Showing posts with label Application modernization. Show all posts
Showing posts with label Application modernization. Show all posts

Wednesday, July 06, 2011

Case Study: T-Mobile's Massive Data Center Transformation Journey Wins Award Using HP ALM Tools

Transcript of a BriefingsDirect podcast on how awarding-winning communications company T-Mobile improved application quality, while setting up two new data centers.

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

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you from the HP Discover 2011 conference in Las Vegas. We're here on the Discover show floor the week of June 6 to explore some major enterprise IT solution trends and innovations making news across HP’s ecosystem of customers, partners, and developers.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, and I'll be your host throughout this series of HP-sponsored Discover live discussions.

Our latest user case study focuses on an award-wining migration and transformation and a grand-scale data center transition for T-Mobile. I was really impressed with the scope and size and the amount of time -- in terms of being short -- for you all to do this.

We're here with two folks who are going to tell us more about what T-Mobile has done to set up two data centers, and how in the process they have improved their application quality and the processes behind their application lifecycle management (ALM). [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

So join me in welcoming Michael Cooper, Senior Director of Enterprise IT Quality Assurance at T-Mobile. Welcome, Michael.

Michael Cooper: Thank you.

Gardner: We're also here with Kirthy Chennaian, Director Enterprise IT Quality Management at T-Mobile. Welcome.

Kirthy Chennaian: Thank you. It's a pleasure.

Gardner: People don’t just do these sorts of massive, hundred million dollar-plus activities because it's nice to have. This must have been something that was really essential for you.

Cooper: Absolutely. There are some definite business drivers behind setting up a world-class, green data center and then a separate disaster-recovery data center. Just for a little bit of a clarification. The award that we won is primarily focused on the testing effort and the quality assurance (QA) effort that went into that.

Gardner: Kirthy, tell me why you decided to undertake both an application transformation as well as a data center transformation -- almost simultaneously?

Chennaian: Given the scope and complexity of the initiative, ensuring system availability was primarily the major driver behind this. QA plays a significant role in ensuring that both data centers were migrated simultaneously, that the applications were available in real-time, and that from a quality assurance and testing standpoint we had to meet time-frames and timelines.

Gardner: Let's get a sense of the scope. First and foremost, Michael, tell me about T-Mobile and its stature nowadays.

Significant company

Cooper: T-Mobile is a national provider of voice, data, and messaging services. Right now, we're the fourth largest carrier in the US and have about 33 million customers and $21 billion in revenue, actually a little bit more than that. So, it's a significant company.

We're a company that’s really focused on our customers, and we've gone through an IT modernization. The data center efforts were a big part of that IT modernization, in addition to modernizing our application platform.

Gardner: Let's also talk about the scope of your movement to a new data center, and then we can get into the application transformation parts of that. In a nutshell, what did we do here? It sounds like we've set up two modern data centers, and then migrated your apps and data from an older one into those.

Chennaian: Two world-class data centers, as Michael had pointed out. One in Wenatchee, Washington and the other one is Tempe, Arizona. The primary data center is the one in Wenatchee, and the failover disaster-recovery data center is in Tempe, Arizona.

Cooper: What we were doing was migrating more than 175 Tier 1 applications and Tier 0, and some Tier 2 as well. It was a significant effort requiring quite a bit of planning, and the HP tools had a big part in that, especially in the QA realm.

Gardner: Now, were these customer-facing apps, internal apps, logistics? Are we talking about retail? Give me a sense of the scope here on the breadth and depth of your apps?

Chennaian: Significant. We're talking critical applications that are customer-facing. We're talking enterprise applications that span across the entire organization. And, we're also talking about applications that support these critical front-end applications. So, as Michael pointed out, 175 applications needed to be migrated across both of the data centers.

For example, moving, which is a customer-facing critical application, ensuring that it was transitioned seamlessly and was available to the customer in real-time was probably one of the key examples of the criticality behind ensuring QA for this effort.

Gardner: IT is critical for almost all companies nowadays, but I can't imagine a company where technology is more essential and critical than T-Mobile as a data and services carrier.

What's the case with the customer response? Do you have any business metrics, now that you’ve gone through this, that demonstrate not just that you're able to get better efficiency and your employees are getting better response times from their apps and data, but is there like a tangible business benefit, Michael?

Near-perfect availability

Cooper: I can't give you the exact specifics, but we've had significant increases in our system up-time and almost near-perfect availability in most areas. That’s been the biggest thing.

Kirthy mentioned That’s an example where, instead of the primary and the backup, we actually have an active-active situation in the data center. So, if one goes down the other one is there, and this is significant.

A significant part of the way that we used HP tools in this process was not only the functional testing with Quick Test Professional and Quality Center, but we also did the performance testing with Performance Center and found some very significant issues that would have gone on to production.

