Next-generation IT starts now - Logicalis...White Paper: Next-generation IT starts now p. 3 There is a wide range of approaches to enterprise IT but new research from Logicalis shows

Next-generation IT starts now

November 2013

White Paper: Next-generation IT starts now p. 2

Introduction ................................................................................................................................................. 3

The challenges facing today’s IT departments ............................................................................................. 4

How IT plans to meet the challenges .......................................................................................................... 6

Tomorrow’s challenges for enterprise IT ...................................................................................................... 8

Tomorrow’s answers – and why they start today ......................................................................................... 9

IT’s Next Generation – less updating, more revolution ................................................................................. 10

Methodology .............................................................................................................................................. 12

About Logicalis, About NetApp .................................................................................................................. 12

Contents


There is a wide range of approaches to enterprise IT but new research from Logicalis shows that the fundamental challenges are starkly universal.

On the one hand, organisations must deal with creaking infrastructure and constant cost-cutting. On the other, technology is expected to contribute to growth and customer satisfaction.

In the past it was simple. Steady increments in hardware capability and a largely in-house approach to IT provision supporting a stable, principally Windows-based ecosystem meant infrastructure planning and spending could be done in the context of regular multi-year cycles. Planning, spending, maintaining and retiring systems was at the heart of any IT organisation.

Two inter-related factors have permanently disrupted this approach and made it a bad fit to reality. A prolonged period of economic uncertainty combined with ‘good-enough’ hardware has discouraged regular investment, especially in new infrastructure, while near-exponential growth in global internet capacity and speed has created new and very lively cloud-based services for any and all enterprise functions.

Other forces are also converging to pose additional challenges for the IT organisation. There is explosive growth of data and demand for this to be analysed and consumed - often in real-time - to improve customer service and create new data-driven business opportunities.

At the same time workers across the organisation, from CEO to new starter, have raised expectations of the technology they use to carry out their jobs based on their experience of using very capable online services - usually also on mobile platforms - in their personal lives.

This puts even more pressure on IT departments, while opening up the temptation for non-IT executives and groups – even individual users – to work around internal departments and use public cloud services to bypass what they see as avoidable limitations. They want agility and speed – the IT attributes that have made Google the world’s third-largest company in just 15 years. And they want it now.

This paper discusses the current environment and expectations in enterprise IT, including the differences between what’s planned and what’s needed. It then identifies an opportunity to adopt a long-term and more service-oriented IT strategy, one that starts by aligning business needs, resources and IT capabilities.

The ultimate benefit? Being adaptable and powerful enough to avoid future divergence between aims and actuality, to make new ideas reality, in real time.

Introduction


The challenges facing today’s IT departments

Money remains in short supply and the mantra of ‘do more with less’ remains a key challenge for the IT function. Our survey of UK organisations, carried out in Sep/Oct 2013, shows almost three-quarters of organisations will have static or declining budgets over the next 12 months [Fig 1]. Just a quarter gets to spend more.

This is important, as seen by almost 90 per cent of respondents telling us budgets are their main challenge [Fig 3]. In comparison, ‘legacy technology’ heads up secondary factors (60 per cent) and coming in equally as tertiary factors are a poor IT business model and insufficient alignment with business objectives.

This picture of modest IT prioritisation is matched by the respondents’ perception of IT’s importance to strategic decision-making and alignment to overall goals.

But the reality is that there is still a huge gap between business and IT in many organisations with 70.2 per cent of respondents admitting IT is not being engaged by the business to help form strategy and policy [Fig 2].

When it comes to the business goals around IT spending, our survey found cost cutting is first, though contributing to top-line business growth comes in a healthy second [Fig 4]. Improving customer service was clearly the leader in secondary priorities.

Fig 2. How aligned is your IT with business strategy and goals?

The business executives engage IT to help define strategy and business policy. We have agreed KPI/SLAs against business outcomes (not just technical metrics) and clear reporting to business on them.

IT maps its plans to the business and meets business executives to approve/explain them. We have technical reports and project delivery KPIs and strong technical governance.

IT struggles to get included in the business planning / Not at all and is reacting to activities as it finds out ad hoc. We have reports, metrics and some governance but mostly the IT department pays attention to it.

