App and Datacenter

Modernization – The

Evolutionary Step in

I.T. Optimization

Mini-Book Strategy Series –

Book 4

Authors: Rand Morimoto, Ph.D.,

MCSE

&

Chris Amaris, MCITP, CISSP

ii

Copyright © 2016 Rand Morimoto & Chris Amaris

All rights reserved.

ISBN: 1537664999

ISBN-13: 978-1537664996

DEDICATION

I dedicate this book to my kids Noble, Kelly, Chip,

and Eduardo - Rand Morimoto

I dedicate this book Sophia and our 5 children, Michelle,

Megan, Zoe, Zachary, and Ian. - Chris Amaris

v

ACKNOWLEDGMENTS

Thank you to all of our clients whom we’ve worked

with over the past 4-years modernizing their

applications and laying the foundation of the best

practices that we share with others today. What

works best always starts with early adopters and

strategic implementers, and we’ve been fortunate to

have many organizations that have leveraged the

latest technologies to formulate a definitive process

of what works and what doesn’t. The results of

these efforts is what has been provided in the pages

of this book.

TABLE OF CONTENTS

Mini-Book Strategy Series – Book 4...................................i

DEDICATION..................................................................iii

ACKNOWLEDGMENTS...................................................v

TABLE OF CONTENTS..................................................vii

INTRODUCTION.............................................................1

1 Identifying the Need for Change.................................3

Legacy Targeting of Buying, Building, and Running

Systems........................................................................4

I.T. Like the Package Delivery Industry......................4

Optimized for Self-Sufficiency.....................................5

Internalizing the Cost of High Availability and

Disaster Recovery........................................................5

When Overhead Exceeds the Facility for Utility.........6

2 Cloud Brought About Better Ways of Doing I.T...........7

Paying for Services You Use........................................7

Economies of Scale......................................................8

OpEx vs CapEx.............................................................9

Bypassing Cloud Wannabe’s........................................9

Consolidated Investments and Expertise..................10

When Cloud Scale Equates to Cloud Reliability.......10

3 The Hybrid Strategy – Not Just Migrating to the

Cloud..............................................................................13

Cloud as an Option, Not the Total End Goal.............13

Focusing on App and Datacenter Modernization.....14

The On-Premise Model for Legacy Applications.......15

Potentially Migrating Core Secure Apps Last...........15

The Larger the Enterprise, the More Likely the

Hybrid Model for I.T...................................................16

Planned and Coordinated Transitions to

Modernization............................................................17

4 Focusing on the Application, Not the Server............19

Over Emphasis on I.T. Infrastructure........................19

The True Cost and Overhead of “Server” Operations

....................................................................................20

The Total Cost of Running a Server-based I.T.

Environment...............................................................21

The Case Study of Email as a Service.......................21

The Case Study of Websites as a Services................22

5 Application Modernization.........................................23

Replacing Server Focused with Application Focused

Services......................................................................23

Software as a Service for Commodity-based

Applications................................................................25

Email as a Service (Office 365 / Google Mail)..........25

CRM as a Service (Salesforce.com)..........................27

File System as a Service (Box, DropBox, OneDrive) 27

Choosing Functionality over Product Brand.............28

Running On-Premise for a Period of Time................29

6 Datacenter Modernization.........................................31

Getting to the Rest of I.T............................................31

Leveraging Identity as a Service...............................32

Transitioning the Rest of the Datacenter Isn’t a One

for One Process..........................................................33

Simplicity of IaaS.......................................................34

Where PaaS Fits In for Datacenter Modernization. .35

7 Strategy Planning for App and Datacenter

Modernization...............................................................37

Developing a Methodical Process for an Optimized

Transition...................................................................37

Inventorying Current Applications............................38

Assessing Employee Tasks and Technology Usage...38

Preparing an Initial Gap Analysis..............................39

Identifying More Effective Apps and Services for

Employees..................................................................40

Building a Transition Plan.........................................40

8 Budgeting for Modernization.....................................43

Assessing Transition Costs Relative to Traditional

Version Migration Costs............................................43

Assessing CapEx and OpEx Costs in the New World of

I.T................................................................................44

Comparing Overall Costs to Historical Costs of I.T.. 45

Creating an ROI Analysis for the Modern App and

Datacenter Environment...........................................46

Calculating the True Runtime Needs of the Systems

....................................................................................46

Summarizing the Business Benefits of the Modern I.T.

Environment...............................................................47

9 Rethinking Monitoring and Management Services. .49

The Evolution of I.T. Management in the Modern App

and Datacenter Environment....................................49

Reassessing the Need for Patch and Update

ix

Management..............................................................50

Evaluating Monitoring and Management an “As a

Service”......................................................................51

Handling Downtime and System Faults in a Modern

Environment...............................................................52

Addressing Security in a Broadly Distributed I.T.

Model..........................................................................53

10 Retraining Personnel for the New World of I.T.......55

The Decline of the Buy, Build, and Run Model.........55

Focusing on Leveraging Functionality of SaaS Model

Applications................................................................56

Focusing on Customization of PaaS Model

Applications................................................................57

Enabling More Time to Focus on Monitoring and

Security Tasks............................................................57

Focusing on End User Productivity...........................58

Embarking on Data Analysis and Predictive Learning

on Opportunities........................................................59

11 Summary..................................................................61

ABOUT THE AUTHORS................................................63

x

INTRODUCTION

It has become clear that Cloud Technologies are not a

short term fad nor technological solution relegated to a

small subset of business solutions. Rather, cloud

applications like email in the cloud leveraging Microsoft’s

Office 365 or Google for Business, or client relationship

management in the cloud with Salesforce.com, and even

datacenter solutions utilizing Amazon AWS and Microsoft

Azure have become mainstream core business solutions.

As organizations plan out their 12, 18, and 24 month

I.T. plans, technology architects have to consider cloud

solutions as a probable fit for their business needs.

However, the focus of this book is not on “migrating to

the cloud,” but rather “modernizing Applications and the

Datacenter.” The difference is focusing on updating

internal I.T. technologies that leverage the best near term

and long term solutions available, than simply believing

that everything needs to go to the cloud.

What we’ve found over the years is that the Cloud does

provide some very good solutions and benefits for

organizations. Microsoft’s Office 365 email and

Salesforce.com are good examples of solutions that work

better as hosted shared services than what a typical

organization can afford to implement, manage, and

support on their own.

There are many solutions that organizations have

moved to the cloud however that all they’ve done is

bundle up a relatively ineffective solution on-premise,

and moved that inefficient application to run in the cloud

as a hosted virtual machine. Same application, same

problems and inefficiencies, but just running in a

different datacenter environment.

The focus of this book is to provide best practices and

lessons learned in building the strategy to modernize

organization’s applications and datacenter operations to

take advantage of the most appropriate solution

available. The solution may be a cloud-based application,

1

or the solution may be an on-premise solution. This book

will provide guidance on the decision points and best

practices in developing the modernization strategy.

2

1 IDENTIFYING THE NEED FOR CHANGE

The technology industry tends to introduce a major

new model of computing every 5-7 years, and goes

through significant changes every 12-15 years. The

recent 5-7 year changes have included the introduction

of the smart phone and tablet to the compute

environment, along with mobile and web applications.

The major changes over the decades have been the

evolution of centralized mainframe computing to desktop

local area network attached computing to mobile and

cloud-based computing.

3

IDENTIFYING THE NEED FOR CHANGE

This latest evolutionary change of cloud-based and

mobile-device based computing has now taken hold, and

enterprises are now looking to fully develop their

strategy to integrate core cloud and mobile technologies

in their workforce environment.

Legacy Targeting of Buying, Building, and

Running Systems

For many, the idea of changing a well-developed and

proven I.T. strategy to something new or different is

challenging. We have spent years developing a process

that now works extremely well. We buy, build, and run

systems that has reliably kept the I.T. services in our

organizations running for years.

This new model of cloud services removes the buy,

build, and run process from our internal I.T. personnel,

and requires us to rely on someone else to maintain the

critical I.T. services for our organizations. Mobile

computing extends the security of our organizations

beyond the desktops and laptop systems that we’ve

gotten good at locking down and managing.

However, cloud and mobile computing has proven why

this buy, build, and run model is no longer the most

efficient or effective business model for organizations

today and into the future.

I.T. Like the Package Delivery Industry

A common analogy used to describe the dramatic

changes being undertaken in the changes in the

technology industry is a comparison with the product and

package delivery industry. Years ago, if you

manufactured a product in a small town, you would

package the product up, put it on one of your trucks, and

deliver it to the marketplace or to your customers

directly. As the organization grew, the business would

buy a bigger truck or more trucks to move their goods

around.

This do-it-yourself shipping model worked great when

the organization was able to string together

marketplaces and routes that made the delivery of their

goods efficient. However, as the organization expanded

to new markets, with ups and downs in deliveries to

4

APPLICATION AND DATACENTER MODERNIZATION

small marketplaces or individuals across the country or

around the globe, the do-it-yourself shipping model was

no longer effective.

However, in the past 3 decades, package shipping

organizations like UPS and FedEx came about that

allowed an organization to ship 1 item, 5 items, 500

items to virtually any marketplace. Organizations were

able to effectively shift the reliance of one of the most

critical aspects of their business (the delivery of their

products) to another organization who was better setup

and more efficiently delivered their products.

These package delivery companies allowed

organizations to get out of the shipping and

transportation logistics business, and refocus on their

core product and services. The package delivery

companies were better focused at optimizing

transportation costs, served great marketplaces, and

more efficiently fulfilled on a key components of

organizations in the final delivery of their products.

Cloud computing has also transformed the delivery of

application functionality to be an optimized service model

than a do-it-yourself model. While early providers of

cloud services did not have the discipline or rigor for

reliability and security, nor the scale to optimize the cost

of the service, we’re now at a point where core cloud

providers are integral in providing key business services

just like UPS and FedEx are depended on for providing

key product delivery services.

Optimized for Self-Sufficiency

Just as the analogy describes a clear example of an

optimized operational model for shared services, it

becomes more and more clear how I.T. organizations

have built out a business model of extreme self-

sufficiency that is the clear driving force of why change is

needed in the industry.

I.T. best practices over the past decade have developed

a model where each and every I.T. organization created

their own datacenters built on internal systems that had

layers of security and redundancy. When the public

power grid wasn’t sufficient enough in terms of power

5

IDENTIFYING THE NEED FOR CHANGE

reliability, battery backup systems were put in place to

maintain system operations. When battery backup

systems weren’t sufficient enough to maintain the

operations of the I.T. systems during an extended outage,

diesel generators were added to the operational

datacenters. And when a single site wasn’t sufficient

enough in the event of a site failure, all of the business

systems were replicated in a redundant datacenter with

self-sufficiency built into that redundant center to

maintain operations.

I.T. best practices over the past several years has

meant every organization’s I.T. department had to be

independently ready to withstand the 30-year flood, the

once in a lifetime earthquake, and the traumatic

shutdown of the power grid.

Internalizing the Cost of High Availability

and Disaster Recovery

As touched on in the last section, every single

organization has been building their I.T. operations with

self-sufficiency, including high availability and disaster

recovery built in to their operations. When one is good,

two is better, and three is even better than that. It’s not

necessarily “I.T.’s fault” for this level of redundancy as

every I.T. organization has experience being “yelled at”

when a system is down and the organization is losing

“millions of dollars a day” because of the failure. It has

been I.T. managements responsibility to “do whatever is

necessary” to ensure the core business systems are

operational 24 x 7 x 365.

However, it is this internalization of cost of this high

availability and disaster recovery that has made basic I.T.

services so expensive for each organization to fulfill on

their own. We’ve finally crossed that barrier where the

value provided by I.T. doesn’t completely match the

extreme cost it takes to provide the services when other

alternatives, like cloud services, have become available

that provide organizations an alternative to their internal

services.

Back to the analogy of the business person shipping

and delivering his own goods, while he was making a

6

APPLICATION AND DATACENTER MODERNIZATION

certain type of widget to sell to customers, a major

portion of the business investment went into the delivery

trucks to deliver the goods, and the spare trucks and

spare truck drivers standing by just in case the primary

trucks and drivers were unable to fulfill on deliveries,

and a third spare of trucks and drivers in case a localized

event prevented the primary and secondary trucks and

drivers from fulfilling on their responsibilities. All of this

investment placed in the delivery of basic services that

have nothing to do with the core line of business for the

organization.

