Cloud Computing for STG Business Partners

1. Annette Miller annmil@us.ibm.com Dynamic Infrastructure Offerings, Cloud Computing Lead Cloud Computing for STG Business Partners

2. Why do you care about selling cloud? • There is nearly universal interest in Cloud computing • 40% of customers use Cloud computing today and nearly all are interested in using it in the future (IBM Value Proposition Quantitative Research Phase II Global Report - December 2008) • 58% CIOs believe cloud computing will cause a radical shift in IT…47% already using or actively researching. – CIO Magazine • C-level executives are looking to reduce cost, drive innovation and competitive advantage and asking how cloud can help • Customers are planning now & going to vendors & analysts for advice “We’re going to do this with or without you” Comment from a data center manager – “We’ve been told to look at cloud. There are 1000 people in our IT organization, and we have 1000 different opinions” • Our competition is talking to your customers – if you don’t, we lose • You need to establish IBM cloud leadership mindshare with your customers • Use this to identify pragmatic, short-term opportunities to sell and move the customer forward

3. Chart can be used with customers Green & Beyond New Intelligence Smart Work Dynamic Infrastructure Cloud Services delivered from a Dynamic Infrastructure. • A dynamic infrastructure provides a foundation for efficient delivery of cloud based services. • Cloud has multiple possible deployment models (public, private, or hybrid) • Cloud also has multiple layers of service (application, platform or infrastructure provided as a service) *Information as a Service * Business Process as a service * Energy Mgmt as a Service Infrastructure as a Service * Examples only – there are multiple possible types of cloud services aligned to smart work, new intelligence , green & beyond

4. Chart can be used with customers Delivery characteristics drive the IBM definition of Cloud Computing • Cloud Computing is a newconsumption and delivery model inspired by consumer Internet services. Cloud Computing exhibits the following key characteristics: • On-demand self-service • Ubiquitous network access • Location independent resource pooling • Rapid elasticity • Pay per use/ flexible pricing models, eg, pay per use Service Consumers DatacenterInfrastructure AccessServices Monitor & ManageServices & Resources IT Cloud Component Vendors/Software Publishers Service Catalog, ComponentLibrary CloudAdministrator Publish & UpdateComponents, Service Templates

5. New consumption and delivery models drive new sourcing options and business flexibility Chart can be used with customers • Private … • Client owned – managed by client or services provider. • Access defined by client. • Public … • Standardized services on the provider’s cloud. • Access by subscription. Cloud Services Cloud Computing Model • Considerations … • Speed & flexibility. • Standardization. • Security, privacy, resiliency. GOVERNANCE

6. Public Cloud Providers Are A New Challenge To Enterprise Data Centers • Line-of-business units can now go to public cloud providers for IT infrastructure services, eg: • Amazon Web Services (AWS) • Microsoft Azure • Low cost, pay-per-use model seen as more cost-effective • Amazon EC2: $0.10/hour (small Linux/UNIX instance) • Near-immediate provisioning enables users to respond at market speed • 64-node Linux cluster available in 5 minutes on AWS vs. 3 months internally1 • Threatens disintermediation of firm’s IT strategy and information assets 1 http://www.informationweek.com/cloud-computing/blog/archives/2009/01/whats_next_in_t.html

7. What Is The Solution? • Much of cloud computing revenue opportunity in the next three years will be driven by private cloud implementations • Cisco and HP are in our customer accounts trying to win the business • Much of what they call cloud is IT infrastructure plays which you know how to sell • How to counter Cisco and HP • Use IBM Cloud Strategy to tell the story and advise clients • Make use of IBM’s Dynamic Infrastructure for Cloud to counter IT proposals from Cisco and HP being presented as cloud • IBM can go head to head with Cisco UCS & HP Matrix • Team up with IBM to offer IBM CloudBurst, and integrated hw, sw and services solution • IBM Dynamic Infrastructure for Cloud: Reinvent the data center to build a more flexible infrastructure – a critical part of a successful cloud deployment • Take Cost Out • Virtualization and consolidation • Request-Driven Provisioning • Automatic self service • Pay-as-you-go chargeback Provide private cloud services to the enterprise

8. Chart can be used with customers An effective Cloud Computing deployment is built on a Dynamic Infrastructure and is highly optimized to achieve more with less…. CLOUD COMPUTING + + = VIRTUALIZATION STANDARDIZATION AUTOMATION Reduced Cost …leveraging virtualization, standardization and automation to free up operational budget for new investment.

