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Accelerate The Journey to Cloud First IT

Digital transformation is defined as the application of technologies such as mobility, big data, and cognitive systems to fundamentally change levels of customer engagement. Download This PDF Here: http://www.cloudsyntrix.com/accelerate-the-journey-to-cloud-first-IT.html

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Accelerate The Journey to Cloud First IT

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  1. White Paper Accelerate the Journey to Cloud-First IT Sponsored by: Rackspace and Dell EMC Rob Brothers Richard L. Villars March 2017 Kelly Quinn IDC OPINION Today, many organizations are engaging in digital transformation (DX) of their businesses because of three key considerations: the need to reduce time to market for a growing base of applications, the need to shift the IT organization's focus to the delivery of applications rather than datacenter operations, and the need to transform the company's IT organization into a business enabler, not a cost center. For organizations undertaking digital transformation at the business level, extension of the corporate datacenter isn't just about picking among a specific set of product or service delivery models such as public, private, or hybrid cloud. It's about finding the right partner to help your organization through the next critical stages of datacenter migration and extension. As applications and requirements evolve, developers and business leaders expect their IT teams to automate the provisioning of tuned IT resources for mobile, analytic, and IoT workloads at the right locations while achieving maximum reuse of all their datacenter, IT, and data assets. These leaders face three critical IT challenges:    Meeting expectations for automated provisioning and maximum reuse Delivering a diversified portfolio of cloud-based assets Quickly aligning — and intelligently realigning — cloud selection with business needs Your IT organization is challenged to deliver a diversified portfolio of cloud-based IT assets in your own datacenters as well as in a growing range of third-party datacenters that enable more agile IT and service creation. You're additionally tasked with improving the ability to securely manage a growing range of data and application assets in multiple internal and third-party datacenters and develop a hybrid IT operations and developer operations model. Your IT team must also realign its cloud selection and operations strategies based upon the use of multiple types of cloud options, with each addressing a specific set of goals. These are important challenges that must be addressed by any organization that makes the decision to expand its IT assets beyond the four walls of its internal datacenters. Getting a head start in this migration to off-premise resources is critical, but achieving these goals requires selection of a trusted datacenter and cloud partner, not just a provider of specific hardware, software, or IT-as-a-service offerings. IDC believes that the best partners are companies — such as Rackspace — that provide managed services that facilitate the monitoring, service management, and data control capabilities needed to enable more effective and secure use of multiple cloud/datacenter options. The best partners work with their customers to provide digital transformation from both business and value drivers. March 2017, IDC #US42370517

  2. THE DIGITAL TRANSFORMATION IMPERATIVE Digital transformation is defined as the application of technologies such as mobility, big data, and cognitive systems to fundamentally change levels of customer engagement. DX optimizes business operating models and improves business outcomes through the timely exploitation of data that is critical for survival today. In the coming year, initiation of a successful DX strategy will be contingent on executing a shift toward a cloud-first IT environment where the IT organization emerges as the most effective technology partner for the business. The key benefits of moving to cloud-based IT include:  Offloading the IT "chores" associated with deploying, maintaining, and updating IT hardware (compute, storage, and networking) as well as infrastructure software and network connections so that internal IT personnel can focus on more strategic tasks, such as service creation, data control, and governance Enabling agile resource delivery at all levels (development, IT systems, and datacenters) so that the business can take early advantage of innovative technologies, more rapidly respond to changing business conditions, and more quickly extend services into new geographies or customer bases Utilizing self-service functionalities in private cloud environments, such as configuring servers and launching applications Leveraging more flexible asset and service acquisition, financing, and cost control models so that business leaders can reduce "the risk of taking risks" by closely aligning technology investments with the near- and long-term revenue and cost impact of new business initiatives    These key benefits are all augmented when an organization works with a trusted partner that can help the organization leverage the advantages of cloud technologies such as auto-scaling. Accelerating the Move to Cloud-First IT IT leaders understand that the shift to cloud-first IT is critical, but like you, they face significant challenges regarding datacenter and IT resource planning. Some essential questions that you and your team must answer when faced with these challenges are:  How quickly does the organization need to complete the transformation to a predominantly cloud-based IT environment? What datacenter and hosting options are most suitable for taking full advantage of existing and emerging cloud solutions? What are the best strategies for leveraging and managing the array of different on-premise and off-premise cloud options (e.g., private, public, or hybrid and IaaS, PaaS, or SaaS)? What types of change management (e.g., training and education) are needed for IT and line-of-business (LOB) personnel?    Working with a trusted advisor to answer these questions can provide an organization with clear requirements and a detailed services road map for the organization's migration to the cloud. By identifying use cases and onboarding the appropriate initial workloads, a managed service provider (MSP) can help reduce the amount of time before an organization recognizes value in its migration efforts. ©2017 IDC #US42370517 2

