UNIT -2

CLOUD SERVICE STRATEGY

Syllabus: Cloud Strategy Fundamentals - Cloud Strategy Management Framework -
Cloud Policy - Key Driver for Adoption - Risk Management - IT Capacity and Utilization
- Demand and Capacity matching - Demand Queueing - Change Management - Cloud
Service Architecture
CLOUD STRATEGY FUNDAMENTALS
 Strategy: It involves setting goals and priorities, determining actions to achieve the
goals, and mobilizing resources to execute the actions.
 Cloud strategy: It is the plan an organization follows to host its IT infrastructure in a
cloud environment.
 Goal:
1. Optimize the business outcomes (speed, resilience [elasticity] and agility) (or)
Ensure Effective performance of the infrastructure
2. Enable distributed based cloud architecture for different services
3. Growing the public to improve the skills internally
4. Minimize the risks and challenges
 It refers to the core principles and considerations that organizations should take into
account when adopting and implementing cloud technologies.
 Cloud Strategy must supports (cloud management)
a. Cost
b. Service level
c. Functionalities
 Cloud Strategy principles:
a. Trust
b. Enablement
c. Enterprise Risk
d. Capability
e. Cost-benefit
f. Accountability

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 Fundamental Aspects for strategy formulation
1. Business Objectives and Alignment - align the cloud strategy with the overall
business strategy to ensure that technology decisions are in line with the
company's direction.
2. Workload Assessment - Evaluate existing applications and workloads to determine
which ones are suitable for migration to the cloud.
3. Selection of suitable Deployment Models
4. Selection of suitable Service Models to align with the business goals
5. Security and Compliance - Security strategy that addresses data protection, access
control, encryption, and compliance requirements specific to your industry and
jurisdiction.
6. Data Management and Governance – Define how data will be managed, stored,
and accessed in the cloud. Establish data governance policies to ensure data
quality, privacy, and compliance.
7. Cost or financial Management
8. Migration Plan
9. Vendor Selection - Evaluate and choose a cloud service provider based on factors
such as service offerings, pricing, geographic availability, reliability, and support.
10. Performance and Scalability
11. Resilience and Disaster Recovery
12. Training and Skill Development
13. Change Management and Training
14. Performance Monitoring and Management
15. Continuous Improvement
16. Communication and Reporting
 Main Phases:
1. Strategy Phase
- It is the initial and foundational part of strategy steps.
 - It sets the foundation for successful cloud adoption by aligning technology
decisions with business goals and considering the organization's unique needs
and challenges
2. Planning Phase
- Perform the problem analysis & risk analysis for switching to cloud technology
- Steps:
a. Development of Business Architecture
b. Development of IT Architecture
c. QOS development requirement
d. Development of Transformation plan
3. Deployment Phase
 Strategy Life Cycle :
1. Planning for utilizing cloud technology
2. Capabilities of an enterprise
3. Target architecture require
4. Transition planning & gap analysis
5. Planning to implement cloud
6. Governance & significance of SOA (Service-Oriented Architecture)
 CLOUD STRATEGY MANAGEMENT FRAMEWORK
 Definition: It is a structured approach that guides organizations through the process of
developing, implementing, and managing their cloud strategies.
 It provides a systematic way to align business objectives, technology decisions, and
operational considerations when adopting and utilizing cloud services.
 It is essential for providing a structured, consistent, and effective approach to
managing cloud services.
 It helps organizations mitigate risks, optimize resources, ensure security and
compliance, and align cloud strategies with business objectives in a rapidly evolving
technological landscape.
 Need for Cloud Service Framework:
1. Need common standard ad practices (wide range of services, technologies and
providers)
2. Complexity management (hybrid or multi-cloud setups)
3. Efficiency
4. Scalability
5. Security and compliance
6. Training and onboarding (easy)
7. Change management (adopt with new technologies in cloud)
8. Resource management
 Components of cloud Strategy management Framework:

