Tuesday, July 03, 2012

Roundtable: Revlon, SAP and VMware Describe Accretive Benefits from Aggressive Adoption of Cloud Computing

Transcript of a sponsored podcast on how cloud and virtualization deliver benefits in cost, efficiency, and agility.

Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: VMware.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.

Today we present a sponsored podcast discussion focused on two prime examples of organizations that have gleaned huge benefits from high degrees of virtualization and aggressive cloud computing adoption.

We're joined by executives from Revlon and SAP, who recently participated in a VMware-organized media roundtable event in San Francisco. The event, attended by industry analysts and journalists, demonstrated how mission-critical applications supported by advanced virtualization strategies are transforming businesses. [Disclosure: VMware is a sponsor of BriefingsDirect podcasts.]

We're going to learn more about the full implications of IT virtualization, and how they're being realized -- from bringing speed to business requests, to enhancing security, to strategic disaster recovery (DR), and to unprecedented agility in creating and exploiting applications and data delivery value.

With that, please join me now in welcoming our guests, David Giambruno, Senior Vice President and CIO of Revlon. Welcome back, David.

David Giambruno: Thanks a lot, Dana.

Gardner: We're also here with Heinz Roggenkemper, Executive Vice President of Development at SAP Labs. Welcome Heinz.

Heinz Roggenkemper: Welcome, Dana.

Gardner: Heinz, let me begin with you, if you don’t mind. Describe for our listeners your internal cloud approach that you've been using to make training and development applications readily available. What's going on with that internal cloud, and why is the speed and agility so important for you?

Roggenkemper: If you look at SAP, you find literally thousands of development systems. You find a lot of training systems. You find systems that support sales activities for pre-sales. You find systems that support our consulting organization in developing customer solutions.

From a developer's perspective, the first order of business is to get access to a system fast. Developers, by themselves, don’t care that much about cost. They want the system and they want it now. For development managers and management in general, it’s a different story.

For training, it's important that the systems are reliable and available. Of course again for management, it's the cost perspective. For people in custom development, they need the right system quickly to build up the correct environment for the particular project that they're working on.

Better supported

lso these requirements are much better supported in the virtualized environment than they were before. We can give them the system quickly. We can give them the systems reliably. We can give them the systems with good performance, and from a corporate perspective, do it at a much better cost than we did before.

Our business agility and ability to respond to market drivers is greatly improved by this.

Gardner: One of the things that was intriguing to me was the training instance, where people were coming in and needed a full stack of SAP applications, perhaps third-party applications that were mission critical. Tell me how the training application in particular, or the use of virtualization in that instance, demonstrates some of the more productive aspects of cloud?

Roggenkemper: The most interesting part about that is that you don’t need a vanilla system, but a system that is prepared for a particular class, which has the correct set of data. You need a system that can be reset to a controlled stage very quickly after the end of a training class, so that it’s ready for the next training class.

So there are two aspects to it. One is the reliable infrastructure on which the systems run, and second part is to get the correct system for that particular class ready in a short period of time.

Gardner: On the issues of control of the data, security, and even licensing, are there unintended consequences or unintended benefits that come when you approach the delivery of these applications through the full virtualization and this cloud model?

One is the reliable infrastructure on which the systems run, and second part is to get the correct system for that particular class ready in a short period of time

Roggenkemper: For unintended benefits, the thing that comes to my mind is that it allows us to take advantage of new computing infrastructure more quickly. We reduce the use of power, which is always a good thing.

For an unintended downside, the only thing that would come to my mind is that when in development, you are tuning for performance. That is a slightly different thing. In some areas, if you do general tuning, where you run a couple of iterations instead of just running to identify where your hotspots are, and if it’s a highly critical component, you might have to go to dedicated hardware to get to the last few percentages.

So in that area, you have to behave differently, but it affects only a small window of your total development time. Most of the time, you still take full advantage of a virtualized environment. Once you go into tuning, then you move the system to dedicated hardware and do your job there. If you average it out, you still have a substantial advantage.