  3. Cloud Market Adoption IDC conducts an annual survey of IT, development, and LOB leaders around the world to gauge their pace of cloud adoption. Figure 1 presents the summary of worldwide results concerning current and planned (two years later) IT budgeting based on procurement and management models (e.g., on-premise versus off-premise and cloud versus more traditional models). FIGURE 1 IT Budget Redistribution to Cloud Q. Please estimate what percentage of your organization's total annual IT budget (including …) is allocated to each of the following procurement/management models. n = 11,350 worldwide respondents Note: The data is weighted by GDP and company size. Source: IDC's CloudView Survey, January 2016 The message from the survey is quite clear. Today, we are already at the stage where switching to a cloud-first strategy is a necessity for survival, not a strategy for competitive advantage. By early 2019, organizations like yours must be prepared to complete — not start — the shift to a predominantly cloud-based IT environment. Results from the survey also imply that organizations intend to spread their cloud investments across a multitude of options: some in their own datacenters but increasingly on a mix of shared and dedicated IT assets in service providers' datacenters. Your IT team must become the leader in enabling rapid adoption of an extended datacenter strategy. ©2017 IDC #US42370517 3

  4. Confronting the Datacenter Challenges of Cloud-First IT As digital and IT transformation efforts expand within enterprises, driving major changes in workload profiles, datacenter availability, and performance will become a critical risk factor and requirement for ensuring engagement with customers via digitally based services. Any datacenter outage will translate into substantial service disruptions for customers and revenue opportunity losses for the digital business. Any degradation in performance will lead to user dissatisfaction and the possible abandonment of the application or workload. Datacenter stability and availability depend upon many different aspects of datacenter configuration and operations. Mismatches between new IT systems designs (e.g., converged and hyperconverged systems as well as software-defined datacenter solutions) and embedded facilities elements (such as power supply) in all enterprise datacenters built prior to 2010, and most after, are among the hardest and most capital-intense issues to address quickly or nondisruptively. In addition, physical facilities are not the only aspects of datacenters that face stress because of obsolescence. Many operational processes at enterprise datacenters that limit datacenter agility are also exacerbating issues of availability and compliance. Given these factors, enterprises like yours are forced to answer the following question: Do we move our workloads to a service provider environment, or do we "do it ourselves" by investing the time and resources in upgrading/replacing our existing datacenters? From 2015 to 2017, new internal datacenter space brought on line by enterprises will decrease by over 50%, from an annual total of 31.6 million sq ft to 15.3 million sq ft (see Figure 2). Conversely, new annual datacenter construction by service providers, designed to match up well with new IT architectures and cloud-based as-a-service delivery models, will increase fourfold, from 16.0 million sq ft to 66.5 million sq ft in the same period. These numbers illustrate that new do-it-yourself (DIY) datacenter construction by the enterprise is being bypassed in favor of leveraging service provider assets for enterprise IT needs. The future strategy for organizations is not DIY; it's multi-cloud and multi-datacenter. ©2017 IDC #US42370517 4

