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iii Contents
Contents
Introduction .................................................... viii
Acknowledgments ...................................................... ix
Errata, updates, & book support .......................... ix
Free ebooks from Microsoft Press ........................ x
We want to hear from you ...................................... xi
Chapter 1: The cloud, efficiency, and
innovation .......................................................... 1
Economics of the cloud ............................................ 2
Daily efficiencies .......................................................... 7
Innovation ................................................................. 7
Telenor........................................................................ 9
Aviva .......................................................................... 12
3M Parking Systems ............................................ 15
Heineken .................................................................. 18
Learnings ...................................................................... 21
iv Contents
Chapter 2: Journey to the cloud:
the roadmap ..................................................... 23
Don’t miss the opportunity to modernize ...... 27
Evolution of the five R’s of modernization ..... 30
Cloud migration: three stages ............................. 34
Chapter 3: Experimentation ........................... 37
Microsoft IT’s first cloud application ................. 37
Experimentation and the problem of
“shadow” IT ................................................................. 40
Chapter 4: Migrating IT to the cloud............. 47
Establish strategy and goals ................................. 49
Organizational responsibilities in
creating the strategy ............................................... 57
Enterprise architecture ....................................... 58
Information security and risk
management .......................................................... 61
Data classification ................................................ 65
Enterprise Risk Management........................... 67
Finance ..................................................................... 67
Operations .............................................................. 70
Human resources and the evolution
of roles ...................................................................... 74
v Contents
Applications teams .............................................. 78
Business units ........................................................ 81
Building the catalog ................................................. 82
Top-down portfolio analysis ............................ 84
Bottom-up portfolio analysis .......................... 87
The cloud migration plan ...................................... 92
Microsoft IT’s experience ....................................... 97
Cloud governance ................................................. 100
Data governance ............................................... 101
Financial governance ....................................... 103
Security and compliance ................................ 104
Change management ...................................... 105
Information Technology Infrastructure
Library and the cloud ....................................... 107
Chapter 5: Transformation .......................... 112
Platform as a Service architecture ................... 113
Containers and microservices ........................... 115
Storage ....................................................................... 117
Relational databases in the cloud............... 119
NoSQL (nonrelational) storage .................... 121
Analysis ...................................................................... 130
vi Contents
Integration ................................................................ 135
Using services to create rich end-to-end
applications .............................................................. 137
Conclusions .............................................................. 142
Appendix A: Cloud architectural
blueprints....................................................... 144
Data analytics .......................................................... 144
BI and analytics ....................................................... 148
Live media streaming ........................................... 151
Video on demand (VOD) .................................... 154
Line-of-business applications in
infrastructure services .......................................... 158
Hybrid cloud storage ............................................ 161
E-commerce website ............................................ 164
Business-to-business (B2B) e-commerce ..... 168
Multichannel marketing ...................................... 170
DevOps ...................................................................... 174
Appendix B: Sample technology
scenarios ........................................................ 179
Hybrid cloud scenarios ........................................ 179
Hybrid cloud connectivity .............................. 180
vii Contents
Using the cloud for data backup and
recovery ................................................................ 184
Hybrid database scenarios ............................ 192
Development and test ......................................... 193
Application development .............................. 194
Microsoft SharePoint ....................................... 196
High availability in the cloud ............................. 196
Connected devices ................................................ 200
Identity and authentication ............................... 203
Mobile applications .............................................. 207
Enterprise mobility management .................... 209
Websites .................................................................... 212
Azure Media Services ........................................... 214
Migration strategies .............................................. 217
Appendix C: Recommended references ..... 220
Storage references ............................................ 220
Application development and insights
references ............................................................. 221
Performance best practices references .... 221
Other cloud migration references .............. 223
About the authors ................................................. 224
viii Introduction
Introduction
When briefing CIOs and senior IT executives at
Microsoft, we are often told that migrating IT
workloads to the cloud ranks among their
highest priorities. That statement is almost
inevitably followed by “How do I start?”; “How
should I build a plan for cloud migration for my
entire portfolio?”; and “How will my organization
be affected by this change?”
