Implement quality control systems and metrics reportingBeyond testing the initial implementation, ongoing quality control systems and metrics reporting to ensure SLA compliance need to be put in place. These are essential for the long-term management of the on-demand services platform. Metrics range from the direct user experience (e.g., lag in the online service portal) to deeper system performance (e.g., scalable compute delivery and virtual compute orchestration). Quality control will both improve the direct service provided, and deliver an ongoing record of improvement compared to the baseline approach. In parallel, these same metrics should be applied to the legacy service request process (e.g., ticket submissions, SLA compliance) to reinforce the business case for the overall solution.

Step 4: Launch and Rollout Full SolutionDeliver consistent track record of successSuccess of the initial launch is essential for long-term viability of on-demand services. The transition will require a different approach to requesting and accessing IT services, and first impressions will stick. The implementation needs to be executed very carefully, with the first catalog offerings being simplest for users to understand (e.g., CPU, memory). The first user/customer group can be those who are most comfortable with direct IT provisioning (e.g., internal IT, developer teams) and with the most predictable resource demands. Resisting a “big bang” launch of the full catalog will allow wrinkles to be worked out before the full user population is stressing the solution. At first, it may ease the transition to create a service catalog and self-service portal that are fulfilled through the traditional manual IT processes, and gradually transition them over to automated provisioning as that capability matures.

Provide visibility and assurance for compliancePerformance measurement against internal metrics, standards, and alternatives, should be complemented by measurement against industry benchmarks. Appropriate internal groups (e.g., audit) should be provided with sufficient visibility to assure alignment with governance and compliance requirements.

Establish capabilities for continuous refinement and improvementThe ongoing monitoring reporting should have an established process to feedback and result in continuous refinement and improvement of the system. Business users and IT managers should be part of ongoing engagement and review, to ensure alignment with changing organizational requirements. On-demand services performance should be measured. The self-service portal and its supporting service catalog should be tracked by specific, quantitative metrics to guide performance evaluations. These metrics can be broken down into several top-line groups, for example: share of IT services provisioned through on-demand services, service delivery sourcing (e.g., public vs. private cloud), resource-definition SLAs (e.g., compute, storage), supplemental SLAs (e.g., availability, provisioning turnaround), and user experience.

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Organizational ConsiderationsMoving to on-demand services requires significant organizational changes, given the major shift of IT to the role of service provider and broker. The most significant changes are to establish two new cross-functional departments, the Cloud Infrastructure Operations Center of Excellence (CoE) and Cloud Tenant Operations.

Cloud Infrastructure Operations Center of ExcellenceThe CoE coordinates the activities of all the organizational resources that are required to drive a successful cloud initiative. It brings together business analysts and technical experts to consistently measure, account for, and improve the effectiveness of cloud infrastructure operations management (Figure 4).

Figure 4. Cloud Infrastructure Operations Center of Excellence

These functional specialties within the Cloud Infrastructure Operations CoE have particular responsibilities for on-demand services2:

Service portfolio manager•Develops and maintains cloud service portfolio policy including the criteria for acceptance and rejection

•Manages the portfolio of cloud services and works with IT management to develop the cloud service offering strategy used to determine what services should be included in the overall portfolio and to make sure the service offering strategy aligns with IT strategy

•Proactively identifies potential cloud service offerings based on demand information gathered from cloud consumer managers or other sources such as requests coming in through the service desk

Service catalog manager•Manages the cloud service offering catalog and makes sure that all of the information contained in the catalog

is accurate and up-to-date

•Maintains the consumer self-service catalog portal information

2 A complete description of the functional responsibilities of the members of the Cloud Infrastructure Operations Center of Excellence is contained in “Organizing for Cloud Operations,” 2012, VMware White Paper.

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Service architect•Defines a cloud service offering based on the requirements provided by the cloud service owner after it’s

determined that a particular cloud service offering is to be included in the cloud service portfolio. This involves translating cloud business requirements into technical requirements that can be used to architect a cloud service offering.

