Digital Transformation and Cloud Computing Role

Digital Transformation and the role of Cloud Computing
Mark Skilton
Director, GBD, Global Infrastructure Services, Capgemini
mark.skilton@capgemini.com
mark.skilton@capgemini.com

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© Copyright Capgemini 2013 All Rights Reserved
Agenda
 Digital transformation – Cloud in Context
 Challenges - case studies - SLAs & Cyber Security
 Case Study – Pharmaceutical Company
 Solutions – the Cloud Orchestrator and other
patterns
> Cloud Ecosystem and TOGAF CE
> Session Architecting on Social , Mobility , Big data
and Cloud

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Where have we got to ?
Unprecedented pace of change

4
Technology shift is not incremental
How do we cope with new Business Model Realities?

5
Capgemini Report on Global Cloud Adoption Nov 2012
460 detailed interviews with executives at a variety of enterprises (most with over 10,000 employees) from key sectors and from selected
geographic regions. IT executives and line-of-business decision-makers
http://www.capgemoni.com/insights-and-resources/by-
publication/business-cloud-the-state-of-play-shifts-rapidly
Responsibility for deciding Cloud strategy lies with business
units in 45% of cases, and with IT departments only just
ahead with 46%.
Firms are increasingly taking a careful, step-by-step progression to
Cloud maturity, rather than making an all- or-nothing decision – 80%
respondents are saying they are maturity their adoption
78% respondents saying New applications and business initiatives are hitting
the Cloud first, with many “edge” solutions going straight to the new
platform, almost as a default;
IT and Business aligned in that 52% and 51% stated Cost reduction as main
cloud driver
Cloud is now owned right across the business. A broad range of functions are
now perceived to be involved in encouraging the use of Cloud – from the Board
to Legal, in addition to IT.

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Context of Business Constructs - Service Orchestrating This
FRONT END BACKEND END
TRANSFORM
DIGITAL BUSINESS MODELS
TRANSFORM
CUSTOMER
EXPERIENCE
TRANSFORM
OPERATIONAL
PROCESSES
Search Subscribe Consume
Process Publish Run
CEO, CFO, COO, CIO..
MARKET ECOSYSTEM CONTEXT

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Use of Digital Technologies to transform Customer Experience
The FRONT END

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Use of Digital Technologies to transform operational processes

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Technology drivers pushing New Digital Business Models

10
Some key questions for Technologists and Business
New models emerge…..
How much data traffic is there on the Internet ?
INTERACTIONS
21 exabytes per month 2010
How big is the Internet ? How big is 1 exabyte ?
DIGITAL NETWORK SIZE
7 Billion “things” connected to
Internet, tipping point 2008
By 2020 50 Billion “things”
Smart phones, PCs, devices..(2)
How big is big Data ?
DIGITAL DATA SIZE
161 exabytes in 2006 globally
3 million times amount of
Information contained in all
the books ever written (3)
988 exabytes in 2010
1 exabyte = 1 million Terabytes
1 Zettabyte = 1000 exabytes
How is computing power increasing? When will
computation power exceed the human brain?
DIGITAL COMPUTE POWER SIZE
1 Billion Transistors 2010 Had
doubled per year but
Moores Law ends in 2013
Density double only every 3
years (4). Now Multi-core.
16 Petaflops 1.6 million cores 2012 –
Super computer (16,000 trillion flops)
76.8 GFLOPS GPU in A6X Apple ipad4
The “Exaflood” 2007(1)

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Technology entanglement
INTERACTIONS
DIGITAL
DATA
DIGITAL
NETWORK SIZE
DIGITAL
COMPUTE
POWER
SOCIAL NETWORKS
INTERNET
OF
THINGS
BIG DATA
SEARCH
ACCESS & LOCALITY
TO CLOUD
RESOURCES,
MOBILITY
CONNECTIONS
MULTIPLICITY
OF WORKLOADS
KNOWLEDGE
INSIGHT
VALUE, RISK,
TRADEOFFS
Innovation
happening at intersections
DATA NETWORKS