When Overhead Exceeds the Facility for

Utility

And the last piece on this commentary on why a

change in I.T. is needed is around the general overhead

that it takes to run application services for an

organization. This has become very evident in

organizations that have moved most or all of their

applications to a cloud-based model. What is left in these

organizations are dozens of servers and systems of

“management systems”. Things like domain controllers,

DNS name servers, DHCP servers, patching servers,

software deployment servers, backup servers, monitoring

servers, intrusion detection servers, management console

servers for each application, management console

servers for the management system, etc, etc, etc.

As organizations have optimized their applications and

datacenter operations, the number of servers and

systems leftover to simply run and manage the

management systems showed how much overhead exists

in datacenters today to simply provide basic application

services.

We’ll get into more specifics in subsequent chapters,

and how to best optimize I.T. operations today and in the

near future to truly improve and modernize application

and datacenter operations.

7

2 CLOUD BROUGHT ABOUT BETTER WAYS

OF DOING I.T.

Cloud provided services are no different than any

other specialized operational service. The more you do

of it, the better you get at it. And if it is your line of

business that your organization will make or break based

on its success, then the efficiencies and effectiveness of

the service will be optimized over time. Just as each

enterprise has individually developed and optimized its

I.T. operations multiplied by the hundreds and thousands

of organizations doing the same thing worldwide, cloud

providers simply extend the volume, capacity, scale, and

efficiencies to extend their services to support hundreds

of thousands and millions of users.

8

APPLICATION AND DATACENTER MODERNIZATION

Paying for Services You Use

Cloud services have been about paying for services

you use, just like the package shipping industry that

allows you to pay for 1-day, 2-day, 3-day shipping times,

add in insurance options, and add-in specialty services

like morning delivery, Saturday delivery, proof of delivery,

and the like. The whole concept is that you pick and

choose what you want to buy, pay for those services, and

choose to have some services one way, and other services

another.

The application cloud service industry will still see a

shake-up in this type of services arrangement, just as

every other service industry ultimately optimizes to an a

la carte in addition to their bundled offerings. Today, the

nature of most cloud service providers is to bundle

together more and more services, thus raising the

“value” and the cost of their bundled services for things

you may or may not want. Pricing models have remained

the same over the past 3-4 years more than have dropped

through what would be expected over time, however as

other providers enter the market and provide more a la

carte services, we’ll eventually see more competitive

individualized pricing.

This is similar to the mobile phone service industry

where mobile phone prices have gone up over time as

providers bundle in more data services, unlimited

nationwide calling, “friends and family” plans, and the

like. However, with pressure from Internet-based

telephony providers (like Google Hangouts, Office 365

Cloud PBX, Skype, Viber, WhatsApp, etc) and

metropolitan area WiFi service providers, the traditional

mobile phone carriers are unbundling services and

working to compete for business again.

Bottomline, cloud services open the way for individuals

and organizations to pay for services and eventually only

the services they use and need.

Economies of Scale

Ultimately, the business model for cloud is an

Economics 101 “economies of scale” model. A

consolidated organization doing the same thing for a

9

CLOUD BROUGHT ABOUT BETTER WAYS OF DOING

I.T.

thousand companies should be able to do it more

efficiently and effectively than a thousand companies

each doing the same thing on their own. Because an

organization whose sole business is to provide reliable,

secure, and effective services is dependent on that

quality of service, they will be driven to invest at levels to

ensure they will retain the trust of their customers and

ultimately maintain their customer base, if not expand

their customer base from their quality and reputation.

Just as internal I.T. organizations have invested in server

redundancy, storage redundancy, and site redundancy, so

will the cloud hosted providers.

However, unlike a thousand organizations each

building out this redundancy and reliability for just their

organization, the cloud provider will spread this

redundancy, security, and operational cost across

hundreds or thousands of companies, thus ultimately

driving costs down, while driving reliability and security

up.

OpEx vs CapEx

The cloud services model changes the cost model for

organizations from one of major expenditures that are

Capital Expenses (CapEx) of hardware, software, and

datacenter infrastructure costs, to that of a monthly

Operational Expense (OpEx) model. As much as I.T.

budgets have been typically consistent with a base cost

plus typically an annual cost increase each year, inside

each I.T. budget are large swings in major upgrade

expenses that have been staggered over 2-3 years.

Organizations have picked a handful of their applications

to upgrade every year, rotating out the upgrades in these

2-3 year cycles, whether it’s a major email system

upgrade every 3-5 years, or the purchase of a new

Enterprise Resource Planning (ERP) system or

Accounting software system every 5-7 years, or a major

upgrade of a database system every 2-3 years.

Organizations have had major outlays in capital

purchases to maintain the operations of their reliable and

secure I.T. environments.

The shift from hardware and software purchases to a

10

APPLICATION AND DATACENTER MODERNIZATION

subscription model common of cloud services shifts the

budgeting from staggered major expenditures to a

regular monthly cost. Organizations can now calculate a

monthly cost of application services on a per employee

basis. Financially, this subscription model shifts

organizations into an operational expense model instead

of a capital expense model, and provides organization the

ability to more easily budget for I.T. expenses based on

these monthly subscription fees.

Bypassing Cloud Wannabe’s

In the early days of cloud and application services, it

was difficult for I.T. executives and personnel to truly

depend on the reliability, security, integrity, and

dependability of the cloud providers. There was a period

where anyone and everyone in the I.T. industry overnight

became a “cloud provider”. While their product hadn’t

changed, all of a sudden their applications were

marketed as “ready for the cloud.” The reality is the

same application built for a 1000-person company was

now being touted as an application that could scale and

support 100,000 or a million users. These “wannabe

cloud providers” gave the entire sector a bad reputation

when the early clouds failed for hours or days, had

security breaches, or didn’t provide the level of

price/value that was touted by the provider.

While not to say that all of these wannabe cloud

providers are gone, enough major cloud providers have

matured and are now on their second, third, or fourth

generation of software, built specific for cloud scale,

cloud security, and cloud reliability. These mature cloud

providers have improved if not perfected their models for

rolling upgrades and updates, defense in depth security,

and operational efficiencies.

As the competitive nature of the market economy

eliminates inefficient and ineffective service providers,

greater confidence can be placed in the surviving

organizations servicing the marketplace.

Consolidated Investments and Expertise

Over the past few years as cloud providers have

11

CLOUD BROUGHT ABOUT BETTER WAYS OF DOING

I.T.

evolved their product and service offerings, a clear

consolidation of investments and expertise into a defined

set of providers has taken place. Instead of email system

experts in every single company in the world managing

their own messaging system, the top email experts have

consolidated into working at or working with the major

cloud-messaging and communication platform hosted

providers.

Instead of every organization having their own internal

security experts that span 20-30 core business

applications, each organization now has their security

experts focused on 5-10 core internal business

applications, with oversight of the security of their

hosted cloud applications. A greater number of security

experts now work within the hosted cloud provider

organizations doing internal security for the major cloud

providers, as well as third party security experts

performing external audits, reviews, assessments, and

support of the major cloud providers.

The industry still needs experts and top run

operations, however the experts are consolidated into

fewer individual organizations, with a similar

consolidation of investments in these I.T. operations

serving millions and tens of millions of users, not simply

hundreds and thousands of users.

When Cloud Scale Equates to Cloud

Reliability

And lastly, cloud scale means that hosted cloud

providers have a true investment in their operational

success that is dependent the reliability of services to

their customers. Just like if a package delivery company

lost packages or was not dependable in delivering

packages on time as expected, the organization wouldn’t

stay in business very long.

Cloud scale with the consolidation of investments and

expertise has taken operational reliability to a higher

level. I.T. organizations for years have touted their

uptime as 99.99% or 99.999%, but effectively cheated in

their calculations. For example, most organizations have

not counted “planned downtime” in their uptime

12

APPLICATION AND DATACENTER MODERNIZATION

numbers. If they do system maintenance every 2 weeks,

and everyone in the organization knows that the

maintenance will be happening, that would not count

against the organizations uptime statistics. For internal

organizations, they would be able to pick a time that is

convenient for the organization where this planned

downtime could take place (weekend, evening, middle of

a quarter, etc).

Other organizations have completely cheated the

statistics by deferring all maintenance, upgrades, or even

server reboots to report they have had NO downtime.

We’ve seen some organizations run 2-3 years without

doing any system maintenance, which sounds great when

they can tout 99.999% uptime, but eventually the

systems do fail, and in many cases the servers don’t even

come back online and the organization suffers several

days of unplanned outage time.

However, in the cloud environment, an evening or

weekend for a traditional business may be a perfect time

for planned downtime, however for an organization

servicing the public during weekends or evenings, or

emergency services organizations servicing the public 24

hours a day, 7-days a week would find that evening and

weekend cloud disruption to be significant. As such, true

cloud providers have no “good time for planned

downtime,” and cloud providers typically calculate a true

uptime metric that includes planned and unplanned

outages.

Thus, the key hosted cloud providers have developed

processes that allow them to “roll out” upgrades and

updates across all users and organizations without

bringing the service to a halt. Cloud scale has truly

produced cloud reliability as a key tenet in defining a

long term successful hosted cloud provider.

13

CLOUD BROUGHT ABOUT BETTER WAYS OF DOING

I.T.

14

3 THE HYBRID STRATEGY – NOT JUST

MIGRATING TO THE CLOUD

As much as the first couple chapters of this book have

focused on talking about hosted cloud applications, or

cloud computing, in reality, the cloud is just ONE option

for the target destination of application modernization.

Just as the title of this book denotes, the goal is

application and datacenter modernization, not cloud

migration. A hybrid strategy that includes some

applications that remain on-premise, and some

applications that are migrated to the cloud have been

found to be the norm for organizations modernization

their I.T. operations.

Cloud as an Option, Not the Total End Goal

15

THE HYBRID STRATEGY – NOT JUST MIGRATING TO THE

CLOUD

The end goal for any I.T. organization is to truly

optimize their I.T. operations. In basic economic terms,

I.T. should leverage the most efficient and effective

services that fulfill on the business requirements of the

organization at an optimized cost. Early cloud solutions

did not meet the security or reliability requirements of

many organizations, and thus 2 or 3 years ago, the cloud

wasn’t the best solution for many of these organizations.

However, over time, the cloud providers have improved

and optimized their services, and are now providing

mature, highly secure, and reliable services that

organizations have to seriously consider as part of their

application modernization initiatives.

Many organizations have tried to bundle up their

existing highly customized applications, forklift them into

the cloud, and then run them in a cloud hosted

environment only to find that the cost of running the

application isn’t cheaper and in many cases significantly

more expensive to run a specific application outside of

the internal datacenter. In those cases, cloud was not the

best choice for a cost or performance perspective. There

are several factors in assessing the true efficiencies of

the application and datacenter modernization plan that

are highlighted throughout the text of this book.

Focusing on App and Datacenter

Modernization

When the title of this book “Application and Datacenter

Modernization” is clearly defined, it’s not about taking

100% of everything being run on-premise today and

moving of it to the cloud. The focus on modernization is

to clearly assess the use of the application, preferably

working from the perspective of the users themselves to

determine WHAT the users can most effectively use in

their day to day responsibilities.

In early engagements in Application and Datacenter

Modernization efforts, in some cases it was found that

many employees don’t find the applications they are

using particularly helpful in completing the tasks of their

jobs. Whether that application is on-premise or in the

cloud, an ineffective application is an ineffective

16

APPLICATION AND DATACENTER MODERNIZATION

application for these users. When the day to day tasks of

a user is assessed and analyzed, a completely different

application is found to be more applicable for those

users.

In some cases, the idea of “modernization” has been to

completely replace an existing on-premise application

with a completely new and different application. In other

cases, a Software as a Service (SaaS) application exists

that the users are able to take advantage of that is

immediately available and provides significant value to

the users. Key SaaS examples include accounting

applications, client relationship management

applications, and human resource management

applications.

Many organizations have been using the same

accounting software for years, repeatedly upgrading the

software every 5-10 years, but finding the function of the

general ledger, accounts payable application, and

accounts receivable application being sufficient for the

organization. However key integration components like

time and billing systems, expense report systems, client

management systems, project costing, and cost

accounting systems integrated into the application are

frequently found to be grossly inadequate. The modern

SaaS applications have evolved to provide extensive

features and functions that enable employees using

tablets or mobile phones to quickly enter their

timesheets or file expense reports without having to sit in

front of a “computer” and a legacy “web browser”,

instead getting key components of their work done from

a readily available mobile app.

It’s this type of thinking, assessment, analysis, and

business optimization that truly modernizes how

organizations improve their business bottom-line. It’s

that shift from a legacy on-premise application to do the

same thing in the cloud that might be more up to date,

more functional, and easier to support that is advancing

the organization into a modern application environment.

