Cloud computing: Is ITIL still relevant?

1. Cloud computing: Is ITIL still relevant? Randy Steinberg ITIL and IT Service Management Specialist Leader, Deloitte Consulting Nicholas ClarkeSenior Consultant, Deloitte Consulting

2. Table of contents

3. Cloud computing represents a major shift in information technology architecture, altering the way services are sourced and delivered • Software and information are provided to computers and other devices on-demand, like a public utility • Services accessed via single point of access • Consumption billed on a utility or subscription basis with little or no upfront cost creating a low barrier to entry • Reduces upfront capital expenditures but may pay more for operating expenses • Some argue that the cloud is a paradigm shift, similar to the displacement of electricity generators by electricity grids early in the 20th century

4. Cloud computing represents a growing evolution in IT in which core IT services are getting sliced and diced across many providers • Organizations can now rent what they were earlier forced to make or own • This translates into collaborative relationships with service providers who provide access to capabilities and resources otherwise not available • IT is devolving into services that are delivered through patterns of collaborative exchanges Email Application Other Network Database Security Storage Operating Platform Infrastructure IT is rapidly becoming a service provider operating as a value chain network of services

5. A capability to abstract this value chain in the form of services is critical to the future success of IT and its mission of delivering business value ITIL and IT Service Management are well positioned for this Continual Service Improvement Service Transition The Service Lifecycle can be leveraged to build this value chain Service Operation Service Design Service Strategy Lack of a service approach will expose end users and the business to further complexities with no accountability for the end services being delivered

6. ITIL can be seen as supporting the Service Management layer within the HP Cloud Assure architecture, where its processes cover the entire value chain

7. HP Cloud Assure Reference Architecture

8. Operating as bundles of technologies and capabilities could pose serious risks for any IT organization migrating to cloud solutions • Overall loss of control as services are managed and controlled elsewhere • Operating complexity as external providers change platforms, services and versions of software based on their schedules and priorities – not yours • Security exposures for services working with sensitive data across the cloud • Poor user/customer satisfaction related to confusion over how to handle service outages and finger pointing between suppliers • Key service features that get dropped or fall through the cracks between providers • Risks of getting locked into poor supplier arrangements – over paying for services or under providing for actual business demand • Legal exposures and regulatory compliance risks with suppliers that use differing sets of controls • Locked into arrangements with suppliers that can’t deliver needed performance or meet business demand volumes

9. Core IT management disciplines have not changed – just shifted from the IT organization to the cloud service provider ITIL for the IT Organization ITIL for the Cloud Vendor Architect service solutions by piecing together Cloud service providers and their service offerings Identify services provided, their value and costs; demand management is key for providing on-demand services Service Strategy Bundle service packages for consumption – capacity management key to disruption-free, on-demand delivery Focus on integrating and securing services from suppliers Service Design Manage and control a complex mix of releases / changes across a wide range of suppliers’ varying schedules and priorities Provide customers with easy, smooth and safe ways to transition and access provided services Service Transition Ensure expected value is being delivered, and service disruptions responses are coordinated across suppliers Ensure that expected value is being delivered and that services are not disrupted Service Operation Provide the needed transparency of results and coordinated improvement efforts across many providers Provide a means for staying ahead of competition and gauging customer satisfaction or business will be lost Continual Service Improvement

10. ITIL is well positioned help – nearly all the ITIL disciplines are used when pulling services delivered via the cloud together • IT organizations must clearly understand: • The services they operate with (Service Portfolio Mgmt, Service Catalog Mgmt) • How services are networked and bundled to deliver value (Configuration Mgmt, Knowledge Mgmt, Service Level Mgmt, Supplier Mgmt) • Service costs (IT Financial Mgmt) • Service Demand (Demand Mgmt, Capacity Mgmt) • How services will be put on the cloud operating model (Service Strategy, Capacity Mgmt, Availability Mgmt, Information Security Mgmt, IT Service Continuity Mgmt) • Managing transitions as service providers (or their offerings) move in and out of the network (Change Mgmt, Release and Deployment Mgmt, Configuration Mgmt, Service Testing, Evaluation) • Delivering services on the cloud operating model (Incident Mgmt, Problem Mgmt, Access Mgmt, Event Mgmt, Request Fulfillment) The ITIL v3 Library Lifecycle Books

11. The current set of HP IT Service Management Tools can support your cloud services program when looking at either vendor, internal or hybrid solutions

12. Two cloud computing case studies demonstrate the sharp difference between using a service management approach versus not Unsuccessful Cloud Experience Successful Cloud Experience Case #1 Large Healthcare Company Case #2 Applications Management Provider • Needed social networking site to support M&A integration activities • Circumvented IT group to launch it leveraging Cloud services • Handed off to IT when done • User volume brought the site down • Site was cut off – bad press and embarrassment for company senior executives • Set strategy to leverage Cloud delivery as a way to lower development costs, increase delivery speed and gain competitive advantage • Underpinned current service offerings with Cloud-based delivery services • Was able to slash delivery costs by almost 90% • Was able to provision infrastructure in days versus weeks No Service Management Service Management Considered From The Start

13. Service Strategy – considerations for Cloud Delivery Solutions

14. Cloud computing will not change the strategic objectives or the market spaces of a service, it provides new avenues to reach those objectives Input Output Strategic Asset Strategic Objectives Service Strategy Organizational Capability Drive Business Value Define Market Space Cloud Services Additional Enterprise Stakeholders Closely evaluating the strategy generation process, and verifying its alignment with the needs of your organization is a critical step.

