Data Center Evolution in the Era of the Cloud

8/18/2019 Data Center Evolution in the Era of the Cloud

1/43NETWORK

BPI

ACCELERATE HOW

YOU INNOVATEDATA CENTER EVOLUTION IN THE ERA OF THE CLOUD

NETWORK

BPI™

Full Report | May 2015


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ACCELERATE HOW YOU INNOVATE | RE

© Copyright BPI Network. All Rights Reserved. 2015

Executive Experts

Introduction: Transform to Better Perform

Executive Summary

1. Getting There from Here: Bringing the Data Center into the Cloud Era

2. Who’s Leading the Change? A Look at Successful Transformations

3. Security & Compliance: Keeping Data Safe and Private

4. Who’ll run all this stuff? Job Requirements for the New IT

5. A World Apart: Regional Variations Inspire and Challenge

6. Modernizing Your Legacy: ERP’s Evolving Role in a Hybrid World

7. Putting It on Auto Pilot: Automation’s Role in Managing Data Networks

8. Always On: Assuring High Availability and Rapid Disaster Recovery

9. Change Management: Transformation Starts at the Top

Conclusions

Infographic

About BPI Network

About Dimension Data

CONTENTS

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EXECUTIVE EXPERTS

We would like to thank the group of executives who contributed to this report via interviewsand commentary.

FEATURED

David RumseyChief Information OfcerTourism Australia

Steve RubinowChief Technology OfcerCatalina

Cary SylvesterVice President of Technologyand CommunicationsKellerWiliams

Andrew Lam-Po-Tangformer Chief Information OfcerFairfax Media

Ben IssaHead of IT StrategyING Direct


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CONTRIBUTORS

Peter GrossSenior Vice Presidentof Mission Critical SystemsBloom Energy

Scott OffermannDirector of Critical OperationsCushman & Wakeeld

Martin ZuckermanChief Executive OfcerTeswaine Technologies

Tomoo MisakiResearcherGreen IT Promotion Council

Dr. Natalie PetouhoffVice President& Principle AnalystConstellation Research

Stephen WornChief Technology OfcerDCD Group

Gabe ColeFounder

RTE Group

Dakota KelleyDirector of Facility ConsultingTelios Engineers

Zahl LimbuwalaChief Executive Ofcer

& Co-FounderRomonet

Adriaan BoutenChief Executive OfcerdPrism

Dustin HaislerChief Innovation Ofcer

e.Republic

Andria LongVice President of Innovation

Johnsonville


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PARTNER CONTRIBUTORS

Rob LopezGroup Executive, NetworkingDimension Data

Matthew GydeGroup Executive, SecurityDimension Data

Treb RyanChief Strategy OfcerCloud Business, IT-as-a-ServiceDimension Data

Jahangir NainaGeneral Manager, AsiaPacDimension Data

Gary MiddletonGlobal BusinessDevelopment ManagerNetwork IntegrationDimension Data

Kevin LeahyGroup General ManagerData Centre SolutionsDimension Data

Dave D'ApranoGroup Executive

Enterprise ServicesDimension Data

Gerard FlorianSenior Vice PresidentIT-as-a-ServiceDimension Data

Steve NolaGroup Executive, IT-as-a-Service

Dimension Data

Stuart Fox Group DirectorBusiness DevelopmentData Centre Business UnitDimension Data

Aman KhanGeneral Manager

Alliances, EuropeDimension Data

Richard GarrattGeneral Manager, Americas

Data Centre Business UnitDimension Data


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INTRODUCTION: TRANSFORM TO BETTER PERFORM

In today’s data-driven world, agile organizations are embracing a new model of business-responsivedata centers and networks to drive the innovation, agility and speed needed to stay ahead of globalcompetitors. To explore this new imperative, the Business Performance Innovation (BPI) Network,a Silicon Valley-based organization representing enterprise leaders, has launched a major initiativeinvolving multiple global partners, scores of senior executives, communities and stakeholder groups.

The results of this campaign include this rst in a series of reports and strategic briefs and the launchof a new content-rich portal, www.ReinventDataCenters.com, where visitors can contribute ideas,access relevant original and curated content, cast opinions in polls and surveys, download reportsand white papers, view videos on TransformTechTV and, importantly, participate in candid, ongoing

conversation with other members of the community. The initiative also will produce regional executiveroundtable discussions, webinars and presentations at IT and business events worldwide.

The Transform to Better Perform program is made possible through a sponsorship by Dimension Data,a global leader in the planning, provisioning and management of next-generation IT infrastructuresand services. Dimension Data is also contributing thought leadership and commentary to help fuel thisglobal conversation about business-responsive IT transformation. Other contributions will come fromDatacenterDynamics, a global expert on data center trends, operational improvement and professionalskills development, as well as other partners.

For this, the initiative’s introductory report, we’ve interviewed executives and technology expertson six continents and from many sectors about the key challenges confronting them and thetechnological solutions they’re using to address them. We found that globally, and almost withoutexception, organizations are moving steadily toward a hybrid model for data centers and networksthat reach far into the cloud. These include such technologies as virtualization, automation, software-dened systems and managed services as well as updated approaches to Enterprise Resource Planningand the traditional on-premises data center.

We are pleased to share this report with you and to invite you to join the Transform thought leadersat www.ReinventDataCenters.com (or www.ReinventDataCentres.com) and follow our program on@Transform_DC and to share your own insights, questions, opinions and success stories with othercommunity members.


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EXECUTIVE SUMMARY

Data has changed the business world forever. The global adoption of mobile technologies, fastercomputing, social networks, the internet and the cloud means the future of business is lled withopportunities for business leaders who can leverage that technology to their advantage and forconsumers who will get better service and value as a result of increased competition. With the right

tools, companies will be able to predict precisely when supplies will reach thefactory, exactly when products will arrive at the store and – perhaps mostimportantly – the very moment when specic customers will be inclined to buy.

With the help of advanced analytical and processing systems operating across globalnetworks, companies will be able to ll an order for a customer anywhere at any

hour. They’ll support sales staff in the eld with critical information. They’ll gatherreal-time feedback from customers who purchased newly released products.

They’ll adjust production rates based on fresh orders. Many will even forecast the yearly prot ona rolling basis using real-time revenue and cost reports. All of this and much more is possible right now.

It’s quite understandable that business managers everywhere are eager to acquire these new powers,and just as understandable that many are currently frustrated at the seemingly slow pace of the ITstaff to make it happen. But the IT staff is not to blame. The growth of data over the past decadehas far, far outstripped the capabilities of almost any enterprise to acquire, analyze, secure and deliveractionable intelligence to business managers, suppliers, employees or customers. For while data has

grown, the data center has not kept pace.

(Source: CloudTweaks)

“It’s such a dynamic and changing environment that is impacting the much broader sense of the marketas a whole. And the data center is really at the heart of that change,” says Steve Nola, Group Executivefor IT-as-a-Service for Dimension Data.

That’s about to change. A transformation has begun. Thanks to the cloud, software dened networks,automation and other fast-evolving technologies, there are new answers that can help large companiescreate customized environments to absorb the rising tide of big data, add new applications in minutesand empower all stakeholders with information that will change outcomes.

“THE DATA CENTER ISREALLY AT THE HEARTOF THIS CHANGE.”

STEVE NOLADIMENSION DATA


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This transformation of the datacenter will result in better performance with increased agility and shortertime-to-market. To be sure, there’s much to be done. And CIOs will quickly learn that one size does nott all. But companies that complete this journey – some already have – will be well-positioned to

assume leadership roles in their sectors.

After interviewing scores of business leaders, the Transform to Better Perform initiative is able to reportsix key ndings. These themes are explored in detail in the essays that follow:

Data Centers: Traditional data centers were built at enormous expense overa period of years with an expected lifespan of 15-20 years. Yet most weren’tdesigned to address today’s business demands or to offset today’s unprecedentedrisk factors. Many companies are now pursuing new solutions, particularlyapproaches that blend their on-premises facilities with cloud-based capabilitiesin a bid to enhance business performance.

