Thursday, August 30, 2018

Building the Intelligent Enterprise with Strategic Procurement and Analytics

Transcript of a discussion on how the powerful combination of procurement and deep analytics can make businesses smarter and more efficient.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: SAP Ariba.

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

Our next thought leadership discussion explores ways that the powerful combination of deep analytics and the procurement function make businesses smarter and more efficient. A new breed of corporate behavior emerges when the latest data science techniques are applied to more data sets that impact supply chains and optimize procurement.

To learn how data-driven methods and best practices are transforming procurement into an impactful intelligence asset, we're now joined by David Herman, Chief Data Scientist for Strategic Procurement at SAP Ariba. Welcome to BriefingsDirect, David.

David Herman: Thanks, Dana. I'm happy to be here.

Gardner: Why is procurement such a good place to apply the insights that we get from data science and machine learning (ML) capabilities?

Herman: Procurement is the central hub for so many corporate activities. We have documents that range from vendor proposals to purchase orders and invoices to contracts, and requests for proposal (RFPs). Lots and lots of data happens here.

So the procurement process is rich in data, but the information historically has been difficult to use. It’s been locked away inside of servers where it really couldn't be beneficial. Now we can take that information in its unstructured format, marry it with other data – from other systems or from big data sources like the news -- and turn it into really interesting insights and predictions.

Gardner: And the payoffs are significant when you're able to use analysis to cut waste or improve decisions within procurement, spend management, and supply chains.

Procurement analysis pays 

Herman: The very nature of spend analysis is changing. We implemented a neural network last year. Its purpose was to expedite the time it takes to do spend analysis. We dropped that time by 99 percent so that things that used to take days and weeks can now be done in mere hours and minutes.

Because of the technology that is available today, we can approach spend analysis differently and do it more frequently. You don’t really have to wait for a quarterly report. Now, you can look at spend performance as often as you want and be really responsive to the board, who these days, are looking at digital dashboard applications with real-time information.

Gardner: How is this now about more than merely buying and selling? It seems to me that when you combine these analytic benefits, it becomes about more than a transaction. The impact can go much deeper and wider.

Herman: It’s strategic -- and that's a new high plateau. Instead of answering historic questions about cost savings, which are still very important, we’re able to look forward and ask “what-if” kinds of questions. What is the best scenario for optimizing my inventory, for example?

That's not a conversation that procurement would normally be involved in. But in these environments and with this kind of data, procurement can help to forecast demand. They can forecast what would happen to price sensitivity. There are a lot of things that can happen with this data that have not been done so far.

Gardner: It's a two-way street. Not only does information percolate up so that procurement can be a resource. They are able to execute, to act based on the data.

Herman: Right, and that's scary, too. Let's face it. We're talking about peoples’ livelihoods. Between now and 2025, things are going to change fundamentally. In the next two to three years alone, we are going to see positions [disappear], and then we're going to have a whole new grouping of people who are more focused on analysis.

The reality is that of any kind of innovation -- any kind of productivity -- follows the same curve. I am not actually making this prediction because it’s the result of ML or artificial intelligence (AI). I am telling you every great increase in productivity has followed the same curve. Initially it impacts some jobs and then there are new jobs.

And that's what we're looking at here, except that now it’s happening so much faster. If you think about it, a five-year period to completely reshape and transform procurement is a very short period of time.

Gardner: Speaking of a period of time, your title, Chief Data Scientist for Strategic Procurement, may not have even made much sense four years ago.

Herman: That's true. In fact, while I have been doing what I'm doing now for close to 30 years, it has had different names. Sometimes, it's been in the area of content specialist or content lead. Other times, it's been focused on how we are managing content in developing new products.

And so, really, this title is new. Yet it’s the most exciting position that I've ever had because things are moving so much faster and there is such great opportunity.

Gardner: I'm sure that the data scientists have studied and learned a lot about procurement. But what should the procurement people know about data science?  

Curiosity leads the way

Herman: When I interview people to be data scientists, one of the primary characteristics I look for is curiosity. It’s not a technical thing. It’s somebody who just wants to understand why something has happened and then leverage it.

Procurement professionals in the future are going to have much more available to them because of the new analytics. And much of the analytics will not require that you know math. It will be something that you can simply look at.

For example, SAP Ariba’s solutions provide you with ML outcomes. All you do is navigate through them. That’s a great thing. If you're trying to identify a trend, if you're trying to look at whether you should substitute one product for another -- those analytic capabilities are there.
SAP Ariba's solutions provide you with ML outcomes. All you do is navigate through them. That's a great thing.