15. The nature of cloud computing may require changes in how services are charged, and how IT organizations allocate cloud services costs Input Output Service Portfolio Examine Demand Factors Develop Meaningful Unit Charge Apply Charge Based on Usage Allocations Service Cost Pay Per Use Provider Financial management in ITIL terms requires you to identify the bundles of services being delivered, the delivery costs for each service, and how demand consumes those services.

16. Cloud computing forces IT to take a hard look at the services they deliver, and how these are bundled to add value for varying stakeholders Input Output Provider Service Offerings Examine Services Bundle Services Updated Service Portfolio Existing Service Portfolio Integrate Into Existing Delivery Chain A service portfolio must be augmented to include Cloud services being provided, what level of investment is being made in these services, how they are being sourced, bundled, and providing value to the business.

17. Service Strategy – case summary Service Strategy In Place Service Strategy Not In Place

18. Once an effective process is defined to support your cloud computing program, select ITSM tools to realize the capabilities and processes ITILv3 Service Strategy Demand, Portfolio, and Financial Management Processes HP Project & Portfolio Management (PPM) Software Solution Suite Project & Portfolio Management (PPM) Center [fka Kintana & Mercury ITG] • PPM – • Portfolio Management • Program Management • Project Management • Financial Management • Resource Management • Demand Management • Deployment Management • Time Management Universal CMDB (UCMDB) and Discovery & Dependency Mapping ae (DDMae) Software-as-a-Service

19. Service Design - considerations for Cloud Delivery Solutions

20. Service catalog management, service level management, and capacity management processes are necessary to achieve an integrated Cloud computing solution to complement business needs Design the cloud computing solution to provide maximum benefits to business instead of treating it solely as technology innovation Business Requirements Technical Requirements Business Needs Service Catalog Management Cloud Solution Service Level Management Capacity Management Effective coordinated execution of these customer-facing processes will help to define design requirements to build the stable Cloud solution that will benefit the business in the long term.

21. Cloud computing requires a renewed effort in supplier management processes to ensure meeting terms, conditions, and target of agreements Input Output Cloud Vendors Align Contracts with Business Needs Valued Business Partner Provide Understanding of Business Needs Measure and Compare Supplier Performance 100+ Cloud Computing Vendors Maximize Return On Investment (ROI) By Selecting the Right Provider Partner Supplier Management is the critical process necessary to strengthen relationships between the business and vendor Cloud computing service providers

22. Service Design – case summary Service Design Not In Place Service Design In Place

23. Selecting the correct tools to support a well-defined Service Design program can dramatically improve the maturity level of your cloud services capability ITILv3 Service Operation¹ ITILv3 Service Design² Event, Problem Management Processes Availability, Capacity Mgmt Processes HP Business Service Management (BSM) Software Solution Suite Business Availability Center (BAC) [fka Mercury]² • BAC Dashboard • Diagnostics¹ • SiteScope¹ • Real User Monitor (RUM) • Business Process Monitor (BPM) • TransactionVision Operations Center [fka Openview]¹ • Operations Manager (OM) • OMi • Smart Plugins (SPI) • Performance Manager/Agent² • Reporter² • GlancePlus Pak² Network Management Center [fka Openview]¹ • Network Node Manager (NNMi) • Smart Plugins (SPI) Universal CMDB (UCMDB) and Discovery & Dependency Mapping ae (DDMae) Software-as-a-Service

24. Service Transition – considerations for Cloud Delivery Solutions

25. Transition planning and support processes plan and coordinate resources to deploy a cloud service within predicted cost, time, and quality estimates Input Transition Planning And Support Activities Output Planned Changes Deployment Plan Initiate Project Documentation Plan Close Project Management Methodology Cloud Services Project Planner Control Execute Since a vendor Cloud is a shared responsibility environment, having an inclusive, structured Transition Planning and Support process and a responsible Project Planer is a critical success factor

26. Coordination between IT and cloud vendors is critical to ensure that beneficial changes can be made minimum disruption to IT services Input Change Management Activities Output Change Requests Planned Changes Cloud Services R = Responsible A = Accountable C = Consulted I = Informed To achieve successful change management in a vendor Cloud services environment, the organization and Cloud computing provider must agree on roles and responsibilities as they both participate in major changes.

