Data Center Evolution in The Era of The Cloud

ACCELERATE HOW
YOU INNOVATE
DATA CENTER EVOLUTION IN THE ERA OF THE CLOUD
Full Report | May 2015
BPI
NETWORK
BPI
NETWORK
ACCELERATE HOW YOU INNOVATE | REPORT
CONTENTS
Executive Experts
Introduction: Transform to Better Perform
Executive Summary
1. Getting There from Here: Bringing the Data Center into the Cloud Era
10
2. Whos Leading the Change? A Look at Successful Transformations
15
3. Security & Compliance: Keeping Data Safe and Private
20
4. Wholl run all this stuff? Job Requirements for the New IT
23
5. A World Apart: Regional Variations Inspire and Challenge
26
6. Modernizing Your Legacy: ERPs Evolving Role in a Hybrid World
28
7. Putting It on Auto Pilot: Automations Role in Managing Data Networks
30
8. Always On: Assuring High Availability and Rapid Disaster Recovery
31
9. Change Management: Transformation Starts at the Top
32
Conclusions
34
Infographic
38
About BPI Network
43
About Dimension Data
43
Copyright BPI Network. All Rights Reserved. 2015
EXECUTIVE EXPERTS
We would like to thank the group of executives who contributed to this report via interviews
and commentary.
FEATURED
Cary Sylvester
Vice President of Technology
and Communications
KellerWiliams
David Rumsey
Chief Information Officer
Tourism Australia
Andrew Lam-Po-Tang
former Chief Information Officer
Fairfax Media
Steve Rubinow
Chief Technology Officer
Catalina
Ben Issa
Head of IT Strategy
ING Direct
CONTRIBUTORS
Andria Long
Vice President of Innovation
Johnsonville
Dustin Haisler
Chief Innovation Officer
e.Republic
Tomoo Misaki
Researcher
Green IT Promotion Council
Peter Gross
Senior Vice President
of Mission Critical Systems
Bloom Energy
Dr. Natalie Petouhoff

Vice President
& Principle Analyst
Constellation Research
Scott Offermann
Director of Critical Operations
Cushman & Wakefield
Gabe Cole
Founder
RTE Group
Zahl Limbuwala
Chief Executive Officer
& Co-Founder
Romonet
Stephen Worn
Chief Technology Officer
DCD Group
Martin Zuckerman
Teswaine Technologies
Dakota Kelley
Director of Facility Consulting
Telios Engineers
Adriaan Bouten
dPrism
PARTNER CONTRIBUTORS
Richard Garratt
General Manager, Americas
Data Centre Business Unit
Dimension Data
Aman Khan
General Manager
Alliances, Europe
Dimension Data
Jahangir Naina
General Manager, AsiaPac
Dimension Data
Rob Lopez
Group Executive, Networking
Dimension Data
Gary Middleton
Global Business
Development Manager
Network Integration
Dimension Data
Matthew Gyde
Group Executive, Security
Dimension Data
Dave D'Aprano
Group Executive
Enterprise Services
Dimension Data
Steve Nola
Group Executive, IT-as-a-Service
Dimension Data
Kevin Leahy
Group General Manager
Data Centre Solutions
Dimension Data
Treb Ryan
Chief Strategy Officer
Cloud Business, IT-as-a-Service
Dimension Data
Gerard Florian
Senior Vice President
IT-as-a-Service
Dimension Data
Stuart Fox
Group Director
Business Development
Data Centre Business Unit
Dimension Data
INTRODUCTION: TRANSFORM TO BETTER PERFORM
In todays 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 initiatives introductory report, weve interviewed executives and technology experts
on six continents and from many sectors about the key challenges confronting them and the
technological solutions theyre 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, softwaredefined 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
THE DATA CENTER IS factory, exactly when products will arrive at the store and perhaps most
REALLY AT THE HEART importantly the very moment when specific customers will be inclined to buy.
OF THIS CHANGE.
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
STEVE NOLA
DIMENSION DATA hour. Theyll support sales staff in the field with critical information. Theyll gather
real-time feedback from customers who purchased newly released products.
Theyll 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.
Its 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)
Its 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.
Thats 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.
This transformation of the datacenter will result in better performance with increased agility and shorter
time-to-market. To be sure, theres 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 werent
designed to address todays business demands or to offset todays 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, theres
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 cant 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 todays
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 todays 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 todays 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. Weve 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 youre in marketing,
sales or services, that data is really important to you. As a marketer, data is supposed to help you increase lead conversion rates. In sales, its supposed to help you target prospects. In customer service,
its 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 numbers, process transactions and keep business applications running smoothly over the entire enterprise.
Traditionally, theyve 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. Theyre growing fast, though perhaps not fast enough to keep up
with business needs.
10
What were seeing today is that many, many enterprises lack in over-arching architecture for where
theyre 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
Its important to know where all that data originates and the types of data were 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 cant easily be interpreted or added to a table. Traditional
data centers were mostly designed to process structured data, but new technologies
WHAT WERE SEEING
like Hadoop, an open-source software framework, can help to analyze consumer
sentiment and other important characteristics of unstructured data.
TODAY IS THAT
MANY,MANY
ENTERPRISES LACK
IN OVERARCHING
ARCHITECTURE FOR
WHERE THEYRE
GOING IN THE FUTURE.
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.
GABE COLE
RTE GROUP
Data comes from billions of people around the world. It might be a crop report
from the government, a childs post on Facebook, a conference call between
business managers, an email, a search, a movie youre 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 youre an adult or a child, whether youre at work or at school,
whatever youre doing, theres an element of IT services and applications involved in your life and
thats pretty much the sole reason were 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? Theyre
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?
11
Because many data centers also were designed before smartphones (and selfies) became ubiquitous,
they often werent 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 lineof-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.
EVERYONE WANTS
HYBRID. I THINK THAT