This book, based on real-world cloud
experiences by enterprise IT teams, seeks to
provide answers to these questions. Here, you’ll
see what makes the cloud so compelling to
enterprises; with which applications you should
start your cloud journey; how your organization
will change, and how skill sets will evolve; how to
measure progress; how to think about security,
compliance, and business buy-in; and how to
exploit the ever-growing feature set that the
cloud offers to gain strategic and competitive
advantage.
ix Introduction
Acknowledgments
The authors wish to express their deep gratitude
to the following individuals for their support,
guidance, and their willingness to freely share
their expertise: Scott Woodgate, Javier Nino,
Tom Schinder, Venkat Gattamneni, Martin Vliem,
Ulrich Homann, Robert Hanegraaff, John
Devadoss, Brenda Carter, Michael Washam,
Zoiner Tejeda, Nadia Matthews, Rob Beddard,
Jeff Fryling, Kevin Gee, Colin Nurse, Raman Johar,
Walter Myers, Uwe Hoffman, Ashish Sharma,
Ashutosh Maheshware, Rich Nickerson, Michel
Declercq, Arlindo Alves, Dennis Mulder, and
George Moore.
Rob Boucher and Monica Rush created the
graphic representations of the blueprints in the
Appendixes.
Errata, updates, & book
support
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book and its companion content. You can access
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submitted errata and their related correctionsat:
x Introduction
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xi Introduction
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1 C H A P T E R 1 | The cloud, efficiency, and innovation
C H A P T E R
1
The cloud,
efficiency, and
innovation
Most people now agree that the
cloud has become a core element
of any enterprise’s technology
strategy. Indeed, in the past few
years we have seen the
conversation around cloud
adoption move from “if” to “when”
and “how.” It is, in short, a fact of
life.
Nevertheless, it remains one of the most
disruptive changes in computing in years, and it
is worth reviewing what makes the cloud so
compelling to enterprise IT. Its value proposition
2 C H A P T E R 1 | The cloud, efficiency, and innovation
is many-faceted, ranging from significant cost
savings over a traditional datacenter approach to
the ability to quickly build robust, resilient
applications that can scale up as traffic spikes,
and scale down as it recedes.
Economics of the cloud
In cloud computing, enterprises pay for what
they use, much as they would a telecom
provider. If demand decreases and you no
longer need capacity, you can turn off systems
and you are not charged. This simple model
stands in stark contrast to the traditional model
of enterprise computing, which is a capital-
intensive function, requiring expensive
datacenters, electricity, air conditioning, servers,
networks, storage, and 24x7 operations staff. For
most companies, maintaining a large IT presence
in this model implies large capital expenditures
and a nontrivial amount of accounting and
record-keeping to track depreciation, tax
considerations, and so forth. Moreover, when
you purchase the hardware and the software,
they become yours in every sense of the word.
Operations staffs are responsible for hardware
swaps, networks, backups, updates for operating
systems, and upgrades to the system software
3 C H A P T E R 1 | The cloud, efficiency, and innovation
and applications. The traditional model is a
“capital expense” model.
The cloud, being subscription-based, is an
operating expense model. In the cloud,
computing becomes a service for which
customers are billed a monthly charge. Like
other such services, it is metered by usage. The
more compute, network, and storage resources
that you use, the higher will be your bill. Of
course the reverse is also true: the less you use,
the less you are charged. Indeed, most IT
organizations find wide variations in system
utilization: some applications (for example, retail
shopping) are seasonal; other applications (for
example, training applications) run for a short
period of time before being shut down; others
are simply unpredictable. The cloud addresses
this variability (shown in Figure 1-1) perfectly via
its “pay for what you use” model.
4 C H A P T E R 1 | The cloud, efficiency, and innovation
Figure 1-1: Common application utilization models
(It is worth mentioning that in the on-premises
datacenter, the maximum utilization must be
planned for and provisioned, which is financially
far more inefficient than in the cloud.)
But, there is more to it. Operating in the cloud
frees enterprises of the mundane tasks of system
backup, network maintenance, patches, and
software upgrades, because the cloud provider
can handle these in their entirety. The cloud
provider in turn is heavily incented to utilize and
5 C H A P T E R 1 | The cloud, efficiency, and innovation
in many cases pioneer best practices for system
maintenance; the benefits are then passed to the
customer.