1. Assessment and Analysis - Workload assessment (identify current IT landscape,

business needs)
2. Business Objectives and Alignment (vision and objectives)
3. Selection of suitable Deployment Models
4. Selection of suitable Service Models to align with the business goals
5. Governance and policies (security, compliance, data management and budgeting)
6. Data Management and Governance – Define how data will be managed, stored,
and accessed in the cloud. Establish data governance policies to ensure data
quality, privacy, and compliance.
 7. Cost Management
8. Migration Plan
9. Vendor Selection - Evaluate and choose a cloud service provider based on factors
such as service offerings, pricing, geographic availability, reliability, and support.
10. Performance and Scalability
11. Resilience and Disaster Recovery
12. Training and Skill Development
13. Change Management and Training
14. Performance Monitoring and Management
15. Continuous Improvement
16. Communication and Reporting
 Framework Architecture:

CLOUD POLICY
 Cloud security policy: It is formal guidelines companies adhere to that help ensure
safe and secure operations in the cloud. (or) set of rules, guidelines, and principles
that an organization establishes to govern the use, management, and security of cloud
computing resources and services.
 It is an essential part of your cloud security strategy and helps your organization
properly store and protect your critical data assets.
 Cloud policies are designed to ensure that organization's business goals.
 Entire Life cycle: A cloud policy is applicable throughout the entire lifecycle of cloud
adoption.
 Guidance: It serves as a guiding document that outlines the rules, guidelines, and best
practices for using, securing, and managing cloud resources effectively.

