Confused about "The Cloud"? Learn the basics of cloud computing and how you and your organization can benefit from it right now.

1. The Myths and Magic of Cloud Computing and
How it is Revolutionizing the World
Jay Roy
Chief Executive Officer
“Practical Intelligence for Ensuring Profitability”
IMA DFW - Fall 2011 | Dallas, TX

2. Cloud Computing Confusion at its Best…
vs.
1

3. What is Cloud Computing? – Learning Objectives
1. What is It and why has it suddenly become popular?
2. Why should our company move to the cloud?
3. As a financial or IT professional, why should I care about it?
4. What should I fear about the cloud and what are my risks?
5. What technical things do I need to know about it?
6. How can I add value to my organization using the cloud?
7. How do I use this as another tool in my tool box?
2

4. Poll Question
Poll Question 1
Do you think cloud computing is
all hype about another technology
fad OR really here to stay?
3

5. Table of Contents …
What Is Cloud Computing? – Basic Primer, Jargon and Technical details 7
The Myths (and Potential Downsides) of Cloud Computing 25
The Magic (and Potential Benefits) of Cloud Computing 29
The Implications of the Cloud 35
How the Cloud is Revolutionizing the World of the Finance Executive 39
How You can Add Value to Your Organization Using the Cloud 42
Examples of Cloud Computing in Daily Life 47
Conclusion and Key Takeaways 51
© 2011 Predictive Dashboards LLC
4

6. Poll Question
Poll Question 2
Do you care if your personal health
information is being stored at a on-
site premise or in the clouds?
© 2011 Predictive Dashboards LLC 5

7. Poll Question
Poll Question 3
Do you care if your organization’s
information (accounts receivable)
is being stored at a on-site premise
or in the clouds?
6

8. What is Cloud Computing? – Basic Primer, Jargon and
Technical Details
7

9. What is “the Cloud”?
Ø The term “cloud” is used as a metaphor for the Internet representing infrastructure
Ø Originally, a cloud drawing was used to depict a telephone network; Currently it is
used to depict the infrastructure as the Internet on computer network diagrams
8

10. What is Cloud Computing? - Primer
“Cloud computing is the delivery of computing
as a service rather than a product, whereby
shared resources, software, and information
are provided to computers and other devices
as a utility (like the electricity grid) over a
network (typically the Internet).”
“A standardized IT capability (services, software,
or infrastructure) delivered via Internet
technologies in a pay-per-use, self-service way”
9

11. What is Cloud Computing? - Primer
Ø Cloud Computing (“CC”) is a broad term for delivering hosted services
over the Internet by service providers
Ø Cloud computing has a few unique characteristics which separates it
from traditional hosting:
Ø Services are sold on a unit basis (e.g. per minute/hour) – similar to
buying services from a utility (pay for what you use)
Ø Services can be purchased on an on-demand or as-needed basis and
scalable to adjust to customer needs
Ø Services are offered and fully managed by a third-party
10

12. What is Cloud Computing? – A Snapshot of Configurations
11

13. What is Cloud Computing? - Primer
Ø Cloud Computing has 3 main categories of service delivery:
Ø Software-as-a-Services (SaaS)
Ø Platform-as-a-Service (PaaS)
Ø Infrastructure-as-a-Service (IaaS)
12

14. What is Cloud Computing? - SaaS
Software-as-a-Service: A software (service) delivery model
in which business applications and their data are hosted by a
Cloud Provider in a cloud and accessed by users through a
thin client (web browser).
Examples: Google Mail or Salesforce.com
13

15. Example of SaaS – Salesforce.com
14

16. What is Cloud Computing? - PaaS
Platform-as-a-Service: A service delivery model in which a
Cloud Provider allows customers to rent virtualized servers and
associated services for running existing applications or
developing and testing new ones.
Examples: Google Apps Engine or Force.com
15

17. Example of PaaS – Google Apps Engine
16

18. What is Cloud Computing? - IaaS
Infrastructure-as-a-Service: A provisioning model in which
Cloud Provider supplies all of the infrastructure including,
offering the customer the ability to deploy and run software,
including OSs and applications. The Cloud Provider owns the
equipment and is responsible for maintaining and operating it.
Examples: Rackspace, Amazon Web Services
17