The New IT: As new technologies evolve, IT teams must evolve with them.In the past, they kept systems running securely, managed networks and builtapplications through traditional, waterfall development. Now they mustcollaborate with business owners to build applications in hours or days, notmonths or years, that can turn raw data into actionable intelligence. Automationwill increasingly assume the role of operating networks optimally, freeing stafffor more important roles that require the human element. Right now, there’sa global shortage of IT specialists with the required skills to meet these changingbusiness demands.

The Business: Line of business managers need more agility to respondto competition and better-serve distant customers with new apps, analyticsand ever-richer data. Frustrated with IT, many turn to SaaS apps and storageto ll gaps. Many of them learn that they lack the skills to properly implementor manage technologies, or that the new SaaS tool can’t integrate fully with thedata center. With additional support from IT, this approach is helping companiesin the short term, but falls short of tapping into the full power of today’stechnologies.

Security and Compliance: Both companies and governments put a highpremium on protecting data and privacy. Challenges vary from region to region,with deep implications for the way data centers and supporting networks are built and managed. Companies that lack adequate staff are turning to trustedpartners to help manage and secure their operations.

Costs: Businesses are investing hundreds of millions of dollars in data centersystems and networks. They want exible, cost-effective solutions to transformlegacy technology into agile hybrid cloud environments. New hybrid operations


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and automation can help to free up IT staff to help grow the business in otherways. As the volume and use of data grows, green IT is helping to limit powerconsumption and the related emissions of C02.

High Availability and Disaster Recovery: Ensuring continuous serviceand rapid recovery from disruptions is paramount in today’s business climate.Traditionally, many companies build back-up data centers to put into use whenneeded. Cloud services can cut that cost dramatically by avoiding the high costsassociated with building more facilities. While cloud services themselves can

“go down,” they provide much needed exibility and cost savings. Companiesmoving towards a hybrid cloud are nding advantages here.


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1. GETTING THERE FROM HERE: BRINGING THE DATA CENTER INTO T

The good news is that today’s business managers have more data than ever to help them make thebest possible decisions. The bad news is the ow of data is rising so quickly that it has outpaced theability of most companies to turn most of it into actionable intelligence. In the worst cases, it resultsin unreliable or even contradictory conclusions.

According to Cisco, data center trafc will nearly triple to 7.7 zettabytes per year by 2017 from 2.6zettabytes in 2012 -- a compound annual growth rate (CAGR) of 25 percent. How much data is that?Many laptops today have a 1 gigabyte drive. A single zettabyte is equal to 1.1 trillion GB. We’ve comea long way. It was only in 1980 that IBM broke the 1 GB barrier with a 2.52 GB drive the size of arefrigerator.

“The volume of data is increasing exponentially,” says Dr. Natalie Petouhoff, an analyst for ConstellationResearch who specializes in digital business transformation. “I think that whether you’re in marketing,sales or services, that data is really important to you. As a marketer, data is supposed to help you in-crease lead conversion rates. In sales, it’s supposed to help you target prospects. In customer service,it’s supposed to help you gure out what problems customers are having.”

(Source: Cisco)

The choke point for most companies is the data center. Large companies typically spend millions(or tens of millions) of dollars to build air-conditioned facilities lled with servers that crunch the num-bers, process transactions and keep business applications running smoothly over the entire enterprise.Traditionally, they’ve been built to last 15-20 years, with plans to amortize that cost over the years.Capacity can be added with more servers as needed – a process that can take weeks or months toexecute and years to pay off. Another popular path, especially for mid-size companies, is to place theirdata center in a co-location center that is responsible for monitoring, security, upgrades and more.

According to DatacenterDynamics, businesses around the world poured $122.77 billion into in-housedata center equipment and solutions in 2014 alone. Data centers already cover an estimated 35.7million square meters worldwide. They’re growing fast, though perhaps not fast enough to keep upwith business needs.


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“What we’re seeing today is that many, many enterprises lack in over-arching architecture for wherethey’re going in the future,” says Gabe Cole, founder of the RTE Group, which advises companieson their mission critical systems. He says it has become critical for companies confronting this problemto take a step back and ask themselves what business applications they need, which of their legacysystems can help and what their data center technology architecture should look like. And those arequestions they should continue to ask as they continue in their transformation from the data centersthey operate today to the environment that will support them in the future.

The Data Generation

It’s important to know where all that data originates and the types of data we’re discussing. There aretwo fundamental types of data: structured, which includes facts like your name, address and age thatcan be added to a table; and unstructured data, which includes your comments on social media, videos,emails, photos and other information that can’t easily be interpreted or added to a table. Traditional

data centers were mostly designed to process structured data, but new technologieslike Hadoop, an open-source software framework, can help to analyze consumersentiment and other important characteristics of unstructured data.

Both types are critical in serving customers, but the volume of unstructured datais growing the fastest. About 90 percent of all the data on Earth was created inthe last two years, according to various sources. Last year, IDC estimated that 90percent of the data being generated is unstructured, but only 0.5 percent is beinganalyzed. That gap has prompted business managers to demand applications thatcan turn more data into actionable intelligence for use in the customer supportcenter, marketing, sales and other departments.

Data comes from billions of people around the world. It might be a crop reportfrom the government, a child’s post on Facebook, a conference call between

business managers, an email, a search, a movie you’re streaming over the Internet, a text on yoursmartphone, the signal from a wireless temperature sensor or information from literally millions ofother sources. It comes from people communicating with people, people interacting with machines,and machines talking to machines.

“Everyone, everywhere, whether you’re an adult or a child, whether you’re at work or at school,whatever you’re doing, there’s an element of IT services and applications involved in your life and

that’s pretty much the sole reason we’re having this explosion of data,” says Zahl Limbuwala, theCEO of Romonet, a group of data center industry thought leaders.

Virtually all that data is owing through multiple data centers. Those cat photos on social media? They’reall stored in the cloud along with your sales reports, customer orders, emails, movies from Netix, looksfor your Kindle and all those millions upon millions of entries that pop up when you search for almostanything on Google in the West or Baidu in the Far East. Case in point: it took Google 0.42 seconds forits data center to deliver 1.1 billion possible answers to the question: “How much data is there?”

“WHAT WE’RE SEEING TODAY IS THATMANY,MANYENTERPRISES LACKIN OVERARCHINGARCHITECTURE FOR

WHERE THEY’REGOING IN THE FUTURE.”

GABE COLERTE GROUP


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Because many data centers also were designed before smartphones (and seles) became ubiquitous,they often weren’t built to handle the volume of data available today. Yet, because their owners arestill depreciating the costs of equipment, integration and software, companies have a strong incentiveto keep them in operation while assessing newer technologies.

Do businesses really need all that data? Thankfully, no. But sorting out the particular data thata company needs to advance their business is a challenge that consumes the time of many of thebest and the brightest in technology today. More precisely, the challenge is to nd data that a line-of-business manager can use to identify a prospect, gauge their interests, establish contact, makea sale and record the revenue.

Live Nation, a US-based company that sells tickets to its subscribers, tracks millions of people across4,000 personal attributes such as their location, musical preferences and their friends on social media.When it sells a ticket, it can tell you that your friend is going to hear your favorite artist. When you

drive to an event, it can give you parking directions. When you enter the concert hall, it can directyou to the refreshment stand. To a large extent, it uses cloud-based services from Salesforce.com to

accomplish that. Adobe, Oracle and hundreds of other vendors offer other servicesin the eld of digital marketing alone.

Andria Long, VP of Innovation at Johnsonville, a popular American sausagemanufacturer, says her company collects “a tremendous amount of data” frommultiple sources, and then analyzes it to look for themes. “And then,” she says,“we translate that into our hypothesis on customer opportunity and start downthe path of researching it and learning more.” All that to make a better bratwurst.

The Internet of Things, which will connect ordinary devices through intelligentsensors, may add a new layer of challenge, placing hundreds of billions of sensors – perhaps 1 trillionor more over time – in homes, businesses and public places. And all those sensors will gather andtransmit data. Your phone already has at least a half-dozen sensors in it. A car may have scores.Many household appliances – heating systems, televisions, security systems, refrigerators – eithertransmit data to you and each other now, or they will in the near future. Sensors monitor the jetengines in planes, the brakes of trains and the roadways upon which we drive.

