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TECHNOLOGY WHITE PAPER

From Infrastructure to Applications, the Future of IT is On-Demand From big data to cloud computing, technology advances are giving business leaders ideas about how to build an agile organization that can respond quickly to changing market conditions. In order to support this new business model, the IT department must undergo a complete transformation. SPONSORED BY

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INTRO

In today’s world, business as usual means working across global time zones, taking mergers and acquisitions in stride, and being highly productive while operating on a trim budget and with a lean team. IT must enable this “new normal” while delivering competitive advantage through technologies like big data and predictive analytics, not to mention virtualization, cloud computing and mobility. It’s a tall order that calls for new, disruptive approaches.

TECHNOLOGY WHITE PAPER | From Infrastructure to Applications, the Future of IT is On-Demand

THE BIG DATA CHALLENGE Thanks to declining storage costs, enterprises are now able to retain vast quantities of data and to subject that data to the scrutiny of predictive analytics. The goal: to find new patterns and insights to drive business strategy. Big data may come from customer transactions, electronic sensors, social media and many other sources. According to a McKinsey & Company report, big data is an emerging catalyst for innovation, competition and productivity. The consultancy asserts that if the U.S. health care system were to use big data creatively and effectively to drive efficiency and quality, the sector could create more than $300 billion in value every year.¹ Other industry pundits agree that predictive analytics will revolutionize decision making. But just having the technology is not enough. It requires a conscious culture shift and the right skill set. Unfortunately, according to that same McKinsey report, there will be a shortage of talent necessary for organizations to take advantage of big data. By 2018, the United States alone could face a shortage of 140,000 to 190,000 people with deep analytical skills, as well as a dearth of as many as 1.5 million managers and analysts with the know how to use the analysis of big data to make effective decisions. That means it is time to make a plan to capture the full potential of big data in the enterprise. In a new study, Deloitte Consulting LLP outlines eight business trends for 2013, one of which is the push toward the disruptive power of analytics.2 The consulting firm contends

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help narrow that gap. Traditional data centers are located in house and require large server farms for ample processing power. They also require a lot of time for the IT staff to manage and maintain the hardware and software licenses. It is an asset-intense setup that is expensive and unproductive when it comes to innovating IT services. As executives put more pressure on IT to figure out how to convert the IT department from a cost center to a profit center, a move to virtualization in the data center makes a lot of sense. Virtualization technology enables a single physical server to act as if it were many servers. Each virtual server runs its own operating system. The biggest appeal of this technology is that it lowers cost by reducing the amount of hardware required. A smaller amount of physical servers yields other advantages as well, including less electrical power consumption, lower maintenance expense and streamlined server and backup management. Indeed, virtualization addresses the pressing challenge of infrastructure sprawl that forces IT departments to use 70% of budget on maintenance, even as many servers are running at only about 15% of capacity. Many organizations, like Los Alamos National Laboratory (LANL), have found that they can get much more utilization out of their servers through virtualization and conserve energy as well. In 2007, the Environmental Protection Agency released a report revealing that data centers are responsible for nearly 2% of U.S. elec-

that companies that find a way to use big data analytics and social data in core strategic decisions will ultimately be the most insightful and agile. These organizational and business shifts will require a reevaluation of current IT investments. To get started, companies must determine where they need to create more efficiency and cut expenses. A good place to begin is the data center.

DATA CENTER CONSOLIDATION The IT department is in charge of figuring out how to fill the gap between what the business is demanding in innovation and enhanced services, and the actual resources that are available due to flat or shrinking budgets. Reducing infrastructure complexity and cost can

UH-OH By 2018, the United States alone could face a shortage of

140,000 to 190,000 people with deep analytical skills, and as many as

1.5 million managers and analysts with the know-how to use the analysis of big data to make effective decisions.

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TECHNOLOGY WHITE PAPER | From Infrastructure to Applications, the Future of IT is On-Demand

tricity consumption and climbing, costing about $4.5 billion annually.

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Ultimately, however, the advantages outweigh any disadvantages

It was this report that spurred an architect at LANL to improve IT ef-

related to virtualization. In most cases, the transformation of the data

ficiency through a virtualization effort that LANL dubbed “infrastruc-

center from a collection of independent systems to a system of tightly

ture on demand.” The group created a self-service portal through

integrated parts will vastly improve operations. What’s more, orga-

which researchers could automatically provision virtual servers. The

nizations that make the move will find themselves one step closer to

new setup enabled them to get their processing power in 30 minutes

the computing cloud, where processing power, storage and applica-

vs. 30 days in the old model.

tions are contained off-site and delivered on demand via the Internet.

