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The Build vs. Buy Decision for SaaS Delivery

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The Build vs. Buy Decision for SaaS Delivery

  1. 1. Webinar: The Build vs. Buy Decision for SaaS Delivery Featuring: Saad Saleem, Director, IT & SaaS Operations – Granicus Dave McKenzie, Sr. Director, Field Operations – OpSource Slide 1 © 2010 OpSource, Inc. All rights reserved.
  2. 2. Agenda• Housekeeping• Build vs. Buy Issues Overview – Dave McKenzie, Sr. Director, Field Operations, OpSource• Granicus: Real-life Case Study in the Move from DIY to Outsourcing – Saad Saleem, Director, IT & SaaS Operations, Granicus• Q&A SessionSlide 2 © 2010 OpSource, Inc. All rights reserved.
  3. 3. Welcome!• Moderating: Kim Kelley, Director, Marketing Programs & Alliances, OpSource• All phones are set on mute• If you have a question, please use the Chat Q&A box located below the presentation panel• We will collect questions throughout the webinar and answer as many as we can at the end• If we don’t answer your question, we’ll follow-up with an answer via email• Full-screen button will let you toggle between a larger image view and the view with Q&A box to type in questions – you can use it throughout the webinarSlide 3 © 2010 OpSource, Inc. All rights reserved.
  4. 4. Dave McKenzie, Sr. Director Field Operations, OpSource • 17 years experience in technology • At Applied Materials, Dave was in charge of IT services and support for a billion dollar product group • At Accelica he helped lead a start up consulting company through the transition to managed services and later through the acquisition to OpSource • At OpSource, Dave has held positions as Director of Operations directly managing client implementations and on-going support teams, and is now the Sr. Director of Field Operations in charge of the OpSource Business Consulting team Slide 4 © 2010 OpSource, Inc. All rights reserved.
  5. 5. Saad Saleem, Director, IT & SaaS Operations, Granicus • Over 12 years of experience delivering Software-as-a-Service • Background in IT, Product Management and Business Development at companies including UpShot, Siebel, Oracle and Granicus • Extensive hands-on knowledge of various hosting strategies from Self-Managed Co-Location to Managed Hosting Slide 5 © 2010 OpSource, Inc. All rights reserved.
  6. 6. Presentation Agenda• OpSource Overview• Questions you should be thinking about• Build: Why would you build? and What do you need?• Buy: Why would you buy? and What do you get?• How to Compare and Contrast• SummarySlide 6 © 2010 OpSource, Inc. All rights reserved.
  7. 7. OpSource: Enterprise Cloud and Managed Hosting• OpSource provides Enterprise Cloud and Managed Hosting Services• Solutions for Enterprise, SaaS, Telecoms and Cloud Platforms• Investors: Crosslink Ventures, Velocity Founded in 2002 Interactive Group, Intel and NTT• Offices: Santa Clara, CA (HQ); Herndon, VA; Dublin, London, Bangalore• Unmatched Industry Experience – SaaS Hosting and Scaling Software-Oriented Architectures (SOA) – High Performance, Secure Cloud ComputingSlide 7 © 2010 OpSource, Inc. All rights reserved.
  8. 8. Questions to keep in mind• Is building and maintaining infrastructure a core competency?• Who will do the work in-house?• Do you feel you can trust a Service Provider with your application/data?• Can you give up some control?• Do you understand all your needs/requirements?• Do you understand the gaps between what you can build vs. what you can buy?• What do your end users expect from your service?• How will you scale as you grow?Slide 8 © 2010 OpSource, Inc. All rights reserved.
  9. 9. The Case for Build DIY: Why Build it Yourself & What Do You Need?Slide 9 © 2010 OpSource, Inc. All rights reserved.