AROUND THE WORLD,
EVERYONE AGREES.
KEVIN LEAHY
DIMENSION DATA
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.
12
Personal Cloud Traffic
20
EXABYTES
1.7
EXABYTES
EXABYTES
2012
2014
2017
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
$0
$4,000
$2,400
$3,200
$0
$1,000
$149,000
$129,000
$106,000
0%
13%
29%
MONTHLY SERVICES
MONTHLY LABOR
COST OVER THREE YEARS
SAVINGS GAINED
Use of the cloud can cut IT costs by 29 percent. (Sources: OReilly 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.
13
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. Its 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 companys 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 configuration 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 isnt the choice of every company. Some financial institutions or government 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 compliance issues, the nature of the business, the age and capabilities of companys 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. Well 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 dont 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 didnt work, and it created the rub between business and IT.
14
2. WHOS 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 weve 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.
By
2017
73% of data
will be in the cloud
More than 60%
of businesses utilize cloud for performing

IT-RELATED OPERATIONS
(Source: CloudTweaks)
Keller Williams Real Estate
Keller Williams began with a single office in Texas in 1983. Within two years, it was the states 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 years 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 companys 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
were just on the tip of the iceberg of where we can go, she tells us. And were very excited about
where we are going.
15
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 were offering, those will be primarily cloud-based.
I THINK WERE JUST ON

THE TIP OF THE ICEBERG OF
WHERE WE CAN GO.

CARY SYLVESTER
KELLER WILLIAMS
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. Were still at the beginning of this transformation, says Sylvester. But the benefits that
weve 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 its 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 couldnt quench the banks thirst for innovation.
The in-house dev team included 49 developers and 18 testers, but they clearly needed a faster way
to replicate the banks 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 Ciscos 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.
16
OUR CAPABILITY
NOW SUPPORTS
OUR APPETITE FOR
TRANSFORMATION AND
CHANGE AND
The solution was integrated with the tools used by INGs 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.
DELIVERING FASTER
FOR OUR CUSTOMERS.
The company conducted a pilot project, sharing the results with the banks senior
management.When we showcased it to our executive team, they were amazed to
BEN ISSA see how this technology came together to reduce a process that used to take months
ING DIRECT AUSTRALIA 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 hes 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 todays digital world, Rubinow says its all about flexibility and speed of execution, and thats
where he wants to focus his teams efforts. Thats why hes 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."
17
Fairfax Media Publishing

When Andrew Lam-Po-Tang became CIO at Fairfax Media, Australias 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
companys 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. Its 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-Tangs staff would first see what SaaS applications might solve the problem.
The great thing is, once youve 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 companys primary content
management solution, supporting its major daily newspapers and digital publications that reach
about 80 percent of the companys 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.
18
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, theres 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 organizations network is used by about 250 of the agencys employees half of them in Sydney
-- plus another 50 from its allied government groups. Rumseys agency produces Australia.com, which
is in demand 24 hours a day from potential visitors all over the world. Rumseys first step about three
and one-half years ago was to set up a three-year transformation plan. He says, Wed invested in
technology but hadnt 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 agencys 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 weve done there is really delivered that in a hybrid way, he says.
Because it had already bet on Microsoft, it decided to use Microsofts Azure cloud services extensively.
Its using cloud-based Office 365 for online forms. And it is migrating from SharePoints on-premises
version to SharePoint Online. It also runs SQL Reporting Services and the Microsoft stack out of Azure.
Weve 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, were able to bring those services online within the hour, he says.
Asked what tips hed 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.
19
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 youre not worried, youve 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.
IF YOURE NOT
WORRIED, YOUVE GOT
A PROBLEM.
STEPHEN WORN
DCD GROUP
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 youre 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.
20
Top 5 Certifications Sought by IT Workers
20%
Security
Networking
17%

