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© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
Spend OPEX dollars and get your own private cloud Ken Rief, Americas Portfolio Manager
June13, 2013
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 3
My background
Title
Americas Portfolio Manager –Flexible Capacity Service
IT industry experience • Business Development for Multi-Vendor Services
• Services Sales Consultant
• Hardware Sales
Years at HP
15
Current responsibilities • Portfolio Management
• Subject Matter Expert for Private Cloud offering
• Sales training
Name: Ken Rief
E-mail: [email protected]
Agenda
Customer challenges
Flexible Capacity Service Overview
Why is Flexible Capacity Service necessary?
How it works
Customer Example
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 5
What we are hearing...
Customer challenges
• Large upfront IT investment
• Capital budget constraints
• Flexibility to meet growth and surges in demand
• Ability to control and monitor infrastructure utilization
• Provisioning, managing, and scaling infrastructure
• Aligning costs with infrastructure usage
• Increase IT sustainability
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 6
Why is Flexible Capacity Service necessary?
Predicting capacity requirements
Too much capacity with low utilization
Missed opportunities and dissatisfied customers
Limited IT budgets
Large upfront IT investment is difficult
Align infrastructure cost with usage
Long purchase cycles
Purchase orders take weeks to months
Customer challenges
Actual Capacity Usage
Flexible Capacity Deployed Ahead of Demand
Capital Expenditure or Lease IT Infrastructure deployed
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Flexible Capacity Service Overview
Infrastructure capacity that never runs out and ensures customer security • Customizable to meet unique requirements for servers, storage, networking and software
• The right resources as pre-emptive services, ensuring maximum uptime and best time to value
• The right time on your site, ensuring security & compliance by keeping all infrastructure in your data center
Paid for as you use it • Eliminate upfront capital expenses
• Monthly service invoice on metered usage
Easy to procure • Smooth acquisition process
• Equipment ready when you need it on your site
• Partnership to share utilization risk
Capacity ahead of demand – at customer site
Flexible Capacity matches your variable demand
Business Application Fo
reca
ste
d c
ap
aci
ty
Increase capacity
Loca
l b
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er
Decrease capacity
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Pay only for the servers, storage and networking capacity and services you actually use each month
Monthly Payment Includes1
• Servers
• Storage
• Networking
• Software
• Services
Variable usage = variable payment
• Usage = Billing
• Usage = Billing
• Usage = Billing
Network Per Port
Servers Per blade
Storage Per GB
1Minimums apply below certain usage levels (80%)
Software Per License,
GB or VM.
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Services are included in the Monthly Cost Install and Deploy • All equipment is delivered turn key with a basic configuration as mutually defined.
• Spare equipment is delivered in the same way but powered down. Ready to start when you need it.
HW and SW support • DL Servers: 7x24 with 4 hour hardware response time.
• All HP delivered software: 7x24 with 2 hour response time
Proactive services targeted to the availability of the infrastructure through: • 4x per year on-site meeting for operational review and forecasting
• 2x per year patch analysis and management
• 1x per year system health check
Utility Management services • Dedicated back office in combination with the Account Support Manger (who is also part of the Proactive services)
• Monthly reporting of the usage figures and related costs
• Initializing assessments and migration services.
• Architectural/Consultancy support
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Projected investments for traditional acquisition plan vs. proposed Flexible Capacity Service solution
Cost comparison – 3Par Storage – 9.01% Savings
CAPEX Expenditures Year 1 Year 2 Year 3 Year 4 4 Year Total
Total CAPEX expenditure $1,529,702 $122,716 $179,121 $759,834 $2,591,375
FCS Solution
Year 1 Year 2 Year 3 Year 4 4 Year Total
Total FCS costs $355,385 $504,605 $652,752 $845,203 $2,357,947
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* Includes all hardware, software and services
