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Cloud Business Strategy

Part Two of the Cloud Business Management Series

Cloud Business Strategy

By Khalid Hakim, Charlie McVeigh and Reg Lo

At VMware we have the good fortune of working with many different customers on driving and implementing a Cloud Business Strategy.  As we have discussed in some of our prior Cloud Business Management blogs, there is a full spectrum of issues to be considered when considering Cloud Business Management.  This spectrum of issues include:

  • Cloud Strategy
  • Cloud Costing
  • Cloud Marketing
  • Service Level Management & Contracts Management
  • Budgeting & Forecasting
  • Services Definition
  • Cloud Pricing
  • Consumption & Charge-back
  • Cost Optimization

Today we are going to look specifically at the role of Cloud Business Strategy and our time tested workshop approach that we use with our customers to derive a road map to success.

CBM_workshop

Our Cloud Business Management (CBM) Workshops always start by asking our customers what their definition of “success” is when looking forward 18-24 months into the future.  While every customer is unique, the common success criteria that we hear from our customers include the following items:

  • Full transparency for IT consumers as to what they consume and what are the costs for what they are consuming, i.e. who consumes what and at what cost
  • Reclamation and recovery of unused or underutilized infrastructure.
  • Establishment of services definitions for “patterns” (repeatable services in the service catalog) and “snowflakes”  (services that are unique and require engineering to stand the service up.)
  • Reduced time of deployment of services especially “patterns”
  • Understanding from an economic and technical perspective of where is the best place to run cloud workloads. Is it private cloud, public cloud or a hybrid cloud environment? Maybe it is more cost efficient to run temporary workloads in the public cloud than the private one.
  • Incentivizing users to “do the right thing” due to understanding of economics and transparency of costs.
  • Incentivizing users to “do the right thing” due to vastly improved day 0, day 1 and day 2 operations automation.

Once we have an understanding of what “success” will look like in the future, we then drive into a deeper discussion of the following items:

  1. We start by asking for current pain points across the CBM spectrum listed after the first paragraph above. For example: Do you have service definitions? Do you know your costs for services?  Do you engage in pricing strategies?  Are you marketing cloud services to incent user behavior?  Do your users know what they are consuming?  What are you doing for cost optimization?, etc.
  2. We then engage our customers in a discussion of what they would like to see in the future across the CBM spectrum and what tangible improvements that they can anticipate as they mature across each of these disciplines.
  3. Discussions then dive into the current level of maturity across the CBM Spectrum. The key here being that more mature organizations provides higher levels of value to the IT organization and the business consumers of IT resources.
  4. Lastly, a deep dive into data sources that can be used for setting up automated cost modeling are investigated. We are looking to understand what are some of the foundational data sources for Cloud Management (such as vRA, vROPs), Foundation sources for costs (G/L, A/P, Organization, Budgets), Operational Data (Labor rates, Headcount, Compute capacity and metering, Storage capacity and metering, Network capacity and metering, Reporting requirements, Financial practices, etc.)

The workshop and the discussions that occur require a significant discovery effort and detailed listening to our customers.   From this effort we are able to derive a detailed deliverable that results in a tangible Cloud Business Strategy deliverable.   The strategy includes a road map with definitive success points at 6 months, 12 months and 18 – 24 months.

Cloud Business StrategyEmbedded within the Cloud Business Strategy document, is an illustration of what will happen to the organizations maturity across the CBM spectrum if the road map is followed.  Maturity gains will be followed and realized by direct and quantifiable improvements in value provided by the Cloud management team to the business that they are supporting.

For more information and to schedule a Cloud Business Management Workshop for your organization, please contact your local VMware representative.

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Khalid Hakim is an operations architect with the VMware Operations Transformation global practice. You can follow him on Twitter @KhalidHakim47.

Charlie McVeigh is an IT business management strategic advisor for VMware. You can follow him on Twitter @cbmcveigh.

