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Tag Archives: IT Services

Strategizing and Modernizing your Cloud Delivery Practice

Part 1 – Establishing your Cloud Business Management Practice 

By Khalid Hakim, Charlie McVeigh

History, particularly IT history, sure does have a way of repeating itself.

Think back to the 80’s and the advent of mini computers.   Mini computers were widely adopted by business units because of the perceived difficulty and cost of having the IT organization implement business solutions on the corporate mainframe.   In the 1990’s it was the PC.  Again, Corporate IT was seen as too slow and too expensive for the business solutions that were needed.  In the  2000’s  it is the advent of 2nd and 3rd generation Internet applications followed quickly by  the mobile computing revolution.  Like a broken record, corporate IT organizations were perceived as being slow and expensive to react to these new business demands.   Now that we are  in 2015, IT organizations are fighting the proliferation of public cloud offerings that business units cannot seem to drink up quickly enough.

What is common to each of the historical phases that are described above?  Business units that consume IT services perceived that they could procure IT services and applications more quickly and at a lower cost than corporate IT organizations could provide them.

What does this mean for the CIO in the modern era of IT?  It means that CIO’s must adapt or run the risk of being rendered irrelevant in relation to the way IT is consumed today and into the future.  It means that  CIO’s must now get on board with the concept of “running IT like a business.”  It means that CIOS’s must evolve such they are arbiters of technology and understand economically where is the best place for IT workloads to run.  Is it private cloud?  Public cloud?  Hybrid?  Outsourced?  Insourced? SaaS?  Iaas?  PaaS?  The choices are nearly endless – and you get it – todays CIO must be versed in all of these capabilities.

Todays effective CIO is asking and seeking answers most of the following questions:  Can you tell me on the spot what your total cloud spend is, and, what that spend is comprised of?  What’s the cost for you to deliver a unit of cloud service (IaaS for instance)? And what about your consumers: Who consumes what service and at what cost?

Can you identify the services used and the cost allocation for each service? How is your cost efficiency compared to that of other public cloud infrastructures? How can you use that type of information to optimize the cost of your existing and future operations? How can you create a showback report to each of your stakeholders?

Let’s say that you’re the VP of Cloud — think through how you would justify your data center investments. Have you proactively analyzed demand vs. capacity and how this is impacting your forecasting/budgeting exercises?  How can you scale dynamically to fulfill your consumer needs? Have you thought about your goal to optimize the cost of delivering cloud services? “What if” scenarios, benchmarking, and the reduction and optimization cost and price of your cloud services should be considered as well. Don’t you need closer monitoring to the quality of your delivery, such as continuous analysis and improvement? Have you thought of aligning your efforts with the corporate marketing and promoting your cloud services value?

(I can hear you thinking, enough with the questions already…)

What I would like to share with you today is a 6-month program (shown in the diagram below) to transform your cloud initiative into a successful robust cloud business management practice. The goal of the Cloud Business Management (CBM) service is to set up a cloud business management practice to enable effective, efficient, and agile business management of your cloud services.

Cloud Business Management

The following components are addressed in the full cloud business lifecycle service.

  • Cloud Business Manager Workshop – Educate the cloud service delivery teams on the foundations of cloud business and financial management aspects including costing, pricing, showback/chargeback, budgeting, forecasting, and cost optimization.
  • Cloud Business Strategy Assessment – Evaluate the IT business operational maturity of an organization and compare with VMware recommended practices. VMware will recommend possible strategies and propose a plan that best fits the organization IT and business models.
  • Cloud Services Definition – A comprehensive methodology to define cloud services and their constituent components end-to-end.
  • Cloud Services Costing – Understand Customer’s cloud services cost end-to-end and create a service-based cost allocation and classification strategy for Customer’s cloud services.
  • Cloud Services Pricing – Help Customer set a cloud pricing strategy and propose rates for the various components and offerings. This includes showback, cost recovery, investment funds, and driving particular behavior.
  • Cloud Services Marketing – Set up the cloud services marketing strategy including branding, marketing objectives, cloud service positioning, communications plan, value measurement, cultural considerations, and catalyst of change. Also, identify types of promotions and drivers of cloud services consumption and behavior impact.
  • Consumption and Showback / Chargeback – Help Customer develop a process for reporting on cloud service consumption and billing for cost recovery using VMware vRealize™ Business Advanced. In addition, determine the required people roles and dashboards.
  • Cloud SLM and Contracts Management – A comprehensive Cloud Service Level Management process including SLA and OLA templates between Cloud Infrastructure and Tenant Operations teams and the consumer. Additionally, basic vendor contract management process is provided.
  • Cost Optimization – Develop and execute a cloud cost optimization repeatable process that includes competitive analysis, benchmarking, public cloud comparison, and cost savings realization.
  • Cloud Services Budgeting and Forecasting – Develop a cloud-service-based budgeting and forecasting process to enable a more efficient demand and supply chain supported by the vRealize Business Advance cost model.

