Cloud Computing, Business Models, Geilo April 2009

Making cloud computing work … for
provider and consumer

Forretningsmodeller for skyen - Hva og Hvordan?
Geilo, April 20-21 2009

Copyright © 2009 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Objectives for the session

• Provide a context for discussing approaches to “cloud
computing” in the marketplace

• Highlight a few Norwegian businesses offering some form of
“cloud computing”

• Discuss implications for business value and for IT capabilities

Copyright © 2009 Accenture All Rights Reserved. 2

Agenda

• Market context for “clouds”
• Business models for Norwegian cloud businesses
• Opportunities and challenges for succeeding with cloud
• Questions & Comments


About me

• Business technology planner working with architecture and
service modelling
– Enterprise Architecture (the enterprise’s architecture)
– Service Management
• Board member Norwegian Computer Society (Østlandsdistrikt)
– Architecture communities – Information, SOA and Buiness
– Business Intelligence community


“What on earth is Cloud Computing?”*


“What on earth is Cloud Computing?”*

A computing-based capability that is offered to
a consumer in the form of services

Processes
Software
Software platform

Infrastructure


The cloud capability serves enterprise users as
well as consumers

Processes
Software
Software platform

Infrastructure


Enterprise Web vs Consumer Web

1. Scale (Users vs Applications)
2. Experience (Simplicity vs Functionality)
3. Security (One for One vs One to Many)
4. Transaction (Decoupled vs Complete)
5. Integration (Loose vs Strict)
6. Search (Page vs Data)

7. Enterprises will pay, Consumers expect it free

http://www.bitsandbuzz.com/article/enterprise-web-vs-consumer-web-20-top-six-differences/


What then is a service?
A service is a task performed (by a provider) to produce a desired result (for a
customer). Customer compensates provider based on degree of accountability.
Restaurant Chef home Take-away


Cloud Computing Survey: IT Leaders See Big
Promise, Have Big Security Questions
Primary Reasons You're Using or Plan to Use Greatest Concerns Surrounding Cloud Adoption
Cloud at Your Company
Security 45%
Scalability on demand/flexibility to the business 50%
Integration with existing systems 26%
Reduced hardware infrastructure costs 38% Loss of control over data 26%
Reduced IT staffing/administration costs 35% Availability concerns 25%
Performance issues 24%
Access to skills/capabilities we have no interest in
28%
developing in-house IT governance issues 19%
Regulatory/compliance concerns 19%
Not using or planning to use cloud computing
19%
offerings Dissatisfaction with vendor offerings/pricing 12%
Ability to bring systems back in-house 11%
Capacity - data center 16%
Lack of customization opportunities 11%
Capacity - storage 11%
Measuring ROI 11%
Frequent software updates 10%
Not sure 7%
Other 5% Other 6%
*Respondents selected up to three criteria.
SOURCE: CIO Research

http://www.cio.com/article/455832/Cloud_Computing_Survey_IT_Leaders_See_Big_Promise_Have_Big_Security_Questions


confirmIT (www.confirmIT.com)

• Founded in Norway in 1996 as Future Information Research
Management (FIRM) – Offices: Oslo, San Francisco, New York..
– Provides Feedback management solutions on demand to some of the
largest global companies
– Solution confirmIT is built on the Microsoft platform
• Offers web-based tools for authoring surveys, designing panels and analysis
• Commercial model
– confirmIT is a SaaS-business (Rackspace provide the infrastructure)
– Customers are enterprises and market research businesses
– Market reach is through a partner and reseller model
– Subscription-based tools for reporting, authoring and managing surveys
• Consumption-based fees (only completed surveys are charged)


Fronter (www.fronter.com)

• Founded in Norway in 1998 as Fronter
– Provides a platform for virtual learning that serves over 6 million users
– Flagship product is called Fronter and built on a Java platform
• Includes a number of tools including tools from 3rd parties for content creation,
collaboration, plagiarism control, multimedia etc
– Acquired by Pearson Group in 2009
– Fronter is a SaaS-business targeting educators (University of Oslo
provides the data center)
– Customers are primarily educational institutes (schools to universities)
– Subscription-based fee with different service options
– Market reach through a partner and reseller model


Mamut (www.mamut.com)

• Founded in Norway in 1994 as Mamut
– Provides a PC-based solution for small and medium sized businesses (ca
400.000 businesses in Europe)
– Flagship product is called Mamut One and built on a Microsoft platform
– Mamut is a Software + Services business
– Customers are small and medium sized businesess
– License fee (software) and subscription fee (service) with different service
options
– Market reach through a partner and reseller model


Statens senter for økonomistyring
(www.sfso.no)

• Established in 2004 as an agency within the Ministry of Finance
– Provides accounting, payroll and invoice management services to all
government entities
– Uses SAP for HR-service, Agresso for Accounting and Contempus for
invoice management
– SSØ operates as a not-for-profit senter
– Customers are government entities
– An annual fee for services rendered.