As for a use case, I was recently talking to the buyer responsible for staffing at one of SAP’s data centers. He is also responsible for equipping it. When they buy the large servers that run S4/HANA, they have different generations of hardware that they leverage. They know the server types and they know what the chip lifecycles look like.

But they've never been able to actually examine their own data to understand when and why they fail. And with the kinds of things we're talking about, now they can actually look to see what's going on with different chipsets and their lifecycles -- and make much more effective IT deployment decisions.

Gardner: That's a fascinating example. If you extrapolate from that to other types of buying, you are now able to look at more of your suppliers’ critical variables. You can make deductions better than they can because they don't have access to all of the data.

Tell us about how procurement people should now think differently when it comes to those “what-if” scenarios? Now that the tools are available, what are some of the characteristics of how the thinking of a procurement person should shift to take advantage of them?

Get smart

Herman: Anyone who's negotiated a contract walks away, glad to be done. But you always think in the back of your head, “What did I leave on the table? Perhaps soon the prices will go up, perhaps the prices will go down. What can I do about that?”

We introduced a product feature just recently in our contracts solution that allows anyone to not only fix the price for a line item, but also make it dynamic and have it tied to an external benchmark.

We can examine the underlying commodities associated with what you are buying. If the commodities change by a certain amount – and you specify what that amount is -- you can then renegotiate with your vendor. Setting up dynamic pricing means that you're done. You have a contract that doesn't leave those “what-ifs” on the table anymore.

That's a fundamental shift. That’s how contracts get smart -- a smart contract with dynamic pricing clauses.
Gardner: These dynamic concepts may have been very much at home in the City of London or on Wall Street when it comes to the buying and selling of financial instruments. But now we’re able to apply this much more broadly, more democratically. It’s very powerful -- but at a cost that's much more acceptable.

Is that a good analogy? Should we look to what Wall Street did five to 10 years ago for what is now happening in procurement?

Herman: Sure. Look, for example, at arbitrage. In supplier risk, we take that concept and apply it. When trying to understand supplier risk, begin with inherent risk. From inherent risk we try to reduce the overall risk by putting in place various practices.

Sometimes it might be an actual insurance policy. It could also be a financial instrument. Sometimes it’s where we keep the goods. Maybe they are on consignment or in a warehouse.

There are a whole host of new interesting ways that we can learn from the positives and negatives of financial services -- and apply them to procurement. Arbitrage is the first and most obvious one. I have talked to 100 customers who are implementing arbitrage in various forms, and they are all a little bit different. Each individual company has their own goal.

For example, take someone in procurement who deals with currency fluctuations. That kind of role is going to expand. It's not going to be just currency -- it is also going to be all assets. It is ways to shift and extend risk out over a period of time. Or it could even be reeling in exposure after you have signed a contract. That's also possible.

Gardner: It seems silly to think of procurement as a cost center anymore. It seems so obvious now -- when you think about these implications -- that the amount of impact to the top line and bottom line that procurement and supply chain management can accomplish is substantial. Are there still people out there who see procurement as a cost center, and why would they?

From cost to opportunity 

Herman: First of all, it's very comfortable. We can demonstrate value by saving money, and it goes right to the bottom line. This is where it matters the most. The cost is always going to be a factor here.

As one chief procurement officer (CPO) recently told me, this has been a kind of a shell game because he can't actually prove how much his organization has really saved. We can only put together a theoretical model that shows how much you saved.

As we move forward, we are going to find that cost remains part of the equation -- I think it will always be part of the equation – yet the opportunity side of the equation with the ability to work more effectively with sales and marketing is going to happen. It's actually happening now. So you will see more and more of it over the next three to five years.
We can demonstrate value by saving money, and it goes right to the bottom line. This is where it matters the most. The cost is always going to be a factor here.

Gardner: How are analytics being embedded into your products in such a way that it is in the context of such a value-enhancing process? How are you creating a user experience around analytics that allows for new ways to approach procurement?

Herman: Again, supplier risk is a very good example. When a customer adopts the SAP Ariba Supplier Risk solution, they most often come with a risk policy in place. In other words, they already know how to measure risk.

The challenges with measuring risk are commonly around access to the data. Integration is really hard. When we went about building this product we focused first on integration. Then we came up with a model. We take the historical data and come up with a reference model. We also really worked hard to make sure that any customer can change any aspect of that model according to their policy or according to whatever scenario they might be looking at.