19. Example of IaaS – Amazon Web Services
18

20. Why has the Cloud suddenly become so popular?
Outsourcing
Robust Apps &
User Interfaces Services-based
Economy
Critical Mass
Shrinking IT Shared Services
Budgets
Distributed
Weak Economy Computing
Cheap
Pervasive Increased Rising
Broadband Computing Licensing Costs
Speeds
19

21. What is Cloud Computing? – Types of Clouds
Ø Cloud Computing has only one Internet but three deployment
methods:
Ø Private – “Single tenant” – it is cloud infrastructure operated solely for a single
organization (i.e. you), whether managed internally or by a third-party and
hosted internally or externally. (e.g. Your Company Cloud)
Ø Public – “Many tenant” – An offering from a service provider to many clients
who share the cloud processing power concurrently. The service provider’s
public cloud clients share applications, processing power and data storage
space communally. Client data are commingled, but segregation is provided
through the use of metatags
Ø Hybrid – “Many tenant” is cloud infrastructure composed of two or more
clouds, private or public, that remain unique entities but are bound together by
standardized technology that enables data and application portability
20

22. What is Cloud Computing? – Types of Clouds
Ø Other Cloud Computing deployment methods:
Ø Virtual Private Cloud – is a private cloud existing within a shared or
public cloud (e.g. Amazon Web Services)
Ø Community Clouds – A private-public cloud with users having a common
connection or affiliation, such as a trade association, the same industry or
a common locality. The community cloud business model allows a CSP to
provide cloud tools and applications specific to the needs of the
community. When the community is in a PaaS cloud, the SOA applets can
be specific to communal requirements, e.g., business-process-specific,
industry-specific. (e.g. )
Ø Variety of Other Cloud Solutions in progress
21

23. What is Cloud Computing? – Attributes Defining Clouds
Source: ISACA – IT Control Objectives for Cloud Computing
22

24. What is Cloud Computing? – A Visual of a Private Cloud
Data Center
Internet
Private Cloud
Your Enterprise
23

25. Quick Comparison between Private vs. Public Clouds
Public Cloud Private Cloud
Public Cloud Private Cloud
• Hosted at Service Provider Site • Hosted at an Enterprise or Service
Provider Site
• Supports Multiple Customers
• Supports only one Customer
• Often utilizes shared infrastructure
• Does not utilize shared infrastructure
• Supports connectivity over the Internet
• Supports connectivity over private
• Suited for information that is not sensitive
network or the Internet
• Can be cheaper than private cloud
• Suited for information that is sensitive
and demands high security
24

26. The Myths (and the Potential Downsides) of Cloud Computing
25

27. The Myths (and Potential Downsides) of Cloud Computing
Are the following Myths or Truth?
1. CC can t handle my environment s security & privacy requirements
2. Migrating our work environment to the Cloud is just too hard
3. CC is too expensive and or potential savings is too good to be true
4. CC is an IT project & has no real business value
5. CC does not integrate well with on-premise or other clouds solutions
All of these concerns have some level of validity but …
Without doing your home work, the myth becomes reality!
26

28. Debunking Myth 1
Cloud Computing can t handle my security and privacy requirements
Facts
Ø 50% or more of traditional security breaches are perpetrated by internal personnel
Ø Not all cloud solutions are equally secure or insecure (reason for hybrids)
Ø Some security risks are very real and some are perceived
Overcoming the Myths – Your responsibility
Ø Perform a security analysis
Ø Use encryption technologies
Ø Use federated identity management systems
27

29. Debunking Myth 2
Migrating our work environment to the Cloud is just too hard
Facts
Ø The decision regarding which applications, infrastructure and data to migrate will
be one of the biggest technological hurdles not to mention latency and interoperability
Ø Not all cloud provider do migration well, migration is still your responsibility
Ø Integration points are opportunities for failure – missing links (UI, data, functional)
Overcoming the Myths – Your responsibility
Ø There are many ways to migrate: virtual machines, web-interfaces or porting to a
cloud platform but figure out how you will do this and by whom
Ø Have your own migration plan and very solid back up plan
28