So, how is this valuable to your organization?

  1. Help your business consumers be accountable for better management of their cloud spend  rate cards, showback, chargeback, service tier options, and fair recovery of IT costs
  2. Help you make informed decisions for hybrid cloud, cost takeout, application rationalization, intelligent workload placement and bill of cloud
  3. Empower your IT to deliver on cloud promises for the desired quality, at the right cost by creating tighter alignment and accountability between IT, Business, and Finance
  4. Present you a comprehensive cloud business management practice within your IT organization leveraging your investment on vRealize Business and enabling you to run your cloud like a business
  5. Accelerate your transformation journey to an IT organization that is more consumption and cloud-service based

In our next blogs, we’ll cover the cloud business management components in greater details to help you plan for your Cloud Business Management (CBM) practice within your organization.

And if you’re heading to VMworld, don’t miss this session!

VMworld 2015

Using vRealize Business for Cloud Business Management

IT services and applications gradually rely on cloud services that provide more flexibility and agility for IT providers to supply the value to the business on demand. However this change also introduce new challenges to manage a dynamic environment that needs to scale economically per consumer’s demand. The cloud model can facilitate the shift to a business focus for the entire IT hierarchy—from the top to the technical teams managing and delivering the cloud. But to achieve the full business value of the cloud, companies need to put in place a more specialized and robust Cloud Business Management (CBM) practice. The CBM practice addresses the key business aspects of cloud operations.  Khalid Hakim, global operations financial and business management architect, and Kobi Katzir – Senior Product Line Manager at VMware will shed light on this new business practice using VMware vRealize Business to move your cloud management to the next level in maturity and position it as a strategic partner to your business consumers and line of businesses.

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, and you can follow him on Twitter @cbmcveigh

4 Steps to Better Market Your Cloud Services

By Alberto Martinez

Alberto Martinez-cropSuccessful cloud providers invest in marketing their services: promoting them, showing the value to customers, implementing strong pricing campaigns—and they understand how to rapidly adapt to changing market demands. But what prevents your internal IT organization from defining an effective marketing strategy to be more competitive and foster your cloud investments? And more importantly, how should you approach this effort to ensure success?

When moving to a cloud environment, most of the IT organizations that I work with focus on defining processes such as provisioning, support, or capacity, but forget about how to market the services they will be delivering and communicate their value to their customers. The same IT organizations end up with a private cloud infrastructure without clear target customers or, even worse, their cloud services are not used by the lines of business, resulting in a poor return on investment (ROI).

To realize the full ROI that enterprises are looking for from their cloud investments, the IT organization needs to drive the uptake of those services and persuade the lines of business away from using external service providers (shadow IT) or alternative legacy internal service provision options.

In order to mitigate those situations and increase their integration with the business, I advise my clients to define a consistent approach—as outlined below—to market their (internal or external) cloud services.

Defining Your Cloud Services Marketing Strategy
The approach to defining a cloud service marketing strategy must be innovative and not follow the traditional approaches. You need to apply a special focus on your customers in order to build a stronger relationship between your IT organization and the lines of business. That innovative approach has to contain similar characteristics as those of your cloud environment —simple and agile while powerful and impactful.

Below are four steps your IT organization can follow when defining a cloud services marketing strategy:

4 steps

  1. Define a service marketing strategy. As an essential initial activity, the key elements of the marketing strategy have to be defined with your CIO and leverage the expertise of your CMO and his/her marketing organization (experience, models, tools, and so forth). Those elements include market research, branding, pricing, differentiation, and competition.
  2. Create a communications plan. As my colleague Alex Salicrup wrote recently in this blog, communication is the key pillar to a successful IT provider. Define an effective communications plan for your cloud that will communicate its unique value to your customers and why they have to believe that differentiation is real (“reason to believe”). Your plan must define at a minimum what information will be communicated, how it will be communicated, as well as when it will be distributed and to which audience. Always keep in mind to exclude any technical information from the marketing materials.
  3. Develop marketing campaigns. One mechanism to create new favorable consumer perceptions of your cloud services is the marketing campaign. When developing tailored campaigns, you must identify what you are expecting from the campaign, what your customers can expect, what the impact will be on the audience, and how you will measure success. Measuring the success of your marketing campaigns is key to knowing the impact they had on your targeted audience.
  4. Measure. Benchmark your cloud environment against your competition, and set achievable actions to improve the value to business (always provide the best to your customers!).