The On-Premise Model for Legacy

Applications

17

THE HYBRID STRATEGY – NOT JUST MIGRATING TO THE

CLOUD

One key example of applications remaining on-premise

rather than being simply migrated to the cloud are very

old customized legacy applications. Some organizations

have spent months updating the code or rewriting their

legacy applications to support a cloud-model without a

lot of thought into understanding how the application is

used, and whether the application in its legacy form (now

migrated to the cloud) actually serves the organization.

Instead, the application should be assessed, users of

the application interviewed to determine “who” uses the

application, “what” they use the application for, and

“whether” the application actually serves a valuable

function to the organization. Or could the same function

and utility be achieved with a different application

altogether?

With all the applications a typical organization has, it

is these old legacy applications that are frequently best

off being assessed and dealt with last. The organization

can gain more traction and better time utilization by

focusing on other applications that may be more

effectively migrated to the cloud or modernized, and

circle back to these legacy applications later.

These legacy applications may be good candidates to

just continue to have them run on-premise, and thus a

clear justification of a hybrid model where applications

are migrated to the cloud, modernized to a new model, or

just left on-premise as the near term strategy of the

organization.

Potentially Migrating Core Secure Apps Last

Another key set of applications that are best to leave

on-premise are applications that have extremely high

security or regulatory compliance requirements wrapped

around the application. Rather than spending months

trying to create the ultimate secure cloud environment,

an organization can better allocate their time and efforts

identifying and migrating “all the other applications” in

the enterprise that are easier or cleaner to modernize

and migrate, and leave the more complex or compliance-

restricted applications on-premise to be the last to deal

with in modernizing and migrating.

18

APPLICATION AND DATACENTER MODERNIZATION

This strategy has proven successful for enterprises as

they move email, file collaboration, backup systems,

intranet content, accounting software, and the like to

cloud-based systems, gain experience with the cloud

providers for their reliability and security features, and

then make more informed and easier decisions down the

line on core specialized applications.

The Larger the Enterprise, the More Likely

the Hybrid Model for I.T.

Small organizations with fewer than 300 employees

have been successful in modernizing almost “all” of their

application and datacenter services into the cloud within

a few months with the initial migration of core business

productivity applications to Office 365. Subsequent

migrations have included initiatives to move the

accounting and line of business applications to a SaaS or

IaaS VM-based cloud model, and finally leveraging

hosted endpoint and server management tools thereafter.

But the larger the enterprise, the longer it will take to

modernize and optimize applications and the datacenter.

It’s clear that the modernization process could take

months or even years to complete and, as such, a hybrid

model is the norm for these larger enterprises.

A huge challenge for large enterprises is simply

getting around to all of the application owners across

hundreds of applications to do the business analysis

assessment of who uses the application, what the

application is used for, and whether there is a better way

of handling the application with an off the shelf SaaS

application, a refactor to a PaaS application, the simple

migration of the application to an IaaS virtual machine in

the cloud, or whether the application should just remain

on-premise.

However, despite the fact that larger enterprises are

more complicated and will take longer to modernize their

applications and datacenters, this doesn’t mean that the

large enterprises cannot benefit from the cloud

economies of scale. Quite the contrary, the larger the

enterprise, the more inefficiencies exist in terms of

duplication of similar application function and services,

19

THE HYBRID STRATEGY – NOT JUST MIGRATING TO THE

CLOUD

or simply just the operations, support, and management

of “systems” that are either under-utilized or even not

used at all. In one environment assessment, it was found

that of the 480 applications identified by the

organization, 120 of the applications were running on

servers, backed up daily, and configured for replication

and high availability, yet NO users actually used the

applications any longer.

So an analysis and assessment for organizations of all

sizes nets out a significant benefit simply by optimizing

I.T. operations and business services to meet the current

needs of the organization.

Planned and Coordinated Transitions to

Modernization

We’ve likened Application and Datacenter

Modernization efforts to the work done almost a couple

decades ago in Y2K assessments, where every application

in the organization is identified, key application owners

are identified, and the purpose and use of the application

identified. In a very methodical process, an organization

can quickly identify how application and datacenter

modernization can be conducted in the organization, with

categorization of applications that will be the easiest to

modernize, versus applications that fit in the category of

not appropriate to modernize (or be prioritized last), and

everything in-between.

This planned and coordinated transition process can

take an organization months or even years to complete,

with some logical milestones that include modernizing an

application during a typical migration or upgrade cycle.

So if an application is upgraded every 4-years and the 4th

year comes along, rather than just upgrading the

application to the next on-premise version, instead take

that opportunity to assess and modernize the application.

Without additional cost, effort, or commitment to time

historically allocated for application upgrades and

updates, the organization can more rapidly transition to

newer, more appropriate and effective applications. The

next chapter gets into more specific details on how the

assessment is done, and how the transition process is

20

APPLICATION AND DATACENTER MODERNIZATION

typically completed.

21

THE HYBRID STRATEGY – NOT JUST MIGRATING TO THE

CLOUD

22

4 FOCUSING ON THE APPLICATION, NOT THE

SERVER

So far we’ve identified the impetus to modernize

applications and the datacenter, and when modernization

might not be applicable or better deferred. Now we’ll

get deeper in the assessment and costing process that

will help prioritize and justify the strategy and execution

of the modernization process.

Over Emphasis on I.T. Infrastructure

One of the first steps in developing a strong strategy

to modernize applications and the datacenter model is to

separate oneself from the entrenched personal

investment in the current I.T. model and methods of

service delivery. By starting with a completely new slate

23

FOCUSING ON THE APPLICATION, NOT THE SERVER

in planning the future I.T. model, the architecture can be

based on what is best for the organization, and not try to

work backwards into making the future I.T. model fit into

the old model of I.T.

As we started off this book, the current I.T. model was

built on a buy, build, and run model based on the premise

that I.T. has to be self-sufficient, and remain operational

(onsite and in hot or standby datacenters) in the event of

a system fault or site failure. The current architecture

overemphasizes this model of I.T. infrastructure that

ensures every aspect of the architecture is highly

reliable, redundant, and over capacity. The current

model is likely built on over engineered hardware, with

redundant components, replicated appliances, and

mirrored servers, and redundant applications designed to

keep everything running 24 x 7 x 365.

Every single component has to be made redundant and

highly available, however when you think about it, all

you’re looking for is the application to remain highly

available. Business people don’t say they want the

application to have synchronous replicated databases,

RAID-10 storage, fiber channel connected pipes, and

meshed network redundancy. The business people in the

organization simply say they want the application to

always be available, period. If we start with THAT

premise of application continuity, and move away from

the thinking of the bits, bytes, hardware, features, and

functions, if there’s a better way of achieving application

continuity, then THAT becomes the focus for the

organization’s I.T model and business continuity plans.

The True Cost and Overhead of “Server”

Operations

From a costing basis, after lengthy surveys,

interviews, and crunching numbers for statistical

purposes, it was found that 82% of the infrastructure of

an application is setup to simply support the application

availability. A mere 18% of the infrastructure resources

were directly allocated to running the application itself.

To quickly and simply net out the basis for that statistic,

an example is that servers are rarely if ever running at

24

APPLICATION AND DATACENTER MODERNIZATION

near full capacity like 80%-90% utilization.

Organizations typically run their servers at 30%-40%

runtime utilization, and sometimes down the 5%-10%

runtime utilization, so that the server has the capacity to

meet demand without the organization needing to

constantly go out and buy new hardware.

In addition, on top of those servers running with a LOT

of capacity headroom, organizations also typically have 2

or 3 redundant servers in a cluster, array, or load

balanced model where demand is distributed across

multiple systems, thus minimize a central point of failure

for all components of the system. The current I.T model

of running an application has more than three-quarter of

the infrastructure allocated as spare or standby

resources, rather than actually being used.

The Total Cost of Running a Server-based I.T.

Environment

In addition to the server, storage, and networking

environment needed to simply run the application, the

application and datacenter environment then has all of

the redundancy mentioned in the previous two chapters

which raises the overhead to 99% of the overall cost to

run the application.

That 99% overhead includes all of the tape backup

servers, patching and application management servers,

security analysis servers, replicated storage systems,

mirrored datacenter environments, etc.

Think about that statistics for a moment. For every 1%

of application runtime capacity exists to deliver the

functionality of an application, 99% overhead exists to

keep the application redundant, highly available, backed

up, updated, and managed. The I.T. operational

inefficiencies are easily calculated and then leveraged in

an ROI-comparison between running an application on-

premise in a current I.T. operational model, and moving

the application to a modern shared cloud I.T operational

model.

25

FOCUSING ON THE APPLICATION, NOT THE SERVER

The Case Study of Email as a Service

Email as a Service has been a very successful model

already broadly in use by hundreds of thousands of

enterprises around the world, and is commonly cited as a

case study for the benefits and justification for cloud-

based applications. While early environments of

Microsoft’s Business Productivity Online Service (BPOS)

struggled in reliability and feature/functionality, roll

forward 5 years and Office 365 has proven to be feature

rich, highly reliable, and extremely secure.

Email is frequently identified as one of the most

important communication applications in an enterprise.

Most organizations state that downtime to email can

completely halt all communications in the organization,

and that email needs to “just work”. However, beyond

simply working, because email is the backbone of

organizations for communications within the

organization, and external to the organization.

Organizations typically over architect their email systems

with 2-3 times as many servers than are needed, 2-3

times the storage (in terabytes and hundreds of

terabytes) than is needed, and redundancy upon

redundancy upon redundancy from everything from hard

drive systems, to frontend server redundancy, to backend

server redundancy, to directory look-up and

authentication processes, and so on.

For organizations that have shifted their email system

to something like Office 365, the organizations now have

the most current version of the Microsoft Exchange email

system, they get email archiving and retention, they get

modern mobile device access, the latest in anti-spam and

anti-virus tools, a full eDiscovery and Legal Hold tool,

and at an operational cost that, when assessed and truly

compared to current email system expenses, turns out to

be at a significantly lower cost point.

With organizations having shifted to a cloud-hosted

email system, the internal personnel that used to be

dedicated to managing and maintaining the email system

are now available to spend more time on more important

security focused tasks, true frontend business operations

tasks, and working to ensure that the new modernized

26

APPLICATION AND DATACENTER MODERNIZATION

applications are optimized and meeting the business

goals and objectives of the organization.

The Case Study of Websites as a Services

Websites as a Service is also a great case study on the

benefits an organization receives as part of the process of

modernizing applications. For websites, whether it's the

organization’s www public site, its intranet site, or the

frontend of a business application, the actual running of

a webserver requires very minimal resources. Many

organizations have a server dedicated to hosting a Web

application, which might be running on Java,

Microsoft .NET Framework, or the like. However, in

addition to the server running the basic Web application,

the organization likely has 2, 3, or more redundant

servers load balanced and replicated so that if the Web

application server fails, there’s another server available

to take up the load.

This redundancy exists full time so that no user is

inconvenienced in the event of a failure. However, the

redundancy comes at a big cost for the organization since

a Web application that requires less than 5% utilization of

a system, which is then made 3x redundant now has only

5% application demand against 300% available

resources.

Web applications are frequently the target of

conversion to a Platform as a Service (PaaS) model. PaaS

moves the native application code to the cloud, and the

application no longer has multiple systems effectively

doing nothing. All of that redundancy is now abstracted

within the cloud and does not need to be maintained by

the organizations I.T., in effect efficiently outsourcing the

redundant infrastructure. The focus is on providing the

required capacity to the users for the running of the Web

content, not on all of the capacity allocated to non-

essential services directed specifically at the application.

PaaS is covered in more detail in Chapter 6 of this book.

27

5 APPLICATION MODERNIZATION

Up until now, we have setup the groundwork for the

basis of modernizing our environment, rather than simply

putting our heads down and upgrading applications to

the latest on-premise version or migrating everything to

the cloud. In this chapter, we’ll further develop the

strategy and structure of modernizing applications, with

a focus on best practices around decision making on the

shift of updating applications in a manner that makes

most sense.

Replacing Server Focused with Application

Focused Services

The key to application modernization is to update the

thinking that an application equates to a brand or a

server or a system. Instead of thinking that a Web

application requires Microsoft Internet Information

Server (IIS), or a financial system requires Oracle,

instead focus on the business side of the application.

28

APPLICATION AND DATACENTER MODERNIZATION

It’s replacing a server focused view of applications

with a user perspective view of what they do or need to

do in their job. The financial analyst thinks of

transactional calculations and financial modeling as their

job and task, they don’t call themselves a Microsoft Excel

specialist. Or the accounting manager focuses on double

entry accounting tasks, payables, and receivables, and

does not describe their trade expertise as an Oracle

Financials specialist. They are concerned with the

business processes and not the technologies.

