Capgemini Government Cloud Broker: A Point of View

Transcription

1 Public the way we see it Capgemini Government Cloud Broker: A Point of View Bryant Park Hotel - 40 W. 40th Street, New York, NY October 21-22, 2013

2 Contents Introduction 3 What is an Exchange 4 What is a Cloud Broker 4 The Challenges Facing the Government in the Cloud 7 The Capgemini Approach for a Cloud Broker Model 8 Who Should be a Cloud Broker 9 Capgemini Cloud Broker Experience 10 Conclusions 11

3 Introduction The introduction of Cloud technology has allowed providers of software to adopt and offer additional business models. These new business models have the potential to greatly impact the way in which government departments and agencies can budget and acquire services. The models address key government challenges by transforming the model under which services are obtained, and transferring some of the risks associated with those services from the government to the provider. The combination of complexity in implementation and the amount of changes needed to support the models has lead to significant challenges for the government. The primary challenge is how to manage the many elements, interdependencies, service levels and competing priorities of the new Cloud landscape. One solution being considered is the concept of a Cloud Broker. 3

4 What is an Exchange The government is looking at Cloud Brokers as exchanges (at least in part), where they may buy computing services in much the same way as commodities are sold in the private sector. But, what is an exchange? An exchange is an organized entity that provides a place for buyers and sellers to come together, with sufficient volume and value added services to attract both parties to participate. An exchange may be an actual, existent organization such as the New York Stock Exchange (NYSE), or it may be a more virtual idea around a common market place. Some characteristics of an exchange include: Neutrality The exchange does not offer actual products or services for sale, nor does it offer to buy products for services. An exchange does not take a position in the market it facilitates. For example, the NYSE does not buy or sell stocks it offers a market place where buyers and sellers can meet. NYSE makes its money by providing value added services, such as real time price quotes and transaction processing. In the real estate world, the Multiple Listing Service, or MLS, provides the ability for sellers to reach a broad audience and buyers to view many possibilities in their search for a home. Transparency An exchange needs to provide equal information to all participants. The aspects of the transaction must be public knowledge for all participants (or at least accessible under the right conditions). Simple exchanges are based primarily on price (stock price for the NYSE, listing price for the MLS). In the government arena, the aspects of a transaction are more complex, and can include items such as price, service level agreements, acquisition model, small business targets and other elements. Volume An exchange should have the ability to offer a significant number of transactions, and to accommodate large purchases. Within a market, volume purchasing (or selling) may also involve a premium or a discount tied to the quantity being moved. Value added services The definition of these services vary, but the value added by an exchange justifies its transaction fees. The NYSE provides price quotes, overall market analysis and other useful financial information, as well as the ability to process a transaction and provide the real or virtual results (stock certificates, etc.). The MLS provides broad access to buyers to each seller, and value added information such as tax rates, school ratings and pricing comparisons to the buyer. What is a Cloud Broker Having introduced the exchange concept, we can now discuss the general concept of a broker, and then the more specific concept of a Cloud Broker. A broker provides and manages the process or solution provided by one or more providers and adds value through components such as management, facilitation, negotiation, leverage, risk transfer, function specific information and tools, and aggregated buying power. In the NYSE model, a mutual fund closely resembles the concept of a broker. It aggregates and federates multiple providers (individual stocks). It transfers risk in some cases by presenting a balanced portfolio, allowing the buyer to benefit from their greater institutional knowledge and expertise. It leverages the buying power of multiple investors to get better pricing (due to volume of purchases). It intermediates between the investor and multiple offerers of financial instruments, simplifying the financial transaction for the investor. Mutual funds arose from several needs. Non-institutional investors were at a significant disadvantage and financial institutions recognized an opportunity to add value. By creating a level of indirection (the artificial stock that represents the purchasing power of the mutual fund) these institutions allowed the individual investor to benefit from the institutional research power of the financial institution. This in turn lowered the risk for the investors, which increased the volume of the market by encouraging more investors to participate in the exchange. The investment model which allowed fractional share purchases also allowed people to invest on a dollar basis rather than a share price basis. Mutual funds were part of a process that changed how individual investors could invest their money. For example, an investor with two hundred dollars to spend is unable to buy a stock priced at five hundred dollars. He is, however, able to buy a fractional share of a mutual fund with his two hundred dollars, allowing him to participate in an investment sooner and garner the rewards of ownership more quickly. In short, in response to a business need and a desire for a new model of transaction, a broker model was established in the existing market. Just as in the private sector, where commodities markets enable corporations to acquire needed resources based on a set of requirements, the government can also profit from acquiring computing resources from an exchange or broker model, which leverages qualified Cloud Services Providers unique offerings to match government needs. Rather than acquiring systems and the accompanying costs (data center space, administrative personnel, licenses, updates, etc.) which have long term 4 Capgemini Government Cloud Broker:A Point of View