  5. FIGURE 2 Shifts in Datacenter Construction, 2015–2017 Source: IDC, 2017 Today, your fellow CIOs admit that their existing hybrid cloud and third-party datacenter portfolio (e.g., a mix of collocation, private clouds and multiple public cloud IaaS, and SaaS) was not assembled based on a strategy; rather, it describes the circumstance that they need to deal with going forward. Here is the real challenge. Your IT team must ensure a quick but controlled transition to a cloud-first IT model. During this transition, you must ensure that you simultaneously maintain control over data and application security while successfully moving assets and resources to new datacenters owned and operated by the service provider. The most important aspect of this transition is the extension of your enterprise's private clouds into more agile and geographically relevant datacenters. THE CRITICAL IMPORTANCE OF PRIVATE CLOUD IN CLOUD-FIRST IT The key to using cloud-first IT effectively as the driver of DX in the next two years depends upon moving beyond the current world of hybrid cloud solutions and developing a dynamic, diversified cloud strategy that enables the coordinated use of all appropriate cloud options to achieve specific business purposes. Each cloud option addresses a specific set of purposes for the business and must align with specific workload and operational requirements that are at the core of DX efforts. Being able to take advantage of the right option for any circumstance is the key to success. CIOs and their IT organizations must gain the ability to integrate change and business transformation continuously without disrupting business performance. Many companies mistakenly believe that the most important cloud issue to manage is the growing portfolio of public IaaS, PaaS, and SaaS solutions delivered in large hyperscale datacenters. The two ©2017 IDC #US42370517 5

  6. purposes for greater use of these highly elastic public clouds are to provide the resources upon which the enterprise can build and continuously integrate short-lived and highly variable systems of engagement and to provide analytic insight at the heart of rapidly evolving customer experience efforts. In these environments, individual applications have short lives, but the integration of the services they support (and the data they generate) is perpetual. Private, dedicated hosted clouds have a much different set of purposes than public clouds. These private clouds can create risks for a company if they are not delivered correctly.  They are the clouds that must align with the needs of IT organizations for incorporating cloud capabilities that optimize and update critical business systems of record to support digital transformation. They are the systems to which many innovative applications first developed in public clouds will ultimately migrate as the cost, availability, and latency metrics change with the maturity of the application. They are the primary option for addressing data sovereignty because the systems of record running on these clouds must be delivered at metropolitan, regional, and country levels.   These are the systems of trust that are at the heart of the business. The primary purposes for using any private offering come back to efficiency in physical/data asset management, use, and enhancement. When evaluating any of these offerings, companies should include the following key criteria in their assessments:  Does the cloud offering significantly reduce the amount of physical and logical overprovisioning needed to meet required service levels? Does the cloud offering significantly reduce the number of IT staff — IT administrators, database administrators, or developers — needed to support the service delivered? Does the cloud offering eliminate the need to dedicate staff and financial resources to planning, managing, and executing upgrades, patches, or migrations at the hardware, system software, and application levels? Does the cloud offering meet the security, SLA, and performance requirements needed for the workload?    Customers Speak About Private Cloud In IDC's discussions with companies that succeeded (and struggled) with their private cloud efforts, a specific set of challenges dominated the conversations:      Have a well-thought-out migration strategy. Implement operational model changes to ensure consistency throughout the organization. Implement funding model changes to reduce friction throughout the organization. Scan continuously for mismatches between evolving workloads and IT resources. Create an end-user experience comparable to the experience offered by cloud providers. ©2017 IDC #US42370517 6

  7. IDC also noticed that successful companies took the following important steps to address the challenges:    Instituted proper internal planning and vetting of private cloud migration strategy Considered all private clouds in the context of the master DX strategy Worked with a trusted and experienced managed service provider to speed planning, review, and deployment processes Key Datacenter Steps Required to Deliver Cloud-Based IT As noted previously, with regard to private cloud services, organizations must immediately take specific steps to create an experience for their users that is similar to the experience delivered by leading cloud providers (see Figure 3). They must create an environment that prevents delays or outright failures in the extension of their datacenter strategy. They also must be able to run workloads with low latency, response time, and performance that should aim to be better than that offered by a cloud provider. FIGURE 3 Key Steps to Cloud-First IT Source: IDC, 2017 Key steps required include:   Management lead for change in how IT functions within the company Timely rationalization of infrastructure and application workloads and service catalogs across multiple datacenters and clouds to align with business needs Rapid updating of IT assets and datacenter connectivity services to meet performance, security, and resiliency requirements  ©2017 IDC #US42370517 7

