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Cloud Transformation Through ITIL Service Strategy

For some IT organizations the cloud computing paradigm poses critical existential questions; How does my IT organization stay relevant in a cloud environment? How does IT still provide value to the business? What can be done to improve the business’ perception of IT’s contribution to the company? Without a clear approach to tackling these and other related questions, IT organizations stumble into a partially thought-out cloud computing strategy and miss out on capturing the short and long-term financial ROI and transformational benefits of a cloud-first strategy.

Several key concepts and principles from ITIL’s Service Strategy lifecycle stage lend themselves to defining and guiding a strategic approach to adopting and implementing a cloud-first strategy. In this article, we’ll highlight and define some of these key principles and outline a tactical approach to implementing a cloud-first strategy.

One of the key concepts leveraged in ITIL’s Service Strategy is the Run-Grow-Transform framework from Gartner.  From an executive management perspective, the IT organization’s contribution to the company’s goals and objectives can be framed along the Run-Grow-Transform model – specifically around how IT can help the company (1) Run-The-Business, (2) Grow-The-Business, and (3) Transform-The-Business.

The CIO’s value is both objectively and subjectively measured by answering:

1 – How can IT reduce the cost of current IT operations, thus improving the bottom line?

2 – How can IT help the business expand and gain greater market share with our current business offerings?

3 – How can IT empower the business to venture out into new opportunities and/or develop new competitive business advantage?

We’ll take a close look at each model area, highlight key characteristics, and give examples of how a cloud-first policy can enable a CIO to contribute to the companies’ goals and objectives and not only remain relevant to the organization but enable business innovation.

Run-the-Business and Cloud-First Strategy

Run the Business (RTB) is about supporting essential business operations and processes. This usually translates to typical IT services and operations such as email-messaging systems, HR services, Payroll and Financial systems. The core functionality these IT services provide is necessary and essential but not differentiating to the business. These are generally viewed as basic core commodity services, required IT costs for keeping the business operational.

The CIO’s objective is to minimize the cost of RTB activities without any comprise to the quality of service. A cloud-first policy can achieve these outcomes. It can reduce costs by moving low value-add IT activities (sometimes referred to as ‘non-differentiating work’) to a cloud provider that excels at performing the same work with hyper efficiency. Add in the ability of a cloud provider to leverage economies of scale and you have a source of reliable, highly cost-optimized IT services that cannot be matched by any traditional data center or hosting provider (see AWS’s James Hamilton discuss data center architecture at scale). Case studies from GE, Covanta, and Conde Nast bare out the benefit of moving to AWS and enabling their respective CIOs to improve their  business’ bottom line.

Grow-the-Business and Cloud First Strategy

Grow the Business (GTB) activities are marked by enabling the business to successfully increase market share and overall revenue in existing markets. If a company doubles its customer base, then the IT organization responds with timely and flexible capacity to support such growth. Generally, an increase in GTB spending should be tied to an increase in business revenue.

Cloud computing providers, such as AWS, are uniquely capable to support GTB initiatives. AWS’ rapid elasticity drastically alters the traditional management of IT demand and capacity. A classic case in point is the “Black Friday” phenomena. If the IT organization does not have sufficient IT resources to accommodate the projected increase in business volume, then the company risks missing out on revenue capture and may experience a negative brand impact. If the IT organization overprovisions its IT resources, then unnecessary costs are incurred and it adversely affects the company’s profits. Other similar business phenomena include “Cyber Monday,” Super Bowl Ads, and product launches. Without a highly available and elastic cloud computing environment, IT will struggle to support GTB activities (see AWS whitepaper “Infrastructure Event Readiness” for a similar perspective).

A cloud’s elasticity solves both ends of the spectrum scenarios by not only being able to ramp up quickly in response to increased business demand, but also scale down when demand subsides. Additionally, AWS’ pay-for-what-you-use model is a powerful differentiating feature. Some key uses cases include Crate & Barrel and Coca-Cola. Through a cloud-first strategy, a CIO is able to respond to GTB initiatives and activities in a cost-optimized manner.

Transform-the-Business and Cloud Computing

Transform the Business (TTB) represents opportunities for a company to make high risk but high reward investments. This usually entails moving into a new market segment with a new business or product offering. Innovation is the key success factor in TTB initiatives. Traditionally this is high risk to the business because of the upfront investment required to support new business initiatives. But in order to innovate, IT and business leaders need to experiment, to prototype and test new ideas.