Don’t know

Not at all

43.3%

24%

20.2%

10%2.9%

Fig 1. Over the next 12 months your IT budget will…

Increase

Decrease

Stay the same

26%

28.8%

45.2%


The survey shows IT priorities are still heavily weighted towards back-office tasks, such as cutting costs and generally keeping the lights on, but there are signs the seeds of a major shift are being sown. Some 38.5 per cent of respondents cite front office value creation, such as attracting new customers, as future investment priorities [Fig 4]. This compares with historical industry averages of around 20-30 per cent for this type of growth-focused activity.

Taken together, these mean nothing short of a transformation of IT as it is practised today, will do.

Fig 3. What are the key challenges preventing you from achieving IT and business goals?

Budgetary constraints

Outdated technology/legacy infrastructure

Lack of skills

Need to change the way IT works (change the IT business model)

Lack of alignment with the business objectives

First priority Second priority Third priority

88.5%60%19.2%

17.3%33.7%

33.7%

18.3%4.8%

3.8% 1%

Fig 4. What are the business goals driving IT strategy and investment priorities over the next 1-2 years?

Cost cutting

Contributing to top-line business growth

Attracting and retaining new customers

Improving customer service

Creating new products/services

Attracting and retaining new staff Second priority Third priority

54.8%23.1%

15.4%6.7%

First priority

17.3%

11.5%

46.2% 28.8%25%

6.7%

1.9%

By the numbers – the changing face of infrastructure

The very definition of infrastructure is changing rapidly. It is even possible to have a zero-infrastructure company, where the entirety of IT is consumed via individuals’ mobile devices on the public cloud.

The move to cloud, hybrid as well as public, is not in general so dramatic. But the trend towards a divergent infrastructure supporting standard, unified services is undeniable.

� Analyst Forrester pegs spending on cloud computing overall at a quarter of a trillion dollars by 2020, up from $40bn in 2011

� Gartner reported nearly 20% growth in the cloud services market in 2012 � IDC reports the software-as-a-service (SaaS) sector is rapidly increasing. $17bn was spent on acquisitions in

the 20 months ending in November 2012. There will be around a thousand different platform-as-a-service (PaaS) industry platforms by 2016, 10x those available in 2012.

Networking is also mutating at a remarkable rate, driven by the need to provision and control cloud services. Software-defined networking - which provides automation, virtualisation and flexibility to the fabric of enterprise IT - is growing at around 60% per year, says Transparency Market Research, into a $3.5bn market by 2018.


How IT plans to meet the challengesThe move to mobile and cloud, pioneered by consumer technology and now part of everyone’s daily lives, has created new enterprise-ready options. However, three decades in to pan-organisational IT investment, the business landscape is very different. Continuity, the cost of switching, security and the diversity of line-of-business requirements all contribute to the inertia of enterprise IT and the continued relevance of existing strategies and architectures.

This is reflected in how organisations view their past return on investment (ROI) on IT [Fig 5].

Fig 5. What areas of technology investment have delivered the best returns?

Second priority Third priorityFirst priority

Infrastructure/architecture modernisation

Mobile

Cloud

Virtualisation

Analytics and business intelligence

Big Data

ERP

CRM

Security

Data centre infrastructure

Collaboration

69.2%11.5%

8.7%

5.8%1.9% 1.9% 1%

3.8% 1.9%5.8%

35.6%

28.8%28.8%

15.4%

14.4%

11.5%

18.3%

1.9%1.9%

9.6%

16.3%

12.5%

14.4%

23.1%

It isn’t a surprise that infrastructure/architecture modernisation comes in first. Approaching 12 per cent told us mobile has given the best ROI, followed by cloud and virtualisation.

The damning blow for all that historic infrastructure investment, however, is the fact that, separately, our survey revealed only a third of respondents believe their existing IT is currently fit for purpose [Fig 6].

Fig 6. How would you describe/rate the state of your IT architecture now? (choose one)

Fit for purpose

Outdated and in need of some modernisation

Outdated and in need of a lot of modernisation

Outdated and requires a complete overhaul

51%31.7%

11.5%5.8%


That is leading organisations to question the value of further infrastructure investment, with just 1.9 per cent of respondents citing it as a top priority over the next 12 months [Fig 7].

