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Extracting the full value of the cloud

Extracting the full value of the cloud

Cost, price, and ROI are always going to be part of the decision process for selecting any technology or service including cloud

Category: Cloud Computing

Date: , 12:13

Company: Navisite

Today, cloud adoption is rapidly expanding its footprint and is no longer simply a theoretical or academic conversation that enterprise organizations are debating. The reality is that companies across a wide variety of sectors are actively engaged in cloud adoption.

Download this whitepaper to discover the real-world business impact of the cloud.

Whitepaper 2014 EXTRACTING THE I FULL VALUE OF THE CLOUD TIME WARNER CABLE Business Class" NaviSite* Whitepaper: Extracting the Full Value of the Cloud EXECUTIVE SUMMARY J Today, cloud adoption is rapidly expanding its footprint and is no longer simply a theoretical or academic conversation that enterprise organizations are debating. The reality is that companies across a wide variety of sectors are actively engaged in cloud adoption. This includes everything from strategy and planning, to pilot solutions, and production rollout. With firms such as Forrester Research, Inc. forecasting a growth in the overall public cloud market to the tune of $191 billion by 2020,1 it is evident that cloud services are becoming more integral to enterprise business. Business cases for cloud services often focus on financial return on investment (ROI). But, while ROI is a compelling argument, the full value of cloud computing extends beyond cost savings. Significant value is realized through business transformation that is fueled by innovation, and facilitated by cloud computing. This whitepaper is structured for business leaders evaluating enterprise cloud services, and uses real-world customer experiences to examine the business impact of the Cloud: IT Innovation: The Cloud empowers innovation by relieving IT Teams from the burden of managing applications, infrastructure, and desktops and enabling them to focus on creative solutions to business impediments. Application Delivery: Because cloud services streamline IT operations, reduce the stress placed on budgets, and remedy the concerns of server space, storage, and networking, IT teams can more quickly implement their ideas. Increased Employee Efficiency: Employees can capitalize on the IT team's innovations to perform their roles better, creating a sustainable business advantage in today's fast-paced marketplace. ' "The Public Cloud Market Is Now In Hypergrowth" Andrew Bartels, John R. Rymer, James Staten et al. Forrester Research. April 24, 2014 Whitepaper: Extracting the Full Value of the Cloud TABLE OF CONTENTS cioudROi: Not Just About the Numbers IT Creativity and Innovation: 5 IT Takes a Seat at the Business Strategy Table Application Delivery: 7 Lower the Barriers to Continuous Improvement Productivity Gains: 9 Increase Employee Efficiency and Effectiveness Continual Business Improvement 11 Beginning the Journey 12 Conclusion 15 Whitepaper: Extracting the Full Value of the Cloud 4 CLOUD ROI: NOT JUST ABOUT THE NUMBERS "...with each new innovation that IT teams introduce, the organization continues to reap the benefits." Enter a decision making, technology discussion with virtually any business leader or IT professional and the conversation quickly turns to the subject of ROI and lower total cost of ownership (TCO). These have been mainstay criteria for decades. However, the adoption of cloud services is changing the way organizations think about ROI - the benefits extend far beyond the tangible costs of hardware and software. Cloud computing often shifts the burden of capital expense to a "pay-as-you-go" model for IT infrastructure. As many recognize, the outcome of this model is a conversion of upfront capital expenditure to a predictable operational expense, lower IT staff costs associated with provisioning and managing infrastructure, and a reduction of costs associated with datacenter space, power, and cooling. But, while lower TCO is a powerful driver in the migration to cloud computing, early adopters are reporting that the Cloud's impact on innovation is significantly greater than that sparked by lessened financial commitments, and is beyond the scope of traditional ROI calculations. By shifting the focus of IT from time- consuming operational chores (managing infrastructure and supporting applications), cloud-enabled delivery models and services free-up time for IT innovation and strategic thinking. These cloud benefits often generate new application delivery models and tools that empower employees to be both more efficient and more effective, fueling business success (Figure 1). In many instances, organizations continue to realize these benefits well beyond initial implementation. Often, such benefits gain momentum and continue to expand throughout the organization as additional applications, services, tools, and technologies migrate to the Cloud. Therefore, with each new innovation that IT teams introduce, the organization continues to reap the benefits. USER SATISFACTION & PRODUCTIVITY GAINS Figure 1, Marked business growth and successes are more effectively realized with a combination of IT innovation, cloud-enabling