 Not adopting cloud policy: If not adopting a cloud policy can result in a lack of
consistency, security vulnerabilities, compliance risks, inefficiencies, and missed
opportunities.
 Policy ensures
a. Confidentiality
b. Integrity
c. Availability of data stored
d. Accessing of data
e. Manipulation of data
 Key aspects:
a. Data Security and Privacy: - Access control and authentication
b. Access and Identity Management – user access controls
c. Resource Provisioning and Management
d. Cost Management
e. Vendor Management – selection of CSP
f. Disaster Recovery and Business Continuity
g. Change Management
h. Cloud Service Adoption
i. Monitoring and Incident Response
j. Training and Awareness
 KEY DRIVER FOR ADOPTION
 It is the strategically move taken by an organization in order to bring the services at
one common platform pertaining to the responsibilities of an organization, with the
motive to clear the cost, access the cloud storage, mitigates the risk factors and deliver
scalable services.
 It plays a pivotal role in shaping the strategy, benefits, and outcomes of adopting cloud
services.
 Business Drivers:
a. Capacity Planning - Estimates the production capacity (storage,
infrastructure, hardware, software, availability of resources) needed for its
products to cope with the ever-changing demands in the market. It depends on
o Level of demand
o Cost of production
o Availability of funds
b. Cost Reduction
c. Organizational Agility - the process by which an organization will adapt and
evolve to sudden changes caused by internal and external factors.
 Drivers to cloud adoption:
1. Security
2. Cost Saving or cost Efficiency
3. Efficiency
4. Flexibility and Scalability
5. Rapid Recovery
6. Increased Convenience – easy accessing
7. Speed and Productivity
8. Strategic Value [ competitive edge to businesses - business agility and
customer satisfaction]
9. Multi-tenancy (multiple customer share the underlying models)
10. Service and innovation (use many API and use flexible cloud tools and
environments to build new and innovative applications and process)
 11. Standards
12. Sustainability
13. Rapid deployment – Cloud services enables fast provisioning of resources and
deployment of applications. (reduce time for the product enter into market)
14. Access to advanced technologies
15. Reduced IT Management Burden
16. Competitive advantage
 key drivers for cloud service adoption are not defined clearly, an organization may
face various challenges and uncertainties when transitioning to the cloud.
 Consequences of not well-defined key drivers:
a. Lack of strategic alignment
b. Unpredictable outcome
c. Inefficient resource utilization
d. Inconsistent decision making
e. Missed opportunities
f. Security and compliance risk
g. Limited adoption to advanced technologies
h. Difficult in vendor selection
RISK MANAGEMENT
 Risk management: Risk management in cloud services management involves
identifying, assessing, mitigating, and monitoring potential risks associated with using
cloud computing resources and services.
 Effective Risk Management: Proactive risk control
 Life Cycle: It needs to be applied throughout the entire lifecycle of cloud services
management, from the initial planning and assessment phases to ongoing operations
and monitoring.
 Continuous process: Risk management is a continuous and integral part of cloud
services management.
 Risk management life cycle: It is a structured process that organizations follow to
identify, assess, mitigate, monitor, and respond to risks.
 Different risk management Process:
a. Identify the risk
b. Analyze the risk
c. Evaluate the risk (ranked based on the sevierity)
d. Solve the risk
e. Monitor or review the risk
 Types of Risk in cloud computing:
a. Data breach - unauthorized access to the confidential data of an organization
b. Cloud vendor security risk – CSP cloud security and risk mitigation affects
organization growth
c. Availability - Any internet connection loss disrupts the cloud provider's services,
making the services inoperative
d. Compliance - The service provider might not follow the external audit process,
exposing the end user to security risks
 Steps involved in Risk Management:
1. Risk Identification – identify the potential risk
2. Risk Assessment
3. Risk Mitigation Strategies - Develop strategies to mitigate or reduce identified
risks
4. Data security (encryption techniques)
5. Compliance and governance - policy
6. Vendor risk management - evaluate the security practices and certifications of
CSP
7. Data Loss Prevention
8. Service availability
9. Change Management – It ensures that updates, changes, and configurations are
carefully planned and tested to avoid disruptions.
10. Business continuity - ensure that critical applications and data can be restored in
the event of a disaster.
11. Incident Response
 12. Cost management
13. Continuous Monitoring
14. Audit and reporting
15. Employee training and awareness
16. Establish Service Level Agreements (SLA) with CSP
 Benefits of Risk Management:
a. Forecast probable issues (identify the risks – helps to implementing appropriate
control strategies)
b. Increase the scope of growth
c. Business process improvement
d. Better budgeting
 Best practices for Risk Management:
a. Better selection of CSP
b. Deploy Technical safeguards to monitor the activities of the consumers
c. Establish effective control strategies
d. Optimize cloud service model
IT Capacity and Utilization
 Capacity of cloud: It defines the amount of resources, such as CPU, memory, disk
space, network bandwidth, and concurrent users that the cloud provider can allocate to
for the applications and services.
 IT Capacity plan: IT defines the resources necessary to meet the organization's
service requirements.
 Issues of no proper capacity planning: It leads to performance problems,
unnecessary hardware expenditures, and user dissatisfaction.
 Factors for measuring capacity plan: capacity plan is derived from the current and
future utilization for holding, storing and accommodating the software services.
 Survey report: servers' average utilization in the traditional data center is between 5%
and 20%.
 Capacity management: It involves planning, monitoring, and optimizing IT resources
to ensure that they meet current and future demands while avoiding underutilization or
over provisioning.
 Utilization: It defines the percentage of time that a component is actually occupied, as
compared with the total time that the component is available for use.
o Example: Assume for an instance if a CPU processes transactions for a total of 40
seconds during a single minute then what is the utilization factor?
Utilization factor in percentage = 40/60*100 = 2/3 = 67%
 Role of Cloud Capacity Management:
a. It reduces the excess capacity occupied by the services
b. It helps to increase the business growth
c. It reduces the cost of the service
 IT capacity
a. Planning for Capacity - It helps ensure that the organization has the right
amount of resources to handle demand.
b. Resource Provisioning – Over provisioning (allocating more resources than
necessary) and under provisioning (allocating fewer resources than needed)
can both have negative impacts on cost and performance.
 IT utilization
- Utilization rates indicate how much of the available capacity is being actively
used.
- Resource monitoring: Tracking metrics such as CPU usage, memory
consumption, storage usage, and network bandwidth
- Optimization: Reallocating resources to achieve better efficiency and
performance.
 Benefits of Effective capacity and Utility management:
a. Cost efficiency
b. Performance optimization
c. Scalability
d. Flexibility - Easy to align with business needs
 e. Resource allocation based on priority
f. Proactive Problem Detection
g. Data driven decision (effective resource allocation)