Bridging the Gap Between the Cloud and Marketing Organizations

Establishing an IT services marketing capability is not just about defining the above steps—it’s also about your people in your organization and how they will execute upon those activities. To be successful, you need a strong integration between your IT organization and the marketing organization at two levels:

  1. Executive level: While defining the marketing strategy for your cloud environment, both your CIO and CMO have to work in tandem to ensure consistency with the business strategy. This will lead to the cloud services vision or value proposition, its unique value including differentiating factors, and the four steps previously described.
  2. Departmental lead/individual contributor level: Once you have defined your strategy, your IT organization—through cloud tenant operations—will have to work together with at a minimum two teams: 1) the marketing communications team to execute your cloud services communications plan, and 2) with the field marketing team to develop the marketing campaigns and success measurements.

Bridging the gap between the IT and marketing organizations will encourage an open environment of collaboration. I recommend to assign champions to integrate both areas, whose responsibility will be to support the promotion of the cloud services whilst leveraging the IT organization´s functions and expertise.

In summary, an effective cloud services marketing strategy promotes the value of your services and drives the adoption of those services within the lines of business. Start your effort early and with a consistent approach, so you can compete effectively against other cloud providers and achieve the ROI the business is looking for from its cloud investments.

Alberto Martinez is an operations architect with the VMware Operations Transformation global practice and is based in Spain.

A Click Away—The IT Vending Machine Experience

IT users increasingly expect a more consumer-type of enterprise technology experience. A user friendly, cloud-based experience will increase productivity, efficiency, and customer satisfaction.

This infographic reveals why the consumerization of IT is a key development that organizations can leverage to ensure that IT is successful.



Shifting from ‘Free Services for All’ to ‘Gold/Silver/Bronze Service Bands’

The art and science of leveraging VMware’s IT Business Management solution to manage demand

By: Pierre Moncassin

Here is a real-life customer challenge that I encountered at a workshop with a global pharmaceutical company. The challenge boils down to the question: How do you use tiered service offerings to manage demand in a culture where users are used to receiving only ‘gold plated’ services?

The team I met with is a central IT function delivering centralized, cloud-type services to multiple lines of business distributed globally. Each line of business tends to provision its virtual infrastructure independently, based on project-specific requirements. Many projects are business critical (or at least linked to substantial revenues), so teams tend to ask for the highest service levels offered without really thinking about lower service level alternatives. In absence of a mechanism to charge business units for their consumption, teams opt for the ‘gain’ of highest service offerings.

In the past, the IT organization tried to temper demand by standardizing its offering on a few median-specification offerings while requesting more justifications for the high-specification services. This approach encountered some success, and I believe it was going in the right direction because it shared the “pain” of higher IT costs.

However, in the absence of a use-based-on-consumption cost allocation method, their users still prefer high-end, or non-standard, configurations with a higher internal cost. And they will keep doing this as long as they experience all gain and no pain.

The solution is “simple” in principle: The IT organization needs to “share the pain” and cross-charge users according to chosen usage and service levels. But ‘simple,’ of course, does not mean ‘easy.’

Given the complexity of the effort and the potential pitfalls it can encounter, let’s break down the process for getting cross charging into place into three discrete steps:

Step 1 – Start with the Essential Tools: Deploy VMware’s Chargeback Manager

Okay. I said it. You need a new tool.  Spreadsheets just don’t work over the long term. VMware Chargeback Manager enables accurate metering of the cloud-based resources being used. Beyond that, it offers pre-defined cost models that make it easier for consumers to be billed according to their usage (with a range of allocation methods).

In addition, Chargeback Manager establishes a stepping stone to VMware’s IT Business Management – the comprehensive solution for managing IT budgets for the cloud. But, for now, let’s assume that you have introduced Chargeback Manager just so that each resource has a cost and an associated ‘bill of IT’ to the consumer (whether internal or external). Is that enough in itself to manage demand?

In my view, there is an implicit, but critical, additional assumption when presenting consumers with the ‘bill of IT:’ that the bill will show items that the consumers will a) clearly understand, and b) appreciate for their quality.

To compare, for example, with a restaurant service, clients would not normally expect an itemized bill showing a breakdown of heating, water rates, and raw ingredients (meat, vegetables) measured by weight. They expect to be charged by dish. But beyond accepting the costing model, they also have an implicit quality assumption. They expect that:

  1. Dishes must meet a minimum quality standard, or they will simply leave
  2. There is some link between the price offered and the quality of the dish

If these tacit assumptions about price/quality are not met, chances are that the customers will never come back (or in the case of a private cloud, move on to a public cloud provider).

