Rethink IT. Reinvent Business.
Five Cloud Essentials for the Boardroom
What Banking & Financial Markets Executives
Need To Know About Cloud Computing
David Zimmerman
Global Solutions Executive, WW Cloud Leader
IBM Banking and Financial Markets
davidzim@us.ibm.com
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Five Cloud Essentials for the Boardroom
Cloud is “computing as a service over the internet”
1. Why Cloud for Banking & Financial Markets?
2. Cloud hype vs. Cloud realities?
3. Cloud “feels” like IT plumbing, very tactical. . .
• Impact on my overall strategy?
4. What about Cloud’s risks and “hidden costs”?
5. Cloud economics: What’s the business case for Cloud?
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
1. Why Cloud? Industry changes mean that Banking & Financial
Markets Executives need agility to drive growth and profitability
Turbulent global conditions are
affecting revenue and reducing
demand for services.
Rebuilding customer trust
and marketplace
confidence is critical to
future growth.
Competition is intensifying
with M&A, divestitures, and
non-traditional entrants
Clients have rapidly
evolving expectations for
offerings and services.
Radically increased
oversight is driving
investment in risk
management technology.
$
Mature and emerging market
segments are focus on
optimizing use of capital.
Cloud helps address The Boardroom Paradox: “How do we cut costs today, while still investing in future growth?”
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Changing Cloud economics:
It’s more than just cost savings…Improving Business Agility, too.
What is Your Organization’s Level of
Cloud Adoption?
% of Respondents
91%
72%
21%
Piloting
38%
28%
Adopting
21%
41%
Substantially
Implemented
+215%
13%
Today
3 yrs
Source: IBM/The Economist Cloud-enabled Business Model Survey of 572 leaders
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
2. “Hype” vs. realities: Common “hype” About Cloud Computing
Cheap
Cloud:
•Rent vs. own computing
•Drives growth while
saving money
Easy
Turnkey
Completely
Flexible
Fast results
. . . . . . Can be true – IF you set it up that way
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud realities: Forward-thinking companies view Cloud as a force
that will impact their business models
Strategy: Expect significant increase in substantial change resulting from cloud:
13%
41%
Customers: Expect to reinvent their customer value propositions with cloud:
10%
29%
Today
2015
Business Value: Expect to create / transform value chain through cloud:
16%
43%
Transformation: Shift focus to driving substantial impact on customer relationships:
14%
57%
*Source: Institute for Business Value / The Economist
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud realities: Cloud is already solving many of today’s typical
Enterprise challenges
• Maintenance accounts for
over 70% of the IT budget
• Annual operational costs
(power, cooling, and
management) exceed their
acquisition cost by 2-3X
10 weeks: The mean time to deliver a
new (or expanded) IT Service from
the time of request. Nearly 40% take
more than 90 days.
2/3’s of companies miss their original
.
project/solution deployments
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
3. Cloud “feels” like IT plumbing, very tactical. Impact on my overall strategy?
Cloud’s Six potentially “game-changing” business enablers
Business Scalability
•
Provides limitless, costeffective computing
capacity to support
growth
2
Cost Flexibility
•
•
Shifts fixed to variable cost
Pay as and when needed
3
1
Cloud’s
Business
Enablers
Mobile Banking & Ecosystem Connectivity
•
•
•
New value nets
Potential new businesses
Enables rapid simulation
and development
•
•
•
•
4
6
Market Adaptability
Faster time to market
Quickly adapt to regulatorydriven changes
Seasonal & special projects
Rapid product, pricing and
services innovation
Simple Self Service
•
Hides IT complexity
5
Context-driven Variability
•
•
User-defined experiences
Increases relevance
Source: IBV Analysis
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud’s Impact on my overall strategy?
