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Justify Your Hybrid Cloud Future with a Solid Business Case Business Case: the Cloud Computing Playbook by Sophia I

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Justify Your Hybrid Cloud Future with a Solid Business Case Business Case: the Cloud Computing Playbook by Sophia I FOR INFRASTRUCTURE & OPERATIONS PROFESSIONALS Justify Your Hybrid Cloud Future With A Solid Business Case Business Case: The Cloud Computing Playbook by Sophia I. Vargas, Dave Bartoletti, and William Martorelli November 28, 2016 Why Read This Report Key Takeaways Some infrastructure and operations (I&O) leaders Cloud Promises Agility, Flexibility, And and others have overzealous expectations of Savings, But Are The Savings Really There? cloud’s impact on costs, with many thinking cloud Cloud remains a top priority for I&O professionals is always cheaper, faster, and easier. Under the in 2016, but many question whether the savings right conditions, cloud can indeed yield good are real. Public cloud platforms, software-as-a- cost savings, but a true business technology service (SaaS) and managed cloud services can (BT) agenda must also quantify speed and agility. be cheaper than on-premises infrastructure for This report describes how to make your business some apps and workloads today, but do your case for cloud. We tell you how to identify which homework, as the economics change frequently. apps are a good fit for the three major cloud Infrastructure Cost Savings Are Only One Part deployment options and how to include the most Of Your Cloud Business Case important elements in your business case for You can’t easily make apples-to-apples cost each option. comparisons between running apps on-premises This is an update of a previously published report; and on a cloud platform, as a SaaS subscription, Forrester reviews and revises it periodically or with a managed cloud service provider. Your for continued relevance and accuracy. We are business case must include not only capital updating it now with our most recent survey data. infrastructure savings but also operational cost benefits such as developer productivity and faster time-to-market. Observe The Peculiarities Of Different Cloud Models Dynamics of the business case will vary across infrastructure-as-a-service (IaaS) and SaaS. The scalability afforded by IaaS isn’t a primary selling point for SaaS, yet both models enhance corporate agility. Your business case must accommodate these differences. Our methodology outlines costs, benefits, and risks for all three major cloud options. FORRESTER.COM FOR INFRASTRUCTURE & OPERATIONS PROFESSIONALS Justify Your Hybrid Cloud Future With A Solid Business Case Business Case: The Cloud Computing Playbook by Sophia I. Vargas, Dave Bartoletti, and William Martorelli with Glenn O’Donnell, Michael Caputo, Clare Garberg, and Diane Lynch November 28, 2016 Table Of Contents Notes & Resources 2 More Than Ever, Cloud Promises Speed, Companies interviewed for this report include Flexibility, And Cost Benefits Accenture, Amazon Web Services (AWS), Capgemini, CGI Group, Cisco, Cloudability, 4 In A Hybrid Sourcing Model, You Still Own Cloud Cruiser, Cloud Health, Cloudyn, Datapipe, Strategy And Governance Dell, Google, Hewlett Packard Enterprise (HPE), 4 Run A Rightsourcing Exercise To Identify IBM, Infosys, Microsoft, Rackspace, RightScale, The Right Apps For Cloud and VMware. 8 Build Your Business Case For Using A Public Cloud Platform Related Research Documents 10 Build Your Business Case For Migrating Brief: Top 10 Facts Every I&O Pro Should Know Applications To SaaS About Cloud Economics 12 Build Your Business Case For Using A Cloud The Forrester Wave™: Global Public Cloud Service Provider Platforms For Enterprise Developers, Q3 2016 Recommendations The Forrester Wave™: Hybrid Cloud Management Solutions, Q1 2016 14 Maximize Value By Tailoring Your Strategy To Your Specific Situation The Public Cloud Services Market Will Grow Rapidly To $236 Billion In 2020 What It Means 16 Think Twice Before Embracing The “Low- Cost Supplier” Role In Cloud 17 Supplemental Material Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA +1 617-613-6000 | Fax: +1 617-613-5000 | forrester.com © 2016 Forrester Research, Inc. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Unauthorized copying or distributing is a violation of copyright law. [email protected] or +1 866-367-7378 FOR INFRASTRUCTURE & OPERATIONS PROFESSIONALS November 28, 2016 Justify Your Hybrid Cloud Future With A Solid Business Case Business Case: The Cloud Computing Playbook More Than Ever, Cloud Promises Speed, Flexibility, And Cost Benefits As cloud computing enters its second decade, the cloud is not only a viable option for an even larger class of enterprise applications and workloads but is often the preferred business technology model for gaining competitive advantage in the age of the customer.1 Most companies now turn to the cloud first to develop new mobile and eCommerce applications designed to engage, delight, and retain both new and existing customers. Cloud computing is also extending the life and reach of the core systems of record