With a cloud-first policy, the IT organization can mitigate the high-risk investment, yet still obtain the high rewards by enabling a ‘fail early, fail fast’ strategy in a cloud environment. Boxever is a case study in fail fast prototyping. Alan Giles, CTO of Boxever, credits AWS with the ability to know within days “if our design and assumptions [are] valid. The time and cost savings of this approach are nearly incalculable, but are definitely significant in terms of time to market, resourcing, and cash flow.” This cloud-based fail-fast approach can be applied to all market-segments, including government agencies. The hidden value in a cloud-based fail fast strategy is that failure is affordable and OK, making it easier to experiment and innovate. As Richard Harshman, Head of ASEAN for Amazon Web Services, puts it, “Don’t be afraid to experiment. The cloud allows you to fail fast and fail cheap. If and when you succeed, it allows you to scale infinitely and go global in minutes”.

So what does a cloud-first strategy look like?

While this is a rudimentary, back-of-the-envelope style outline, it provides a high-level, practical methodology for implementing a cloud-first based policy.

For RTB initiatives: Move undifferentiated shared services and supporting services to the cloud, either through Infrastructure-as-a-Service (IaaS) or Software-as-a-Service (SaaS) based solutions.

For GTB initiatives: Move customer-facing services to the cloud to leverage dynamic supply and demand capacity.

For TTB initiatives: Set up and teardown cloud environments to test and prototype new ideas and business offerings at minimal cost.

In addition to the Run-Grow-Transform framework, the ITIL Service Strategy lifecycle stage provides additional guidance from its Service Portfolio Management, Demand Management, and Financial Management process domains that can be leveraged to guide a cloud-first based strategy. These principles, coupled with other related guidance such as AWS Cloud Adoption Framework, provide a meaningful blueprint for IT organizations to quickly embrace a cloud-first strategy in a structured and methodical manner.

By aggressively embracing a cloud-first strategy, CIOs can demonstrate their business relevance through RTB and GTB initiatives. Through TTB initiatives IT can facilitate business innovation and transformation, yielding greater value to their customers. We are here to help our customers, so if you need help developing a cloud-first strategy, contact us here.

-Vince Lo Faso, Solutions Architect

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AWS re:Invent 2017 Recap and Initial Impressions

While AWS re:Invent 2017 is still fresh in our minds, here are some of the highlights of the most significant announcements.

Aurora Multi-Master/Multi-Region: This is a big deal! The concept of geographically distributed databases with multiple masters has been a long-desired solution. Why is this important?
Having additional masters allows for database writes, not just reads like the traditional read replicas that have been available. This feature enables a true multi-region, highly available solution that eliminates a single point of failure and achieves optimum performance. Previously, third party tools like Golden Gate and various log shipping approaches were required to accomplish proper disaster recovery and high availability. This will greatly simplify architectures for some that want to go active-active across regions and not just availability zones. Additionally, it will enable pilot light (and more advanced) DR scenarios for customers that are not going to be using active-active configurations.

Aurora Serverless: Aurora Serverless is an on-demand, auto-scaling configuration for the Aurora MySQL and PostgresSQL compatible database service, where the database will automatically start-up and scale up or down based on your application’s capacity needs. It will shut down when required, basically scaling down to zero when not being used. Traditionally, Aurora RDS required changing the underlying instance type to scale for database demand. This is a large benefit and cost saver for development, testing, and QA environments. Even more importantly, if your workload has large spikes in demand, then auto-scaling is a game changer in the same way that EC2 auto scaling enabled automated compute flexibility.

T2 Unlimited: T2 is one of the most popular instance types used by 2nd Watch and AWS customers, accounting for around 50% of all instances under 2nd Watch Managed Cloud Services. In the case of frequent, small and inconsistent workloads, T2 is the best price and performance option. However, one of the most common reasons that customers do not heavily leverage T2 is due to concerns related to a sustained spike in load that will deplete burstable credits and result in unrecoverable performance degradation. T2 unlimited solves this problem by essentially allowing unlimited surges over the former limits. We expect to see more customers will adopt T2 for those inconsistent workloads as a cost-effective solution. We will watch to see if this this shift is reflected in the instance type data for accounts being managed by 2nd Watch.