Google engineers have already produced a robotic version of the Toyota Prius that has driven over700,000 miles without human assistance. The key sensor is a 64-beam, roof-mounted laser that

guides the car through trafc and around turns, and four radar systems that help to avoid collisions.

“EVERYONE WANTS HYBRID.I THINK THATAROUND THEWORLD,EVERYONE AGREES.”

KEVIN LEAHY

DIMENSION DATA


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Personal Cloud Trafc

Personal cloud trafc is expected to quadruple between 2014 and 2017 (Source: inc)

New Options for IT

If the internet and the cloud have helped to shrink the business world, it is only right that they shouldhelp to address the challenges of Big Data. They now provide exible options to expand the data center,accelerate application development, maintain high availability of service and keep IT costs under control.

To augment their current data center operations, most companies already use or plan to use a privatecloud, a public cloud, co-location facilities or some combination of them – solutions known as hybrid cloud.

Cost of Cloud vs. Infrastructure

INTERNAL ITMANAGEDSERVICES

THE CLOUD

CAPITAL INVESTMENT $40,000 $0 $0

SETUP COSTS $10,000 $5,000 $1,000

MONTHLY SERVICES $0 $4,000 $2,400

MONTHLY LABOR $3,200 $0 $1,000

COST OVER THREE YEARS $149,000 $129,000 $106,000

SAVINGS GAINED 0% 13% 29%

Use of the cloud can cut IT costs by 29 percent. (Sources: O’Reilly Media, George Reese)

The hybrid cloud offers a number of advantages, including the exibility to add compute power andstorage capacity quickly when needed. For example, if a large retail chain had a spike in demand duringthe holiday season, it can add capacity for just that period instead of keeping a costly data centerrunning all year.

1.7EXABYTES

5EXABYTES

20EXABYTES

2012 2014 2017


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The cloud also offers a much quicker path to application development, because that applicationis running in a cloud environment instead of on a highly customized platform in the data center.This allows business owners to respond with agility in hours or days instead of going through thetraditional in-house app development process that could take months or even years.

The cloud can also provide attractive solutions to assuring high availability at a time when 24x7 servicehas become the standard globally. It’s also far less expensive to rely on the cloud for disaster recoverythan it is to build a back-up data center that would be available if the company’s main data center goesdown, a topic explored later in this report.

“The condence clients get from the cloud is that they have a number of options,” says Gerard Florian,Senior Vice President for the IT-as-a-Service group at Dimension Data, a global leader in IT infrastructuresolutions and services. “In the past, the most common way to do this was quite expensive and involveda signicant amount of duplication.”

Other evolving technologies, like software dened networks, automation and so-called hybrid networkscomplement the power of the cloud to solve a variety of issues related to stafng, costs and compliance

All of the technology and business executives interviewed for the Transform to Better Perform initiativesay the hybrid cloud is emerging as the preferred solution for most, but they also caution that its con-guration will vary greatly from company to company.

“Everyone wants hybrid. I think that around the world, everyone agrees,” says Kevin Leahy, Group GeneralManager for Data Center solutions at Dimension Data. “The difference is how they are going after it.”

To be sure, the hybrid cloud isn’t the choice of every company. Some nancial institutions or govern-ment agencies – security agencies or NASA, for example – may prefer to optimize an ultra-secure,on-premises facility. The decision on whether to go hybrid can also be complicated by regional com-pliance issues, the nature of the business, the age and capabilities of company’s existing data center,telecommunication costs and other factors. In the end, costs may be comparable or even higher to anon-premises facility, though expanding into the cloud is far less expensive, faster and easier than addingto a traditional data center. We’ll look at all those issues elsewhere in this report.

Because of the many choices that companies face, most of the executives interviewed for this reportpredicted that companies will want to bring in a trusted advisor to help them design the hybrid solution

that works best for them. Despite the urgency felt by many executives and line of business leaders,it is critical to carefully choose the right solutions. However, it appears the hybrid solution is provingto being the best way to bring the data center into the cloud era.

“I don’t really see how IT can meet all the needs that are being requested of them unless they goto the cloud,” says Petouhoff, the Constellation Research analyst. “We already know that doingit the on-prem way didn’t work, and it created the rub between business and IT.”


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2. WHO’S LEADING THE CHARGE? A LOOK AT SUCCESSFUL TRANSFOR

For a moment, think back to the mid-90s when the Mosaic browser opened the Internet up to manymillions of new users. Many corporations dismissed the early days of the Internet as a fad, but therewere also many early adopters that launched corporate websites and companies like eBay or Amazonthat pioneered the eld of e-commerce that is now a pillar of the global economy. That gave themcompetitive advantages over laggards.

In the digital transformation now underway, the need for better business and IT processes is clear andpresent. As noted earlier in this report, most companies have established some presence in the cloudover the past few years. Still, almost all of the experts we’ve interviewed agreed that we are still verymuch in the early stages of this signicant transformation in data management. They noted the leaderstend to be large nancial institutions, which have deeper pockets for funding new development, andhealthcare companies that have strong nancial incentives to improve secure record-keeping and sharing.We also found pioneers in a variety of other sectors – like publishing, real estate, nance and tourism.

Their examples reect two themes that we found repeatedly in our research: a strong business needfor agility and the reality that successful solutions are those that are tailored to specic organizations.The examples below and others are explored in greater detail on the www.ReinventDataCenters.com.

(Source: CloudTweaks)

Keller Williams – Real Estate

Keller Williams began with a single ofce in Texas in 1983. Within two years, it was the state’s largest

realty brokerage. Three decades later, KW is the largest real estate franchise in the world with 112,000associates and is rapidly expanding to other countries around the world. At this year’s annual companyconvention, Chairman Gary Keller and other executives credited that growth to training and technology.

Cary Sylvester, VP for Technology, Innovation and Communications at Keller Williams, is the womanresponsible for the company’s tech transformation, which began last year as the company expandedbeyond its North American base to South America, Europe, South Africa and Southeast Asia. “I thinkwe’re just on the tip of the iceberg of where we can go,” she tells us. “And we’re very excited aboutwhere we are going.”

By

73% of datawill be in the cloudMore than 60%

of businesses utilize cloud for performingIT-RELATED OPERATIONS

2017


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In its legacy environment, Keller Williams has outsourced its data center to SunGard in Texas, the hubof operations for the US and Canada. SunGard provides hosting and monitoring. But the internationalpush required more, so KW partnered with large cloud vendors to build a global hybrid platform.Says Sylvester: “We still have a lot of legacy that will stay in our current data center. As we have moreand more products that we’re offering, those will be primarily cloud-based.”

With about 100,000 email accounts, the company faced a choice: hire morestaff to manage them or outsource it to a cloud vendor. It chose the latter course,which means the Keller Williams technology team now spends about one-quarterof its time managing email “instead of 150 percent of their time.” For the mostpart, they now work on other projects linked to the transformation, like updatinguser management and security. The team is also working much more closely withbusiness owners to plan and build new systems instead of just reacting to theneeds of the legacy system.

Sylvester says recovery and continuity were among the key factors in choosing the hybrid approach.It considered replicating data centers around the world, but the cost was in the “hundreds of millionsof dollars.” This also helped the company sort out compliance issues in different regions, particularlyin Europe, where certication varies from country to country.

Her key points of advice to other CIOs include: 1) Find a trusted partner who can help; 2) Manageorganizational change; and 3) Once the decisions are made, take small steps towards fullling thevision. “We’re still at the beginning of this transformation,” says Sylvester. “But the benets thatwe’ve reaped already on what we can do with our team and how we can respond are exactly whatwe were hoping to see.”

ING Direct – Financial Services

When the conversation turns to innovative banking solutions, the banks mentioned usually includeING Direct, which has won accolades for its mobile banking apps. So it’s not surprising the bankapplied a creative solution to address the kind of challenge faced by many enterprises: its applicationdevelopment team in Australia just couldn’t quench the bank’s thirst for innovation.

