CBS February 2013 Cloud Computing in the context of outsourcing

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What impact does the Cloud Delivery model have on SO business. What is the market and SO is not just for IT but for several processes , therefore BPaaS.

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  • Mobile Revolution: By the end of 2011, smart phones and tablets will overtake PC shipments.2 Downloads of mobile applications, or “apps,” are expected to surge from 11 billion in 2010 to 77 billion in 2014.3 These applications use location sensors and cameras, coupled with broadband connectivity, to enable activities ranging from videoconferencing to real-time coupon delivery for nearby stores. People want more than music, movies and books on the go; they want all information (including from businesses) that way. Mobility has eliminated the boundaries of space and time. Customers are always connected, and companies can interact with them at any time. The implications cannot be overstated. With information about products becoming as important as the products themselves, almost every company is now in the business of creating and delivering “content” – information that is personal, relevant and timely when accessed by the customer. Social Media Explosion With 2 billion people connected to the Internet, social media is quickly becoming the primary means for communication and collaboration. Young people may have spearheaded the changes, but people of all ages have joined the virtual revolution: 89 percent of the millennial generation uses social networking sites, but so do 72 percent of baby boomers. And the gap is closing. Hyper Digitization Today’s world exhibits a fast-developing case of hyper-digitization. As much information is now being generated every two days, according to former Google CEO Eric Schmidt, as existed between the dawn of civilization and 2003. Demand for video, as well as constant connectivity, is expected to double the amount of mobile data traffic every year through 2014. Power of Analytics Advanced mathematical analysis, powered by intensive computing systems, provides unprecedented opportunity to unleash the value of interconnected data. Electronic tags on packages, pallets and transport vehicles can relay critical information about the location and quality of items ranging from pharmaceuticals to food. Sensors in electrical grids and water systems, intelligent buildings and congested roadways can optimize the use of scarce resources. Predictions based on information relayed from security cameras, satellites and soil can improve public health and safety.
  • IBM PureSystems are designed to help IBM clients achieve greater simplicity, speed and lower cost in their IT environments. Expert Integrated Systems reduce the time cost and risk of custom designing, integrated, tuning, managing and maintaining each intended purpose. For our clients, changing today’s status quo is critical for a number of reasons: to shift a higher % of budgets from operation expense to investment in projects that accelerate new value; to reduce dependency on scare expertise; and to enable greater IT agility that enables greater business agility.
  • Main Point: With management and admin costs taking the bulk of IT budgets, the most efficient datacenters will be the enablers for innovation. Speaker Notes: Based upon an annual IDC study, the pie charts on the left show the relative share of IT expense on servers (the dark blue wedge), energy and cooling (the green wedge), and management and administrations (the light blue wedge). The increase in management and administration expense from 29% in 1996 to 68% estimated for 2013, demonstrates a critical challenge faced by IT organizations around the world. We need to simplify complex IT environments to turn this trend around, so clients can shift management expense to growth investment   Our global technology services group funded some additional primary research into the effectiveness of IT datacenters and discovered some interesting differences between the least and most efficient ones. Only 1 in 5 organizations are able to invest greater than 50% of their budget on new projects. The question is how can we help clients shift expense of operating existing systems, to investment in delivering new capabilities and value for their organizations? BACKGROUND DETAIL: Source: 2012 IBM Data Center Study: www.ibm.com/data-center/study ( http://www.ibm.com/data-center/study ) Data Source: IBM Data Center Study Conducted January 2012 Study conducted in seven countries worldwide – U.S., Canada, Brazil, Germany, France, China, India 65 questions 308 Respondents in the study: IT managers and CIO respondents IBM Report, IDC conducted research and helped write Study measured data center efficiency across the data center – including operations, facilities, server, storage, networking, applications and tool, governance, staffing Analyzed data to determine stages of data center efficiency Study Findings What we found is that one in five, or 21% or about 1 in 5 of the total respondents are operating at the Most Efficient level The Most Efficient data centers, are currently allocating about 53 percent of their total IT budget on new projects Least Efficient data centers are allocating much less to new projects that can help innovation – only 35% of IT budget on new projects Let’s look at some of the attributes that differentiate between the Most Efficient and the Least Efficient The Most Efficient Data Centers Early and fast adoption of new technology – 86% describe themselves as first or early adopters of new technology vs. 43% for Least Efficient data centers 58 percent use automation tools to move VMs automatically based on service level agreements (SLAs), without the need of manual intervention—versus 1 percent for Least Efficient data centers 93 percent of Most Efficient data centers use virtualized storage, versus 21 percent for Least Efficient data centers 87 percent use a services catalog approach for storage, leading to cost-effective storage placement, versus only 3 percent for Least Efficient data centers Definition of Storage Services Catalog: storage services catalog enables more efficient storage allocation and governance
