Data Center Transformation Includes More Than New Systems, There's Also Secure Data Removal, Recycling, Server Disposal

Transcript of a sponsored podcast discussion on how proper and secure handling of legacy equipment and data is an essential part of data center modernization planning and cost reduction.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. 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 an often-overlooked aspect of data center transformation (DCT), and that is what to do with the older assets inside of data centers as newer systems come online.

DCT is a journey, and an essential part of that process is modernizing, but at the same time sun-setting older systems must come with data protection in mind, and even with an eye to monetize those older systems, or at least recycle them properly.

Properly disposing of data, and other IT assets, is an often overlooked, and under-appreciated element of the total data center transformation journey, but it’s one that can cause great disruption and an increase in costs, if not managed well.

Compliance and recycling issues, as well as data security concerns and proper software disposition should therefore be top of mind. We'll take a look at how HP manages productive transitions of data center assets -- from security and environmental impact, to recycling and resale, and even to rental of new and older systems during a DCT process.

Indeed, many IT organizations are largely unaware of the security and privacy risks of the systems that they need to find a new home for and can often find themselves delivered to the wrong hands. So thinking through the retirement of older assets should be considered early in the DCT process.

With us now to explain how to best take care of the older systems reducing risk, as well as providing a financial return, are Helen Tang, Worldwide Data Center Transformation Lead for HP Enterprise Business, and Jim O'Grady, Director of Global Life Cycle Asset Management Services with HP Financial Services. Welcome to the show.

Helen, let me start with you. As I mentioned, we've got a whole lifecycle to think about with DCT, but what’s driving the market right now? Where are the enterprises involved with DCT going, and how can we start thinking about the total picture in terms of how to do this well?

A total solution

Helen Tang: That’s a great question, Dana. HP really started marketing DCT as a total solution that spans hardware, software, and services throughout the entire life cycle in 2008, when we launched the solution. Since then, we've had about 1,000 customers take this journey to very successful results.

I would say 2010 is a very interesting year for DCT number one, because of the economic cycle. We are -- fingers crossed -- slowly coming out of this recession, and we're definitely seeing that IT organizations have a little bit more money to spend.

This time around, they don’t want to repeat past mistakes, in terms of buying just piles of stuff that are disconnected. Instead, they want a bigger strategy that is able to modernize their assets and tie into a strategic growth enablement asset for the entire business.

So, they've turned to vendors like HP and said, "What do we do differently this time and how do we go about it in a much more strategic fashion?" To that end, we brought together the entire HP portfolio, combining hardware, software, and services, to deliver something that helps customers in the most successful fashion.

When you look at the entire life cycle, some of them are starting with consolidation. Some of them already did a lot of virtualization, and they want to move to more holistic automation. So, throughout that entire process, as you mentioned earlier, there's a lot to think about, when you look at hardware and software assets that are probably aged and won’t really meet today’s demands for supporting modern applications.

How to dispose of those assets? Most people don’t really think about it nor understand all of the risks involved. That’s why we brought Jim here to talk to you more about this.

Gardner: Helen, as I understand it, it's often a 10- or 20-year cycle, when you completely redo or transform a data center. So there probably aren’t people around with the skills to remember the last time their organization disposed of a data center. This is a fairly new activity, something you might need to look to outside help for.

Tang: Absolutely. Of course, there are different pieces to the DCT picture. When you say 10 or 20 years, that’s generally referring to the lifecycle of facilities. Within that, hardware usually lasts between 5 and 8 years. But the problem is that today there are the new things coming about that everybody is really excited about, such as virtualization, and private cloud. Even experienced IT professionals, who have been in the business for maybe 10, 20 years, don’t quite have the skills and understanding to grasp all this.

In HP, we're in a unique vantage point of being the number one technology company. We're about 300,000 strong in terms of headcount, and about half of those are consultants who have expertise across all these data center technologies. As I mentioned earlier, we've helped over 1,000 customers. So, we have a lot of practical hands-on experience that can be leveraged to help our customers.

Gardner: Jim O'Grady, it sounds as if the risk here is something that a lot of these organizations don’t appreciate. What are the levels of risk that are typical, if you wait until the last minute and don’t think through the proper disposal of your existing or older assets?

Brand at stake

Jim O'Grady: We're not trying to overstate that risk too much. But the risk may be that you are simply putting your company’s brand at stake, through improper environmental recycling compliance, or exposing your clients, customers, or patients’ data to a security breach. This is definitely one of those areas you don’t want to read about in a newspaper to figure out what went wrong.

We see that a lot of companies try to manage this themselves, and they don’t have the internal expertise to do it. Often, it’s done in a very disconnected way in the company. Because it’s disconnected and done in many different ways, it leads to more risks than people think. If you know how to do it correctly in one part of your enterprise and you are doing it differently in another part of your enterprise, you have a discrepancy that’s hard to explain, because you're not learning from yourself and you're not using best practices within the organization.

Also, a lot of our clients choose to outsource this work to a partner. They need to keep in mind that they are sharing risk with whomever they partner with. So, they have to be very cautious and be extremely picky about who they select as a partner.

You have to feel very comfortable that your partner’s brand is as respected as your brand, especially if you are defending what happened to your board of directors or, worse yet, you get into a legal proceeding. If you don’t kick the tires with your partner and you don’t find out that the partner consists of a man, a dog, and a pickup truck, you just may have a hard time defending yourself as to why you selected that partner.

This may sound a bit self-serving, but I always suggest for enterprises to resist smaller local vendors. Use the fewest number of vendors that can manage your business scale and geographic coverage requirements. This is an industry where low barriers to entry really just don’t match up to the high levels of customer accountability required to properly manage your end-of-use asset disposition.

We also suggest that they have a well thought-out plan for destroying or clearing data prior to the asset decommissioning.

Gardner: So while we can have very significant risk, on the other hand we also know that there are proper, well-established, well-understood ways of doing this correctly. Even though the risk might not be understood, doing this right is possible.