DEMAND AND CAPACITY MATCHING

 Goal: Ensure the available resources are efficiently utilized to meet customer demand
without causing supply shortages or excessive resource wastage.
 It is a fundamental concepts in cloud computing.
 Demand: The amount of computing resources that users require at any given time.
 Need for Demand and capacity utilization:
a. Efficient allocation of resources
b. Optimizing cost (cost management)
c. Maintain better performance
d. Improve customer satisfaction
e. Inventory management
 Parameters for deciding the demands:
a. User activity
b. Application usage
c. Business operations
 General Methods:
a. Adjusting capacity to match demands
b. Altering demands to match available capacity
 Strategies for demand and capacity matching:
a. Capacity expansion / reduction
b. Flexible operations (adjust output more easily to match changing demand)
c. Demand Forecasting
d. Lead Time management – quickly responds to demands
e. Buffer stocks – Maintain buffer stocks to manage temporary demands
f. Collaboration – supply chain management
 g. Pricing strategies - Dynamic pricing strategies can be used to influence
demand during peak periods or to stimulate demand during low-capacity
periods
 Demand Forecasting: It is the process of estimating the future demand for a service
or product on historical data, market trends, customer behavior, and other factors.
 Different forecasting models:
a. Based on varying detail (business needs)
b. Time
c. Type of data storage
 Capacity management: It is the process of planning, allocating, and adjusting the
resources of a business to match the demand for its products or services
 Key aspects define the relationship between demand and capacity matching:
a. Balancing demand and supply
b. Efficient resource utilization
c. Customer satisfaction
d. Revenue generation
e. Cost control
f. Risk management
g. Technology and innovation - Automation, data analytics, and AI-driven
forecasting can enhance decision-making.
 Challenges:
a. Uncertainty in demand prediction
b. Investment costs for expanding capacity requires investment
c. Lead Time: Rapidly adjusting capacity might not be feasible due to lead times
for equipment, hiring, or training.
d. Seasonality (fluctuations in demands - maintain consistency throughout the
year is not feasible)
 DEMAND QUEUEING
 Demand Queuing: It refers to the practice of organizing and prioritizing incoming
requests for cloud resources or services in a systematic manner when the available
resources are currently insufficient to fulfill all requests immediately.
 Excessive queuing can lead to long waiting times and user dissatisfaction.
 Need for effective queue strategies: It is need to fine-tune their queuing strategies
and ensure that resource capacity is adjusted to meet the overall demand over time.
 Balance: Need to create a balance between demand queuing and providing timely
access to resources for effective management.
 Essential tool: It ensures fair and organized access to resources during times of high
demand, promoting a balanced and efficient service environment.
 Need for Queuing Strategies: It helps to manage the situations when the demand for
resources temporarily exceeds the available capacity.
 Size of the Queue: It defines the balance between demand and capacity
 Size of the queue is measured by counting the number of requests or tasks that are
currently waiting in line to be processed or fulfilled by the cloud service provider.
 Situation suitable for implement queuing strategies:
a. Incoming request for accessing resources
b. Limited capacity of the resources available
c. The number of requests exceed the available resources capacity
d. Prioritization of request
e. Resource allocation based on criteria
f. Monitoring and metrics
 Services associated with Queuing:
a. Monitoring and metrics
b. Notification and feedback
c. Load balancing
d. Prioritization
 Advantages:
a. Resource optimization
 b. Fairness (FIFO order)
c. Performance stability
d. Reduced service failure (minimize the rejection of services)
 Challenges faced if queue mechanism is not implemented:
a. Service rejection
b. Unpredictable access
c. User dissatisfaction
d. Missed business opportunities
e. Inefficient resource utilization
f. Lack of prioritization
g. Unpredictable performance
h. Loss of business opportunities
i. Negative impact in revenue
j. Reduced customer loyalty

