AWS Techical Due Diligence to post transaction execution for M&A
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The AWS Value Creation Practice focuses on generating strategic and financial returns for investors and their company portfolios by implementing a structured approach to technical due diligence (TDD) and post-acquisition value creation. It encompasses various aspects, including migration, modernization, cost optimization, and support for cloud adoption in the first 100 days and beyond, aiming to enhance operational efficiency, reduce technical debt, and drive innovation. The practice facilitates a more robust financial governance model, aligning regulatory requirements and ensuring enhancements in security and compliance through continuous assessments and tailored recommendations.
AWS Techical Due Diligence to post transaction execution for M&A
- 1. AWS Value Creation Practice Overview Collective focus on creating strategic and financial returns for investors and their portfolio of companies Begins in Diligence Works Backwards from the Investment Strategy
- 2. M&A Lifecycle: Hypothesis to Exit Firm Investment Hypothesis • AWS support of PE Firms investment hypothesis • AWS support for funds hypothesis • Impact of cloud and data on hypothesis Technical Due Diligence • Playbook and runbook • Post TDD 48 hour report • AWS proposal for first 100 days • Recommendation s on migration /modernization, innovation, go-to- market First 100 Days • Cloud Economics Business Case • Value Benchmarking • Cloud Capability Assessment • Transformation Journey Plan and Cloud Manifesto • Cloud Adoption Office • Security and Compliance Assessment • Cloud in a Box reference architectures • Identify Partners First Six Months • Non-AWS – Migrate and Modernize • AWS – Cost and platform optimization • Training and enablement • Cloud Operating Model • Operational Readiness Reviews • Technical Debt reduction • Digital Innovation Workshops Operate • Cloud Capability Assessment every 6 months • Operational Excellence on AWS • Automate • CI/CD • Focus on innovation and disruption • Cost Optimization • Correction of Errors • QBRs One year before sale • ‘Fit for sale’ program – data fabric, data analytics, AI/ML, Cloud Native • AWS Marketplace, SaaS, APN AWS Proactive Engagement Pre-Acquisition Post-Acquisition Value Creation
- 3. AWS Value Creation Practice Cloud Value Creation Levers Accelerate value realization by identifying value creation levers in diligence, reducing cost and risk in first 100 days, re-investing in growth and innovation for competitive advantage. GrowCost Risk Innovate Unlock hard-dollar savings from reduced infrastructure costs and improved staff productivity, while providing a robust financial governance model to sustain in the long-term. Improve overall security posture, align to specific regulatory requirements, and ensure operational and financial risk reduction through robust (and on-going) reviews and optimization of environment. Collaborate, develop, and go-to- market on unique next-gen initiatives that both delight end users and tap into new revenue streams/business lines. The Rule of 40. A software company growing at a combined growth rate and profit margin of 40% is worth more than a legacy business growing at 5% with 30% margins. Mission: Create Long-Term Differentiated Business Value BridgeDiligence Integration Undifferentiated Differentiated
- 4. Cloud Value Creation Levers Deep Dive Well-Architected Reviews Digital InnovationCloud Security Assessments AI/ML Workshops Modernization Readiness Review Transformation Strategy Workshops MigrationTooling Executive Briefings (EBCs)) Immersion Days AWS Curated Playbooks, Runbooks, Workshops, Programs, and Offerings Cloud Economics Business Case Technical Debt Discovery Experienced Based Accelerators Workshops AWS SaaS Factory and Marketplace MigrationTCO and ROI FinHacks PE Accelerate Discounts Migration Credits ProServ InvestmentsTraining Credits AWS Platform Discovery OptimizationCost Optimization Reviews Value Benchmarking Industry Solution Group IT Landscape Discovery
- 5. 90% the same process and assets apply for TDD Acquisitions New business and IT discovery Separate cloud environment Potential organization and process disruption Separate cultures Divestitures Existing IT discovery Separate Cloud environment Migrate < 6 months Separate or combined cultures Assimilatio n Mergers New and existing business and IT discovery Cloud environment integrated with existing IT environment Aligning organization structures and processes Cultures combined Au to n o mo u s S p e e d Acquisitions Vs Mergers Vs Divestitures
- 6. AWS Technical Due Diligence Assets and Process Overview
- 7. AWS Deliverables • Flash report with hypothesis • The purpose of this document is to provide prescriptive recommendations. The strength, weaknesses, opportun threats in this document are based upon the intelligence gathered during the TDD. The document provides monetary value realization or value benchmarks – empirical cost savings, staff productivity, resilience, and busin percentage savings, revenue production, and efficiencies gained, from customers that have migrated or mode AWS, or innovated or optimized their existing AWS environment. • ROI and TCO • Migration, modernization, and re-platform person hours, and AWS run time costs based upon AWS empirical da industry averages, and a set of assumptions. • Value Benchmarking Reports • Results based on four cloud value benchmarking areas that provide a portfolio company industry based insight better outcomes. • Cloud Capability Report • Results in a better understanding of the readiness of a portfolio company to undertake a cloud mig modernization effort, innovative pilot project, or digital transformation initiative.