Tell me some of the basic steps of doing this properly, where you don’t run into these risks, where you have thought it through or found those who have established best practices well under control.

O'Grady: Some of the best practices that we recommend to our customers is to have a well-established plan and budget up-front, one that’s sponsored by a corporate officer, to handle all of the end-of-use assets well before the end-of-use period comes.

We also suggest that they have a well thought-out plan for destroying or clearing data prior to the asset decommissioning and/or prior to the asset leaving the physical premise of the site. Use your outsource partner, if you have one, as a final validation for data security. So, do it on site, as well as do it off site.

Vendor qualification

Also, develop a very strong vendor audit qualification and ongoing inspection process. Visit that vendor prior to the selection and know where your waste stream is going to end up. Whatever they do with the waste stream, it’s your waste stream. You are a part of the chain of custody, so you are responsible for what happens to that waste stream, no matter what that vendor does with it.

So, you need to create rigorous documented end-to-end controls and audit processes to provide audit trails for any future legal issues. And finally, select a partner with a brand name and reputation for trust and integrity. Essentially, share the risk.

Gardner: What about environmental issues? These can vary pretty widely. Maybe you don’t know about these risks, but as you say, you're going to be responsible for them. Tell me about the environmental and even recycling aspects of this equation.

O'Grady: You're right. That’s one of the most common areas where our clients are caught unaware of the complexity of the data security, the e-waste legislation requirements that are out there, and especially the pace of its change.

Legislation resides at the state, local, national, and regional levels, and they all differ. There's some conflict, but some are in line with each other. So it's very difficult to understand what your legislative requirements are and how to comply. Your best bet is to deal with a highest standard and pick someone that knows and has experience in meeting these legislative requirements.

Legislation resides at the state, local, national, and regional levels, and they all differ.

Gardner: Now, part of the process that you're addressing is not just what to do with these assets, but how to make the transition seamless. That is to say, your service level agreements (SLAs) are met and that the internal users or external customers for your organization don't know that there is this transition going on.

So, in addition to what we've talked about in terms of some of these assets and environmental and security issues, how can you also guarantee that all the lights stay on and the trains keep running on time?

O'Grady: HP Financial Services (HPFS) has a lot of asset management capabilities to bring to bear, to help customers through their DCT. A lot of it is financial-based capability and services and a lot of it is non-financial based.

Let me explain. From a financial asset ownership model, HPFS has the ability to come in and work with a client, understand what their asset management strategy is, and help them to personalize the financial asset ownership model that makes sense for them.

For example, perhaps a client has a need to monetize some of their existing IT asset base. Let's just say there are existing data center assets somewhere. We have the asset-management expertise to structure a buyout for those targeted data-center assets and lease those same assets back to the client with a range of flexible terms, potentially unlocking some hidden capital for them to exploit elsewhere, perhaps funds for additional data center capacity.

Managing assets

That's just one of many examples of how we help our clients manage their assets in a more financially leveraged way. In addition to that, customers often have a requirement to support legacy gear during the DCT journey HPFS can help customers with pre-owned legacy HP product.

We're able to provide highly customized pre-owned authentic legacy HP product solutions, sometimes going back 20 years or more. We're seeing a big uptake in the need to support legacy product, especially in DCT. The need for temporary equipment just scaling out legacy data center hardware platform capacity that’s legacy locked is an increasing need that we see from our clients.

Clients also need to ensure their product is legally licensed and they do not encounter intellectual property right infringements. Lastly, they want to trust that the vendor has the right technical skills to deal with the legacy configuration and compatibility issues.

Our short-term rental program covers new or legacy products. Again, many customers need access to temporary product to prove out some concepts, or just to test some software application on compatibility issues. Or, if you're in the midst of a transformation, you may need access to temporary swing gear to enable the move.

Finally, customers should consider how they retire and recover value for their entire end-of-use IT equipment, whether it's a PDA or supercomputer, HP or non-HP product.

We can help educate customers on the hidden risk and dispositioning that end-of-use equipment into the secondary market.

In summary, most data center transformations and consolidations typically end with a lot of excess or end-of-use product. We can help educate customers on the hidden risk and dispositioning that end-of-use equipment into the secondary market. This is a strength of HPFS.

Gardner: Jim, you mentioned global a few times. Help me understand a little more about the global benefits that HP is bringing to the table here in terms of managing multiple markets, multiple regulation scenarios, and some of these other secondary market issues.

O'Grady: From what I see in the market, there are tremendous amounts of global complexities that customers are trying to overcome, especially when they try to do data center consolidation and transformation, throughout their enterprise across different geographies and country borders.

You're talking about a variety of regulatory practices and directives, especially in the EU, that are emerging and restrict how you move used and non-working product across borders. There are a variety of different data-security practices and environmental waste laws that you need to be aware of.

Gardner: Let’s look at some examples. It’s one thing to understand this at a high level, but seeing it in practice is a lot more edifying and educational. So, I guess HP is a good place to start.

What did you learn when you had to take many different data centers from a lot of merger and acquisition activity in many different markets? Tell me a little about the story of HP’s data centers, when it comes to properly sun-setting and managing all of those assets.

Creating three data centers

O'Grady: First, let me explain what were up against in terms of the complexities of consolidating HP’s data centers. There were about 85 worldwide data centers located in 29 different countries, and we were consolidating down to 6 data centers within three U.S. geographical zones. Essentially, we were creating three prime data centers and three backup data centers.

HP decommissioned over 21,000 assets over a one-year period. In addition, there were another 40,000 data center related assets. The majority of the data center servers were being ported to new technologies. So, this really left a tremendous amount of IT product to be decommissioned, retired, and to recover value for.

HPFS was asked to come in and take control of the entire global reverse logistics, the off-site data security plan, as well as the asset re-marketing and recycling process.