While initially users are concerned whether they can

do their job with a different tool, it’s amazing how

responsive users are when they get a better tool, and a

better solution, that ultimately makes the execution of

their job easier and better. Even in cases where the

employee ends up doing the same thing in a different tool

with no improvement in features or functions that help

the employee do more, it might be that the underlying

application is easier or more cost effective for the

organization to host, manage, and upgrade on an ongoing

basis. In that case, the benefit is in doing the exact same

thing, but with a tool that makes better sense for the

organization.

A couple good analogies are found in decisions buyers

make when they purchase a new car. Sometimes a new

car has significant benefits over the old car, like a shift

from a 2-door sedan to a 5-passenger sport utility vehicle

(SUV). While the old vehicle was great for the young

couple, now with 2 kids, trying to get the car seat and

kids into the back seat of the 2-door sedan is difficult.

The SUV is nothing more than a vehicle that transports

everyone from one place to another, it likely doesn’t

change how fast the family gets to and from school, or

the market, or the parents to work. However, the extra

door, extra backseat space, extra trunk space makes it

easier for the family to use the vehicle, so the transition

to the SUV has tangible improvements for the family.

In contrast, in another analogy, a couple with no kids

that replaced an old 2-door sedan with a new 2-door

sedan may have gotten a new vehicle with no real feature

improvements. But the key difference is the new vehicle

just “runs better.” Compared to their old sedan that

29

APPLICATION MODERNIZATION

required constant maintenance at night to ensure it

would start in the morning, the new vehicle itself hasn’t

added any new features as perceived by the primary

driver but it did provide a significant improvement in

eliminating the need for constant servicing that the old

vehicle required to keep it running.

This is the same modernization experience that

applications will go through in an organization. There

will be times when the shift to a new application may add

significant improvements in features and functions, and

other times there may be changes to something new, with

little or no perceived benefits to the application owner

and user, but will have significant improvements on the

“backend” in what it takes to keep the application

running every day.

“Modernization” may mean improving the application

with new and better functionality, or modernization may

mean a change that reduces the unseen costs of

maintaining and managing problem some system on the

backend.

Software as a Service for Commodity-based

Applications

There are many applications that are critical to the

day-to-day success of the organization which have been

cloud-based solutions for many years. Many times

personnel would say they don’t “trust” the cloud because

of security or reliability concerns, and how some

application like email or their line of business application

is so critical that they couldn’t trust someone else

running or managing it. But then, when asked what

payroll service the organization uses, it turns out that

every employee paycheck is electronically processed,

payroll directly deposited to employee’s accounts, and

employee access their payroll information via a Web

browser to a cloud-based payroll system, which is a SaaS

application. The same organization that says they don’t

trust an outsourced cloud service for a critical secure

business application, is the same one that in reality uses

an outsourced cloud-based solution (also a SaaS

application) to pay employees every month.

30

APPLICATION AND DATACENTER MODERNIZATION

Or an organization that ships their products to their

customers that uses a Web-based package scheduling

and tracking system, that organization is also already

utilizing a SaaS cloud solution to get their goods to their

clients. Bill of ladings are processed electronically over

the Internet, the scheduling for pick-up is Web-based,

and the search for the tracking status is also done via an

application or Web-app.

Cloud or Internet based SaaS applications doesn’t

mean the organization has decreased the reliability,

performance, or quality of service. The key is to ensure

the provider of the service has the right systems in place

to ensure uptime, performance, and ongoing

maintenance and modernization of their application as a

service.

This Software as a Service (SaaS) model has proven to

be an extremely valuable service for many core business

applications. As already identified, tasks such as payroll

services, package shipping and delivery services, and

application services such as electronic mail, client

relationship management, and file collaboration have

been core applications that have lent themselves as

commodity systems similar across many industries, that

have proven to be prime examples of successful Software

as a Service application models.

Email as a Service (Office 365 / Google Mail)

Electronic mail as a service has been cited time and

time again as a key business application for

organizations, and it is effectively one of the most

broadly used applications as a service. As much as many

organizations will claim that their email is one of the

most critical business communications applications they

own and must remain internally managed and serviced to

ensure the level of security and integrity, at the end of

the day, email is the same across various industries,

business sizes, and business focus. A person in a 10-

employee organization sends and receives email the

exact same way a person in a 10,000-employee

organization does. Users type a message, maybe attach

a file to the message, and click to send the message.

31

APPLICATION MODERNIZATION

Email users around the world receive emails regardless

of their line of business the exact same way where they

select to open a message, they read the message, then

they delete or save the message.

The key thing organizations want to ensure is that the

email system is always working, and that their

employee’s messages retain a high level of security and

privacy. But just like the cloud and internet-based payroll

system, there’s not many organizations that would say

that payroll isn’t highly secure nor something that is okay

if employee paychecks are late because of a reliability

problem by the payroll service. Hosted providers that

are serious about email reliability and security

understand the importance of their role, can build their

system and services to provide that level of protections,

and run their operations as well if not better than what

an organization can internally do themselves.

The key players in the cloud-based hosted email

business are Microsoft with their Office 365 service, and

Google with their Gmail for Business service. These

organizations are two of the largest and most well-funded

organizations in the world. Each organization has spent

billions of dollars and invested years in the development,

management, and maintenance of their cloud-hosted

email systems. They clearly understand if they fail their

customers, they will not survive in the hosted email

sector for long, and thus maintain an extremely high

rigor in security and reliability of their services.

And because Microsoft and Google serve millions of

users worldwide across virtually every industry, their

attention to the needs of this diverse population of users

across language support, device support, operating

system support, end user support, and the like is of the

caliber of a global enterprise grade solution.

These providers are constantly improving the features

and functions of their service to retain existing

customers, and to attract new customers looking for a

top notch solution. And while each organization has had

bumps in the performance or reliability of their service

early on in the offering of their service, as time has gone

on, these key providers of email as a service have

matured and improved their offerings to achieve

32

APPLICATION AND DATACENTER MODERNIZATION

enterprise quality, security, and support expected of a

reliable and dependent service provider.

As such, email as a service has grown as a core hosted

service offering with tens of millions if not hundreds of

millions of users relying on the hosted services of key

email as a service provided service.

CRM as a Service (Salesforce.com)

Another common, almost defacto provider of a service

is Salesforce.com and what they provide as client

relationship management or enterprise relationship

management as a service. Unlike email as a service that

gained popularity because of the commonality that email

in every enterprise is effectively the same across the user

of every employee in the organization across various

industries, CRM as a service was quite the opposite.

CRM is an application that only a handful of employees in

an organization use, and in many cases the use of CRM is

unique to that business or industry.

For a highly customized application used by a limited

number of users, CRM was an expensive application for

organizations to setup, maintain, and manage in the

enterprise.

Salesforce.com took this specialty

application, developed a SaaS product, and offered as a

monthly subscription service, and created an ecosystem

that allowed third party providers to customize the

Salesforce application to meet the specific needs of

specific users in an industry. By providing a service that

an organization can pay for only the number of licenses

for the number of users that actually use the service, that

can be customized to meet the specific needs of the

organization, CRM as a service was transformed early on

as a solution that was better off being offered as a hosted

service than for organizations to try to build and manage

the platform internally.

File System as a Service (Box, DropBox,

OneDrive)

Filesystem as a Service by key providers like Box.com,

DropBox, or OneDrive evolved and gained popularity for

33

APPLICATION MODERNIZATION

a much different reason than email or CRM as a service.

Filesystem services grew out of a need by users to share

and collaborate with users internal and external to their

organization. Because most I.T. organizations were

focused on what was deemed to be more critical business

applications like ERP systems or other core line of

business applications, basic file sharing and collaboration

was not given the same level of attention by I.T. services.

As Box and DropBox grew popularity by students and

individuals sharing documents easily over the Internet

from any device (Windows, Mac, iPhones, Android

devices), these file sharing and collaboration solutions

started to be introduced into enterprises without

business or I.T. approval or even awareness. By the time

I.T. realized that their users had found a “backdoor”

application for a key business collaboration and

communication task, it was too late to stop it, as a whole

model for business information sharing was by then too

engrained in the day-to-day tasks and processes of

employees.

The users of file system as a service validated the

business need for a simple solution to share content

among employees and between organizations. The effort

for many organizations has been to bring this

functionality into a company owned and managed

solution that fits within the security policies and

practices of the organization, and eliminate hundreds of

unmanaged individual accounts being used throughout

the enterprise.

And with file sharing and collaboration functionality

bundled into application suites, organizations are already

paying for file sharing services as part of their email

solutions, so a shift from a 3rd party solution to an

integrated solution has been the focus of enterprises. To

address the concerns of security, document permissions,

and data leakage, I.T. organizations are focusing their

time on implementing and enforcing electronically stored

information policies for the management of business

owned data.

This shift of I.T. resources from building and running

file storage and management systems, to having the I.T.

resources focused on policy development and

34

APPLICATION AND DATACENTER MODERNIZATION

enforcement is the change that comes about with the

transition to modern application and datacenter services.

More time is available for I.T. personnel to rightly focus

on areas of business importance, rather than on basic

hardware and software installation and maintenance.

Choosing Functionality over Product Brand

Cloud services can be setup, enabled, and used almost

immediately, which accelerates an organizations adoption

of cloud-based solutions. In the old days, organizations

had to be careful choosing an application because of the

significant investment in hardware and software along

with months of setting up the infrastructure needed to

even start to play with the software. The decision to

choose a cloud service is more based on the functionality

the solution provides than simply the product brand.

Cloud providers are very awareness of the “stickiness” or

lack of “stickiness” of their products. When email is

email, and file sharing is file sharing, the differentiation

from one brand to another is based on customer

satisfaction of the solution. As easy as it was for the

organization to originally spin up a cloud-based solution,

the organization can now quickly shift over to a different

solution in the same time and effort it has historically

taken an organization to do a version level upgrade of an

on-premise product.

So the decision making of an organization on what

product to select is heavily dependent on the features

and functions the users will get from the service.

However, that said, cloud services over the past 3-4 years

have proven that the key leader in a solution can quickly

fall from favor if the cloud service provider doesn’t

continue to invest in the development of their solution.

Many cloud-based solutions are developed and run by

organizations that have never shown a profit in the

running of their operations. The key for any business to

stay in business long term is to offer up a solution and

run a business that can sustain itself. With the focus on

acquisition by many cloud providers, rather than the

development of a business model based on sustainability

of the organization, the selection of the cloud based

35

APPLICATION MODERNIZATION

solution, regardless of the features and function, still has

to be based on an assurance that the organization will

remain in business and has a track record of providing

improved functionality over time.

Running On-Premise for a Period of Time

As has been noted previously in this book, application

modernization doesn’t mean that everything needs to be

migrated to the cloud, or at least immediately migrated

to the cloud. Application modernization has in many

cases been focused on assessing the right solution for the

organization for each individual application.

For many applications that are extremely custom, for

which cloud-based solutions do not exist, or the solution

will simply not run at all in the cloud, the effort to move

the application to the cloud would be counterproductive.

For these applications, deferring the decision on what to

do with the application can be put off to a future date.

An organization can focus on modernizing other

applications and be well under way to getting as much

moved to a cloud-based or modern solution based

offering, and then circle back to the more difficult

solutions for modernization.

36

APPLICATION AND DATACENTER MODERNIZATION

37

6 DATACENTER MODERNIZATION

The previous chapter was on Application

Modernization, effectively focusing on the migration of

legacy applications to a modern application. This

chapter on Datacenter Modernization extends the

application modernization concept, and effectively

encompasses “everything else” an organization has

running in their datacenters.

Getting to the Rest of I.T.

Usually in the Application and Datacenter

modernization process, organizations start with

transition efforts around migrating email to the cloud, or

38

APPLICATION AND DATACENTER MODERNIZATION

implementing dev and test scenarios in a cloud-based

solution, or replacing legacy applications with specialized

SaaS based services. The “rest of I.T.” in the transition

process takes a holistic approach to all applications and

services run by the organization.

The other services may include user identity and

authentication, it usually includes backup and business

continuity solutions, and it includes management

systems. The reason these other services are specifically

called out is that, as organizations shift from a

datacenter model to a distributed cloud-based model,

monitoring systems isn’t as simple as loading an agent on

all of the servers in a datacenter and monitoring the

systems. In the new cloud based model, it may require

doing application state monitoring across a number of

different cloud-based IaaS, PaaS, and SaaS environments

and in some hybrid cases an on-premise environment.