This is a unique situation, because we actually got to do the performance testing live in the performance environments. We had to scale up to real performance types of loads and found some real issues that -- instead of the customers facing them, they didn’t have to face them.

The other thing that we did that was unique was high-availability testing. We tested each server to make sure that if one went down, the other ones were stable and could support our customers.

We were able to deliver application availability, ensure a timeframe for the migration and leverage the ability to use automation tools.

Gardner: Now, this was a case where not only were you migrating apps, but you were able to go in and make sure that they were going to perform well within this in new environment. As you pointed out, Michael, you were able to find some issues in those apps in the transition, and at the same time simultaneously you upgraded to the more recent refreshes of the HP products to do that.

So, this was literally changing the wings on the airplane when it was still flying. Tell me why doing it all at once was a good thing.

Chennaian: It was the fact that we were able to leverage the additional functionality that the HP suite of products provide. We were able to deliver application availability, ensure a time-frame for the migration and leverage the ability to use automation tools that HP provides. With Quick Test Professional, for example, we migrated from version 9.5 to 10.0, and we were able to leverage the functionality with business process testing from a Quality Center standpoint.

As a whole, from an application lifecycle management and from an enterprise-wide QA and testing standpoint, it allowed us to ensure system availability and QA on a timely basis. So, it made sense to upgrade as we were undergoing this transformation.

Cooper: Good point, Kirthy. In addition to upgrading our tools and so forth, we also upgraded many of the servers to some of the latest Itanium technology. We also implemented a lot of the state-of-the-art virtualization services offered by HP, and some of the other partners as well.

Streamlined process

Using HP tools, we were able to create a regression test set for each of our Tier 1 applications in a standard way and a performance test for each one of the applications. So, we were able to streamline our whole QA process as a side-benefit of the data migration, building out these state-of-the-art data centers, and IT modernization.

Gardner: So, this really affected operations. You changed some platforms, you adopted the higher levels of virtualization, you're injecting quality into your apps, and you're moving them into an entirely new facility. That's very impressive, but it's not just me being impressed. You've won a People's Choice Award, voted by peers of the HP software community and their Customer Advisory Board. That must have felt pretty good.

Cooper: It feels excellent. In 2009, we won the IT Transformation Award. So, this isn't our first time to the party. That was for a different project. I think that in the community people know who we are and what we're capable of. It's really an honor that the people who are our peers, who read over the different submissions, decided that we were the ones that were at the top.

Gardner: And I hear that you've won some other awards as well.

Cooper: We've won lots of awards, but that's not what we do it for. The reason why we do the awards is for the team. It's a big morale builder for the team. Everybody is working hard. Some of these project people work night and day to get them done, and the proof of the pudding is the recognition by the industry.

Our CIO has a high belief in quality and really supports us in doing this. It's nice that we've got the industry recognition as well.

Honestly, we also couldn't do without great executive support. Our CIO has a high belief in quality and really supports us in doing this. It's nice that we've got the industry recognition as well.

Gardner: Of course, the proof of the pudding is in the eating. You've got some metrics here. They were pretty impressive in turns of availability, cost savings, reduction in execution time, performance and stability improvements, and higher systems availability.

Give me a sense, from an IT perspective, if you were to go to some other organization, not in the carrier business, of course, and tell them what this really did for you, performance and in the metrics that count to IT, what would you tell them?

Cooper: The metrics I can speak to are from the QA perspective. We were able to do the testing and we never missed one of the testing deadlines. We cut our testing time using HP tools by about 50 percent through automation, and we can pretty accurately measure that. We probably have about 30 percent savings in the testing, but the best part of it is the availability. But, because of the sensitive nature and competitive marketplace, we're not going to talk exactly about what our availability is.

Gardner: And how about your particular point of pride on this one, Kirthy?

Chennaian: For one, being able to get recognized is an acknowledgement of all the work you do, and for your organization as a whole. Mike rightly pointed out that it boosts the morale of the organization. It also enables you to perform at a higher level. So, it's definitely a significant acknowledgment, and I'm very excited that we actually won the People's Choice Award.

Gardner: A number of other organizations and other series of industries are going to be facing the same kind of a situation, where it's not just going to be a slow, iterative improvement process,. They're going to have to go catalytic and make wholesale changes in the data center, looking for that efficiency benefit.

You've done that. You've improved on your QA and applications lifecycle benefits at the same time. With that 20-20 hindsight, what would you have done differently, or at least what could you advise people who are going to face a similar large, complex, and multifaceted undertaking?

Planning and strategy

Chennaian: If I were to do this again, I think there is definitely a significant opportunity with respect to planning and investing in the overall strategy of QA and testing for such a significant transformation. There has to be a standard methodology. You have to have the right toolsets in place. You have to plan for the entire transformation as a whole. Those are significant elements in successful transformation.

