ENABLE cloud service strategies by running IT like a business.
The rapid evolution of IT to a strategic service broker by enabling cloud service strategies Business white paper
Table of contents Introduction.............................................................3 Why service management is critical for a cloud . service strategy.......................................................3 IT responds to competition: the emerging role of . the service broker....................................................4 Making the move to adopting cloud services................6 Sourcing service management capabilities through . the cloud...............................................................7 Help for your journey to cloud services........................8 HP Cloud Discovery Workshop...................................8 HP Cloud Roadmap Service ......................................9 HP Cloud Design Service......................................... 10 HP Service Management Consulting Services . for cloud computing............................................... 10 Why HP?.............................................................. 11
Introduction Discussions on the cloud and cloud services have gained greater momentum over the last 18 months, and cloud services are increasingly embraced. More organizations, from small and medium enterprises to large corporations and government agencies, are reviewing how cloud services can benefit them, piloting their use, or already deploying them in full.
A new range of suppliers is providing a market for the cloud and cloud services: • Organizations such as Google™, Amazon, and Yahoo that have operated cloud services to deliver their own customer services, and are now offering IT services to consumers and corporations
• Network and communications service providers as well as managed services providers looking to sell private and public clouds based on their The portfolio of services available is growing, while extensive communications networks or data center the number of participants in the market who offer and services capabilities even resell cloud services is increasing and becoming • Software-as-a-service providers who are addressing more diverse. business process operations or IT process operations, or even enabling interfaces through “middleware as a service,” including established • 77 percent of business companies such as Salesforce.com, as well as a leaders believe that rapid whole host of startups, who see the opportunities through the changing and more consumer-aligned change is the norm in today’s attitudes toward adopting cloud services
economy.
• One in two business leaders say that their IT department is unable to respond to rapidly meet changes in demand. • 71 percent would increase IT investment if it meant better time to market.1 Advantages of the cloud include: • Everything as a service—service functionality and outcomes are key to influencing the choices made; individual technical components are less relevant • Availability of a broad and flexible service portfolio, from infrastructure, platforms, software, and applications to business processes • The ability to gain access to these services from outside the office, across the Internet • On-demand access, often with variable availability and capacity levels • Cloud service consumers being charged only for services used Organizations see the benefits in terms of increased agility for business and IT operations, shorter time to market, reduced capital expenditure, and opportunities for innovation. New operating models and value chains are emerging as new and, at times, unexpected partnerships and supply chains are formed. 1
The adoption of cloud services means that organizations are consuming business and IT services from an internally and externally provided portfolio with varying extents of control and influence over the individual services. This drives the conclusion that IT must act in a business-centric way by: • Managing suppliers and the service portfolio as a business would • Establishing an understanding of the business’s goals, plans, and perspective to translate these into the appropriate service portfolio, quality of service, charges, and speed to refresh to meet new go‑to‑market plans • Transforming into a service-centric organization and understanding the importance of the technology services delivered to the business and how best to deliver them
Why service management is critical for a cloud service strategy The principles of service management—the management of IT-enabled services to meet business requirements in terms of functionality, availability, risk, and costs—remain just as relevant, and in fact even more so, as cloud services are deployed or sourced. Over the years, organizations have strived to mature their service management capabilities. They have developed service assurance and proactive operations for the avoidance of outages. Further customer-centricity and alignment with the business have been sought, resulting in greater
Statistics from “Enterprise IT and the cloud distribution,” HP Software and Solutions keynote presentation at Cloud Computing World Forum 2010
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Figure 1: With so many service sources, shadow sourcing may flourish.
Lines of business
Hosted, managed, outsourced
Internal
Value opportunity
Cloud Enterprise IT
Business outcome
Business functions
service‑centricity. This has included clarifying the types of services provided and describing their alignment to business services and processes and enterprise risk management. Demonstration of the actual service delivery performance, that is, availability and business or end-customer enablement achieved, has been important in helping IT demonstrate its value. Some IT organizations have looked to run IT more like a business to proactively enable the corporation, managing costs and charging for services, or to drive new revenue streams through IT innovation.