technologies, application enhancements, and enhanced user satisfactions and productivity. Whitepaper: Extracting the Full Value of the Cloud 5 IT CREATIVITY AND INNOVATION: IT TAKES A SEAT AT THE BUSINESS STRATEGY TABLE If done correctly and used strategically within an organization, the IT department can transition from being an internal cost center, focused on maintaining current performance, to a strategic business driver and profit engine. Traditionally, IT led the charge to design and build systems to last a lifetime. Their focus was on technology, and enterprise organizations relied heavily on them to manage the technological advances. Today, with a fundamental shift in the IT infrastructure marketplace, Internal IT is being ousted as the premier knowledge source for enterprise technologies. In fact many employees have similar - often better - devices, applications, and network access at home as compared to those which they use in the office. The focus of IT has shifted from orchestrating specific technologies to managing information and the way in which users access and employ data. The new IT organization is aligned with business strategy. It is focused on making the organization effective, resilient, and capable of change at a moment's notice; this opens the doors to unprecedented creativity and innovation. As IT looks for new ways to provide better service to users without increasing IT budgets, many investigate cloud-based solutions with the goal of simplifying key stages of service and solution delivery, including: test and development, provisioning, management, and security and compliance governance. The benefits of managed cloud services typically appear first in IT organizations. With traditional infrastructure, IT teams can quickly end up spending the majority of their time reacting to requests for servers and storage, and managing application infrastructure and desktops. Cloud services liberate IT teams from persistent emergency responses, making time for innovation and operations improvement. To illustrate, the IT team at a rapidly growing North American insurance company uses a managed cloud service to quickly provision infrastructure on- demand for test and development. The time to fulfill requests has decreased from weeks to minutes, and moving the applications to production takes just a few clicks. Furthermore, costs for test and production servers have decreased by more than 40% since managed cloud services were first implemented. As with traditional managed or outsourced services, some IT professionals may first be worried that cloud computing is going to drive companies to function with smaller IT staffs. In reality, for most, cloud services may be the most prudent choice to spark innovation and enhanced operations among IT departments. If done correctly and used strategically within an organization, the IT department can transition from being an internal cost center, focused on maintaining current performance, to a strategic business driver and profit engine. Whitepaper: Extracting the Full Value of the Cloud 6 IT CREATIVITY AND INNOVATION: CASEIN POINT OCGSC "Where some companies were coming in and trying to sell us a huge infrastructure," explains Brent Kruger, Group CIO, CGSC. "NaviSite tookthe opposite approach... starting small and growing overtime. That was a key reason why we selected them." __> Cooper Gay Swett & Crawford is one of the world's largest global wholesale & reinsurance brokers. The group offers a wealth of broking talent and market- leading global customer support. They create bespoke risk transfer and risk mitigation programs to suit their clients' needs, delivering global solutions to global challenges. CGSC has undergone considerable global growth over the past few years and continues to go from strength to strength, both through organic growth and strategic acquisition. The fast pace of growth has meant that CGSC's global IT team has faced considerable challenges in meeting the ever- increasing demands of a global business, providing first-class, world-wide IT services within a decentralized technology model. Economies of scale, resilience, and the security of information are of paramount importance to CGSC, as is the flexibility in up-scaling and downsizing operations when the need arises. Given CGSC's high-profile clients, strict sector regulations and the need to know exactly under which jurisdiction their data was being stored, CGSC took the decision to house all data within the EU only, both physical and virtual. This decision limited CGSC's options in regards to hosted email applications. Using a hybrid physical / virtual model based in NaviSite's SSAE16 compliant UK based datacenters, CGSC has been able to achieve the flexibility it needs without compromising on security, resilience, and compliance. NaviSite manages the infrastructure, the server-side licensing, and all suppliers within the service delivery chain on infrastructure provisioned through the partnership. This dramatically consolidated the payment structure, allowing CGSC to pay for its infrastructure services through a simple OPEX cost model rather than capitalizing the infrastructure spend. Next CGSC is looking at Desktop-as-a-Service (DaaS) as a solution to support its rapid global growth. Brent Kruger envisions deploying