•Provides tier 3 cloud service offering support as needed

Service developer•Works with the cloud service architect to understand cloud service offering technical requirements

•Works with the application development team(s) to incorporate bespoke or third-party applications into cloud service offerings as needed

•Develops new cloud service offering components into blueprints, or constructs blueprints from existing cloud service offering components, for automatic provisioning

•Releases cloud service offerings into production

•Develops and maintains cloud service offering blueprint documentation

•Works with the cloud service analyst and application development to define service monitoring

•Works with cloud service analyst and application development to make sure security, operations, and chargeback metering capabilities are built into cloud service offerings

•Develops customizations for and maintains the on-line consumer self-service catalog capability

Service analyst•Develops and maintains service capacity forecasts

•Responsible for the day-to-day capacity and resource management of services

•Initiates requests for new or expanded service capacity

•Monitors and analyzes service performance, availability, usage, and other operational analytics

Service administrator•Administers tools used by cloud tenant operations to govern, develop, and operate services

•Administers customer cloud environments

•Provides tier 3 cloud service offering support

Cloud Tenant OperationsOn-demand services represent a fundamental shift for the IT group from reactive problem-solver to proactive service broker. Infrastructure and applications are accessed through the cloud—private, hybrid and public—and become decoupled from traditional service delivery silos. This intentional agnosticism must not lead to the end of mutual awareness and transparency. Owner-users must understand service-level needs and implications. IT managers need user feedback from both application owners and end-users, both for near-term service management and longer-term demand management and platform planning.

One innovative approach to this problem is the creation of a tenant operations group. Inserted between the IT operators and application developers and owners, this group is primarily responsible for services. It works with all groups within IT to ensure that service levels are maintained and stakeholders receive feedback that they need to fine tune their processes and technologies.

Cloud tenant operations is central to governing, developing, and providing cloud service offerings. It manages service governance, service design and development, service operations, and provisioning (Figure 5).

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Figure 5. Cloud tenant operations

Key responsibilities of the tenant operations / customer support group include:

•Market to internal customers

•Educate and onboard new tenants

•Help business users select standard offerings from the service catalog

•Support project evaluation and facilitate as business units develop budgets and prioritize projects

•Communicate chargebacks and resolve billing issues

•Serve as a point of escalation for major incidents or recurring problems

•Capture feedback to improve the service catalog, including new service requirements

•Collect service demand projections from tenants

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IT Business Management ConsiderationsBuild Capability in IT Financial Management for Cloud Pricing and cost information presented in the service portal should be driven by the financial management system. Resources available in the service catalog (both hardware and software) need to be carefully inventoried and tracked. Monitoring should include active, in-use resources and idle resources, at both the physical and virtual levels. The methodology employed by the IT financial management system can be driven by simple average cost methods (e.g., ignoring age of inventory, operations costs for one data center vs. another) or track and price based closely on the specific resources.

Pricing presented through the portal should reflect different service levels. Close mapping of resources to costs, with a detailed bill of materials behind each service catalog offering, will connect the cost of delivery for more advanced service levels to user pricing. Price levels can help business users decide what resources are more important to them, rather than always requesting the highest available service levels. For example, delivering “five nines” availability is more costly for IT, and therefore should cost more for the business user.

While pricing should reflect the costs of supply, the “market behavior” observed within on-demand services can be used to estimate and forecast demand, and feed into the capacity-planning and budget processes for the IT organization. In hybrid environments, near-horizon needs can be met through public cloud resources, with the possibility of replacing with private cloud resources during the next expansion phase.

Manage Performance and Monitor Success via KPIsThe performance of on-demand services should be measured by concrete quantitative measures. The initial targets can be defined top-down, but the ongoing hurdles should be defined as part of an active-learning approach. Metrics can include:

•Share of IT consumption: Particularly important during the initial implementation and rollout of on-demand services, these metrics track the uptake in the business user community and the corresponding delivery by the IT organization. Examples include percentage of IT requests submitted through portal vs. other channels (e.g., phone, in-person, other ticketing systems) and percentage of request fulfilled through standard offerings vs. in-portal customized offerings vs. non-portal customized offerings.

•Delivery sourcing: For each type of service (e.g., infrastructure, platform) and sub-type (e.g., compute, storage) the organization should track what percentage are supplied through different channels. At its most basic, this should break down internal provisioning (e.g., through private cloud) and external (e.g., through public cloud). More detailed metrics can cover the particular source (e.g., Data Center A vs. Data Center B vs. External Provider A vs. External Provider B), and how that changes over time. For example, as a particular workload may require only simple compute and storage resources, which were supplied originally through a lowest-common-denominator public cloud provider during the test and development phases. Later, when the application was deployed to customers, the same workload was brought into newly online internal cloud resources to increase available security and governance.

•Core resource SLAs: Each type of resource delivered through the catalog will have a baseline measurement of performance. At its simplest, this means that when a user requisitions 50GB of storage, 50GB of storage is allocated and made available. This does not necessarily mean that every storage request means another block of unused capacity, but that when the user (or their application) calls on additional storage, it is available on-demand. Success on this metric is the foundation of on-demand services and failures must be remediated immediately.