HP FCS Annual Cost Comparison*
Millions of Dollars
0
1
2
3
4
5
6
7
Year 1 Year 2 Year 3 Year 4 Total Cost
CAPEX
FCS
Cost comparison: 3Par Storage – 9.01% Savings
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 12
1. Analyze Requirements, Business Drivers; initial sale & ongoing
2. Define Plan Sign Contract and *SOWs
3. Servers, Storage and Networking devices delivered to Customer
4. HP installs & configures systems and meter software
5. Metering and data collection enabled during configuration
6. System sends usage report to HP portal
7. Monthly Invoice: Usage data used to calculate monthly bill.
HP and Customer can view usage data
on the web portal
Interlinked, ongoing management
• Add-on technology due to business need
• Buffer consumption and addition
• Technology refresh
*SOW = Statement of Work
Continuous loop process
Flexible Capacity Service: How it works
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Account Support Manager (ASM) Accountable for FCS proactive services relating to Capacity
Responsible for the installation and ongoing
mgmt (HP & Customer) of “meter” technology
Submits monthly usage data to HP
ECO
Conducts quarterly Customer Reviews Incorporates FCS activities, metering, and change processes into the overall Datacenter Care Account Support Plan
Monitor capacity used/buffer
capacity – Daily and trigger
change request if needed
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 14
Non-coterminous contract
Flexible Capacity Service – Basic Model
• From day 1 HP delivers and charges the Basic capacity
• Basic model includes 10% buffer capacity that is only charged when used
• HP charges used buffer capacity at a monthly price per server/GB/port/ and makes software available on a per license or VM used, until end of contract
• HP monitors consumption of buffer capacity on a pay-as-you-grow basis, replenishes it ahead of demand after consulting with customer
Pay as you grow model
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Buffer replenished ahead of demand
Flexible Capacity Service – Basic Model Example
Pay as you Grow model
Committed Capacity
120 blades
Utilization (6 blades)
Utilization (6 blades)
Utilization (6 blades)
Utilization (6 blades)
Time in months
Initial Buffer
Actual Usage
Server, Storage, SAN
12 blades
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 16
Flexible Capacity Service – Premium Model Possibility of rolling contract
• Set committed capacity (e.g. ,70% of current capacity used)
• HP delivers solution that is at least equal to current capacity
• HP implements a 10% buffer capacity, charged when customer uses it
• HP charges actual used capacity at a monthly price per server/GB/port/license/VM
• Grow and shrink in usage is allowed in FCS Premium, but never less than committed capacity.
Pay as you go model
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 17
Buffer replenished ahead of demand
Flexible Capacity Service – Premium Model
Pay as you Go model
Committed Capacity
120 blades
Utilization (6 blades)
Utilization (6 blades)
Utilization (6 blades)
Utilization (6 blades)
Time in months
Initial Buffer
Server, Storage, SAN
Actual Usage
Capacity returned, charges adjust
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Projected investments for traditional acquisition plan vs. proposed Flexible Capacity Service solution
Cost comparison: Blade Servers - 25.24% savings
CAPEX Expenditures Year 1 Year 2 Year 3 Year 4 4 Year Total
Total CAPEX expenditure $ 2,834,084 $ 986,621 $ 1,132,437 $ 1,633,073 $ 6,586,217
FCS Solution
Year 1 Year 2 Year 3 Year 4 4 Year Total
Total FCS costs $ 752,350 $ 1,001,240 $ 1,334,629 $ 1,829,354 $ 4,917,575
* Includes all hardware, software and services
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 19
HP FCS Annual Cost Comparison*
Millions of Dollars
0
1
2
3
4
5
6
7
Year 1 Year 2 Year 3 Year 4 Total Costs
CAPEX
FCS
Cost comparison: Blade Servers - 25.24% savings
* Includes all hardware, software and services
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 20
HP offers the required hardware and services capabilities as a utility:
FCS at a Glance
HP optimizes investments
1. HP meters and invoices customer on usage.
2. Internal charge-back of the usage of capacity is simplified.
3. Transparent & predictability based on actual use.
4. “Off balance-sheet financing”; Depending on accounting treatment, FCS may qualify for OPEX, which helps you improving your financial position.
HP shares risk costs
1. No expensive pre investment in HW & SW
2. A hot standby buffer ensures immediate availability of sufficient capacity at all times.
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 21
Financial Benefits of FCS for customers 1. Cash
– Preserves Cash for higher yielding investments 2. Cash Flow
– Cash in = Cash out, solves cash flow challenges – Service Providers can grow faster.
3. Impact on Financial Statements – Positive impact on financial ratios (current ratio & debt-to-equity)
4. Impact on Income Statement – Positive impact on profitability ratios (return on assets)
5. Predictability – Better visibility and predictability of IT costs.
6. Budgetary considerations – Payments are typically made from the operating budget. Allows companies to acquire needed equipment
when capital budget is exhausted or frozen. 7. Flexibility
– IT costs are aligned to infrastructure usage (both growth and shrink allowed). 8. Efficient
– Pay-per-Use means you don’t finance your over provisioned capacity in the Datacenter 9. Shared Financial Risk
– In FCS both customer and HP share the financial risk of unused capacity
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Capacity ahead of demand” with required infrastructure capacity provided on your site as a service
Flexible Capacity Service in a nutshell
• HP is responsible for supplying new HW & providing a buffer with a number of Blades / Storage capacity, not billed for unless used
• Depending on the category of server/cloud, storage or network security software you choose HP will include the software licenses, on a license, per GB, or per VM price.
