(BPI) Network

NETWORKBPI™

ACCELERATE HOW YOU INNOVATEDATA CENTER EVOLUTION IN THE ERA OF THE CLOUD

NETWORKBPI™Full Report | May 2015

ACCELERATE HOW YOU INNOVATE | REPORT

© Copyright BPI Network. All Rights Reserved. 2015 2

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 interviews

and commentary.

FEATURED

David Rumsey Chief Information Officer

Tourism Australia

Steve Rubinow Chief Technology Officer

Catalina

Cary Sylvester Vice President of Technology

and Communications

KellerWiliams

Andrew Lam-Po-Tang former Chief Information Officer

Fairfax Media

Ben Issa Head of IT Strategy

ING Direct



CONTRIBUTORS

Peter Gross Senior Vice President

of Mission Critical Systems

Bloom Energy

Scott Offermann Director of Critical Operations

Cushman & Wakefield

Martin Zuckerman Chief Executive Officer

Teswaine Technologies

Tomoo Misaki Researcher

Green IT Promotion Council

Dr. Natalie Petouhoff Vice President

& Principle Analyst

Constellation Research

Stephen Worn Chief Technology Officer

DCD Group

Gabe Cole Founder

RTE Group

Dakota Kelley Director of Facility Consulting

Telios Engineers

Zahl Limbuwala Chief Executive Officer

& Co-Founder

Romonet

Adriaan Bouten Chief Executive Officer

dPrism

Dustin Haisler Chief Innovation Officer

e.Republic

Andria Long Vice President of Innovation

Johnsonville



PARTNER CONTRIBUTORS

Rob Lopez Group Executive, Networking

Dimension Data

Matthew Gyde Group Executive, Security

Dimension Data

Treb Ryan Chief Strategy Officer

Cloud Business, IT-as-a-Service

Dimension Data

Jahangir Naina General Manager, AsiaPac

Dimension Data

Gary Middleton Global Business

Development Manager

Network Integration

Dimension Data

Kevin Leahy Group General Manager

Data Centre Solutions

Dimension Data

Dave D'Aprano Group Executive

Enterprise Services

Dimension Data

Gerard Florian Senior Vice President

IT-as-a-Service

Dimension Data

Steve Nola Group Executive, IT-as-a-Service

Dimension Data

Stuart Fox

Group Director

Business Development

Data Centre Business Unit

Dimension Data

David Wilcox General Manager

Alliances, Europe

Dimension Data

Richard Garratt General Manager, Americas

Data Centre Business Unit

Dimension Data



INTRODUCTION: TRANSFORM TO BETTER PERFORM

In today’s data-driven world, agile organizations are embracing a new model of business-responsive

data centers and networks to drive the innovation, agility and speed needed to stay ahead of global

competitors. To explore this new imperative, the Business Performance Innovation (BPI) Network,

a Silicon Valley-based organization representing enterprise leaders, has launched a major initiative

involving multiple global partners, scores of senior executives, communities and stakeholder groups.

The results of this campaign include this first in a series of reports and strategic briefs and the launch

of 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 reports

and 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 executive

roundtable 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 infrastructures

and services. Dimension Data is also contributing thought leadership and commentary to help fuel this

global conversation about business-responsive IT transformation. Other contributions will come from

DatacenterDynamics, a global expert on data center trends, operational improvement and professional

skills development, as well as other partners.

For this, the initiative’s introductory report, we’ve interviewed executives and technology experts

on six continents and from many sectors about the key challenges confronting them and the

technological solutions they’re using to address them. We found that globally, and almost without

exception, organizations are moving steadily toward a hybrid model for data centers and networks

that reach far into the cloud. These include such technologies as virtualization, automation, software-

defined systems and managed services as well as updated approaches to Enterprise Resource Planning

and the traditional on-premises data center.

We are pleased to share this report with you and to invite you to join the Transform thought leaders

at 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 other

community members.



EXECUTIVE SUMMARY

Data has changed the business world forever. The global adoption of mobile technologies, faster

computing, social networks, the internet and the cloud means the future of business is filled with

opportunities for business leaders who can leverage that technology to their advantage and for

consumers 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 the

factory, exactly when products will arrive at the store and – perhaps most

importantly – the very moment when specific customers will be inclined to buy.

With the help of advanced analytical and processing systems operating across global

networks, companies will be able to fill an order for a customer anywhere at any

hour. They’ll support sales staff in the field with critical information. They’ll gather

real-time feedback from customers who purchased newly released products.

They’ll adjust production rates based on fresh orders. Many will even forecast the yearly profit on

a 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 IT

staff to make it happen. But the IT staff is not to blame. The growth of data over the past decade

has far, far outstripped the capabilities of almost any enterprise to acquire, analyze, secure and deliver

actionable 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 market

as a whole. And the data center is really at the heart of that change,” says Steve Nola, Group Executive

for IT-as-a-Service for Dimension Data.

That’s about to change. A transformation has begun. Thanks to the cloud, software defined networks,

automation and other fast-evolving technologies, there are new answers that can help large companies

create customized environments to absorb the rising tide of big data, add new applications in minutes

and empower all stakeholders with information that will change outcomes.

“THE DATA CENTER IS REALLY AT THE HEART OF THIS CHANGE.”