Gardner: This idea of agility when producing these applications with their full data and production ready, even if you are in a training and development environment, where you're not necessarily facing their customers, proves this concept of IT as a service. Do you see it that way, and if so, is it something that you are going to be bringing to other applications within SAP?

Roggenkemper: Absolutely. And obviously, what we use internally benefits our customers as well. To have these systems available in a much shorter period of time for the customer’s development environment is as important for them as it is for us.

Future plans

Gardner: And a question about future plans. It sounds as if this works for you. Then the virtual desktop infrastructure (VDI) approach of delivering entire client environments with apps, data, and full configuration would be a natural progression. Is that something that you're looking at or perhaps you're already doing?

Roggenkemper: Some things we're already doing, We have a hefty set of terminal servers in our environment, as well, which people, especially if they are on the road or work from home, take full advantage of.

Gardner: David, let’s go to you. I was very interested to hear today your version of IT as a service, really a vision that you painted. I think essentially you're saying that advances in pervasive virtualization and cloud methods are transforming how IT operates, but it’s giving you the ability of, as you said, saying yes when your business leaders come calling. What have you have been able to say yes to that exemplifies this shift in IT?

Giambruno: I can’t equate that to numbers. We've increased our project throughput over the past couple of years by 300. So my job is to say, "yes." I'm just here to help. I'm a service. Services are supposed to deliver. What this cloud ecosystem has delivered for us is our ability to say yes and get more done faster, better, cheaper.

The correlating effect of that is we have seen not only this massive increase in our ability to deliver projects for the business, because that’s really what business alignment is. I do what they want and I give them some counsel along the way.

The second piece is that we've seen a 70 percent reduction in the time it takes us to deliver applications, because we have all of these applications available to us in the task and development site which is part of our DR.

So this ability to move massive amounts of information where everything is just the file, bring that up and let our development teams at it, has added this whole speed, accuracy, and ability to deliver back to the business.

Gardner: So we understood with SAP that they're a very big, global delivery of business applications for all sorts of companies. They have an internal cloud that they're using for some specific training and some specific development activities.

That’s really what business alignment is. I do what they want and I give them some counsel along the way.

But Revlon is also a global company. Tell us a little bit about the role that you have for our listeners who might not be familiar, the extent to which your applications are being used, and the type of mission-critical activities that you're involved in?

Giambruno: It’s probably easier to quantify it this way. We have 531 applications running on our internal cloud. Our internal cloud makes roughly 15,000 automated application moves a month. Our transaction rate is roughly 14,000 transactions a second. Our data change rate is between 17 and 30 terabytes a week. Over 90 percent of our corporate workload sits on our internal cloud, and it runs most of our footprint globally.

Gardner: We're talking about mission-critical apps here -- ERP, manufacturing, warehousing, business intelligence. Did you start with mission-critical apps or did you end up there? How did you progress?

Trust, but verify

Giambruno: I have a couple of "isms" that I live by. The first one is “Crawl, Walk, Run” and the second one is “Trust, but Verify.” When we started our journey roughly five years ago, we started with "Crawl" -- very much "Crawl" and “Trust – but Verify.” At Revlon, we didn’t spend any more to put this in. We changed how we spent our money.

We were going through a server refresh, and instead of buying all the servers, we only bought roughly 20 percent. With the balance of that money, we bought the VMware licenses. We started putting in our storage area network (SAN), and although core component pieces, and we took some of our low-hanging fruit file systems and started moving all that.

As we did that, we started sharing with the business. We showed them what we're doing and that it still worked. Then, we started the walk phase of putting applications on it. We actually ran north of six nines.

System availability went up. Performance went up. And after this "Crawl Walk Run," "Trust and Verify," it became "Just keep Going." We accelerated the whole process and we have these things that we call "fuzzies," things that we can do for the business that they weren't expecting. Every couple of months, we would start delivering new capabilities.

