Presentation on Cloud Conputing presented by Theo Slaats, partner at Deloitte, during 2011 Cloud Expo in Jaarbeurs Utrecht.

1. Ready-made Cloud solutions don’t exist
Challenges in your journey to the cloud
Theo Slaats - Cloud Expo NL - Jaarbeurs Utrecht - December 7th, 2011

2. The Cloud is to Computing, what the grid is to electricity
In 1879, Edison
invented the light
bulb
About a 100 years ago, companies ceased
generating their own electricity and switched to
using the power grid.
And now...?
Will IT also become
a utility?
1 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands

3. Yeah, right...?
The horse is here to stay but the
automobile is only a novelty – a fad
1903, the president of the Michigan Savings
Bank advising Henry Ford‟s lawyer, Horace
Rackham, not to invest in the Ford Motor Co.
There is no reason anyone would want a
computer in their home
1977, Ken Olson, president, chairman and founder of
Digital Equipment Corp. (DEC)
There’s no way that company exists in a year
2001, Tom Siebel, founder - Siebel CRM Systems
[That company is Salesforce.com. Siebel doesn’t exist as a
company anymore. In September 2005 it was bought by Oracle
Corporation]
2 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands

4. Cloud computing represents a major change in Information Technology
sourcing and services delivery
Cloud Computing is not a matter of definitions but a matter of characteristics
“On-demand self- Service Types:
service” “Rapid elasticity” Business Process-as-a-Service
“Pay per use”
Software-as-a-Service
Cloud computing is based on the
convergence of Platform-as-a-Service
Internet technologies, Infrastructure-as-a-Service
Virtualization
and Service Sources:
IT standardization Public cloud (External)
“Location independent “Ubiquitous network Hybrid Virtual Private Cloud
resource pooling” access”
Private cloud (Internal)
Business Models:
Strategic and Operational Benefits: Cloud Service Subscriber
√ Increased Business Agility Cloud Service Broker
√
Cloud Service Provider
Reduce the amount of IT capital spending (OpEx vs CapEx)
Cloud Service Enabler
√ Reallocation of resources
3 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands

5. Yeah, right!
With the cloud, individuals and small
businesses can snap their fingers and
instantly set up enterprise-class services.
2011, Roy Stephan, Director of IT architecture and
engineering - Intelligent Decisions
Our industry is going through quite a wave of
innovation and it's being powered by a
phenomenon which is referred to as the cloud.
2010, Steve Ballmer, CEO - Microsoft
Cloud computing is empowering, as anyone in any
part of world with internet connection and a credit
card can run and manage applications in the state of
the art global datacenters; companies leveraging
cloud will be able to innovate cheaper and faster.
2010, Jamal Mazhar, founder and CEO - Kaavo
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6. IT Services will migrate to different cloud computing models at different
times, based on fit, maturity of services providers, availability of technology
Mainstream Adoption of Workloads by Service Type
New Core Apps SaaS
High
Engineering Apps
IaaS
Core ERP
High Performance
Computing / Clusters
“Standalone” Apps
Adoption
High-End Servers
Office Productivity
Storage & Back-Up
PaaS
Standard Servers
Collaboration Productivity Apps
Dev & Test Rapid App Dev
Websites, Intranet
Low
Today Future
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7. There are significant near term benefits for IT of a comprehensive
Cloud Strategy...
• Significantly increased flexibility: reduced time to design, implement, and “go to
market” with cloud-based software systems
• Much faster time to develop, test, and deploy packaged software
• “Encapsulating” single-tenant non-cloud software is a fast path to short-term value
• Longer-term value in cloud will offer significantly higher benefits, but will require
replatforming and replacement of “legacy” software – and that is a big hurdle
• Cost Savings: reduced CapEx, at a lower amortized cash flow, using subscriptions
• Reduction in total costs of software licenses and ongoing maintenance costs,
through use of SaaS subscription models rather than on-site licensed software
• Reduced physical infrastructure costs by moving to vendor cloud IaaS: reduced
hardware, networking, data center, facilities, power, etc.
• Positioning for major cloud architecture changes coming in the future:
• By introducing cloud products and services into the complex IT architectures, you
will be positioned for the major changes to reap the benefits of cloud
Enterprises that adopt cloud computing delivery models have the potential to re-
shape their competitive position – and the broader business landscape
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8. ...but there is a bigger Cloud promise
Cloud Computing
Improve Increase Improve
Product Innovation Revenu Operational Efficiency
• Accelerate compute intensive product • New revenue streams from wrapping • More efficient coordination of
development services around products disparate supply networks
• Reduce up-front investment • New services by mashing information • Accelerate market penetration
• Reduce error rates/risk across ecosystem • Faster scalability
• Increase open • Broader customer relationships, • Best-of-breed supply chain
innovation/collaboration leading to richer/more profitable • Reduce risk and lead-time
interactions (e.g., analytics)
• Life Sciences & Chemicals (e.g., • Manufacturing (e.g., insights on • Financial Services (e.g., create
drug and chemical discoveries) crop productivity by aggregating extended supply chain platform
• Oil & Gas, Energy and Mining (e.g., data from farm equipment • Travel & Tourism (e.g., coordinate
site selection modeling manufacturers) complex activities networks)
• Manufacturing & Automobiles (e.g., • Automobiles (e.g., cars bundled • Manufacturing (e.g., supply chain
farm equipment or automobile with services delivered through planning)
prototyping and technology testing) Cloud) • Technology (e.g., open innovation
• Healthcare (e.g., wellness and collaboration)
programs)
Cloud Computing has the potential to disrupt existing operating models and
business economics. Deep industry knowledge is needed to highlight these
disruptions and guide organizations in reacting to and capitalizing on them.
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9. Moving to the cloud is not just migrating some applications
How do I successfully
manage the transition?
How will cloud computing Future
impact my IT landscape?
Current situation
• Everything-as-a-Service
• In-house IT
• Client - Server
orchestration
• In-house IT department
• Flexible costs
• Fixed costs, upfront
dependent on usage
investments
• IT and business
• Low IT agility
collaborate in harmony
What benefits can I How will cloud computing
get from leveraging impact my (IT) organization?
cloud computing?
Rather than moving just some application „to the cloud‟. Finding answers to these
questions will be the key to successfully integrate Cloud Computing into your
organisation.
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10. Enterprises should understand the unique benefits and the challenges
deploying cloud computing services, and its potential for significant
business advantages
Business Organization
Benefits:
 Business can assume roles traditionally reserved for IT,
from solution ownership to administration
 Users can play an active role in creating new applications
Challenges:
 Limited ability to customize some solutions may challenge
cultures accustomed to bespoke solutions Adoption of SaaS and PaaS will
abstract the data center from the
 SaaS vendors tend to underplay the investment in process enterprise, resulting in fundamental
optimization, change management, integration and data changes to the business and IT
organizations, and costs of software
migration required to realize value services
IT Organization Finance Organization
Benefits: Benefits:
 Can reallocate resources to more strategic initiatives and  Costs will be allocated to operational expenses (OPEX)
solutions over maintenance rather than capital expenses (CAPEX) – enterprises can
 Simplified and free upgrade process allocate more of the CAPEX budget to revenue generating
Challenges: activities
 The transition from a waterfall to an iterative / agile  Unlike on-premise applications, large upfront license fee is
development lifecycle and the speed of delivery will not required
challenge traditional IT delivery processes Challenges:
 Need to upgrade skills of staff, particularly around web-  SaaS Contracts are loosely defined with little consistency
services and web technology amongst vendors– better transparency and structure in the
 Standards / policies around disaster recovery and security / overall sourcing process is required
privacy as it relates to SaaS vendors will need to be  Need careful Total Cost of Ownership (TCO) analysis to
developed truly understand potential savings over longer time horizons
and with larger user bases
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11. Cloud Computing has a significant impact on IT Strategy
Cloud offers major benefits of flexibility, cost savings, and improved IT capabilities. To gain
these advantages, enterprises should:
• Establish new IT application and technology architectural principles and standards which
are necessary to reap cloud benefits.
• Revisit current major system architecture and design principles and evaluate fit with
cloud suitable design concepts
• Understand the timing of major system software architecture changes, and plan for
adjustments to enable „cloud friendly‟ application delivery models
• Identify new usage models, considering new options for SaaS, IaaS “encapsulation”,
mobility apps, and “Big Data” analytics, to enable highly efficient and flexible products
and services
• Quantify the benefits that cloud will bring to your company, while assessing all affected
roles and functions to gauge organizational and business impacts and risks
New cloud software is fundamentally different, and improvements to “legacy”
software often require complex software engineering and architecture refactoring.
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12. Enterprises should take a comprehensive approach to cloud strategy,
integration, migration, and monitoring, to manage the risks and maximize
benefits of adoption
Cloud computing opportunity assessment Cloud Computing Strategy
 Evaluate vendor capabilities, mapped to requirements,
 Understand the future business needs & capabilities that with financial benefits
need IT enablement
 Assessment of cloud computing providers security
 Assessment of application portfolio to select applications capabilities, control, and monitoring
suitable for cloud migration  Assess tax Implications and evaluate strategic
alternatives
 Impact to regulatory compliance, data privacy and
protection standards, data location/segregation standards  Define cloud computing architecture, migration, and
operations plan
 Impact to organizations security posture and likelihood of  Create processes to integrate cloud computing into
increased vulnerabilities security framework
Ongoing monitoring Implementation of cloud computing
 Periodic security activities for cloud related components to  Assist in conducting cloud proof of concepts (POC) and
evaluate for vulnerabilities pilots to mitigate risk
 Conduct review of logs/audit monitoring,  Assist with installation, configuration, and testing;
vulnerabilities/controls mitigation/remediation migration, and operational transition
11 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands

13. Enterprises should consider several dimensions when evaluating strategic
options for applications and services to be delivered through cloud
computing
Considerations For Building a Cloud Strategy
Technology Business and Financials
 Do the workloads exhibit characteristics that can derive  What are the anticipated usage patterns for the application
real benefits from scalability and elasticity? and will it be cost effective to move to the cloud?
 Will the application be built to run on a cloud supported  What is business sponsor's preference for CapEx vs
platform (e.g., commodity hardware, supported OS) OpEx?
 Can the application components be architecturally  How will designing for cloud readiness impact my
designed to be suitable for deployment to a cloud implementation cost and timelines? Can I achieve
based solution? overall lower TCO?
 What design trade-offs will be needed to make this  Will moving to cloud help me capture new sources of
application cloud-ready? value for the business?
 Are internal IT architecture and organization structures  Are cloud offerings mature enough for these workloads?
“ready”?
Operational Regulatory and Compliance
 What are the availability requirements for this  Are there any risk management or compliance
application and can those be met by cloud? requirements for this application? Will cloud be able to
 How will support model for this application change if it satisfy those requirements?
is moved to the cloud? Are the potential changes  Does the application hold confidential or customer data?
acceptable? Can this data be easily masked in the future?
 How will cloud impact my chargeback model for this  Does the application data need to reside within
application? Can I support the new model? Will organization? Will we be prohibited from moving data
business accept the changes? outside of the country?
 Can cloud meet my business continuity and disaster  Who owns the data? How is it used? Are controls in place?
recovery requirements for the application?  How is security achieved? What is the level of privacy
 Is the vendor limiting interoperability or access to your protection?
data?  Can you meet needs for legal compliance and tax issues?
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14. To successfully make the transition, enterprises must address key
operational and governance issues during the adoption of cloud computing
services models
Data Controls Who owns the data? How is it be used? Are controls in place?
Security and
How is security achieved? What is the level of privacy protection?
Privacy
Audit and
Are there risk management controls to applications and data?
Assurance
Tax and Legal Can you meet needs for legal compliance and tax issues?
Back Up and
Are data backup, retention, and disaster recovery practices sufficient?
Disaster Recovery
Vendor “Lock-In” Is the vendor limiting interoperability or access to your data?
IT Operations What IT services and applications are best suited for the cloud?
IT Readiness Are internal IT architecture and organization structures “ready”?
Alignment with Enterprise Risk and Governance strategy will help organizations
address the operational hurdles to cloud adoption
13 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands

15. Summary
• Leveraging the cloud for your organisation can have huge benefits by:
‒ Significantly increasing flexibility of IT quickly meeting business requirements.
‒ Saving Cost, reduced CapEx because of pay-per-use or monthly subscriptions.
‒ Pooling resources, flexibility of shifting resources on demand.
However, just migrating applications to the cloud will not be sufficient
• Organisational change lies at the heart of the success of cloud computing.
‒ Create a roadmap to the cloud that fits the organisation‟s needs.
‒ Make this roadmap an integral part of the IT strategy.
‒ Anticipate changes in IT department activities, moving from execution to
orchestration.
‒ Allow the business the flexibility to harness the possibilities of cloud computing on-
demand.
Ready-made Cloud solutions do not exist, to harness the full power of cloud
computing, cloud should be regarded as a strategic opportunity.
14 © 2011 Deloitte The Netherlands

16. Questions?
Theo Slaats Deloitte Consulting BV
Partner Laan van Kronenburg 2
CRM, Social Media, Cloud Computing 1183 AS Amstelveen
The Netherlands
Tel: +31 88 2882531
Mobile: +31 6 52672525
tslaats@deloitte.nl
Member of
Deloitte Touche Tohmatsu
@theoslaats
15 Ready-made Cloud solutions don‟t exist - Theo Slaats © 2011 Deloitte The Netherlands

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© 2011 Deloitte The Netherlands