Step 2 – Offer Tiered Service Categories

Similarly, charging for internal cloud-based services also needs both a well-defined ‘menu’ (i.e. a catalog of services) and a clear relationship between services and price.

In earlier blogs, we commented about the importance of standardizing cloud services and the trade-offs that this implies.

Standardization is a pre-requisite for charging, as this defines the ‘menu’ of services offered. It also underpins economies of scale and automation – which make the costs of cloud services attractive in the first place.

However, the introduction of a ‘price tag’ for services means far more than an accounting figure. It means a cultural change – introducing a buyer/seller relationship between the IT organization and the business units. The natural response for the ‘buyer’ side is to focus on price. This is why the IT organization needs to respond – like any experienced retailer would – with a focus on both price and quality of service.

A popular way to communicate service quality is to offer tiered service categories (e.g. ‘bronze/silver/gold’ with associated price bands).  These price/quality levels can be then published in the service catalog.

Step 3 – Facilitate Cultural Change Through Communication

Introducing tiered service categories will have ripple effects throughout the IT organization and beyond, as it will foster – and perhaps enforce – a service-oriented attitude. Externally, it will shift the image of the IT organization from a cost center to that of a commercially-focused service broker.

It’s a cultural change that can’t be left to chance, however – so I highly recommended that this should be supported by a communication management plan.

In an earlier blog, I shared some ideas for making your communication plan as effective as possible. But I want to emphasize a couple here that can help speed your move to a tiered service approach – and mindset.

Internally to the IT Organization, we want to empower the Tenant Operations teams not just to deliver the best possible service (as a matter of course), but also to manage end-user expectations. In practice, a workshop such a Cloud Operations’ Service Definition Process Optimization can go a long way in helping these internal IT teams crystalize their thinking around what to promise their users by way of IT services: setting the foundations for clearly-understood, two-way agreements between themselves and their ‘consumers.’

When it comes to communication with the end-users (consumers), I’d recommend thinking in terms of a sales campaign (whether pitched within the same company or not) that emphasizes both short term and long term ‘wins’:

  • Short-term ‘wins,’ such as increased control over their provisioning spend, and clearly-defined service quality underpinned by written service levels
  • Long-term ‘wins,’ such as being more closely involved in the service definition process – i.e. having more say in how services will be adapted to their evolving needs.

The Way Forward: Service Differentiation Beyond ‘Gold/Silver/Bronze’

The global pharmaceutical company I was working with is already embracing many of these concepts, and has introduced a tiered service model at the infrastructure component level (e.g. server, storage). That, in turn, has paved the way for further service development: once the tiered service approach has full adoption, the next step will be to expand the model towards the application level – offering numerous opportunities to add further value for consumers. The tiering model can be extended even further, to more complex application-related services, such as continuity management, database services, etc.

This ‘win-win’ perspective is at the core of the Cloud Operation’s approach to managing demand: it is not about taking capacity away from end users – instead, it’s about offering a more informed range of choices with a clear trade-off between cost and quality. Given the right choices, even the most vocal consumers will rethink picking the ‘gold-plated’ option every time.

Summary – Key Steps to Manage Demand for Cloud-Based Services:

  • Introduce Chargeback Manager to establish a robust foundation for service costing
  • Link service quality to service prices – think like a retailer
  • Offer a simple, tiered range of choice to consumers
  • Differentiate the end-to-end services, not the service components
  • Facilitate cultural change with a communication plan (internal and external)

Follow @VMwareCloudOps and @Moncassin on Twitter for future updates, and join the conversation by using the #CloudOps and #SDDC hashtags on Twitter.

DevOps and All The Other “Ops Religions”

By: Kurt Milne

I didn’t wake up yesterday thinking, “Today I’ll design a T-shirt for the DevOps Days event in Mountain View.”  But as it turns out – that is what happened.

Some thoughts on what went into my word cloud design:

1. DevOps is great. This will be my 4th year attending DevOps Days.  I get the organic, bottoms up nature of the “movement.” I’ve been on the receiving end of the “throw it over the wall” scenario. A culture of collaboration and understanding go a long way to address the shortcomings of swim lane diagrams, phase gate requirements and mismatch of incentives that hamper effective app lifecycle execution. Continuous deployment is inspirational, and the creativity and power of the DevOps tool chain is very cool.