5 consequences and commitments, the broker or exchange model allows the government to move some of the federal IT spend to a consumption or usage based model, with no long term vendor lock in. In short, the government IT procurement market has reached an intersection with Cloud technologies and concepts, which has generated the opportunity to benefit from the application of a broker model, creating the concept of a Cloud Broker. Government customers have access to a wide spectrum of services labeled Cloud. To simplify the discussion, let s stipulate that Cloud services, provided by Cloud Service Providers, or CSPs, have most of the following characteristics: As a Service / Off Premise Software Model instead of selling software (or licenses) which is installed in a Government data center, the CSP provides the software under an As a Service approach, in which the software is accessed over the internet. The software is retained at the CSP, which is responsible for version control and management (in some cases only one version is ever public, in other cases the CSP provides multiple versions). Normally a software license is not granted, software is not installed on Government Furnished Equipment (or GFE), and no ownership is conveyed. Multiple or Alternative Pricing Models Traditional software services acquisition involves procurements that have a rather long period of performance (typically at least one year). During this timeframe, the price is usually fixed and not subject to revision. Additionally, the quantity of service provided is also fixed, and the government must follow additional, time consuming procedures to purchase additional quantities, and it is often not possible to reduce the quantity (and therefore the cost) during the period of performance. In contrast, CSPs offer a number of models, such as consumption based pricing, transaction based pricing and value generated pricing. Elastic Capacity Traditional models of computing services rely on fixed, known capacity usually modeled in terms of servers or equipment. Because there was no ability to dynamically add capacity, government organizations frequently overbuilt to avoid downtime. The new Cloud model includes a concept of elastic capacity. In a Cloudbased model, capacity is based on virtual machines, or VMs. VMs provide a unit of consumption that is independent of machines, can be moved rapidly, and can be adjusted to meet dynamic needs (additional VMs can be added during peak The government IT procurement market has reached an intersection with Cloud technologies and concepts, which has generated the opportunity to benefit from the application of a broker model, creating the concept of a Cloud Broker. usage and VMs can be removed and cost savings achieved when usage is lower than expected). By moving to a Cloud model with elastic capacity, an agency can measure its true consumption and benefit by reducing its actual equipment to match its actual consumption. Reductions in equipment typically range between 25% to 75%, reducing footprint, energy and operating costs. It s important to clarify that the concept of a Cloud Service Provider is not constrained to what is commonly referred to as Public Cloud providers, such as Amazon Web Services. There are several models of Cloud computing. The National Institute of Standards and Technology (NIST) Cloud definition includes: Public Cloud Cloud services available to the general public. These services may be single tenant (multiple instances) or multi-tenant (single instance, application based separation). Under many Public Cloud implementations, there are multiple locations providing services, and there is no guarantee of location of service, or data. Government requirements preclude the use of many Public Cloud solutions, but there are solutions that are viable with GSA FedRAMP or similar certifications, allowing government usage. Private Cloud Cloud services which are not available to the general public. These services are typically in a privately held data center. For government work, this could either be a government data center, or a private, third party solution, with requisite security to satisfy the needs of the particular entity. The overall elastic capacity of the private Cloud may be more limited than that of a public Cloud. Hybrid Cloud The Hybrid Cloud model represents the union of one or more separate Clouds into a synthetic blend of services. Typically this option in Government represents the combination of the traditional Data Center with third party Cloud services, usually Private Cloud. 5