The first thing that we had to do was establish a global program office with dedicated support. This is almost required for every larger global asset recovery project in the market, so there can be a single coordination point and focus to make all the trains run on time, so to speak, and to manage and reconcile a single financial and asset reporting process. This is critical.

HP wanted to have one place, one report, with reconciled asset level detail that demonstrated that every single asset came back was audited, wiped of data, and was recycled in an environmentally compliant way.

We also needed to set up a global reverse logistics strategy that proved to be extremely challenging as well. HP had SWAT teams deployed for time-critical de-installs in some of the smaller remote locations. They needed us to position secured truck vehicles to be there within a one-hour window, where there was no local storage available to store the data center equipment as it came out of the data center.

We were able to hand back apparent net recovery, versus a bill for our services. They were quite pleased with that result.

We also had to act as a backup for data eradication. HP’s policy was to wipe the data on-site, but they realized that that’s not always a perfect process, and so they wanted us to again wipe all of the equipment as it came back into our process.

Last, but not least, recovering value for the older end-of-use assets was one of our highlighted strengths. We found 90 percent of the decommissioned data center products to be re-marketable, and that’s not unusual in the market. We were able to hand back apparent net recovery, versus a bill for our services. They were quite pleased with that result, and it must have worked out more than okay, because I am still around to describe what we did.

Gardner: I can see now why this is under Financial Services. This really is about auditing, making sure that every asset is managed uniquely and fully, and that nothing falls through the cracks. But, as you point out, there is this whole resale, with the regulation and recycling issues to be managed as well.

Tell me a little more about this. Obviously for HP, you were doing it for your own good. Are there some other examples that we can look to where that bill has been much lower because of the full exercise of your financial secondary market activities?

A key strength

O'Grady: Sure. That’s where we think our strength is. If you look at a leasing organization, when you lease a product, it's going to come back. A key strength in terms of managing your residual is to recover the value for the product as it comes back, and we do that on a worldwide basis.

We have the ability to reach emerging markets or find the market of highest recovery to be able to recover the value for that product. As we work with clients and they give us their equipment to remarket on their behalf, we bring it into the same process.

When you think about it, an asset recovery program is really the same thing as a lease return. It's really a lot of reverse logistics -- bring it into a technical center, where it's audited, the data is wiped, the product is tested, there’s some level of refurbishment done, especially if we can enhance the market value. Then, we bring it into our global markets to recover value for that product.

Gardner: While the IT folks don’t necessarily always want to think about the financial implications, they're certainly more likely to get the okay to move ahead with their technical transformations, to get the new tools and systems that they want, if they can better appreciate that there is a way to recover costs safely from existing systems. I think it's probably an important lesson for IT people that they might not have thought of.

Helen, do you have any thoughts about that, about the culture between a financial side and the technical side in DCT?

The customer asked us to recreate their old data center environment at that new location, with the exact legacy spectrum of the original data center.

Tang: We're seeing some interesting shifts right now. So, you're right. Classically, there was this conception that the CFO’s office didn’t understand the needs of IT, and IT didn’t understand how best to save money, and also optimize for those tricky CAPEX and OPEX issues.

But, in the last five years, we're seeing a shift, and these two organizations are working harder together. A lot of it is because they have to do it, with the recession, and a lot of the limitations. But, we're starting to see sort of this IT hybrid role called the IT controller, that typically reports to the CIO, but also dot-lines into the CFO, so that the two organizations can work together from the very beginning of a data center project to understand how best to optimize both the technology, as well as the financial aspects.

Gardner: Thanks to Jim, we've heard quite a bit about HP's story. Are there some other users out there who have gone through this, and that we can look to for some more understanding of how this should apply to future DCT? Back to you, Jim?

O'Grady: Sure. There was a case that involved an internationally known food services company that had a data center consolidation and move requirement. This company had 12,000 locations in 35 countries. Their basic need was to economically migrate to a new facility, where there was room for expansion and consolidation.

Their existing server environment was only a couple of years old, and it wasn’t economical for them to replace them at this point in time. So, the customer asked us to recreate their old data center environment at that new location, with the exact legacy spectrum of the original data center.

Legacy solution

We were more than happy to provide them with a highly customized HP legacy server solution, that was identical to their existing equipment, and we did it on a short-term rental basis. Once the new cutover data center was fully operational, we simply brought back all of the equipment located in the original data center.

We did it as a trade for the legacy servers that were rented and installed at the new data center site. Essentially, it was an asset swap. We rented some equipment to them. We brought back their original data center. And, we just called it a day. So it was an extremely pleasant and easy transition for the customer to get through.

We also helped the customer manage the license transfers from their prior owned servers to the ones that we just provided to them.

Gardner: These are things that organizations on their own probably don’t have the visibility and understanding to pursue. Is it fair to say, Jim, that a lot of companies are just leaving money on the table, so to speak, if they try to do this themselves, if they look for some of those local secondary market folks, and are maybe not as creative as they could be in some of these financial approaches to the best outcome for these assets?

O'Grady: I think they do. They typically try to disconnect some of this activity and they don’t put it into a holistic view in terms of the DCT effort. Typically, what we find with companies trying to recover value for product is that they give it to their facilities guys or the local business units. These guys love to put it on eBay and try to advertise for the best price. But, that’s not always the best way to recover the best value for your data center equipment.

Your best bet is to work with a disposition provider that has a very, very strong re-marketing reach into the global markets, and especially a strong demonstrative recovery process.

We're now seeing it migrate into the procurement arm. These guys typically put it out for bid and select the highest bid from a lot of the open market brokers. A better strategy to recover value, but not the best.

Your best bet is to work with a disposition provider that has a very, very strong re-marketing reach into the global markets, and especially a strong demonstrative recovery process.

Gardner: I suppose there is a scale issue too. An organization like HP can absorb a football field full of laptops, whereas not every other entrant in the market, at least the local players involved, can absorb that sort of scale. So tell me a little bit about the size issues, both scaling up, in terms of the largest types of data centers and IT issues, but also perhaps scaling down in terms of where specialization or even highly vertical systems are involved?