at least initially, to provide IT services through their own IT functions. IT departments frequently comment on the difficulties of driving standardization of IT services within enterprises as business units cite conflicting needs and see their own respective requirements as priority. If business units are willing to source externally provided standardized cloud services, is there an opportunity for IT to benefit from the related potentially demonstrated change in perspective? Or will the business units see this as an opportunity to do it their own way, resulting in a dramatic increase of duplicated effort and spend as The adoption of cloud services continues the requirement shadow IT becomes commonplace? for mature service management capabilities. A cloud services strategy, whether it is to consume and source or provide services, needs to be balanced against business requirements. An appropriate, up-to‑date service portfolio that meets current business and functionality requirements needs to be established. Furthermore, the portfolio should be competitive by meeting typical cost or TCO indicators when compared to the wider market. There is growing evidence that business units simply engage with external cloud service providers when the IT relationship or services delivered are not seen as sufficiently relevant, business-centric, enabling speed to market, or meeting expected price points. In fact, SMEs and startups are increasingly sourcing cloud services at the outset, negating their need,
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IT responds to competition: the emerging role of the service broker CIOs are recognizing all too rapidly that the range of cloud services brought to market is extensive. This has added a new competitor to IT as business users may view cloud services as cheaper or simpler to utilize. Opportunities for increasing business return and value to consumers and providers include: • Infrastructure as a service • Platform as a service • Software as a service • IT process operations as a service • Business process operations as a service
Figure 2: Integration characteristics
Service sourcing strategy and governance
Cloud service providers Hosted, managed outsource providers
Enterprise IT Service portfolio
App services
Data services
Infrastructure services
Communication service providers
Service portfolio aligned with business strategy
Business services
S
S
S
S
In-sourced services Multi-supplier management
At the same time, the complexity of operation for providers increases. There is initially the requirement to provision infrastructure and then applications and processes, all of which need to be available to a demonstrable level of quality and service, standardized, and, to an extent, certified at an acceptable price. Going down the list, the services represent to consumers an expanding role within IT and the wider corporate functions, including sales and accounting. For most larger organizations, the conversation about “core versus context” is important: Which services are core and form part of the key capabilities that drive competitive advantage? For which services are they being held accountable by regulators? Many businesses differentiate these as “core” services that should remain in-house and largely under corporate governance. “Context” services are more readily brought in and integrated externally. Figure 2 illustrates the importance of the IT service portfolio. It is important for IT to determine and provide an appropriate service portfolio that ensures that the actual service delivery meets the business’s and IT’s expectations regarding strategy, functionality, quality, flexibility, and acceptable levels of risk. In some cases, the services offered will be commodity-like, without much room for negotiation or modification. In other instances, a greater choice of service options may be available. Establishing a balanced comparison between providers and their offered services is important, including, at times, a comparison against internally provided services.
Service catalog with self - sourcing controls
The variety of organizations offering cloud services is potentially surprising, ranging from established firms or vendors who use their estates and capabilities to reach new markets or exploit new trends, to new entrants who offer newly established services or a white-labeled portfolio that may be established through several providers. Similar business diversification can be noted for supermarket chains that seek new opportunities while exploiting existing routes to market. By adding a breadth of services ranging from, among others, banking and insurance to telephony and travel, the supermarkets are becoming brokers of business services and providing a route to market. The ability of the business to act as a broker and manage the supply chain needs to be reflected in the integration of IT services, which are typically managed by IT and the service management function within. When sourcing cloud services, IT needs to be able to manage several service providers appropriately together with the respective service contracts and charging. There needs to be clarity on how support for the services will be provided and within which response and resolution times. While cloud services are the new kid on the block, many organizations have been providing and consuming services for years now in the form of managed services or outsourcing services. All three classifications of service sourcing are valid and can be considered to be part of a continuum, balancing pricing model and contract type with commitment and resulting business risk.
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Service catalog and portal layer Marketing and billing
Service request layer
Service health and SLAs
Service catalog management
Pragmatic, proven approach Pragmatic, proven approach
Service portfolio management
Principles
Demand
Figure 3: HP Cloud Functional Architecture—a provider’s view
By understanding the business’s requirements (and importance), IT can evaluate the right service provider (and service sourcing model) for each service, resulting in an IT organization that is likely to have a varied mix of in-house capability and services sourced from a number outsourced, managed, and cloud service providers. This of course further compounds the challenges of service management and business continuity.