  • The six cloud business enablers are applicable whether your cloud strategy involves becoming a consumer or a provider of cloud-based offerings – or includes elements of both Cost flexibility – 1) Shift capex to opex; - IT CapEx is money spent on acquiring physical assets for the purpose of running business.  Examples of IT CapEx: printers, servers, laptops, networking equipment, etc.  OpEx is money spent on the operational aspect of running business.  Examples of IT OpEx: telephone service, leased network lines, printer cartridges.  Enterprise software licenses are typically treated as CapEx, along with the servers and networking equipment required to host the software.  IT CapEx also tends to be less fluid and much more expensive than routine IT OpEx.  CapEx spending also tends to be harder to forecast than OpEx. OpEx typically represents a real cost of doing business: your business needs an internet connection to exist, and you pay for what you use.  CapEx in general is often more fuzzy in relation to its impact on a company’s operations, especially when it comes to IT CapEx.  Sure, you need a server to run your business, but do you really use it 100% for the entire duration of its life?  Even with virtualization tools like VMWare, you’re probably not using it 100%.  Plus, CapEx also has maintenance and “unexpected events” overhead that OpEx doesn’t. Cloud enables the shift from CapEx to OpEx. ii) Pay-per-use software and services; - With cloud applications there is no longer a need to install software or pay software license fees. This pay-per-use model provides greater flexibility and eliminates the need for significant capital expenditures 2) Business Scalability : Businesses can scale operations very easily based on requirement. If you need new servers because the number of hits to your website has increased, then you can easily do so. If you need to get rid of the extra servers, you can do that easily as well 3) Market Adaptability : Cloud enables a f aster time to market and helps in rapid prototyping, development and deployment; 4) Masked complexity : The c omplexity becomes hidden from end-user; There is user independence from IT or other operational issues like upgrade & maintenance. 5) Context-driven variability : Supports user defined preferences. Cloud can be used to store information about user preferences and enable the customization of product or service which is being delivered. 6) Ecosystem connectivity : Creation of new value nets including SMEs Shared infrastructure and services from cloud service providers Enhanced productivity through customer / partner interaction For example, cloud based platforms support sharing of resources, processes and workforce between companies in Pharmaceutical value chain, hence enabling joint research and collaboration
  • Enhance –Use cloud to improve products and services and gain incremental revenue Improve existing products/ services, add new features Enhance customer experience Deliver through broader array of channel Extend – use cloud to create new products and services or utilize new channels or payment models Create new products or services Deliver via new channels Develop new payment models Invent - use cloud to “create a need” and own a new market Introduce new revenue models, generate new revenue streams
  • As discussed earlier, Optimizers are organizations which utilize Cloud to IMPROVE their role in the value chain and ENHANCE their value proposition further. North Carolina State University (NCSU) In collaboration with IBM, NC state looked to a new virtualization based ‘Cloud Computing’ model—known as Virtual Computing Lab (VCL) – for flexible and intelligent provisioning that offers a quantum improvement in access, efficiency, and convenience over the traditional approach for managing resources that it previously relied on. It allowed NCSU to enhance user experience while optimizing operational efficiencies. Innovators: Organizations, which in addition to the above, also actively utilize Cloud to EXTEND or TRANSFORM  and create or invent to an extent have been categorized as INNOVATORS 3M Visual Attention Service (VAS) offers Cloud-based scientific analysis of product and marketing design effectiveness, predicting visual impact. 3M offers VAS in a Cloud-based, pay-as-you-go model that is fast, affordable, flexible, user-friendly, and fits easily into a designer’s existing process. The new Cloud-based offering allows 3M to transform its role in the product development value chain by closely integrating with a global network of designers. The offering enables 3M to extend into adjacent customer segments, including brand owners, marketing professionals, and creative designers beyond 3M’s target market segments. Disruptors: CREATE a new industry ecosystem or disintermediate an existing value chain or INVENT by constructing a radically different value proposition to create a new ‘need’ and own the market Comcast In 2011, Comcast piloted Xcalibur, its next generation cloud based TV platform that aims to revolutionize the way people watch TV. Xcalibur moves the company beyond the delivery of channels and video via set-top boxes that use digital television technology to leveraging cloud architecture that delivers live TV service directly to any Internet-connected device. The cloud-based platform shifts the ability to control content into the cloud. It enables live video feeds that serve the ever-growing numbers and types of mobile and connected devices. Customers can find content tailored to their needs in new ways, for example, by using an iPad app to choose channels, on demand videos and Xfinity online streaming videos. They can then watch their selected content when and where they want – whether on TV, tablet or other device. This personalized TV experience, combined with a powerful search engine and Internet apps to access non-TV content, as well as the ability to share via social media channels, allows Xcalibur to create a radically different customer value proposition.