As infrastructure is increasingly seen as a commodity that doesn’t drive ROI our survey shows a clear and dramatic shift over the next year towards spending on cloud, mobile and virtualisation.

Of note also is the rising importance of analytics, business intelligence, Big Data and CRM as technology investment priorities at the expense of ‘old IT’ mainstays such as ERP, security and data centres.

More broadly this shift in investment priorities shows how the IT organisations know they need to use cloud and mobile-enabled services and applications to engage the workforce, deliver new customer insights and relationships, create new product and revenue opportunities and, ultimately, help drive top-line business growth.

Fig 7. What are the technology areas you will be investing most in over the next 12 months in support of IT and the wider business strategy?

Second priority Third priorityFirst priority

Private cloud capability

Mobile

Virtualisation

Hybrid cloud capability

Public cloud services (IaaS, PaaS, SaaS)

Analytics and business intelligence

Big Data

CRM

ERP

Infrastructure modernisation

Collaboration tech

Security

Data centre infrastructure

5.8%2.9% 2.9% 1.9%

27.9%

24%11.5%

10.6%8.7%7.7%

18.3%10.6%21.2%8.7%

8.7%

1.9%2.9%

4.8%3.8%

3.8%

22.1%

20.2%

22.4%

16.3%11.5%

10.6%

8.7%

5.8%4.8%1.9%1%


Tomorrow’s challenges for enterprise ITThe basic tasks for enterprise IT remain the same: to collect and secure the right data and deliver it efficiently to the right people. However, there are unstoppable trends towards larger sets of increasingly heterogeneous data and increasingly diverse ways of working.

This is backed up by our survey results, which show IT investment priorities shifting towards cloud, mobile, Big Data, analytics and CRM.

What’s more, these are taking place alongside an acceleration in the rate of change of the business environment - competition, regulatory requirements/governance, globalisation and reliance on third-party services all loom large.

The way business develops is no longer linear. Challenges can materialise rapidly without the luxury of spotting them on long-distance radar.

The same is true for IT. It is increasingly difficult to envisage satisfactory ways of investing in IT infrastructure that will cope with the demands of the next five to 10 years, even in those environments where IT enjoys substantial strategic input during early stages of project planning. (Just over 20 per cent or so – [Fig 2].)

It is unlikely that near-term investment will substantially increase, nor that pressures on IT to cut costs will ease. It is also certain that the emphasis on customer satisfaction will grow, not just in areas of business that traditionally operate in competitive environments.

The old capital intensive IT stalwarts of hardware, infrastructure and the data centre are no longer seen as the best investment bets, according to our survey [Fig 7]. The business environment is forcing a shift to more responsive technology such as cloud and mobile, which are creating new customer relationships and insights, driving growth and enabling more flexible and diverse working practices.

The old division between public and quasi-governmental organisations and the private sector is eroding rapidly, as are the old barriers of geography and markets.

With barriers going down, emphasis on the end user must grow, across all organisations, and end users’ expectations of rapid, reliable and efficient delivery of products and services is being recalibrated by their experience of rapid, reliable and efficient web-based offerings from internet-native organisations.

But users in one context are employees, managers and board-level executives in another. It is becoming increasingly unacceptable within organisations to experience poor levels of service from their own IT. Levels of service will have to match and exceed those experienced from public cloud services if enterprise IT departments are to maintain or increase their relevance.

Long-term change in the very nature of IT organisations has already started. But it is in the nature of modern technology that change becomes exponential.

Those used to thinking in terms of long cycles, complex systems requiring large capital expenditure and careful, intensive tending, will find themselves marginalised unless they can demonstrate real ROI, efficiency and line-of-business benefits over the alternatives from outside the organisation.


Tomorrow’s answers - and why they start todayThe challenges are clear, as are the solutions: IT must become much more closely aligned, not only to business needs but to the expectations of its users.

A service-oriented approach – something users have long wanted – now becomes not only desirable but essential. This means engagement, not just at board and departmental level but through understanding how today’s workers experience IT in doing their jobs.

The IT organisation’s job then becomes understanding the whole range of internal and – crucially – external resources and becoming an efficient synthesis of the best available.

This has further implications. Relationships with suppliers must change, demanding of them a similarly service-based approach. IT must up its demands and expectations in step with being able to deliver on requirements – ideally surprising everyone with benefits over and above expectations.