27. Cloud vendors need to be integrated with release/deployment processes to protect the integrity of the live environment when releasing components Input Service Management Activities Output Deployment Plan Change Release Joint Release Planning Agreed Maintenance Windows Cloud Services Release Documentation Collaboration between the Cloud computing services vendor and the organization is key to successful release management during deployments to an operating environment

28. Service Transition – case summary Service Transition Not In Place Service Transition In Place

29. Tools can provide the capabilities required to support the core ITIL processes to support your transition to operating a unified cloud computing program ITILv3 Service Operation¹ ITILv3 Service Design² ITIlv3 Service Transition³ Incident, Problem, RequestSLM, Service Catalog Change, Asset/Config, KM Management Processes Processes Management Processes HP IT Service Management (ITSM) Software Solution Suite Service Management Center [fka Peregrine & Openview] • Asset Manager 5.x³ • Discovery & Dependency Mapping Inventory (DDMi) • IT Financial Management (ITFM) • Contract Management • Chargeback • Procurement • Software Asset Management (SAM) • Portfolio Management • Connect-it¹,²,³ • DecisionCenter¹,²,³ • Business Impact Analytics • IT Performance Analytics • Optimization Module • Planning and Analysis Module • Service Manager 7.1x • ServiceDesk¹ • Incident Management (OGC Gold)¹ • Problem Management (OGC Gold)¹ • Change Management (OGC Gold)³ • Asset/Configuration Mgmt (OGC Gold)³ • Knowledge Management (OGC Gold)³ • Service Catalog (OGC Gold)² • Service Level Management (OGC Gold)² • Request (Fulfillment) Mgmt (OGC Gold)¹ • Service Portfolio Management (OGC Gold)2 Universal CMDB (UCMDB) and Discovery & Dependency Mapping ae (DDMae)³ Software-as-a-Service

30. Service Operation – considerations for Cloud Delivery Solutions

31. Monitoring for security compliance, privacy and access, reliability, and availability of IT services and components pose increased challenges Service Operations Cloud computing delivery traits from an Internal IT and Cloud Vendor perspective

32. Sharing the high number of nodes in vendor clouds sees failed configuration components as the norm rather than the exception Service Operations Cloud computing delivery traits from an Internal IT and Cloud Vendor perspective

33. As you refine your and integrate cloud delivery with your overall service management capability, look to improve operations through automation ITILv3 Service Operation¹ ITIlv3 Service Transition² Incident, Problem, Event Mgmt ProcessesRelease/Deploy, Asset/Configuration Mgmt Processes HP Business Service Automation (BSA) Software Solution Suite Client Automation Center [fka Novadigm Radia]² • Client Automation Enterprise (CAE) Data Center Automation Center [fka Opsware]² • Operations Orchestrations (OO) • Runbook Automation¹,² • Server Automation (SA) • Network Automation (NA) • Storage Essentials (SE/SRM) • Services Automation Visualization (SAV) • Services Automation Reporter (SAR) • BSA Essentials (fka Live Network) • Release Control (RC) Service Management Center [fka Peregrine & Openview] • Asset Manager 5.x³ • Service Manager 7.1x Universal CMDB (UCMDB) and Discovery & Dependency Mapping ae (DDMae) Software-as-a-Service

34. Service Operation – case summary Service Operation Not In Place Service Operation In Place

35. Continual Service Improvement - considerations for Cloud Solutions

36. The melding of cloud centric approaches with CSI by IT can dramatically speed up realignment and improvement processes Traditional CSI outputs Cloud and CSI outputs • Introduce new service offerings • Improve existing offerings • Connects IT with customers • Improvement space restricted by rigid systems • IT more dynamic and responsive to the needs of the business • Cutting edge applications are rolled out and adopted by the end user at a much higher rate • Additional users and teams will find applications that better meet their requirements

37. The nature of cloud computing may lead to challenges for CSI such as misalignment between business needs and technical solution Public, Private, and Hybrid Clouds Provider Policies User Requirements Cloud Vendor Existing Alignment Delegation of content Limited product influence Business Needs Outspoken change advocates Establishing KPIs and SLAs with Cloud Vendors helps communicate the expectation that change requests will be acted upon in an acceptable manner and time frame

38. Continual Service Improvement – Case Summary CSI Not In Place CSI In Place

39. Key takeaways • IT is devolving into a network of services that can be provided from anywhere – aided and abetted by advancements in Cloud computing technology • The service mindset that ITIL brings is key to operating in a Cloud world – the disciplines still exist but may have shifted emphasis from the IT Organization to the Cloud Vendor • Continuing to operate as bundles of technologies and capabilities might lead to serious operational risk The ITIL Service Lifecycle and HP software supporting its processes can be leveraged as a design, build, deploy and operate vehicle for constructing Cloud-based solutions!

40. Q&A

41. To learn more on this topic, and to connect with your peers after the conference, visit the HP Software Solutions Community: www.hp.com/go/swcommunity