One of the big things that we did was that we internalized all our DR. We kept taking external money that we were spending and were able to give it back to the business and essentially invest in ourselves, because at Revlon I'm not going to be a profit center.

We kept taking external money that we were spending and were able to give it back to the business and essentially invest in ourselves.

For Revlon, the more money R&D has to develop new products to get to our consumers and for marketing to tell that product story and get it out to our channels and use the media to talk about our glamorous products, that really drives growth in Revlon.

What we've done is focused on those things, taking the complexity out, but delivering capability to the business while either avoiding or saving money that that the business can now use to grow.

Gardner: So you've been able to say yes when they come and ask you for new services and capabilities. You've been able to keep your costs at or below the previous levels. That’s pretty impressive. Do you credit that to virtualization, to cloud, to the entire modernization? How do you describe it?

Giambruno: To me it’s the interaction of the entire ecosystem. It is a system. Virtualization is a huge part of that. That’s where all it started. As you look through the transition, it's really been interesting. I'm going to segue back to the saying yes pieces and what it’s allowed us to be.

We have this thing called Oneness. I always talk about being the Southwest [Airlines] of computing, and I live inside of very simple triangle. The triangle has three sides, obviously. One side is our application inventory, the other side is our infrastructure capabilities, and the other side is my skill-sets.

Saying yes

f you're inside that space I can say yes, very quickly. What’s happened inside that space helped us contain cost . When we first started work, our ratio was one physical to seven virtual. A couple years later, we're at 1:35. It’s roughly a 500 percent increase in capacity without any commensurate cost. I give credit to my team for owning the technology and for wielding the technology for the benefit of the business and to get the most out of it.

The frame of reference to keep ourselves grounded is that we make lipstick, and it’s really how much money we can save and how well we can wield that technology to deliver value and do more with less. That’ll enable our company to grow.

We love simplicity and we have this Southwest computing model of taking a very complex ecosystem and making it simple to use. To a large degree it's kind of like an iPad, where the business wants to touch it, but they don’t care what’s going on underneath.

It's our job to deliver that, to deliver that experience and capability back to the business, without them having to think about it. I just want them to ask that we’re here to help and that we can figure a way to deliver it and keep exercising our technical capabilities to wield the technology to do more.

Gardner: I'm intrigued by this notion of the ecosystem being a whole greater than the sum of the parts. One of the things that you've been able to do, in addition to saying yes and keep your costs in line, is to improve your data and manage your data lifecycle, according to what I heard today.

It's our job to deliver that experience and capability back to the business, without them having to think about it.

Tell me about this notion you said of all the data becoming structured. What are some of the upsides on the data, when it comes to this ecosystem approach?

Giambruno: When you were talking to Heinz, you talked about unintended consequences. One of the things that we have is a big gestalt after our cloud was live. We literally had all of our data in one place.

One of the big challenges historically was that we had all these applications geographically dispersed. The ability to touch them, feel them, get access, access controls, all of these things were monumentally challenging. In Revlon, as we went to the Southwest or Oneness model, we organized globally our access controls and those little things.

So when we had all this data and all these applications now sitting at one place, with our ability to look at them and understand them, we started a fairly big effort for our master data model. We’re structuring our data on the way in So when we're trying to query the data, we already know where it is and what it does in its relationships, instead of trying to mine through unstructured data and make reasoning out of it. It’s been this big data structure.

I’d say we "chewed glass." We spent a couple of years chewing glass, structuring all this data, because the change rate is so big, but there's value in information to the business. I joke, if you've missed at this, we’re in the information age. So how well we can wield our information and give our leadership team information to act on is a differentiator. The ability to do this big data and this master data model has been really what we see as the golden egg going forward, the thing that can really make a difference with the business.

Gardner: While we’re on this notion of unintended consequences and unintended benefits, does anything along the lines of security or licensing also come to mind?

Self selection

Giambruno: From a licensing perspective, along the journey we called it self-selection. Licensing is important. Everybody has to make money. We live in capitalism. So from a procurement perspective, we always want to make sure we’re legal, but at the same time, vendors will self-select, depending on their licensing model in the virtualization world. That's our triangle. That's our infrastructure. Through that, we’ve had to manage relationships and we’ve done that.