- 8. Working Backwards from the Customer Non-AWS customers • What is the cost savings of running on AWS? • How long and how much will it cost me to migrate or modernize to AWS? • How can I reduce my operational costs by moving to AWS? AWS customers • How can I optimize the run time costs of the current AWS environment? • What does the current AWS environment look like? What the AWS Services are being utilized? What AWS Services are being used the most? AWS and non-AWS customers • Is the AWS, on-premises, or co-location platform optimized? • What are the cloud capabilities of the customer? • How do I reduce technical debt? • Are best practices being used?
- 9. Prescriptive Guidance Playbook Contains the requisite AWS services, product offerings, tools, mechanisms, reference architectures, and frameworks for users to employ during the TDD. By working backwards from the customer, the AWS Value Creation Practice (VCP) generates the assets necessary to deliver on the end goal of accelerated value creation for customers. Runbook Contains the execution order, escalation procedures, communication methods, and AWS owners for the mechanisms and tools defined in the playbook. Contains a prescribed list of questions to ask prior and during the on-site TDD. The questions are different based upon whether the target is running on-premises or in AWS.
- 10. Technical Due Diligence Journey with AWS Preparing for TDDs Execution of Technical Due Diligence Months before First TDD On-site Five days or less Purchase Decision One Month after Purchase decision Day 0 Instructor lead and self service education • Post mortem of TDD • AWS delivers TDD reports AWS Proposal for 100 day plan AWS helps with 100 day plan Preparing for TDDs • Playbooks • Runbooks - Uses Cases / hypothesis questionnaires • Self service training • Instructor lead training • GameDays TDD with the target • ROI and TCO Analysis • Value Benchmarking • AWS Technical Due Diligence report • Cloud Capability Assessment Report 100 day planning • Value Creation Acceleration Plan • Customer case studies, reference architectures, and other supporting documents • Enhancing the financial models • Workshops and immersion Days • Pilot migrations and/or innovations Two weeks Before on-site PE and/or consulting firm and bank analysis documents to AWS AWS on-site or remote support (email, Chime, Slack) AWS understands PE fund investment hypothesis Post-Transaction
- 11. Common Use Cases and Scenarios : Non-AWS Environment Migration. Relocate or rehost of on-premises workloads to AWS. AWS provides TCO, ROI, AWS cloud in box solutions, and value benchmarking. Database re-platform to AWS. Re-platform RDBMS and noSQL databases to Amazon EC2, Redshift, Aurora, RDS, or another managed databases. AWS provides TCO, ROI, AWS cloud in box solutions, and value benchmarking. Application Modernization. Modernize the applications that provide the highest cost savings or have the highest business value – 10 or less critical applications. Modernize to a microservices, cloud native architecture. AWS provides TCO, ROI, AWS cloud in box solutions, and value benchmarking. Hybrid, multi, and poly cloud. Architect, provision, manage, operate, and secure a low latency hybrid/multi/poly cloud. AWS provides references architectures, AWS cloud in box solutions, and AWS services.