O'Grady: That’s a good point. Especially in the large DCTs, you're getting back a lot of enterprise equipment, and it's easy to re-market it into the secondary market and recover value. You could put it on the market tomorrow and recover very minimum value, but we have a different process.

We have skilled product traders within our product families who know how to hold product, and wait for the right time to release it into the secondary market. If you take a lot of product and sell it in one day, you increase the supply, and all of the recovery rates for the brokers drop overnight. So, you have to be pretty smart. You have to know when to release product in small lot sizes to maximize that recovery value for the client.

Gardner: Tell me how you get started on this Jim? As we said, this is sort of a black box for a lot of people. The IT people don’t understand the financial implications, and the financial folks might not understand what’s involved when a data center is going to be transformed and what’s coming down the avenue that they need to then disposition.

So, how do we merge these cultures? How do they get started, and who do you target this information at? Is there a Chief Disposition Officer? I tend to doubt it. Who should be involved? Who should be in charge?

C-level engagement

O'Grady: We recommend that a C level executive is in charge, whether it's the CIO, the CFO, or the Security Officer. Someone at a very high level should be engaged. To engage us is very simple. Your best bet is to contact your HP account manager. They would know how to get in contact with us to bring our services to bear.

You can also look at, under HP.com, and get to HPFS, and that’s really simple. From there, it's an easy process to engage us. If you're looking for pre-owned or rental equipment, we would provide a dedicated rep, or you can just access this product through most authorized HP enterprise resellers. They know how to access legacy product from us as well.

Asset recovery is a much more complex engagement. We start with a consultation with the client on a whole range of topics to educate them on what the whole used IT disposition market is all about, especially things to watch out for. There are things like comparing price versus risk, when you are selecting a vendor, and what to think about to ensure you comply with the emerging legislation and directives that you need to be aware of and deal with, especially environmental waste stream management, data security, and cross-border product movement of non-working IT products.

We also help clients understand strategies to recover the best value for decommissioned assets, as well as how to evaluate and how to put in place a good data-security plan.

We help them understand whether data security should be done on-site versus off-site, or is it worth the cost to do it on-site and off-site. We also help them understand the complexities of data wiping enterprise product, versus just the plain PC.

The one thing we help customers understand, and it’s the real hidden complexity is how to set up an effective reverse logistic strategy.

Most of the local vendors and providers out there are skilled in wiping data for PCs, but when you get into enterprise products, it can get really complex. You need to make sure that you understand those complexities, so you can secure the data properly.

Lastly, the one thing we help customers understand, and it’s the real hidden complexity is how to set up an effective reverse logistic strategy, especially on a global basis. How do you get the timing down for all the products coming back on a return basis?

Gardner: Helen, it sounds as if there is a whole lot going on with this cleansing and regrouping of assets in such a way that you get the most financial return. To me this is a real educational issue for the DCT process and that this needs to be really considered early on and not as an afterthought.

Tang: That’s absolutely true, which is why we reach out to our customers in various interactions to talk them through the whole process from beginning to end.

One of the great starting points we recommend is something we called the Data Center Transformation Experience Workshop, where we actually bring together your financial side, your operations people, and your CIOs, so all the key stakeholders in the same room, and walk through these common issues that you may or may not have thought about to begin with. You can walk out of that room with consensus, with a shared vision, as well as a roadmap that’s customized for your success.

Gardner: Back to you one last time, Jim. Tell us a little more about how people should envision this? If we're in the process, what’s the right frame of mind -- philosophy, if you will -- of this disposition element to any DCT?

Well-established plan

O'Grady: My advice is to have a well-established plan in the budget and think about that way up front in the process. This is the one area that most of our clients fail to do. What happens is that, at the disposition point, they accumulate a lot of assets and they haven’t budgeted for how to disposition those assets. They get caught, so to speak.

Customers should educate themselves about the market complexities involved with dispositioning your own products from the data security standpoint, as well as environmental legislation.

As you try to recover value in the secondary market, you own the result of that transaction. So, you could be putting your company brand at risk, if you're not complying with the morass of legislative directives and regulations that you find out there at a global and local level.

Gardner: We've been hearing about trying to make the most productive transitions with data center assets and transformation activity from the vantage point of security and environmental impact, recycling, and resale. I suppose the idea here now is to get your older assets out with low risk, but also get the highest financial return from them as well.

I want to thank our panelists for helping us sort this out. We have been here with Helen Tang, Worldwide Data Center Transformation Lead for HP Enterprise Business, and Jim O’Grady, Director of Global Life Cycle Management with HP Financial Services. Thanks so much, Jim.

O'Grady: 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 Podcast.com. Download the transcript. Sponsor: HP.

Transcript of a sponsored podcast discussion on how proper and secure handling of legacy equipment and data is an essential part of data center modernization planning and cost reduction. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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Explore the Myths and Means of Scaling Out Virtualization Via Automation Across Data Centers

Transcript of a podcast discussion on how automation and best practices allows for far greater degrees of virtualization and efficiency across enterprise data centers.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. 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 the improved and increased use of virtualization in data centers. We'll delve into how automation and policy-driven processes and best practices are offering a slew of opportunities for optimizing virtualization. Server, storage, and network virtualization use are all rapidly moving from points of progress into more holistic levels of adoption.

The goals are data center transformation, performance and workload agility, and cost and energy efficiency. But the trap of unchecked virtualization complexity can have a stifling effect on the advantageous spread of virtualization. Indeed, many enterprises may think they have already exhausted their virtualization paybacks, when in fact, they have only scratched the surface of the potential long-term benefits.

In some cases, levels of virtualization are stalling at 30 percent adoption, yet other data centers are leveraging automation and best practices and moving to 70 percent and even 80 percent adoption rates. By taking such a strategic outlook on virtualization, we'll see how automation sets up companies to better exploit cloud computing and IT transformation benefits at the pace of their choosing, not based on artificial limits imposed by dated or manual management practices.