DaaS in many of CGSC's smaller global offices, some of which have fewer than 10 staff members. Whitepaper: Extracting the Full Value of the Cloud APPLICATION ENABLEMENT: LOWER THE BARRIERS TO CONTINUOUS IMPROVEMENT "With cloud computing, developers can afford to be more creative than when every experiment required cost-justifying permanent infrastructure." J 1 "Accelerate Market Responsiveness With A Holistic Cloud Strategy." John R. Rymer, Sophia I. Vargas et al. Forrester Research. June 9,2014 Cloud computing provides enterprises access to three main application delivery advantages: • Increased efficiency during internal development cycles; • Enhanced resiliency, availability, and performance of cloud-based applications; • IT's ability to aggregate cloud- based applications into a new, synthetically formed, application catalog. As IT professionals focus on strategic business initiatives they begin to uncover new and creative ways to service both the organization and the end-user. With cloud- based development, they now have a new means to manage application lifecycles within the enterprise. The ability to create and to use application templates, in addition to a virtual application appliance, can dramatically improve reactions to dynamic business needs. IT professionals know that they can provision only the needed amount of compute, storage, and networking resources in minutes and can turn off these provisions just as easily. With cloud computing, developers can afford to be more creative than when every experiment required cost- justifying permanent infrastructure. Enhanced application delivery and integration is gaining popularity with IT departments due to the highly visible impact of the benefits IT derives from cloud services to deliver applications. Recent Forrester Research analysis concludes that Cloud Applications are leading the charge in the growth of the public cloud market, set to reach $133 billion in 2020, marked growth from the $52 billion in 2013.1 Organizations are becoming increasingly reliant on delivering applications to end-users for virtually anywhere, anytime access to critical resources on almost any device. Users are demanding applications be developed quickly and flexibly, potentially putting IT in a position to provide the corporation with agile application development and delivery mechanisms or risk being viewed as an impediment to productivity and innovation. These requirements are driving additional needs for performance, stability, and scalability. At all levels of the enterprise, application availability and performance is paramount. Cloud computing provides an important bridge between the development cycle and deployment. With inherent resiliency provided by high availability and performance managed by automated resource load leveling and scheduling, cloud computing provides the operational capacity to match the agility of development. Figure 22 contextualizes the influence of cloud resources through the lenses of Finance, Operations, and Innovation. IT often has an abundance of applications available "in the Cloud" and offered via a Software-as-a-Service (SaaS) model - the success of Salesforce.com is but one of many examples. Rather than building from scratch or customizing an off-the-shelf package, IT has new options to integrate into the corporate application suite. With this menagerie of applications, IT faces new integration challenges as they become increasingly modular, distributed, volatile and interdependent. Whitepaper: Extracting the Full Value of the Cloud 8 APPLICATION ENABLEMENT: LOWER THE BARRIERS TO CONTINUOUS IMPROVEMENT DAI is an organization committed to helping developing nations become more prosperous and just, cleaner and healthier, safer and more stable, more efficient, and governed for success. DAI's IT resources are directly involved in executing projects in developing nations on the topics of Democratic Governance and Public Sector Management, and Energy and Climate Change, among others. These IT resources, however, were being impeded by the obligations of managing internal application environments. DAI looked to NaviSite's cloud-based managed application services for its Oracle® E-Business suite. Offloading management of the Oracle environment has enabled DAI to devote more IT resources to end-user facing projects instead of internal applications and systems. EMPOWER INNOVATORS TO MOVE FAST. Figure 2, The benefits of cloud services extend into multiple facets of business innovation, leveraging essential vehicles such as a Pay-as-You-Go billing model, rapid rollout capabilities, and self-service resources and controls Whitepaper: Extracting the Full Value of the Cloud PRODUCTIVITY GAINS: INCREASE EMPLOYEE EFFICIENCY AND EFFECTIVENESS "An IT team that saves time by using a managed cloud service might invest the reclaimed time to implement new applications which were not previously available to a business unit, or perhaps to support a marketing campaign which was otherwise deprived of IT services." 