STEVE NOLA DIMENSION DATA



This transformation of the datacenter will result in better performance with increased agility and shorter

time-to-market. To be sure, there’s much to be done. And CIOs will quickly learn that one size does not

fit 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 report

six key findings. These themes are explored in detail in the essays that follow:

Data Centers: Traditional 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 address today’s business demands or to offset today’s unprecedented

risk factors. Many companies are now pursuing new solutions, particularly

approaches that blend their on-premises facilities with cloud-based capabilities

in 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 built

applications through traditional, waterfall development. Now they must

collaborate with business owners to build applications in hours or days, not

months or years, that can turn raw data into actionable intelligence. Automation

will increasingly assume the role of operating networks optimally, freeing staff

for more important roles that require the human element. Right now, there’s

a global shortage of IT specialists with the required skills to meet these changing

business demands.

The Business: Line of business managers need more agility to respond

to competition and better-serve distant customers with new apps, analytics

and ever-richer data. Frustrated with IT, many turn to SaaS apps and storage

to fill gaps. Many of them learn that they lack the skills to properly implement

or manage technologies, or that the new SaaS tool can’t integrate fully with the

data center. With additional support from IT, this approach is helping companies

in the short term, but falls short of tapping into the full power of today’s

technologies.

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 centers and supporting networks are

built and managed. Companies that lack adequate staff are turning to trusted

partners to help manage and secure their operations.

Costs: Businesses are investing hundreds of millions of dollars in data center

systems and networks. They want flexible, cost-effective solutions to transform

legacy technology into agile hybrid cloud environments. New hybrid operations



and automation can help to free up IT staff to help grow the business in other

ways. As the volume and use of data grows, green IT is helping to limit power

consumption and the related emissions of C02.

High Availability and Disaster Recovery: Ensuring continuous service

and rapid recovery from disruptions is paramount in today’s business climate.

Traditionally, many companies build back-up data centers to put into use when

needed. Cloud services can cut that cost dramatically by avoiding the high costs

associated with building more facilities. While cloud services themselves can“go down,” they provide much needed flexibility and cost savings. Companies

moving towards a hybrid cloud are finding advantages here.



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

The good news is that today’s business managers have more data than ever to help them make the

best possible decisions. The bad news is the flow of data is rising so quickly that it has outpaced the

ability of most companies to turn most of it into actionable intelligence. In the worst cases, it results

in unreliable or even contradictory conclusions.

According to Cisco, data center traffic will nearly triple to 7.7 zettabytes per year by 2017 from 2.6

zettabytes 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 come

a long way. It was only in 1980 that IBM broke the 1 GB barrier with a 2.52 GB drive the size of a

refrigerator.

“The volume of data is increasing exponentially,” says Dr. Natalie Petouhoff, an analyst for Constellation

Research 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 figure 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 filled 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 to

execute and years to pay off. Another popular path, especially for mid-size companies, is to place their

data 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-house

data center equipment and solutions in 2014 alone. Data centers already cover an estimated 35.7

million square meters worldwide. They’re growing fast, though perhaps not fast enough to keep up

with business needs.



“What we’re seeing today is that many, many enterprises lack in over-arching architecture for where

they’re going in the future,” says Gabe Cole, founder of the RTE Group, which advises companies

on their mission critical systems. He says it has become critical for companies confronting this problem

to take a step back and ask themselves what business applications they need, which of their legacy

systems can help and what their data center technology architecture should look like. And those are

questions they should continue to ask as they continue in their transformation from the data centers

they 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 are

two fundamental types of data: structured, which includes facts like your name, address and age that

can 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 technologies

like Hadoop, an open-source software framework, can help to analyze consumer

sentiment and other important characteristics of unstructured data.

Both types are critical in serving customers, but the volume of unstructured data

is growing the fastest. About 90 percent of all the data on Earth was created in

the last two years, according to various sources. Last year, IDC estimated that 90

percent of the data being generated is unstructured, but only 0.5 percent is being

analyzed. That gap has prompted business managers to demand applications that

can turn more data into actionable intelligence for use in the customer support

center, marketing, sales and other departments.

Data comes from billions of people around the world. It might be a crop report

from 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 your

smartphone, the signal from a wireless temperature sensor or information from literally millions of

other 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, the

CEO of Romonet, a group of data center industry thought leaders.

Virtually all that data is flowing through multiple data centers. Those cat photos on social media? They’re

all stored in the cloud along with your sales reports, customer orders, emails, movies from Netflix, looks

for your Kindle and all those millions upon millions of entries that pop up when you search for almost

anything on Google in the West or Baidu in the Far East. Case in point: it took Google 0.42 seconds for

its data center to deliver 1.1 billion possible answers to the question: “How much data is there?”

“WHAT WE’RE SEEING TODAY IS THAT MANY,MANY ENTERPRISES LACK IN OVERARCHING ARCHITECTURE FOR

WHERE THEY’RE GOING IN THE FUTURE.”

GABE COLE RTE GROUP



Because many data centers also were designed before smartphones (and selfies) became ubiquitous,

they often weren’t built to handle the volume of data available today. Yet, because their owners are

still depreciating the costs of equipment, integration and software, companies have a strong incentive

to keep them in operation while assessing newer technologies.

Do businesses really need all that data? Thankfully, no. But sorting out the particular data that

a company needs to advance their business is a challenge that consumes the time of many of the

best and the brightest in technology today. More precisely, the challenge is to find data that a line-

of-business manager can use to identify a prospect, gauge their interests, establish contact, make

a sale and record the revenue.

Live Nation, a US-based company that sells tickets to its subscribers, tracks millions of people across

4,000 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 direct

you 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 services

in the field of digital marketing alone.