Gardner: Monday morning quarterback for you, Michael?

Cooper: We did a lot of things right. One of the things that we did right was to augment our team. We didn’t try to do the ongoing work with the exact same team. We brought in some extra specialists to work with us or to back-fill in some places. Other groups didn’t and paid the price, but that part worked out for us.

Also, it helped to have a seat at the table and say, "It's great to do a technology upgrade, but unless we really have the customer point of view and focus on the quality, you're not going to have success."

We were lucky enough to have that executive support and the seat at the table, to really have the go/no-go decisions. I don't think we really missed one in terms of ones that we said, "We shouldn't do it this time. Let's do it next time." Or, ones where we said, "Let's go." I can't remember even one application we had to roll back. Overall, it was very good. The other thing is, work with the right tools and the right partners.

Gardner: With data center transformation, after all, it's all about the apps. You were able to maintain that focus. You didn’t lose focus of the apps?

It's great to do a technology upgrade, but unless we really have the customer point of view and focus on the quality, you're not going to have success.

Cooper: Definitely.The applications do a couple of things. One, the ones that support the customers directly. Those have to have really high availability, and we're able to speed them up quite a bit with the newest and the latest hardware.

The other part are the apps that people don't think about that much, which are the ones that support the front lines, the ones that support retail and customer care and so forth. I would say that our business customers or internal customers have also really benefited from this project.

Gardner: Well great. We've been talking about a massive undertaking with data center transformation and application QA and lifecycle improvements and the result was a People's Choice Award won here at the Discover Show in Las Vegas. It's T-Mobile, the winner. We've been talking with their representatives here. Michael Cooper, the Senior Director of Enterprise IT Quality Assurance. Thanks again, Michael.

Cooper: Thank you, and we're very proud of the team.

Gardner: We are also here with Kirthy Chennaian, the Director of Enterprise IT Quality Management at T-Mobile. Thanks.

Chennaian: Thank you. Very excited to be here.

Gardner: And thanks to our audience for joining this special BriefingsDirect podcast coming to you from the HP Discover 2011 Conference. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this series of User Experience Discussions. Thanks again for listening, and come back next time.

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

Transcript of a BriefingsDirect podcast on how awarding-winning communications company T-Mobile improved application quality, while setting up two data centers. Copyright Interarbor Solutions, LLC, 2005-2011. All rights reserved.

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Tuesday, May 18, 2010

IT's New Recipe for Success: Modernize Applications and Infrastructure While Taking Advantage of Alternative Sourcing

Transcript of a sponsored BriefingsDirect podcast on making the journey to improved data-center operations via modernization and creative sourcing in tandem.

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

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 on improving overall data-center productivity by leveraging all available sourcing options and moving to modernized applications and infrastructure.

IT leaders now face a set of complex choices, as they look for ways to manage their operational budget, knowing that discretionary and capital spending remain tight, even as demand on their systems increases.

One choice that may be the least attractive is to stand still as the recovery gets under way and demands on energy and application support outstrips labor, systems supply, and available electricity.

Economists are now seeing the recession giving a way to growth, at least in several important sectors and regions. Chances are that demands on IT systems to meet growing economic activity will occur before IT budgets appreciably open up.

So what to do? Our panel of experts today examines how to gain new capacity from existing data centers through both modernization and savvy exploitation of all sourcing options. By outsourcing smartly, migrating applications strategically, and modernizing effectively, IT leaders can improve productivity, while operating under tightly managed costs.

Economists are now seeing the recession giving a way to growth, at least in several important sectors and regions.

We'll also look at some data-center transformation examples with some executives from HP to learn how effective applications and infrastructure modernization improves enterprise IT capacity outcomes. And, we'll examine modernization in the context of outsourcing and hybrid sourcing, so that the capacity goals facing IT leaders can be more easily and affordably met, even in the midst of a fast-changing economy.

As we delve into applications and infrastructure modernization best practices, please join me in welcoming our panel: Shawna Rudd, Product Marketing Manager for Data Center Services at HP. Welcome, Shawna.

Shawna Rudd: Thank you.

Gardner: We're also here with Larry Acklin, Product Marketing Manager for Applications Modernization Services at HP. Welcome, Larry.

Larry Acklin: Hello.

Gardner: And, Doug Oathout, Vice President for Converged Infrastructure in HP’s Enterprise Services. Welcome, Doug.

Doug Oathout: Thank you, Dana. I'm glad to be here.