  • IBM Confidential
  • Nearly half (48%) of CIOs surveyed evaluate cloud options first, over traditional IT approaches, before making any new IT investments We asked the respondents regarding their plans around the organization's level of cloud technology adoption today and the expected level in 3 years. 72% of the respondents were either piloting, or had adopted or substantially implemented cloud in their organization, and this number is expected to increase to more than 90% in 3 years with a rate of growth touching 215% for organizations which intend to substantially implement cloud. Further, forecasts around cloud predict the cloud market to reach up to $241bn by 2020. Today, at least two thirds of companies of all sizes are actively either experimenting with or implementing cloud Survey results reveal that organizations are experimenting with cloud regardless of the size. Although, larger organizations are more likely to adopt or are piloting in cloud when compared to smaller organizations.
  • All cloud services categories will continue to outpace the overall IT market growth over the next several years. In fact, for every cloud service, 40% or more of Europeans SMBs report that they are considering adding the service in the next 3 years. Here are some of the highlights: Web hosting will continue to be the cloud service with the highest penetration rate. Already more than 50% of the SMBs in Europe have websites and many more SMBs will be adding websites in the near term. Business applications (aka SaaS) will be the largest category of SMB cloud service spending by 2015 at over 7B euros. Hosted infrastructure with be close behind. Hosted Communication and collaboration, as mentioned, will be the fastest growing with a 3 year CAGR (compound annual growth rate) of nearly 60%.
  • While the SMB cloud services market is growing across Europe, the growth will be much faster in Eastern and Southern Europe than in Northern and Western Europe, where the cloud services market is already quite mature. Today Northern and Western Europe make up 58% of the SMB cloud services market. However they will grow at half the rate of Eastern and Southern Europe over the next 3 years and will make up 45% of the cloud services market in 2015.
  • While Parallels did not create a country SMB Cloud insights report for Denmark, we can estimate the size of the market and its growth rate from the model we build of the European region. We estimate that the current market size about 830 million kroner and will grow 75% over the next 3 years to about 1.6 billion kroner. This points to strong growth in Denmark as more and more SMBs become aware of the cloud and its benefits for their business, particularly in the micro SMB size segment. Hosted infrastructure, communication and collaboration, and business applications will all grow about 30% or more year-over-year, while web presence is a bit slower at 9% (a typical growth rate for mature cloud markets in Europe). For speakers: CAGR = compound annual growth rate, you can explain it by saying it represents “the year over year growth rate” that we expect for the next 3 years
  • Firstly IBM offers 3 products to build a private Cloud Infrastructure for SAP either by using the exiting infrastructure or building a new one Tivoli Service Automation Manager Product to enable existing infrastructures for cloud deployment IBM Service Delivery Manager providing a pre-installed image for rapid deployment of a comprehensive Cloud management environment for existing infrastructures. Available as VMWare/Linux and PowerVM/AIX image IBM Cloudburst, the cloud-in-a-box appliance which provides certified stacks for SAP out of the box and a complete private cloud infrastructure IBM implementation services that support customers in setting up their specific SAP automation on an IBM Private Cloud infrastructure IBM Private Cloud Management Services for SAP providing support and operation services for SAP on a private cloud IBM Cast Iron, an appliance to connect the on-premise private cloud applications like SAP with a large variety of external cloud based SaaS applications like e.g. Salesforce.com IBM GTS also offers SAP hosting services on customer dedicated cloud infrastructures, which are also considered as private clouds by SAP IBM GTS also offers SAP solutions on shared private cloud environments, i.e. Customer workloads are separated on their own virtual networks and virtual machines, but share the same physical infrastructure (model 4). Such environments require SAP certification for cloud services to be supported for SAP production workloads. IBM completed that certification and SAP customer can run SAP production on this service environment Last but not least IBM also offers the IBM SmartCloud Enterprise a public cloud service. At this time SAP does not support production workloads on such public cloud environments. However, customers can deploy development, demo or prototype workloads on that environment.