- 12. Common Use Cases and Scenarios : AWS Environment Cost Optimization. AWS determines the cost optimization initiatives to reduce cost through AWS purchasing options, instance types, spot, elasticity, etc. AWS provides recommendations and potential cost savings. Platform Optimization. AWS Well-architected review to determine optimizations in the areas of cost, operations, security, performance, and reliability - including elasticity. AWS provides recommendations and potential cost savings. SaaS. AWS determines to potential to modernize the AWS environment to a multi-tenant SaaS environment. AWS provides cost savings and revenue improvement value benchmarks. Application configuration and provisioning. AWS provides recommendations to automate the configuration and provisioning of applications through CI/CD. AWS provides cost savings and revenue improvement value benchmarks.
- 13. Common Use Cases and Scenarios : AWS and non-AWS Environments Technical Debt. AWS determines areas of technical debt reduction and potential improvements to reduce technical debt, as well as future proof architectures. AWS provides cost savings and revenue improvement value benchmarks. Data Lake. Re-platform on-premises data lakes to AWS, or modernize existing AWS data lakes to AWS cloud native solutions. AWS provides TCO, ROI, AWS cloud in box solutions, and value benchmarking AI/ML. Re-platform on-premises DaaS solutions to AWS, or modernize existing AWS DaaS solutions to AWS cloud native solutions. AWS provides TCO, ROI, AWS cloud in box solutions, and value benchmarking Remote workers. Re-platform on-premises AI solutions to AWS, or modernize existing AWS AI/ML solutions to AWS cloud native solutions. AWS provides TCO, ROI, AWS cloud in box solutions, and value benchmarking Infrastructure configuration and provisioning automation. AWS provides recommendations to automate the configuration and provisioning of applications through Infrastructure as Code and AWS hybrid cloud infrastructure automation services. AWS provides cost savings and revenue improvement value benchmarks.
- 14. © 2019, Amazon Web Services, Inc. or its Affiliates. Highlighted Case Studies – By Industry Project Aurora ProjectTreasury Travel Migration, modernization, database re-platform Financial Services MicrosoftSQL Server to AWS EC2 Social Media MySQL to Amazon Aurora Technology Akamai to AmazonCloudFront AWS had a seat at the table. Tools Utilized: MPA, Cloud Economics Business Case AWS resources: Transformation Strategist, SA leader, Professional Services Migration SME, Cloud Economics SME Migration: $4,6M Services: $2.5M Savings: $1.6M AWS provided a SQL Server re-host cost to AWS. Tools Utilized: AWS Pricing Calculator AWS resources: Transformation Strategist, Migration SME Services: $313k AWS provided urgent assistance for an estimate to re-platform CDN platform Tools Utilized: Manual (CloudFront SME) AWS resources: Transformation Strategist, Amazon CloudFront SME Migration: $300k Services: $3.5M Savings: $1.2M AWS provided remote support. Tools Utilized: MPA, Cloud Economics Business Case, AWS Well-Architected, AWS NIST and CIS Quickstarts AWS resources: Transformation Strategist, PE Solution Architect, Professional Services Migration SME, Cloud Economics SME Project Buzz Project Icelander
- 15. © 2019, Amazon Web Services, Inc. or its Affiliates. AWS Post Transaction Assets and Process Overview
- 16. © 2019, Amazon Web Services, Inc. or its Affiliates. Post transaction AWS 100 planning recommendations - ExampleExecutive Overview Migration and/or modernization to AWS can save costs on technology spend, accelerate revenue growth, remediate infrastructure risks, and increase innovation. 2)Value of AWS beyond cost savings. 3) An industry-based go-to-market program can accelerate market penetration and revenue growth. Migration and modernization opportunities Based upon AWS’s knowledge of the Accelya application landscape, the focus should be on these solutions: 1) Revenue Accounting 2) Payment Solutions 3) RMS Database Re-Platform Opportunity Recommendation to re-platform to Amazon Aurora MySQL or PostgreSQL can only be determined once each individual Oracle and SQL Server database has been analyzed Joint Product/ServicesWe Could Deliver to the Industry Recommendation: Identify several application candidates in the Accelya portfolio to attend our AI/ML Solutions Lab. Look for applications that would benefit from additional insight, analytics, or potential upsell/add on opportunities Go to Market Opportunities Recommendation: Working session with the Amazon Partnership and Industry Business Development teams to identify potential go-to-market opportunities.