Gardner: Let me start with you, Doug. We're seeing some additional green shoots now across the economy, and IT services are also being taxed by an ongoing data explosion, the proliferation of mobile devices, use of social media, and new interfaces. So, what happens when the supply of budget -- that is to say, the available funding for innovation in new applications -- is lacking, even as the demand starts to pick up? What are some of the options that IT leaders have?

Tackling the budget

Oathout: Dana, when you look at the budgets still being tight in the tight economy, but business is starting to grow again, IT leaders really need to look strategically at how they're going to tackle their budget problem.

There are multiple sourcing options, there are multiple modernization tasks as well as application culling that they could do to improve their cost structure. What they need to do is to start to think about how, and what major projects they want to take on, so that they can improve their cash flow in the short-term while improving their business outcomes in the long-term.

At HP, we look at: how do I source products that are more beneficial to me -- outsourcing cloud and such -- to give us a better economic picture, and also using modernization techniques for application and infrastructure to improve the long-term cost structures.

At HP we also look at modernization of the software, and we look at outsourcing options and cloud options as ways to improve the financial situation for IT managers.

Gardner: Looking at this historically, have the decisions around outsourcing been made separately from decisions around modernization and infrastructure? Is it now time to bring two disparate decision processes together?

Oathout: Yes. In the past, companies have looked at outsourcing as a final step to IT, versus an alternate step in IT. We're seeing more clients, especially in the tight economy, that we have gone through, looking at a hybrid model.

How do I source things smartly that are non-mission critical or non-business critical to me to the outside world and then keep the stuff that is critical to my business within the four walls of the data center? There is a model evolving, a hybrid model between outsourcing and in-sourcing of different types of applications in different types of infrastructure.

Gardner: Let's go to you, Shawna. When we think about the decisions around sourcing, as Doug just pointed out, there seems to be a different set of criteria being brought to that. How do you view the decision-making around sourcing options as being different now than two, three or five years ago?

Rudd: Clients or companies have a wider variety of outsourcing mechanisms to choose from. They can choose to fully outsource or selectively out-task specific functions that should, in most cases, be able to provide them with substantial savings by looking at their operating expenses. Alternatively, as Doug just pointed out, we can provide many transformational and modernization type of projects that don’t require any outsourcing at all. Clients just have a wider variety of options to choose from.

Gardner: To you, Larry. As folks look at their current infrastructure and try to forecast new demands on applications and what new applications are going to be coming into play, are they faced with an either/or? Is this about rip and replace? How does modernization fit differently into this new set of decisions?

Acklin: It's definitely becoming a major challenge. The problem is that if you look purely at outsourcing in order to have additional investment for innovation, it will take you so far. It will take you to a point.

There needs to be a radical change in most businesses, because they have such a build-up of legacy technology, applications and so forth. There needs to be a radical change in how they move forward so they can free up additional investment dollars to be put back into the business.

Realigning the business and IT

More importantly, it's necessary to realign the business and the application portfolio, so that they're working together in order to address the new challenges that everyone is facing. These are challenges around growth: How do you grow so that, when you come out of a tough economy situation, the business is ready to go.

Investors are expecting that your company is going to accelerate into the future, providing better services to your market. How can you do that when your hands are completely tied, based on your current budget?

You know your IT budgets aren't going to increase rapidly, that there may be a delay before that can happen. So how do you manage that in the interim? That’s really where the combination of modernization and using various sourcing options is going to add additional benefit to be an enabler to get you to that agility that you want to get to.

Gardner: Larry, what would be some of the risks, if this change or shift in thinking and approach doesn't happen? What are some of the risks of doing nothing?

Acklin: We call that "the cost of doing nothing." That's the real challenge. If you look at your current spend and how you are spending your IT budgets today, most see a steady increase in expenses from year-by-year, but aren't seeing the increases in IT budgets. By doing nothing, that problem is just going to get worse and worse, until you're at a point where you're just running to keep the lights on. Or, you may not even be able to keep up.

The number of changes that have been requested by the business continues to grow. You're putting bandages on your applications and infrastructure to keep them alive. Pretty soon, you're going to get to a point, where you just can't stay ahead of that anymore. This is the cost of doing nothing.

If you don’t take action early enough, your business is going to have expectations of your IT and infrastructure that you can't meet. You're going to be directly impacting the ability for the company to grow. The longer you wait to get started on this journey to start freeing up and enabling the integration between your portfolio and your business the more difficult and challenging it's going to be for your business.

Gardner: Doug and Shawna, it sounds as if combining the decisions around modernizing your infrastructure and applications with your sourcing options is, in a sense, an insurance policy against the unknown. Is that overstating the opportunity here, Shawna?

Rudd: I don’t think so. Obviously, to Larry’s point, it's not going to get any cheaper to continue to do nothing. To support legacy infrastructure and applications it's going to require more expensive resources. It's going to require more effort to maintain it.