If, for example, you have just acquired a company, you don’t know what the risks look like. You need to develop a good look at the information, and then migrate over time. With supplier risk management, both the predictive and descriptive models are completely under the control of our customers. They can decide what data flows in and becomes a feature of that model, how much it is weighted, what the impacts are, and how to interpret the impact when it's finished.

We also have to recognize when you’re talking about data outside of the organization that is now flowing in via big data, that this is an unknown. It's not uncommon for somebody look at the risk platform and say, “Turn off that external stuff so I can get my feet under the table to understand it -- and then turn on this data that’s flowing through and let me figure out how to combine them.”

At SAP Ariba, that’s what we are doing. We are giving our customers the tools to build workflow, to build models, to measure them, and now with the advent of the SAP Analytics Cloud be able to integrate that into S/4HANA.

Gardner: When we think about this as a high-productivity benefit within an individual company, it seems to me that as more individual companies begin doing this that there is a higher level of value. As more organizations in a supply chain or ecosystem share information they gain mutual productivity.

Do you have examples yet of where that's happening, of where the data analytics sharing is creating a step-change of broader productivity?

Shared data, shared productivity 

Herman: Sure, two examples. The first is that we provide a benchmarking program. The benchmarking program is completely free.  As long as you are willing to share data, we share the benchmarks.

The data is aggregated, it's anonymous, and we make sure that the information cannot be re-identified. We take the proper precautions. Then, as a trusted party and a trusted host we provide information so that any company can benchmark various aspects of their specific performance.

You can, for example, get a very good idea of how long it takes to process a purchase order, the volumes of purchase orders, and how much spend is not managed because you don't have a purchase order in place. Those kinds of insights are great.

When we look at analytics across industries we find that most supply chains have become brittle. As all of us become leaner organizations, ultimately we find that industries end up relying on one or two critical suppliers.

For example, black pigment for the automotive industry was provisioned for all of the major manufacturers by just one supplier. When that supplier had a plant fire and had to shut down their plant for three months it was a crisis because there was no inventory in the supply chain and because there was only one supplier. We actually saw that in our supplier risk product before it happened.

The industry had to come together and work with one another to solve that problem, to share their knowledge, just like they did during the 2008-2009 financial crisis.

In the financial crisis, we found that it was necessary to effectively help other company’s suppliers. Traditionally that would be called collusion, but it was done with complete transparency with the government.

When you look at such ways that information can be shared -- and how industries can benefit collectively -- that's the kind of thing we see as emerging in areas like sustainability. With sustainability we are looking for ways to reduce the use of forced labor, for example.

In the fishing industry, shrimping companies have just gone through their industry association to introduce a new model that collectively works to reduce the tremendous use of forced labor in that industry today. There are other examples. This is definitely happening.

Gardner: What comes next in terms of capabilities that build on data science brought to the procurement process?

Contract evaluations 

Herman: One of the most exciting things we’re doing is around contracts. Customers this quarter are now able to evaluate different outcomes across all of their contracts. A prominent use case is that perhaps you have a cash flow shortage at the end of the year and it’s necessary to curtail spend. Maybe that’s by terminating contracts, maybe it’s by cutting back on marketing.

We picked an area like marketing so that we can drill down to evaluate rights and obligations and assess the potential impact to the company canceling those contracts. There is no way to do this today at scale other than manually.

If the chief financial officer (CFO) were to approach someone in procurement and ask this question about cash flow, they would bring in your paralegals and lawyers to begin reading the contracts. That's the only way today.
Customers are now able to evaluate different outcomes across all of their contracts. We are teaching machines to interpret the data, to evaluate cause and effect and then classify the impact so decision makers can act quickly.

What we are doing right now is teaching machines to interpret that data, to evaluate the cause and effect -- and then classify the impact so that the decision makers can take action quickly.

Gardner: You are able to move beyond blunt instruments into a more surgical understanding -- and also execution?

Herman: Right, and it redefines context. We are now talking about context in ways that we can't do today. You will be able to evaluate different scenarios, such as terminating relationships, push out delivery, or maybe renegotiating a specific clause in a contract.

These are just the very beginnings of great use cases where procurement becomes much more strategic and able to respond to the scenarios that help shape the health of the organization.

Gardner: We spoke before about how this used to be in the purview of Wall Street. They had essentially unlimited resources to devote to ML and data science. But now we are making this level of analysis as-a-service within an operating expense subscription model.

It seems to me that we are democratizing analysis so that small- to medium-size businesses (SMBs) can do what they never used to have the resources to do. Are we now bringing some very powerful tools to people who just wouldn’t have been able to get them before?