at the heart of every enterprise.2 Is it time for you to move to the cloud? To answer that question, I&O professionals should consider the following: › Cloud promises cost savings plus improved performance, availability, and security. Each year brings more cloud options, from public cloud infrastructure and development platform services to new SaaS versions of core business apps to hosted and managed service provider offerings, each designed to help I&O professionals offload some portion of their technology management burden. Before asking, “Which one?” I&O pros must have an answer to “Why?” Forrester’s Business Technographics® surveys confirm that infrastructure decision-makers choose public cloud to improve overall infrastructure performance (on-demand scalability and flexibility), boost availability, lower costs, and improve their security posture (see Figure 1). This data shows cloud maturity: Cloud isn’t just a cost-saving vehicle. It’s a proven path to establishing a highly elastic, flexible, resilient, safe, and secure enterprise infrastructure foundation. › The savings are there, but beware hidden costs. You must do the math for yourself. Pennies- per-hour infrastructure costs and low per-user SaaS prices look very tempting until you use the infrastructure all the time or grow your SaaS user base — and receive your first “shock bill.” Reports of companies that have spent more than they expected or have reversed course on cloud computing due to escalating costs cause some to question whether the promised cloud savings are really there. If you’re one of those skeptics, how can you be sure? Have you taken the time to build a cloud business case to explore just how and where cloud economics can actually benefit your organization? The answer will depend on the efficiency of your current environment. › Public cloud is cheaper for many workloads, but it isn’t the only cloud option. For many variable-demand workloads, such as app development/testing and back ends for mobile apps, renting pay-per-use compute and storage services will indeed save you money in comparison with maintaining your own technology infrastructure. Public clouds offer massive economies of scale, scale elastically, and run fully automated, so it’s nearly impossible for an on-premises data center to compete on raw price or efficiency. But cheaper isn’t always better, and public cloud platforms aren’t your only cloud option. Cloud services vary in terms of security and resiliency, and you must make sure that the app portfolio you have is compatible with a cloud infrastructure platform.3 › Not everything is right for cloud. Your future is a hybrid mix of cloud services. Your cloud business case today must take into account not only public cloud IaaS/platform-as-a-service (PaaS) platforms but also SaaS alternatives and managed service provider offerings. When you move an app to a public platform, you outsource infrastructure only — compute, storage, and © 2016 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law. 2 [email protected] or +1 866-367-7378 FOR INFRASTRUCTURE & OPERATIONS PROFESSIONALS November 28, 2016 Justify Your Hybrid Cloud Future With A Solid Business Case Business Case: The Cloud Computing Playbook network elements, mostly — but you’re still responsible for everything above the operating system: applications, middleware, and data. When you replace an app with a SaaS option, you outsource operation of the app as well, but you’re still responsible for integration and customization. When you outsource to a managed services provider, you transfer even more of your technology management function but likely not all of your operations responsibilities. Pay careful attention to this “uneven handshake” and make sure your business case accurately accounts for how much responsibility you can or must retain for each option.4 FIGURE 1 Security/Compliance, Cost, And Performance Are Top Drivers For Public Cloud Adoption “How important were the following in your rm’s decision to adopt public cloud?” (Responses on a scale from 1 [not at all important] to 5 [very important]) Very important Important Performance On-demand capacity and scalability 30% 38% Improved disaster recovery and 30% 37% Availability business continuity Lower total cost of ownership for servers 29% 38% Cost Improved IT infrastructure manageability 29% 37% Performance and exibility Improved security or ability to meet 28% 36% Security/ compliance regulations compliance Lower capital expenditures by purchasing 27% 38% services instead Cost Improved performance for a global user 26% 37% base (either internal or external) Faster time-to-market with new 25% 37% business capabilities Remain competitive as an IT organization 25% 38% Ability to use as peak capacity for times of 25% 36% high usage, such as the holiday season Eliminate need for capacity planning 23% 38% and/or contract renegotiation Base: 1,758 infrastructure decision-makers whose rms are planning to implement or have implemented public cloud Source: Forrester’s Global Business Technographics® Infrastructure Survey, 2016 © 2016 Forrester Research, Inc.
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