Disruptive Leapfrogging: Cloud’s Strategic Impact
Cloud Enablement Framework
Transform
Improve
Value Chain
Create
Disruptors
Innovators
Optimizers
Enhance
Extend
Customer Value Proposition
Invent
1. Disruptors create radically different
value propositions: New Asian Mobile
Banking provider implements Cloud
plus 10,000 agents. Accelerates growth
2. Innovators significantly extend
customer value proposition: Cloud
accelerated Global Bank’s results
“From 45-days to 20 minutes” for their
20,000 developers
3. Optimizers use the cloud to improve
organizational efficiency: Cloud drives
European Bank’s 10-month ROI
Five Executives discuss Cloud’s
disruptive leapfrogging…
http://www.youtube.com/watch?v=C
D_elWBD1Zk
The Power of Cloud -- IBV PoV and Executive Report
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Competitive Insights: Getting started is easier than you might think.
Cloud computing is already transforming the financial services industry
Analytics
Business services
Allows integration of
customer data across
banking silos to enable
near-real-time insight
Enables application and
service management,
customer relationship
management, and client
and market analytics
Banking & Financial
Markets Solutions
Infrastructure compute
Provides more flexible
and elastic on-demand
compute resources for
variable application
scaling
•Cloud & Payments
•Cloud & Retail Banking
•Cloud & Financial Markets
•Cloud & Mobile Banking
•Cloud & Risk Management
(Basel III, Solvency II), etc.
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Collaboration
Provides communications
and collaboration tools
and solutions to enable
employees to share
information almost
seamlessly
Desktop and
devices
Infrastructure
storage
Managed backup
Enables high availability
through more rapid
backup and recovery
services
Ensures that the nearreal-time demands of
today's trading and
analytics processes are
maintainable through
scalable storage solutions
Helps reduce costs and
complexity, enables better
security of personal
computer data and
facilitates centralized
management of critical
enterprise data
Development and test
Helps accelerate
provisioning of resources
for development and test
environments, facilitating
faster time to market
while supporting reduced
costs
Security
Enforces security and
endpoint management to
help ensure compliance
of corporate governance
and IT policies
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
4. What are Cloud’s risks and “hidden costs”?
. . .For starters. . .one size does not fit all. . .
Hybrid Cloud
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Private Cloud
M anaged
Private Cloud
Hosted
Private Cloud
Shared
Cloud Services
Public
Cloud Services
Your Equipment
Your Resources
Your Equipment
Someone Else's
resources
Trusted 3rd Parties
Equipment and Resources
Dedicated Hardware
Trusted 3rd Party
Shared Services,
Software
Trusted 3rd Party
Shared Infrastructure
Key Takeaway: Cloud Service Level Agreements (SLA’s) are very
important. SLA’s record a common understanding about services,
availability, security, privacy, governance, data protection, disaster
recovery, workloads, audit, priorities, responsibilities, exit strategies, etc.
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud risks and “hidden costs”: Projects can fail for many reasons
Underdeveloped
Transformation
Strategy
Unrealistic
Expectations
Performance
Issues
Security,
Data Protection,
Migration,
Governance. . .
Business Case
Poor Due
Diligence
. . . . . . How do I mitigate Cloud risks?
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud’s risks and “hidden costs”? Cloud Strategy is Important
“Getting it right, the first time” covers four key dimensions for cloud adoption
A Cloud strategy needs to incorporate four key dimensions in order to fully address the
transformation opportunity for the business.
Our guidance builds on a core set of time-based transformative practices, including roadmaps,
business and technology architecture, and investment cases.
Innovate and Integrate
Broad
2
Performance
Impact
4
Infrastructure Platforms
High Tech
Page 13
1
Enterprise
Cloud
Strategy
Governance
integrating
with other
providers
Narrow
Real time
product
changes in
market
Business Models
Strategic Focus
Data Platforms
3
Innovate and Integrate
Building
cloudnative
apps on
cloud
Application and Delivery
Platforms
Big data
feeding the
business
model
High Biz
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
What are Cloud’s risks and “hidden costs”? Cloud Strategy is Important
The “right” Cloud Strategy drives your cloud transformation roadmap
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Brutal Efficiency
Testing & Development Services for Cloud
Mobile Innovation in the Cloud
Cloud Application Modernization
ADaaS (Application Development as a Service)
API Centric Architecture & Roadmap
Roadmap
Cloud
Infrastructure
Strategy and
Design
Workload
Transformation
Analysis
Network
Application and
Infra
Optimization for
Cloud
Security
Assessment
Security
Roadmap
Resiliency
Planning
Migration
Services
Private Cloud
Implementation
Services
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Profitable Growth
Cloud business-model ecosystem:
customers, partners, suppliers. . .