Patch and update management systems in an

environment based on cloud services may no longer be

needed, as SaaS-based applications typically have no

tenant level patching and updating responsibilities. Even

for the handful of systems that are left in the datacenter,

or the handful of systems that are running as IaaS virtual

machines in a cloud environment, the organization has to

think whether an enterprise scale server management

tool is needed anymore. It was fine have an enterprise

grade management system when the organization had

50, 500, 5000 systems to manage, but when the

organization is left with a fraction of the number of

systems, a simpler solution for management might be to

use a basic Windows Update platform, or even a manual

process that takes someone in I.T. a couple hours a

month to initiate and manage may be more efficient than

having a team of people monitoring and managing the

management system each day and week.

So the process of modernizing “everything else” in the

datacenter may very likely be selectively choosing

systems to eliminate and not need any plans for

replacement.

Leveraging Identity as a Service

39

DATACENTER MODERNIZATION

One of the core services that typically remains in the

on-premise datacenter toward the very end of the

modernization is the organization’s identity system.

Most organizations rely on Microsoft’s Active Directory

as the basis for user identity. Almost inevitably, the

Active Directory has connectors that link Active Directory

on-premise to cloud services like Office 365,

Salesforce.com, Microsoft Azure, and the like. The end

solution for identity typically takes one of two forms.

One solution for enterprises is to retain Active

Directory on-premise as a key authentication point for

users in each site. Active Directory has already been

consolidated from a distributed site model to a

centralized datacenter model as servers and applications

have undergone consolidation to corporate datacenters.

In other cases, as applications have distributed out to

various cloud points, and datacenters being shutdown,

we’ve seen Active Directory being distributed back down

to organization site level.

Another solution for enterprises with respective to

identity is to move the identity source to a cloud hosted

model. Many organizations depend on Active Directory

for some type of authentication mechanism and other

configuration or security services, whether that’s

leveraging Group Policies for configuration and security,

Active Directory integration of users, groups, computers,

and sites, or even 3rd party two-factor authentication

tools integrated with Active directory. These

organizations may choose to move Active Directory to an

IaaS virtual machine running in a cloud or leverage

Azure Active Directory cloud identity.

Microsoft Azure Active Directory is a cloud-based

centralized identity solution. This is the directory that

Office 365 uses. As users logon to their email and

authenticate to Azure Active Directory from their laptops,

mobile phones, and tablets, the users may just need a

cloud-based authentication point like Azure AD and may

not have any legacy Active Directory exist at all.

The key decision points are to determine what

applications users need to authenticate to, what services

are needed, and from what devices the users are

connecting from. Are the users connecting from within a

40

APPLICATION AND DATACENTER MODERNIZATION

corporate office via a corporate device and thus an on-

premise instance of the directory makes the most sense?

Or are users primarily logging in from somewhere in the

world from an Internet connection, with the user

accessing cloud SaaS applications from a mobile phone

or tablet. In those cases, the user is likely not interacting

with a server sitting in a company on-premise site, and

would be better served by authenticating to a cloud-

based directory.

Many services and functionality can be provided, and

some thinking should take place to modernize

authentication to applications in a manner that better

suits the day to day usage by employees.

Transitioning the Rest of the Datacenter Isn’t

a One for One Process

Another interesting lesson learned in transitions out of

a traditional datacenter model to a modern cloud model

is the benefit that consolidation plays in the transition

process. Rather than taking 100 servers and migrating

the servers to 100 cloud-based servers, the I.T.

organization needs to assess a model where consolidation

can reduce the footprint of the enterprise.

While the organization may have 100 servers, through

consolidation of services such as adding multiple

database instances to a single database server, or

consolidating multiple web instances to a single (or

handful) of servers can decrease the sheer number of

systems that’ll reside in the I.T. environment down the

line.

Many times application servers were built to host a

specific application without consideration that the

application could co-run on an existing system. During

the initial implementation process, application owners

are typically target focused on the deployment of their

application, not on datacenter optimization. So a simple

process of stepping back, identifying applications, and

then consolidating applications to fewer systems will help

maximize the efficiency of I.T. in the organization, and

best optimize the environment as part of the

modernization process.

41

DATACENTER MODERNIZATION

Other applications were built to run in distributed

datacenters to be “closer to users,” however in this day

and age of high speed wide area network connectivity

and latency insensitive communication protocols,

applications can be centralized without the need to put a

server in each and every site. As an example, a content

sharing system may have been implemented in 6 site

datacenters of the organization, distributing the

application infrastructure and enabling close access to

localized data for each organizational site. However, in a

modernization effort where the application is

consolidated to a cloud-based environment, potentially

just 1 or 2 distributed cloud-based instances of the

application is now needed, thus eliminating the need for

a lot of redundant infrastructure. Just as the

organization in years prior assessed on performance and

redundancy, a new assessment can be conducted to

determine if the high speed connectivity options available

today will be sufficient to consolidate the application

across a single region instead of six.

These are all of the tasks that need to be considered as

part of the completion of datacenter modernization. Not

simply taking each application and moving them one-to-

one into a similarly configured hosted environment, but

instead conducting a thorough into a more appropriate

modern model that still meets the core needs of the

organization.

Simplicity of IaaS

During the datacenter modernization process, many

organizations simply capture the running state of an on-

premise virtual machine (VM), and import the virtual

machine into a cloud-based running VM. This

Infrastructure as a Service (IaaS) model most certainly is

a relatively easy model of transition and quite frankly is

typically the initial step that most organizations take in

their journey to the cloud. However, if there’s a SaaS

application available that does the same thing, or a

consolidation model that allows the organization to

decrease the number of virtual machines as part of the

consolidation and transition process, then the one-for-one

42

APPLICATION AND DATACENTER MODERNIZATION

migration of systems to IaaS is not the best long term

model.

As identified in Chapters 2 and 3 of this book, the

challenges with existing I.T. models are all of the

operating system, application, patching, updating,

monitoring, and system management required to run a

“server”. By simply moving the server to an IaaS cloud

instance of the server, the organization still has the same

legacy overhead to manage and maintain. So IaaS really

is recommended solely for the simplicity of moving an on-

premise instance to a similarly configured cloud instance.

However, if the organization can transform the

application to a modern SaaS or PaaS model, the

organization can eliminate a layer (or two, or three) of

ongoing management and maintenance.

Where PaaS Fits In for Datacenter

Modernization

Platform as a Service (PaaS) has proven to be a good

model for many custom applications. PaaS fits between

the removal of all of the overhead of an IaaS virtual

machine system, and the limitations that might exist with

a SaaS model, for example when the application doesn’t

exist as a SaaS offering. A good example of PaaS based

applications is the running of Websites and Databases in

PaaS offerings.

Many of the applications that run in a datacenter,

outside of structured email, file sharing, accounting, and

ERP systems, are Websites and Databases. In a

traditional I.T. model, a Website is a simple HTML, .NET,

Java, or other simplified application running on a Web

engine like Microsoft’s IIS or Apache Web servers.

Underlying those Web engine is an operating system

(Windows or Linux) and typically a Hypervisor (like

VMware or HyperV). The Web Engine, operating system,

and hypervisor serve absolutely no operational value or

benefit for the running of the Web application, and

there’s a lot of overhead to patch, manage, backup, and

maintain a very thin Web application.

A Web-based PaaS platform allows an organization to

simply upload the Web application code to the cloud and

43

DATACENTER MODERNIZATION

run the application. The application owner has to do

nothing with the underlying infrastructure running the

application. The elimination of server layers greatly

decrease the administration and management overhead

for the organization.

PaaS still allows the organization to completely

customize their Web instance, so whatever colors, form,

style that the organization desires is coded in HTML,

.NET, Java, or the like. The organization can pay the

PaaS hoster to backup the code, replicate the code to

another geo region, and add code capacity to increase

performance.

And the other common PaaS platform model is the

implementation of SQL databases as a PaaS service. A

SQL application typically requires a SQL server running

on a Windows server running on a Hypervisor. Again, the

SQL server, Windows Server, and Hypervisor add no

value to the running of the SQL tables and queries other

than the underlying infrastructure.

As a PaaS instance of SQL, an organization can upload

data, structure it in tables, build cubes, generate reports,

secure fields, and address raw SQL queries just as if the

query was going to a full SQL server, but without all of

the management overhead that would be needed with a

full blown virtual machine running a SQL server.

From a costing perspective, SQL as a PaaS offering is

a fraction of the cost of building a SQL Server running on

Windows because SQL as PaaS is paid for based on real

capacity allocation variable on demand, than the building

of a fixed configuration IaaS VM with a fixed 16 cores

and 256gb of memory that the organization pays for by

the number of cores 24 x 7 x 365 whether the application

needs that capacity or not.

Cloud capacity can be added and decreased at any

time, unlike hardware in a datacenter that had to be

budgeted, purchased, acquired, stacked in a rack,

configured, installed, and setup 2, 3, or 6 months in

advance of needing the capacity. The complete

rethinking of the ease and availability of acquiring cloud

capacity changes how organizations buy, configure, and

run cloud services very differently than the organization

has addressed capacity on-premise for the past couple

44

APPLICATION AND DATACENTER MODERNIZATION

decades.

45

7 STRATEGY PLANNING FOR APP AND

DATACENTER MODERNIZATION

The modernization process for applications and

datacenters is a methodical process that takes an

organization from their existing state, to the next

generation of their I.T. operations. As much as the

transition plan deals with technology, it is also a strategic

plan that optimizes employee productivity with technical

solutions that meet the needs of the employee’s tasks.

Developing a Methodical Process for an

Optimized Transition

The modernization process is unlike historical I.T.

architecture and budgeting processes that have

46

APPLICATION AND DATACENTER MODERNIZATION

traditionally focused on taking existing systems, and

upgrading them to the latest release of the same system

with minor updates to leverage new features and

functions. This modernization process, when done right,

looks to assess what employees do, and match an

appropriate technical solution to meet the tasks of the

employees.

The strategic planning process is a gap analysis

exercise that determines the right tools and solutions

based on employee requirements, and then a technology

transition process to shift from the existing platform of

technical solutions to the modern solution.

Inventorying Current Applications

The first step in the process to an optimized

datacenter with modernized applications is to inventory

existing applications to understand what currently exists

in the environment. The exercise is to categorize

applications based on what they are and who uses them.

An example might be:

Microsoft Exchange

Email and Calendaring

Everyone

Salesforce.com

CRM

Sales

Oracle Financials

General Accounting

Accounting

System Center

Monitoring and Mgmt

I.T.

Intranet

Old Intranet

Not

Used

At this point, the inventory assessment is merely to

ensure later on that application functionality is addressed

either in upgraded versions of applications, or in

application replacement tasks. Additionally, the current

inventory will help in the retirement of applications over

time. Far too often, organizations move forward in their

modernization process, but never eliminate the older

legacy applications. This inventory list will be used to

check off applications as the organization moves forward.

Assessing Employee Tasks and Technology

Usage

47

STRATEGY PLANNING FOR APP AND DATACENTER MODERNIZATION

The next step in the modernization process is a very

critical step that involves assessing what employees in

the organization do, and how the existing applications

they use are leveraged as part of the day to day of the

employees job responsibilities. What is helpful to

understand in the process is whether their existing

applications are useful in what they do, or if there are

things they would like to do that they cannot do today.

With a “wishlist” mapped out, as the application

modernization is conducted, the suitability of an

application can be determined.

Application replacement may not be part of the scope

of the modernization effort. I.T. also may not necessarily

find a replacement application that includes ALL of the

items on employee’s wishlist. However, if an application

is not used by employees, or the application is completely

unusable by employees, the assessment could be used to

determine whether an application could potentially be

eliminated or really needs to be replaced as part of the

modernization process.

Some organizations may spend less than a week doing

an employee application usage assessment, others might

spend 2-3 months. Any insight the I.T. organization can

gain from better understanding the tasks and

responsibilities of employees and how current

applications are leveraged can assist in the

modernization process. This understanding provides a

clearer path for application upgrade, replacement, or

elimination can help the organization modernize their

application and datacenter operations.

Preparing an Initial Gap Analysis

With an inventory list of applications in use by

employees, along with a list of needs and application

suitability assessment, the next step is to develop a gap

analysis of application effectiveness. The gap analysis

should net out:

 Applications that Work As Is

 Applications that May Require Further Review

 Applications that Aren’t Used at All

48

APPLICATION AND DATACENTER MODERNIZATION

Clearly, applications that aren’t used at all should be

flagged for elimination. This may include applications

that are marginally used where the functionality could be

replaced by other applications so that the transition

process includes moving users off of underutilized

applications.