CHANGE MANAGEMENT
 Definition of change: The addition, modification, or removal of anything that could
have a direct or indirect effect on services.
 Definition: It is the methodology and processes used by organizations to plan and
manage these changes (or) the process responsible for controlling the lifecycle of all
changes, enabling beneficial changes to be made with minimum disruption to IT
services (or) deliver critical updates to products while simultaneously minimizing
disruption to user workflow (or) it is a structured process of planning, implementing,
and tracking changes to cloud-based systems, applications, and services while
minimizing disruption to business operations and ensuring the integrity and security of
the environment.
 Condition for consistent change management: The changes must be beneficial and
the minimum disruption to IT services.
 Managed activities: It refers to a set of policies and actions that ensure change is
properly managed throughout every stage of the process.
 Survey report: Effective change management strategy allows 93% of organizations to
successfully achieve predefined objectives.
 Complexity of implementing the changes: Complex due to the dynamic and
interconnected nature of cloud services.
 Need for change management:
a. Maintain control
b. Maintain Stability
c. Maintain security
d. Maintain compliance
 Stable and Reliable: It is crucial for maintaining a stable and reliable cloud
environment, ensuring data security and compliance, and facilitating the seamless
evolution of cloud-based solutions as business needs evolve.
 Duration of change management: It depends on,
a. Complexity of the change
b. Scope of the cloud environment
c. Organization's processes
d. Level of coordination required.
 Need for Rollback: Yes required if any risks happen due to the changes
 Basic types of change management:
a. Routine updates and patches
b. Configuration change
c. Upgradation in resource scaling
d. Migration and deployment
e. New feature implementation (new functionality)
f. Service decommissioning (removing feature)
g. Data management
h. Security enhancement
i. Vendor changes
j. Disaster recovery and business continuity
k. Process and work flow changes
 Outline or steps involved in change management:
a. Change identification and request (new feature / existing, configuration change
or security)
b. Change evaluation – assess the potential impact [Evaluate technical feasibility,
risk analysis, benefits, costs and alignment with business goals]
c. Change planning – develop a plan for implementing the change (it involves
defining the scope, setting priorities, allocating resources and creating
timeline)
d. Testing and validation
e. Communication and stakeholder management - Keep all relevant stakeholders
informed about the upcoming change
f. Change deployment – implement the changes in the production based on plan
(requires careful execution to minimize disruptions to ongoing operations)
g. Monitoring and feedback – identify or detect any anomalies, performance
degradation or security issues introduced due to the changes if any
h. Issue Resolution – Address the issue (rollback needed in necessary)
i. Documentation and knowledge management
j. Post- change review
 Advantages of Change Management:
a. Continuous improvement
b. Adopt to new technology and innovation
c. Improve vendor relationship
d. Adopt to new infrastructure
e. Helps to improve the security
f. Minimize user impact
g. Helps to reduce the risks
 CLOUD SERVICE ARCHITECTURE
 Cloud service: It refers to various internet based information technology resources.
 Cloud Service architecture:

(or)
 Different components of Cloud Service Architecture:
1.Service Consumption 6. Service support
2.Service usage and Billing 7. Service Function
3.Service Security 8. Service Economics
4.Service monitoring and 9. Service chain Entity
Control
5. Self-Service
1. Service Consumption: (how much bandwidth data is consumed)
- Service consumption is based on the usage of cloud resources based on
entitlement or subscription.
- Parameters: It includes
a. Offering (type of service models used)
b. Consumption component (the way the resources are used – Pay-as-you-Go-,
reserved instances, spot instances, subscription, free tier, etc..)
c. Consumption method – Effective organization of resources (optimization)
d. Consumption pre-requisite (well structured, efficient goals)
2. Service Usage and Billing
- It is used to generating bills for the resources used based on predefined policies.
- Functionalities involved:
a. Metering – measuring and tracking of resource usage
b. Billing – Generating invoice
c. Unit of Measurement – Specific metrics used to measure the resource
consumption
d. Instrumentation - process of adding monitoring, tracking, and measurement
capabilities to various components and services
3. Service Security
- It offers security of cloud-based services, resources, and data
- It includes
a. Consumer access
b. Authentication and authorization
c. Entitlement / usage permission
4. Service monitoring and Control
- It includes
a. Monitoring boundary
b. Instrumentation
c. Map – Graph representation about utilization of resources status, health
and performance.
5. Self-Service
- It enables auto-fix scripts / automation, access to knowledge nuggets
6. Service support
- It covers SLA commitments, resolver groups and product owners.
7. Service Function
- It includes
a. Service d. Status
name
e. Utility
b. Function
f. Warranty
c. Description
8. Service Economics
- It deals with the principles, costs and benefits of cloud computing.
- It includes
a. Cost management
b. Cost model
c. Charge back / show back
9. Service chain Entity
- It defines a sequence or combination of interconnected cloud services or
resources that work together to deliver a specific functionality or application.
- It includes
a. Creator e. Orchestrator
b. Provider f. Aggregator
c. Supporter g. Consumer
d. Integrator h. Payer