Power tools to the people 

Herman: Yes. The cloud providers create all kinds of opportunities, especially for SMBs, because they are able to buy on demand. That’s what it is. I am able to buy what I need on demand, to negotiate the price based on whether it’s on peak or off peak and get to the answers that I need much more quickly.

SAP Ariba made that transition to a cloud model in 2008, and this is just the next generation. We know a lot about how to do it.

Gardner: For those SMBs that now have access to such cloud-based analytics services, what sort of skills and organizational adjustments should they make in order to take advantage of it?

Herman: It’s interesting. When I talk to schools, to undergraduates and graduate students, I find that many of those folks are coming out of school with the right skill sets. They have already learned Python, for example, and they have already built models. There is no mystery, there is no voodoo about this. They have built the models in the classroom.

Just like any other business decision, we want to hire the best people. So, you will want to maybe slip in a couple of questions about data sciences during your interviews, because it’s the kind of thing that a product manager, an analyst, and an IT leader need to know in the near future.

With the transition of the baby boomers into retirement, Millennials are coming up as this new group which is extremely talented. They have those skill sets and they are driven by opportunity. As you continue to challenge them with opportunities, my experience is that they continue to shine.

Gardner: David, we have talked about this largely through the lens of the buyers. What about the sellers? Is there an opportunity for people to use data in business networks to better position themselves, get new business, and satisfy their markets?

Discover new business together

Herman: We need a good platform to discover these kinds of opportunities. Having been a small business owner myself, I find that the ability for me to identify opportunities that trigger business is really essential. You really want to be able to share information with your customers and understand how you can generalize those.

I recently spoke to a small business owner who uses Google Sheets. At the end of every call, everybody on this team writes down what they had learned about the industry so they could share it among themselves. They would write down the new opportunities that they heard in a separate section of the sheet, in a separate tab. What were the opportunities they saw coming up next in their industry? That’s where they would focus their time in building a funnel, in building a pipeline around it.

When looking at it from that perspective, it’s really useful. Use the tools we have to get into these new areas of access -- and you win.

Gardner: What should people expect in the not too distant future when it comes to the technologies that support data science? Are there any examples of organizations at the vanguard of their use? Can they show us what others should expect?
We now have to look at it differently. We need to look at how to use ML to validate your risks and assumptions and then concentrate investments. ML is going to help you find your answers faster.

Herman: Here’s the way I look at it: If we are going to think about how much money you could invest and bet on the future, maybe we have 7 percent of operating income to play with, and that’s about it. That has been in the common in the past, for us to spread that spending across four, five, or six different bets.

I think now we have to look at it differently. We need to look at how to use ML to validate your risks and assumptions, of how to validate your market and then concentrate investments. We can take that 7 percent and get more out of it. That’s how ML is going to help, it’s going to help you find your answers faster.

Gardner: How should organizations get themselves ready? What should organizations that want to become more intelligent -- to attain the level of an intelligent enterprise, an intelligent SMB -- what do you recommend that they do in order to be in a best position to take advantage of these tools?

Collaborate to compete 

Herman: Historically we asked, “What is your competitive advantage?” That’s something that we talked about in the 1980s, and then we later described learning as your core competency. Now in this time, it’s who you know. It’s your partnerships.

Going back to what Google learned, Google learned how to connect content together and make money. Facebook one-upped them by learning about the relationships, and they learned how to make money based on those relationships.

Going forward, customer networks and supply chains are your differentiation. To plan for that future, we need to make sure that we have clear ways to collaborate. We can work to make the partners strategic, and to focus our energy and bets on those partners who we believe are going to make us effective.

When you look at what are the key enablers, it’s going to be technology. It’s going to be analytics. To me that’s a given in these situations. We want to find someone who is investing, looking forward, and who brings in these new capabilities -- whether it’s bitcoin or something else that is transformative in how we make companies more network-driven.

Gardner: So perhaps a variation on the theme of Metcalfe’s Law -- that the larger the network, the more valuable it is. Maybe it’s now the more collaboration -- and the richer the sharing and mutually assured productivity -- the more likely you are to succeed.

Herman: I don’t think Metcalfe’s Law is over yet. We are going to find between now and 2020, that’s where this is at.

Gardner: I’m afraid we’ll have to leave it there. You have been listening to a sponsored BriefingsDirect discussion on how the powerful combination of deep analytics and procurement make businesses smarter and more efficient.

And we have learned how a new standard of corporate behavior emerges when the latest data science techniques are applied to more datasets that impact supply chains and optimize procurement business processes. So a big thank you to our guest, David Herman, Chief Data Scientist for Strategic Procurement at SAP Ariba. Thank you so much, David.