Applications that meet the general needs of users will

be flagged as applications that will be transitioned in

some form or another. Whether the application will be

upgraded to a new version, hosted on-premise, or moved

to the cloud solution will be addressed in the next step.

For now, just a general flag that the application will

survive and be addressed upcoming.

The applications that are flagged for further review

may not necessarily be replaced, but in the next step in

determining modernization, a review of the application

and suitability of a replacement should be conducted.

This application gap analysis provides visibility into what

applications may be replaced or updated to truly meet

the business needs of the organization. A roadmap can

be created to identify the timing of which applications

will be retained, which applications will be upgraded on-

premise, which applications will be migrated to the

cloud, and which applications need to be replaced as part

of the application modernization process. The previous

table can be extended with additional columns such as:

Microsoft Exchange Works Fine as is

Mobile

Support Desired

Salesforce.com

Works Fine as is

No

Changes Needed

Oracle Financials

Works Fine as is

Over 5-yrs

old, Upgrade

System Center

Works Fine as is

Cloud

Version available?

Intranet

Not Used Anymore Eliminate

Identifying More Effective Apps and Services

for Employees

With an inventory of applications and an initial

assessment of which applications will be replaced,

retained, or eliminated, the next step is to determine the

transition state of the application. Additional columns of

49

STRATEGY PLANNING FOR APP AND DATACENTER MODERNIZATION

the initial application table can be created to identify a

timeline and proposed disposition of each application in

use in the environment.

The table could be extended with the following:

Microsoft Exchange Replace with Office 365 Within

Next 6-mo

Salesforce.com

No Changes Needed

No

Changes

Oracle Financials

Keep On-prem for Now

Upgrade Version

System Center

Evaluate OMS/Intune

Go

Cloud 1-2 Yrs

Intranet

Power Off for 30-days

Eliminate thereafter

The additional columns of the table will identify a

projected timeline when applications will be upgraded,

updated, transitioned, or eliminated. This will also build

out the framework of a transition roadmap and can be

the basis for budgeting and a timeline for the

modernization initiative.

Building a Transition Plan

The basis for the transition plan have been outlined in

the steps building up of the planning table. The table can

be sorted to note an initial assessment on timing with

budget numbers added to the table for costing as well as

a “complexity” rating along with an “impact” rating and a

priority rating for each line item.

The table builds the basis of the transition plan that

can be sorted and executed based on complexity, priority,

and impact. Some items may need to be upgraded

sooner than later due to supportability of the current

application. Rather than upgrading to a current version

of the application, the organization can consider

upgrading off an old or obsolete version of an application

into a version that might be SaaS-based or cloud-hosted.

Additionally, the upgrade process can address more than

just a version update but could also include

enhancements in features and functions.

Aside from transitioning based on obsolescence, some

50

APPLICATION AND DATACENTER MODERNIZATION

applications may be targeted for transition because of

the current cost or current (lack of) security of the

application. These factors can drive priority of the

transition to eliminate a pending license renewal cost or

ongoing support contract cost of the application, or

address a concern the organization has where the

application lacks enterprise security, data leakage, and

data integrity controls that are expected of all

applications in the enterprise.

Organizations typically upgrade applications every 3-5

years, and so the cost and effort to upgrade applications

from one version to another can be reallocated to the

cost of transitioning the application from the current

version to a newer, more modern version of the

application or similar application. This modernizes the

environment by moving the application off of an on-

premise model to a potentially more efficient and

effective cloud-hosted applications.

51

STRATEGY PLANNING FOR APP AND DATACENTER MODERNIZATION

52

8 BUDGETING FOR MODERNIZATION

One of the exercises commonly associated with an

application and datacenter modernization initiative is the

budgeting cost of the effort. Not just of the one-time cost

to perform migrations, but also the ongoing cost of any

licensing or subscriptions necessary to run the

application. This chapter covers the common budgeting

components calculated during a modernization initiative.

Assessing Transition Costs Relative to

Traditional Version Migration Costs

One of the key costing factors calculated in the

53

BUDGETING FOR MODERNIZATION

modernization process is the transition cost from the

current operating environment to the new operating

environment. As an example, if the organization is

shifting from Exchange email on-premise to Office 365

email in the cloud, a cost calculation is assessed on what

it will take to complete the migration.

While the cost of the migration certainly needs to be

calculated and funded for completion, the cost to migrate

to a cloud-based solution is typically the same cost the

organization would have incurred if it upgraded from one

version to the next version of an application.

Back to the example of the Exchange to Office 365

email migration cost, for organization that have

upgraded Exchange email every 3-5 years, the cost to

upgrade to a newer version of Exchange on-premise is

about the same cost (and effort) to migrate the

organization from Exchange on-premise to Office in 365

in the cloud. The process involves a planning process,

setting up core migration servers, conducting a prototype

and pilot migrations, and then completing the migration

with any applicable administration and enduser training.

In transitions to cloud-based applications, there may

be initial training costs to familiarize I.T. personnel on

the new way of managing and administrating the new

solution, or if a solution is replaced with a completely

new or different product, then enduser training may need

to be budgeted. However, in general, the cost of

transitioning to a new version is typically not significantly

more expensive to complete than other migrations

performed by the enterprise in the past.

Assessing CapEx and OpEx Costs in the New

World of I.T.

What does change in the budgeting and costing of

modern applications may come in the form of licensing or

subscription costing. In older application licensing

models, organizations bought a product (hardware and/or

software) and at most purchased a maintenance contract

for the application or systems.

Under many new licensing models, the cost of the

application is paid for as a “monthly cost” on a “per user

54

APPLICATION AND DATACENTER MODERNIZATION

basis”. The more users the organization has, the higher

monthly cost of the application. Additionally, the cost is

billed typically every month on a perpetual basis for as

long as the organization uses the application. Unlike

some legacy applications where the organization bought

the application outright 10 or 15 years ago and hasn’t

paid a cent for the application license since, there is an

ongoing cost associated with most applications these

days. This ongoing cost also typically includes upgrades

and support contract arrangements. And cloud-based

applications are typically upgraded behind the scenes so

that users of the application get an updated version on a

rolling update basis instead of interruption every 3-5

years and a massive retraining on ALL of the new things

in the application. So the model changes, subscription

licensing model changes, yet a much simpler and more

predictable model for costing is the result of the modern

cloud based application model.

The other change in the new model of licensing and

subscriptions is this rolling monthly subscription cost.

Rather than a major purchase of hardware, software, and

services every 3-5 years that an organization may classify

as a Capital Expense (CapEx), the new subscription

models typically include hardware, software, and

maintenance on a rolling monthly cost basis as a “per

user subscription” basis. The costing model shifts to an

Operational Expense (OpEx) model. This may (or may

not) impact how the organization does their financial

planning shifting CapEx expenses to OpEx expenses,

something to explore if there is a question or concern on

how new model licensing is contracted.

Comparing Overall Costs to Historical Costs

of I.T.

As organizations shift from a CapEx to an OpEx

costing model, many times it is hard for the organization

to justify an OpEx monthly expenditure while the

organization is still depreciating hardware and software

from a historical CapEx model. The key is to not

encumber the CapEx and OpEx expenses to a single

application, but rather look to shift CapEx depreciation

55

BUDGETING FOR MODERNIZATION

expense to offset current and future adjusted cost

allocations.

As much as an organization may be shifting off of

Microsoft Exchange on-premise to Office 365 in the cloud

and eliminating the need for 15 or 20 Exchange servers,

storage, and other I.T. services, the organization may

have budgeted and be looking to purchase more servers,

storage, and networking capacity to fulfill on demands of

other I.T. initiatives.

Instead of buying more Capital expensed hardware

and software, the organization can repurpose unused

Exchange servers and storage, to the part of the business

that was planning on purchasing more servers and

storage. This reallocation of costs helps the organization

spread out CapEx expenses over a 2-3 year period, and

can eliminate any near term impact to the financials of

the organization in this shift from CapEx to OpEx

integrated services. This is commonly missed in the

budgeting and cost analysis of modernizing I.T., the

effective repurposing of encumbered assets. This is also

why a well-structured roadmap strategy can take in

account a transition process that includes financial and

CapEx/OpEx depreciation schedules into the roadmap.

Instead of buying more storage or more servers to meet

the rolling demands of the organization, the Capital

Expense of hardware purchases if properly arranged to

coincide with the transition of storage and hardware rich

solutions that are moving to the cloud can eliminate the

need for the purchase of more Capital expense goods.

Creating an ROI Analysis for the Modern App

and Datacenter Environment

Another common practice that I.T. organizations need

to consider is how the Return on Investment (ROI) is

calculated in the analysis of the modernization of

applications and datacenter operations. Specific to the

costing of current running systems to a comparable

cloud-running system, organizations mistakenly cost a

one-for-one analysis. If the organization currently has 8

servers running 16-core and 256gb of RAM each, the

organization frequently costs the exact same quantity

56

APPLICATION AND DATACENTER MODERNIZATION

and configuration in the cloud. The cost of the cloud at

that capacity is very expense, and the ROI doesn’t make

sense.

However, as covered in Chapter 6, the cloud

modernization model is not a one-for-one target of all

servers and systems. When organizations had to plan

and budget hardware purchases 6-12 months in advance,

and hardware took 2-4 months to acquire, setup,

configure, and make the resource available,

organizations over-purchased hardware to meet virtually

any demand the organization may need in capacity

planning. And when the I.T. organization also had to

build in high availability and disaster recovery planning

capacity, then the over allocation of hardware was now

double and triple allocated.

But in a cloud model where additional capacity can be

spun up in 5-10 minutes as well as cloud capacity can be

reduced in just a few minutes as well, an organization

can buy and implement capacity closer to what they

really need and use. Additionally, when Service Level

Agreements on cloud runtime and disaster recovery is

part of the cost of the hosted service, the organization

doesn’t need to buy 2x or 3x the number of systems when

the cloud provider has already included in a component

for high availability and geo-redundancy.

For the same organization that had 8 high capacity

systems with 16-core and 256gb of RAM frequently finds

that the organization can run off 2 systems running 4-

core and 128gb of RAM with no impact on performance,

and with the ability to scale more capacity within 10-

minutes. THIS decrease from 8 servers to 2 servers, and

the elimination of over 100-core processors can eliminate

thousands if not tens of thousands of dollars a month in

the costing model, and drastically improve the ROI

calculations to metrics that are more applicable to the

workload scenarios.

Calculating the True Runtime Needs of the

Systems

While the previous section notes that an organization

can use a significantly lower capacity of servers and

57

BUDGETING FOR MODERNIZATION

systems, how does the I.T. organization calculate what it

really needs? In simple terms, the organization assesses

the server utilization and runs calculations off the peak

and the sustained runtime calculations.

If a server normally runs at 6% utilization and peaks at

10% utilization, then an optimized configuration would

be 10-15 times fewer server resources than currently

configured. Memory is sometimes harder to calculate as

many applications these days use up all of the memory

available, so even if an application only really needs 32gb

of memory, if the system has 128gb of memory, the

application will load up and use all 128gb of memory for

cache whether it really uses it or not. The configuration

of “dynamic memory” for many systems has the

application optimized for the actual memory used to

operate the application on a runtime basis.

Relying on manufacturer specifications or

recommended configurations when the manufacturer is

still basing its specifications on an older traditional

inhouse server model is usually not a good metric to

work from either. Some vendors have modernized their

recommended specifications to address this change in

resource allocation, and truly provides specs that are

more application to the dynamic hosted cloud datacenter

model.

When assessing the requirements for high availability

and site recoverability, working with the Service Level

Agreements of the hosted environment, as well as

evaluating options for operational continuity can provide

a better allotment of systems needed for the running of

the application. Again, keep in mind that additional

systems can be brought online typically within 5-10

minutes, so the focus for the cloud environment shifts

from monitoring systems for uptime, versus the new

model of monitoring systems for capacity demands, and

then automating the process to bring more capacity

online as needed.

Summarizing the Business Benefits of the

Modern I.T. Environment

As much as this chapter has been focused on costing,

58

APPLICATION AND DATACENTER MODERNIZATION

budgeting, and calculating ROI, an important factor to

include in the calculation model is the business benefit

that the Modern I.T. environments provides for the

business. Significant business benefits can be achieved

by eliminating servers and datacenters, and refocusing of

I.T. resources on allocating creative ways to make I.T. a

business enabler. Other business benefits include core

factors in eliminating unused resources and capacity to a

model that is “on demand” where resources can spin up

in minutes when needed than constantly running excess

capacity.