Andria Long, VP of Innovation at Johnsonville, a popular American sausage

manufacturer, says her company collects “a tremendous amount of data” from

multiple sources, and then analyzes it to look for themes. “And then,” she says,

“we translate that into our hypothesis on customer opportunity and start down

the path of researching it and learning more.” All that to make a better bratwurst.

The Internet of Things, which will connect ordinary devices through intelligent

sensors, may add a new layer of challenge, placing hundreds of billions of sensors – perhaps 1 trillion

or more over time – in homes, businesses and public places. And all those sensors will gather and

transmit 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 – either

transmit data to you and each other now, or they will in the near future. Sensors monitor the jet

engines 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 over

700,000 miles without human assistance. The key sensor is a 64-beam, roof-mounted laser that

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

“EVERYONE WANTS HYBRID. I THINK THAT AROUND THE WORLD, EVERYONE AGREES.”

KEVIN LEAHY DIMENSION DATA



Personal Cloud Traffic

Personal cloud traffic 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 should

help to address the challenges of Big Data. They now provide flexible 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 private

cloud, a public cloud, co-location facilities or some combination of them – solutions known as hybrid cloud.

Cost of Cloud vs. Infrastructure

INTERNAL IT

MANAGED SERVICES

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 flexibility to add compute power and

storage capacity quickly when needed. For example, if a large retail chain had a spike in demand during

the holiday season, it can add capacity for just that period instead of keeping a costly data center

running all year.

1.7EXABYTES

5EXABYTES

20EXABYTES

2012 2014 2017



The cloud also offers a much quicker path to application development, because that application

is 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 the

traditional 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 service

has become the standard globally. It’s also far less expensive to rely on the cloud for disaster recovery

than it is to build a back-up data center that would be available if the company’s main data center goes

down, a topic explored later in this report.

“The confidence 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 infrastructure

solutions and services. “In the past, the most common way to do this was quite expensive and involved

a significant amount of duplication.”

Other evolving technologies, like software defined networks, automation and so-called hybrid networks

complement the power of the cloud to solve a variety of issues related to staffing, costs and compliance

All of the technology and business executives interviewed for the Transform to Better Perform initiative

say the hybrid cloud is emerging as the preferred solution for most, but they also caution that its con-

figuration will vary greatly from company to company.

“Everyone wants hybrid. I think that around the world, everyone agrees,” says Kevin Leahy, Group General

Manager 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 financial 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 an

on-premises facility, though expanding into the cloud is far less expensive, faster and easier than adding

to 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 report

predicted 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 proving

to 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 go

to the cloud,” says Petouhoff, the Constellation Research analyst. “We already know that doing

it the on-prem way didn’t work, and it created the rub between business and IT.”



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

For a moment, think back to the mid-90s when the Mosaic browser opened the Internet up to many

millions of new users. Many corporations dismissed the early days of the Internet as a fad, but there

were also many early adopters that launched corporate websites and companies like eBay or Amazon

that pioneered the field of e-commerce that is now a pillar of the global economy. That gave them

competitive advantages over laggards.

In the digital transformation now underway, the need for better business and IT processes is clear and

present. As noted earlier in this report, most companies have established some presence in the cloud

over the past few years. Still, almost all of the experts we’ve interviewed agreed that we are still very

much in the early stages of this significant transformation in data management. They noted the leaders

tend to be large financial institutions, which have deeper pockets for funding new development, and

healthcare companies that have strong financial incentives to improve secure record-keeping and sharing.

We also found pioneers in a variety of other sectors – like publishing, real estate, finance and tourism.

Their examples reflect two themes that we found repeatedly in our research: a strong business need

for agility and the reality that successful solutions are those that are tailored to specific 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 office 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 112,000

associates and is rapidly expanding to other countries around the world. At this year’s annual company

convention, 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 woman

responsible for the company’s tech transformation, which began last year as the company expanded

beyond its North American base to South America, Europe, South Africa and Southeast Asia. “I think

we’re just on the tip of the iceberg of where we can go,” she tells us. “And we’re very excited about

where we are going.”

By 73% of data will be in the cloud

More than 60%of businesses utilize cloud for performing

IT-RELATED OPERATIONS

2017



In its legacy environment, Keller Williams has outsourced its data center to SunGard in Texas, the hub

of operations for the US and Canada. SunGard provides hosting and monitoring. But the international

push 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 more

and more products that we’re offering, those will be primarily cloud-based.”

With about 100,000 email accounts, the company faced a choice: hire more

staff 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-quarter

of its time managing email “instead of 150 percent of their time.” For the most

part, they now work on other projects linked to the transformation, like updating

user management and security. The team is also working much more closely with

business owners to plan and build new systems instead of just reacting to the

needs 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 millions

of dollars.” This also helped the company sort out compliance issues in different regions, particularly

in Europe, where certification varies from country to country.

Her key points of advice to other CIOs include: 1) Find a trusted partner who can help; 2) Manage

organizational change; and 3) Once the decisions are made, take small steps towards fulfilling the

vision. “We’re still at the beginning of this transformation,” says Sylvester. “But the benefits that

we’ve reaped already on what we can do with our team and how we can respond are exactly what

we were hoping to see.”

ING Direct – Financial Services

When the conversation turns to innovative banking solutions, the banks mentioned usually include

ING Direct, which has won accolades for its mobile banking apps. So it’s not surprising the bank

applied a creative solution to address the kind of challenge faced by many enterprises: its application

development 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 way

to 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 configurations. “What we were looking for was

a ‘bank in a box,’ an instant environment that reproduced our own [production environment] in all its

complexity,” 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 Unified Computing

System, 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 SYLVESTER KELLER WILLIAMS



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 the

time 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 Direct

Australia. “Our capability now supports our appetite for transformation and

change and delivering faster for our customers.”