Here is an example of the journey you may go on to transform your infrastructure from component-based architecture to a more flexible and business-aligned IT-as-a-service.

The path to cloudThere is a trend to explain an enterprise’s path into the cloud as a conceptually simple, linear progression through four stages: consolidation of existing IT, virtualisation of servers and services, standardisation of process and requirements and automation of management tasks.

This corresponds nicely to the rules of any successful evolution – every step must add to the functionality and usefulness of a system without degrading performance.

However, it is wise to be mindful of the whole system throughout and be aware of the consequences of decisions made in one step on the effectiveness of the next.

Consolidation begins with mapping and understanding systems. This is no small task and cannot be achieved by simply looking at infrastructure. Users use systems in ways unknown to IT, so their input is indispensable. The goal? A unified approach combined with resource sharing, providing immediate business benefits through reduced costs and increased efficiency.

Virtualisation, the process of creating a logical separation between the applications/OS and the underlying physical infrastructure, has been going on for a decade and is maturing. It isn’t there yet, with different vendors having a different idea of what it means, so you must have a strong idea of the end result, which is the ability to create, move, manage and deploy virtual machines with the absolute minimum of complexity and maximum automatability.

Standardisation will flow from this but must be considered during the virtualisation phase. Not all storage and networking architectures work well with virtualised tasks, while moving existing systems onto different underlying architectures is often tricky, even daunting. Early insight into what standard processes and technologies will look like will inform the previous stages and avoid the dangers of making early decisions which complicate later stages.

Automation is the end goal. The amount of time needed to run an organisation’s IT infrastructure should reduce to the sort of levels where you can offer services to users in the same regions of cost and responsiveness as they could get directly with the public cloud. The benefits over the public cloud – which will be providing many of these services, aligned to goals by the watchful eye of IT – will include much better support, suitability for the enterprise’s individual requirements and tight integration with local resources and services.


IT’s Next Generation – less updating, more revolutionIn short, IT must make the move to the next generation, not just build on the way things have been done before. There comes a point in any industry where the old ideas hold back innovation, rather than encourage it. For IT, that point is now.

The great successes of the 21st century – Amazon, Apple, Google – have largely abandoned the idea of working within the boundaries of hardware and software, offering instead seamless, instant service-based products that anticipate their users’ needs. This is the next generation. No enterprise can ignore the lesson.

Take the way Apple with its App Store has changed software provision. The selling/buying, distribution and installation of software was radically changed. Consumers – and increasingly businesses – are up and running from a choice of millions of apps with a single click. That is disruptive innovation, something enterprise IT can aspire to.

Enterprise IT’s own ground zero is its infrastructure. Without attending to this first nothing great can be built. On this journey from cost centre to service provider the IT department must first begin the move away from a traditional component-based infrastructure. And that is more than simply sticking a ‘private cloud’ badge on existing storage and networking

This is one level of infrastructure evolution but it does nothing to address the underlying data architecture, with large storage and networking installations still running on the assumptions of moderate levels of data sharing between processes and users, and well-defined and predictable requirements for space and speed.

Major recent innovations such as virtualisation strain this model. To get the promised benefits from virtualisation, the virtual machines themselves – often many gigabytes of complex data, with high demands on disparate data stores – must be easy to move, manage and multiply.

Large, mixed data sets must be accessible across the organisation and beyond, without compromising security or regulatory requirements. In fact, they become indistinguishable from the virtual machines that access them.

While isolated virtualisation of some infrastructure can help, an industrial-level response to this must demand flexibility, scalability and manageability. Only that can deliver what users have come to expect, the ability to take a disruptive idea and make it real, quickly and effectively enough to hit hard. A unified approach - with systems capable of working with a wide variety of types and sizes of applications and data to defined service levels - is the only practicable, generally applicable architecture to meet the needs of today and the disruptive ideal of tomorrow. (See Agile DC transformation journey overleaf.)

Big Data, analytics, provisioning, mobile, even CRM and ERP become more and more effective with highly-performant, adaptable infrastructure behind them. Conversely, any bottleneck in the engine room can cripple any end-user solution.