Making the move to adopting cloud services While IT’s cloud service strategy discussions continue, organizations are starting to experiment to prove the viability and manageability of cloud services in their environments. Infrastructure as a service is typically initially sourced to increase capacity at peak times or for temporary use by development and testing teams. Through gaining familiarity, ability, and confidence, organizations are then expanding the range of external cloud services adopted. Meanwhile, the considerations for “core” services are to review how these may be offered through an internally provided private cloud. Here, standard services are made available through an internal service catalog to business users. Similar to external cloud services, the principles of self-service, usage through the intranet, provision on demand, and cost distribution or charging based on consumption apply. In turn, the complexity of driving a standardized portfolio for core services increases as the services change from infrastructure as a service to platform
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Integrated service delivery architecture layer
Resource and foundation layers
Service management
Separate layers: Demand, delivery, supply
Service governance
Modular building blocks
Supply
Data-driven integration
Delivery
Use case-driven architecture
as a service, software as a service, and so on. In combination with adhering to the principles listed above, the general initial step is to drive improved efficiency by automating the provisioning of services on demand, and providing these services on standard infrastructures that are typically more modern than those that run the familiar core applications. The benefits of providing infrastructure as a service and platform as a service in this way include: • Support of the drive to cultural acceptance of standard services • Acceptance of standard services defined in functional requirements rather than detailed technical specifications • Ability to clarify and confirm the provisioning processes for the specific services and then automate them, thereby enabling a company-wide understanding of the processes, improving risk management, and gaining financial benefit • Initial alignment of: –– Development, operational, maintenance, and support processes –– Standards for development, operability, supportability, and service delivery –– Enterprise architectures, data architectures, development frameworks, and service management and operations management architectures The lessons learned and benefits gained are then built on when organizations are ready to move to software as a service.
In instances where the core services are based on legacy applications that are architecturally not well suited to the internal cloud, options for modification or replacement activities as well as the potential of “doing nothing” need to be established and evaluated in the context of the business’s requirements and the related business case.
Sourcing service management capabilities through the cloud In addition to the responsibilities that the cloud places on IT organizations or lines of business—namely vendor and supplier management, contract and financial management, and service assurance—there are opportunities to seek service management function support through the cloud. Extensive software-as-a-service offerings are available to automate an organization’s current service management capabilities, or even help to rapidly introduce new ones. The supported activities range from service portfolio management; to service testing for functionality, performance, and security; to service support (including incident and change management); to operations management and end‑user experience management of services provided by a business organization. The benefits of adoption include rapid deployment of capability and the immediate availability of toolsets that frequently take months to implement. Standard processes are provided as part of the package, allowing organizations to deploy these promptly. In some instances, the requirement to work with standard processes supports organizations in their longstanding
aims to rationalize and standardize the processes currently deployed. The management software is maintained, supported, and updated in line with version releases, eliminating the need for extensive administration and development teams. The adoption of these services should still be considered and aligned within an organization’s overall service management architecture. The interfaces to in-house processes, toolsets, and data stores need to be reconciled and managed where appropriate. This is no different when compared with internally provided functions. Businesses may see an opportunity to provide cloud‑like service management functions themselves, using an underlying basis of software as a service or in-house capabilities. Providing IT services with service management functions to organizations in related business areas enables new business opportunities and mutually beneficial partnerships. These may accelerate revenue generation, drive efficiencies, manage costs, and avoid capital expenditure requirements. Examples of potential partnerships include: • Parent companies generating a common services portfolio for subsidiaries (that is, a shared services model) • Established pharmaceutical companies working with bio-tech companies to accelerate the development of new drugs • Communities of companies that together streamline the supply chain of their related customers The prerequisite for these ventures is the ability for IT and service management to be treated as a viable business function.
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Figure 4: HP Cloud Consulting Services
Unique HP Methodology, Cloud Reference Architecture, Intellectual Property Define
Cloud Discovery Workshop
Strategy and Plan
Cloud Roadmap Service
Design
Cloud Design Service
Deploy and Activate
Manage and Improve
Service Mgt and BTO Transformation Services; BTO Cloud Services
Solution Management Services and Premier Support
Build + Consume + Transform + Manage Service Management Consulting Services
BTO Cloud Services
• • • • •
• HP SaaS & Cloud Assure—security, availability, performance, cost control
Service Strategy & Portfolio Management Service Lifecycle Management Service Catalogue Business Service Management Cloud Service Automation
Help for your journey to cloud services
• Testing-as-a-Service • Archiving-as-a-Service • Track and Trace Services
product portfolio combined with existing customer strengths and capabilities
• Improve the time to value based on our blueprints, Our unmatched background in service management reference architectures, critical success factors, and cloud consulting, along with our industry-leading and experience portfolio of management tools that are also available The key HP Software and Solutions cloud services, as a service and underpin the full service management including consulting and product-oriented services, are lifecycle, enables HP to support customers in their described below in more detail. journey to adopt cloud services. The HP Software portfolio guides customers through a proven process to: • Confirm the key goals and aims of the cloud services strategy • Determine the strategic cloud services portfolio and how it will be established (whether as a consumer or provider)