- 17. © 2019, Amazon Web Services, Inc. or its Affiliates. First 100 Days Roadmap Launch Advance Day 20 Day 45 Day 60 Day 80 100 DaysDay 10 • Immersion Days • EBA • Cloud in a box / landing zone implemented • Customer AWS technical champion • First 10 workloads migrated • ORR performed on all apps developed to AWS Business, People, Organization • Cloud Capability and migration workshop • Cloud Economics Business Case development • Value Benchmarking Exercise • Define theAWS and PE programs that apply • Customer core AWS team & AWS champion Platform, Security, Operations • Current IT landscape discovery exercise • Migration and Modernization rationalization and target disposition workshop • Immersion Days • Landing Zone/ControlTowerWorkshops • Experience BasedAccelerator (EBA)Workshops – Migrations, Security, Operations Business, People, Organization • AWS Financial Management Sessions • Experience Based Accelerator Workshops – CEE/people • Weekly steering committee sessions (governance) • Training plan Platform, Security, Operations • Operational Readiness Reviews (ORR) • Security and Compliance Assessment • Well-architected Reviews (WAR) • Technical Debt remediation Business, People, Organization • CEE established (MVP) • Initial Cloud Operating Model in place • FinOps • AWS dedicated resources trained and certified Platform, Security, Operations • WAR completed on all workloads/applications • Migration and Modernization Best practices • AWS Cost Optimization Day 30 • Migration workshop • 100 Day recommendations • TCO and ROI report • IT landscape report Excel • First 5 workloads migrated • Cloud Capability Workshop • Training Plan • KPIs identified and documented • Key customer AWS resources certified • WARs completed on all migrated workloads • Initial cost Optimization (Savings plans, Ris) • First 20 workloads migrated • Lessons learned and best practices documented • Customer objectives, goals and current state session • TSO Logic or other tool installed • Customer AWS team identified Day 1
- 18. © 2019, Amazon Web Services, Inc. or its Affiliates. First Year Roadmap Launch Advance 30 days 100 days 6 Months 9 Months 1YearDay 10 • Cloud Manifesto • AWS Champion in place • Migration Landing Zone • 50% of resources dedicated to AWS trained • CEE fully staffed Business, People, Organization • CloudCapability and migration workshop • Cloud Economics Business Case development • Value Benchmarking • AWS Financial Management Sessions • Experience BasedAcceleratorWorkshops – CEE/people • Transformation StrategyWorkshops • EBCs • Define theAWS and PE programs that apply Platform, Security, Operations • Current IT landscape discovery engagement • Migration and Modernization rationalization and target disposition • Immersion Days • Landing Zone/ControlTowerWorkshops • Security and ComplianceAssessment • Experience BasedAcceleratorWorkshops – Migrations, Security, Operations • Technical DebtAssessment Business, People, Organization • Cloud Operating Model • Correction of Errors • QBRs • Mass training and certification • CEE - FinOps • Governance and KPIs Platform, Security, Operations • Operational Readiness Reviews • Technical Debt reduction • Automation – CI/CD, Infrastructure as Code, cost optimization, security, compliance • Well-Architected Reviews • Security Catalog Business, People, Organization • Correction of Errors • QBRs • AWS and portfolio go-to-market • Automation – Governance and Compliance Platform, Security, Operations • Disruption : SaaS, Data Fabric, AI/ML, Data Analytics andCloud Native • Cost Management Platform (goDaddy) • WAR completed on all workloads • DevSecOps 60 days • 100 Day recommendations • Identify partners • TCO and ROI report Excel • First 10 workloads migrated • CEE in place • Training Plan • Cloud in a box implemented • First 20 workloads migrated • KPIs identified and documented • 50% of workloads on AWS • Training completed • AWS Marketplace, AWS Solutions • AWS Self Service Platform
- 19. © 2019, Amazon Web Services, Inc. or its Affiliates. Cloud Capability and Transformation Action Plan Cloud Capability Matrix Migration and Modernization Questionnaire TSO Logic Output Cloud Adoption Framework (CAF) Envisioning (if on AWS) Working backwards (if on AWS) Tool Adoption Inspection Inputs Outputs One day Cloud Capability workshop One day modernization and migration workshop One day CAF EnvisionWorking Backwards Workshop Assessment, highlights Observations KeyTakeaways Recommendations – 60, 120, 1 year plan Migration and modernization plan Migration an/or Innovation pilots (100 days) Press Release/FAQ