The company conducted a pilot project, sharing the results with the bank’s senior

management.“When we showcased it to our executive team, they were amazed to

see how this technology came together to reduce a process that used to take months

down to minutes,” says Henderson. “The solution enables us to streamline processes

that 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 shoppers

incentives to try new products, increase consumption and stay loyal to brands and retailers. To help

do that, Catalina tracks purchase history of 260 million consumers. Staying on course requires the

flexibility 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-location

center instead of running one on-premises. “That move was recognizing the need for the increased

security, 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 data

center is not a competitive differentiator.“

In today’s digital world, Rubinow says “it’s all about flexibility and speed of execution,” and that’s

where he wants to focus his team’s efforts. That’s why he’s also using the cloud to support application

development. “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 time

and 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 whether

to 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-sufficient 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 CAPABILITY NOW SUPPORTS

OUR APPETITE FOR TRANSFORMATION AND

CHANGE AND DELIVERING FASTER

FOR OUR CUSTOMERS.”

BEN ISSA ING DIRECT AUSTRALIA



Fairfax Media – Publishing

When Andrew Lam-Po-Tang became CIO at Fairfax Media, Australia’s largest independent news

organization, 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 systems

following a three-year transformation that has cut expenses and made life much simpler for the

company’s editorial workforce and its technology staff.

“Technology is really just an enabler, albeit an incredibly powerful one, that can help businesses

to radically overhaul, simplify, and lean-out their business processes,” he says. “It’s an enabler that

can radically improve the interactions that the company has with its customers, not just at a point

of transaction, but throughout an entire customer relationship.” During his tenure, the company

adopted a “cloud first” stance to all technology decisions. For example, when applications came

up 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 new

need surfaced, Lam-Po-Tang’s staff would first 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 and

the availability issues for you.” If no application was suitable, they would evaluate whether an app

could be developed on a cloud-based platform (PaaS). For example, Force.com, the development

platform 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 content

management solution, supporting its major daily newspapers and digital publications that reach

about 80 percent of the company’s audience in Australia and New Zealand. “We licensed the software

in a conventional manner and implemented it in the cloud,” he says. The open-source Django content

management framework became the second system, also based in the cloud. It was supporting 174

other digital publications within nine months.

The publishing industry is itself in a state of change as publications move from print to digital formats

that readers can access on any device. Similarly, journalists now gather news and submit stories through

mobile devices. “That was precisely the point of going to a digital first content management system

rather than a print-first 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 with

its legacy systems.

A practical impact of this transformation was that it simplified the sharing of content across Fairfax

publications. For example, with the legacy system, if one paper wanted to publish a story written for

another publication, editors often had to copy it from one system and email it to another editor, who

then pasted it into another system. Now ideas and stories can be accessed across all publications on the

network. “Think of it like internal syndication but on steroids, and doing that in a cost-effective and timely

way,” says Lam-Po-Tang, who noted cost reduction was one of the major advantages for his department.



Like many organizations, news publishers have a very low tolerance for any downtime. For speedy

recovery, Fairfax now has its main production instance on the cloud. Should that fail, there’s a

synchronized recovery instance in another location that kicks in within a couple of minutes. A third

instance 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 between

Sydney and a dozen Tourism Australia offices around the globe. CIO David Rumsey realized the job

would 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, which

is in demand 24 hours a day from potential visitors all over the world. Rumsey’s first step about three

and one-half years ago was to set up a three-year transformation plan. He says, “We’d invested in

technology but hadn’t maintained that investment.” Tourism Australia was running the Oracle Business

Suite with bolt-on applications but had stopped investing in it over a period of years. “Those systems,

while they might have been very business specific a number of years ago, were really not meeting the

needs 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 demonstrate

to 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 first decision was o purchase

Microsoft Dynamic CRM and re-evaluate all other business systems: HR, finance, procurement and so

on. It then embarked on a “business systems replacement” transformation” that is now coming to an end

as 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 Office 365 for online forms. And it is migrating from SharePoint’s on-premises

version 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 getting

that 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 all

the tools they need to succeed, particularly from a marketing perspective. “So developing a strong

relationship with the CMO and with the marketing team has been critical,” he says. “I think no losing

sight of really supporting the front of office business is key as well.”



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 safe

and 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 who

found it challenging to get past layers of computer security. Today, the list of known intruders include

foreign governments seeking economic advantage, highly organized gangs of criminals who re-sell

personal 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 security

of 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 has

escalated dramatically in the past few years. As of May 2015, the top five breaches

included: eBay (e-commerce), 145 million records; Anthem (healthcare), 80 million;

JP Morgan Chase (financial services), 76 million; Target (retail), 70 million; and Home

Depot (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 be

cautious. The security challenge can be much greater for mid-size companies or smaller organizations

that tend to have smaller IT staffs, limited budgets and difficulty competing for employees with the

skills needed to defeat the most aggressive attackers.

“Whether you’re using a cloud provider, whether you have your own data center, whether you have

your own computer rooms in your offices or servers sitting in your office, the security issues have grown

much more significant,” says Gabe Cole, founder of the RTE Group.

In a recent survey of IT workers who plan to seek a certification in the coming year, most planned to

seek a certification for security.