Herman: My pleasure.

Gardner: And thank you as well to our audience for joining this BriefingsDirect modern digital business innovation discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of SAP Ariba-sponsored BriefingsDirect discussions. Thanks again for listening, and do come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: SAP Ariba.

Transcript of a discussion on how the powerful combination of deep analytics and the procurement function make businesses smarter and more efficient. Copyright Interarbor Solutions, LLC, 2005-2018. All rights reserved.

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Monday, August 27, 2018

HPE and Citrix Team Up to Make Hybrid Cloud-Enabled Applications and Workspaces Simpler to Deploy

Transcript of a discussion on how hyperconverged infrastructure and virtual desktop infrastructure are combining to make one of the more traditionally challenging workloads far easier to deploy, optimize, and operate.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of the Customer podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on digital transformation success stories.

Hyperconverged infrastructure (HCI) and virtual desktop infrastructure (VDI) are combining to make one of the more traditionally challenging workloads far easier to deploy, optimize and operate. As businesses of every stripe seek to bring more VDI to their end users -- and to make the digital edge a virtual playground for workspaces and support devices -- HCI is proving a deployment back-end architecture of choice.

Now the benefits are being taken to managed cloud and hybrid cloud deployments as well. To learn more about the future of VDI powered by HCI and hybrid cloud, we are now joined by executives from two key players behind the solutions.

Please join me in welcoming Bernie Hannon, Strategic Alliances Director for Cloud Services at Citrix. Welcome, Bernie.

Bernie Hannon: Nice to be here, Dana. Thank you.

Gardner: We are also here with Phil Sailer, Director of the Software Defined and Cloud Group Partner Solutions at Hewlett Packard Enterprise (HPE). Welcome, Phil.

Phil Sailer: Thanks, Dana. Good to be here.

Gardner: Phil, what trends and drivers are making hybrid cloud so popular, and why does it fit so well into workspaces and mobility solutions?

Sailer: People are coming to realize that the world is going to be hybrid for some time when you look at the IT landscape. There are attractive attributes to public cloud, but there are many customers that are not ready for it or are unable to move there because of where their data needs to be. Perhaps, too, the economics don’t really work out for them.

There is also a lot of opportunity to improve on what we do in private data centers or in private cloud. Private cloud implies bringing the benefits of cloud into the location of a private data center. As our executives at HPE say, cloud is not a destination -- it’s a way to get things get done and how you consume IT.

Gardner: Bernie, how does hybrid cloud contribute to both opportunity and complexity?

Hannon: The premise of cloud has been to simplify everything. But in reality everybody knows that things are getting more and more complicated. A lot of that has to do with the fact that there’s an overwhelming need to access applications. The average enterprise has deployed more than 100 applications.

And users -- who are increasingly mobile and remote, are trying to access all of these applications on all kinds of devices -- they have different ways of accessing the apps and different log-in requirements. When they do get in, there are all sorts of different performance expectations. It has become more and more complicated.

Why hybrid cloud?

For the IT organization, they are dealing with securing all those applications – whether those apps are up in clouds or on premises. There are just so many different kinds of distributed organizations. And the more distribution, the more endpoints that have to be secured. It creates complexity -- and complexity equals cost.

Our goal is to simplify things for real by helping IT securely deliver apps and for users to be able to have simpler work experiences, so they can get what they need -- simply and easily from anywhere, on whatever device they happen to be carrying. And then lock everything down within what we call a secure digital perimeter.

Gardner: Before we look at VDI in a hybrid cloud environment, maybe we should explain what the difference is between a hybrid cloud and a private cloud.

Sailer: Let’s start with private cloud, which is simpler. Private clouds are within the company’s four walls, within their data centers, within their control. But when you say private cloud, you’re implying the benefits of cloud: The simplicity of operation, the capability to provision things very easily, even tear down and reconstruct your infrastructure, and consume resources on a pay-per-use basis. It’s a different financial model as well.
Learn More 
About HPE
SimpliVity HCI
So the usage and financial models are different, but it is still private. You also have some benefits around security and different economic benefits depending on the variety of parameters.

Hybrid cloud, on the other hand, is a mix between taking advantage of the economics and the flexibility you get with a public cloud provider. If you need to spin up some additional instances and resources for a short period of time, a very bursty requirement, for example, you may want a public cloud option.

In these environments you may have a mix of both hybrid and private clouds, because your workloads will have different requirements – a balance between the need for burstiness and for security, for example. So we see hybrid as being the most prevalent situation.

