1. Utility Computing for Shared Services Massachusetts Digital Government Summit September 23rd, 2004 – Boston, MA Perry Boster Architect Sun Microsystems Federal, Inc.

2. 2 Presentation Outline ● Customer Reality ● What are Shared Services ? ● What is Utility Computing ? ● Technology Enablers ● Implications ● Success Factors ● Take Aways ● Call to Action ● Q &A

3. 3 Server Utilization Servers/ Admin Terabytes/ DBA Network Ports/Admin Projects Deployed/ Quarter Availability 6-15% 99.9% 15-30 50-100 Few 60+% 500+ 100TB 500+ 100 % Many 1TB Customer Reality

4. 4 What are Shared Services ? ● Reduce and optimize costs associated with an agencies non-core activities ● Improve operational efficiencies and productivity ● Provide expanded/better services to internal departments or customers ● Measure and better understand back office costs, efficiencies and business unit necessities as a pre-curser to outsourcing Shared Services often involves some form of centralization, and most importantly involves applying marketplace and business principles to the management and provisioning of services. www.sharedservicesnetwork.com The Primary Objective of Shared Services is to:

5. 5 What is “Utility” Computing ? a) Pay-for-use Pricing Business Model b) Data Center Virtualization and Provisioning c) Solves Resource Utilization Problem d) Outsourcing e) Web Services Delivery f) Automation All of the Above

6. 6 Utility Solution – Your Perspective Consumer Provider Pricing Security Resource Utilization Service Assurance SLA Technology Refresh vs System Admins Application Sizing Service Procurement Infrastructure Procurement Equipment Maintenance Consultants Contractor Management Availability Capacity Planning

7. 7 Utility Model Capacity Procurement Operation Pay-As-You-GoLeaseBuy FixedTCOD/COD Grid/ Dynamic SelfManagedOutsourced Scaling Enterprise Servers WorkgroupServers Blade/EdgeServers Matrix of Decision Points ?

8. 8 Policy and Automation Provisioning Virtualization IPNetworksStorageNetworksServerNetworks Foundation Resources Telemetry ● Virtualize platform, automate provisioning, and optimize through policies ● Unify heterogeneous resources into “pools” (processors, storage, network). Make data centers work like “systems” ● Policy-driven services rightsize automatically ● Metering and Monitoring Key Technical Enablers for UC

9. 9 Management Complexity Too Many Different Things to Manage AppDBStorageWebNetwork 3 Shared Service 2 1

10. Infrastructure Virtualization Resource Pools Storage Servers Network

11. 11 Application Provisioning Applications Server Pool Network Pool Storage Pool Shared Services Controlled by Policy and Automation Utility Computing Grid Web App ServerMessaging Directory Shared Service 2 Shared Service 3 Shared Service 1

12. 12 Metering and Monitoring Technology Customer Web PortalSSL Firewall Proxy Reporting Server Metered Systems Telemetry

13. 13 Utility Pricing: ● Base fee + variable usage charge – CPUs, I/O, GBs, etc. – Some combination or aggregation of the above ● Transaction based- $X per service transaction ● Fixed fee or subscription ● # of users per month ● One size does NOT fit all “What Will It Cost or How will I Charge?”

14. 14 What Are the Implications? ● Changes to your business processes – Are there regulatory requirements that apply to UC ? – Agencies own data, but not technology processing it – Secure data in a shared infrastructure – Management of outsourcing/utility relationship – Change in the way you conduct internal business and departmental charge-back – Ownership/maintenance of IT, technology decisions shifts to service provider

15. 15 What Are the Implications? ● Changes to your financial model – Shift in how you buy IT ● From buying parts to buying service? ● From capital outlay to base fee plus usage? ● From multi-year to annual or monthly contracts? – Infrastructure and capital assets shift to service providers – Chargeback model(s) ● How are costs measured and allocated? How is service pricing handled? ● Automated metering and billing will become increasingly more important

16. 16 What Are the Implications? ● Changes to your organization dynamics – Who “owns” IT? Technology decisions shift to the Service Provider as: ● IT buying and maintenance shifts to service provider(s) ● IT staff become strategic decision makers (services, SLAs, etc.) ● IT becomes manager(s) of outsourcing/utility relationship(s) – Business partners – IT staffing and personnel – General organizational maturity/willingness to embrace change

17. 17 Critical Success Factors ● People – Project manager independence and support – Willingness/ability to embrace change – Set/manage expectations ● Executive sponsorship – The right sponsorship on both sides (customer and partner) is CRITICAL to a successful UC deployment – CXO is preferred/VP of LOB is required ● Politics – Server and application ownership – “You can have my server when you pry it from my cold, dead hands!” ● Firm mandate to do so

18. Take Aways ● UC provides technologies for shared service providers, but is more of a business model for consumers of shared services ● Intelligently matches IT resources to business demand on a pay-for-use basis ● Helps solve the resource utilization problem ● Shift in business paradigm from buying IT to buying a level of service ● UC is NOT a get well plan for a poorly run operation ● One size does NOT fit all ● More questions than answers ? Good, you're thinking !

19. 19 Call to Action ● GET EDUCATED! Engage your partner(s) to help answer your questions: – Business/financial/organizational/technical – Educate all players in your value chain (employees, suppliers, customers, competitors, etc.) ● Start planning and readying your organization – Optimize infrastructure (consolidation and migration) and costs; implement best practices, embrace open system standards – GET READY FOR CHANGE! Embrace it/leverage it ● PROVE IT! – Do a workshop - Make potential vendors offer proof points that fit your model, or work with them to validate a model for your organization – Pick a pilot and try it out

20. http://www.sun. com/service/utility Perry Boster Perry.Boster@Sun.Com Utility Computing

21. 21 Backup Slides ● Additional information follows

22. 22 Risks in a UC World ● Data Backup ● Data Security ● Partner Competency ● Defining SLA ● Getting value from charge back