If ”cloud computing” is the answer,
what was the question?
A new model in the value stack is emerging

Past Future
New Model
Consumers and Interviewed for Activity monitored User generated
Business Users requirements content & app’s
Mainstream

Spend time Integration and Spend time creating
CIOs and IT Managers managing IT compliance new app’s

Mostly on-shore Global
IT Service Providers Rapid concurrent
and on-site delivery and
development
CMM

Consolidating and
Technology Industry 2-3 year product
SOA-izing On-demand
upgrades
services


A provider perspective (SaaS) – Revenue
growth and market reach with a manageable
cost base

• Standardized application platforms and interfaces
Development
reduces service creation costs.
• Reusable components reduce effort to build new
Reduced services.
Costs
• Well-architected operations platforms reduce support
Operations costs
• Infrastructure optimized to meet SLA requirements
SaaS
Offer
• Dramatically reduced service creation costs allows
Time to Market testing of new services and increases service
profitability
• Quicker service creation process gets products to
Increased Offers market faster.
Revenue • Greater flexibility in integrating, bundling and packaging
features and applications to create new services,
thereby increasing subscribers
Subscribers • Extends digital value chain to third party application
and content providers.
• Accelerates the ability to operationalize and scale
services.

A service delivery framework (solution)
provides a mechanism to address technology
challenges.

• A service delivery platform
Service Delivery Platform – Technology architecture that enables efficient and
rapid creation and support of new services /
applications
– Provides self-provisioning services
Service Management
• Service Management
– Control of underlying services, including
provisioning and activation, inventory/resource
and Billing
Metering

Technology management, etc.
Solution – Incorporates existing Security offering
• Application Architecture
Operations

– Design and configuration of software to run in a
Application Architecture
hosted / managed service
• Metering and Billing - Usage
Infrastructure – Tracking of licenses and usage
Software • Infrastructure
Hardware – Design and layout of physical components to meet
Telephony performance / volume requirements
Network • Operations
– Systems and processes to ensure quality of service


Key success factors for SaaS
implementation

Establish a quantifiable business case and
1. Maintain a
qualitative user experience
value focus
Rapidly course correct leading and lagging
metrics (compared to on-premise, SaaS can
enable value faster if executed properly)

3. Simplify and
Avoid the SaaS “trap” of
extend integration 2. Drive the
designing entity-by-entity vs the
behavioral end-to-end business process
change Align incentives and adapt to
Agree integration roadmap for optimized the culture (SaaS has a strong
agile development fit to the 80/20 rule to drive
Address trade-off decisions for integration iteration)
within business processes in high flux


Key considerations for a SaaS
implementation
1. What are the implications for multi-tenancy around the
SaaS application for your organization?
2. How do you exploit the ‘viral’ take-up of SaaS at a
user/departmental level and avoid ‘unwinding’ tactical
deployments?
3. How do you use SaaS to drive greater standardization
and still manage SaaS customization (platform or plug-
ins) where necessary?
4. What new governance processes are necessary to
manage a SaaS program? Indeed, how do the business
and IT organizations need to adapt to the new
approaches that SaaS can enable?
5. What implications does SaaS have for master data
management?

References

• Above the Clouds: A Berkeley View of Cloud Computing
– http://www.eecs.berkeley.edu/Pubs/TechRpts/2009/EECS-2009-28.pdf
• Corporate websites: Mamut, confirmIT, Fronter, SSØ
• Trivergence
– http://www.accenture.com/Global/Accenture_Blogs/Trivergence_Blog/def
ault.htm
• Enterprise Web vs Consumer Web
– http://www.bitsandbuzz.com/article/enterprise-web-vs-consumer-web-20-
top-six-differences


Takk for meg!

Francis D’Silva
Enterprise Architecture Planning & Nordic Innovation Lab
francis.dsilva@accenture.com
+ 47 908 26 049

Cloud Computing, Business Models, Geilo April 2009

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