Gardner: And why is having that hybrid mix and choice a good thing when it comes to addressing the full desktop experience of VDI?

Hannon: Cloud is not one-size-fits-all. A lot of companies that originally started down the path of using a single public infrastructure-as-a-service (IaaS) cloud have quickly come to realize that they are going to need a lot of cloud, and that's why multi-cloud is really the emerging strategy, too.

The ability to seamlessly allow companies to move their workloads where they need to -- whether that’s driven by regulation requirements, governance, data sovereignty, whatever -- gives users a seamless work experience through their workspace. They don’t need to know where those apps are. They just need to know that they can find the tools they need to be productive easily. They don’t have to navigate to figure out where stuff is, because that's a constant battle and that just lessens productivity.

Gardner: Let’s dig into how HPE and Citrix specifically are working together. HPE and Citrix have talked about using the HPE SimpliVityHCI platform along with Citrix Cloud Services. What is it about your products -- and your cloud approach -- that delivers a whole greater than the sum of the parts?

Master cloud complexity  

Hannon: HCI for the last several years has been adding a huge amount of value to customers that are deploying VDI. They have simplified the entire management process down to a single management stack, reducing all that complexity. So hyperconverged means you don't need to have as much specialization on your IT staff to deploy VDI as you did in the past. So that's great.

So that addresses the infrastructure side. Now we are dealing with the app delivery side, and that has historically been very complicated. To address that, we have packaged the control plane elements used to run Citrix and put them in a cloud, and we manage it as-a-service.

So now we have Citrix-as-a-service up in the cloud. We call that Citrix Cloud Services. We have HPE SimpliVity HCI on the on-premises side. And now we can bring them together. This is the secret sauce that has come together with SimpliVity.

We have built scripting and tools that automate the process for customers who are ready to use Citrix Cloud Services. With just a few clicks, they get the whole process initiated and start to deploy Citrix from the cloud onto SimpliVity infrastructure. It really makes it simple, fast, and easy for customers to deploy the whole stack.

Gardner: We have seen new applications designed of, by, and for the cloud in a hybrid environment. But there are an awful lot of organizations that would like to lift and shift legacy apps and take advantage of this model, too. Is what you are doing together something that could lead to more apps benefiting from a hybrid deployment model?

Making hybrid music together 

Sailer: I give Citrix a lot of credit for the vision that they have painted around hybrid cloud. By taking that management plane and that complexity away from the customer --that is singing right off our song sheet when it comes to HPE SimpliVity.

We want to remove the legacy complexity that our customers have seen and get them to where they need to go much faster. Then Citrix takes over and gets them the apps that they need.

As far as which apps, there aren’t any restrictions on what you can serve up.

Gardner: Citrix has been the bellwether on allowing apps to be delivered over the wire in a way that's functional. This goes back some 20 years. Are we taking that same value that you pioneered from a client-server history and now extended to the hybrid cloud?

Hannon: One of the nice things about Citrix Cloud Services is that after we have established the relationship between the cloud service up in the cloud and the SimpliVity HCI on-premises -- everything is pretty much as it was before. We are not really changing the dynamics about how desktops and applications are being delivered. The real difference is how customers deploy and manage it.
Learn More 
About HPE
SimpliVity HCI
That said, customers are still responsible for managing their apps.  Customers need to modernize their apps and prepare them for delivery via Citrix, because that is a huge challenge for customers, and it always will be. Historically, everything needs to be brought forward.

We have tools like App Layering that help automate the process of taking applications that are traditionally premises-based -- not virtualized, and not available through app delivery -- and package them for virtual app and desktop delivery. It really amplifies the value of Citrix by being able to do so.

Gardner: I want to go back to my earlier question: What kinds of apps may or may not be the right fit here?

ROI with the right apps 

Sailer: Bernie, can you basically turn a traditional app into a SaaS app that's delivered through the cloud, in a sense, though not a traditional SaaS app, like a Salesforce or Asana or something like that? What are your thoughts?

Hannon: This is really something that is customer-driven. Our job is to make sure that when they want to make a traditional legacy application available either as a server-based app or as a virtual app on a virtual desktop -- that it is possible for them to do that with Citrix and to provide the tools to make that as easy as possible to do.

Which apps exactly are the best ones to do? That's really looking at best practices. And there are a lot of forums out there that discuss which apps are better than others. I am not personally an expert on trying to advise customers on whether you should do this app versus that app.
Our job is to make a traditional legacy application available either as a server-based app or as a virtual app on a virtual desktop, and to make that as easy as possible.