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  • Our delivery model balances risk, cost and operational efficiency by: Enabling the right mix of delivery alternatives to achieve the optimum combination of quality, stability and savings Providing consistent worldwide processes and tools Utilizing a cohesive risk mitigation strategy across business continuity plans, assets and people, security resources IBM’s Global Delivery Model includes the following elements to meet our clients’ requirements and mitigate risks: Parallel and faster ramp-up, delivering savings quicker. Access to the world’s largest experienced services skill pool with extensive industry and technology expertise, in 173 countries worldwide. Access to the world’s largest business consulting and research organization. Multilanguage support with native speakers across the globe (English, French, Dutch, Portuguese, Mandarin, etc.) Our Global delivery model also enables flexibility in each delivery location: “ follow the sun” without a night shift 24x7 support for mission-critical applications, infrastructure, testing Working-day overlap between countries Multisite solution in different economic zones, protecting against: Wage inflation Currency risk Political and economic uncertainty
  • We utilize three key levers to drive quality and productivity… The first, standardization, is all about industrializing service delivery. We have embarked on the quality journey long time ago and have made significant progress with our quality methods, focusing on process simplification and eliminating non-value add steps. We have broadened our continuous quality roll-out across all geographic locations ... The second lever is Automation. Here we leverage IBM hardware, software and Research assets extensively. A great example is our deployment of Maximo to implement standard best practice workflows ... leveraging this tool from SWG allows us to pool delivery resources and drive skill depth for quality and productivity gains… Lastly, skills are critical in a delivery business ...and as over 50% of our delivery costs are labor, leveraging the right talent globally, at the best cost, is vital. Equally as vital is continually looking at the skills we have, where we may have gaps and the training/certifications that are needed to fill those gaps ... I'll also cover this in a little more detail... So, let's look at some specifics on how we execute on these three levers…
  • The 3750 questions were related to the EU CoC  see next page Next cohort is to include another 12-ish DC in Europe
  • CBS February 2013 Cloud Computing in the context of outsourcing

    1. 1. 4.500successful cloud projects 4.5M daily client transactions >1M managed virtual machines through public cloud 80 % revenue Growth in 2012 Cloud Computing in the context of Outsourcing Henrik Hasselbalch Cloud Leder, IBM Danmark © 2012 IBM Corporation
    2. 2. Cloud’s business enablersMobility, social media, increasing digitization and new analyticscapabilities are conspiring to drive broad business change Major Technology Trends driving Business Change Mobile revolution  Connectivity, access and participation are growing rapidly  Smart devices are becoming the primary route to get connected  Devices are getting smarter as they are increasingly enriched by mobile apps Social media explosion  Social media is quickly becoming the primary communication and collaboration format  GenY’s or “digital natives” use of technology and social media platforms is accelerating adoption  Enterprises are adopting social media but are struggling to realize the value and manage risk Hyper digitization  Digital content is produced and accessed more quickly than ever before  Internet traffic is growing globally driven by consumer use of video, mobile data, interconnectedness  An increasing number of connected devices and sensors is further driving growth The power of analytics  New capabilities for real time analysis, predictive analytics and micro-segmentation are emerging  Top performing companies use analytics to drive action and business value  Analytics are making information “consumable” and is transforming all parts of the organization, from customer intimacy to supply chain managementSource: IBV Analysis © 2012 IBM Corporation
    3. 3. IT is Being Challenged by Business Business Opportunity Time to Operations of IT LOST BUSINESS © 2012 IBM Corporation
    4. 4. The Current It Challenge - Sprawl © 2012 IBM Corporation
    5. 5. Is IT ready for the challenge? New server spending Power & cooling costs Server mgmt & admin costs 2013 1996 29% 68% 68% of IT Only 1 in 5 operating costs in 2013 will be for organizations allocate more than management and 50% of IT budget to new administration * IDC; Converged Systems: End-User Survey Results projects presentation; September 2012; Doc #236966 * 2012 IBM Global Data Center Study © 2012 IBM Corporation