9. Chart can be used with customers A dynamic infrastructure provides the foundation for effective cloud services delivery • Cloud Services Delivery • Elastic Scaling • Rapidly provisioned • Flexible pricing • Ease of use • Standardized offerings Required Infrastructure Characteristics for effective Cloud Delivery • Open standards-based, service-oriented • Advanced virtualization and automated mgmt • Common components and processes • Advanced security and resiliency • Easy to use service catalog

10. Major factors driving cloud economics Chart can be used with customers Infrastructure Leverage Virtualization of Hardware Drives lower capital requirements Virtualized environments only get benefits of scale if they are highly utilized Utilization of Infrastructure Automation of Management Take repeatable tasks and automate Labor Leverage Standardization of Workloads More complexity = less automation possible = people needed

11. The key building blocks of clouds are familiar… Chart can be used with customers User Self Service Advanced Service Management Advanced Virtual Resource Pools Simplification/ Consolidation • Remove physical resource boundaries • Allocate less than physical boundary • Improve scalability, increase utilization • Reduce hardware costs • Centralized, robust, self serve portal for 24X7 access to tools, information, IT and business services • Improve user satisfaction & productivity • Control and manage delivery, support & administrative costs • Service catalog, metering, and automated deployment of virtualized resources • Integrated virtualization management with IT processes • Reduce overhead, improve productivity • Consolidation, systems management, and monitoring • Reduce infrastructure complexity, staffing requirements, and costs • Improve business resilience and utilization System pools with VMControl … Tivoli Service Automation Manager

12. IBM has invested to achieve insight, innovation and breakthrough solutions Chart can be used with customers “Project Blue Cloud” IBM Transformation Academic Alliance • Global collaboration. • 27 Universities. • 800+ students. • NSF grants to 14 schools. • 155 data centers to five. • 16,000 applications to 4,500. • $1.5 Billion savings. • Technology Adoption Program “TAP cloud” for 110,000 employees. • Hundreds of client engagements. • 20 Cloud centers. • Proof-of-concepts. • IBM Research/Client collaborations. Wuxi Carnegie Mellon iTricity HCMCUniv of Technology NedBank

13. Business Case Results – IBM Technology Adoption Program Chart can be used with customers Without Cloud With Cloud • The IBM TAP business case re-presents an ideal environment fora private cloud implementation. By implementing virtualization and automated provisioning, the team was able to: • Reduce from 488 servers to 55 • Reduce from 15 admins to 2 • Reduce Power costs (fewer servers) New Development Liberated funding for new development, trans-formation investment or direct saving Strategic Change Capacity Software Costs 100% Power Costs Deployment (1-time) Labor Costs (Operations and Maintenance) Current IT Spend Software Costs Business Case Results: Annual savings: $3.3M (84%) from $3.9M to $0.6M Payback Period: 73 days Net Present Value (NPV): $7.5M Internal Rate of Return (IRR): 496% Return On Investment (ROI): 1039% Power Costs(88.8%) Hardware, labor & power savings re-duced annual cost of operation by 83.8% Hardware Costs (annualized) Labor Costs ( - 80.7%) Hardware Costs( - 88.7%) Note: 3-Year Depreciation Period with 10% Discount Rate

14. Chart can be used with customers Private Cloud Cost AdvantageCost Per Image for Linux Workloads (5 Yr TCO) $285K $253K Private CloudCost Advantage Cost per Workload/Image $71.1K $57.7K $55.8K Buy Standalone Servers Public Cloud (AWS) Private Cloud x86 hypervisor Private Cloud z/VM Add IFLs to z10 EC Private Cloud Power/VM (p570) SWG Competitive Project Office Study

15. Workload Optimized – workload characteristics will drive the rate and degree of standardization of IT and business services. Chart can be used with customers Hardware Software Services Delivering Cloud Computing to our Clients Integrated Service Management – increasing complexity of IT systems necessitates enhanced service management visibility, control and automation Choice of Delivery Models – public, private and other consumption models reflect clients’ differing circumstances and needs IBMoffers 3 delivery models by workload Smart Business Servicescloud services delivered Smart Business Systemspurpose-built infrastructure Enterprise Data Center Private Cloud Cloud Private cloud services, behind your firewall,built and/or run by IBM Integrated Service Delivery Platform Standardized serviceson the IBM cloud

16. Chart can be used with customers Cloud usage should be tailored to the workload • Workloads where risk and migration cost may be too high: • Database • Transaction processing • ERP workloads • Highly regulated workloads • Workloads which can be standardized for cloud: • Web infrastructure applications • Collaboration infrastructure • Development and test • High Performance Computing • New workloads made possible by cloud: • High volume, low cost analytics • Collaborative Business Networks • Industry scale “smart” applications