Agile data centre transformation journey

Component-based architecture

Converged Infrastructure

Virtualized

Automation & Orchestration

IT as a Service

Business Alignment

IT Agility

Fixed

1 Basic

2Rationalised

3Dynamic

4Automated

5Business Aligned

Flexible

On demand

Component servers, storage, switches, routers, firewalls. Professional Services, Managed Services, security and DR are bespoke per service.

Pre-Integrated Server/Storage/Network Architectures. Professional, Managed Services standardised packages, standard BC and security options.

Server, Desktop, Storage and Network Virtualisation. Application Optimisation/Modernisation/Creation, VM management and monitoring systems, virtual BC and security models. Managed VM services.

IT Process Improvement, Application Development for automated scaling/provisioning, infrastructure automation and orchestration tools, workflow & optimisation Professional Services, ServiceNow, SIEMs, automated BC.

IT Consumption Model: On-demand public , hybrid or dedicated private cloud infrastructure, platform or applications. DR-as-a-service, backup-as-a-service, security-as-a-service, Professional Services catalogue (BPaaS)

The major cloud providers of today have built their businesses on exactly this model and with it are successfully assaulting all areas of IT (whether consumer or business). It will take some time for those who are handcuffed by legacy to move to a similar model but by demanding that their existing suppliers build in the capability to integrate their systems into a cloud-based infrastructure, not just in basic compatibility but in basic design, the ‘private cloud’ can start to live up to its name.

At the same time, cloud-based services should be introduced wherever possible for new systems as well as collaborative, cross-departmental and cross-company partnerships. Chances are, your users already know how to do this – and will, whether you lead or follow.

IT must transform itself from the functional cost centre that simply keeps the lights on to a more dynamic, service-oriented organisation that is a trusted advisor to the business and integral to driving top-line growth.With this approach, IT can start to set in place its own industrial revolution, be prepared for whatever the next 10 years demand and allow for the emergence of what could truly be a service-defined enterprise.


Methodology

Survey data was gathered online from 104 senior IT decision-makers in the UK in September and October 2013 by research partner emedia. This white paper was written by Collective Content (UK).

About Logicalis

Logicalis is an international IT solutions and managed services provider with a breadth of knowledge and expertise in communications and collaboration; business analytics; data centre and cloud services; and managed services. Logicalis employs nearly 3,500 people worldwide, including highly trained service specialists who design, specify, deploy and manage complex ICT infrastructures to meet the needs of almost 6,000 corporate and public sector customers. To achieve this, Logicalis maintains strong partnerships with technology leaders such as Cisco, HP, IBM, CA Technologies, NetApp, Microsoft, VMware and ServiceNow. The Logicalis Group has annualised revenues of over $1.4 billion, from operations in Europe, North America, South America and Asia Pacific, and is fast establishing itself as one of the leading IT and Communications solution integrators, specialising in the areas of advanced technologies and services.

The Logicalis Group is a division of Datatec Limited, listed on the Johannesburg and London AIM Stock Exchanges, with revenues of over $5 billion. For more information, visit www.uk.logicalis.com.

About NetApp

NetApp creates innovative storage and data management solutions that deliver outstanding cost efficiency and accelerate business breakthroughs. Our dedication to the principles of simplicity, innovation, and customer success has made us one of the fastest-growing storage and data management providers today.

Customers around the world choose us for our ‘go beyond’ approach and broad portfolio of solutions for business applications, storage for virtual servers, disk-to-disk backup, and more. Our solutions provide nonstop availability of critical business data and simplify business processes so companies can deploy new capabilities with confidence and get to revenue faster than ever before. Customers rely on our industry-leading solutions to lower the cost of protecting their data, businesses, and reputations.

We bring together the industry’s best partners and technology to deliver services that help customers maximize what they are getting from their infrastructure. Our collaborative approach, working as one team with one goal, means that customers get a solution that is just right for them—on time and on budget. To support global businesses, we provide highly-responsive support in local languages. From London to Austin, Bangalore to Tokyo, we’ll work with customers to solve their problems and help them reach their goals.

Discover our passion for helping companies around the world go further, faster at www.netapp.co.uk

This white paper was brought to you by Logicalis and NetApp.

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Next-generation IT starts now - Logicalis...White Paper: Next-generation IT starts now p. 3 There is a wide range of approaches to enterprise IT but new research from Logicalis shows