    6. 6. Danish CIOs 10 top priorities in 2013 1. Implementing new solutions: 27.3 procent 2. Support multiple platforms and operatingsystems: 26.8 procent 3. Modernise the infrastructure and/or applications: 26.4 procent 4. Improve and automate IT processes: 25.9 procent 5. Adjust IT-systems to changes business requirements: 23.6 procent 6. Reduce cost: 23.2 procent 7. Improve service: 19.5 procent 8. Secure a secure infrastructure: 17.3 procent 9. Optimise business processes by using IT: 16.8 procent 10. Keep old systems running: 10.9 procent Kilde: IDC © 2012 IBM Corporation
    7. 7. Cloud’s business enablersCloud harnesses the capabilities born out of these trends toempower six potentially “game changing” business enablers Cloud’s Business Enablers Business 2 Scalability Cost  Provides limitless, cost- Market 1 Flexibility effective computing capacity 3 Adaptability to support growth  Shifts fixed to variable cost  Faster time to market  Pay as and when needed  Supports experimentation Ecosystem Masked 6 Connectivity 4 Complexity  New value nets  Expands product sophistication  Potential new Context-driven  Simpler for customers/users businesses 5 Variability  User defined experiences  Increases relevance Source: IBV Analysis © 2012 IBM Corporation
    8. 8. Cloud Enablement FrameworkOrganizations are leveraging cloud to enhance, extend and invent newcustomer value propositions Cloud Enablement Framework Customer Value Proposition Enhance Extend Invent Enhance Extend Invent Xerox’s “Mobile Print” cloud-based service Animoto’s Cinematic Artificial Intelligence Apple has used its iOS platform to create a enables customers to print documents technology leverages cloud to affordably new need and a market for a range of office remotely without installing printer drivers and analyze and edit user multimedia content from productivity tools, gaming and entertainment without a direct connection a myriad of potential sources yet retain simple options and various other applications on a self-service. mobile device like a tablet or phone. Retain/attract customers for existing products and services through enhanced user Generates new revenue by appealing to The Apple iOS brings together an ecosystem experience. novice/ intermediate computer users entering with a radically different value proposition that market and drawing customers away from has allowed Apple to generate entirely new traditional commercial software revenue streams and dominate the market8 © 2012 IBM Corporation
    9. 9. Cloud-enabled Business Model archetypesOrganizations can be classified across three archetypes using the CloudEnablement Framework: Optimizers, Innovators, and Disruptors Positioning a Cloud initiative on the Disruptors framework involves understanding the impact Create of the resulting Cloud business model. Organization Value Chain Transform Innovators North Carolina State University Virtual Computing Lab Optimizers 3MImprove Visual Attention Service Comcast XCloud-based Television Platform Enhance Extend Invent Customer Value Proposition © 2012 IBM Corporation
    10. 10. Cloud-enabled Business Model (CeBM) AcceleratorIBM’s Cloud-enabled Business Model Accelerator aims to help clientsenvision new business models using cloud’s game changing enablers The objective of this engagement is to identify business model innovation Objective Objective opportunities for your organization that are enabled using the ‘game- changing’ attributes of the cloud. Our approach includes  Discussions with key stakeholders  Presentations and education sessions Approach Approach  Workshop based brainstorming  Joint analysis guided by insights from IBM  Synthesis and recommendations Key takeaways from this engagement are a prioritized set of opportunities for Takeaways Takeaways cloud-enabled business model innovation and recommended next-steps. © 2012 IBM Corporation
    11. 11. Cloud is widely recognized as an increasingly important technology;adoption is expected to accelerate rapidly in the coming years What is Your Organization’s Level of The Global Cloud Computing Market is Cloud Adoption? Forecast to Grow 22% per year through 2020 % of Respondents 91% $250B $241B 21% Piloting 72% $200B $150B 28% Adopting $150B 38% +33% $100B Substantially 21% 41% Implemented $50B +215% $41B 13% $0B Today 3 yrs 2011 2015 2020 Source: Sizing the cloud, Forrester Research, Inc., April 21, 2011 Source: (1) 2011 joint IBV/EIU Cloud-enabled Business Model Survey of 572 business & IT leaders; Q4. Which of the following most accurately describes your organisation’s level of cloud technology adoption today and which do you expect will best describe it in three years? Sizing the cloud , Forrester Research, April 21, 2011; http://www.cio.com/article/684338/Survey_CIOs_Are_Putting_the_Cloud_First © 2012 IBM Corporation