17. Chart can be used with customers Hardware Software Services Delivering Cloud Computing to our ClientsSample of cloud computing offerings IBMoffers 3 delivery models by workload Smart Business Servicescloud services delivered Smart Business Systemspurpose-built infrastructure Enterprise Data Center Private Cloud Cloud Private cloud services, behind your firewall,built and/or run by IBM Integrated Service Delivery Platform Standardized serviceson the IBM cloud Collaboration: IBM Lotus Live IBM Lotus Live iNotes Infrastructure Compute: IBM Computing on Demand … Analytics: IBM Smart Analytics Cloud ** Infrastructure Compute: IBM Smart Business Test Cloud ** Infrastructure Compute: IBM CloudBurst ** ** team with IBM for these solutions

18. Virtualized servers and storage System x, IBM BladeCenter, iDataplex, Power Systems, System z SAN Volume Controller IBM Systems Director VMControl Standard Edition Image Management Enterprise Edition -- New Virtual System Pools IBM Solution Edition for Cloud Computing (System z) -- New Standard IBM offering to create a cloud computing management and infrastructure for hosting private clouds Tivoli Service Automation Manager 7.2 – New release Cornerstone for IBM's Service Management Center for cloud computing. Provides the ability to request, deploy, and helps manage clouds with simple entry points IBM WebSphere CloudBurst Appliance 1.1 Dispense & manage WebSphere images in a cloud Chart can be used with customers after Oct 20th announcements IBM Dynamic Infrastructure Building Blocks for Cloud Computing WebSphere CloudBurst VMControl TSAM Virtualized Systems Virtualized Systems Virtualized Systems

19. How do you get started with a customer:A practical approach… Dynamic Infrastructure for Cloud Chart can be used with customers Plan & Prepare • Condition the existing infrastructure for cloud • Virtualize and automate existing systems • Add service management (provisioning, service catalog, user interface)** • Define a cloud strategy & roadmap • Choose an initial project and understand the workload characteristics • Assess cloud deployment models, service options • Plan cloud strategy and roadmap • Start with an isolated cloud deployment • Choose low-risk workload such as test and development – we have a pattern established • Focus on defining services to be provided, what will be different • Measure ROI Test & Deploy • Develop a broader plan with ongoing ROI • Services can provide thought leadership • IBM can deliver capabilities however your customer wants to acquire Extend & Evolve **Note: Dynamic Infrastructure service mgmt includes Tivoli Service Automation Manager (TSAM)

20. Chart can be used with customers How IBM Business Partners can help Plan & Prepare

21. Chart can be used with customers How IBM can help Test & Deploy

22. Chart can be used with customers How IBM can help Examples of cloud-delivered services Extend & Evolve

23. Dynamic Infrastructure for CloudSelling the infrastructure for a private cloud • Present together Dynamic Infrastructure for Cloud and IBM Cloud vision: strategy, business impact, savings, technology • Cloud provides an additional Dynamic Infrastructure reason of call • Show ROI examples of Dynamic Infrastructure for Cloud • Show IBM differentiation: • Many customers will start small, but strategically move into a cross-platform infrastructure • Use TCO advantages of a Dynamic Infrastructure for private cloud • Leverage IBM • Optionally offer a Cloud Computing Infrastructure Workshop (engage STG lab services) • Use the SWG Competitive Project Office study – If you need help from the CPO, email Scott Bain, sbain@us.ibm.com • Contain the scope • Focus on how to prepare for successful outcome, Dynamic Infrastructure for Cloud key • If you don’t, discussions could go on forever • Recommend that client starts with Dynamic Infrastructure for Cloud • If a client already has a dynamic infrastructure and wants to deploy cloud • Team with IBM • Focus on private cloud and start small • Test/dev is a good low risk workload that can quickly offer ROI • Plan & deploy initial pilot project