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So where do we go from here?
2015 - 2020
 Post cloud computing
 Multiple device era
 Ubiquitous presence
 Ubiquitous potential access and
choice
 Changing population growth and
dynamics
 Changing Economics
 Changing sustainable markets and
resources
Reimagining
Extensions
Todays
World
Enhancements
Substitution
Disruptions
DIGITAL INNOVATION
Incremental
Warwick Business School - ISM
Digital Entanglement

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Example Cloud Computing issues from IT perspective
 Service Management
– Google email outage 10 Dec 2012. 15 minutes
– http://techcrunch.com/2012/12/10/gmail-experiences-a-widespread-outage-most-
users-affected/
– http://www.zdnet.com/gmail-in-widespread-outage-also-caused-chrome-browser-
crashes-7000008568/
 Cyber Security
– Go-daddy domain hosting Sept 10 2012. 50,000 sites affected. 6 hours down
– http://news.cnet.com/8301-1009_3-57509753-83/go-daddy-serviced-web-sites-go-
down-hacker-takes-credit/
– US banks cyber attack Sept 2012.and again in Jan 2013
– http://bits.blogs.nytimes.com/2012/10/05/in-cyberattacks-on-banks-evidence-of-a-
new-weapon/

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Data of Everything - Search versus Big Data
 How everyone can use Hadoop / map reduce
directly on Amazon to run his / her own analysis of
the web
 So the question is…
 Not whether you have data of everything but how
old and accurate is this data ?
 How to marry intuition + data insight ?
http://www.technologyreview.com/news/509931/a-free-database-of-the-entire-web-
may-spawn-the-next-google/

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Agenda
The Pharmaceutical Industry in
Context

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Competitive threats
- New Competition Dynamics
This example illustrates Industry Services in Cloud that a SME can access and compete in areas that larger Companies
once had incumbent control due to own assets and services. This means that there are lower switching costs via Self Service
Portals and 3rd party Cloud service providers. Because people can choose Self Service over other General Traditional Services

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Pharmaceutical Industry
Global pharmaceutical market
• Worldwide
• Many segments: Consumer healthcare
products, advanced medical devices,
• biotechnical research…
• Dynamic interconnected marketplace
• Local / Regional / Global Segmentation
• Multiple channels
• FDA / HIPAA compliance
• Patent Expiration
• Erosion of existing or expired brands
• Price cuts (lower operating costs)
• Reimbursements
Industry is heavily regulated
• Regional and global
governance standards
• Patent Laws
• Products and drugs licensing
• FDA (US Food & Drug
Administration) as well as
specific health data protection
laws such as HIPAA (Health
Insurance Portability and
Accountability Act).

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The Pharmaceutical Company
Global pharmaceutical company
Healthcare Products and
Pharmaceutical
250 Operating Companies
operating across Americas,
Europe, Middle East, Asia Pac,
South American Markets +
Wider Partner channel
Ecosystem network
100,000 employees
Research &
Development
Design Manufacturer
Brand
Management
Sourcing
Support
Compliance Market
Trials LaunchesInvestment
Distribution
Values
Family
of
Companies
Business
Segment
Business
Segment
Business
Segment
Consumer Health
care
Medical Devices &
Diagnostics
Pharmaceuticals
Franchises TherapeuticFranchises TherapeuticFranchises Therapeutic
Product range :
• Consumer
products
• Medical Devices &
Diagnostics
• Prescription
Products
• Product Coupons,
Promotional offers
from the Family of
Companies
Citizenship
Corporate
Governance
People &
Diversity
Business Processes
Organization
Categories
Strategic
Business
Units
Operating
Companies

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Pharmaceutical Industry – Operating consequences
Dynamic distributed Business Workloads
• Research
• Collaboration
• Regulatory Compliance (FDA, HIPAA..)
Operating Model Pressures
• Constant Research
• Rapid Market trials
• Dynamic scaling up and down of collaborative product design
/manufacturing
• Diverse distribution supply chains to deliver residential , wholesaler
and retailer marketplaces

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Family
of
Companies
Business
Segment
Business
Segment
Business
Segment
Consumer Health
care
Medical Devices &
Diagnostics
Pharmaceuticals
Franchises TherapeuticFranchises TherapeuticFranchises Therapeutic
Categories
There are many internal and external stakeholders
- The Formal Organizational Tree
Technical
Assessment
Planners
Strategic
Planners
Competitors
Own BUIs -
Business
Leaders
Own
BUsBU
CIO’s
Global CIO
Investment
Funding Planners
Strategy
Planners
Investment
Fund
Planners
Global CIO
Suppliers &
Intermediates
Technical
Assessment
Planners