    12. 12. Cloud Computingin the context of Outsourcing © 2012 IBM Corporation
    13. 13. The market will continue to grow across all categories ofcloud services Across all cloud services, an average of 40% of European SMBs are considering adding each in the next 3 years Highest Highest Web hosting is used by more than 50% of SMBs penetration penetration that have a website, and more SMBs plan to add it. Largest in Largest in SaaS applications will be the largest cloud 2015 2015 service category by 2015, reaching €7.4B. Hosted communication and collaboration is the Fastest Fastest fastest growing cloud service category in Europe Growing Growing with a CAGR greater than 57%.Source: Parallels SMB Cloud Insights™ (EUNA regional), 2012 © 2012 IBM Corporation
    14. 14. Growth is not equal, however, and market composition is changing The SMB cloud services market in Eastern and Southern Europe is growing 2x faster than in Northern and Western Europe 2012 % 2015 % of market CAGR of market Northern 23% 23% 19% Western 35% 20% 26% Eastern 8% 45% 11% Southern 34% 46% 44%Source: Parallels SMB Cloud Insights™ (EUNA regional), 2012 © 2012 IBM Corporation
    15. 15. Parallels estimates the SMB cloud market in Denmark isabout kr 830M and will grow to kr 1.6B by 2015 kr 1.6B 25% 3yr 25% 3yr CAGR CAGR ($280M USD) kr 830M GR ($144M USD) CA 33% R % CAG 46 A GR 9% C A GR 27% C 2012 2015Source: Parallels SMB Cloud Insights™ (EUNA regional) 2012 © 2012 IBM Corporation
    16. 16. IBM ourselves looked at a 4 tier approach Key Most Critical applications:  Our application portfolio is 5% of total Tier 1 segmented into four tiers 24x7 Support  We are migrating as many of the Tier 4 applications as possible and 30% of total Tier 2 24x7 Support valuable to a production cloud  Lowest-risk, lowest service applications are being moved first. 21% of total Tier 3 Apply lessons learned to Primary hours subsequent migrations support 44% of total Tier 4 Limited support 95% 98.5% 99.7% 100% Availability © 2012 IBM Corporation Production
    17. 17. The fundamentals of cloud value … Cloud value varies by workload and deployment model Where you are coming from is as important as where you want to be • Don’t forget the journey Cloud is about reducing costs and increasing flexibility Cloud is not rocket science, but it is computer science © 2012 IBM Corporation Cloud value
    18. 18. Does cloud always result in lower cost? Reduced Cost Increased Flexibility Whether cloud saves money for the service consumer is a function of • The value they get from the cloud • What it takes to move their workload into the cloud • Other things they’ll need to provide if they move into the cloud • The cost for all the above With most private clouds the enterprise takes on the provider role • Like traditional hosting, the enterprise owns the risk to balance supply and demand … and the costs associated with that • True cost should be measured at the enterprise level “ … cloud computing does not always save money. In fact, it can drive cost up if it is used simply to replace on-premises work with an exact duplicate of that work in the cloud. Knowing when to redesign or when to use cost savings as a justification for cloud computing is critical." -- “The (Not So) Future Web”, Gartner Inc. © 2012 IBM Corporation Cloud value
    19. 19. The “other benefit” of cloud Reduced Cost Increased Flexibility “… All the emphasis (with cloud) “… All the emphasis (with cloud) is on cheaper and efficient ways is on cheaper and efficient ways to deliver IT. In reality its also aa to deliver IT. In reality its also way of delivering new industrial way of delivering new industrial value -- thats the more exciting value -- thats the more exciting thing." Erich Clementi, IBMs thing." Erich Clementi, IBMs Hidden Cloud on Forbes.com Hidden Cloud on Forbes.com The “other” benefit of cloud -- the increased flexibility it provides – enables a new way of delivering IT • In some applications, it may be the biggest (or only) benefit • Enables quicker time-to-value, or new applications, shorter project lifecycles, etc. • Industry analysts: The ability of cloud to enable speed to deliver will be bigger than cost savings in driving adoption Cloud will be a foundational mechanism in the “as-a-service" transformation of IT delivery © 2012 IBM Corporation Cloud value
    20. 20. The future is Hybrid Sourcing Source: IDC © 2012 IBM Corporation