The same applies for any non-virtualized or unconsolidated environment. It costs more to manage more boxes, more software, more network connections, more floor space, and also for more people to manage all of that.

Greater risk

The risk of managing these more heterogeneous, more complex environments is going to be greater -- a greater risk of outages -- and the expense to integrate everything and try to automate everything is going to be greater.

Working with a service provider can help provide a lot of that insurance associated with the management of these environments and help you mitigate a lot of that risk, as well as reduce your cost.

Gardner: Doug, we can pretty safely say that the managed service providers out there haven’t been sitting around the past two or three years, when the economy was down. Many of them have been building out additional services, offering additional data and application support services. So, IT departments are now not only competing against themselves and their budgets, they are competing against managed service providers. How does that change somebody’s decision processes?

Oathout: It actually gives IT managers more of a choice. If you look at what's critical to your business, what's informational to your business, and you look at what is kind of the workflows that go on in your business, IT managers have many more choices of where they want to go source those applications or those job functions from?

As you look at service providers or outsourcers, there is a better menu of options out there for customers to choose from. That better menu allows you to compare and contrast yourself from a cost, service availability, and delivery standpoint, versus the providers in the marketplace.

IT managers have choices on where to source, but they also have choices on how to handle the capacity that fits within their four walls of the data center.

We see a lot of customers really looking at: how do I balance my needs with my cost and how do I balance what I can fit inside my four walls, and then use outsourcing or service providers to handle my peak workloads, some of my non-critical workloads, or even handle my disaster recovery for me?

So IT managers have choices on where to source, but they also have choices on how to handle the capacity that fits within their four walls of the data center.

Gardner: Let’s look at how you get started. What are some of the typical ways that organizations explore sourcing options and modernization opportunities? As I understand it, you have a methodology, a basic three-step approach: outsource, migrate, and modernize.

Let’s take each one of these and start with outsourcing smartly. Shawna, what does that mean, when we talk about these three steps in getting to the destination?

Rudd: From an outsourcing standpoint, it’s simply one mechanism that clients can leverage to facilitate or help facilitate this transformation journey that they may be looking to, as they go on to help generate some savings, which will help fund other maybe more significant modernization or transformational efforts.

We help clients maintain their legacy environments and increase asset utilization, while undertaking those modernization and transformation efforts. From an outsourcing standpoint, the types of things that a client can outsource could vary, and the scope of that outsourcing agreement could vary -- the delivery mechanism or model or whether we manage the environment at a client’s facility or within a leveraged facility.

Bringing value

All those variables can bring value to a client, based upon their specific business requirements. But then, as the guys will talk about in a second, the modernization or the migration and the modernization yields additional savings to those clients’ business.

So, from an outsourcing standpoint, it’s that first thing that will help generate savings for a client and can help fund some of the efforts that will generate incremental savings down the road.

Gardner: The second step involves migration. Who wants to handle that, and what does that really mean?

Oathout: Let me start and then I'll hand it over to Larry. When we talk about migration, we can look at different types of applications that migrate simply to modern infrastructure. Those applications can be consolidated onto fewer platforms into a more workflow-driven automated process.

We can get a 10:1 consolidation ratio on servers. We can get a 5-6:1 consolidation ratio on storage platforms. Then, with virtual connectivity or virtual I/O, we can actually have a lot less networking gear associated with running those applications on the servers and the storage platform.

When you look at modernizing your applications and look at modernizing infrastructure, they have to match.

So, if we look at just standard applications, we have a way to migrate them very simply over to modern infrastructure, which then gives you a lower cost point to run those applications.

Gardner: Now, not all applications are created or used equally. Is there a difference between what we might refer as core or context applications, and does that come into play when we think about this migration?

Oathout: Oh, it definitely does. There are some core applications that are associated with certain platforms that we can consolidate on the bigger boxes, and you get more users that way. Then, there are context applications, which are more information-driven, and which can easily continue to grow. That's one of the application areas that continues to grow, and you can't see how fast it's going to grow, but you can scale that out onto modern platforms.

As you have more work, you have more information, and you can grow those systems over time. You don't have to build the humongous systems to support the application, when it’s just starting out. You can build it over time.

There's a lot we can do with the different types of applications. When you look at modernizing your applications and look at modernizing infrastructure, they have to match. If you have a plan, you don't have to buy extra capacity when you start. You can buy the right capacity then grow it, as you need it.

Specific path

Acklin: Let me add a little bit to that. When we look at these three phases together, we ordered them this way for a specific path to minimize the risk as part of it. Outsourcing can drive some initial savings, maybe up to 40 percent, depending on the scope of what you're looking at for a client. That's a significant improvement on its own.