Governance, Organization and
Service impact of cloud
•
2
1
4
3
•
•
•
Predictive Cloud-enabled Analytics
Data protection & Privacy
Cloud disaster back-up & recovery
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud risks and “hidden costs” :
Deliver Enterprise class,
production applications
such as SAP & Oracle via
IBM’s SmartCloud platform
with subscription-based
pricing
Build it yourself? vs. IBM’s One-stop shopping
Services
Client
defined
Industry
services
services
Workplace
Services
Security
Services
Resilience
Services
Enterprise
applications
Partner
services
Unprecedented choice in
the deployment and
management of
applications on the IBM
SmartCloud platform
Application Services
Enterprise class
governance,
administration and
management control
Application
Lifecycle
Multiple security and
isolation options built into
the virtual infrastructure
and network
Real business-centric
SLAs that align IBM
accountability to your
business
Business
Analytics
Services
Application
Resources
Application
Environments
Enterprise
Infrastructure
Platform
Management
and Support
Enterprise
data center
Managed private cloud
Application
Management
Integration
Enterprise+
Security and
Compliance
Payment and
Billing
Availability and
Performance
Enterprise
Enterprise
A
Hosted private cloud
B
The most complete set of
automated and integrated
application services to
support enterprise
applications
Open standards based
platform for portability
across Cloud
environments
Shared cloud services
Multiple delivery models allow clients to optimize against
economics, integration, security and control.
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© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud risks and “hidden costs” : Workload is Important
Key Takeaway: Not all workloads may be suited for Cloud
Ready for cloud
Healthcare
Payments
Analytics
Infrastructure Storage
Information
intensive
Sensitive
Data
New growth
workloads made
possible by cloud
Collaborative Care
Isolated
workloads
Highly
customized
Banking & Financial
Markets Solutions
Collaboration
Mature
workloads
Not yet virtualized
3rd party SW
Evaluate: May . . .or
may not. . . be ready
for Cloud based on
their attributes or
maturity
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Wealth Management
Workplace, Mobile,
Desktop & Devices
Preproduction
systems
Complex
processes &
transactions
Risk Management
Business Processes
Disaster Recovery
Batch
processing
Regulation
sensitive
Development & Test
Infrastructure
Compute
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud risks and “hidden costs”: Architecture is Important
Get it right, the first time: Cloud
Architecture is Important:
Foundation
Platform as a Service Technologies
IBM joins the new OpenStack
Foundation as Platinum Sponsor
Lifecycle
Resources
Environment
s
Applications
Integration
Objectives
Infrastructure as a Service Technologies
Infrastructure
Administration
LinkedData,
OSLC*, TOSCA*
Cloud Standards
Customer Council
(CSCC)
Performance
Security
Usage
• Continues IBM strategy to leverage standards
(LinkedData, CCRA, TOSCA, etc.) that
accelerate clients’ success with cloud
OpenStack
Open Source
Reference
IBM’s Cloud
Computing
Reference
Architecture
(CCRA)
IBM’s Ecosystem approach to standards
Page 18
• Contribute to open source projects and provide
resources to help shape and promote the
organization
• Work with 180 companies to focus the industry
around an ubiquitous Infrastructure as a Service
(IaaS) open source cloud computing platform
for public and private clouds
• Develop and sustain a vibrant, innovative
ecosystem and become a platform of choice to
build upon
*Open Services for Lifecycle Collaboration; Topology and Orchestration Specification for Cloud Applications
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud risks and “hidden costs”: Security is Important
IBM’s history with Cloud Computing in Defense
A Security Framework developed through real-world operational experience
 NATO ACT announces their Mission
Development Cloud, a platform for
federating NATO strategic and tactical
mission experiments
 Defense Agency’s Cloud, one of
the first operationally deployed
Cloud infrastructures with the US
Intelligence community
 Provides self-service on-demand
access to imagery exploitation
assets
 Joint effort with the US Air
Force creates an advanced
cyber security and analytics
system on a hardened
Cloud Infrastructure
protecting national data
 Through the NCOIC*, IBM demonstrates a clouddelivered Common Operational Picture integrating
real-time track data across nine worldwide nodes.