Here now to discuss how automation can help you achieve strategic levels of virtualization adoption are our guests, Erik Frieberg, Vice President of Solutions Marketing at HP Software. Welcome to BriefingsDirect, Erik.

Erik Frieberg: Great. Good to be here.

Gardner: And, we're here with Erik Vogel, Practice Principal and America's Lead for Cloud Resources at HP. Welcome, Erik Vogel.

Erik Vogel: Well, thank you.

Gardner: Let's start the discussion with you Erik Frieberg. Tell me, why there is a misconception about acceptable adoption levels of virtualization out there?

Frieberg: When I talk to people about automation, they consistently talk about what I call "element automation." Provisioning a server, a database, or a network device is a good first step, and we see gaining market adoption of automating these physical things. What we're also seeing is the idea of moving beyond the individual element automation to full process automation.

IT is in the process of serving the business, and the business is asking for whole application service provisioning. So it's not just these individual elements, but tying them all together along with middleware, databases, objects and doing this whole stack provisioning.

When you look at the adoption, you have to look at where people are going, as far as the individual elements, versus the ultimate goal of automating the provisioning and rolling out a complete business service or application.

Gardner: Is there something in general that folks don't appreciate around this level of acceptable use of virtualization, or is there a need for education?

Perceptible timing

Frieberg: It comes down to what I call the difference in perceptible timing. Often, when businesses are asking for new applications or services, the response is three, four, or five weeks to roll something out. This is because you're automating individual pieces but it's still left to IT to glue all the individual element automation together to deliver that business service.

As companies expand their use of automation to automate the full services, they're able to reduce that time from months down to days or weeks. This is what some people are starting to call cloud provisioning or self-service business application provisioning. This is really the ultimate goal -- provisioning these full applications and services versus what is often IT’s goal -- automating the building blocks of a full business service.

Gardner: I see. So we're really moving from a tactical approach to a strategic approach?

Frieberg: Exactly.

Gardner: What about HP? Is there something about the way that you have either used virtualization yourselves or have worked with a variety of customers that leads you to believe that there is a lot more uptake? Are we really only in the first inning or two of virtualization from HP's perspective?

Frieberg: We're maybe in the second inning, but we're certainly early in the life cycle. We're seeing companies moving beyond the traditional automation, and their first goal, which is often around freeing up labor for common tasks.

Companies will look at things like how do they baseline what they have, how they patch and provision new services today, moving on to what is called deployment automation, and the ability to move applications from the development environment into the production environment.

They're asking how do I establish and enforce compliance policies across my organization.

You're starting to see the movement beyond those initial goals of eliminating people to ensuring compliance. They're asking how do I establish and enforce compliance policies across my organization, and beyond that, really capturing or using best practices within the organization.

So we're maturing and moving to further "innings" by automating the process more and also getting further benefits around compliance and best practices for use through our automation efforts.

Gardner: When you can move in that direction, at that level, you start to really move into what we call data center transformation, rather than spot server improvements or rack-by-rack improvements.

Frieberg: Exactly. This is where you're starting to see what some people call the "lights out" data center. It has the same amount or even less physical infrastructure using less power, but you see the absence of people. These large data centers just have very few people working in them, but at the same time, are delivering applications and services to people at a highly increased rate rather than as traditionally provided by IT.

Gardner: Erik Vogel, are there other misconceptions that you’ve perceived in the marketplace in terms of where virtualization adoption can go?

Biggest misconception

Vogel: Probably the biggest misconception that I see with clients is the assumption that they're fully virtualized, when they're probably only 30 or 40 percent virtualized. They've gone out and done the virtualization of IT, for example, and they haven't even started to look at Tier 1 applications.

The misconception is that we can't virtualize Tier 1 apps. In reality, we see clients doing it every day. The broadest misconception is what virtualization can do and how far it can get you. Thirty percent is the low-end threshold today. We're seeing clients who are 75-80 percent virtualized in Tier 1 applications.

Gardner: Erik Frieberg, back to you. Perhaps there is a laundry list of misconceptions that we can go through and then discount them. If we're going to go from that 30 percent into that strategic level, what are some specific things that are holding people back?

Frieberg: When I talk to customers about their use of virtualization, you're right. They virtualize the easy stuff.

The three misconceptions I see a lot are, one, automation and virtualization are just about reducing head count. The second is that automation doesn't have as much impact on compliance. The third is if automation is really at the element level, they just don't understand how they would do this for these Tier 1 workloads.

Gardner: Let's now get into what we mean by automation. How do you go about automating in such a way that you don't fall into these traps and you can enjoy the things that you've been describing in terms of better compliance, better process, and repeatability?

Provisioning, managing, and moving in this new agile development environment and this environment of hybrid IT . . . is really moving beyond what a lot of people can manage.

Frieberg: What we're seeing in companies is that they're realizing that their business applications and services are becoming too complex for humans to manage quickly and reliably.

The demands of provisioning, managing, and moving in this new agile development environment and this environment of hybrid IT, where you're consuming more business services, is really moving beyond what a lot of people can manage. The idea is that they are looking at automation to make their life easier, to operate IT in a compliant way, and also deliver on the overall business goals of a more agile IT.

Companies are almost going through three phases of maturity when they do this. The first aspect is that a lot of automation revolves around "run book automation" (RBA), which is this physical book that has all these scripts and processes that IT is supposed to look at.

But, what you find is that their processes are not very standardized. They might have five different ways of configuring your device, resetting the server, and checking why an application isn’t working.

So, as we look at maturity, you’ve got to standardize on a set of ways. You have to do things consistently. When you standardize methods, you then find out you're able to do the second level of maturity, which is consolidate. We don’t need to provision a PC 16 different ways. We actually can do it one way with three variations. When you do that, you now move up the ability to automate that process. Then, you use that individual process automation or element automation in the larger process, and tie it all together.