Not every client sees that high of a saving, but many do. The next step, that migration step that we’ve talked about, where we’re also migrating over to a consolidated infrastructure, allows you to take immediate actions on some of your applications as well.

In that application space, you can move an application that may be costing you significant amounts of the dollars whether it be, license fees or due to a lack of skilled resources and so forth on a legacy platform. Migrating those or keeping the application intact, running on that new infrastructure, can save you significant dollars, in addition to the initial work you did as part of the outsourcing.

The nice thing, as you do these things in parallel, is that it's a phase journey that you are going through, where they all integrate. But, you don't have to. You can separate them. You can do them one without the other, but you can work on this whole holistic journey throughout.

The migration of those applications, basically leaves those applications intact, but allows them to have a longer lifespan than you may typically would. A great example of this is, if you had an application that you want to eventually replace with a ERP system of some sort, or that business process is going to be changed in the future in some way, but we still need to do something about this cost-saving problem today.

When you move into that modernized phase, you're really trying to change the structure of those applications, so that you can take advantage of the latest technology to run cloud computing and everything operating as a service.

It's a great middle step. We can still drive significant 40-50 percent saving, just through this migration phase of moving that application onto this new infrastructure environment and changing the way that those cost structures around software and so forth are allocated towards that. It frees up short-term gain that can turn around to be reinvested in the entire modernization journey that we're talking about.

Gardner: So, if I understand that correctly, when we get to the modernization phase, we've been able to develop the capacity and develop a transformation of the budget from operations into something that can be devoted to additional new innovation capacity.

Acklin: Right. Then as you continue that journey, you're starting to get your cost structures aligned and you're starting to get to a place where your infrastructure is now flexible and agile. You’ve got the capacity to expand. When you move into that modernized phase, you're really trying to change the structure of those applications, so that you can take advantage of the latest technology to run cloud computing and everything operating as a service.

Future technologies allow us to enable the business for growth in the marketplace. Right now, many of our applications handcuff the business. It takes months to get a new product or service out to the market. By changing over to a service-oriented model, you're saving a lot of cost component here, but you're adding that agility layer to your applications and allowing your business to expand and grow.

Gardner: Before we go to some examples, I'm curious about what happens. What benefits can occur when you play these three aspects of this journey together?

There is sort of a dance, if you will, of three partners. When you apply them to the specific needs, requirements, and growth patterns within specific companies, what types of benefits do we get? Is this about switching to a more pay-as-you-go basis? Is this about reduced labor or improved automation?

Let's start with you, Shawna. What are some of the paybacks that companies typically get when they do this correctly?

Some 30 percent savings

Rudd: They can achieve about 30 percent savings, obviously depending on what they outsource and how much they outsource. Those savings will be achieved through the use of best-shore resources through the right sizing of their hardware and software environments, consolidation, virtualization, automation, standardization, processes, and technologies.

And, then they'll achieve incremental cost savings. As Larry said, it can be upward of 40-60 percent from migrating some of that low-hanging fruits, or those applications that are easily lifted and shifted to lower cost platforms. So, they'll reduce the associated IT and application expenses that are also the ongoing management expense. Then, as they continue to modernize those environments, they'll achieve additional efficiencies and potentially some additional savings.

In that scenario, in which they have combined everything, when they work with a single source provider to help them go through that journey and help facilitate that journey, the transitions, the hand-offs, and all of that should go much more smoothly.

The risk to the client, to the client's business, should be better mitigated, because they're not having to coordinate with four or five different vendors, internal organizations, etc. They have one partner who can help them and can handle everything.

Gardner: Doug, to you. When this is done properly, what are some of the high-level payoffs? What changes in terms of productivity at the most general level?

IT is now seen as adding value to the business versus just being the cost center, and the paybacks are unbelievable.

Oathout: The big thing that changes, Dana, is that when you go through this journey at the end, IT is aligned to the businesses. So, when a business wants to bring on a new application or a new product line, IT can then respond and stand up a new application in hours instead of months.

They can flex the environment to meet a marketing campaign, so you have the ability to do the transactions when a major TV advertisement goes on or when something happens in the industry. You get the flexibility and you get the efficiencies, but what you really get is IT is acting as a service provider to the line of business, and IT is now a partner with the business versus being a cost center to that business.

That's the big transformation that happens through this three-step process. IT is now seen as adding value to the business versus just being the cost center, and the paybacks are unbelievable.

You move from deploying an application in months to two hours. The productivity of your IT department gets two or three times better. You can now plan to run your data centers or your IT at normal workloads. Then, when peaks come in, you can outsource some of the work to service providers or to your outsource partner.

Your actual IT is running at average load, and you don't have to put all the extra equipment in there for the peak. You actually outsource it, when that peak comes. So, at the end of this journey, there is a whole different business model that is much more efficient, much more elastic, and much more cost-effective to run the business of the future.