6 When a Cloud Consumer (CC) begins to use multiple vendors (as in a Hybrid model) and consume a variety of services, the management of the ecosystem becomes challenging. Those challenges are solved by a third entity in the Cloud Model the Cloud Services Broker, or CSB. Capgemini believes a single broker is necessary within an ecosystem, and that a single broker provides the best opportunity to achieve the most value from a CSB, by driving a common report, financial and operating model, without redundancy. Community Cloud Another concept is that of a community Cloud, one in which the services are shared by a community (and possibly administered by multiple agencies). An example of this in the federal government is the DHS as a Service. This Cloud based Software as a Service (SaaS ) supports multiple components of DHS. Another aspect of the model is the concept of a Cloud Consumer (CC), a role that is normally fulfilled by the government entity which needs to use services. The simplest interaction in a model is directly between CCs and CSBs. Contracts, SLAs and other agreements are directly managed. In a small Cloud ecosystem, this is not an issue, but when a CC begins to use multiple vendors (as in a Hybrid model), and consume a variety of services the management of the ecosystem becomes challenging. Those challenges are solved by a third entity in the Cloud Model the Cloud Services Broker, or CSB. A Cloud Services Broker, or CSB, acts as an intermediary between a CC and the CSPs that provide services to the CC. And much like the exchanges discussed earlier, the CSB provides a set of services and adds value by simplifying the management process for the CC. Ideally, a CSB manages the relationships (the service level agreements and operating level agreements), aggregates services, provides a pricing arbitrage model and creates transparency among disparate pricing models. A CSB also manages the financial and operational aspects of the interaction, allowing the CC to focus on achieving its mission objectives. The NIST model defines technical and business brokers, differentiating between technical services management and business services management. Capgemini believes that the distinction is unnecessary, as most of the value adds on the technical level are repeated on the business level. Further, the separation can add unneeded complexity to the model. Capgemini also believes that only a single broker is necessary within an ecosystem, and that a single broker provides the best opportunity to achieve the most value from a CSB, by driving a common report, financial and operating model, without redundancy. 6 Capgemini Government Cloud Broker:A Point of View

7 The Challenges Facing the Government in the Cloud The government faces many challenges in providing superior services to the citizens. Agencies face budget reductions while dealing with escalating, unmanaged and opaque costs, particularly in the Information Technology arena. These reductions have been particularly challenging for the OCIO organization that is managing large-scale contracts. n n n n n Government challenges with Cloud Costs are escalating, unmanaged, and not transparent Managing IT suppliers is difficult and haphazard Projects do not progress or perform to expectations Insufficient flexibility to respond to business changes User perception of IT services is poor Government Cloud Goals Complete integration of legacy and new environments An easy and agile procurement Unified operating process Critical Success Factors End-to-end self-service hybrid model with OLA management Full hybrid provisioning, enabling arbitrage and aggregation Comprehensive, proven processes enabled by an end-to-end broker solution Transparent governance, financial performance and management Full featured solution uniting provisioning, operations and management 7