“IF YOU’RE NOT WORRIED, YOU’VE GOT

A PROBLEM.” STEPHEN WORN

DCD GROUP



Top 5 Certifications Sought by IT Workers

Security is the top certification 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 this

in the past year as the giant real estate company expanded from North America to countries around

the world. The firm now has offices 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 service

on Salesforce.com and Google platforms, and both of those companies are certified to operate across

Europe. However, because the regional servers were communicating with the Keller Williams data

center in Texas, the company itself has to be certified in each country. “We made an assumption that

was incorrect,” says Sylvester. “It wasn’t just Salesforce.com and Google that needed to be certified.

So we got ourselves certified 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, prohibiting

the storage of data outside the country or prohibiting the flow of information across borders.

“In the past two years, compliance and security has escalated,” says David Wilcox, General Manager,

Alliances, Europe at Dimension Data. “People have been sensitive to keeping their data in their own

territory, but I think they’re even more conscious that they have to meet compliance. And the EU rules

say 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 continent

is frequently cited at the most difficult place to manage compliance issues.

“France, Germany and the UK, which are the ones I know best in Europe, have pretty tight, pretty

stringent, very mature data protection and data sovereignty legislation, legal guidelines and so on

that make it very difficult, particularly for international businesses that want to take advantage of the

fact 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%



There are, however, further restrictions around the world, particularly in the Asia-Pacific region

where there are also fragmented rules and regulations concerning the transmission and storage

of data. Each situation needs to be addressed in the context of other regional considerations such

as the practices at local telecommunication services, political realities, staffing or anything else that

involves moving data from one point to another. Compliance and security surfaced in almost all

of the interviews conducted for this project, with broad agreement that global organizations looking

to expand their data base operations should bring in experts to work with them on this issue.



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

The transformation to better performance isn’t just changing business. It’s changing IT, creating

demand 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 acted

as guardians of security. The main contacts with the business side came when IT staff set up a PC for

new employees, installed software or helped workers figure out why they weren’t getting emails.

The major exception was when a manager demanded a new application to serve a particular need

in 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 IT

professional 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 had

to have a very, very specific skill set. You had to be a highly trained individual,”

says Scott Offermann, Director of Critical Operationsfor Cushman & Wakefield.

“Now, everybody’s a computer technician.”

With the transformation underway today, IT still plays a critical role in keeping the

business running safely and smoothly, but the skills and processes associated with

running 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 Martin

Zuckerman, CEO of Teswaine Technologies, a data center engineering consultancy firm.“There are people

who 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 Computerworld

study. Sixty-four percent of those surveyed said the open positions in IT were for highly skilled

professionals, with application development leading the list. The same survey found 36 percent

of the managers estimated I took three to six months to fill open positions; 15 percent said it took

more 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 specifically, when employees started bringing smartphones

to work at the birth of the “bring your own device” (BYOD) movement. Suddenly, they wanted to

“SECURITY NEEDS TO BECOME MORE AGILE. IT NEEDS TO

BE INVOLVED IN DIFFERENT

DISCUSSIONS.”MATTHEW GYDE DIMENSION DATA



connect with the network. To do that safely required a new application, with different applications for

different types of phones. Old-guard IT professionals, realizing the cost and time required for making

all 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 eventually

lost the battle. Soon there were more devices in the office, with employees hacking their way into

the company’s servers, first to retrieve email and later to get to other data they needed for a sales

presentation, 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 finding the right

talent 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 who

built their own applications after growing tired of waiting for IT to address their needs. Suddenly, app

development was cheap, fast and didn’t require long arguments with the IT staff. As managers started

building their own apps, a sort of “shadow IT” movement ensued, with business managers actively

going 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 of

business leaders building their own apps. In a best-case scenario, IT professionals would actively help

them, 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’s

Director of the Data Centers for the Americas. “I think a lot of new developers coming out of school

and colleges already have that mindset of DevOps. Why do things need to take time if you can get

them 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 first 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%



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

the 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 make

sure that it’s secure as they move to the hybrid-type model.”



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 reliable

telecommunication service. When one overlays all those considerations on top of a world map, it may

tempt a wary IT professional to leave the data center where it is now. But companies that navigate

through those challenges will find 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, which

can 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 from

country to country. (Source: Forrester)

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

of data into or out of their countries. On the other end are countries like the US that have cultures

supporting the free flow of information. Europe countries tend to be fragmented in their policies,

presenting challenges to regional data networks. And emerging economies remain an enigma, with

cheaper new technologies like mobile giving them the potential to leapfrog over countries with far

greater resources.

The Asia-Pacific 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 certification, particularly in the areas of government

Most Restricted

Restricted

Some Restrictions

Minimal Restrictions

No Legislation or No Information

Government Surveillance May Impact Privacy



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 security

measures are in place.

Telecommunications represents another significant 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 information

vary in different countries, so much so that systems designed to run in the first world

won’t perform well in emerging markets. Cost is another factor, with extremely high

rates in some areas.

The telecom question is driving an innovative solution called the Hybrid WANs (Wide

Area Network) in some areas that shifts some network traffic onto the Internet instead

of 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 Development

Manager 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 the

power used by the machines, but the air conditioning systems required to keep them operating at an

optimal temperature. Germany, for example, has high costs for electricity, so some companies work

with neighboring countries like Poland to supply cheaper power.