The in-house dev team included 49 developers and 18 testers, but they clearly needed a faster wayto replicate the bank’s technical environment to test new apps. The copies had to include 5.5 TB of

data and a full set of bank applications, services and congurations. “What we were looking for wasa ‘bank in a box,’ an instant environment that reproduced our own [production environment] in all itscomplexity,” says Andrew Henderson, CIO for ING Direct, Australia.

The bank worked with Dimension Data on a solution that included products and services from Cisco,Microsoft and NetApp. It began with a data center infra-structure built on Cisco’s Unied ComputingSystem, Cisco Nexus switching and NetApp storage with Microsoft Windows virtualization technology.The Microsoft System Center managed the provisioning process for the developers.

“I THINK WE’RE JUST ON THE TIP OF THE ICEBERG OF

WHERE WE CAN GO.”

CARY SYLVESTERKELLER WILLIAMS


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The solution was integrated with the tools used by ING’s testers and developers,who could suddenly provision environments easily. ING Direct says this cut thetime needed to provision test environment to 10 minutes from three months.“Everything we do is faster,” says Benn Issa, head of IT Strategy for ING DirectAustralia. “Our capability now supports our appetite for transformation andchange and delivering faster for our customers.”

The company conducted a pilot project, sharing the results with the bank’s seniormanagement.“When we showcased it to our executive team, they were amazed tosee how this technology came together to reduce a process that used to take monthsdown to minutes,” says Henderson. “The solution enables us to streamline processesthat previously took eight people three months with a very simple self-service model.”

The project in Australia was so successful that ING Direct is now planning to deploy it globally.

Catalina – Digital Media

Another leader in the data revolution is Catalina, the digital media company that provides shoppersincentives to try new products, increase consumption and stay loyal to brands and retailers. To helpdo that, Catalina tracks purchase history of 260 million consumers. Staying on course requires theexibility to try new approaches and the speed to stay ahead of competitors.

CTO Steve Rubinow told us he’s now achieving those two objectives with the help of a co-locationcenter instead of running one on-premises. “That move was recognizing the need for the increasedsecurity, increased reliability and all the kinds of things that you want to have in a data center,” he says.

“Running a good data center [on premises] isn't the core of what we do … and running a good datacenter is not a competitive differentiator.“

In today’s digital world, Rubinow says “it’s all about exibility and speed of execution,” and that’swhere he wants to focus his team’s efforts. That’s why he’s also using the cloud to support applicationdevelopment. “Perhaps we want to spin-up something quickly as an experiment for developers,or some small-scale experiment that we'd like to run where we don't want to spend a lot of timeand money doing it and dedicate facilities to it,” he says.

If the new approach works, the IT team can make the application more robust and decided whetherto host it in the cloud or run it from the co-lo facility. To assure continuity of service in can of a disaster,

Catalina has set up a distributed architecture that would be self-sufcient if the data center were to fail.Rubinow is also planning to enhance other cloud facilities to further assure high availability of service.

“In the digital world, if there's a hiccup in digital systems, potentially 3 billion people may notice,”he says. “That's a big exposure."

“OUR CAPABILITYNOW SUPPORTS

OUR APPETITE FOR TRANSFORMATION ANDCHANGE AND

DELIVERING FASTERFOR OUR CUSTOMERS.”

BEN ISSAING DIRECT AUSTRALIA


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Fairfax Media – Publishing

When Andrew Lam-Po-Tang became CIO at Fairfax Media, Australia’s largest independent newsorganization, the company supported its hundreds of publications through 40 different content

management systems. By the time he left his position, the company had just two CMS systemsfollowing a three-year transformation that has cut expenses and made life much simpler for thecompany’s editorial workforce and its technology staff.

“Technology is really just an enabler, albeit an incredibly powerful one, that can help businessesto radically overhaul, simplify, and lean-out their business processes,” he says. “It’s an enabler thatcan radically improve the interactions that the company has with its customers, not just at a pointof transaction, but throughout an entire customer relationship.” During his tenure, the companyadopted a “cloud rst” stance to all technology decisions. For example, when applications cameup for renewal, Lam-Po-Tang says his team asked itself if it could eliminate the application AND

servers and move to cloud-based services instead.

Every initiative started with the question of what business outcome was desired. When a newneed surfaced, Lam-Po-Tang’s staff would rst see what SaaS applications might solve the problem.

“The great thing is, once you’ve done that, then somebody else is looking after the infrastructure andthe availability issues for you.” If no application was suitable, they would evaluate whether an appcould be developed on a cloud-based platform (PaaS). For example, Force.com, the developmentplatform for Salesforce.com, allows enterprise to build “a lot of reasonably good, robust applications,”he says. If no platform, was suitable then the development would be hosted on cloud infrastructure (IaaS).

Adobe CQ (now Adobe Experience Manager) was selected as the company’s primary contentmanagement solution, supporting its major daily newspapers and digital publications that reachabout 80 percent of the company’s audience in Australia and New Zealand. “We licensed the softwarein a conventional manner and implemented it in the cloud,” he says. The open-source Django contentmanagement framework became the second system, also based in the cloud. It was supporting 174other digital publications within nine months.

The publishing industry is itself in a state of change as publications move from print to digital formatsthat readers can access on any device. Similarly, journalists now gather news and submit stories throughmobile devices. “That was precisely the point of going to a digital rst content management systemrather than a print-rst management system, and for going into the cloud rather than on-premises,”

he says, noting that this choice resolved the access and mobility challenges the company faced withits legacy systems.

A practical impact of this transformation was that it simplied the sharing of content across Fairfaxpublications. For example, with the legacy system, if one paper wanted to publish a story written foranother publication, editors often had to copy it from one system and email it to another editor, whothen pasted it into another system. Now ideas and stories can be accessed across all publications on thenetwork. “Think of it like internal syndication but on steroids, and doing that in a cost-effective and timelyway,” says Lam-Po-Tang, who noted cost reduction was one of the major advantages for his department.


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Like many organizations, news publishers have a very low tolerance for any downtime. For speedyrecovery, Fairfax now has its main production instance on the cloud. Should that fail, there’s asynchronized recovery instance in another location that kicks in within a couple of minutes. A thirdinstance in a third region “gives us plenty of redundancy” Lam-Po-Tang says.

Tourism Australia – Government Services

Promoting Australia as a global destination for work and play demands careful coordination betweenSydney and a dozen Tourism Australia ofces around the globe. CIO David Rumsey realized the jobwould be a lot easier with the help of the cloud.

The organization’s network is used by about 250 of the agency’s employees – half of them in Sydney-- plus another 50 from its allied government groups. Rumsey’s agency produces Australia.com, whichis in demand 24 hours a day from potential visitors all over the world. Rumsey’s rst step about three

and one-half years ago was to set up a three-year transformation plan. He says, “We’d invested intechnology but hadn’t maintained that investment.” Tourism Australia was running the Oracle BusinessSuite with bolt-on applications but had stopped investing in it over a period of years. “Those systems,while they might have been very business specic a number of years ago, were really not meeting theneeds of the business.”

Tourism Australia generates its revenue from government grants and through marketing partnerships.Their CFO was keen on getting better visibility into every dollar spent. “We really want to demonstrateto both government and to our partners that … one dollar can have three dollars worth of reach,”Rumsey explains.

The agency’s business is built around customer relationship, so the rst decision was o purchaseMicrosoft Dynamic CRM and re-evaluate all other business systems: HR, nance, procurement and soon. It then embarked on a “business systems replacement” transformation” that is now coming to an endas the focus shifts to analytics. “What we’ve done there is really delivered that in a hybrid way,” he says.

Because it had already bet on Microsoft, it decided to use Microsoft’s Azure cloud services extensively.It’s using cloud-based Ofce 365 for online forms. And it is migrating from SharePoint’s on-premisesversion to SharePoint Online. It also runs SQL Reporting Services and the Microsoft stack out of Azure.

“We’ve had some really good wins on that and have been able to really empower the business by gettingthat data on dashboards deployed right throughout the globe so people can see it,” says Rumsey.

To assure continuity, the system in Sydney is replicated in near real-time to the cloud in Singapore “and, if we have a major disaster, we’re able to bring those services online within the hour,” he says.