    21. 21. IBM SmartCloud represents the IBM vision for cloud computing Business Process as a Service Software as a Service Platform as a Service Infrastructure as a Service Design Deploy Consume Cloud Enablement Managed Cloud Cloud Business Technologies Services Solutions Enables private/hybrid cloud service Secure and scalable cloud managed Pre-built Cloud SaaS business delivery and management services platform applications and solutions Proven Strategy Consulting, Migration, & Management Expertise Common Open Standards Technology and Industry Ecosystem © 2012 IBM Corporation
    22. 22. An enterprise-grade IaaS is the foundation for our Cloud servicesincl PaaS and SaaS. Rapid access, multi-tenant solution Robust multi-tenant solution, including scaled and priced based on usage. managed production services. Workloads Ideal for developing and deploying new Ideal for migration of traditional and higher application designs availability applications Operating system Linux, Windows Windows, Linux, AIX Management level Self Service with advanced Fully managed premium support Availability 99.9% 99.9% Security Virtual and some physical isolation Multiple levels of isolation Software usage Bring your own / pay as you go / free developer use IBM provides operating system and tool licenses Pricing Hourly usage-based with reserved options Monthly usage-based and fixed contract © 2012 IBM Corporation
    23. 23. Serving clients - Our Capabilities CLOUD29,000 employees in EMEA Healthcare60 Data Centres (99.000 sqm - Gross) managed by IBM25 Strategic Data Centres, 11 European cities99.9960% Data Centre Availability (with 99.9999% for strategic DCs)65,000 servers, z, p, i, x Series; 118,000 logicalpartitions 3.3M electronic software distributions p/ yearHosting about 155 petabytes of data for our clients 2.1M client initiated software distributions p/year49,5% of the logical server images virtualised 60,000 network devices managed in Europe880 000 devices have remote and on-site support 42 European countries covered 4 million mobile users with secure access 1.2 million contacts to service desks per month 23 languages 400 applications 20 different desktop images © 2012 IBM Corporation
    24. 24. Our delivery model balances risk, cost and operational efficiency Globally Integrate Achieves the optimum combination of quality, stability and skills Onsite Local Regional Global Service that requires a Service that needs to be Service that needs to be Service that can be     physical presence at the delivered from the same delivered from the same standardized to achieve client location country continent maximum savings Consulting Processing of sensitive data Similar time zone Ongoing operations     Front-end analysis Legal restrictions Similar culture Monitoring     Development  Central Europe China  Brno  Shenzhen North America  Székesfehérvár   Shanghai Boulder  Wroclaw  Columbia  Dalian   Beijing Dubuque New  East Fishkill  Raleigh Malaysia  Canada India  Bangalore Latin America  Pune New  Buenos Aires  Delhi  Costa Rica  Chennai  Hortolandia  Hyderabad  Sao Paolo All follow uniform, best-practice service management processes2012 IBM Corporation ©
    25. 25. In SO Service Delivery, we execute on our strategy by investing ininnovative technologies, processes and skill portfolios Standardize: Implement standard solutions for all services, maximizing economies of scale and ease of enhancement Globally Integrate: Source the Automate: Eliminate manual right skills at the right time globally tasks to drive up quality and reduce error We are continually investing in key innovations and intellectual property to differentiate our services through exceptional quality outcomes © 2012 IBM Corporation
    26. 26. Energy Efficient Data Centers EU Code of ConductAwarded - created in response to increasing energy consumption in data centersIBM awarded participant status in the and the need to reduce the relatedEuropean Union Code of Conduct. Largest environmental, economic andportfolio of data centers from a single energy supplycompany to receive the recognition security impacts.(January 2012)The area ofsubmission 27 Data Centers -aim is to inform and stimulate dataSame best practices 15 Countries center operators and owners toand controls 70749 m² RF reduce energy consumption in a cost-effective manner without Austria 2 hampering the mission critical Belgium 2 Germany 2 function of data centers. Denmark 3 Spain 1 Finland 1 - achieves this by improving France 2 understanding of energy demand Hungary 1 Ireland 1 within the data center, raising Italy 1 Netherlands 1 awareness, and recommending Poland 1 energy efficient best practice and Portugal 4 Sweden 2 targets. UK 3 © 2012 IBM Corporation
    27. 27. The 4 catagories of ”Cloud Services” Employee Procurement Benefits Mgmt. Business Industry- Travel specificLayer 4 Processes Business Process-as-a-Service Collaboration CRM/ERP/HR Industry Financials ApplicationsLayer 3 Software-as-a-Service Middlewar Web 2.0 Application Java e Runtime Runtime Developmen Database tLayer 2 Tooling Platform-as-a-Service Data Center Servers Networking Storage Fabric Shared virtualized, dynamic provisioningLayer 1 Infrastructure-as-a-Service © 2012 IBM Corporation