- 20. © 2019, Amazon Web Services, Inc. or its Affiliates. Cloud Capability Assessment The Cloud Capability Assessment consist of 192 questions equally divided among the six Cloud Adoption Framework (CAF) business and technical perspectives. Each question is assigned a rating from 1-5 that maps to the cloud stages of adoption: • Project • Foundation • Acceleration and migration • Optimization and Reinvention • Disruption A report including highlights and observations, key takeaways, a functional rating (1-5), and a radar chart with recommendations to increase the rating across each of the six CAF perspectives is generated from the assessment. Tool type: Microsoft Excel Spreadsheet Tool Usage: AWS VCP engagement required for tool access/deliverables unless trained by AWS
- 21. © 2019, Amazon Web Services, Inc. or its Affiliates. Cloud Capability Report A detailed report including highlights, observations, and key takeaways with recommendations to increase a company’s rating across each of the six CAF perspectives is generated from the cloud capability assessment.
- 22. © 2019, Amazon Web Services, Inc. or its Affiliates. Cloud Capability Assessment – KeyTakeaways Example While solid cloud development, deployment, and run action plans are in place for ensuring a secure, performant, cost optimized, reliable, and well-operated AWS environment, current EC2 and cloud native workloads require an AWS Well Architected Review (WAR). Governance Business Cost optimization and cost management improvements for the current AWS environments are necessary. The ROI and TCO for re-platforming existing on-premises customers to AWS needs to be completed. Training not consistently tracked, designed or executed across organizations. Business and field sales engineering focused AWS training needs to be delivered by AWS.People Opportunity to leverage AWS standardized/best practices run time environments (AWS Landing Zone, AWS Control Tower, AWS Quickstarts). Opportunity for co-development with AWS service teams regarding edge computing, serverless, integration, and IoT. Platform Security Solid vision with several initiatives underway. However, full deployment, including integration with the application pipeline, will occur in the future. Additional application security controls are required. Operations Many solutions are being considered to provide an operations single pane of glass. A unified management and operations platform, with showback and chargeback capabilities, is needed.
- 23. © 2019, Amazon Web Services, Inc. or its Affiliates. Cloud Capability Assessment – Sample Recommendations Organization and Culture Category Action Outcome Timeframe FWI time commit Cost Owner Governance Execute AWSWell-architected Review (WAR) of (WAR) of two current applications on AWS (Cloud native and EC2 based) Assessment of cost effectiveness, effectiveness, operational reliability, best practices in use 3 weeks 2 days $0 Governance Map currentAWS account structure with associated cost sources Improved cost controls and predictability for budgeting 4 weeks 2 days $0 Business Engage AWS specialists on cost optimization, optimization, deployCloud cost performance management best practices, determine cost associated with migrated customer Improved cost controls and predictability for budgeting 3 weeks 5 days $0 People Work with AWSTrainingTeam to define role based training program (including Cloud Practitioner training for broader business and and Associate Architect training for sales engineers) Increased foundational cloud knowledge and established cloud education pipelines 8 weeks 3 days $0 People Execute Immersion Days on security,Cloud formation and IoT Increased functional cloud knowledge and improved talent around key areas 6 weeks 3 days $0