That’s how we see companies or organizations moving up this maturity curve within automation.

Gardner: I was intrigued by that RBA example you gave. There are occasions where folks think they're automated, but are not. Is there a way to have a litmus test as to whether automation is where you need to go, not actually where you’ve been?

The easy aspects

Frieberg: Automation is similar to the statistics you gave in virtualization, where people are exploring automation and they're automating the easy aspects, but they're hitting roadblocks in understanding how they can drive automation further in their organization.

Something I have used as a litmus test is that run book. How thick is it now and how thick was it a month ago or a year ago, when you started automation? How have you consolidated it through your automation processes?

We see companies not just trying to standardize, consolidate, or make tough choices that will enable them to push the automation further. A lot of it is just a hard-held belief of what can be automated in IT versus what can't. It's very analogous to them approaching virtualization -- I can do these types of workloads, but not these others. A lot of these beliefs are held in old facts and not based on what the technology or new software solutions could do today.

Gardner: So, perhaps an indication of where they are actually doing automation is is that run book is getting smaller?

Frieberg: Exactly. The other thing I look at, as companies start to roll out applications, is not just the automation, but the consistency. You read different facts within the industry. Fifty percent of the time, when you make a change into your environment, you cause an unforeseen downstream effect. You change something, but something else breaks further down.

They look at that initial upfront cost and see that the investment is probably higher than what they were anticipating. I think in a lot of cases that is holding our clients back from really achieving these higher levels of virtualization.

When you automate processes, we tend to see that drop dramatically. Some estimates have put the unforeseen impact as low as five percent. So, you can also measure your unforeseen downstream effects and ask, "Should I automate these processes that seem to be tedious, time-consuming, and non-compliant for people to do, and can I automate them to eliminate these downstream effects, which I am trying to not have occur in my organization?"

Gardner: Erik Vogel, when these folks recognize that they need to be more aggressive with automation in order to do virtualization better, enjoy their cost performance improvements, and ultimately get towards their data center transformation, what is it that they need to be thinking of? Are performance and efficiency the goals? How do we move toward this higher level of virtualization?

Vogel: One of the challenges that our clients face is how to build the business case for moving from 30 percent to 60 or 70 percent virtualized. This is an ongoing debate within a number of clients today, because they look at that initial upfront cost and see that the investment is probably higher than what they were anticipating. I think in a lot of cases that is holding our clients back from really achieving these higher levels of virtualization.

In order to really make that jump, the business case has to be made beyond just reduction in headcount or less work effort. We see clients having to look at things like improving availability, being able to do migrations, streamlined backup capabilities, and improved fault-tolerance. When you start looking across the broader picture of the benefits, it becomes easier to make a business case to start moving to a higher percentage of virtualization.

One of the impediments, unfortunately, is that there is kind of an economic hold. The way we're creating these business cases today doesn't show the true value and benefit of enhanced virtualization automation. We need to rethink the way we put these business cases together to really incorporate a lot of the bigger benefits that we're seeing with clients who have moved to a higher percentage of virtualization.

Gardner: In order to attain that business benefit to make the investment a clear winner and demonstrate the return what is it that needs to happen? Is this a best-of-breed equation, where we need to pull together the right parts? Is it the people equation about the operations, or all of the above? And how does HP approach that stew of different elements within this?

All of the above

Vogel: It's really all of the above. One of the things we saw early on with virtualization is that just moving to a virtual environment does not necessarily reduce a lot of the maintenance and management that we have, because we haven’t really done anything to reduce the number of OS instances that have to be managed.

If we're just looking at virtualizing and just moving from physical to virtual devices, we may be reducing our asset footprint and gaining the benefits of just managing fewer physical assets. From a logical standpoint, we still have the same number of servers and the same number of OS instances. So, we still have the same amount of complexity in managing the environment.

The benefits are relatively constrained, if we look at it from just a physical footprint reduction. In some cases, it might be significant if a client is running out of data-center space, power, or cooling capacity within the data center. Then, virtualization makes a lot of sense because of the reduction in asset footprint.

But, when we start looking at coupling virtualization with improved process and improved governance, thereby reducing the number of OS instances, application rationalization, and those kinds of broader process type issues, then we start to see the big benefits come into play.

Now, we're not talking just about reducing the asset footprint. We're also talking about reducing the number of OS instances. Hence, the management complexity of that environment will decrease. In reality, the big benefits are on the logical side and not so much on the physical side.

It becomes more than just talking about the hardware or the virtualization, but rather a broader question of how IT operates and procures services.

Gardner: It sounds like we're moving beyond that tactical benefit of virtualization, but thinking more about an operational fabric through which to support a variety of workloads -- and that's quite a leap.

Vogel: Absolutely. In fact, when we start talking about moving to a cloud-type environment, specifically within public cloud and private cloud, we're looking at having to do that process work and governance work. It becomes more than just talking about the hardware or the virtualization, but rather a broader question of how IT operates and procures services. We have to start changing the way we are thinking when we're going to stand up a number of virtual images.

When we start moving to a cloud environment, we talk about how we share a resource pool. Virtualization is obviously key and an underlying technology to enable that sharing of a virtual resource pool.

But it becomes very important to start talking about how we govern that, how we control who has access, how we can provision, what gets provisioned and when. And then, how do we de-provision, when we're done with a particular environment; and how do we enable that environment to scale up and scale down, based on the demands of the workloads that are being run on that environment.

So, it's a much bigger problem and a more complicated problem as we start going to higher levels of virtualization and automation and create environments that start to look like a private cloud infrastructure.

Gardner: And yet, it's at that higher level of adoption that the really big paybacks kick in. Are there some misconceptions or some education issues that are perhaps holding companies back from moving toward that larger adoption, which will get them, in fact, those larger economic productivity and transformative benefits?