8 The Capgemini Approach for a Cloud Broker Model Capgemini suggests a broker model operated for a government agency can be successful under certain conditions. These include the following: Operational Freedom. The broker needs to be able to manage and change their operational capacities and paradigms to take advantage of new cost savings. As such, requirements from the government to utilize specific locations, hardware or software negatively influence the ability of a broker to be successful. Exclusivity for Offered Services. A broker adds value by normalizing the service levels, providing a bundled pricing model and acting as an intermediary for the service consumer (the agency). Of necessity, the broker needs to charge for the services it provides on top of the costs of the individual services because it adds additional value and reduces the cost of operation and total cost of ownership to the agency. A broker relies on economies of scale to achieve success. In order to make a broker successful, the agency has to be willing to allow the broker to be the exclusive provider of any service for which it acts as the intermediary. Otherwise, there is no reason why the overall service provider to the broker cannot provide a lower cost to the agency (because the broker adds overhead to cover the other advantages it provides) and essentially avoid using the broker. In such a case, the broker model breaks down because the agency fails to recognize the value of the service integrator model. Broad Contractual Availability. The broker needs customers to have the ability to easily acquire their services. As such, the more easily an agency can buy from the broker, the more likely the broker is to garner a wide array of customers and use that base to leverage pricing from its service providers. A brokerage model operated for the government can help realize the benefits of Cloud computing under certain conditions. Capgemini considers the benefits to include the following: Capacity on Demand. Hardware and software scaled to meet usage requirements that are dynamic and cyclical. Capacity on demand allows the government to pass the responsibility for acquiring, managing, updating and operating the hardware resources that it uses to carry out the tasks it has implemented as a service. Pay for Use Model. The costs of the services are based not on a hardware, software, license and maintenance model, but on a model that matches cost to consumption. Additionally, this new model does not require lengthy software contracts with multi-year commitments. Location Independence. Cloud computing relieves the need of the IT organization to purchase and manage space, cooling and power as well as to manage hardware, replacement of failed components, upgrades of end of warranty equipment, etc. Cloud computing replaces that need with a model in which the provider takes on the operating burden and leverages the economies of scale gained from multiple customers to provide a pricing model based on a simpler paradigm: consumption. These benefits can change the way the government obtains services from a traditional capital expense-based procurement to a more nimble, cost-contained operating expense. A Cloud broker augments these benefits by providing additional capabilities as follows: Single Set of Service Levels. When an agency or department procures services individually from a variety of vendors, it incurs excessive overhead in procurement and negotiation. Additionally, vendors may not all be capable or willing to provide the same levels of services, so a broker assumes the responsibility of managing these service levels and negotiating on behalf of the agency. Service Level Facade. A façade provides a level of intermediation, breaking the coupling of the agency to a particular service implementation. This approach allows the agency to change services quickly and to adopt new services with the assurance that if a better service is created later, it can be moved into the broker s model with minimum disruption. Operating Expense versus Capital Expense. In a Cloud broker model, start up/ramp-up cost is minimal, and the expenses associated with the service are incurred over time, rather than up front. This approach allows an agency to try new services with minimal investment and risk and allows costs from the beginning of a project to be distributed throughout the project. 8 Capgemini Government Cloud Broker:A Point of View