Moreover, cloud providers such as Microsoft can
achieve economies of scale by buying hardware
in massive bulk, tens of thousands of servers at a
time, for example. Very large datacenters hosting
public clouds can also achieve economies in
purchasing other resources; cloud datacenters
pay only a quarter of the average cost of
electricity in the United States. Figure 1-2 shows
how overall total cost of ownership (TCO) per
server declines dramatically at scale.
Figure 1-2: Economies of scale in the cloud
6 C H A P T E R 1 | The cloud, efficiency, and innovation
These savings can, and are, passed on to
customers of the cloud service.
1
Indeed,
although an IT department can certainly create a
private (internal) cloud of a thousand or so
servers, using the public cloud can result in
savings up to ten times!
2
Later, we will discuss how IT departments can
quantify the savings they can expect to achieve
by adopting cloud computing.
Perhaps most important, the cloud is not an
“either/or” proposition. It is certainly possible,
and indeed in many cases desirable, to leave
some applications running in a local, traditional
datacenter while others are migrated to the
cloud. Providers such as Microsoft have made
huge investments in this hybrid cloud model that
securely connects applications in the cloud to
those remaining in a customer’s datacenter.
1
See “Economics of the Cloud” at
http://news.microsoft.com/download/archived/presski
ts/cloud/docs/TheEconomics-of-the-Cloud.pdf
2
John Rex, CFO Microsoft North America, analyst
presentation
7 C H A P T E R 1 | The cloud, efficiency, and innovation
Daily efficiencies
After there is an on-demand computing service
available, all sorts of other efficiencies become
possible. For example, systems devoted to
development and application testing often
constitute a large cost area for IT departments,
yet in the end do not actually provide any direct
value to end users. With the cloud, developers
and testers can quickly allocate cloud-based
resources, use them for their work, and then free
them up when done. Similarly, with the vast,
capacious amounts of cheap storage available in
the cloud, data backup to the cloud, and across
multiple geographies if desired, becomes a
straightforward and inexpensive function. We
will cover more of these in the course of the
book.
Innovation
Of course, at the end of the day, the goal of any
enterprise strategy is to create competitive
differentiation and advantage, and little doubt
remains that IT has become a key element in
modern strategy. IT now drives transformative
innovation, enabling enterprises to compete
more effectively by instantiating processes that
deliver ongoing competitive advantage.
8 C H A P T E R 1 | The cloud, efficiency, and innovation
As we will see, the emergence of a global
computing cloud heralds the arrival of entirely
new classes of innovation across applications
and markets. Indeed, such new forms of
innovation can actually transform an
organization, and a business.
Transformational innovation drives a different
culture and mindset than most organizations
currently have. Affecting both IT and the
leadership of the enterprise as a whole, this
culture requires a close alignment between IT
and business leadership.
In the next few pages, we will examine a number
of case studies from various global companies,
all of which have reaped rewards by their use of
the cloud. The first, Telenor, shows how even a
simple migration of on-premises applications
can make it possible for it to be far more cost-
effective in its operations. The second, Aviva,
demonstrates how an insurance company used
mobile phones and the cloud to create an
innovative approach to dynamic insurance
pricing. In a third case study, 3M Parking
Systems opted for a cloud-based solution when
it needed a way to track its thousands of devices
in the field. Lastly, the beverage giant Heineken
chose the cloud as a way to deliver a global
media campaign tied in with the release of a
9 C H A P T E R 1 | The cloud, efficiency, and innovation
major motion picture, and the following year,
with major sporting events.
Telenor
The Telenor Group is a Norwegian
telecommunications company with worldwide
operations serving almost 150 million mobile
subscribers. To modernize its intranet and
collaboration sites and deliver better search
within and across business units, Telenor will
soon migrate from the Microsoft SharePoint
2007 web application platform to SharePoint
2013. With 13 different business units spread
across 12 countries, Telenor’s prime business
objectives were to improve collaboration and
best-practice sharing, bolster process efficiency,
and facilitate a more agile and responsive
organization. Through the enhanced capabilities
of SharePoint 2013, Telenor could also reduce
significantly the complexity and maintenance
cost of the 150-plus custom features installed on
its IT network. That network, with approximately
40,000 users, utilizes two SharePoint farms to
support more than 20,000 site collections, 70
web applications, and 100 content databases.