From a security model, the structuring of all of our infrastructure, putting the in the Southwest model of computing, this Oneness, getting our data, our access controls, all of that plus with greatly simplified security, all of that is completely ubiquitous. There were even some of the crazy things that we did --we restructured the IP-ing of everything in Revlon to make all of our IP blocks contiguous. So when we move things around the world inside our cloud, we move entire blocks of IP addresses.

As you look forward, one of the interesting things that I find is that, as you look at streaming our applications, there is a huge security paradigm shift. Essentially no data will ever leave my data center and sit on a device.

In five years, that would be my goal. I think I can do it in 24 months, but really from a horizon, it’s like five years. At that point, I can literally encrypt my data center. Think about PCI and HIPAA and all the controls around that. Encryption is one of those big first checkmarks. If you can do that, you solve a lot of your compliance challenges.

Second, you have this trusted computing model, where I know the person from an access control. I know the device. I know what that person is supposed to have access to. I've encrypted my entire data center, so when that person comes in, I can let them have access only to what they’re supposed to have in the context that they're supposed to have, and decrypt it on the way out. They’re only viewing a device, and no data ever lives on a device.

They’re only viewing a device, and no data ever lives on a device.

So bring your own device. I wouldn’t care, because there's almost no security concerns at that point. I've encrypted. I know the user. Going one step further, as companies progress, you’re going to look at these internal marketplaces that everyone is going to build.

What the iPad has done is make it so I want to turn it on. I want to click on the app that gives me the information to do my job. I want my workflow, my exception management, the information I need to do for the day or do my planning, whatever I need to do. But they want that information in context.

Roll the tape forward a couple of years, and the capabilities that’s coming out on VMware, we fully expect to take care of that, to adopt that model, and that’s what we’re pushing for.

Gardner: It’s fascinating hearing you talking about large-scale virtualization and internal cloud. This has allowed you to have a much better grasp over your costs and deliver your apps and services readily, so that you can say yes to your business users.

In addition, you're getting master data management (MDM) benefits. You’re getting a better handle on licensing. You’re seeing great improvements in security now, and perhaps more to come, as you stream apps to a more virtualized client model.

Symbiotic relationship

ou also mentioned something when it came to disaster recovery (DR) that piqued my interest. It sounds almost as if there is a symbiotic positive relationship between high levels of virtualization and DR. It almost sounds like DR has become the ability to move entire data centers as assets that are fungible, and that that gives you a lot more capability, in addition to being able to recover.

Is that true? Tell me how this DR plays into this larger set of values.

Giambruno: We’ve actually done this. No one was hurt, but last year, our factory in Venezuela burned. It was on a Sunday afternoon and they had what we call a drib. If you look at VMware architecture, they have data center in a box. I always joke that we’re years ahead of them in that. We use dribs, strategically placed throughout the world where we push capacity to for our cloud. They largely run dark.

So our drib "phoned home" that it was getting hot. We were notified that the building was on fire. It took us an hour and 45 minutes, and most of that time was finding one of my global storage guys who was at the beach. We found Ben, and got him to do his part, which was to tell the cloud to move from Venezuela to our disaster site in New Jersey.

So we joke that our model in DR is that we just copy everything. We don’t even think about tiering or anything. It’s this model, sometimes a Casio is just better than a Rolex. Simplicity rules, and not thinking about it ensures that we have all the data available. Again, it goes back to our cloud and virtualization. Everything is just a file. We just copy the deltas all the time. We never stop.

For us it was available in less than 15 minutes. We went in, we broke the synchronization, we made sure everything was up-to-date, and we told our F5s and our info blocks that Venezuela is now New Jersey. Everything swung, we got everything in, we contacted the business units to test everything and verify everything.

It's this whole idea of simplicity, where you're just not putting the complexity into the system.