Tropical climates may be too warm, prompting companies like Facebook to build air-cooled plants

in areas to the north, like Oregon in the US. Because of its namesake weather, Iceland is actively

pursuing data center operations as a growth industry. Server manufacturers have also produced more

efficient machines that require less power, which allows them to run cooler. That, in turn, reduces CO2

emissions 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 Institute

in Japan, says 85 percent of his company’s energy costs stem from its data base operations. He said the

country’s Ministry of Economy, Trade and Industry, which governs the data center industry, has asked

small 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 LIMBUWALA ROMONET



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

A key goal of the transformation of business technology is to make applications more useful to

employees and customers around the world and around the clock. Earlier, we discussed the security

and 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 suite

of software applications collectively known as enterprise resource planning, or ERP. This suite of tools

facilitates the flow of data in areas such as marketing, production, accounting,

human resources, sales, distribution or other departments. Leading suppliers nclude

SAP, Oracle, Microsoft and other large software vendors. Typically, many of these

tools are highly customized, that is, tailored to the specific needs of different

operating groups within different companies. Traditionally, they’re driven by the

on-premises data center.

Adding new applications to traditional ERP systems often takes months or years

of careful planning and execution at a cost of millions of dollars with the goal

of 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 and

speed that reflects 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 applications

of processing expense accounts or monitoring customer success. Almost half of today’s cloud

investment goes to SaaS applications, according to some estimates. It’s also much easier for internal

software application projects to be built in the cloud through Platform-as-a-Service. Consider this

explanation from Treb Ryan, Chief Strategy Officer 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 the

adoption of anything new and different … You had to do a lot of justification.

Now, if I want to try out something new or different, I can have those resources

to 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 typically

support the core functions of businesses. However, the emergence of cloud-based applications is

driving the need for what some call “hybrid ERP” or “postmodern ERP.” The future environment would

be a more flexible suite of tools that blends deeply grounded on-premises applications with Software-

“WE SEE ERP TAKING A HUGE AMOUNT OF BENEFIT FROM THE HYBRID

CLOUD ENVIRONMENT.”

STEVE NOLA DIMENSION DATA



as-a-Service (SaaS) of custom-built applications in the cloud. Today, however, about 61 percent of ERP

sales 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, offers

an example of why a company would favor the hybrid approach. He says he was just consulting for

a company that wants to add a major new line of business that is in demand right now. To do that

through the traditional path, the client would need to build a new ERP application, a process that

would take years and millions of dollars. Instead, Bouten suggested that the company use a SaaS

application that would be available right away instead of facing the risk of missing the current business

opportunity. That path would not only help with time-to-market, but also would reduce risk because

the 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. Many

applications, such as accounting or inventory tracking, are used heavily at key periods, such as quarterly

financial reporting or during peak sales periods. The rest of that time, an on-premises system is running

at a lower capacity but still drawing on resources. Cloud-based systems can be used to provide bursts

of activity only when needed. “So we see ERP taking a huge amount of benefit from the hybrid cloud

environment,” 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%



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

Automation is a word with many meanings, in part because the evolution of technology gradually

allows for automation of more things. The data center and software defined networks will be the

next significant step for automation.

The concept of automation, of course, is not new. As often happens in technology, the automation

of networks and servers began with a vision, was nurtured by innovative engineers and matured

before businesses had learned about its potential. The notion of automating the data center has been

discussed for several years. Until recently, however, it wasn’t far enough along to support the task with

the 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 only

means 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 your

data center’s workload to a public or private cloud – and it can make that choice

without assistance. It can help resolve data sovereignty concerns by directing traffic

through certain jurisdictions. When coupled with predictive analytics, it can help

to prevent security problems. And it does this more efficiently than the IT managers

who used to handle these processes manually.

“There’s so many areas where it will fit that it’s far more than simply saying, ‘We’ll take basic process

and make it faster,’” says Gerard Florian, Senior Vice President for Strategy and Engagement in

Dimension Data's IT-as-a-Service group. He notes some of those purposes could be around provisioning

infrastructure, scaling up or down, or assessing security threats automatically based on a wider matrix

of events and vulnerabilities.

There is also another important side to automation: what it means to the workforce and culture of

a company. It will mean that instead of an IT professional monitoring server loads and the performance

of the network on panels in the data center, they can spend more time with people on the business

floor, helping them get more out of the technology in their hands. Instead of swapping out disks or

starting up new servers manually, they can help initiate innovative new approaches to solving company

challenges.

Automation saves money through ensuring a more efficient use of resources. But more importantly,

it enhances an organization’s ability to scale by reducing complexity, facilitating product development

and supporting global expansion.

“THERE’S SO MANY AREAS WHERE

[AUTOMATION] WILL FIT.”

GERARD FLORIAN DIMENSION DATA



8. ALWAYS ON: ASSURING HIGH AVAILABILITY AND DISASTER RECOVERY

Until recently, the best way to make sure your business wouldn’t stop when the data center went

down was to build a second center that could take over if the first one failed. Earlier in this report,

we discussed the extraordinary expense of building an on-premises data center; the cost of building

a second isn’t any cheaper. If your first facility cost millions of dollars, your backup facility would

probably cost about the same. Worse, it won’t necessarily prevent a service outage if the problem

is 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 high

availability of service even if the data center is destroyed by fire or flood 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 not

one-size-fits-all, which is typically how [disaster recovery] facilities are built today.

It gives you choice and flexibility,” says Steve Nola, global Group Executive for the

Dimension Data’s IT-as-a-Service division.

For example, Tourism Australia recently replaced its aging technology and virtualized

its 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 expand

into the cloud to restore service quickly. “It means we can ship data to multiple places as well and bring

up 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 Netflix about that. Its

service went down on Christmas Eve 2012, just as millions of people were sitting down to watch holiday

movies. 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 in

their data center to their cloud. In the back of their minds, the idea is that the cloud is always up

and never goes down,” says Gerard Florian, Senior Vice President for Strategy in Dimension Data's

IT-as-a-Service group. “Technology is technology. Things will go wrong on the software level, hardware

level, whatever. They're quite exposed. So I think there can be almost a false sense of security.”