Telenor’s IT structure is highly distributed across
its business units, with ownership of corporate-
wide initiatives held by a central team at the
10 C H A P T E R 1 | The cloud, efficiency, and innovation
Telenor Group level. The various business units
are empowered to make the best decisions for
their particular business. Although this structure
fosters initiative, speed, and agility, it also results
in decreased company-wide integration between
business units (the classic IT tradeoff between
individualized flexibility and central control).
Telenor sought to balance and mitigate this
tradeoff by modernizing its shared infrastructure
and processes so that its business units could
still function independently but stay within an
efficiently managed, cohesive, company-wide
infrastructure.
To accomplish this goal, a Telenor project team
estimated that more than 80 servers, plus
additional servers for load and scale testing of
the architecture, would need to be brought
online as part of developing, testing, and
running demos of SharePoint 2013. The time and
cost of getting this huge infrastructure up,
tested, and operational was estimated to exceed
any reasonable timeframe and budget using
Telenor’s standard IT approach. Furthermore, a
SharePoint project of this size required a
significant amount of server infrastructure across
all environments, as well as inclusion of
Microsoft Active Directory and Exchange.
11 C H A P T E R 1 | The cloud, efficiency, and innovation
The project team quickly realized that it needed
to take a different approach.
Microsoft Azure Virtual Machines, which are built
on Azure’s Infrastructure as a Service (IaaS),
made it possible to quickly create the
development and testing environment essential
to Telenor’s successful deployment of SharePoint
2013. The expected three-month window to set
up the environment for a system of this size was
reduced to two weeks, a huge savings not only
in time, but in costs.
SharePoint 2013 is a sophisticated product that
integrates with other Microsoft products such as
Windows/IIS, SQL Server, and Active Directory.
With SharePoint 2013, both a scale-up and a
scale-out strategy can be adopted, meaning that
the different parts of SharePoint can have
multiple instances across different servers, either
virtual or physical. For example, if a network
needs more search servers, it’s simply a matter of
adding more servers running these components.
For Telenor, development and testing SharePoint
2013 in Virtual Machines meant that IT could
scale resources up or down, quickly and easily,
with no up-front capital expense.
“Because of Microsoft Azure Virtual Machines,
Telenor saved 70 percent on test, development,
12 C H A P T E R 1 | The cloud, efficiency, and innovation
and demo that could be turned off when
finished to minimize its capital outlays,” says
Marius Pedersen, associate systems architect,
Microsoft, Norway. “They loved how quickly they
were able to implement, and the scalability of
the solutions, all without the need for a huge
capital investment. There was simply nothing
else that could solve their overall big picture for
this deployment like Virtual Machines.”
“Testing a big new deployment like this is
essential to success, but development and
testing can take up a lot time and it normally
requires that we buy many extra servers that,
once testing is concluded, we don’t really need
anymore. And that costs us considerable money
and other resources,” declared Andreas
Høgberg, director, Telenor.
Aviva
A leading provider of insurance, savings, and
investment products, London-based Aviva serves
43 million customers worldwide. The company
wanted to design an innovative pricing model
that would reduce premiums for the appropriate
customers, but first it needed a better
understanding of driving habits. Traditionally, car
insurance premiums were determined not just by
13 C H A P T E R 1 | The cloud, efficiency, and innovation
the driver’s history, but also by statistical
probabilities, including age and gender.
Aviva sought a better approach. “We wanted to
give people an individual price,” says Jason
Vettraino, application architect at Aviva. “We
didn’t want to say ‘You’re in your forties, so you
must drive like my dad.’”
Until very recently, this kind of approach would
have required purchasing and installing
individual black boxes in vehicles to collect the
data and transmit it back to the company’s
datacenter, which would need to be scaled-out
to handle the increased storage and computing
capacity needed to process all the data. The
expense of this approach would have been
prohibitive.
Advances in consumer mobile devices and cloud
computing opened up new opportunities, and
Aviva realized it had alternatives to building out
its datacenter and installing black boxes in its
customers’ vehicles. “Suddenly in 2012, all of the
constraints we faced before had eased,” says
Vettraino.