3 "Workforce Personas and the Mobile App Gap" Ted Schadler et al. Forrester Research. November 4, 2013 Cloud computing extends the influence from IT teams to end-users, providing a variety of both employee benefits and business value resulting from their optimized efforts. Employees benefit from the new agile applications and feature upgrades that IT teams can deliver with cloud-based services. For example, an IT team that saves time by using a managed cloud service might invest the reclaimed time to implement new applications which were not previously available to a business unit, or perhaps to support a marketing campaign which was otherwise deprived of IT services. By providing secure, reliable, and easy-to-use applications via the Cloud, enterprises can accelerate many business processes and improve overall corporate communication and collaboration. A division of a large healthcare provider began using Infrastructure-as-a-Service (laaS) to avoid long waits for infrastructure that were preventing the division from meeting performance targets. Now the business unit can provision infrastructure on its own, in minutes. Similarly, ConnectEDU used NaviCloud® to accelerate the introduction of a new web portal for students seeking personalized college and career guidance. The cloud service also lowered infrastructure costs by more than 30 percent because ConnectEDU pays only for the resources it actually consumes; an important benefit because of seasonal fluctuations in demand. Greater Mobility with Virtual Desktops Increasingly, employees are becoming more regionally distributed, with an estimated 29% of global information workers using multiple devices to access an array of applications, often from multiple locations.3 To address potential challenges born from increased enterprise mobility, many organizations are pursuing technologies and solutions which facilitate unprecedented accessibility to critical resources from a diverse set of endpoint devices. To accomplish this, many organizations are turning to cloud-based desktop virtualization, or Desktop-as-a-Service (DaaS). With virtual desktop cloud services, employees' applications and data are not held on their personal device's hard drive, but rather hosted on virtualized servers, in the Cloud. With DaaS, because of enhanced mobility, productivity faces fewer impediments, while employees benefit from a seemingly borderless ability to work virtually anywhere, on nearly any device, with the same experience as they would have on office terminals. Additionally, corporate IT can be satisfied that corporate data and information is not as easily lost or stolen when compared to its previous storage on potentially at-risk physical devices - very little is actually residing on a physical device outside the four walls of a corporation and the datacenters it employs for its administration, computing, and data storage needs. By empowering non-local, remote, and mobile employees, cloud-based virtual desktops can also support business continuity, limiting the adverse effect of inclement weather, disasters, or a pandemic on employees and other susceptible resources. Employees can work off-site using virtually any device at-hand, such as a home PC or tablet, and still realize a Windows desktop experience, or maintain access to the applications they need most. Whitepaper: Extracting the Full Value of the Cloud With DaaS, because of enhanced mobility, productivity faces fewer impediments, while employees benefit from a seemingly borderless ability to work virtually anywhere, on nearly any device... __J The ROI from Desktop-as-a-Service is Significant For many, some of the principle benefits of a DaaS solution include: limiting IT commitment to managing and troubleshooting operating systems and applications on hundreds or thousands of devices; lower licensing costs; lower capital costs for thin or zero clients; and a roughly 10-year - rather than 3-year - life expectancy for thin clients as compared to workstations. SaaS and DaaS offerings are leading IT departments and business executives to consider completely new approaches and policies around the endpoint devices employees use to conduct business; in many cases, these changes fundamentally modify the manner in which employees operate. Whitepaper: Extracting the Full Value of the Cloud 11 CONTINUOUS BUSINESS IMPROVEMENT Having solutions that help to accelerate the business by relieving burden . is crucial to business success. Companies are quickly realizing the full potential of the Cloud as they take steps to leverage its full breadth of applications, technologies, and standards. While it certainly can be used as a point solution, with the deep strategic view encouraged in this publication, the Cloud has the potential to be the gift that keeps giving. By viewing the Cloud as the platform from which your business may innovate, it can be easier - and potentially less expensive - to give employees the tools they need to excel at their jobs. Rather than simply filling a niche for another purpose-built technology, managed cloud services are an enabler for business transformation. Conversely, the choice not to embrace the Cloud can make businesses sluggish when compared to competitors. In these highly competitive times, speed, efficiency, and time-to-market are critical for enterprise organizations. Frequently, the firms which can streamline operations, increase productivity, and leverage their strengths as dynamic organizations are those which are more readily able to differentiate themselves in the marketplace. Having solutions that help