  8. Implementation of multi-cloud data management and control practices that address increasingly complex data privacy and compliance requirements Creation of an experience similar to the experience delivered by cloud providers at approximately the same cost  Choosing the Right Partner to Accelerate the Shift to Cloud-Based IT The key for central IT to shift successfully to cloud-based IT is to find a managed service provider that can act as a partner in the evaluation, deployment, and use of the right hardware, software, IaaS, and SaaS solutions in large-scale environments. The right managed service provider:  Helps central IT determine which workloads to move to the cloud first (often these are test and dev and DR) Successfully architects/migrates workloads into new facilities (datacenters), application architectures (cloud), and operating models (policies and procedures) Continuously facilitates ongoing architectural decision making and new service innovation by keeping up to date with technology and service delivery models Extends the size of central IT's current team by filling open IT resources and skill set gaps (usually with "fanatical" support), which helps internal IT focus more on strategic business initiatives versus just managing technology Supports the enterprise through not only the initial journey but also the ongoing management and optimization of the environment over time     The right managed service provider will have a long and extensive track record of helping organizations manage the asset and operational challenges associated with major datacenter and technology transitions. It will have the expertise and resources required to keep your digital business running 24 x 7 and the flexibility needed to provide a cloud experience for internal customers, namely lines of business. RACKSPACE MANAGED SERVICES ACCELERATE THE MOVE TO CLOUD-FIRST IT Rackspace has been in the business of managed services for over 15 years. The company has thousands of customers in its global portfolio and serves half of the Fortune 500. Its approach has consistently been "customer first" in the development and deployment of its managed services and cloud offerings. Rackspace's approach to managed services leverages single-tenant dedicated hosting and multi-cloud connectivity to offer customers top-of-the-line quality and value in the company's services while providing them the option to build custom infrastructure to meet the needs of their custom applications. Rackspace's goal for customers is to help them see value in their engagement with Rackspace quickly, in terms of both the quality of service offered and the monetary value to be gained by working with Rackspace. The company provides its customers with both current-state and future-state architectural guidance and ongoing support. The Rackspace Managed Services Approach Because of its extensive experience — in terms of both breadth and depth — with its dedicated hosted private cloud business, Rackspace leverages its strengths with monitoring, service management, and data control capabilities to help thousands of companies identify the best placement and environment for customers' workloads. The value of these capabilities cannot be overstated for companies on the DX path. ©2017 IDC #US42370517 8

  9. To be competitive in the digital economy, companies must have workloads properly supported so that they can run at the highest levels of efficiency to meet end-user demand. If a company lacks this alignment in workloads, it can expect to fall behind in the DX migration — something that can negatively impact the long-term future of an organization. Rackspace enables customers to extend their datacenters through its managed services portfolio. It understands that enterprises not only must expand their datacenter capacity but also must ensure that their need for flexibility is met. Rackspace's cloud transformation expertise has been finely honed over thousands of customer engagements. As a result, Rackspace can enable business transformation, reduce business risk, and increase IT value. Rackspace has proven experience in providing its customers with guidance on workload placement as well as actionable items to assist with that placement. As a result, companies working with Rackspace can expect supportive guidance as to where and how best to deploy their transitioning workloads. In conjunction with this focus on customers' workload needs, Rackspace offers "fanatical" support. This may seem like hyperbole, but with Rackspace, it's fact. The company prides itself on offering customers both the 24 x 7 support one would expect from an MSP and professional services to assist its customers in focusing on their business initiatives and building out their DX projects from there. This macro level of support cannot be found at all MSPs. Rackspace also offers the critical feature of multi-cloud connectivity through its RackConnect Global networking solution. With RackConnect, customers' workloads run on Rackspace's secure, private network and connect over RackConnect to customers' on-premise datacenters as well as their cloud providers of choice, such as Microsoft Azure and Amazon Web Services. In addition, RackConnect offers reliable, low-latency connection speeds of up to 10Gbps. This connectivity is highly valuable for use cases beyond just testing and development. It can enable the success of both traditional enterprise applications and newly emerging customer-facing digital applications that will transform how enterprises do business. BMC Group SmartRoom — Leveraging Rackspace BMC Group is an information management company that focuses on selling software and services through a diversified portfolio of companies. BMC Group has been partnering with Rackspace since 2004 to host its SmartRoom solution. SmartRoom is a cloud-based deal management solution that provides ultra-secure file-sharing application in due diligence and M&A activities. Over the past 13 years, SmartRoom has supported thousands of clients and hosted billions of document pages. Rackspace's 24 x 7 coverage, quality of services, and expertise have allowed BMC Group to maintain high service levels (and peace of mind) for its SmartRoom solution. The lasting partnership with Rackspace has enabled BMC Group to:  Gain a Gain access to critical expertise. ccess to critical expertise. Like most large organizations, BMC Group constantly evaluates the value of bringing IT resources in-house versus using a managed service approach. While BMC Group can certainly bring "things" in-house and save costs as a result, that is not the whole equation. According to Mathew Satuloff, vice president of IT Services at BMC Group, "Where the balance starts to come in is the quality and depth of services that Rackspace can offer. That's very difficult to match in-house. At a moment's notice, [BMC Group] can get a Microsoft system administrator, a storage engineer, a backup engineer, a network security engineer, or a network designer on the phone 24 x 7." It's the immediate access to critical expertise and support that BMC Group so greatly values. ©2017 IDC #US42370517 9