Lifecycle view

Vogel: The biggest challenge where education needs to occur is that we need to be looking at IT through a lifecycle view. A lot of times we get tied up just looking at an initial investment or what the upfront cost would be to deploy one of these environments. We're not truly looking at the cost to provide that service over a three-, four- or five-year period, because if we start to look carefully at what that lifecycle cost is, we can see that these shared environments, these virtualized environments with automation, are a fraction of the cost of a dedicated environment.

Now, there will need to be an upfront investment. That, I think, is causing a lot of concern for our clients because they look at it only in the short-term. If we look at it over a life-cycle approach and we educate clients to start seeing the cost to provide that service, that's when we start to see that it's easy to make a business case for moving to one of these environments.

It's a change in the way a lot of our clients think about developing business cases. It's a new model and a new way of looking at it, but it's something that's occurring across the industry today, and will continue to occur.

Gardner: I'm curious about the relationship that you’re finding, as the adoption levels increase from net 30 percent to 60 or 70 percent. Are the benefits coming in on a linear basis as a fairly constant improvement? Or is there some sort of a hockey-stick effect, whereby there is an accelerating level of business benefits as the adoption increases?

Vogel: It really depends on the client situation, the type of applications, and their specific environment. Generally, we're still seeing increasing returns in almost a linear fashion, as we move into 60-70 percent virtualized.

Right now, we're looking at that 60-70 percent as the rule of thumb, where we're still seeing good returns for the investment.

As we move beyond that, it is client-specific and client-independent. There are a lot of variables and a lot of factors in play, such as the type of applications that are running on it and the type of workloads and demands that are being placed on that environment. Depending on the clients, they can still see benefits when they're 80-85 percent virtualized. Other clients will hit that economic threshold in the 60-65 percent virtualized range.

We do know that we're continuing to see benefits beyond that 30 percent, beyond the easy stuff, as they move into Tier 1 applications. Right now, we're looking at that 60-70 percent as the rule of thumb, where we're still seeing good returns for the investment. As applications continue to modernize and are better able to use virtual technologies, we'll see that threshold continue to increase into the 80-85 percent range.

Gardner: How about the type of payoff that might come as companies move into different computing models? If you have your sights set on cloud computing, private cloud or hybrid cloud at some point, will you get a benefit or dividends from whatever strategic virtualization, governance and policy, and automation practices you may inherit now?

Vogel: I don’t think anybody will question that there are continued significant benefits, as we start looking at different cloud computing models. If we look at what public cloud providers today are charging for infrastructure, versus what it costs a client today to stand up an equivalent server in their environment, the economics are very, very compelling to move to a cloud-type of model.

Now, with that said, we've also seen instances where costs have actually increased as a result of cloud implementation, and that's generally because the governance that was required was not in place. If you move to a virtual environment that's highly automated and you make it very easy for a user to provision in a cloud-type model and you don’t have correct governance in place, we have actually seen virtual server sprawl occur.

Everything pops up

All of a sudden, everybody starts provisioning environments, because it's so easy and everything is in this cloud environment begins to pop up, which results in increased software licensing costs. Plus, we still need to manage those environments.

Without the proper governance in place, we can actually see cost increase, but when we have the right governance and processes in place for this cloud environment, we've seen very compelling economics, and it's probably the most compelling change in IT from an economic perspective within the last 10 years.

Gardner: So, there is a relationship between governance and automation. You really wouldn’t advise having them separate or even consecutive? They really need to go hand in hand?

Vogel: Absolutely. We've found in many, many client instances, where they've just gone out, procured hardware, and dropped it on the floor, that they did not realize the benefits they had expected from that cloud-type hardware. In order to function as a cloud, it needs to be managed as a cloud environment. That, as a prerequisite, requires strong governance, strong process, security controls, etc. So, you have to look at them together, if you're really going to operationalize a cloud environment, and by that I mean really be able to achieve those business benefits.

Gardner: Erik Frieberg, tying this back to data-center transformation, is there a relationship now that's needed between the architectural level and the virtualization level, and have they so far been distinct?

I guess I'm asking you the typical cultural question. Are the people who are in charge of virtualization and the people who are in charge of data center transformation the same people talking the same language? What do they need to do to make this more seamless?

When you talk about an entire service and all the elements that make up that service, you're now talking about a whole host of people.

Frieberg: I’ll echo something Erik said. We hear clients talk about how it's not about virtualizing the server, but it's about virtualizing the service. This is where we look at virtualizing a single server and putting it into production by cloning it is relatively straightforwardly. But, when you talk about an entire service and all the elements that make up that service, you're now talking about a whole host of people.

You get server people involved around provisioning. You’ve got network people. You’ve got storage people. Now, you're just talking about the infrastructure level. If you want to put app servers or database servers on top of this, you have those constituents involved, DBAs and other people. If you start to put production-level applications on there, you get application specialists.

You're now talking about almost a dozen people involved in what it takes to put a service in production, and if you're virtualizing that service, you have admins and others involved. So, you really have this environment of all these people who now have to work together.

A lot of automation is by automating specific tasks. But, if you want to automate and virtualize this entire service, you’ve got to get 12 people to get together to look at the standard way to roll out that environment, and how to do it in today’s governed, compliant infrastructure.

The coordination required, to use a term used earlier, isn’t just linear. It sometimes becomes exponential. So, there are challenges, but the rewards are also exponential. This is why it takes weeks to put these into production. It isn’t the individual pieces. You're getting all these people working together and coordinated. This is extremely difficult and this is what companies find challenging.

Gardner: Erik Vogel, it sounds as if this allows for a maturity benefit, or a sense of maturity around these virtualization benefits. This isn’t a one-off. This is a repeatable, almost a core, competency. Is that how you are seeing this develop now? A company should recognize that you need to do virtualization strategically, but you need to bake it in. It's something that's not going to go away?

Capability standpoint

Vogel: That's absolutely correct. I always tend to shy away from saying maturity. Instead, I like to look at it from a capability standpoint. When we look at just maturity, we see organizations that are very mature today, but yet not capable of really embracing and leveraging virtualization as a strategic tool for IT.