- 24. © 2019, Amazon Web Services, Inc. or its Affiliates. Cloud Capability Assessment – SampleTechnology Recommendations Category Action Outcome Timeframe FWI time commit Cost Owner Platform Connect custoemr toAWS service teams for for regional IoT DR solution and to understand understand howAWS Outposts can support support remote, disconnected compute requirements and to explore mutual development opportunities (e.g. edge computing, integration platform, serverless optimization) Established DR solution for IoT and opportunities to explore partnerships with AWS for computational and performance enhancements 6 weeks 2 days $0 Security Connect customr withAWS security specialists specialists to discuss GuardDuty issues, serverless security controls and scanning and and AWS NIST Quickstart (CIS benchmark) benchmark) Improved application and infrastructure security 4 weeks 2 days $0 Security Engage CISO to assess balance of security security within development Established risk profile and corresponding development and cybersecurity initiatives to implement implement appropriate controls 4 weeks 3 days $0 Platform Connect customer toAWS service teams for forVPC IP address and cold start issues Address performance issues identified identified as affecting production 3 weeks 2 days $0
- 25. © 2019, Amazon Web Services, Inc. or its Affiliates. Cloud in a Box – Foundational Architecture AWS Reserved Instance Reports Amazon Elasticsearch AWS Cost Explorer AWS Budgets AWS Cost & Usage Reports Amazon EC2 Amazon WorkSpaces Amazon CloudTrail Amazon CloudWatch Amazon Systems Manager Amazon Trusted Advisor Amazon API Gateway AWS DirectConnect AWS Client VPN AWS Transit Gateway Amazon GuardDuty AWS IAM AWS Directory Service AWS Security Hub Amazon Event Bridge AWS KMS AWS Back Up AWS Organizations AWS Control Tower Amazon Workmail
- 26. © 2019, Amazon Web Services, Inc. or its Affiliates. How AWS can help
- 27. © 2019, Amazon Web Services, Inc. or its Affiliates. AWS Enablement – Workshops Value Creation One-Day Intro Workshop This workshop provides participants an introduction to AWS frameworks, tools, mechanisms, and solutions most relevant to accelerating value creation with the help of the cloud. Value Creation Post-TransactionApplication MigrationWorkshop The workshop will provide the foundation for a 10-20-30 project or initiative migration sprint plan with well-defined milestones to quickly demonstrate results. Cloud Adoption ReadinessWorkshop The one-day AWS Cloud Adoption Readiness workshop will result in a better understanding of the readiness of a portfolio company to undertake a cloud migration or modernization effort, innovative pilot project, or digital transformation initiative. Art of the PossibleWorkshop Identify and document three to five pilot projects (aka scenarios) that will solve a customer problem or address a customer opportunity. Choose one scenario and write a press release and Frequent Asked Questions (FAQ) document to describe the result of implementing the solution for this customer problem or opportunity.
- 28. © 2019, Amazon Web Services, Inc. or its Affiliates. AWSTDD Game Days AWS Technical Due Diligence (TDD) GameDay is an interactive team- based learning exercise designed to give players (those that execute TDDs) a chance to validate the AWS TDD playbooks and runbooks. It allows AWS, Customers, Private Equity firms, and M&A Advisory partners to the test the AWS support of a TDD in a real-world, gamified, risk-free environment. The customer should bring 2-3 previous or existing TDD scenarios to the GameDay.
- 29. © 2019, Amazon Web Services, Inc. or its Affiliates. Benefits Pre- and Post-transaction Support Access to the following: • Education (in-person, online webinars, etc.) • Frameworks (CAF, Well-Architected, etc.) • Mechanisms (MPA, Technical and Non- technical Playbooks and Runbooks) • Scalable programs (M&A Advise, etc.) Access to AWS topic matter experts in the following fields: • Solution Architecture • Migration and Modernization SMEs • Cost Optimization SMEs • Cloud Economics SMEs • Professional Services • Digital Innovation Experts • Transformation Strategists • Business Development • Sales
- 30. © 2019, Amazon Web Services, Inc. or its Affiliates. For more details on theAWSTDD for M&A assets and engagement support, contact the following: Tara Jones Value Creation Practice, Global Business Lead tarajon@amazon.com Tom Laszewski Value Creation Practice, GlobalTechnical Lead tomlasz@amazon.com Sven Koppany Value Creation Practice, Solutions Architect @amazon.com
- 31. © 2019, Amazon Web Services, Inc. or its Affiliates. Thank you!