Asked what tips he’d share with his peers, Rumsey says he works hard to ensure the staff has allthe tools they need to succeed, particularly from a marketing perspective. “So developing a strongrelationship with the CMO and with the marketing team has been critical,” he says. “I think no losingsight of really supporting the front of ofce business is key as well.”


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© Copyright BPI Network. All Rights Reserved. 2015 2

3. SECURITY AND COMPLIANCE: KEEPING DATA SAFE AND PRIVATE

One needs only to scan the headlines today to see the growing challenges of keeping data safeand protecting the privacy of individuals. Spurred by the concern of consumers around the world,governments have responded with regulations designed to protect their personal information.This is particularly true in Europe, where personal privacy has been a priority.

Until a decade ago, the average hacker was typically a bright, but misdirected, young person whofound it challenging to get past layers of computer security. Today, the list of known intruders includeforeign governments seeking economic advantage, highly organized gangs of criminals who re-sellpersonal data on the black market, and even competitors who look for trade secrets.

“If you’re not worried, you’ve got a problem. You should always worry about the safety and securityof your customer data,” says Stephen Worn, CTO of the DCD Group, a global B2B media and

publishing company specializing in providing content for ICT professionals.

In consumer-facing businesses alone, the magnitude and frequency of breaches hasescalated dramatically in the past few years. As of May 2015, the top ve breachesincluded: eBay (e-commerce), 145 million records; Anthem (healthcare), 80 million;JP Morgan Chase (nancial services), 76 million; Target (retail), 70 million; and HomeDepot (retail), 56 million, according to Information Is Beautiful.

Those intrusions involved some of the largest companies in their respective sectors,the very companies that have the greatest resources to spend on security and more reason to becautious. The security challenge can be much greater for mid-size companies or smaller organizationsthat tend to have smaller IT staffs, limited budgets and difculty competing for employees with theskills needed to defeat the most aggressive attackers.

“Whether you’re using a cloud provider, whether you have your own data center, whether you haveyour own computer rooms in your ofces or servers sitting in your ofce, the security issues have grownmuch more signicant,” says Gabe Cole, founder of the RTE Group.

In a recent survey of IT workers who plan to seek a certication in the coming year, most planned toseek a certication for security.

“IF YOU’RE NOTWORRIED, YOU’VE GOT

A PROBLEM.”STEPHEN WORN

DCD GROUP


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Top 5 Certications Sought by IT Workers

Security is the top certication sought by today’s IT workers. (Source: Computerworld)

For companies building a hybrid cloud, complying with security regulations can be a nightmare.Cary Sylvester, the VP of Technology, Innovation and Communication at Keller Williams, learned thisin the past year as the giant real estate company expanded from North America to countries aroundthe world. The rm now has ofces in Mexico, Portugal, Turkey, South Africa, Vietnam and Indonesia.It also plans operations in Germany and the UK.

Sylvester summed up one of the unwelcome surprises: Keller Williams based its international serviceon Salesforce.com and Google platforms, and both of those companies are certied to operate acrossEurope. However, because the regional servers were communicating with the Keller Williams datacenter in Texas, the company itself has to be certied in each country. “We made an assumption thatwas incorrect,” says Sylvester. “It wasn’t just Salesforce.com and Google that needed to be certied.So we got ourselves certied as well.”

Of course, as the severity and sophistication of network intrusions rise, so has the volume of data.And the more data that is collected in one place, the more valuable a target it becomes for hackers.This may prompt regional regulators to add new restrictions on companies by, in some cases, prohibitingthe storage of data outside the country or prohibiting the ow of information across borders.

“In the past two years, compliance and security has escalated,” says Aman Khan, General Manager,Alliances, Europe at Dimension Data. “People have been sensitive to keeping their data in their ownterritory, but I think they’re even more conscious that they have to meet compliance. And the EU rulessay what companies can and cannot do. Companies can even be penalized for this.”

Complying with EU rules is one thing, but its member countries may add their own restrictions.With 28 countries in the EU, and another 22 non-member states in Europe overall, the continentis frequently cited at the most difcult place to manage compliance issues.

“France, Germany and the UK, which are the ones I know best in Europe, have pretty tight, prettystringent, very mature data protection and data sovereignty legislation, legal guidelines and so onthat make it very difcult, particularly for international businesses that want to take advantage of thefact that they have a very fast global network,” says Zahl Limbuwala, founder and CEO of Romonet.

Security

Networking

Systems Administration

Project Management/Process

Architecture

20%

17%16%

12%

8%


22/43



There are, however, further restrictions around the world, particularly in the Asia-Pacic regionwhere there are also fragmented rules and regulations concerning the transmission and storageof data. Each situation needs to be addressed in the context of other regional considerations suchas the practices at local telecommunication services, political realities, stafng or anything else thatinvolves moving data from one point to another. Compliance and security surfaced in almost allof the interviews conducted for this project, with broad agreement that global organizations lookingto expand their data base operations should bring in experts to work with them on this issue.


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4. WHO’LL RUN ALL THIS STUFF? JOB REQUIREMENTS FOR THE NEW

The transformation to better performance isn’t just changing business. It’s changing IT, creatingdemand for technology workers with skills sets that are better-suited to a more agile environment.Computerworld recently asked IT managers what skills they’d be hiring for in the coming year.The answers were: application development, 41 percent; help desk/IT support, help desk/support,36; business intelligence/analytics, 25; and security, 24.

For many years, the IT department designed the data center, kept servers running smoothly and actedas guardians of security. The main contacts with the business side came when IT staff set up a PC fornew employees, installed software or helped workers gure out why they weren’t getting emails.The major exception was when a manager demanded a new application to serve a particular needin HR, accounting, marketing, sales or another department.

With traditional data centers, a new application was a big deal. It would mean establishing require-ments, then contacting a business solution provider like SAP, IBM or Oracle. Once the order was

placed, there was often a high degree of customization that took months.Major projects could take over a year. The process wasn’t cheap and the ITprofessional who led the project was well-versed in the ways of the data center.

“When you were working in computer centers back in the ‘80s and ‘90s,you hadto have a very, very specic skill set. You had to be a highly trained individual,”

says Scott Offermann, Director of Critical Operationsfor Cushman & Wakeeld.“Now, everybody’s a computer technician.”

With the transformation underway today, IT still plays a critical role in keeping thebusiness running safely and smoothly, but the skills and processes associated withrunning a data center have changed dramatically. “The new skills that are needed

today are on the application level, not the transmission and physical level or the security level,” says MartinZuckerman, CEO of Teswaine Technologies, a data center engineering consultancy rm.“There are peoplewho understand mobile applications, and those are the skills that are needed today in data centers.”

Hiring the right people is a growing challenge for IT managers surveyed in a recent Computerworldstudy. Sixty-four percent of those surveyed said the open positions in IT were for highly skilledprofessionals, with application development leading the list. The same survey found 36 percentof the managers estimated I took three to six months to ll open positions; 15 percent said it tookmore than six months.

The change in IT skill requirements did happen overnight; IT has been evolving for years. It began,perhaps, with smartphones, or more specically, when employees started bringing smartphonesto work at the birth of the “bring your own device” (BYOD) movement. Suddenly, they wanted to

“SECURITY NEEDS TO BECOME MOREAGILE. IT NEEDS TO BE INVOLVED

IN DIFFERENTDISCUSSIONS.”

MATTHEW GYDEDIMENSION DATA


24/43



connect with the network. To do that safely required a new application, with different applications fordifferent types of phones. Old-guard IT professionals, realizing the cost and time required for makingall those applications, often responded by saying “no.” The result was tension.

However, the CEO was usually among those who demanded that change, and IT managers eventuallylost the battle. Soon there were more devices in the ofce, with employees hacking their way intothe company’s servers, rst to retrieve email and later to get to other data they needed for a salespresentation, or to complete a work project at home. The more IT tried to accommodate them,the harder it became for them to keep up. Tension grew.