“THE CLOUD IS A PERFECTLY GOOD

SECONDARY MODEL BECAUSE IT'S LOW COST AND IT'S FLEXIBLE.”

--STEVE RUBINOW CATALINA



9. CHANGE MANAGEMENT: TRANSFORMATION STARTS AT THE TOP

John Gage may be most famous for coming up with Sun Microsystem’s tagline: “The network is

the computer.” But his greatest insight might be “Technology is easy. People are hard.” One topic

that surfaced repeatedly in our research with executives in this field was the importance of change

management 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 start

collaborating with colleagues on the business floor.

• Business executives must resist the temptation to sign up for SaaS

services 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 professionals

must 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-mated

software-defined data center in the cloud. It’s about helping people understand that the good job

they did in the past is evolving into the better job they will do in the future. Dr. Natalie Petouhoff, the

Constellation 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 that

there are leaders at the top of large companies that are saying, ‘OK, here’s the

direction we’re going to go. We’re going to break down the silos. We’re going

to funnel the data. You guys are going to change how you do your jobs every

day. We’re going to use this data to change how we communicate internally

and how we serve the customer.’”

To manage change effectively, it’s important to let all stakeholders know what, how, when and

why things will change. Cary Sylvester led the tech team at Keller Williams through a transition from

a North American-based company with co-located servers across town into a global company with

a hybrid cloud approach to data and applications that is up and running across five continents.

One of her key pieces of advice to colleagues approaching this challenge is to communicate the

vision with colleagues at key steps along the way “because I think that’s where people get



overwhelmed.” Some of the plans may change as you make that journey, she says, but if you keep

heading 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 will

redefine the role of IT and it will mean bringing in new skill sets. “I think a lot

of our clients, especially in the enterprise domain, are continuing to look at how

they drive their change from a business standpoint,” he says.

Petouhoff worries some companies are asking their employees to do something

different without establishing a formal change management program, “and when you skip over

something, you can expect failure.”

“WHEN YOU SKIP OVER SOMETHING, YOU CAN EXPECT FAILURE.”

NATALIE PETOUHOFF CONSTELLATION RESEARCH



CONCLUSIONS

“If you want something new, you have

to stop doing something old.”

— Peter F. Drucker

If we summed up this report in three words, they would be “things must change.” The powerful

explosion of data we’ve witnesses in just a few short years has already permanently changed the

way 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 finances. Not surprisingly, it has also changed

the nature of information technology, sparking demand from business leaders for faster application

development, new analytical capabilities and real-time access to core systems from anywhere, any

time on any device.

As the late Mr. Drucker might put it: business leaders want something new. And to achieve it, the

old notion of a data center must go. New systems must be global, faster, more secure and able to

keep 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 era

of change. First, there is a strong business need for agility. With brilliant new companies emerging

on 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 tailored

to meet the specific needs of each organization. While they may share some of the same ingredients –



virtualization, hybrid data centers, automated networks, software defined systems – each organization’s

progress depends on finding 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 challenge

notions about this transition and will publish new findings regularly on Transform to Better Perform's

official website, www.ReinventDataCenters.com. Please join us there and by following @Transform_DC

and be prepared to share your own thoughts and experiences.

Six key findings:

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 address

today’s business demands or to offset today’s unprecedented risk factors. On-premises

data centers remain at the technological heart of most large companies worldwide, and

they will continue to drive core systems for years to come. However, like traditional ERP

applications, they are rapidly falling into the category of legacy technology.

Many companies are now pursuing new solutions that are better-suited to today’s

business environment. The most common general approach is to blend the power

of on-premises facilities with cloud-based capabilities that offer greater agility, slower

growth 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 kept

systems running securely, managed networks and built applications through traditional,

waterfall development. Now they must collaborate with business owners to build

applications 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 the

software development end of the spectrum than to the traditional hardware end.

This is driving demand for engineers with those skills. While universities are lagging

in training enough of these engineers to meet future demands, recent graduates

are well-suited to take on the new roles of IT professionals.

Automation will increasingly assume the role of operating networks optimally, freeing

staff for more important roles that require the human element, and that will require IT

staff to demonstrate a spirit of collaboration to complement their technological expertise.



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 maintain

a leading place in the global market.

The pace of change is accelerating. The potential for a new company to become the next

big thing on the world stage is growing. Line of business managers at larger companies

need greater agility to respond to competition and to better-serve distant customers

with new apps, analytics and ever-richer data.

Many companies have already seen business managers signing up for Software as a

Service applications without approval from IT managers. However, some of the same

managers learn they lack the technical skills to properly implement or manage. With

additional support from IT, this “hybrid IT” approach is helping companies in the short

term. 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 centers

and supporting networks are built and managed as companies expand from one country

to another.

When coupled with other considerations, such as regional variations in the costs of

telecommunications and energy, compliance concerns are growing in complexity.

This not only creates a potential liability to the business, but diverts the IT staff from

its new priorities of promoting agility through technology.

As a result, companies are turning to trusted experts to guide them through the maze

of government regulations and create a heightened degree of data security in an age

when network intrusions are growing in number and sophistication. Each company

must decide on its own tolerance for risk and cost, factors that will affect their ability

to comply with regional requirements and govern their data.