Gardner: Larry, to you. What are your more salient takeaways in terms of benefits from doing this all correctly?

Don't have to wait

Acklin: I’ll just add to what Shawna and Doug have said already. One of the bigger benefits that you achieve is that the business doesn't have to wait. Many times, if you're a CIO, you have to tell your business-owners that you've got to wait. "I need to go through. I'm in the midst of this outsourcing operation. I'm trying to change the way we're providing service to the business." That can take time."

The idea of putting the outsourced, migrated, modernized phases together is that they're not sequential. You don't have to do one, then the other, and then the other. You can actually start these activities in parallel. So, you can start giving benefits back to the business immediately.

For example, while you're doing the outsourcing activities and getting that transition set up, you're starting to put together what your future architecture is going to look like for your future state. You have to plan how the business processes should be implemented within the application and the strategic value of each application that you currently have in your portfolio.

You're starting to build that road map of how you are going to get to the end state. And then Even as you continue through that cycle, you're constantly providing benefits back to both the business and IT at the same time.

You really build that partnership between the two. So, when you reach the end, that is the completely well-oiled machine working together -- both the business and IT -- to reach their objectives.

Even as you continue through that cycle, you're constantly providing benefits back to both the business and IT at the same time.

Gardner: Let’s look at some examples that we mentioned earlier. This can vary dramatically from organization to organization, and coming at this from different angles means that they might prioritize it in different ways. Perhaps we can look at a couple of examples to illustrate how this can happen and what some of the payoffs are. Who wants to step up first for an example on doing these three steps?

Oathout: I'll go first. One example that we worked very closely was in services with our customer France Telecom. France Telecom transitioned 17 data centers to two green data centers. Their total cost of ownership (TCO) calculation said that they were going to save €22 million (US $29.6 million) over a three-year period.

They embarked on this journey by looking at how they were going to modernize their infrastructure and how they were going to set up their new architecture so that it was more flexible to support new mobile phone devices and customers as they came online. They looked at how to modernize their applications so they could take advantage of the new converged infrastructure, the new architectures, that are available to give them a better cost point, a better operational expense point.

France Telecom is a normal example where you consolidate 17 data centers to two, but it’s not abnormal when a company goes through this three-step process, to make a significant change to the IT footprint, make a significant change in how they do their business to support the lines of businesses that require new applications and new users to come online relatively quickly.

Gardner: Doug, how would you characterize the France Telecom approach? Which of the three did they emphasize?

Emphasis on migration

Oathout: They really emphasized the migration as the biggest one. They migrated a number of applications to newer architectures and they also modernized their application base. So, they focused on the last two, the modernization and the migration, as the key components for them in getting their cost reductions.

Gardner: Okay, any other examples?

Acklin: I'll talk about another one. The Ministry of Education in Italy (MIUR) is another good example, where a client has gone on this whole journey. In that situation, they had outsourced some of their capabilities to us -- some of their IT management. But, they were challenged with some difficult times. The economy hit them hard, and being a government agency, they were under a lot of pressure to consolidate IT departments globally.

It’s a very, very large organization built up over the years. Most of the applications were built back in the early 1980s or earlier than that. They were mainframe-based, COBOL, CICS, DB2 type applications, and they really weren’t servicing the business very well. They were really making it a challenge.

In addition to all of the legacy technologies, the CIO also had the challenge of consolidating IT departments. They had distributed IT departments. So, they had to consolidate their IT departments as part of this activity.

On top of all that, they were given the challenge to reduce their headcount significantly due to the economic crisis. So, it became a very urgent journey for this client to go on, and they began going through that. Their goal was, as I said, reducing IT, improving agility, being able to respond to change, and doing a lot more with a lot less people in a consolidated manner.

At the end they ended up seeing a 2X productivity improvement and return on investment (ROI) in less than 18 months. They reduced their app support by over 30 percent and they reduced their new development cost by close to 40 percent.

As they went through their transformation, they went through the whole thing. They assessed what they had. They put their strategy together and where they wanted to go. They figured out what applications they needed and how they were going to operate.

They optimized the road map for them to reach their future state, established a governance program to keep everything in alignment while they went on this journey, and then they executed this journey.

They used a variety of methods for modernizing their applications and migrating over to the lower cost platforms. Some of them they re-architected into new service-based models to provide services to their students and teachers through the web.

At the end they ended up seeing a 2X productivity improvement and return on investment (ROI) in less than 18 months. They reduced their app support by over 30 percent and they reduced their new development cost by close to 40 percent.

Those are significant challenges that the CIO took on, and the combination of improving their applications and infrastructure through outsourcing and modernization model helped them achieve their goal. The CIO will tell you that they could never have survived all the pressure they were under without going on a journey like this.