16%
Systems Administration

12%
Project Management/Process
Architecture
8%
Security is the top certification sought by todays 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 wasnt 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 Aman Khan, General Manager,
Alliances, Europe at Dimension Data. People have been sensitive to keeping their data in their own
territory, but I think theyre 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.
21
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.
22
4. WHOLL RUN ALL THIS STUFF? JOB REQUIREMENTS FOR THE NEW IT
The transformation to better performance isnt just changing business. Its 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 theyd 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 werent 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 requirements, 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.
SECURITY NEEDS Major projects could take over a year. The process wasnt cheap and the IT
TO BECOME MORE professional who led the project was well-versed in the ways of the data center.
AGILE. IT NEEDS TO
BE INVOLVED
IN DIFFERENT
DISCUSSIONS.
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, everybodys a computer technician.
MATTHEW GYDE
DIMENSION DATA
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
23
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 companys 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
48%

Keeping up with technology advances

18%
Alignment of IT with Business

17%
Undervaluing older workers

14%
IT Talent Shortage

3%
Job losses due to outsourcing
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 didnt 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.
Thats a big mindset change [for the traditional IT teams], says Richard Garratt, Dimension Datas
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
24
managers is often No. Its not secure. Weve got other projects. Move on. But he thinks thats
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 its a good business decision and then be pushed to make
sure that its secure as they move to the hybrid-type model.
25
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

Most Restricted
Restricted

Some Restrictions
Minimal Restrictions
No Legislation or No Information
Government Surveillance May Impact Privacy
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
26
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
GEOGRAPHY DOES vary in different countries, so much so that systems designed to run in the first world
HAVE A BIG IMPACT, wont perform well in emerging markets. Cost is another factor, with extremely high
AND THE SUBTLETIES ARE
rates in some areas.
QUITE COMPLEX.
ZAHL LIMBUWALA
ROMONET
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 telcos network. Thats a brand new way to view markets and I think its going to be
one of the big trends of the near future, said Gary Middleton, Business Development
Manager for Dimension Datas 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 companys energy costs stem from its data base operations. He said the
countrys 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.
27
6. MODERNIZING YOUR LEGACY: ERPS 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,
WE SEE ERP TAKING A
HUGE AMOUNT OF BENEFIT
FROM THE HYBRID
CLOUD ENVIRONMENT.
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, theyre driven by the
on-premises data center.
STEVE NOLA
DIMENSION DATA
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 todays cloud
investment goes to SaaS applications, according to some estimates. Its 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 Datas IT-as-aService 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-
28
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
61%

On Premise

14%
Saas (Software as a Service)

12%
Cloud (Hosted)
Other
13%
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 Datas Group Executive for IT-as-a-Service.
29
7. PUTTING IT ON AUTO PILOT: AUTOMATIONS 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 wasnt 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 doesnt mean that humans will be taken completely out of the loop. It only
THERES SO MANY means theyll have a much better tool to help them manage systems.
AREAS WHERE
[AUTOMATION] WILL FIT.
For example, when there is a burst of activity, automation can send some of your
data centers workload to a public or private cloud and it can make that choice
GERARD FLORIAN without assistance. It can help resolve data sovereignty concerns by directing traffic
DIMENSION DATA 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.
Theres so many areas where it will fit that its far more than simply saying, Well 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 organizations ability to scale by reducing complexity, facilitating product development
and supporting global expansion.
30
8. ALWAYS ON: ASSURING HIGH AVAILABILITY AND DISASTER RECOVERY
Until recently, the best way to make sure your business wouldnt 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 isnt any cheaper. If your first facility cost millions of dollars, your backup facility would
probably cost about the same. Worse, it wont necessarily prevent a service outage if the problem
is elsewhere in a companys 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.
THE CLOUD IS A
PERFECTLY GOOD
SECONDARY MODEL
BECAUSE IT'S LOW COST
AND IT'S FLEXIBLE.
In much the same way that the cloud can provide added capacity when your business 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 Its 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 Datas IT-as-a-Service division.
--STEVE RUBINOW
CATALINA
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 companys 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, Amazons 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.
31
9. CHANGE MANAGEMENT: TRANSFORMATION STARTS AT THE TOP
John Gage may be most famous for coming up with Sun Microsystems 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 ITs approval.
Business groups must break down their silos and start working in crossfunctional 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. Its 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, Im not sure that
there are leaders at the top of large companies that are saying, OK, heres the
direction were going to go. Were going to break down the silos. Were going
to funnel the data. You guys are going to change how you do your jobs every
day. Were going to use this data to change how we communicate internally
and how we serve the customer.
To manage change effectively, its 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 thats where people get
32
overwhelmed. Some of the plans may change as you make that journey, she says, but if you keep
heading toward the vision, youll eventually get there.
WHEN YOU SKIP OVER