But we have a lot of partners in our ecosystem that work with customers to help them package their apps and get them ready to be delivered. They can help them understand where the benefits are going to be, and if there a return on investment (ROI) for doing certain apps versus others.

Gardner: That's still quite an increase from what we hear from some of the other cloud providers, to be honest. The public clouds make promises about moving certain legacy apps and app modernization, but when the rubber hits the road … not so much. You are at least moving that needle quite a bit forward in terms of letting the customer decide which way to go.

Hannon: Well, at the end of the day just because you can, doesn't always mean you should, right?

Gardner: Let's look at this through the lens of use cases. It seems to me a killer app for these app delivery capabilities would be the whole desktop, VDI. Let's start there. Where does this fit in? Perhaps Windows 10 migration? What are the other areas where you want to use hybrid cloud, with HPE SimpliVity on private and Citrix cloud on hybrid to get your whole desktop rationale process juiced up?

Desktop migration pathways

Hannon: The tip of the spear is definitely Windows 10 migration. There are still tens of millions of desktops out there in need of being upgraded. Customers are at a real pivot point in terms of making a decision: Do they continue down the path that they have been on maintaining and supporting these physical desktops with all of the issues and risks that we hear about every day? Do they try and meet the needs of users, who frankly like their laptops and take them with them everywhere they go?

We need to make sure that we get the right balance -- of giving IT departments the ability to deliver those Windows 10 desktops, and also giving users the seamless experience that makes them feel as if they haven’t lost anything in the process.

So delivering Windows 10 best is at the top of the list, absolutely. And the graphics requirements that go with Windows 10, of being able to deliver that as part of the user experience is very, very important. This is where HPE SimpliVity comes in and partners like NVIDIA who help us virtualize those capabilities, keeping the end users happy however they get their Windows 10 desktop.

Gardner: To dwell just for a moment on Windows 10 migration, cost is always a big factor. When you have something like HPE SimpliVity -- with its compression, with its de-dupe, with its very efficient use of a flash drives and so forth -- is there a total cost of ownership (TCO) story here that people should be aware of when it comes to using HCI to accomplish Windows 10 migrations?

Sailer: Yes, absolutely. When you look at HCI you have to do a TCO analysis. When I talk to our sellers and our customers and ask them, “Why did you choose SimpliVity, honestly, tell me?” It's overwhelmingly the ones that really take a close look at TCO that move to a SimpliVity stack when considering HCI.

Keeping the cost down, keeping the management cost down as well, and then having the ability to scale the infrastructure up and down the way they need -- and protect the data -- all within the same virtualized framework -- that pays off quite well for most customers.

Gardner: We talked about protecting data, so security impacts. What are some other use cases where you can retain control over desktops, control over intellectual property (IP), and with centralized and policy-driven management over assets? Tell us how hybrid cloud, private cloud, HPE SimpliVity, and Citrix Cloud work together in regard to privacy and security.

How much security is enough?

Hannon: The world is going remote, and users want to access their workspaces on whatever device they are most comfortable with. And IT is responsible for managing the policies – of who is using what on whatever devices. What’s needed, and what we deliver at Citrix, is the ability for these users to come in on any device that they have and uniformly be able to provide the same level of security.

Because how much security is enough security? The answer is there is never enough. Security is a huge driver for adoption of this hybrid cloud app delivery model. It allows you to keep your apps and data under lock and key, where you need them; on-premises is usually the answer we get.

But put the management up in the cloud because that's where the ease of delivering everything is going to occur. Then provide all of the great tools that come through a combination of Citrix, together with HPE SimpliVity, and our partners to be able to deliver that great user experience. This way the security is there, and the users don’t feel like they are giving up anything in order for that security to happen.
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Gardner: Let’s pursue another hybrid cloud use case. If you’re modernizing an entire data center, it might be easier to take everything and move it up into a public cloud, keep it there for a while, re-architect what you have on-premises and then bring it back down to have either private or hybrid production deployments.

Is there a hybrid benefit from the HPE and Citrix alliance that allows a larger migration of infrastructure or a refresh of infrastructure?

Opportunities outside the box 
Hannon: We know that a lot of customers are still using traditional infrastructure, especially where VDI is concerned. Hyperconverged has been around for a few years, but not that many customers have adopted it yet.

As the infrastructure that they have deployed VDI on today begins to come to end of life, they are starting to make some decisions about whether or not they keep the traditional types of infrastructure that they have -- or move to hyperconverged.