Gardner: Shawna, do we have a third example?

No particular order

Rudd: This is an example, not naming a specific client, but also making another point, that the things we're talking about don't have to occur in this particular order -- this one, two, three step order.

I know of other clients for whom we've saved around 20 percent by outsourcing their mainframe environments. Then, after successfully completing the transition of those management responsibilities, we've been able to further reduce their cost by another 20 percent simply by identifying opportunities for code optimization. This was duplicate code that was able to be eliminated or dead code, or runtime inefficiency that enabled us to reduce the number of apps that they required to manage their business. They reduced the associated software cost, support cost, etc.

Then there were other clients for whom it made more sense for us to consider outsourcing after the completion of their modernization or migration activities. Maybe they already had modernization and migration efforts underway or they had some on the road map that were going to be completed fairly quickly. It made more sense to outsource as a final step of cost reduction, as opposed to an upfront step that would help generate some funding for those modernization efforts.

Gardner: For those folks who see the need in their organization and understand the rationale behind these various steps, where do they get started, how can they find more information? Let me start with you, Doug. Are the information resources easily available.

Oathout: Well, Dana, there are a ton of different places to start. There's your HP reseller, the HP website, and HP Services. If a customer is thinking about embarking on this journey, I'd contact HP Services and have them come out and do a consulting engagement or an assessment to lay out the steps required.

If you're embarking on the journey on modernization, contact your HP reseller and HP seller and have them come show you how to do consolidation and virtualization to really modernize your infrastructure. If you're having the conversation about applications, contact HP Services. They can look at your application portfolio and show you the experience that they have in modernizing those applications or migrating those applications to modern equipment.

We'll cover everything from how to figure out what you have, what you are planning, how to build the road map for getting into the future state, as well as all the different ways that will impact your business and enterprise along the way.

Gardner: Any additional paths to how to start from your perspective, Larry?

Acklin: Let me add to that. If you're in situation where you think modernization, but you're not positive, you're still trying to get a good understanding of what's involved, go on one of these trainings. We offer something that's called the Modernization Transformation Experience Workshop. It's basically a one-day activity workshop, a slide-free environment, where we bring you and take you through the whole journey that you'll go on.

We'll cover everything from how to figure out what you have, what you are planning, how to build the road map for getting into the future state, as well as all the different ways that will impact your business and enterprise along the way, whether you are talking technology infrastructure, architecture, applications, business processes, or even the change management of how it impact your people.

We go through that entire journey through this workshop. So you come out understanding what's you're getting yourself into and how it can really affect you as you go forward. But, that's not the only starting point. You can also jump into this modernization journey at any point in the space.

Maybe, for example, you've already figured out that you needed to do this, maybe you've tried some things on your own in the past, but really need to get external help. We have assessment activities that allow us to jump in at any point along this journey.

Whether it's to help you see where there are code vulnerabilities within your existing applications that visually show you what those things look like and where opportunities are for modernization, or whether it's to do a full assessment of your environment and figure out how your apps and your infrastructure are working for your business or, in most cases not working for your business, it allows you to jump in at any stage throughout that whole journey.

As Doug mentioned, HP can help you figure out the right place for beginning that journey. We have hundreds of modernization experts globally who can help you figure out where to start.

Gardner: Do we have any other closing thoughts on the process of getting started?

Acklin: Let me just mention one other item. We talked about this cost of doing nothing. Don't let any fears or doubts about this journey stop you from beginning the journey. There are many things that can get you in trouble with that cost of doing nothing. That time is coming for you, when you're not going to be able to make those changes. So, don't let those fears stop you from going on that journey.

An example of this is financial. Many of our clients we talk to, don’t know how they would pay for a journey like this. Actually, you have a lot of options right in front of you that you can take advantage of. Our modernization consultants can give you some good methods on how to cover this, how to put things together like these three phase activities, or how to go on these journeys that can still work for you even in tough financial times.

Gardner: Great. We've been talking about improving overall data-center productivity by leveraging available sourcing options as well moving to modernized applications and infrastructure. I want to thank our guest for today's panel. We've been here with Shawna Rudd, Product Marketing Manager for Data Center Services at HP. Thank you, Shawna.

Rudd: Thank you.

Gardner: And Larry Acklin, Product Marketing Manager for Application Modernization Services at HP. Thank you, Larry.

Acklin: Thank you.

Gardner: And Doug Oathout, Vice President of Converged Infrastructure at HP Enterprise Services. Thanks, Doug.

Oathout: Thank you, Dana.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks for listening, and come back next time.

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

Transcript of a sponsored BriefingsDirect podcast on making the journey to improved data-center operations via modernization and creative sourcing in tandem. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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