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How to you deal with the many internal and external
stakeholders and investors ?
Suppliers
Customers
Customers & Channels
Geographies
Own BUs
Competitors
Intermediates
CIO
CIO
CIO
Business
Leaders
Business
Leaders
Business
Leaders
HQ
Global CIO
Investment
Fund
Planners
Technical
Assessment
Planners
Strategic
Planners
Virtualization
Consolidation
Programs
Competitors – SME
can get cloud services
and get into our market
space. It can attack our
customer base through
lower entry from using
3rd party cloud
resources which we
previously enjoyed
incumbent strengths
from ownership of our
own asset
infrastructure.
Own BUIs - Business Leaders
are buying Cloud services direct
with external cloud vendors
Own BUs – BU CIO’s
are pushing request for
own Cloud projects
Global CIO - Wants to define
a Cloud Strategy having seen
the impact of the above
trends in own business – IT
needs to respond
Investment Funding Planners
– How do I execute and build
foundations for cloud
investment to meet business
needs?. What do I need to do?
What do I need to build ? What
is the 2 to 5 year roadmap?
Technical Assessment
Planners – How do I compare
different cloud vendor
offerings ? – The comparing
apples problem
Strategy Planners –
How does the business
investment need to
change ? How does the
Business itself need to
change?
Virtualization Consolidation
Programs – “..We are building
our own Private Cloud and
developing Projects to
consolidate Servers into
virtualization with Benchmarking
..”

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Many competing Strategies

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Security, GRC Governance , Risk and Compliance
 In the Cloud everything is perceived as untrusted and insecure
 Many enterprises have company policies requiring data and access to be stored behind the
Corporate firewall; transport between geographies are not allowed
 Industrial certifications require physical isolation, audit and authentication processes
Trust ?
Internal
Private
Hybrid
Public
Physical
Resources/
locations Edge
IDAM
Network
Encryption
Trust Zones
Contract Law
Compliance Law
…

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Changes Competitive Advantage Barriers?
Critical Success Factors CSFs
Asset
Investment
Switching
Costs
Self
Service
Alternative
Channels
of Service
Access
to Services
Sourcing
Asset
Operations
Provisioning
Intermediates
Brokerage/
Aggregation
Innovation
Innovation
Sourcing
Lowers
Lowers
Lowers
Lowers
Lowers
Relative
Cost Of
Entry
Competitive Advantage Levers
Avoidance
Utilization
Optimization
Access
Time
Loci of risk
Responsibility
B2C
B2B
Collaborative
Responsibility
Convenience
Leverage
Speed of
Transformation
Growth /
Margin
Rate of
Change
One to
many
Speed
Economics
of Scale

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How Technology develops Differentiation
Relative
Cost Of
Entry
Barriers to
Copying Service
Barriers to Horizontal
Investment Scaling
Barriers to Horizontal
Geographic Scaling
Barriers to
Brand Awareness
Horizontal geographic
Scaling
Bundling / Cross-selling
Brand Awareness
Mimicking
Copying Service
Horizontal Investment
Scaling
Barriers to Vertical
Integration
Supply chain
Vertical Integration
Barriers to
Augmented Intelligence
Collaboration, Knowledge
Augmented Intelligence
Barriers to
Augmented capabilities
Content, insight, BPO, LPO
Augmented capabilities
Barriers to
being faster
Barriers to
being more secure
Speed to market
Speed of service flexibility
Speed of operation performance
Dedicated
Compliance
Assurance
Substitutable
canibalization
How does this change for
Each Industry ? Integration
Barrier versus legislation/openness ?
Does this suggest access and
speed are key ?
easierharder

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Cloud Computing impact on the On Shore – Off Shore Model
• Redefines onshore
• Moving to Cloud Computing redefines the need for each region and business unit to
develop certain types of IT service onshore.
• Common services
• Common services hosted in a secure private cloud Data center provides the possibility
to move to an off-shore shared model for many business units.
• Front end Agility
• Individual market and business unit agility is still essential for competitive response but
this can be supported by targeting cloud computing services for specific business
activity needs.
• Off-shore Governance
• The off-shore move also enables service management and capabilities to be invested in
shared regions to further improve the operating model organizational efficiency.