And more and more we are seeing our customers adopt hyperconverged. At the same time, we are presenting the opportunity for them to think out of the box and consider using a hybrid cloud model. This gets them the best of both -- the hyperconverged simplicity and relieves the IT department of having to manage the Citrix environment, of constantly doing updates, patches, and watching over operations. They let Citrix do that, and let the customers get back to managing the things that are really important -- and that's their applications, data, and security.

Gardner: Speaking of management, we are seeing the need as complexity builds around hybrid models for better holistic management capabilities across multi-cloud and hybrid cloud environments. We have heard lately from HPE about OneSphere and even OneSphere-as-a-service, so HPE GreenLake Hybrid Cloud.
There is probably no end to the things that are possible after this. We are going to start mapping out a roadmap of where we want to go.

Is this an area where the requirements of your joint customers can benefit, around a higher-order cloud management capability?

Hannon: We have just stuck our toe in the water when it comes to hybrid cloud, VDI, and the relationship that we have with HPE as we deploy this workspace appliance capability. But there is probably no end to the things that are possible after this.

We are going to start mapping out a roadmap of where we want to go. We have to start looking at the capabilities that are inside of HPE that are untapped in this model -- and there are a lot of them.

Take, for example, HPE’s recent acquisition of Plexxi. Now, software-defined networking has the potential to bring an enormous amount of benefit to this model. We have to sit down and think about how we can apply that and then work together to enable that in this hybrid cloud model. So I think there is a lot of opportunity there.

More to come

Gardner: So we should be looking for more to come along those lines?

Hannon: Watch this space.

Gardner: Before we sign off, there was some news at the recent Citrix Synergy show and there has been news at recent HPE shows, too. What are the specific products in the workspaces appliances space? What has been engineered that helps leverage HPE SimpliVity and takes advantage of Citrix?

Sailer: The Citrix Workspace Appliance Program enables customers to connect to the Citrix Cloud Services environment as easily as possible. We stuck with our traditional mantra that the interface should live where the administrator lives, and that’s within System Center Virtual Machine Manager, or within vSphere, depending on what your hypervisor choice is.

So in both locations we place a nice Citrix connector button right next to our own SimpliVity button. Within a few clicks, you are connected up into the cloud, and we just maintain that level of simplicity. Even through the process of setting all of this up, it's a very easygoing on-ramp to get connected into the cloud. And that ease of management continues right through the cloud services that Citrix provides.

We had this available in tech preview at the recent HPE Discover show, and we will be releasing later in the year the plug-ins.

Gardner: Bernie, tell us about your vision for how this appliance approach can be a go-to-market benefit. How should people be thinking about such ease in deployments?

Your journey to the cloud, at your pace 

Hannon: At the end of the day, customers are looking for options. They don’t want to be locked in. They want to know that their journey to the cloud, as Phil said, is not a destination; it’s a journey. But they are going to go at their own pace on how they adopt cloud. In some cases they will do it wholesale, and others they will do it in small, little steps.

These kinds of appliance capabilities add features that help customers make choices when they get to a fork in the road. They ask, “If I go hybrid cloud now, do I have to abandon all the infrastructure that I have?”
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No, your infrastructure is going to take you on that journey to the cloud, and that's already built in. We will continue to make those capabilities integrated and built-in, to make it possible for customers to just elect to go in that direction when they are ready. The infrastructure will be simplified and enable that to happen.

Gardner: I’m afraid we’ll have to leave it there. We have been exploring how HCI and VDI are combining to make it easier to deploy, optimize, and operate through hybrid cloud and appliance models. And we have seen how HPE and Citrix have aligned to extend the value of hybrid cloud via these approaches for a variety of high-priority use cases.

So please join me in thanking our guests, Bernie Hannon, Strategic Alliances Director for Cloud Services at Citrix. Thank you, Bernie.

Hannon: Thank you, very much. It has been great being here.

Gardner: And we have also been joined by Phil Sailer, Director of the Software Defined and Cloud Group Partner Solutions at HPE. Thank you, sir.

Sailer: Thanks, Dana. My pleasure.

Gardner: And thanks as well to our audience for joining this special BriefingsDirect Voice of the Customer digital transformation success story.

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-sponsored interviews. Thanks again for listening. Please pass this along to your IT community -- and do come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise

Transcript of a discussion on how hyperconverged infrastructure and virtual desktop infrastructure are combining to make one of the more traditionally challenging workloads far easier to deploy, optimize, and operate. Copyright Interarbor Solutions, LLC, 2005-2018. All rights reserved.

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