Spot Capacity: Spot instances are normally used as pools of compute that run standard AMIs and work on datasets located outside of EC2. This is because the instances are terminated when the spot price increases beyond your bid, and all data is lost. Now, when AWS reclaims the capacity, the instance can essentially hibernate, preserving the operating system and data, and startup again when the spot pricing is favorable. This removes another impediment in the use of spot capacity, and will be a large cost saver for environments that only need to be temporarily available.

M5 Instance Type: Given the large increase in performance of the newer processor generations, one can see large cost savings and performance improvements by migrating to a smaller sized offering of the latest instance type that meets your application’s needs. Newer instance types can also offer higher network bandwidth as well, so don’t put off the adoption of the latest products if possible.

Inter-region Peering: It’s always been possible to establish peering relationships between VPCs in the same region. Inter-region Peering uses AWS private links between VPCs in different availability zones and does not transit the open internet, eliminating VPNs, etc. This same feature is available inter-region. This makes multi-region designs cleaner and easier to implement, without having to build and configure VPN networking infrastructure to support it, which of course also needs monitoring, patching, and other maintenance. It was also announced that users of Direct Connect can now route traffic to almost every AWS region from a single Direct Connect circuit.

There were also some announcements that we found interesting but need to digest a little longer. Look for a follow up from us on these.

EKS: Elastic Container Services for Kubernetes – Amazon Elastic Container Service for Kubernetes (Amazon EKS) is a managed service that makes it easy for you to run Kubernetes on AWS without needing to install, operate, and maintain your own Kubernetes clusters. Even at last years’ AWS re:Invent we heard people wondering where the support for Kubernetes was, particularly since it has become the de facto industry standard over the past several years.

GuardDuty: AWS has now added a cloud-native tool to the security toolbox. This tool utilizes “machine learning” for anomaly detection. AWS GuardDuty monitors traffic flow and API logs for your accounts, letting you establish a baseline for “normal” behavior on your infrastructure, and then watches for security anomalies. These are reported with a severity rating, and remediation for certain types of events can be automated using existing AWS tools. We will be considering the best methods of implementation of this new tool.

Fargate: Run Amazon EKS and ECS without having to manage servers or clusters.

Finally, a shameless plug: If compliance is on your mind, watch this AWS re:Invent breakout session from our product and engineering experts.

AWS re:invent 2017: Continuous Compliance on AWS at Scale (SID313)

Speakers:
Peter Meister, Director of Product Management, 2nd Watch
Lars Cromley, Director of Engineering, 2nd Watch

In cloud migrations, the cloud’s elastic nature is often touted as a critical capability in delivering on key business initiatives. However, you must account for it in your security and compliance plans or face some real challenges. Always counting on a virtual host to be running, for example, causes issues when that host is rebooted or retired. Managing security and compliance in the cloud is continuous, requiring forethought and automation. Learn how a leading, next generation managed cloud provider uses automation and cloud expertise to manage security and compliance at scale in an ever-changing environment. Through code examples and live demos, we show tools and automation to provide continuous compliance of your cloud infrastructure.
Obviously, there was a lot more going on and it will take some time to go through it. We will keep you up to date with our thoughts.

–David Nettles, Solutions Architect, 2nd Watch
–Kevin Dillon, Director, Solutions Architecture, 2nd Watch

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AIG Moves towards DevOps and Cloud

In a blog post this morning, the Head of Enterprise Strategy at AWS, Stephen Orban, shares a personal note he received from Salvatore Saieva, CTO Lead for Public Cloud Projects and Initiatives at American Insurance Group (AIG), about why the company moved away from traditional infrastructure methods and towards DevOps and the Cloud.

In his note to Mr. Orban, Saieva detailed how his infrastructure support team was managing production applications on VCE Vblock equipment and how working with converged technology led them to automation, agile methods, continuous approaches, and, ultimately, DevOps. By using DevOps to collaborate with other teams through the company, Salvatore’s IT team led the charge in becoming cloud-ready.

Read more about AIG’s move to DevOps and the cloud on Stephen Orban’s blog.

-Nicole Maus, Marketing Manager

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AWS re:Invent 2016 – The CUBE

Covanta Energy and 2nd Watch talk with SiliconANGLE Media at AWS re:Invent 2016. Find out why Covanta decided to go all-in on Amazon Web Services and how 2nd Watch helped them make the transition in only 16 weeks.

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