SOMETHING, YOU CAN
EXPECT FAILURE.
NATALIE PETOUHOFF
CONSTELLATION RESEARCH
Richard Garratt, General Manager for the Americas at Dimension Datas 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.
33
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 weve 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 cant 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
34
virtualization, hybrid data centers, automated networks, software defined systems each organizations
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 werent designed to address
todays business demands or to offset todays 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 todays
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 actionable 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.
35
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 todays 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.
36
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 todays
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.
37
THE CLOUDY ROAD TO
TRANSFORMATION
GROWTH IN DATA
90%
80%
of all the data on Earth was

created in the last two years
of it is unstructured
7.7
zettabytes*
Global data center

traffic will triple from
2012-2017
2.6
zettabytes*
The average household generates enough data each year to fill
65 32GB iPhones
2015
In 2020 it is expected that this will grow to
318 32GB iPhones
THE CLOUD LANDSCAPE
2.4
billion people
now use cloud-based services

in some form
Theres an estimated
1 exabyte
of data
stored in the cloud

(Thats 1 BILLION gigabytes!)
By
2017
73% of data
will be in the cloud
More than 60%
of businesses utilize cloud for performing

IT-RELATED OPERATIONS
What is driving the shift to Cloud?
Business
Agility
Scalability
Cost
Mobility
Innovation
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)
CLOUD VS ON-PREMISES
DATA CENTERS
Data Center
Current Assessment
Worldwide data centers
already cover
35.7MILLION
SQUARE METERS
In the global ICT sector,

data centers account for a
17%
CARBON
FOOTPRINT
How much is being invested globally?

(in billions US$)
2012
2015
140.1
185.2
COLOCATION & OUTSOURCING:
32.3
51.2
IN-HOUSE IT:
47.4
58.2
IN-HOUSE FACILITY EQUIPMENT:
60.4
75.8
TOTAL:
How much will the traffic grow?

from 2012 to 2017
4.5 x
GLOBAL DATA CENTER TRAFFIC . . . . . . . . . .3 x
CLOUD WORKLOADS . . . . . . . . . . . . . . . . 3.7 x
DATA CENTER WORKLOADS. . . . . . . . . . . 2.3 x
GLOBAL CLOUD TRAFFIC . . . . . . . . . . . . .
By 2017 Data Center traffic will reach
7.7 zettabytes*, which is equal to...

...the amount of data
generated if the
entire world
population in 2017
streams music
non-stop for
18 months
How much can a shift save me?
key savings areas
LABOR
On average, cloud reduces IT labor costs by 50%
A company with 100 employees saves up to 191 company
hours per day
DECREASED POWER ENERGY AND SPACE

Save 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
Return on investment
curve for cloud solutions
433%
304%
163%
209%
58%
1 YR
2 YR
3 YR
4 YR
5 YR
WHO IS MAKING THE

CLOUD DECISIONS?
Who is making the

Cloud decisions?
70%
IT / Network MGMT 55%
IT / Network Staff 45%
CIO or top IT executive
*1 zettabyte = 1 thousand exabytes
1 exabyte = 1 billion gigabytes
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
BPI
NETWORK
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 todays 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

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Data Center Evolution in The Era of The Cloud

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ACCELERATE HOW

DATA CENTER EVOLUTION IN THE ERA OF THE CLOUD

Full Report | May 2015

ACCELERATE HOW YOU INNOVATE | REPORT

Introduction: Transform to Better Perform

2. Whos Leading the Change? A Look at Successful Transformations

3. Security & Compliance: Keeping Data Safe and Private

5. A World Apart: Regional Variations Inspire and Challenge

6. Modernizing Your Legacy: ERPs Evolving Role in a Hybrid World

7. Putting It on Auto Pilot: Automations Role in Managing Data Networks

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

9. Change Management: Transformation Starts at the Top

About BPI Network

About Dimension Data

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ACCELERATE HOW YOU INNOVATE | REPORT

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Dr. Natalie Petouhoff

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INTRODUCTION: TRANSFORM TO BETTER PERFORM

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Copyright BPI Network. All Rights Reserved. 2015

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GOING IN THE FUTURE.

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HYBRID. I THINK THAT

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

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Personal Cloud Traffic

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2. WHOS LEADING THE CHARGE? A LOOK AT SUCCESSFUL TRANSFORMATIONS

will be in the cloud

More than 60%

of businesses utilize cloud for performing

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I THINK WERE JUST ON

WHERE WE CAN GO.

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OUR APPETITE FOR

FOR OUR CUSTOMERS.

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Fairfax Media Publishing

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