9 Who Should be a Cloud Broker Capgemini believes that a broker model operated entirely by a government entity is not an appropriate approach, nor one that will be successful. A broker by necessity has to operate at a profit, amalgamating services, driving costs down through volume agreements and leveraging unique intellectual property to achieve a value-added service. A governmental agency is not normally empowered as a money-making entity and almost always has a primary mission that does not include acting as a broker. Further, an agency does not usually possess the excess capacity necessary to accommodate large variations in service demand necessitated of a broker and would thus end up moving from a broker/cloud model to a hosting model. While a broker model can be successful, success is not a given. Aequate support for the broker vendor must be established. Failure to secure support for the brokerage concept and to endorse it over time results in an ineffectual brokerage model. Cloud brokerage is a relatively recent concept not pervasive in the commercial or government sector, although a similar facility has evolved over the years in the private sector through brokerage of Business-to-Business (B2B) services and integration of B2B processes. The concept is fairly simple: put an agent in between consumers of IT and the infrastructure that supports it. Looked at historically, this is an evolution, albeit a variation, of traditional broker services provided by an Application Service Provider (ASP), an outsourcer or a consolidated data center for an individual enterprise. Although Cloud brokerage evolves beyond these traditional provisioning methods, all shared service models introduce constraints that must be weighed against the consumer s business requirements in order to determine if brokerage services have sufficient value over point-to-point services delivery between consumer and Cloud provider. Roadmaps abound in both the public and private sectors for migrating applications to Cloud computing or for choosing a Cloud vendor, but relatively little guidance is available on how to choose or implement a Cloud broker. Cloud brokerage within the Federal government adds a new dimension to the Cloud computing strategies that gained significant attention in OMB s 25-Point Plan Point Implementation Plan to Reform Federal Information Technology Management, U.S. CIO, December 9, 2012, Figure 1: Cloud brokerage services in the Federal environment must comply with Federal regulations and laws as well as consider guidance and other formal recommendations. API Cloud Federal Cloud Computing Strategy API Federal IT Shared Services Strategy FedRAMP Memo Cloud Broker 25-Point Implementation Plan Federal Government End-User Cloud Cloud brokerage services in the Federal environment must comply with Federal regulations and laws as well as consider guidance and other formal recommendations. Cloud brokerage services in government environments have an added level of complexity. Additional Federal standards and requirements for Cloud services present challenges for a broker not necessarily present (at least not with the force of law) in the commercial sector. Meeting stringent Federal criteria, passing muster with review boards and processes, working in concert with Federal procurement practices such as the Federal Strategic Sourcing Initiative (FSSI) and aggregating demand must be factored into the value proposition for a Cloud brokerage arrangement. Federal security, interoperability, portability, reliability and resiliency are focal points of the FedRAMP, and Cloud environments must also pass review by the Joint Authorization Board (JAB). Many Federal agencies have FISMA compliance requirements for their infrastructures. The Managing Partner PMO described in the services model in the Federal IT Shared Services Strategy guidance plays a role that is similar to a broker, and would need to be reconciled with a Cloud broker. These and other Federal specifications factor into setting requirements for a Cloud brokerage service. A Cloud API FISMA Compliance Digital Government Building a 21 st Century Platform 9

10 Cloud computing s increasingly attractive and growing number of features, Federal shared services and Cloud first initiatives and directives, and the lack of consistent and uniform interfaces across Cloud providers, all point to a growing level of complexity that Cloud brokerage services can simplify for the Federal end user. broker must be able to balance all of the Federal requirements with what Cloud providers can deliver and still produce sufficient value through aggregation of services and reduced complexity in accessing and consuming those services as shown in Figure 1. The market for Cloud brokerage is emerging and remains somewhat immature, implying a certain level of volatility as brokerage services evolve. Cloud computing s increasingly attractive and growing number of features, Federal shared services and Cloud first initiatives and directives and the lack of consistent and uniform interfaces across Cloud providers all point to a growing level of complexity that Cloud brokerage services can simplify for the Federal end user. The Federal government, subject to substantial legal and governmental constraints, often requires premium services as opposed to commodity server and storage services and operates under strict procurement rules and governance requirements. Governance of Cloud services requires an intelligent approach to brokerage since the broker can see it all and be an integration point for reporting and management. Brokerage services also provide a venue for audit and Independent Verification and Validation (IV&V) of Cloud services. As the brokerage market is emerging, there are a variety of brokerage service builders and providers with no clear market leader. Observations on this market include the following: A common profile of a brokerage service provider is a boutique company leveraging B2B experience to develop Cloud brokerage services for a small number of customers (in some cases, one). Some vendors such as Intel, in partnership with McAfee, provide services and guidance on development of APIs and an API Economy that attempts to hide the complexity of multiple APIs interacting with multiple Cloud providers through automated API management through an API broker. It is common to see partnerships among vendors to offer a proof-of-concept (e. g., British Telecom in partnership with several other vendors), but the focus is on customization for specific client needs, a necessary approach the first time through. The ability to build standard components for Cloud vendors and weave them together into a simple, cohesive package could provide substantial reuse benefit. Profile of a Cloud Broker A single company with global reach and Cloud partners could offer substantial value in offering a brokerage of brokerages. A partner of substantial size and understanding of Federal requirements and procurement could build a brokerage service once with reusable parts that comply with Federal standards, leveraging Cloud partnerships to secure the best technical intelligence on Cloud APIs and other technical characteristics, and then deploy a similar service with reusable components to other agencies. The vendor must be adept at navigating the Federal waters with respect to developing a brokerage service that is interoperable and can be replicated across multiple Federal agencies. It is critical to build standardized services informed by Federal mandates and guidelines so that brokerage service deliverables are interoperable among Federal agencies. As brokerage services are replicated across the Federal government, the lessons learned with each implementation should be captured in a knowledge base to make each subsequent implementation faster and smarter. Capgemini Cloud Broker Experience Capgemini is a large systems integrator, providing consulting services to commercial and government clients. Because Capgemini serves the commercial market where the B2B services integration model is prevalent and similar to Cloud brokerage services, we can leverage our commercial experience and deep knowledge of Federal requirements, guidelines, governance, audit 10 Capgemini Government Cloud Broker:A Point of View