to accelerate the business by relieving burden - rather than slowing it down by encumbering it with additional technologies - is crucial to business success. As organizations adopt more cloud services - laaS, PaaS, SaaS, DaaS, managed application services, among others - the benefits multiply. Each cloud-based solution becomes substantially more effective as it builds upon the impact generated by the additional cloud resources. Additionally, employees and professionals are being exposed to cloud and cloud-like solutions almost daily. As a result, the ramp-up time for adopting and understanding corporate cloud-based tools is significantly less than that seen with traditional corporate technologies. Whitepaper: Extracting the Full Value of the Cloud 12 BEGINNING THE JOURNEY TO THE CLOUD ^ SELECT THE RIGHT FLAVOR OF CLOUD Very rarely are technology decisions easy and straightforward. Despite all the hype surrounding cloud, the decision to implement cloud solutions is not to be taken lightly. The journey to the Cloud begins with some internal business reviews to help drive the following decisions: 1. Select the Right Flavor of Cloud for Your Business Reservations about the Cloud generally refer to public cloud services. Due to cloud architecture's compelling price point, media outlets falsely generate a stigma to which all other cloud options are subject, particularly around security and reliability concerns. Public cloud services generally are used for non-business-critical applications that do not require controlled latency or special security precautions. Enterprise cloud services, such as those offered by NaviSite's NaviCloud® platform, provide the necessary safeguards for mission-critical applications, often fully satiating businesses concerned about compliance and security standards. Cloud service providers offer a variety of pricing models to most appropriately accommodate a variety of business models and governance requirements. In contrast to pricing based on the number of virtual machines engaged, many organizations prefer pricing based on actual resources consumed (NaviSite's model). 2. Identify the Best Cloud Solution for Your Business Many organizations begin their journey to the Cloud with SaaS, including Oracle eBusiness applications and Microsoft messaging applications, or with Infrastructure-as-a- Service. Others begin with virtual desktop infrastructures (VDIs), relieving IT teams from having to manage operating systems and applications on individual desktops, and instead staffing a full helpdesk while allowing employees the ability to choose their own device. Regardless of which cloud solution is adopted first, for many enterprises, the key to success is to identify the best strategy for your particular business. For some, the ideal cloud implementation scenario begins with something that is a green field addition to your infrastructure, like adding cloud storage or deploying DaaS for contract workers. For other businesses that are struggling with traditional applications, moving a non-mission critical application to a cloud environment may provide the fastest benefit to IT and to employees. Each business will be different, so it is important to do a thorough review of your environment and identify the areas which make the most sense to initially implement cloud solutions, without forgetting about future growth and opportunity. 3. Select a Managed Cloud Service Provider with a Strategic Cloud Vision Choice is certainly not a problem when it comes to cloud computing options available today. Despite the lingering perception that all clouds are equal, cloud strategies and solutions can vary extensively. Any enterprise interested in adopting cloud services should carefully examine the options available through the lens of their unique business and technical requirements, all while staying cognizant to the overall needs of the business. Whitepaper: Extracting the Full Value of the Cloud BEGINNING THE JOURNEY TO THE CLOUD (cont'd) Some questions to consider when evaluating service providers include: • What is their cloud services roadmap? • Do they offer multiple flavors of cloud that can all work together? • Do they offer SLAs for latency? • Do they offer SLAs for availability? The following are especially important for transaction-processing applications: • How do they ensure security of your data, information, and technology? • What if the datacenter fails? • Will your applications be disrupted when they upgrade servers or switches? It is important to understand service providers' approaches and philosophies on how the Cloud will evolve and, additionally, how easy it can be for your business to add new cloud services, as required. This illustrates one of the most notable and intrinsic benefits of the Cloud: flexibility and scalability in-step with the changes of a dynamic business. Whitepaper: Extracting the Full Value of the Cloud BEGINNING THE JOURNEY TO THE CLOUD: CASE IN POINT *?