  10. 10. Why would a company “Build it”?• Ability to control all aspects of the environment• Leverage existing infrastructure• Leverage the in-house knowledgebase on how to support the environment• Believe a service provider can not support their application• Easier to manage in-house personnel vs managing a service provider• Cost of migrating or moving (If existing build)• You already have everything they need and have no pain pointsSlide 10 © 2010 OpSource, Inc. All rights reserved.
  11. 11. Responsibilities under “Build it”• Procurement and installation of the system and network infrastructure• Monitoring of all systems 24x7x365• Support of all devices 24x7x365• Employee resources (management of staff dedicated to the hosting infrastructure; insurance; weekend, evening/overnight and holiday coverage; certifications and ongoing training)• Planning and scaling the configuration when appropriate• Management of staff and vendors (colocation center, hardware provider, network provider)• Security and compliance requirements (SAS-70, HIPAA, PCI, etc.)• Maintenance of depreciating assets• Large capital expenditures with growth of business• Slow implementation timesSlide 11 © 2010 OpSource, Inc. All rights reserved.
  12. 12. What do you need to “Build it”?• Hardware – Servers, Network Equipment, UPS (1) ISP – Maintenance Contracts• Software – Operating Systems, Backup software COLO – Service Contracts• Datacenter – Racks, Bandwidth, Power (2) Firewalls• Recoverability – Backup Solution – Disaster Recovery planning• Consumables/Inventory (2) Load Balancers – Spare parts – Tapes – Cables• Tools – Ticketing – Monitoring (2) Web/App – Reporting Servers• People (1) Monitoring Server – Management (2) Database – Technical: DBA, Network engineers, Systems engineers (1) Backup Servers - – Continued Training Server Clustered• Documentation – Runbook – Technical documentation of environment – Diagrams – Reports Network/Sys DBA/IT Manager Admin – Service Level Agreements (SLA)Slide 12 © 2010 OpSource, Inc. All rights reserved.
  13. 13. The Case for Buy Outsource: Why Buy & What Should You Expect?Slide 13 © 2010 OpSource, Inc. All rights reserved.
  14. 14. Why would you “Buy it”?• Lower costs due to economies of scale• Ability to concentrate on your core capabilities• Better and more robust services (security, storage, tools, etc)• Higher quality service due to focus of the partner• Faster implementation to support growth• Focus on delivery and uptime due to SLA penalties• Overcome lack of internal expertise• Increase flexibility to meet changing business conditions• Industry best practices• Mitigate risk• Acquire innovative ideas• Gain market access and business opportunities through the providers ecosystem• Turn CapEx into OpEx• Leverage certifications and compliancy understanding• Recoverability optionsSlide 14 © 2010 OpSource, Inc. All rights reserved.
  15. 15. What do you look for from an outsourced solution?• Proven – Do your homework – research the different providers• Complete – Supplying all the infrastructure, application management, 24x7 monitoring, database support, value added services• Reliable – 100% application uptime SLA, SAS70 Type II compliant, PCI Certified, Safe Harbor• Focused – Tools and Services to enable customers to focus their resources on strategic value creation• Affordable –No costly upfront investment in people and equipment Slide 15 © 2010 OpSource, Inc. All rights reserved.
  16. 16. Decision Time The Decision: How To Compare and ContrastSlide 16 © 2010 OpSource, Inc. All rights reserved.
  17. 17. Decision Making Process What is important to the Servers business? Uptime requirements? Application Facility Build vs.Business Need Design/Requir Capacity needs near- Storage Requirements Buy ements term? Decision Growth of environment Network long term? Slide 17 © 2010 OpSource, Inc. All rights reserved.