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Technology of the Cloud
processes
Moving to a Cloud Computing Environment involves a number of new IT and Business
Processes
Hosting
Networks
Virtualization
External
Services
Physical Virtual
Cloud
Services
Services
ROADMAP JOURNEY…
IT
PORTFOLIO
Business
PORTFOLIO
Internal
Services

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Operating Roadmap concept
Refurbishment
of Infrastructure /
Data Centers
Modular
Data Centers
Mix of Common
and Specific
Business
Services
Alignment of
Business
Services with
Modular Cloud
Services
Business Processes
Infrastructure Software Applications
The
workloads
that run
on the
Infrastructure
But , is this a Technical Roadmap…?
Workload Analysis

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Self- Service and On-demand Collaboration Service model
Self-Service
• enables business and IT users to select the cloud hosted services to expand or
change as the business needs change rather than go through a provisioning cycle
with local or central IT.
On-demand Collaboration Service Model
• Quality of Service
• Aims to improve the quality of service and support in cloud hosted services
• Catalog based
• a Catalog and an Account Management process enabling business and IT users to get
better visibility and control of usage and requests.
• Variants versus / and maverick buying / usage
• Conversely it enables variations and maverick buying to be monitored to encourage the
development of further common IT service reuse and specific development of new
capabilities based on actual usage demand patterns.
• Flexibility / Swaps
• Hitherto commercial contract locking customers and vendors into longer term
contractual solutions limited options for change. Cloud computing catalogs and services
aim to create a looser coupling between buyers, consumers and users of IT services.

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Defining the Right Type of Cloud Computing Operating Model
Modular Data Centers
• Strategic Decision
• Strategic decision to move to Private Cloud Computing
• Existing Investment in Virtualization
• Pharmaceutical company already invested in infrastructure virtualization
technology and a Global Data center Network. Enabled storage, compute,
network, blades, switches and entire Data Center to be developed with the
potential to be treated as an “appliance” – a “data Center in a Box”
• Refurbishment
• Modernize the Data center and infrastructure
• New Target Infrastructure
• Offer Modular Data Centers and Networks
• Enable a New Operating Model for IT Resources and Software Applications
• Align business capacity needs across global Operation to meet specific
business unit needs

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The Business needs driving
new capabilities in Business and IT
What are the Role Needs ?
What are the Solutioning needs?

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Typical Workloads Today 2013
Vertical Workloads
• Data Analytics
• Master Data
Management
• Simulation
• Business Intelligence
Horizontal Workloads
• Email
• Storage
• Office Productivity
• VOIP comms , video
• Shared Business
Apps for
Diagonal
Workloads
• Social Network
collaboration
Enterprise Workloads
• ERP
• CRM
• MRKT
• SCM
• Finance
• ...
• IT Service
Management
• Apps Store
Management
• Business Process
Management
• Mobile
Management
• Partner
Management
• Security & Governance
Monitoring Management
• SLA and QoS
Management
• Usage Capacity
Management, Metering

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Market Workload - Services
Systems
Workloads
Move to Cloud
IaaS
SaaS -Move
discrete
Apps Workloads
Apps
Portfolio
Non-Platform
services (Client
specific service)
Apps
Platform
Workloads
SaaS - Application
Portfolio Services
Business
Platform
Workloads
BPaaS - Business
Portfolio Services
Platform enabled
Services
PaaS Dev /Test
Development
Business/
ITStack
Service Service Service
ISV Source
Market Catalog
Integrated
Information
Services
Process
Integrated Platform
Ecosystem
Management

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Challenges
 Shift in Revenue and Monetization models
 Shift in funding models
 Changing Sales Value and Platform sales automation
 Changing Sales Channel methods to Cloud
 Competitor versus Partner Cloud Ecosystem
 Interoperability and Portability standards to support hybrid cloud agility function
 Skills and competencies in house versus partners
 Data synchronization and Ecosystem workload partition management e.g. Social
Enterprise, Big Data,
 Cost reduction shift versus new Innovation demand
 Speed of change – hyper competition forces

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