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•Supplemental SLAs: Service level agreement measures should also go beyond the basic “compute when you ask for it” measures to include reliability and uptime for compute resources, latency and throughput for network resources, and seek time and durability for storage resources. These SLAs should be closely tied to pricing, with higher levels costing more for business users and reflecting the costs of IT to deliver them.

•User experience: Objective and system-reported metrics should be complemented by understanding of subjective user perceptions. This can be accomplished through a combination of surveys and interviews, and through engagement of the tenant operations group. This research can be used to improve the user interface for the portal, customize (or standardize) offerings to meet most common user needs, and understand user rationales for provisioning through the portal or other channels, or selecting internal or external resources.

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Technology/Tool ConsiderationsThe service catalog and service portal are the core of the supply management side of on-demand services (Figure 6).

Figure 6. Cloud logical component model

Service provisioning can start with a simple product used as the building block for more complex products. The initial offerings can be of a small set of standard sizes with a consistent interface across options. Reliable functionality, stable prices, and credible delivery times can make the service catalog and portal a real win for IT with its business users.

Service Catalog The service catalog defines, with appropriate detail, all services (internal and external) that are available to business users. The purpose of a service catalog is to provide a clearly defined set of services available to customers for consumption. Ideally, the service catalog is offered from a “one-stop shop” where a customer can select the required services with minimal intervention or manual activity. The catalog must be kept current, reflecting the types and scale of services available. On the other hand, the catalog does not present the details of the underlying technology by default. This user-facing opacity provides IT the flexibility to deliver on requests from the best mix of private and public cloud resources. The business user faces a simpler set of resource choices, with well-defined SLAs, and can make selections based on business needs, rather than requiring them to appreciate and understand the variants of server hardware, operating systems, and other infrastructure components.

Self-Service PortalThe self-service portal is the entry point for business users to access the catalog and the accompanying services. A user can review the catalog options, drilling down for additional detail on capabilities or SLAs as desired. Users fill their carts with the services they want to deploy, adding or removing options as needed. The request is submitted, passing through the appropriate governance (e.g., policies, approvals), and then provisioned automatically, without manual intervention by IT staff. Given the self-service nature of the portal, substantial consideration must be given to the user interface to ensure clarity, ease-of-use, and expectations management.

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The governance surrounding the catalog and portal must be carefully designed. If the approval process unnecessarily encumbers the business user, the benefits of on-demand services are reduced. At the same time, the required financial controls, security policies, and resource constraints must be strictly interpreted. Strong and clear rules will enable maximum flexibility and independence within their boundaries, while ensuring on-demand services do not spiral out of scope or control.

Cloud Service Models and SequencingOn-demand services allow the business to easily consume the offerings from the IT organization. For example, the infrastructure-as-a-service section of the catalog can be populated by a selection of virtual machine-based offerings, defined by the resource types provided (e.g., CPU, memory, storage) each with specified performance, availability, and security characteristics. The costs for the virtual machine offerings are defined based on these types and attributes, and the user’s consumption of the VMs.

Infrastructure-as-a-service (IaaS) offerings are an appropriate entry point for on-demand services. The simplicity and uniformity of IaaS offerings also allows the IT organization to offer both private and public cloud options. This is a good avenue to track developing demand and understand customer preferences—including when external resources are preferred.

Once infrastructure offerings are mature, they can be complemented by platform and software services from public and private sources. All offerings from basic infrastructure to applications can then be aggregated into a comprehensive cloud service catalog.

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Key Success Factors Align Business and IT Executive LeadershipSenior sponsorship is essential for successful implementation of on-demand services. In particular, the CIO needs to manage and set expectations for business leaders on the types of resources and channels available, and be ready to collaborate on the on-demand services design and delivery. Leadership must also align on the top-level objectives. On-demand services are often adopted to provide greater cost transparency to businesses (particularly for marginal resources), to reduce the complexity of provisioning for IT, to allow for source-agnostic delivery of resources, and to allow more direct comparison of internal IT costs to external vendor pricing.

Engage Users and IT Staff in TransformationOn-demand services touch every business user, and transformation requires enterprise-wide engagement and cooperation of stakeholders, from design through implementation. Transparency is essential, especially during planning. A detailed roadmap of proposed transition can increase comfort levels and allow IT to react to user feedback before full implementation.

While the business users face a transformation in how they consume IT, the IT staff may also be facing significant changes. The efficiency gains from cloud computing in general, and on-demand services in particular, can be perceived to relegate IT to more mundane tasks, or drive reductions in staffing levels. IT leadership should communicate clearly to staff on expectations and transition plans, including redeployment and retraining where appropriate. The organization needs to send a signal that IT continues to be valued.