• HP meters and invoices based on actual blade server and storage used each month1
• HP assumes significant share of business risk of storage and blade infrastructure
• No major capital investment in hardware required
• Better visibility , predictability and transparency of IT costs
• HP continuously optimizes existing capacity, ensuring sufficient standby capacity
1Minimums apply below certain usage levels (i.e., 80%)
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 23
Flexible Capacity Service – Coming Soon
• FCS to include HP Software Solutions: • Lead Products: • HP Cloud Service Automation (Cloud / Servers) • HP Data Protector (Storage) • HP Security – ArcSight: (Networking)
• Also Available: • HP Business Service Automation • HP Operations Orchestration • HP Server Automation • HP Network Automation • HP SiteScope • HP uCMDB • HP Database and Middleware Automation • Cloud Cruiser – Cloud Cost Management • HP Security – Fortify: Software Security • HP Security – TippingPoint: Network Security
To Be Announced at Discover: FCS Venus Release – July 19, 2013
• FCS for Hyperscale • Support for SL and SE Blades • Support for Moonshot • Support for Hyperscale DC Services
• Back Office Enhancements • Enhanced User Portal Experience • Customer Ad-Hoc Reporting • Faster Invoicing
• HP Networking Expansion • Per Port Billing • Per User Billing
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 24
Customer example: Service Provider
Challenge Service Provider won a large customer deal themselves and needed to provide their customer with software, infrastructure, market-specific solutions and a wide range of related services, quickly and cost-effectively
Solution HP transformed customers traditional IT infrastructure to a Flexible Capacity Service with our TS usage based solution model
Components • HP CloudSystem Matrix
• HP 3Par Storage, HP EVA Storage, HP X9720 Storage
• HP SAN Switches, HP MPX200 Routers
• TS Services: Cloud Start Consulting Service, Lifecycle, Proactive & Reactive Services
What HP provides • Desired financial flexibility
• Solved cash-flow challenges
• Moved CapEx to OpEx
Allows capacity usage to grow and shrink*
HP was the best vendor to deliver the solution both from a product and service perspective.
HP Datacenter Care Flexible Capacity Service
*(within limitations)
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 25
Projected investments for traditional acquisition plan vs. proposed Flexible Capacity Service solution
Cost comparison: Blades, Storage, Network Switches – 4.3% Savings
CAPEX Expenditures Year 1 Year 2 Year 3 3 Year Total
Total CAPEX expenditure $1,453,771 $107,859 $349,706 $1,911,337
FCS Solution
Year 1 Year 2 Year 3 Year 4
Total FCS costs $481,760 $616,600 $728,892 $1,827,252
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 26
HP FCS Annual Cost Comparison*
Millions of Dollars
0
0.5
1
1.5
2
2.5
Year 1 Year 2 Year 3 Total Cost
CAPEX FCS
Cost comparison: Blades, Storage, Network Switches – 4.3% Savings
* Includes all hardware, software and services
© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 27
Flexible Capacity Service Framework Delivering proven business value
Datacenter Care Services
• Implementation/Deinstall and Program Management
• Capacity Management and Planning
• All system health, care and feeding and reactive maintenance services.
• Other things can be added Ex. Migration Planning
Services
Servers, Storage and Networking (and HP software)
Hardware
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For more information
Attend these sessions
BB2678
Datacenter Care: Boost availability, performance and
efficiency while reducing IT operating costs
BB1650
Spend OPEX dollars and Get your own Private
Cloud
DT3268
Exceeding SLAs for critical Cloud based IT services
TB3210
Estimating and improving ROI in your data center
BB3546
Addressing critical support challenges in a
converged cloud environment
BB2673
Datacenter Trends & Direction
Visit these demos
• Moonshot Services
• Datacenter Care PSP
• Supporting the Cloud
After the event
• Contact your sales rep
• Visit the website/Facebook/Twitter at: www.hp.com/services/datacentercare
• Download the whitepaper Conquering the Challenges of DC Complexity
http://h20195.www2.hp.com/V2/GetDocument.aspx?docname=4AA4-0087ENW&cc=us&lc=en
Your feedback is important to us. Please take a few minutes to complete the session survey.
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