30. The Magic and the Benefits of Cloud Computing
29

31. The Magic and Benefits of Cloud Computing
Are the following Magic or just Illusions?
1. Cloud computing will provide dramatic savings in IT costs
2. Our organization will be able to execute strategies faster
3. Cloud computing will free up internal resources for strategic tasks
4. Cloud Computing will enhance performance and stability
5. Cloud computing will enhance our flexibility and usage of resources
30

32. The Magic of Cloud Computing – Lucky Rabbit's Foot
Cloud Computing will provide dramatic savings in IT costs
Facts
Ø Cost Savings are as good as your projected usage. Minimum costs and hidden
charges need to be considered.
Ø Need to consider intangible costs of moving infrastructure and people s time
Ø Need to consider how you are going to save on what IT costs (hardware, software,
etc.)
Validating the Magic – Your responsibility
Ø Due diligence through adequate planning and up front discussions with cloud
provider is necessary to realize benefits.
Ø Develop a road map of workloads to be migrated and cost out the savings
31

33. Accounting for IT Investments using Cloud Economics
Source: Forrester Research, Inc. – Talking to your CFO About Cloud Computing
32

34. Accounting for IT Investments using Cloud Economics
Source: Forrester Research, Inc. – Talking to your CFO About Cloud Computing
33

35. Accounting for IT Investments using Cloud Economics
Source: Forrester Research, Inc. – Talking to your CFO About Cloud Computing
34

36. The Implications of the Cloud
35

37. Poll Question
Poll Question 4
Do you think the average business
person cares if his business
information is in the clouds?
36

38. The Implications of Cloud Computing – Who Cares?
Yeah! I m Concerned
Whatever!?!
Some CIOs Some CIOs General Business Person
And And Or
IT Geeks Corp Attorneys Hip 20 Something
Conversations @ Work
37

39. The Implications of the Cloud
Ø To Cloud or Not to Cloud – Dealing with fear or lagging behind the curve
Ø Organization structure and legal boundaries
Ø Strategy and competitive advantage considerations
Ø Talent and People aspects
Ø Cost considerations including Service Level Agreements SLAs,
Ø Trusted vendors? – Standards to fall back on?
Ø Security, risks and business continuity considerations (What-if there is a breach?)
Ø Work-Life Balance considerations – Being On
38

40. How the Cloud is Revolutionizing the World of the
Finance Executive
39

41. CC is Revolutionizing the World of the Finance Executive
CC impacts us in a variety of ways …
Ø Decision making about how the organization delivers its products and services to
internal customers will change
Ø The focus of Auditing and Accounting will move to the digital era
Ø Business Models will be in flux especially in the area of variable and overhead costs
Ø Risk & Reputation Management will take precedence in the short-term
Ø Talent & Knowledge – The CC Department?
Ø Success Metrics – Its working! Really?
Ø Outsource or Not Outsource – Impacts on you and your customers
Ø Work-Life Balance – Being On 24/7
40

42. CC is Revolutionizing the World of the Finance Executive
Ø Accounting for IT investments will be dramatically simplified
Ø The Financial Executive will shift focus to a monitoring and benchmarking focus
Ø The finance function will be scrutinizing the value of internal IT resources and costs
versus outsourcing IT activities from the cloud.
Ø The finance team will be responsible for negotiating subscription fees instead of
license fees
Ø Cloud providers will have to justify and quantify their value in terms of security,
compliance, service levels, compared to the marketplace
Ø Finance department will be monitoring: subscription fees/per-user fees, resource
usage and direct costs
41

43. How You can Add Value to your Organization
42

44. How You can Add Value to your Organization
Educational Perspective
Ø Educate your personnel of what the cloud is – Host a “Lunch & Learn” for your
team to understand the technical, administrative, value-adds/detracts details
Ø Research specific cloud offerings specifically to your industry or niche –
Remember Caveat emptor – Buyer beware – Not all cloud services are equal
Ø Understand the contractual arrangements i.e. Service Level Agreement ( SLA )
and identify the gotchas for people involved with purchasing the service
Ø Understand how your IT audit function will audit the Cloud – Review the latest
requirements from ISACA
Ø If considering cloud adoption, understand and develop a road map for
implementation and migration of applications used in your function
43