5. Data Drives Costs

New technologies like the cloud and software-defined data centers cost far, far less than

building traditional data center. Many companies spend hundreds of millions of dollars

to 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 the

cloud vendor. The exact balance of cost factors will vary from company to company as

they design and build hybrid systems.



However, even if they record significant savings in their choice of technologies, they can

expect to see costs rise as the volume of data rises. That can be good news, because the

increase in data represents increased opportunities to boost profit in the form of better

sales processes, more efficient 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 flows.

They may do this and improve operations simultaneously by carefully choosing the most

significant data points to analyze, minimize storage of outdated data, choosing green

technologies 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 the

hall, it will fail at times.

Traditionally, companies that wanted to back-up their on-premises data centers did so by

building a second center at another location so that the second center would kick in if

the first failed. Because of the extremely high costs associated with building a traditional

data center, the backup center was also expensive. And the backup center was used

rarely, if at all, resulting in a poor cost-benefit ratio. Further, the maintenance of backup

centers 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 several

different forms. Generally, they result not only in lower costs, but in faster disaster recovery.

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 centertraffic will triple from

2012-2017The 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

THE CLOUD LANDSCAPE

2.4 billion peoplenow use cloud-based services in some form

There’s an estimated

1 exabyteof data

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

InnovationMobilityCostScalabilityBusinessAgility

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 data will be in the cloud

More than 60%of businesses utilize cloud for performing

IT-RELATED OPERATIONS

2017

CLOUD VS ON-PREMISES DATA CENTERS

How much will the traffic grow?from 2012 to 2017

GLOBAL CLOUD TRAFFIC . . . . . . . . . . . . . 4.5 xGLOBAL DATA CENTER TRAFFIC . . . . . . . . . .3 xCLOUD WORKLOADS . . . . . . . . . . . . . . . . 3.7 xDATA CENTER WORKLOADS. . . . . . . . . . . 2.3 x

Data Center Current AssessmentWorldwide data centers already cover

35.7 MILLIONSQUARE METERS

In the global ICT sector,data centers account for a

17%CARBONFOOTPRINT

How much is being invested globally?(in billions US$)

2015TOTAL:

COLOCATION & OUTSOURCING:

IN-HOUSE IT:

IN-HOUSE FACILITY EQUIPMENT:

185.2

51.2

58.2

75.8

2012140.1

32.3

47.4

60.4

How much can a shift save me? key savings areas

DECREASED POWER ENERGY AND SPACESave energy costs by up to 90%

IT INVESTMENT (reduced Capex costs, software savings) 82% of companies saved money as compared to investments in their on-premises data centers by moving to the cloud

LABOROn average, cloud reduces IT labor costs by 50%A company with 100 employees saves up to 191 company hours per day

Return on investment curve for cloud solutions

58%

163%209%

304%

433%

1 YR 2 YR 3 YR 4 YR 5 YR

...the amount of datagenerated if the

entire worldpopulation in 2017

streams musicnon-stop for

18 months

By 2017 Data Center traffic will reach7.7 zettabytes*, which is equal to...

Who is making the Cloud decisions?

45%IT / Network Staff

55%IT / Network MGMT

70%CIO or top IT executive

Infographic Sources:

SiliconANGLE, “20 cloud computing statistics every CIO should know”, NIIT, “Security of Cloud Services”,

Cisco, “Cloud Traffic to Dominate Data Centers”, U.S. Chamber of Commerce Foundation, “Big Data and What it Means”,

Pulse via Linkedin, “The Big Data Economy: Here's What You Must Know”, IDG Enterprise, “IDG Enterprise Cloud Computing Study 2014”,

DCD Intelligence, Inc. “The Future of Cloud Computing--and Why Your Resistance Is Futile”, Cloud Tweaks, “Small Business Cloud Computing”,

SiliconANGLE, “Small Businesses to Cloud Storage : Pinky Promise We Can Trust You?”, All Covered via Linkedin, “The Cloud Revolution”,

RapidScale via Linkedin, “Cloud Computing Stats”, RapidScale via Linkedin,“7 ways the Cloud Saves You Money”,

John Rhoton via Linkedin, “Cloud Computing; Status, Trends and Challenges”,

Daily Infographic, “State Of Cloud Computing In The Enterprise”,

Matrix, “Understanding the Future of Data Centers Around the World”

*1 zettabyte = 1 thousand exabytes 1 exabyte = 1 billion gigabytes

WHO IS MAKING THE CLOUD DECISIONS?



ABOUT BPI NETWORK

The Business Performance Innovation (BPI) Network is a peer-driven thought leadership

and professional networking organization dedicated to advancing the emerging roles

of the chief innovation officer and innovation strategist within today’s enterprise.

The BPI Network brings together global executives who are champions of change within

their organizations through ongoing research, authoritative content and peer-to-peer

conversations. These functional area heads (operations, IT, finance, procurement, sales,

marketing, product development, etc.) and line-of-business leaders are advocates for

innovation as a fundamental discipline and function within 21st-century organizations.

They seek to demonstrate where and how new, inventive solutions and approaches can

advance business value, gratify customers, ensure sustainability and create competitive

advantage for companies worldwide. More information is available at www.bpinetwork.org.

ABOUT DIMENSION DATA

Founded in 1983, Dimension Data plc. is an ICT services and solutions provider that uses

its technology expertise, global service delivery capability, and entrepreneurial spirit to

accelerate the business ambitions of its clients. Dimension Data is a member of the NTT

Group. www.dimensiondata.com.

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