*NETWORK CENTRIC OPERATIONS INDUSTRY CONSORTIUM
2009
2010
Time & Innovation
Page 19
Best Cloud 2013+
Computing Security
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Cloud risks and “hidden costs”: Migration & Applications are Important
Cloud Application Modernization requires a factory model for migration/modernization of
applications to Cloud. . .
Step 1: How to get there
Strategy
Step 3: Tool Output
Design,
Development and
Integration
Rebuild candidates
1. N-Tier loosely coupled architecture
2. Open standards based (JEE)
3. WebServices with SOAP protocols
4. Data communications through standard protocols
(JDBC/ODBC)
5. Remedy latest version capable of running on Cloud /
Virtualized Platform
Migration /
Deployment
Migrate
Migration candidates
Transformation candidates
Analysis /
Implementation
Planning
Design
Transform
Deploy
ITL
CPUInRange
57
CPUNotInRange
21
Grand Total
78
ITL
RAMInRange
64
RAMOutOfRange
14
Grand Total
78
Cloud Deploy Models
Step 2: Tools
Cloud Transformation Tool
 An analytical approach to decide on “cloudability” and
“API”s for modernization of applications: Migrate /
Transform / Rebuild
Workload Analysis Tool
Pain versus Gain
 Tools to conduct analysis: Cloud Transformation Tool,
Workload Analysis Tool
10
Intranet
Apps
App
AB
Field Users
App XC
ABC Data
Warehouse
Exchange
App
NM
Dev
Test
Call Center Users
ClientXYZ.com
5
BW
Value / Gain
App
JK
Office
Task
Users
 Methods, processes and tools - allowing the scale of
mass migration
SAP
 A control model for approaching cloud elasticity
0
10
Page 20
5
Effort / Pain
0
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
5. Cloud Economics: Board-level Considerations
Pros:
• Growth: How to reduce time to
market for new products, services &
segments. . .while also reducing
Cost/Income ratio?
Cons:
•
•
• Efficiency: How to reduce IT
maintenance costs (~70% of total IT
spend) while accelerating new
solution development results?
– How to reduce infrastructure duplication?
– How to simplify products and processes?
• Resilience: How to build an
evolutionary architectural framework
that induces control and supports
growth over the next ten years?
•
• Regulation: How to efficiently adapt
to regulatory-driven change?
Page 21
• Mobile & “Big Data” Analytics
Innovation: How to differentiate? How
to create a customer-centric view?
•
Lack of Compelling Event
–
More pressing uses of
capital
Difficult Business case
–
ROI is not sufficient to justify
the risk and cannot be
realized quickly enough
–
Time-to-Market improvement
is not sufficient to justify
Business Case
–
Business Case relies on
anticipated revenue growth
projections rather than “hard”
cost reductions
Transformation Risk
–
Underdeveloped Business
Transformation Roadmap
–
Inexperience with complex
projects
Risk to Reputation
© 2013 IBM Corporation
Rethink IT. Reinvent Business.
Summary: Cloud is driving disruptive leapfrogging and
business-model transformation.
Getting started is easier than you might think. . .
www.ibm.com/cloud
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© 2013 IBM Corporation