Other organizations have found the elimination of

datacenters and servers as key factors that allow the

organization to move from site to site without having to

spend months and millions of dollars planning for a costly

and time consuming “datacenter move”. Without racks

and racks of servers taking up expensive lease hold

space, or the special electrical power, cooling, and

security requirements traditionally allocated to

organizations to run on-premise servers and I.T. systems,

the organization is nimbler to expand, move, consolidate,

or simplify their business site models.

Additional benefits cited by organizations in their

modernization of I.T. has been the ability for the

organization to concurrently address security and

business continuity services. When “servers” are located

in a site location that is dependent on complex perimeter

security with a focus on protecting the “datacenter” vs

applications that by definition are hosted in the cloud or

in distributed locations, the security and business

continuity is based on the protection of the data itself,

not of the designation of the site.

Data protection and security enables the focus of the

integrity of the data wherever the content resides, and

thus a transition to a distributed cloud-based model

inherently demands the integration of data continuity

and security protections, and site and datacenter

integrity and security. This greatly improves an

organization’s ability to have users access information

from anywhere on any device since the data in transit

and distribution has to be included in the plan, than by

depending solely on firewalls and site security as the

59

BUDGETING FOR MODERNIZATION

method of protection (which doesn’t work when users

access the content outside of the site and datacenter).

This forces the organization to provide more modern

security controls closer to the actual data, rather than

just relying on the perimeter security controls.

There are a number of these benefits that come as part

of the benefits in modernizing I.T. that extend far beyond

simply doing a cost analysis of the migration cost and the

monthly subscription cost that is commonly associated

with a cost/benefit analysis.

60

9 RETHINKING MONITORING AND

MANAGEMENT SERVICES

As enterprises modernize their applications and

datacenters, one of the benefits that result from the

effort is the shift in how I.T. systems are monitored and

managed. The shift in these operational services

simplifies process and decreases costs when the

modernization process nears completion.

The Evolution of I.T. Management in the

Modern App and Datacenter Environment

Traditional I.T. management systems are based on

monolithic systems that are built on monitoring and

managing a datacenter full of applications, servers, and

61

RETHINKING MONITORING AND MANAGEMENT

SERVICES

systems. I.T. management systems include monitoring

the uptime of various servers, patching and updating the

systems, and monitoring the security and integrity of

systems.

However, as organizations shift from running

“systems” to utilizing hosted servers, monitoring the

running of a SaaS-based application simplifies down to

just monitoring that the hosted environment is up and

available. The underlying infrastructure of the hosted

application is not the responsibility of the tenant user.

The shift turns to application monitoring instead of

server and system monitoring. Additionally, since the

organization is buying the service and not hosting and

managing their own systems and servers, there is no

underlying systems to patch and update. The

organization still needs to monitor and manage the

networking infrastructure, network connections, and

Internet connections as well as endpoint client systems,

however the scope of responsibility for the organization

is a fraction of what it used to be when the I.T.

organization was responsible for managing and

maintaining complete datacenters full of servers, storage

systems, and application servers.

Another shift in management of a modernized

application and datacenter environment is the amount of

importance placed on a “site”. When a site included the

core datacenter that required all servers and systems to

be operational for site employees as well as employees in

other sites to be able to access key business systems,

then the uptime of that site was critical. Entire failover

datacenters have been created to ensure redundancy not

only the event of an application server failure, but in a

catastrophic site failure.

But if a site holds no servers or systems, or a limited

number of application servers and systems, and the key

applications are hosted outside of the operational site, a

site failure has limited impact on the business continuity

of the organization. With employees using mobile

phones, tablets, and laptop computers connected to the

Internet on a day to day basis has their primary site fail

due to a power outage, regional disaster, or the like, the

62

APPLICATION AND DATACENTER MODERNIZATION

employee can work from home, from a different site, or

potentially any place with an Internet connection.

Expensive power generators, redundant networking

equipment, redundant Internet connections, and the like

could be eliminated if the business continuity plan of the

organization is to simply have employees go home and

work remotely. This provides organizations significant

flexibility in how it plans its business continuity strategy,

and how site mobility completely changes core cost

factors in business operations.

Reassessing the Need for Patch and Update

Management

As has been identified and described previously,

without an extensive set of servers and systems to patch

and update, organizations that have shifted core business

services to cloud-based solutions changes the nature of

how the organization has addressed patch and update

management. In a SaaS application model, there are no

servers for the organization to patch and update. Entire

infrastructures have been built in the past to simply

manage and maintain servers and application systems.

This is also why a movement away from IaaS should be

part of an organization’s modernization plan. If the

organization simply bundled up all on-premise virtual

machines and forklifted the VMs to a cloud-hosted IaaS

model, the organization still has ALL of the same

monitoring, patching, and updating responsibilities up in

the cloud as it had before on-premise. The organization

hasn’t made drastic improvements in minimizing their I.T.

responsibilities.

Granted there will be applications that the

organization will need to maintain as fully operational

virtual machines that will need to be patched and

updated. However, if the quantity is 80%, 70%, even

50% of what the datacenter used to look like, it’s that

much fewer systems to patch, manage, and update on a

regular basis.

And if an organization is able to get the number of

servers to manage and maintain down to just a handful, a

full blown enterprise patching and management system

63

RETHINKING MONITORING AND MANAGEMENT

SERVICES

may not be required, and definitely not one with an

expensive distribution of servers and complexity that was

once needed to manage 5x or 10x as many systems in the

past.

Managing the management system has become costly

for organizations, and a staged approach to minimize and

potentially eliminate systems that require an extensive

management overhead greatly benefits the overall cost of

maintaining I.T.’s cost for operations.

Evaluating Monitoring and Management “As

a Service”

Just as business applications have shifted to an “as a

Service” model for email, file sharing, document

collaboration, CRM, accounting, and the like, monitoring

and management systems can be purchased “as a

Service” as well. Cloud-based monitoring solutions can

be leveraged to monitor cloud-services or on-premise

server systems, with runtime and health dashboards

providing critical informational data.

Cloud-based patch management and update solutions

are also available to be purchased on a per server, per

month basis that can be leveraged to keep the limited

number of systems still requiring ongoing updates to be

maintained.

Security monitoring and threat analytics solutions are

available “as a Service” to create a holistic view of the

security footprint of the enterprise for not only cloud-

based solutions, but also for servers and systems still

residing within an organization’s datacenter.

All of these systems can eliminate the need for

enterprise hosted, configured, and managed systems that

ultimately remove the management systems out of the

enterprise datacenters for ongoing maintenance and

support.

Handling Downtime and System Faults in a

Modern Environment

As has been described earlier in this chapter, business

continuity is no longer the sole responsibility of each

64

APPLICATION AND DATACENTER MODERNIZATION

organization’s I.T. department to create redundancy and

disaster recovery plans. SaaS-based applications

typically have published Service Level Agreements.

Beyond the published Service Level Agreement, a review

of historical data can validate whether the service

provider has met the published SLA, exceeded the

published SLA, and specifically where problems have

occurred in the past.

There is the possibility of an organization extending

the SLA of their SaaS provider with their own

redundancy or even third party redundancy solutions,

however rather than simply buying or building a

redundant set of systems or services to build what is

believed to be a more resilient environment, an

assessment on the cause of previous failures and the

impact of what it means to switchover to a resilient

environment needs to be reviewed.

Many times the interruption caused by “failing over”

to a resilient environment and then “failing back” can be

more disruptive than the time of the outage itself. Other

assessments of the cause of an outage may be caused by

other infrastructure failures such as an electronical

power failure in a site that causes outage. As much as

the organization may have purchased the ability to

failover their SaaS-based solution to some redundant

solution, if the power is out at the Corporate office, the

actual application failover will have no impact on

addressing the power failure at the Corporate site.

Employees could just leave the business office, go home

or go to some place that has power, and fire up their

laptop or smartphone and gain access to their

applications.

The whole nature of business continuity has changed

with the transition to a modernized application and

datacenter model. If the potential downtime of an

application is 2-hours a year, the organization has to

really think whether it will get value from spending

$100,000, $250,000, or $1-million a year to protect

against downtime. This cost/benefit analysis has proven

to be even more limiting when “someone” has to make

the call whether to failover to a redundant system with

the interruption that can cause, or just wait out the

65

RETHINKING MONITORING AND MANAGEMENT

SERVICES

outage. Even in traditional standby datacenter models

where someone has to “pull the trigger” to failover the

organization, it could be hours before someone finally

decides to cutover the organization to the standby

datacenter only to have the primary datacenter come

online minutes after the switchover decision and now the

organization has a very costly “failback” scenario to deal

with.

Addressing Security in a Broadly Distributed

I.T. Model

The strategy for enterprise security also changes in a

modernized I.T. model. Unlike I.T. of the past, where all

servers and systems were in a single site or datacenter

where organizations would put up firewalls and intrusion

detection devices, in a distributed I.T. model that

includes SaaS providers, putting a firewall around all

application points is not feasible and not a productive

effort.

The focus in a distributed model that includes SaaS-

based applications is to identify users and to protect

critical data. User identification is important to clearly

know that a user logging on and accessing information is

truly the person that the organization assumes is

accessing the system. This might include some form of

multi-factor authentication that validates a user identity.

This also includes role based security as well as content

classification that clearly identifies who should access

what information.

As organizations focuses on content security instead of

site security, the ability for the organization to manage

and implement security is actually easier and better than

traditional site security. Site security has proven to have

drastic limitations as data is accessed by mobile users, or

stored in various cloud-hosted and SaaS-based models.

However, with security associated to content, applied by

policies through classification, and associated by roles of

individuals, the organization can better control content

access in transit and at rest regardless of the target

storage device or location.

66

APPLICATION AND DATACENTER MODERNIZATION

67

RETHINKING MONITORING AND MANAGEMENT

SERVICES

68

10 RETRAINING PERSONNEL FOR THE

NEW WORLD OF I.T.

The last core chapter of this book focuses on the

changing nature of I.T. management and I.T. personnel

that will be managing and maintaining this new world of

the modern I.T. environment.

The Decline of the Buy, Build, and Run Model

With the better part of three decades of I.T. experience

in buying, building, and running I.T., changing to a new

model has been, is, and will be a challenge for I.T.

organizations. It takes a complete new rethinking of the

of I.T. to embrace the fact that I.T. is different these days,

which requires a change in management and support

models.

I.T. organizations no longer spend weeks or months

buying and building hardware systems. Entire groups of

69

RETRAINING PERSONNEL FOR THE NEW WORLD OF

I.T.

I.T. personnel are no longer needed to rack and stack

equipment, and watch blinking lights to make sure

hardware systems are running. Processes like replacing

backup tapes, monitoring system queues, restarting

system services, or rebooting servers are no longer the

daily tasks of I.T. organizations that have their

applications in a SaaS or PaaS based model. Even the

ongoing process of planning and performing system

maintenance, updates, and upgrades are eliminated from

the job responsibilities of I.T. personnel.

This doesn’t mean that I.T. employees are out of a job

though. As much as many mundane tasks have been

eliminated from an organization, the evolution of I.T. in a

cloud-optimized environment refocuses the tasks of I.T.

personnel to proactive points of responsibilities that

benefit the organization in improving security, optimizing

employee use, and leveraging data to provide improved

business services, and decreasing the cost and overhead

typically associated with I.T. operations.

Focusing on Leveraging Functionality of

SaaS Model Applications

In organizations that have implemented SaaS-based

applications, I.T. personnel now spend their time

optimizing the organization’s use of SaaS applications.

The two major areas include feature and function

optimization, and workload optimization.

Within all SaaS applications are a series of features

and functions included in the application itself, many of

which are disabled by default. Some features and

functions are utilized by the users, and some features

and functions are managed by the application

administrator. In the traditional I.T. environment where

so much time was spent simply keeping the system

operational and well maintained, most I.T. personnel had

little time left over to actually understand how the

applications work, or what else they could do to leverage

the administrative capabilities of the application.

Under a SaaS model, since there are no tasks to patch,

maintain, update, or keep the SaaS system operational,

I.T. personnel can allocate time to maximizing their

70

APPLICATION AND DATACENTER MODERNIZATION

knowledge of the solution. Some of the key areas has

been around learning new functions of the product,

understand how employees currently utilize the product,

and come up with weekly articles or even lunch-and-learn

sessions on tips and “did you know” type content. I.T.

has become an enabler of getting employees to maximize

their use of applications. Employees have typically

relegated themselves to just using the features they know

of and have used in the past, even though there are

better ways of using the tool. With most SaaS

applications, new features and functions are added every

month or quarter, so even if a knowledge sharing session

was done 2 months ago, there may be dozens of new

features and functions to share with employees. The best

knowledge sharing is done when functionality is not

merely shared as features and functions, but how the

features and functions can actually be used and

leveraged and truly utilized by employees.