Top 5 Challenges Facing IT

Shifting technologies, aligning with business goals and nding the righttalent are among the top concerns of IT managers. (Source: Computerworld)

Software companies addressed this trend with cloud-based platforms that made it much, much easier

to create applications. IT professionals saw the advantages, and so did many tech-savvy managers whobuilt their own applications after growing tired of waiting for IT to address their needs. Suddenly, appdevelopment was cheap, fast and didn’t require long arguments with the IT staff. As managers startedbuilding their own apps, a sort of “shadow IT” movement ensued, with business managers activelygoing around IT to build what they felt they needed. More tension.

To be sure, it will take a cultural shift for traditional CIOs and IT managers to embrace the idea ofbusiness leaders building their own apps. In a best-case scenario, IT professionals would actively helpthem, a step that will help to ensure the resulting apps would be secure.

“That’s a big mindset change [for the traditional IT teams],” says Richard Garratt, Dimension Data’sDirector of the Data Centers for the Americas. “I think a lot of new developers coming out of schooland colleges already have that mindset of DevOps. Why do things need to take time if you can getthem done instantly?”

The traditional IT professional is often wary to push application development and data into the cloud,even though business owners and even most technology specialists see the strong business case for it.Matthew Gyde, Group Executive for Security at Dimension Data, says the rst response from security

Keeping up with technology advances

Alignment of IT with Business

Undervaluing older workers

IT Talent Shortage

Job losses due to outsourcing

48%

18%

17%

14%

3%


25/43



managers is often “No. It’s not secure. We‘ve got other projects. Move on.” But he thinks that’sthe wrong response.

“Security needs to become more agile,” Gyde says. “IT needs to be involved in different discussions.

The security guys need to understand why it’s a good business decision and then be pushed to makesure that it’s secure as they move to the hybrid-type model.”


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5. A WORLD APART: REGIONAL VARIATIONS INSPIRE AND CHALLENGE

An old joke tells us the three most important words in real estate are location, location, location.They also may be the most important when considering where and how to do business today.

Planning a global enterprise is much easier on a blank white board than in a world divided by borders,privacy laws, energy shortages, temperature ranges, workforce availability and varying costs for reliabletelecommunication service. When one overlays all those considerations on top of a world map, it maytempt a wary IT professional to leave the data center where it is now. But companies that navigatethrough those challenges will nd enhanced performance after their journey.

“Geography does have a big impact, and the subtleties are quite complex,” says Zahl Limbuwala, CEO

and co-founder of Romonet, which helps companies extend their data networks in the US and Europe.He advises clients to examine all parts of their business and decide which can go into the cloud, whichcan go to a co-location facility and which should remain on premises.

Privacy and Data Protection by Country

Compliance gets complicated in Europe, where privacy laws often differ fromcountry to country. (Source: Forrester)

On one end of the spectrum are countries like China and Russia, which may outlaw the ow

of data into or out of their countries. On the other end are countries like the US that have culturessupporting the free ow of information. Europe countries tend to be fragmented in their policies,presenting challenges to regional data networks. And emerging economies remain an enigma, withcheaper new technologies like mobile giving them the potential to leapfrog over countries with fargreater resources.

The Asia-Pacic region is similar to Europe. In countries like Australia, Japan, Singapore, Malaysia,Indonesia and India, much of the technological advances are being driven by the government.Like Europe, there are challenges in gaining certication, particularly in the areas of government

Most Restricted

Restricted

Some Restrictions

Minimal Restrictions

No Legislation or No Information

Government Surveillance May Impact Privacy


27/43



and banking. Steve Nola, Group Manager for IT-as-a-Service at Dimension Data, sees the region as a“country-by-country type of discussion” involving questions of where data is stored and which securitymeasures are in place.

Telecommunications represents another signicant challenge, particularly in emerging regions of Asia,South America, the Middle East and Africa. A data center is only as good as the network that connects

it to the people using it. Telecommunications services that carry much of that informationvary in different countries, so much so that systems designed to run in the rst worldwon’t perform well in emerging markets. Cost is another factor, with extremely highrates in some areas.

The telecom question is driving an innovative solution called the Hybrid WANs (WideArea Network) in some areas that shifts some network trafc onto the Internet insteadof a telco’s network. That’s a brand new way to view markets and I think it’s going to be

one of the big trends of the near future,” said Gary Middleton, Business DevelopmentManager for Dimension Data’s global networking group.

Electrical supplies also play a big role in the placement of a data center. This is not only because of thepower used by the machines, but the air conditioning systems required to keep them operating at anoptimal temperature. Germany, for example, has high costs for electricity, so some companies workwith neighboring countries like Poland to supply cheaper power.

Tropical climates may be too warm, prompting companies like Facebook to build air-cooled plantsin areas to the north, like Oregon in the US. Because of its namesake weather, Iceland is activelypursuing data center operations as a growth industry. Server manufacturers have also produced moreefcient machines that require less power, which allows them to run cooler. That, in turn, reduces CO2emissions related to generating power, a growing concern as the volume of data grows.

Tomoo Masaki, a senior researcher at the Green IT Promotion Council and the Nomura Research Institutein Japan, says 85 percent of his company’s energy costs stem from its data base operations. He said thecountry’s Ministry of Economy, Trade and Industry, which governs the data center industry, has askedsmall to intermediate-sized companies to move their data operations to the cloud to save energy.

“GEOGRAPHY DOES HAVE A BIG IMPACT,

AND THE SUBTLETIES ARE

QUITE COMPLEX.”

ZAHL LIMBUWALAROMONET


28/43



6. MODERNIZING YOUR LEGACY: ERP’S EVOLVING ROLE IN THE HYBR

A key goal of the transformation of business technology is to make applications more useful toemployees and customers around the world and around the clock. Earlier, we discussed the securityand regional considerations of this transformation, but what about the applications themselves –the software that employees routinely use internally now?

Most large companies have invested millions of dollars and years of hard work into an integrated suiteof software applications collectively known as enterprise resource planning, or ERP. This suite of tools

facilitates the ow of data in areas such as marketing, production, accounting,human resources, sales, distribution or other departments. Leading suppliers ncludeSAP, Oracle, Microsoft and other large software vendors. Typically, many of thesetools are highly customized, that is, tailored to the specic needs of differentoperating groups within different companies. Traditionally, they’re driven by theon-premises data center.

Adding new applications to traditional ERP systems often takes months or yearsof careful planning and execution at a cost of millions of dollars with the goalof producing a durable tool that will serve the business well for years to come.

This characteristic, however, puts it at odds with the exploding demand for agility, innovation andspeed that reects today's business needs.

Business managers or IT staff can now sign up for applications in the cloud – Software-as-a-Service –in minutes, whether it is a massive platform like Salesforce.com or smaller, highly focused applicationsof processing expense accounts or monitoring customer success. Almost half of today’s cloudinvestment goes to SaaS applications, according to some estimates. It’s also much easier for internalsoftware application projects to be built in the cloud through Platform-as-a-Service. Consider thisexplanation from Treb Ryan, Chief Strategy Ofcer for Cloud Business in Dimension Data’s IT-as-a-Service group:

“In the old days, if I wanted to get new systems in place, whether it was to try something out, to experiment, or because we needed additional capacity, there

was such a long planning and acquisition process that it really slowed down theadoption of anything new and different … You had to do a lot of justication.Now, if I want to try out something new or different, I can have those resourcesto me in a matter of minutes. We can have one right now.”

It is not that the traditional ERP investment and tools are suddenly worthless; far from it, they typicallysupport the core functions of businesses. However, the emergence of cloud-based applications isdriving the need for what some call “hybrid ERP” or “postmodern ERP.” The future environment wouldbe a more exible suite of tools that blends deeply grounded on-premises applications with Software-

“WE SEE ERP TAKING A

HUGE AMOUNT OF BENEFITFROM THE HYBRIDCLOUD ENVIRONMENT.”

STEVE NOLADIMENSION DATA


29/43



as-a-Service (SaaS) of custom-built applications in the cloud. Today, however, about 61 percent of ERPsales are still for on-premises products, according to Infosys.