— \A/ocfof Western and Central New York "Every dollar I spend comes from sales or our membership team; I'm trying to keep costs contained from a technology perspective so we can focus efforts on membership," said McLaughlin Member satisfaction is at the heart of AAA Western & Central New York's operations. The organization prides itself on delivering top-notch customer service for its customers 24-7, regardless of location or time of day. This means that they cannot have anyone - regardless of their location - have a less than perfect user experience. So for AAA, keeping technology running reliably 99.9 percent of the time is imperative to ensuring that the organization is providing exceptional customer service. AAA Western & Central New York had previously worked with NaviSite's parent company Time Warner Cable to build a fiber optic virtual private network which was configured to allow data traffic to flow without going through a central hub. This design provided them with a very reliable high performance network infrastructure. When AAA began looking at NaviSite they knew being part of the Time Warner Cable family would prove to be valuable. Joe McLaughlin, VP of IT for AAA Central & Western New York, is quick to explain that the move to NaviSite was made for reliability and not for cost-savings. However, he notes that as a result of working with NaviSite, he is no longer burdened with having to look at purchasing additional servers or refreshing hardware each year. "Every dollar I spend comes from sales or our membership team; I'm trying to keep costs contained from a technology perspective so we can focus efforts on membership," said McLaughlin. "When we looked at the numbers, we realized we would need at least two more full-time staff to keep the reliability of our network at the levels that we have by using NaviSite. So while our costs didn't go away, they are predictable each month, and we're now able to react quickly if we need to add or remove a server." "NaviSite has a roadmap where they can clearly articulate about expanding their current services and exploring new services,' says McLaughlin. "They have been open in expressing where they want to go in the future, and, they have asked for our input on any areas they should explore. For me, it signals that they think of us as a long-term partner. I don't have to think about best-of- breed technology for my customers; I can trust that NaviSite will do that." Whitepaper: Extracting the Full Value of the Cloud 15 CONCLUSION The key to achieving the most value from cloud investments, relies on not looking solely at the role it wil play in the organization COST I PRICE I ROI The cloud market is experiencing exponential growth as companies in every sector move to hardware and software solutions that are hosted and delivered over the Internet. Forrester Research, Inc. expects the market for public cloud to reach $191 billion in 2020, compared to $58 billion in 2013.1 All of this growth and expectation demonstrates that cloud services are not just a flash in the pan, but are viewed as, and expected to continue being, a foundational element of corporate IT from this day forward. Cost, price, and ROI are always going to be part of the decision process for selecting any new technology or service - cloud or otherwise - no matter how popular the solution may be. The key to achieving the most value from cloud investments, however, relies on not looking solely at the role it will play in the organization. A true valuation of ROI from cloud services must include the impact it will have throughout the organization and how it will impact the business' ability to operate, to service customers, to innovate, and even to adopt other technologies in the future. IT and the technologies IT deploys are now, more than ever, direct contributors to enterprise success. This creates the need to invest in the latest technologies and services, ultimately leveraging the flexible scalability and cost benefits that are intrinsic to the Cloud. Andrew Bartels, Forrester Principal Analyst Serving ClOs, asserts that "ClOs should start considering cloud as a core deployment option within their formal budgets."1 By consistently evaluating the Cloud's place in the business as requirements and operations change, a more accurate return on investment is established well- beyond that provided by any ROI calculator which fails to acknowledge the extent of the Cloud's influence. Now, each individual enterprise must determine when and how they want to leverage all that the Cloud has to offer and to find the best cloud partner to help achieve and accelerate the real business benefits of the Cloud. About NaviSite NaviSite, Inc., A Time Warner Cable Company, is a leading worldwide provider of enterprise-class, cloud-enabled hosting, managed applications and services. NaviSite provides a full suite of reliable and scalable managed services, including Application Services, industry-leading Enterprise Hosting, and Managed Cloud Services for organizations looking to outsource IT infrastructures and lower their capital and operational costs. Enterprise customers depend on NaviSite for customized solutions, delivered through a global footprint of state- of-the-art data centers. For more information about NaviSite's services, please visit www.navisite.com. NaviSite, Inc., A Time Warner Cable Company www.navisite.com © 2012,2014 Time Warner Cable Enterprises LLC. All rights reserved Time Warner Cable Business Class is a trademark of Time Warner Inc. used under license. © 2014 Time Warner Cable Enterprises LLC. All rights reserved.

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