  18. 18. How to compare Build vs Buy?• Create a score card to compare services/categories Category Build Partner Category Weight Overall cost 0 1 Overall cost 4 Reduce time for On Boarding 1 0 Reduce time for On Boarding 3 Security of environment 0 1 Security of environment 5 Environment Scalability 0 1 Scalability 5 Cost to What do you not have now? implement/Fix The environment has no redundancy $200,000 We need to be PCI Compliant $175,000 Need a network engineer $125,000 Outgrown our current architecture $350,000• Add up who will do the work in house Hours of work Task or Action Who? per week Network administration Kenny DoAll 8 Database Administration Kenny DoAll 12 Storage support Kenny DoAll 4 Total 87 = You killed KennySlide 18 © 2010 OpSource, Inc. All rights reserved.
  19. 19. Comparing Service Providers – Data Center and Security OpSource Vendor 1 Vendor 2Data Center SAS 70 Type II Microsoft Partner Gold Gold Gold Mission Critical Datacenter Own vs Lease Lease Own Own Unlimited 24x7x365 Support Tier 1 Network Number of Bandwidth Providers 5 10 10 Internet Connection Internet Connection 100% Network Uptime Only Only 100% Infrastructure Uptime X 100% Application Uptime X X 1Hr Hardware Replacement Upgrade Time 48hrs ? ?Security Firewalls O O IDS O O DDoS Mitigation O O VPN O O Load Balancing O O Root Access LEGEND X O ? Comes Standard Unavailable Option to buy Insufficient Data Slide 19 © 2010 OpSource, Inc. All rights reserved.
  20. 20. Comparing Service Providers - Service OpSource Vendor 1 Vendor 2 Service Dedicated Account Representative Monthly Account Consultation O Change Management O Capacity Planning O Monitoring Run Book ? Online Ticketing System DNS Manager Customer Portal 24x7 End User Call Center X X Data Base Admin O O Application Engineer X X Website Analytics network+Infra.+app. network + Infra. network Daily Backup O Offsite Storage O O Agents for Data Base O O Over the Wire Backup X X Disaster Recovery O O O LEGEND X O ? Comes Standard Unavailable Option to buy Insufficient DataSlide 20 © 2010 OpSource, Inc. All rights reserved.
  21. 21. Request For Proposal (RFP)There are many templates available for a technology based RFP online. Find the one that meets the majority of your needs and add the additional questions to ensure you collect the information you need to evaluate the provider.RFP Question ExamplesData Center and Physical Access• Does the company have policies on removable media in the datacenter?• Do you have third parties with physical access to information systems?Access Control and Monitoring• Has a SAS70 Type II review been performed? When?• Does a separation of duties exist between individuals who authorize access, personnel who enable access, and personnel who verify access?Data Backup / Business Continuity / Disaster Recovery• Is the distance between the backup recovery facility and the primary location been determined to be of a distance adequate so that one incident does not affect both facilities?• Does the recovery location use different power and telecommunications grids from those used by the primary site?Vulnerability / Intrusion Detection / Anti-Virus• How does OpSource prevent Denial of Service (DoS) & Distributed Denial of Service (DDoS) attacks?• What information is typically logged? Does a formal network log review process exist?Slide 21 © 2010 OpSource, Inc. All rights reserved.
  22. 22. Comparing Costs Use a spreadsheet/graphs to compares the costs Total Savings Chart the differenceImplementationCosts Year 1 Year 2 Costs Costs Slide 22 © 2010 OpSource, Inc. All rights reserved.
  23. 23. Comparing the Cost Models Build Buy Upfront investment Pay as you grow, Delayed breakeven Align costs with revenueSlide 23 © 2010 OpSource, Inc. All rights reserved.
  24. 24. Summary• Make sure a you understand your needs and requirements• Make sure you understand the gaps between build vs. buy….there is value here• Make sure you invest the time to compare the options for both outsourced and internal modelsSlide 24 © 2010 OpSource, Inc. All rights reserved.
  25. 25. Questions & Answers Q&A Type your questions into the chat box below the presentation panel Contact OpSource: Email: sales@opsource.net Phone: 800-664-9973 Website: www.opsource.net Dave McKenzie: dave@opsource.netSlide 25 © 2010 OpSource, Inc. All rights reserved.