Aviva looked for a hybrid cloudbased solution
that would take advantage of its customers’ own
mobile phones. The company needed a flexible,
14 C H A P T E R 1 | The cloud, efficiency, and innovation
highly scalable infrastructure that would
integrate with its existing on-premises quote
system as well as external web-based services
and secure applications running on those mobile
phones.
Aviva began refining its rating algorithm and
strategy for integrating social networks such as
Facebook and Twitter. Next, the company
worked with Microsoft Visual Studio 2010 and
the Microsoft .NET Framework 4 to build its
Aviva Drive app for mobile phones. The
development platform included Azure SQL
Database and the Azure Table storage service.
Developers also used tools in the Azure SDK
including Azure Compute Emulator and Azure
Storage Emulatorto test the solution.
In February 2012, Aviva began a 90-day trial
project with a fleet of commercial vehicles. The
vehicle operators used the app to compete
against one another and evaluate performance,
while Aviva tested scalability and data accuracy.
Satisfied with the results, the company then
worked on integrating the app with its on-
premises quote system.
In July 2012, the company released Aviva Drive in
a consumer pilot project that initially captured
driving data from a phone, stored the
15 C H A P T E R 1 | The cloud, efficiency, and innovation
information in Azure, and connected the mobile
app to the company’s website for insurance
quotes. Three months later, the app had real-
time connectivity with Azure so that it could
collect telematics information for the quote
process. Aviva officially launched Aviva Drive in
November 2012.
“By using a Microsoft Azurebased solution to
learn more about our customers’ driving, we can
help them save money,” says Vettraino. “After
drivers use our application and receive a score,
we can give them up to a 20 percent discount on
their premium.”
Being able to deliver a unique, personalized
pricing model based on data collected by the
customers’ own mobile devices (protected with
Microsoft Azure security and privacy controls)
provided a major competitive advantage. The
fact that this entire system was accomplished in
such a short amount of time is indicative of the
benefits of the close collaboration between the
business process drivers and IT.
3M Parking Systems
Minneapolis-based 3M Parking Systems had
recently purchased parking, tolling, and
automatic license plate reader businesses and
16 C H A P T E R 1 | The cloud, efficiency, and innovation
required better insight into these acquisitions.
Chad Reed, global business manager for 3M,
says: “With thousands of installations across the
world, we couldn’t keep track of our software
and hardware deployments, which made it
difficult to understand our market penetration.
3M wanted a tracking application that sales staff
could use to get real-time information about the
type and location of 3M products in parking lots
and garages. The solution had to provide access
to data anytime, anywhere, and from an array of
mobile devices so that it could be used on site
with potential customers.
The company chose Azure Mobile Services for a
secure, scalable platform that would easily
integrate and store data from 3M equipment
and other sources. It created native apps that run
on multiple mobile operating systems to display
real-time information about 3M installations
around the United States. Whenever a
salesperson enters new data, the information is
immediately available to others in the field
through Azure Notification Hubs, a push
notification engine in Mobile Services. The
solution also takes advantage of the mapping
and GPS technology built in to each mobile
device to automatically provide highly visual,
location-specific information.
17 C H A P T E R 1 | The cloud, efficiency, and innovation
In just two days, 3M created a tracking solution
that connects multiple types of mobile devices,
thousands of machines and data sources, and a
cloud platform. The 3M team credits its success
to a streamlined development environment.
“Integration with Xamarin Studio and Visual
Studio, along with built-in functionality, made
Azure Mobile Services the best choice for a
mobile-services back end,” says Jason Fox,
mobile application architect at 3M. “Having the
right tools and capabilities to put a stable,
robust, and functional solution together in two
days is a great story.”
“The platform provides us with an opportunity to
quickly scale a full solution and provide updates
within a very short response time,” says Jason
Rivera, manager of product development at 3M.
"The benefits of the Azure Mobile Services
platform place the power in the hands of our
development team.”
With real-time access to data on mobile devices,
3M sales teams can work more efficiently. “The
number-one benefit to the sales teams is ease of
use,” says Fox. “With apps powered by Azure
Mobile Services, they can immediately see where
we have equipment installed without having to
call a home office.”
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