2. EnterpriseOps is still a mighty force. I remember an EnterpriseOps panel discussion at DevOps Days 2010. The general disdain for ITIL, coming from a crowd that was high off of 2 days of Web App goodness at Velocity 2010, was palpable. The participant from heavy equipment manufacturer Caterpillar asked the audience to raise their hand if they had an IT budget of more than $100M. No hands went up in the startup-dominated audience. His reply – “We have a $100M annual spend with multiple vendors.” The awkward silence suggested that EnterpriseOps is a different beast. It was. It still is. There is a lot EnterpriseOps can learn from DevOps, but the problems dealing with massive scale and legacy are just different.

3. InfraOps, AppOps, Service Ops. This model developed by James Urquhart makes sense to me.  It especially makes sense in the era of Shape Shifting Killer Apps. We need a multi-tier model that addresses the challenges of running infrastructure (yes, even in the cloud era), the challenges of keeping the lights on behind the API in a distribute component SOA environment and the cool development techniques that shift uptime responsibility to developers, as pioneered by Netflix. Clear division of labor with separation of duties, and a bright light shining on the white space in between, is a model that seems to address the needs of every cloud era constituent.

4. Missing from this 3-tier model is ConsumerOps. Oops. Too late to update the shirt design. Many are consuming IT services offered by cloud service providers; there must be a set of Ops practices that help guide cloud consumption. Understanding and negotiating cloud vendor SLAs and architecting multiple AWS availability zones immediately come to mind. Being a service broker and including 3rd party cloud services as part of an integrate service catalog is another.

5. Tenant Ops. As far as I can tell, this term was coined by Kevin Lees and the Cloud Operations Transformation services team at VMware. See pages 17 and 21 in Kevin’s paper on Organizing for the Cloud. It includes customer relationship management, service governance, design and release, as well as ongoing management of services in a multi-tenant environment. VMware internal IT uses the term to describe what they do running our private cloud internally. They have a pie chart that shows the percentage of compute units allocated to different tenants (development, marketing, sales, customer support, etc). It works. It may be similar to ServiceOps in the three tier model, but feels different enough, with a focus on multi-tenancy and not API driven services, to deserves its own term.

6. Finally CloudOps. This term is meta. It encompasses many of the concepts and practices of all the others. This is a term that describes IT Operations in the Cloud Era. Not just in a cloud, or connected to a cloud. But in the cloud era. The distinction being that the “cloud era” is different than the “client server era,” and implies that many practices developed in the previous era no longer apply. Many still do. But dynamic service delivery models are a forcing function for operational change. That change is happening in five pillars of cloud ops: People, Process, Organization, Governance, and IT business.

So while some of the sessions at this year’s DevOps conference are focused on continuous deployment. I’d bet that all the topics of the “Ops religions” will be covered.  Hence the focus on the term CloudOps.

We’ll be live tweeting from DevOps next Friday. Follow us @VMwareCloudOps or join the discussion using the #CloudOps hashtag.

Consider joining the new VMUG CloudOps SIG or find out more about it during VMUG June 27th webcast.

What Do We Mean by IT Services in the Cloud Era?

By Kevin Lees

You hear it all the time from cloud evangelists: instead of delivering based on projects, IT should now be delivering around a common set of services.

It’s not a new idea—but cloud computing promises to finally make it a reality.

Before we get too excited, though, we should ask: what do we actually mean by cloud services? That’s not something cloud advocates always make clear.

So here’s an example:

The other week I was talking with a customer who runs a cloud that supports production dev test environments for a  government agency. These environments are in turn supporting mission-critical applications that play a major role in maintaining the public’s health.

From a service perspective, the tenant ops team is identifying and building a set of common development platforms as virtual applications. In this case each platform consists of three tiers, with each tier running a Windows operating system that’s been pre-built to meet government security policies. The composite platforms all have monitoring drivers already installed, and also feature commonly-used development environments – in this case they’re either a Microsoft dot-net type environment or Java-based.

Collectively, that creates a common virtual dev test vApp pre-built with a lot of the core capabilities and requirements to do this type of mission-critical application development. My customer’s team is then offering this multi-tier stack as a “service” via self-service on demand provisioning.

In the past, it could have taken two to three months to stand up something like this for a new round of development and testing. Now, with these prepackaged, common services, a new development environment can be deployed in less than an hour..

It’s a great example of how quickly you can provision, not only from infrastructure perspective, but so that developers don’t have to repeatedly start out with raw infrastructure and build-in all of their own environments.

This standardized, pre-packaged development environment can also be used across multiple development teams and even across multiple departments. Each may need to do some tweaking for their particular area, but it saves everyone an enormous amount of work.

For future updates, follow @VMwareCloudOps on Twitter and join the conversation using the #CloudOps and #SDDC hashtags.