Ensure Early and Visible SuccessThe shift to on-demand services is a major transformation in how IT resources are provided and consumed. As with any significant change, the initial experience of business users and IT providers can place the entire project on a positive or negative trajectory. Starting with a pilot launch group can allow both the user population and the IT organization to learn from experience before entering the full spotlight of an enterprise-wide rollout. The pilot can begin with an internally-developed portal as the front end for primarily externally-provided resources to demonstrate the pay-by-the-drink approach. Infrastructure is most likely a more straightforward service to integrate into the catalog than more complex platform or software offerings. The initial population can be selected based on its technology savviness, and the initial services can be carefully selected for simplicity of delivery and measurement. These early experiences will shape the operational maturity of the IT organization and provide a visible record of success for the program.

Invest in Business User and IT Organization EducationBusiness users and IT staff must be actively engaged from the start as part of a two-way communication process, not just as audience members or survey respondents.

•Business users: The business user is not a passive participant. Success starts with user outreach through a combination of surveys, interviews, and engagement groups—but cannot end there. Users need to actively educate the IT organization about what elements are critical to deliver, and what can increase business risks. Business users can directly seek empowerment while simultaneously relinquishing access to underlying technical complexity.

•Business leaders: On-demand services have the potential to deliver increased transparency and control to business leaders, but those leaders need to be educated on how to use the tools and the benefits they offer. Only then can those leaders leverage the management aspects provided—for example, they can leverage either financial or performance “boundaries” to control IT resource usage at the group or individual level. While business leaders must take co-stewardship of the service catalog and portal to ensure their needs are met, they must remain agnostic as to how IT delivers those resources.

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•IT staff: As for the IT group, it must comprehend common (and specific) customer needs, have a deep understanding of the costs of service, benchmark services against alternate providers, and not hesitate to educate the internal consumer. At its most basic, use of the service catalog should be incorporated into new user on-boarding, with more advanced modules for power users (e.g., developers, administrators). If not fully coupled with automated provisioning, IT staff must understand user expectations and SLAs, and how to meet them through manual approaches.

•IT leaders: IT leaders need to be able to use the information contained in the service portal (e.g., user requests, resource performance) to guide management of internal and external resources, with capacity planning as a foundational use cases. They need to see the enabling value of the catalog and service portal to improve their service delivery to the business, to add mutual transparency for supply, demand, and delivery, and to enable superior efficiency, agility, and reliability of IT resources.

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Next Steps On-demand services can scale in parallel with the organization’s adoption of cloud. If the enterprise deploys cloud initially to a limited set of workloads, the service catalog can be limited to that set of services. Alternatively, IT might choose to supplement the cloud service catalog with external cloud services while it builds out a private cloud.

Regardless of the approach, once an organization has decided to implement on-demand services, a number of steps are necessary.

Establish PrerequisitesBefore jumping ahead with on-demand services, a needs and readiness assessment will evaluate the current capability level of enablers (e.g., automated provisioning and deployment, IT financial management for cloud) and organizational demand for the new solution. The scale of current cloud solutions needs to be evaluated, particularly in regards to existing private cloud capacity and the anticipated need for external resources.

Determine Degree of Change NeededThe design and engineering phase needs to move in parallel with the business and organizational roadmap. Non-technology changes should be addressed in significant detail, for both IT and non-IT staff. The initial pilot population should be selected and used as a test bed group for the initial service catalog offerings and self-service portal.

Prepare the Organization for Change Last, an internal messaging and communication plan needs to be in place, to both convey the basic information of the system (e.g., location in the intranet, services offered) as well as the benefits and advantages to build excitement and demand. This should be driven top-down (e.g., through executive communication and announcements) as well as bottom-up (e.g., through advocacy by the pilot user group).

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Why VMware for IT Transformation?The move to the cloud is a foregone conclusion for many organizations today, but the path forward is often unclear. What is the current state of my infrastructure? How do we begin to move forward? What are the right technology choices for implementing our cloud? Most importantly, who can help us achieve our goals?

VMware has built some of the largest and most successful public and private clouds in the world. Now VMware is using that experience to bring to market a complete solution that includes a full suite of software products as well as the services you need to gain the maximum benefit from cloud computing. This combination of software and expertise, delivered via services and education to customers of all sizes across all industries, is unique to VMware and its global ecosystem of partners.

To learn more about the VMware cloud solution, visit www.vmware.com/cloud

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