Of course, there is also a downside to virtualization. While it may reduce the physical footprint and cost to deploy and manage the

IT AS A SERVICE

system, there is added complexity associated with the hypervisor

Some people think that because they have virtualization, they have built

software layer used to run the virtual systems. Managing both virtual

themselves a private cloud. That is false. A cloud computing platform

and physical environments together requires tools that are designed

differs from virtualization in that it refers to the way that information is

specifically for this task.

delivered vs. how it is housed. For example, end users can access cloud

Similarly, the emerging trend to adopt a converged fabric setup,

based applications through a Web browser or mobile app. The business

on which vendors such as Cisco, VMware, and EMC are collaborat-

software is stored remotely, often at a third-party data center, and the

ing, will provide a unified turnkey system that bundles processing,

information is served up to the end user over the Internet. It is very

networking, storage and virtualization into a single integrated archi-

scalable—providing extra processing power when needed for research

tecture. This enables end to end visibility, management and control. It

or test and development, for example, without a large infrastructure

also introduces new types of applications into the IT mix.

investment. But because the IT department does not have complete

There are a variety of new management tools for virtual machine (VM) and converged fabric. That’s good news, but it also means the IT team must learn new programs. This can create problems because

visibility or control over the cloud, there are questions around the security of corporate data. Security red flags keep many companies away from the public

many IT shops face a skills shortage. Further, lean IT operations mean

cloud, in which resources may be shared between multiple tenants.

there may be little time to train the staff they do have.

Instead, they opt for a private cloud deployment that limits service

There’s also the risk of “virtual stall,” which happens when scalability issues surface as a result of virtualization deployments growing faster than the physical infrastructure or traditional enterprise management systems can handle, bringing productivity to a halt. Typically, however, it is a result of a breakdown in communication within the department silos. Virtual stall creeps in when inevitable business issues crop up as a result of a technology migration. First, some departments are skeptical about moving key systems and resist, causing a delay that can result in ROI that is only about 30% of the technology’s potential. Second, if something does go wrong, application specialists and line-of-business managers who have far less visibility into the virtualization rollout will point fingers at the new technology, saying it is to blame.

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ROI LANL’s virtualization infrastructure:³ • Enabled the lab to decommission 105 physical servers and retire three small data centers • Generated total energy savings of more than 1.8 MWh/year • Reduced the physical footprint by 50% to 70% without losing any computing capacity • Returned entire investment within nine months

TECHNOLOGY WHITE PAPER | From Infrastructure to Applications, the Future of IT is On-Demand

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access to the customer, who also has some control and ownership of

team to work closely with business counterparts to create quality

the infrastructure.

services with a competitive edge.

Many service providers are leveraging the cloud computing model to go beyond serving up applications to serve up infrastructure

SUMMARY

as well. Infrastructure as a service (IaaS) is an automated offer-

Upheaval in the business landscape is making it necessary for tech-

ing where compute resources, including storage and networking

nology execs to radically rethink IT. Savvy leaders ask these questions:

capabilities, are owned and hosted by a service provider and offered to customers on demand. According to Gartner, the public cloud services market is expected to grow 18.5% in 2013 to $131 billion worldwide, up from $111 billion in 2012. But it is IaaS that is the fastest growing segment of the market, increasing 42.4% in 2012 to $6.1 billion and expected to grow 47.3% in 2013 to $9 billion.4 This, in turn, feeds the IT as a service (ITaaS) movement. Utilizing a private IaaS, the IT department can become its own service

• Will current IT support future business endeavors, be it an acquisition or move into a new market? • Does it provide the agility and transparency that the organization needs to gain a competitive edge? • Can it give the IT organization the freedom to innovate rather than running reactive fire drills? • Is it moving the IT department away from a cost center and into a value-added profit center?

provider to the company, strategically building a vehicle in which en-

To answer these questions affirmatively, rearchitecting IT to be-

terprise IT can fulfill business needs and exceed user expectations.

come a flexible ITaaS may prove to be the most important technology

In this scenario, IT can leverage business opportunities generated by

strategy decision that you as an IT professional may ever make.

market dynamics and offer a user experience with anytime, anywhere delivery of applications on any device. For example, through IT delivered technology such as virtual desktop infrastructure (VDI), remote workers don’t have to worry about dealing with buggy software or unresponsive operating systems on their own. IT staff can manage and maintain far flung

1. “Big Data: The Next Frontier for Innovation, Competition, and Productivity,” McKinsey & Company, May 2011. 2. “Business Trends 2013,” Deloitte Consulting LLP, 20 March 2013, http://dupress.com/collection/business-trends-2013/ 3. “Los Alamos’ New Virtualized Data Center Saves Energy and Cash,” Energy.gov, 7 March 2011. 4. “Forecast Overview: Public Cloud Services, Worldwide, 2011 – 2016, 4Q12 Update,” Gartner, Inc., 28 February 2013 5. IDC Competing on the 3rd Platform, Welcome to the New (Only) IT Marketplace, doc #DR2013_GS2_FG, March 2013.

desktops through a central cloud based console. Similarly, IT could potentially serve up collaboration platforms such as telepresence tools to enable real time interaction with colleagues regardless of location or time zone. When the IT department acts as a service organization, it can also bill each department based on the consumption of processing power and applications. This could be lucrative for IT as there will be many requests for new services in the future, IDC predicts. It will also be important for IT to maintain a strong profile within enterprises. According to IDC, while business decision makers are only poking their noses into IT about 24% of the time these days, by 2016 line of business managers will be taking a role in IT initiatives about 40% of the time.5 In this situation, the onus will be on the IT

IAAS GOING UP AND UP IaaS is the fastest growing segment of the market, increasing 42.4% in 2012 to $6.1 billion and expected to grow 47.3% in 2013

to $9 billion.

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