Then we brought up all the virtual desktops and we used Riverbed mobile devices. We e-mailed their client to everyone. So people either worked from home or we had some very good partners that gave us some office space where people could use the computers. They loaded the Riverbed mobile devices on those computers. They brought the virtual desktops, people went to work, and the business didn’t go away.

Gardner: So you were able to say yes, even when a factory burned to the ground. That's pretty impressive.

Giambruno: This is a real-world example of how you can do it, and it wasn't a lot of effort. It's this whole idea of simplicity, where you're just not putting the complexity into the system. I always go back to this iPad view of the world, where the business just wants to know what's available and we will do the rest underneath.

This high degree of virtualization lets us move all of this data around the world, and it's for DR, development, and a myriad of capabilities that we keep finding new ways to use this capability.

Gardner: I suppose it elevates the concept of fit for purpose to that data-center level?

Redundancy and expense

Giambruno: Correct. And some of the other unintended consequences are interesting. You talk about redundancy and expense. Two is one and one is none in a data center. Do you really need to be fully redundant, because if something happens we'll just switch to the other data center?

I only need one core switch or whatever. You start to challenge all these old precepts of up-time, because it's almost cheaper for me or less-expensive. I can just roll the computer over here for a little while. I get that fixed, if I have a four-hour service-level agreement (SLA) with my vendors for repairs.

You can start to question a lot of the “old ways of doing things” or what was the standard in figuring out new ways to operate. One of the interesting things I love about my job is you can question yourself and figure out what you can do next.

Gardner: One last item that I suppose also fits into this unintended positive consequences issue. You've mentioned something about supply-chain value and getting to the point where you can take your external cloud, push it out to your suppliers and contractors, and begin sharing with permissions and control. This is a much better approach than the old way of virtual private networks (VPNs) and the headaches around access and so forth. So tell me about this extended business-process value that you're starting to explore?

Giambruno: One of the things we realized is that we could start extending our cloud. We spend a lot of time managing security and VPNs, and the audits that have to go around that.

At the end of the day, it's about collaboration with our community of vendors and suppliers, and enabling them to interact with us easily.

If I could just push out a piece of my application or make that available to them, they could update their data, reduce the number of APIs, the number of connections, all of that complexity that goes out there, and extend our MDM.

Then we can interface our MDM through our cloud to do some of this translation for us that they can enter data, or we can take it from their systems, from our cloud edge securely and in context and bring that back into our systems.

We think there are huge possibilities around automating and simplifying. But at the end of the day, it's about collaboration with our community of vendors and suppliers, and enabling them to interact with us easily.

So you're always trying to foster those relationships and get whatever synergies you can. If we make it easier on them to interact with us from a system’s perspective, it just makes everybody happier. We've got some projects slated for deployment this year. Maybe in a year, if you come back, I can tell you how well we’ve done or what we’ve done. But one of the things that we are looking is we can think really change how we operate as a company.

Gardner: That's fascinating. You talked about a lot of efficiency, reducing your footprint on the physical plant, on energy, keeping your cost in line, spinning up more applications and data. But now we are talking about not just efficiencies, but actually doing things entirely differently, things that could not have been done before because of cloud. That to me is really the essence of where we are going to be talking in the next few years.

So, David, thanks so much for your time. We have to leave it there. You've been listening to a sponsored podcast discussion in conjunction with a VMware-organized media roundtable event in San Francisco.

We've been exploring two prime examples of organizations that have gained huge benefits from high degrees of virtualization and aggressive cloud computing adoption with mission-critical applications. The two organizations of course have been Revlon and SAP.

I’d like to thank our guests David Giambruno, Senior Vice President and CIO of Revlon. Thanks so much, David.

Giambruno: My pleasure.

Gardner: We have also been here with Heinz Roggenkemper, Executive Vice President of Development at SAP Labs.

This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks to our audience for joining, and come back next time.

Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: VMware.

Transcript of a sponsored podcast on how cloud and virtualization deliver benefits in cost, efficiency, and agility. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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