And for administrative “backend” improvements, time

can be spent by I.T. personnel to intimately understand

new security functionality, new monitoring or

management features in SaaS-based applications that the

organization can leverage to improve the organization’s

use of an application. Many times there are integrated

role-based security features that can be enabled. Or

enhancements in an applications monitoring and

employee access tracking can help detect unauthorized

access, or improve the integrity and data-leakage

protection of enterprise content.

So there’s more to SaaS-based applications than

merely adding users, removing users, modifying content,

and doing basic administrative tasks that I.T. dive into

and proactively improve user and administrative tasks in

the use of SaaS-based applications.

Focusing on Customization of PaaS Model

Applications

Another focus for I.T. personnel is shifting IaaS-based

applications from running on virtual machines to PaaS or

SaaS based applications. As has been described

previously, IaaS is not a very efficient model since it

71

RETRAINING PERSONNEL FOR THE NEW WORLD OF

I.T.

requires patching, updating, and traditional I.T.

management that organizations really want to eliminate

from the I.T. tasks to optimize I.T. operations. Shifting to

PaaS or SaaS applications accomplishes this.

I.T. management can allocate time for personnel to

assess all running IaaS systems and determine what can

be done to shift the applications away from running on

virtual machines to running as services. With the

identification of systems that could be prioritized for

conversion, I.T. can then create a roadmap and spend

weeks or months simply stepping through the process of

optimizing applications into a more efficient and effective

runtime model. This modernization effort could keep I.T.

busy for a very long time.

Even after applications have been migrated off IaaS to

a PaaS-based model, the continual customization of the

application, the optimization of the PaaS-application, and

even adding in new features and functions identified

during the application suitability step on what will make

an application more effective for employees becomes a

series of valuable tasks for I.T. to perform.

Enabling More Time to Focus on Monitoring

and Security Tasks

With core application optimization, administration

optimization, and IaaS to PaaS conversion tasks in

progress, I.T. can also focus time on developing and

improving best practices for the monitoring and security

of the new modernized I.T. environment.

Again, in the past when it took a lot of I.T. time simply

to keep servers and systems running, I.T. had little time

to proactively improve the operational state of their

environment. As mundane tasks have been lifted from

I.T. personnel when services are shifted away from

internal corporate datacenter applications to hosted

SaaS and PaaS based applications, I.T. has been able to

focus on monitoring and security tasks to be more

proactive in solving potential problems before they occur.

I.T. has shifted from being one of looking behind itself

on what has occurred, to being able to look forward on

what I.T. can do to facilitate improvements in the

72

APPLICATION AND DATACENTER MODERNIZATION

organization’s use of technology. Monitoring is no longer

simply spent looking to identify problems that occurred

and reactively respond to the problems, but to monitor

current operational states, project out patterns in

runtime operations, and script capacity to come online

before performance is impacted, and to proactively

eliminate capacity (and thus runtime costs) when

capacity is not needed.

This powering on and off capacity is something that

can be done in cloud-based consumption models that is

very different than in the buy / build / run model where

capacity is purchased and encumbered whether the

capacity is utilized or not. For organizations running

systems 60-80 hours a week that can shutdown excess

capacity in the other 80-100 hours a week, the

organization can save 40-60% of their runtime costs.

This is something that could never have been done in the

past that, if managed and leveraged by I.T. in this new

world of computing, can have significant improvements

in lowering costs of I.T. operations on a business.

And with respect to security, for years I.T. has been

reactive, addressing security threats when others have

been hacked or attacked, following others rather than

proactively seeking ways to improve the security stature

of the organization. I.T. can maximize integrated tools in

SaaS, PaaS, and hosted cloud provider solutions to

minimize the impact security threats can have on the

organization.

Focusing on End User Productivity

Besides all of the backend enhancements that I.T. can

utilize its time doing, there’s so much that can be done

on the “frontend” in working with employees and their

optimization of I.T. that can help to improve business

processes. As an organization may have identified and

experienced in the strategy planning process

interviewing employees and assessing employee usage of

applications, there’s frequently a disconnect between

I.T.’s knowledge of what employees do in a day, and how

the tools they use meet (or more likely fail to meet) their

needs.

73

RETRAINING PERSONNEL FOR THE NEW WORLD OF

I.T.

Employees have gotten used to I.T. just telling them to

how to “use the applications and tools” rather than really

helping to improve their daily tasks and responsibilities

through the use of technology. As many organizations

have seen and experienced with the adoption of cloud-

based file storage and collaboration tools like Box.com,

DropBox, or GoogleDocs, employees simply wanted to

share and collaborate internally and externally with

others. Traditional I.T. fileservers didn’t provide this

functionality, so employees found a way to do it on their

own. The same pent-up demand for other uses of

technology exist in employee desire to maximize their

use of data, ability to leverage and access information

from a mobile device just like Apps allow them to do with

other services.

I.T. can shift from a reactive end customer service

organization that helps employees fix things when they

don’t work, to a business entity where I.T. can proactively

understand what employees do, and develop systems,

tools, and solutions that make I.T. an enabler of technical

solutions that help the organization more effectively do

their jobs.

Embarking on Data Analysis and Predictive

Learning on Opportunities

Lastly, a key area that I.T. has been able to focus its

newfound time has been embarking on solutions that

maximize data analysis and predictive learning solutions.

As social media organizations have leveraged their

knowledge of data to understand what consumers have

searched for, have bought, and will likely buy into big

business, organizations have tools available that enable

users to leverage data to the benefit of the organization.

Data analysis tools that can help an organization

identify which customers will buy or increase purchases

of their goods or services, predictive learning tools that

can project inventory demands for better “just in time”

production and stocking levels, security analysis

proactively learning, predicting, and preventing security

threats and data compromise in the environment.

The tools exist, it’s just a matter of “someone” in an

74

APPLICATION AND DATACENTER MODERNIZATION

organization to understand the tools, build models on

leveraging the tools, and implement and train frontline

employees how to utilize the tools to improve how

technology can be a true enabler in the success of the

organization.

75

RETRAINING PERSONNEL FOR THE NEW WORLD OF

I.T.

76

11 SUMMARY

Cloud scale and Cloud optimization are no longer

buzzwords to describe a potential future model for an

optimized technology driven model, but years into the

introduction of the cloud to the marketplace are now

core tenets of technology innovation leveraged by

enterprises to their benefit. Technological changes have

brought about the vision for change, and application and

datacenter modernization is the foundational step that

will help organizations maximize their potential for

technological optimization.

The goal for application and datacenter modernization

isn’t to be “all cloud, right now,” but to selectively choose

what makes most sense for each application and stage

the implementation in the enterprise over time in a way

that makes the most sense for the organization. Most

enterprises will operate in a hybrid model, with some

77

SUMMARY

services hosted and running in the cloud, and other

services remaining on-premise. The larger the

enterprise, the longer the organization will remain in a

hybrid state. However, EVERY organization needs to

have an Application and Datacenter Modernization

roadmap that’ll clearly identify how, when, and what

applications it will shift to a more optimized model.

For many organizations, simply bundling up virtual

machine on-premise and moving them to an IaaS cloud-

based virtual machine is the easy first step to dip their

toe into the enterprise cloud model. However, running

applications on a server, in an operating system is an

expensive operational model. The time and effort

organizations spend in patching, updating, upgrading,

and managing servers is what has driven the movement

to SaaS-based applications. Email and Calendaring

systems have been broadly adopted and deployed by

organizations of all sizes across all industries as email is

the same sending and receiving of messages no matter

what industry an organization belongs to. A one-to-many

model bodes well for email as a service, and

organizations have adopted cloud-based email with rapid

deployments.

PaaS-based models are the step for applications that

require customization unique to an enterprise, but allows

for a simplified model that eliminates an organization’s

need to host servers and manage the core infrastructure

of a server environment itself.

This book identified the cost model where transitioning

from on-premise applications to a SaaS or PaaS model is

not more expensive than the major lift and shift

organizations go through every 3-5 years to upgrade and

update their applications. Organizations investing in

shifting from one major version to another major version

of a solution can transition the organization out of an

internally hosted model to a shared model that eliminates

a huge portion of an organization’s cost of I.T. operations.

Early adopters and now mainstream enterprise

adopters have enjoyed significant operational benefits in

their journey to modernize their applications and

datacenters. I.T. personnel no longer spend their time

trying to keep systems operational, and instead allocate

78

APPLICATION AND DATACENTER MODERNIZATION

their time to proactive tasks that enabled I.T. to truly be

an enabler for the enterprise.

I.T. can now spend its time helping employees better

leverage technology, utilize technology to optimize

employee’s time in the day, and identify ways to improve

security.

It is truly a new world of I.T. with an opportunity for all

organizations to modernize their application and

datacenter environments, and move the organization into

a business model optimize to help the organization meet

their business goals and objectives.

79

ABOUT THE AUTHORS

Rand Morimoto, Ph.D., MBA, CISSP, MCITP: Dr

Morimoto is the President of Convergent Computing

(CCO), a San Francisco Bay Area based strategy and

technology consulting firm. CCO helps organizations

development and fine tune their technology strategies,

and then provide hands-on assistance planning,

preparing, implementing, and supporting the technology

infrastructures. CCO works with Microsoft and other

industry leading hardware and software vendors in early

adopter programs, gaining insight and hands-on

expertise to the technologies far before they are released

to the general public. This early adopter experience has

allowed Rand and CCO’s experts develop tips, tricks, and

best practices based on lessons learned.

Chris Amaris, MCITP, MCTS, CISSP: Chris is the chief

technology officer and cofounder of Convergent

Computing. He has more than 30 years’ experience

consulting for Fortune 500 companies, leading

companies in the technology selection, architecture,

design, and deployment of complex enterprise cloud

integration projects. Chris specializes in leveraging

Microsoft Azure and System Center technologies to

achieve high degree of on-premise to cloud integration,

migration, automation, and self-service, reducing the

level of effort and time-to-market for organizations while

providing high levels of fault tolerance and availability.

80

Table of Contents

Book 4

chapter on Datacenter Modernization extends the

Mini-Book Strategy Series – Book 4...................................i

DEDICATION..................................................................iii

ACKNOWLEDGMENTS...................................................v

TABLE OF CONTENTS..................................................vii

INTRODUCTION.............................................................1

1 Identifying the Need for Change.................................3

Legacy Targeting of Buying, Building, and Running

Optimized for Self-Sufficiency.....................................5

Internalizing the Cost of High Availability and

When Overhead Exceeds the Facility for Utility.........6

2 Cloud Brought About Better Ways of Doing I.T...........7

Paying for Services You Use........................................7

OpEx vs CapEx.............................................................9

Bypassing Cloud Wannabe’s........................................9

When Cloud Scale Equates to Cloud Reliability.......10

3 The Hybrid Strategy – Not Just Migrating to the

Focusing on App and Datacenter Modernization.....14

The On-Premise Model for Legacy Applications.......15

Potentially Migrating Core Secure Apps Last...........15

The Larger the Enterprise, the More Likely the

Planned and Coordinated Transitions to

4 Focusing on the Application, Not the Server............19

The True Cost and Overhead of “Server” Operations

The Total Cost of Running a Server-based I.T.

The Case Study of Email as a Service.......................21

The Case Study of Websites as a Services................22

5 Application Modernization.........................................23

Software as a Service for Commodity-based

Email as a Service (Office 365 / Google Mail)..........25

CRM as a Service (Salesforce.com)..........................27

Choosing Functionality over Product Brand.............28

Running On-Premise for a Period of Time................29

6 Datacenter Modernization.........................................31

Leveraging Identity as a Service...............................32

Transitioning the Rest of the Datacenter Isn’t a One

Simplicity of IaaS.......................................................34

Where PaaS Fits In for Datacenter Modernization. .35

7 Strategy Planning for App and Datacenter

Inventorying Current Applications............................38

Preparing an Initial Gap Analysis..............................39

Identifying More Effective Apps and Services for

Building a Transition Plan.........................................40

8 Budgeting for Modernization.....................................43

Assessing CapEx and OpEx Costs in the New World of

Comparing Overall Costs to Historical Costs of I.T.. 45

Creating an ROI Analysis for the Modern App and

Calculating the True Runtime Needs of the Systems

Summarizing the Business Benefits of the Modern I.T.

9 Rethinking Monitoring and Management Services. .49

Reassessing the Need for Patch and Update