45. How You can Add Value to your Organization
Administrative/Contractual Perspective
Ø Perform a Risk and Cost/Benefit Analyses on Cloud Computing for your
situation
Ø Understand the contractual arrangements i.e. Service Level Agreement ( SLA )
and identify the gotchas for people involved with purchasing the service
Ø Assist in the development of the project plan to migrate to cloud if you own the
financial applications
Ø Improve your budget - Stop paying for services that you may use for free
Ø Find out what your recourse would be if cloud computing isn t for you – i.e.
what things do you own (e.g. data, applications, etc.) and how to move off from that
cloud provider
44

46. How You can Add Value to your Organization
Security and Technological Perspective
Ø Review and update your IT governance and IT change management processes
with new cloud policies and practices into your Sox and compliance requirements
Ø Perform and hire capable professionals to advise, develop and test cloud security
regardless of the delivery model you utilized
Ø Incorporate potential cloud failures into your business continuity and disaster
recovery planning requirements
Ø Keep abreast of changes through governance committees including cloud
computing issues and identify a resource for providing regular briefings
Ø Attend security and technological conferences, webinars and user groups to
ensure your business and IT personnel are competent in this domain
Ø Get familiar about costs to maintain an appropriate level of security – see it as an
investment not an expense
45

47. How You can Add Value to your Organization
Business Process and Internal Controls Perspective
Ø Understand how your business processes will change and affect financial reporting
Ø Understand how your IT audit function will audit the Cloud – Review the latest
requirements from ISACA
Ø Identify and incorporate into your Enterprise Risk Assessments the new risks
resulting from using cloud computing
Ø Discuss with your Audit Firm how changes will affect your audit
46

48. Examples of Cloud Computing in Daily Life
47

49. Case Study: The New Start-Up (Cloud Computing Start-Up)
Ø A next-generation start-up that nearly used all cloud services to begin its operations
48

50. Examples of Cloud Computing that we may be familiar with
49

51. Case Study: Business Intelligence (BI) in the Clouds
50

52. Case Study: Business Intelligence (BI) in the Clouds
Challenges Predictive Dashboards had to Overcome:
Ø Choosing an infrastructure provider was challenging
Ø Understanding the jargon, technologies and the varied offerings was overwhelming
Ø Defining the minimum and appropriate standards was vexing
Actions Taken:
Ø Talked to as many providers and other SaaS-based Cloud Providers to make sense of
and compared the offerings and figured out the Do’s and Don’ts
Ø Punted on the standards issue and felt we could wait a while but ensured ourselves
the minimum amount of security
Results:
Ø Learned not only the technology issues and but also the business issues of the cloud
Ø Learned that technology constantly evolves and you’re always in development mode
51

53. Conclusion & Key Takeaways
52

54. Conclusion & Key Takeaways
Conclusion: Cloud computing has the potential for
revolutionizing the ways businesses and individuals operate.
However, be a skeptic! At its core, CC is another outsourcing
mechanism and must be monitored. Don t forget, it’s still your
responsibility.
Takeaway: Cloud Computing has many positives but the
learning curve can be steep both technologically and
administratively. The benefits can far outweigh risks. There
are huge opportunities and potential for financial
professionals to add value to this area and to your
organization
Takeaway: Cloud computing is not without risk. Do your due
diligence. Unforeseen disasters may await you including
security breaches, cost overruns, technological challenges,
privacy issues, etc.
53

55. Poll Question
Poll Question 5
Now, do you think cloud computing
is Myth or Magic?
54

56. Sources, References, and Trademarks
Ø Forrester Research, Inc. – Talking to your CFO About Cloud Computing
Ø ISACA – IT Control Objectives
Ø The Lego Minifigure is a trademark of The Lego Group
55

57. The Myths and Magic of Cloud Computing and
How it is Revolutionizing the World
Jay Roy, Chief Strategy Officer
www.PredictiveDashboards.com
Jay.Roy@PredictiveDashboards.com
T: 214-621-7612
56