    28. 28. IBM Global Process Services takes a balanced-shore approach COVENTRY SHANGHAI TAUNTON FOSHAN NEWCASTLE BERLIN KRAKOW DALIAN TORONTO GREENOCK SWANSEA ISTANBUL JEONJU TULSA SAINT JOHN BUDAPEST DELHI SAPPORO RTP CHANDIGARH BEAVERTON EDICOTT DUBLIN PARIS GURGAON TOKYO BOULDER SOFIA KASAI GREENVILLE BRAGA PUNE OKINAWA TUCSON BRATISLAVA FREETOWN DALEVILLE MUMBAI KOLKATA FUKUOKA DALLAS MANILA SAN JOSE ATLANTA HORTOLANDIA CAIRO KAMPALA VIZAG QUEENSLAND SAO PAULO F&A BUENOS AIRES BANGALORE CHENNAI BRISBANE HR SYDNEY SCM MONTEVIDEO ANTANANARIVO CRM BALLARAT MELBOURNE Industry-specific © 2012 IBM Corporation
    29. 29. The need:Skype, initially a free, Internet-based communications service, built a portfolio of services offered at a fee.Because of Skype’s rapid growth, it did not have the infrastructure, processes, governance or corporatestructure to deliver satisfactory levels of customer support. Skype recognized that efficient and effectivecustomer service was critical to the growth of its fee-based services and sought a business process operationsprovider that could manage its email customer service operations.The solution:IBM GPS analyzed the client’s needs and created a service and response plan whereby IBM global resourceswould provide email and live chat support for customer queries, service complaints and billing concerns. IBMdivided its activities among 3 sites to support the company’s international customer base: Cairo; Boulder,Colorado; & Manila, Philippines. IBM provides email support in 7 languages and live chat support in English. Inaddition IBM provides web content support for Skype Customer Services from our delivery centre in Bratislava.The benefits: Skype customers experienced a significant improvement in customer services levels: email responses that once took up to 24 hours now take 2 hours or less. At the beginning of the contract 85% of Skype customers corresponded through email. Today up to 50% prefer the quicker response time & resolution rates of chat services. The expansion of live chat greatly improved the speed of problem resolution. When IBM secured the contract, its initial point of contact resolution performance was 70%. As of April 2012, the resolution rate has increased to more than 80%. As a result of the improvements in customer support and cross-selling by IBM Skype has experienced a 50% increase in its fee-based service web pages. And for We do AP, Payroll and © 2012 IBM Corporation TravelExp Mgt
    30. 30. © 2012 IBM Corporation
    31. 31. Unilever Europe: A global CPG company The need: This global consumer products company needed to simplify its complex finance organization across 24 (100) countries and 18 ERP systems. It also needed to Why IBM? achieve cost efficiencies to generate revenue for greater focus on its brand. “The successful partnership between IBM and Unilever Europe along with an The solution: ambitious transformation IBM implemented standardized finance processes and innovative technology under agenda will continue delivering an award-winning joint governance model. Leveraging asset-based process models significant and sustainable and global delivery capabilities, this transformational solution helped integrate the benefits for Unilever Europe.” company and create a more flexible operating and financial model. The benefits:  New, centralized “One-Unilever” finance organization for greater efficiency and Solution components: operational savings contributing to €700M annual savings for the company e-  Accounts payable na thre  Travel & expenseo  End-to-end process ownership and standardized processes and technology i ces for enhanced data quality, tighter controls and greater speed of information ser v  Billss cash roc e to nd  Pan-European service management, including greater visibility and access to n es s p Record to report ia; a d busi cilities in e, In information for decision making and continuous improvement g ed fa ang alor  Flexible, agile delivery model to meet Unilever’s evolving business na ma from its tugal; B ed Por environment and drive greater benefits from economiesvidscaleodel ro of m p IBM elivery nd; Br aga, d a tier ow , Pol ines. p Krak , Philip ila M an © 2012 IBM Corporation
    32. 32. © 2012 IBM Corporation
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    38. 38. © 2012 IBM Corporation
    39. 39. "The short successes that can be gained in a brief time andwithout difficulty, are not worth much."Everything is relative...The Gazelle in Africa © 2012 IBM Corporation

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