24. Chart can be used with customers IBM Case Studies

25. For more information … • Cloud Computing Sales Kit, seller & customer education, deliverables, white papers • System z seller education for cloud computing • Advantages of a Dynamic Infrastructure: A Closer Look at Private Cloud TCO • This paper examines the TCO for a dynamic infrastructure built around private cloud services and compares it to public cloud alternatives as well as conventional one-application-per-distributed server models. • Pulse 2009 -- The ROI of Cloud Computing: Getting the Most Out of Your Investment • PPT presentation – Benefits of cloud computing and ROI through consolidation and virtualization of IT resources and increasing management efficiency. • Gartner co-authored paper: Dynamic Infrastructure – Driving Success • This paper, which is co-authored by Gartner, outlines the need for a dynamic infrastructure, a strategy for developing one, and some best practices and options to consider when getting started. • Cloud Computing: A Highly Resilient Solution for Service Delivery • Gartner defines cloud computing as a style of computing where scalable and elastic IT-enabled capabilities are provided as a service to external customers using Internet technologies and further discusses cloud computing in detail. • CloudBurst Sales Kit for BPs • Computing on Demand Sales Kit for BPs • Cloud IBM TV Ads • Cloud Customer Site • Smart Analytics Education • Cloud Connect Community

26. Contacts • Anne Peck: AG Dynamic Infrastructure • apeck@us.ibm.com • Alice Moran: AG BP Cloud Sales Play • amoran@us.ibm.com • Gary Tomchuk: AG BPO Cloud Communications • gthomchu@us.ibm.com • Kathy Church: AG BP Cloud Enablement Execution • kchurch@us.ibm.com • Annette Miller: WW Dynamic Infrastructure Offering Team, Cloud Computing Lead • annmil@us.ibm.com

27. Understand the strategy Have a discussion with your customer Call to Action • Be conversant in Dynamic Infrastructure and Cloud Computing • Leverage Dynamic Infrastructure for Cloud - both Virtualization + Service Management are KEY • Team with IBM if a client wants to pilot cloud Propose next steps to progress your opportunity • Identify opportunities by probing for places we can help, especially with a test/development scenario • Understand their approach to delivering services – use whiteboarding to discuss service management • Sell Dynamic Infrastructure for Cloud • Leverage our briefing centers so you can showcase our capabilities for your customer

28. Thank You

29. SWG Competitive Project Office TCO Study

30. Cost Per Image for Linux Workloads (5 Yr TCO) $285K $253K Private CloudCost Advantage Cost per Workload/Image $71.1K $57.7K $55.8K Buy Standalone Servers Public Cloud (AWS) Private Cloud x86 hypervisor Private Cloud z/VM Add IFL’s to z10 EC Private Cloud Power/VM (p570)

31. Cost Per Image for Linux Workloads (5 Yr TCO) $285K $253K Private CloudCost Advantage Cost per Workload/Image $84.3K $71.1K $57.7K $55.8K Buy Standalone Servers Public Cloud (AWS) Private Cloud x86 hypervisor Private Cloud z/VM Add IFL’s to z10 EC Private Cloud z/VM Buy New z10 BC Private Cloud Power/VM (p570)

32. Tivoli Services Automation Manager (TSAM) Delivers Fast Self-Service Provisioning • TSAM leverages two stable and mature Tivoli products to create a user friendly provisioning solution • Tivoli Service Request Manager (TSRM) provides the web-based interface with service desk and service catalog • Tivoli Provisioning Manager (TPM) provides the automation infrastructure required to deploy new servers

33. Use service Service Example – Deploy New Virtual Server Based On Existing Image • User requests service via portal from the catalog • TSAM approves user request, reserves hostname • TSAM starts the deployment process via Tivoli Provisioning Manager workflow • TSAM notifies the user that service is ready on the new LPAR Request service IBM Tivoli Service Automation Manager (TSAM) IBM Tivoli Service Request Manager Self Service Portal Auto Manage Catalog IBM Tivoli Provisioning Manager Deploy Hypervisor Hardware

34. Tivoli Usage and Accounting Manager (TUAM) Helps Facilitate Pay-As-You-Go Chargeback Tivoli Usage and Accounting Manager Capability Key Requirements for Metering and Billing Data collectors for IT infrastructure can review consumption across multiple dimensions Who is consuming which IT resources? Costing engine assigns cost to resource usage What is the cost of those resources, including those that are shared? Costing and reporting engine associates and report usage costs to consumers of IT resources How should IT allocate cost for chargeback, ROI, costing analysis, and reporting/billing?

35. SWG CPO TCO Study Summary • Escalating business requirements driving need for data center transformation • Take costs out • Consume less power • Provision service faster • Improve chargeback to pay-as-you-go • Emergence of public cloud providers of IT infrastructure threatens disintermediation of IT • Implementing a private cloud provides a lower cost alternative to meet business requirements • IBM offers new capabilities for self-service access and easy deployment into a private cloud Return to mainline presentation

36. http://w3.ibm.com/software/cpo