  10. Improve Improve IT staff productivity IT staff productivity. . By leveraging Rackspace's capabilities, BMC Group's IT staff reduces the amount of time spent managing the application and can focus on more strategic IT projects for the core business. "Always look at [your situation] from an application basis — what are the cloud-based products that you can use to reduce the time your internal datacenter and IT resources spent managing applications that the business is using," said Satuloff. Accelerate new innovations Accelerate new innovations. . "Knowing the types of capabilities Rackspace can offer allows us to envision any [new] product capabilities that we want, regardless of our IT [staff] size," said Satuloff. In general, access to an MSP's broad capabilities allows enterprises to accelerate not only new product development (with fewer resources) but also time to market.  CHALLENGES/OPPORTUNITIES Rackspace faces challenges in this space, the majority of which stem from customer education — or lack thereof. Customers of MSPs tend to lack the understanding of the value proposition of how DX can transform their companies and impact different parts of their organizations. They are not aware of the abundance of benefits they can derive from DX, and they can lack the vision to see that DX is here and is critical to survival over the coming years. As a leading MSP, Rackspace faces the challenge of educating the market about not just managed services but also DX overall. Rackspace must clearly define and articulate all the benefits and advantages inherent in DX and the importance of executing on a DX strategy now. DX is a change that's happening in the current market, not a change that's months or years out. Rackspace must figure out a way to overcome the lack of urgency on the part of many of its prospective customers with regard to their DX transformation strategy — and how a trusted MSP is a critical component of that strategy. CLOSING THOUGHTS A key step for any organization with aggressive digital transformation agendas is making "cloud first" the mantra for enterprise IT organizations and cloud-based IT the foundation for investment efforts. For CIOs and their IT teams, embracing the tasks of integrating and managing diverse sets of cloud environments in many different locations is critical. It requires clearly defined and articulated IT service management policies and practices, including standard configurations, service catalog definitions, and maintenance schedules. The most consistent and recurring barriers to effective execution of this cloud-first IT transformation remain security, visibility, governance, and policy control elements. Security and governance practices and policies must extend across all cloud options to ensure consistent service delivery and data control regardless of the range of infrastructure and platform resources supporting any specific application. The IT team must develop and continuously refine best practices for cloud portfolio management, including robust service evaluation, partner selection, governance, and performance monitoring practices. At that point, the IT organization itself will be in a strong position to serve as the cloud facilitator team, enabling digital transformation by its line-of-business colleagues. IT leaders must assess themselves and their teams with respect to what it will take to develop a world-class digital organization and/or when it becomes prudent to leverage partners such as Rackspace with defined professional services that can speed the move to the next maturity stage. Organizations that master the orchestration of the key dimensions and sub-dimensions will thrive, while those that do not will struggle to compete. ©2017 IDC #US42370517 10

  11. About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact- based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA 01701 USA 508.872.8200 Twitter: @IDC idc-community.com www.idc.com Copyright Notice External Publication of IDC Information and Data — Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2017 IDC. Reproduction without written permission is completely forbidden.

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