ERP Type Sales

While cloud-based applications now account for one-quarter of the global

market, 61 percent of ERP software is still on-premises. (Source: Infosys)

Adriaan Bouten, founder and CEO of dprism, which advises businesses on digital strategies, offersan example of why a company would favor the hybrid approach. He says he was just consulting fora company that wants to add a major new line of business that is in demand right now. To do thatthrough the traditional path, the client would need to build a new ERP application, a process thatwould take years and millions of dollars. Instead, Bouten suggested that the company use a SaaSapplication that would be available right away instead of facing the risk of missing the current businessopportunity. That path would not only help with time-to-market, but also would reduce risk becausethe SaaS app could be abandoned if it the company decided not to drop the new line of business.

Aside from agility, cloud-based ERP can be used on-demand during peak demand periods. Manyapplications, such as accounting or inventory tracking, are used heavily at key periods, such as quarterlynancial reporting or during peak sales periods. The rest of that time, an on-premises system is runningat a lower capacity but still drawing on resources. Cloud-based systems can be used to provide burstsof activity only when needed. “So we see ERP taking a huge amount of benet from the hybrid cloudenvironment,” says Steve Nola, Dimension Data’s Group Executive for IT-as-a-Service.

On Premise

Saas (Software as a Service)

Cloud (Hosted)

Other

61%

14%

12%

13%


30/43



7. PUTTING IT ON AUTO PILOT: AUTOMATION’S EMERGING ROLE

Automation is a word with many meanings, in part because the evolution of technology graduallyallows for automation of more things. The data center and software dened networks will be thenext signicant step for automation.

The concept of automation, of course, is not new. As often happens in technology, the automationof networks and servers began with a vision, was nurtured by innovative engineers and maturedbefore businesses had learned about its potential. The notion of automating the data center has beendiscussed for several years. Until recently, however, it wasn’t far enough along to support the task withthe reliability and consistency required in a business setting.

Today automation is a tool that companies are exploring as a means to maximize their resources –servers in the data center, the network that carries data and the humans who currently manage both.

That doesn’t mean that humans will be taken completely out of the loop. It onlymeans they’ll have a much better tool to help them manage systems.

For example, when there is a burst of activity, automation can send some of yourdata center’s workload to a public or private cloud – and it can make that choicewithout assistance. It can help resolve data sovereignty concerns by directing trafcthrough certain jurisdictions. When coupled with predictive analytics, it can helpto prevent security problems. And it does this more efciently than the IT managers

who used to handle these processes manually.

“There’s so many areas where it will t that it’s far more than simply saying, ‘We’ll take basic processand make it faster,’” says Gerard Florian, Senior Vice President for Strategy and Engagement inDimension Data's IT-as-a-Service group. He notes some of those purposes could be around provisioninginfrastructure, scaling up or down, or assessing security threats automatically based on a wider matrixof events and vulnerabilities.

There is also another important side to automation: what it means to the workforce and culture ofa company. It will mean that instead of an IT professional monitoring server loads and the performanceof the network on panels in the data center, they can spend more time with people on the businessoor, helping them get more out of the technology in their hands. Instead of swapping out disks orstarting up new servers manually, they can help initiate innovative new approaches to solving companychallenges.

Automation saves money through ensuring a more efcient use of resources. But more importantly,it enhances an organization’s ability to scale by reducing complexity, facilitating product developmentand supporting global expansion.

“THERE’S SO MANYAREAS WHERE

[AUTOMATION] WILL FIT.”

GERARD FLORIANDIMENSION DATA


31/43



8. ALWAYS ON: ASSURING HIGH AVAILABILITY AND DISASTER RECOV

Until recently, the best way to make sure your business wouldn’t stop when the data center wentdown was to build a second center that could take over if the rst one failed. Earlier in this report,we discussed the extraordinary expense of building an on-premises data center; the cost of buildinga second isn’t any cheaper. If your rst facility cost millions of dollars, your backup facility wouldprobably cost about the same. Worse, it won’t necessarily prevent a service outage if the problemis elsewhere in a company’s network.

Technology can fail just as surely as a light bulb can burn out. A key role for the CIO is to maintain highavailability of service even if the data center is destroyed by re or ood or tornado. To accomplish that,many CIOs now turn to the hybrid cloud for innovative approaches to disaster recovery.

In much the same way that the cloud can provide added capacity when your busi-ness surges, it can add security services when your data center comes to a halt.“What the hybrid gives you in the ability to match your requirements … It’s notone-size-ts-all, which is typically how [disaster recovery] facilities are built today.It gives you choice and exibility,” says Steve Nola, global Group Executive for theDimension Data’s IT-as-a-Service division.

For example, Tourism Australia recently replaced its aging technology and virtualizedits entire computing environment. It also began using a backup product that takes

snapshots of the company’s data. If the new system fails, the agency can expandinto the cloud to restore service quickly. “It means we can ship data to multiple places as well and bringup that virtual server wherever we need it,” says CIO David Rumsey.

Some companies believe the cloud can never go down, but you only need to ask Netix about that. Itsservice went down on Christmas Eve 2012, just as millions of people were sitting down to watch holidaymovies. The problem turned out to be a load-balancing problem on AWS, Amazon’s cloud service.

“We come across people who have moved an application that was running on a physical server intheir data center to their cloud. In the back of their minds, the idea is that the cloud is always upand never goes down,” says Gerard Florian, Senior Vice President for Strategy in Dimension Data'sIT-as-a-Service group. “Technology is technology. Things will go wrong on the software level, hardwarelevel, whatever. They're quite exposed. So I think there can be almost a false sense of security.”

“THE CLOUD IS APERFECTLY GOODSECONDARY MODEL

BECAUSE IT'S LOW COSTAND IT'S FLEXIBLE.”

--STEVE RUBINOWCATALINA


32/43



9. CHANGE MANAGEMENT: TRANSFORMATION STARTS AT THE TOP

John Gage may be most famous for coming up with Sun Microsystem’s tagline: “The network isthe computer.” But his greatest insight might be “Technology is easy. People are hard.” One topicthat surfaced repeatedly in our research with executives in this eld was the importance of changemanagement when attempting to carry out a transformation that will make businesses perform better.

Consider some of the obstacles to making the changes discussed in this report:

• The IT team must come out of the on-premises data center and startcollaborating with colleagues on the business oor.

• Business executives must resist the temptation to sign up for SaaSservices without IT’s approval.

• Business groups must break down their silos and start working in cross-functional teams.

• Instead of only managing hardware in the data center, IT professionalsmust be skilled in writing and managing software in the cloud.

• The CEO must set the tone and communicate change across the organization.

Change management is more than switching from a roomful of servers down the hall to an auto-matedsoftware-dened data center in the cloud. It’s about helping people understand that the good jobthey did in the past is evolving into the better job they will do in the future. Dr. Natalie Petouhoff, theConstellation Research analyst who specializes in digital trans-formation, put it this way:

“While I think we are thinking about breaking down the silos, I’m not sure thatthere are leaders at the top of large companies that are saying, ‘OK, here’s thedirection we’re going to go. We’re going to break down the silos. We’re goingto funnel the data. You guys are going to change how you do your jobs everyday. We’re going to use this data to change how we communicate internallyand how we serve the customer.’”

To manage change effectively, it’s important to let all stakeholders know what, how, when andwhy things will change. Cary Sylvester led the tech team at Keller Williams through a transition froma North American-based company with co-located servers across town into a global company witha hybrid cloud approach to data and applications that is up and running across ve continents.One of her key pieces of advice to colleagues approaching this challenge is to communicate thevision with colleagues at key steps along the way “because I think that’s where people get


33/43



overwhelmed.” Some of the plans may change as you make that journey, she says, but if you keepheading toward the vision, you’ll eventually get there.

Richard Garratt, General Manager for the Americas at Dimension Data’s Data

Center group, notes the journey will require business process change, it willredene the role of IT and it will mean bringing in new skill sets. “I think a lotof our clients, especially in the enterprise domain, are continuing to look at howthey drive their change from a business standpoint,” he says.

Petouhoff worries some companies are asking their employees to do somethingdifferent without establishing a formal change management program, “and when you skip oversomething, you can expect failure.”

“WHEN YOU SKIP OVER

SOMETHING, YOU CANEXPECT FAILURE.”