Reg Lo is the Director of VMware Accelerate Advisory Services and is based in San Diego, CA.  You can connect with him on LinkedIn.

The Cloud Business Manager Role

Part One of the Cloud Business Management Series

Khalid HakimCharlie McVeighBy Khalid Hakim and Charlie McVeigh

Business leaders look at the cloud model and see new ways to accelerate innovation, create competitive advantage, and drive new business models. IT executives look at private, public and hybrid cloud models and see a host of new possibilities for positive IT outcomes, including among others:

  • Optimizing CapEx
  • Lowering OpEx
  • Shifting focus to optimize the “run IT” budget thus freeing funding for the “grow IT” budget
  • Improved service delivery times through app and infrastructure delivery automation
  • Improved asset utilization by understanding consumption and usage patterns in the cloud

Never forget your history lessons.   Have you ever participated in a successful transformation project that didn’t factor in People, Process and Technology? We still find that all too often, a critical aspect of harnessing the cloud is overlooked: the organizational impact of moving to the cloud model. The fact is, the transition to the cloud model requires an evolution in roles, skills, processes, and organizational structure.

Organizing for the cloud cannot be an afterthought in the formulation of an effective IT transformation strategy. When IT is in transition, roles and responsibilities are more important than ever. The right people, with the right skills, have to be in the right places and serve the right roles.

Chief among these critical organizational shifts is establishing a Cloud Business Management discipline. This blog is the first in a four part series recommending specific Cloud Business Management roles and processes to consider.

Cloud Business Manager Role:  Run Cloud Like a Business

The Cloud Business Manager role  drives a new business management discipline within IT to lead a comprehensive cloud business management practice, leveraging investments in vRealize Business. The Cloud Business Manager supports Cloud Infrastructure and Tenant Operations to help the business better manage:

  • Cloud spend
  • Rate cards
  • Showback and chargeback
  • Reporting of consumption and wastage
  • Service tier options
  • Fair recovery of IT costs
  • Incentives driving the right economic usage patterns by cloud consumers.

Cloud Business Management

Responsibilities of the Cloud Business Manager are in the following 4 categories:

  • Financial
    • The focus here is primarily to develop the cloud service-based cost model along with a repeatable service costing process for Cloud consumption. Among other responsibilities, this includes service-based cost allocation and classification strategy, tracking and management of cloud costs, cloud services rates settings, and defining consumption and showback/chargeback reports from both the provider and consumer perspective.
  • Business
    • Included here are responsibilities for developing a cloud strategy roadmap, a cloud services marketing program, and liaison work among IT, Corporate Marketing, and Business Unit consumers of the cloud.
  • IT/Cloud
    • Here the responsibilities include defining SLA’s, ensuring delivery, and making cloud workload placement decisions based on the right economic factors to avoid shadow-IT situations.
  •  Value
    • Responsibilities here include defining value metrics, continuous improvement reporting, and regular business performance reporting for key stakeholders. This enables the business consumers of the cloud to make the right economic decisions about where and how to run their workloads.
  • Corporate/IT Marketing
    • Develop a Cloud Services marketing strategy; offers and promotions to ensures cloud services consumption and value. Once you understand the economics of cloud workload placement, cloud marketing will drive users to that desired behavior.

What does the Cloud Business Manager contribute to the business?

The Cloud Business Manager helps IT deliver on cloud promises for the desired quality at the right cost, by ensuring tighter alignment and accountability between IT, Business and Finance.  This roles makes a significant contribution in the workload placement decision-making process, as well as hybrid cloud, cost takeout, application rationalization and bill-of-cloud.

Let us know if we can help you further define this role in your company.  And keep a look out for Part Two in this Cloud Business Management Series next month, where I cover the Cloud Business Strategy topic.

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Khalid Hakim is an operations architect with the VMware Operations Transformation global practice. You can follow him on Twitter @KhalidHakim47.

Charlie McVeigh is an IT business management strategic advisor for VMware. You can follow him on Twitter @cbmcveigh