HP offers the Cloud Discovery Workshop for customers who want to learn more about the cloud, service sourcing strategies, and considerations for decision making. This interactive one-day workshop covers:
• Clarify the implications for IT in terms of its strategic role together with the required service management and broader operational environment capabilities
• Creating common cloud understanding
• Shape the cloud services roadmap based on customer‑specific decisions
• Identifying strategic cloud-related initiatives
• Plan the detailed implementation of the cloud strategy based on the HP consulting, services, and
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HP Cloud Discovery Workshop
• Evaluating cloud opportunity, risks, and economic impact • Understanding management of change and governance strategies • Laying out next steps in a roadmap
HP Cloud Roadmap Service After you learn more about the cloud, a next step is a deeper exploration into how to harness cloud computing as part of your IT and business strategy. With the HP Cloud Roadmap Service, we work with your business organization and IT leaders to define the future state of your service provider strategy, align it with your business objectives and overall IT strategy, and develop a phased plan for the design and implementation of cloud computing and services. The key to the HP Cloud Roadmap Service is prioritization of short-term project phases that deliver value quickly, while working toward building a longer‑term, sustainable architecture for cloud computing. You receive detailed recommendations and a long‑term plan that enable you to make more informed decisions on: • A service strategy, governance, and program model for cloud services • Prioritizing service definition, service catalog, and management, and leveraging service delivery and deployment models as part of your service delivery strategy • Identification of a service culture and the organizational impact of cloud computing • Considerations for the security, availability, and risk management for cloud services, especially from an external provider • Financial impact of consuming or providing cloud services internally or externally • Identification of opportunities for leveraging automation technology to deliver value
Design and Deployment Services The HP Cloud Design Service provides a detailed and flexible cloud design that applies to a private, public, or hybrid model, depending on your roadmap and cloud strategy. HP leverages a comprehensive reference architecture for different sourcing and cloud types, and then provide a detailed design that includes expert and objective technology, recommendations of IT Infrastructure Library (ITIL) V3 and other standards, and a full mapping of HP and partner technologies for the cloud. We then can mitigate implementation risk with a detailed bill of materials and an implementation plan to move your design into production so that you can realize value from your deployment. HP Software Services for Cloud Infrastructure and Cloud Service Automation (CSA) provide you with the ability to effectively transform and automate your business services, infrastructure, and processes. You can design, implement, and integrate your virtualized and physical infrastructure and the application management tools required to proactively manage and operate within a given service level. This service portfolio leverages CSA software to help IT organizations manage, deploy, and automate a hybrid services environment that includes cloud and traditional technology-enabled services. CSA software provides tuned HP software and services to run your applications, enables integrated infrastructure and platform services, and delivers a focused cloud solution to your infrastructure.
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HP Software as a Service (SaaS) offers customers industry-leading BTO software through a SaaS model, including: • Predeployed 24x7 available infrastructure of the application • Embedded best-practice processes where applicable • 24x7 operational support via Web and phone • Ongoing expertise and mentoring to enable successful adoption A component of HP SaaS is HP Cloud Assure, which provides a comprehensive, turnkey solution consisting of HP software, services, and expertise. Cloud Assure leverages our industry-leading portfolio covering security, performance, and availability, while delivering on the industry-leading service-level agreements for software as a service.
HP Service Management Consulting Services for cloud computing We have applied our HP industry leadership in service management to help customers leverage cloud services across the complete service lifecycle, whether sourced from the cloud or deployed via private cloud from strategy through operations and continual improvement. These services include: • Service strategy and portfolio management to develop the right service strategy and portfolio for designing services delivered through internal and across service providers
• Designing, managing, and governing business and cloud services across multiple sources to enable their alignment with IT governance and compliance requirements • A service catalog for self-service delivery and availability of cloud and IT services • Standardizing service levels of cloud and business services, including monitoring and managing of application performance and service levels • Continually improving measurements against key performance indicators defined by the business
Why HP? As a pioneer in service management, HP provides a broad portfolio of service management services and solutions. With countless successful service management implementations across a range of industries and businesses of all sizes, HP is ready to
help you assess your current situation and assist you in making the transformation from managing infrastructure to service innovation. HP advantages include: • Over 20 years of experience deploying service management solutions • More than 12,000 ITIL-certified IT professionals • HP Software is the sixth-largest software company in the world; HP software products have been recognized as market leaders by industry analysts such as Forrester Research and Gartner • HP has long provided authors and reviewers of ITIL books, including writing the Service Operations book and glossary for ITIL V3, and participated in the process model development team • Complete service management solution portfolio, including consulting, education, outsourcing, and management software
Learn more about how HP services can help with your cloud solutions at www.hp.com/go/cloudconsulting
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