NATALIE PETOUHOFFCONSTELLATION RESEARCH


34/43



CONCLUSIONS

“If you want something new, you haveto stop doing something old.”

— Peter F. Drucker

If we summed up this report in three words, they would be “things must change.” The powerfulexplosion of data we’ve witnesses in just a few short years has already permanently changed theway organizations do business around the globe. And this is just the start. The generation, collection,storage and analysis of data are all clearly accelerating, with no end in sight.

Data now drives the way companies create new products and services, market them to customers,

collect feedback, operate internally and manage their nances. Not surprisingly, it has also changedthe nature of information technology, sparking demand from business leaders for faster applicationdevelopment, new analytical capabilities and real-time access to core systems from anywhere, anytime on any device.

As the late Mr. Drucker might put it: business leaders want something new. And to achieve it, theold notion of a data center must go. New systems must be global, faster, more secure and able tokeep up with a fast-changing matrix of government regulation, energy supplies, technical skill sets,leaner organizations and other factors.

(Source: All Covered)

“As we noted earlier, two key themes surfaced repeatedly as we studied companies leading this eraof change. First, there is a strong business need for agility. With brilliant new companies emergingon almost a daily basis, larger well-established organizations must develop ways to remain nimble,to be able to say “we can’t function today the way we functioned yesterday.”

The second truism was that the most successful implementations of hybrid technologies were tailoredto meet the specic needs of each organization. While they may share some of the same ingredients –


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virtualization, hybrid data centers, automated networks, software dened systems – each organization’sprogress depends on nding its own recipe for success.

We arrived at six conclusions, which appear below, however we recognize that we are closer to the

start of this transformation than to its end. Accordingly, we will continue to explore and challengenotions about this transition and will publish new ndings regularly on Transform to Better Perform'sofcial website, www.ReinventDataCenters.com. Please join us there and by following @Transform_DCand be prepared to share your own thoughts and experiences.

Six key ndings:

1. Data Centers must change

Traditional, on-premises data centers were built at enormous expense over a period

of years with an expected lifespan of 15-20 years. Yet most weren’t designed to addresstoday’s business demands or to offset today’s unprecedented risk factors. On-premisesdata centers remain at the technological heart of most large companies worldwide, andthey will continue to drive core systems for years to come. However, like traditional ERPapplications, they are rapidly falling into the category of legacy technology.

Many companies are now pursuing new solutions that are better-suited to today’sbusiness environment. The most common general approach is to blend the powerof on-premises facilities with cloud-based capabilities that offer greater agility, slowergrowth in costs, heightened security and faster resolution of evolving business needs.

2. The Role of IT Has Changed

As new technologies evolve, IT teams must evolve with them. In the past, they keptsystems running securely, managed networks and built applications through traditional,waterfall development. Now they must collaborate with business owners to buildapplications in hours or days, not months or years, that can turn raw data into action-able intelligence.

The skill sets needed to support the evolution of data technology fall more to thesoftware development end of the spectrum than to the traditional hardware end.

This is driving demand for engineers with those skills. While universities are laggingin training enough of these engineers to meet future demands, recent graduatesare well-suited to take on the new roles of IT professionals.

Automation will increasingly assume the role of operating networks optimally, freeingstaff for more important roles that require the human element, and that will require ITstaff to demonstrate a spirit of collaboration to complement their technological expertise.


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3. Business Agility Is Mandatory

Turning a small sail boat remains far easier than changing the course of an ocean liner.However, in business today, the biggest companies must learn to change their cultures,

processes, products and services as quickly as a tiny startup if they wish to maintaina leading place in the global market.

The pace of change is accelerating. The potential for a new company to become the nextbig thing on the world stage is growing. Line of business managers at larger companiesneed greater agility to respond to competition and to better-serve distant customerswith new apps, analytics and ever-richer data.

Many companies have already seen business managers signing up for Software as aService applications without approval from IT managers. However, some of the same

managers learn they lack the technical skills to properly implement or manage. Withadditional support from IT, this “hybrid IT” approach is helping companies in the shortterm. But it falls short of tapping into the full power of today’s technologies.

4. Security and Compliance:

Both companies and governments put a high premium on protecting data and privacy.Challenges vary from region to region, with deep implications for the way data centersand supporting networks are built and managed as companies expand from one countryto another.

When coupled with other considerations, such as regional variations in the costs oftelecommunications and energy, compliance concerns are growing in complexity.This not only creates a potential liability to the business, but diverts the IT staff fromits new priorities of promoting agility through technology.

As a result, companies are turning to trusted experts to guide them through the mazeof government regulations and create a heightened degree of data security in an agewhen network intrusions are growing in number and sophistication. Each companymust decide on its own tolerance for risk and cost, factors that will affect their abilityto comply with regional requirements and govern their data.

5. Data Drives Costs

New technologies like the cloud and software-dened data centers cost far, far less thanbuilding traditional data center. Many companies spend hundreds of millions of dollarsto build on-premises facilities, far more than they spend on services in the cloud.Companies will also save money in maintenance as that responsibility is shifted to thecloud vendor. The exact balance of cost factors will vary from company to company asthey design and build hybrid systems.


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However, even if they record signicant savings in their choice of technologies, they canexpect to see costs rise as the volume of data rises. That can be good news, because theincrease in data represents increased opportunities to boost prot in the form of bettersales processes, more efcient operations and improved forecasting. In other words,you need to spend more money to make more money.

To limit the growth in costs, companies will need to master the art of managing data ows.They may do this and improve operations simultaneously by carefully choosing the mostsignicant data points to analyze, minimize storage of outdated data, choosing greentechnologies that minimize energy use (and CO2 emissions) and other creative approaches.

6. Downtime Will Decline

Ensuring continuous service and rapid recovery from disruptions is paramount in today’s

business climate. Whether technology is in the cloud or in a refrigerated room down thehall, it will fail at times.

Traditionally, companies that wanted to back-up their on-premises data centers did so bybuilding a second center at another location so that the second center would kick in ifthe rst failed. Because of the extremely high costs associated with building a traditionaldata center, the backup center was also expensive. And the backup center was usedrarely, if at all, resulting in a poor cost-benet ratio. Further, the maintenance of backupcenters prompted many companies to build them within a short drive of the main center,which increased risk both could fail in a major disaster.

Many companies now are shifting to backup centers in the cloud, which may take severaldifferent forms. Generally, they result not only in lower costs, but in faster disaster recovery.


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THE CLOUDY ROAD TO

TRANSFORMATIONGROWTH IN DATA

90%of all the data on Earth was

created in the last two years

80% of it is unstructured

2.6zettabytes*

7.7zettabytes*

Global data center traffic will triple from

2012-2017

The average household generates enough data each year to fill

65 32GB iPhones

2015In 2020 it is expected that this will grow to

318 32GB iPhones


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THE CLOUD LANDSCAPE

2.4 billion peoplenow use cloud-based servicesin some form

There’s an estimated

1 exabyteof data

stored in the cloud(That’s 1 BILLION gigabytes!)

InnovationMobilityCostScalabilityBusiness Agility

What is driving the shift to Cloud?

Where is the Cloud investment going?

52% Software as a Service (SaaS)

26% Platform as a Service (PaaS)

25% Infrastructure as a Service (IaaS)

23% Data as a Service (DaaS)

By

73% of datawill be in the cloud

More than 60%of businesses utilize cloud for performing

IT-RELATED OPERATIONS

2017


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CLOUD VS ON-PREMISESDATA CENTERS

How much will the traffic grow?from 2012 to 2017

GLOBAL CLOUD TRAFFIC . . . . . . . . . . . . . 4.5 x

GLOBAL DATA CENTER TRAFFIC . . . . . . . . . . 3 x

CLOUD WORKLOADS . . . . . . . . . . . . . . . . 3.7 x

DATA CENTER WORKLOADS. . . . . . . . . . . 2.3 x

Data Center

Current AssessmentWorldwide data centersalready cover

35.7 MILLIONSQUARE METERS

In the global ICT sector,data centers account for a

17%CARBONFOOTPRINT

How much is being invested g

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Data Center Evolution in the Era of the Cloud

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