11 practices and procurement processes to produce a brokerage service that aligns perfectly to Federal requirements. Capgemini has a long history of outsourcing, hosting and infrastructure and applications management, in both the commercial and government (public sector) markets across the globe. Our experiences in managing multiple vendors in very large instances, such as our Aspire contract with Her Majesty s Revenue and Customs (HMRC) in the United Kingdom have helped us develop a sophisticated solution for Cloud Broker. We have honed this experience with other global customers in automotive, aerospace and defense, and manufacturing industries. Capgemini provides a variety of services including: - ITIL Based Service Management - Service Desk Solutions - Program Management - IT Security - Business Continuity - Disaster Recovery - Financial Management Capgemini is the integrator of multi-sourced services on behalf of the IT organization of one of the largest state governments in the United States. Capgemini provides Cloud Broker services as it looks to standardize its infrastructure processes and maximize the value of its IT services delivered by various suppliers. This program supports numerous government organizations across the state. Specifically, the team provides a variety of services including information technology infrastructure library (ITIL) based service management, service desk solutions, program management, IT security, business continuity, disaster recovery and financial management. Capgemini has also begun work at the state to integrate the Gravitant Cloud Platform into our solution to address provisioning and acquisition of Cloud services. The combination leverages Capgemini s experiences with Public Cloud providers such as AWS as well as Data Centers (which have evolved to act as Private Clouds), with the Gravitant platform s ability to plan and procure complex options in infrastructure. Together we provide end to end service for all IaaS / PaaS / SaaS needs. Conclusion Cloud capabilities provide tremendous opportunities for government agencies to transform their IT and CIO organizations, bringing the flexibility and agility the government seeks, with a pricing model that is dramatically more cost effective. The real world use of Cloud services can quickly become complex, and the use of a Cloud Services Broker who can arbitrate and aggregate services allows government agencies to reach the full potential of Cloud in their organizations. 11

12 Public the way we see it For more details contact: Sean Rhody Chief Technology Offi cer Capgemini Government Solutions About Capgemini With more than 130,000 people in 44 countries, Capgemini is one of the world s foremost providers of consulting, technology and outsourcing services. The Group reported 2012 global revenues of EUR 10.3 billion (more than $13 billion USD). Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience, and draws on Rightshore, its worldwide delivery model. Learn more about us at Copyright Capgemini All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Capgemini. The information contained herein is general in nature and is not intended, and should not be construed as professional advice or opinion provided by Capgemini U.S. LLC (Capgemini) to the user. While every effort has been made to offer current and accurate information, errors can occur. This information is provided as is, with no guaranty of completeness, accuracy, or timeliness, and without warranty of any kind, express or implied, including any warranty of performance. Rightshore is a trademark belonging to Capgemini.