So, we've developed a capability matrix across six broad domains to look at how a client needs to start to operationalize virtualization as opposed to just virtualizing a physical server.

We definitely understand and recognize that it has to be part of the IT strategy. It is not just a tactical decision to move a server from physical machine to a virtual machine, but rather it becomes part of an IT organization’s DNA that everything is going to move to this new environment.

We're really going to start looking at everything as a service, as opposed to as a server, as a network component, as a storage device, how those things come together, and how we virtualize the service itself as opposed to all of those unique components. It really becomes baked into an IT organization’s DNA, and we need to look very closely at their capability -- how capable an organization is from a cultural standpoint, a governance standpoint, and a process standpoint to really operationalize that concept.

Gardner: Erik Frieberg, moving toward this category of being a capability rather than a one-off, how do you get started? Are there some resources, some tried and true examples of how other companies have done this?

The key goal here is that we work with clients who realize that you don’t want a two-year payback. You want to show payback in three or four months.

Frieberg: At HP Software, we have a number of assets to help companies get started. Most companies start around the area of automation. They move up in the same six-level model -- "What are the basic capabilities I need to standardize, consolidate, and automate my infrastructure?"

As you move further up, you start to move into this idea of private-cloud architectures. Last May, we introduced the Cloud Service Automation architecture, which enables companies to come in and ask, "What is my path from where I am today to where I want to get tomorrow. How can I map that to HP’s reference architecture, and what do I need to put in place?"

The key goal here is that we work with clients who realize that you don’t want a two-year payback. You want to show payback in three or four months. Get that payback and then address the next challenge and the next challenge and the next challenge. It's not a big bang approach. It's this idea of continuous payback and improvement within your organization to move to the end goal of this private cloud or hybrid IT infrastructure.

Gardner: Erik Vogel, how about future trends? Are there any developments coming down the pike that you can look in your crystal ball and say, "Here are even more reasons why that capability, maturity, and strategic view of virtualization, looking toward some of the automation benefits, will pay dividends?"

The big trend

Vogel: I think the big trend -- and I'm sure everybody agrees -- is the move to cloud and cloud infrastructures. We're seeing the virtualization providers coming out with new versions of their software that enable very flexible cloud infrastructures.

This includes the ability to create hybrid cloud infrastructures, which are partially a private cloud that sits within your own site, and the ability to burst seamlessly to a public cloud as needed for excess capacity, as well as the ability to seamlessly transfer workloads in and out of a private cloud to a public cloud provider as needed.

We're seeing the shift from IT becoming more of a service broker, where services are sourced and not just provided internally, as was traditionally done. Now, they're sourced from a public cloud provider or a public-service provider, or provided internally on a private cloud or on a dedicated piece of hardware. IT now has more choices than ever in how they go about procuring that service.

A major shift that we're seeing in IT is being facilitated by this notion of cloud. IT now has a lot of options in how they procure and source services, and they are now becoming that broker for these services. That’s probably the biggest trend and a lot of it is being driven by this transformation to more cloud-type architectures.

Gardner: Okay, last word to you Erik Frieberg. What trends do you expect will be more of an enticement or setup for automation and virtualization capabilities?

Most people, when they look at their virtualization infrastructure, aren’t going with a single provider.

Frieberg: I'd just echo what Erik said and then add one more aspect. Most people, when they look at their virtualization infrastructure, aren’t going with a single provider. They're looking at having different virtualization stacks, either by hardware or software vendors that provide them, as well as incorporating other infrastructures.

The ability to be flexible and move different types of workload to different virtualized infrastructure is key so having this choice, because that makes you more agile in the way you can do things. It will absolutely lower your cost, providing them the infrastructure that really leads to the higher quality of service that IT is trying to provide to the end users.

Gardner: It also opens up the marketplace for services. If you can do virtualization and automation, then you can pick and choose providers. Therefore, you get the most bang for your buck and create a competitive environment. So that’s probably good news for everybody.

Frieberg: Exactly.

Gardner: We've been discussing how automation governance and capabilities around virtualization can take the sting out of moving toward a strategic level of virtualization adoption. I want to thank our guests. We've had a really interesting discussion with Erik Frieberg, Vice President of Solutions Marketing at HP Software. Thank you, Erik.

Frieberg: Thank you, very much.

Gardner: And also Erik Vogel, Practice Principal and America's lead for cloud resources at HP. Thanks to you also, Erik.

Vogel: Thank you.

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 Podcast.com. Download the transcript. Sponsor: HP.

Transcript of a podcast discussion on how automation and best practices allows for far greater degrees of virtualization and efficiency across enterprise data centers. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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Modern Data Centers Require Efficiency-Oriented Changes in Networking

Transcript of a sponsored podcast discussion on modernizing data centers to make them adaptable and flexible.

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

Special Offer: Gain insight into best practices for transforming your data center by downloading three whitepapers from HP at www.hp.com/go/dctpodcastwhitepapers.

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 the increasingly essential role of networking in data center transformation (DCT).

As data center planners seek to improve performance and future-proof their investments, the networking leg on the infrastructure stool can no longer stand apart. The old rules of networking need to change, and that’s because specialized labor-intensive and homogeneous networking systems need to be be brought into the total modern data center picture -- to jointly cut complexity while spurring on adaptability and flexibility.

Advances such as widespread virtualization, increased modularity, converged infrastructure, and cloud computing are all forcing a rethinking of data center design. The architecture needs to accomplish the total usage pattern and requirements for both today and tomorrow -- and with an emphasis on openness, security, flexibility, and sustainability.

Networking, therefore, needs to be better architected within -- and not bolted onto -- this changeable DCT equation. Here to discuss how networking is changing, and how organizations can better architect networking into their data centers future, we're joined by two executives from HP. Please join me in welcoming Helen Tang, Worldwide Data Center Transformation Solutions Lead. Welcome to the show, Helen.

Helen Tang: Thanks, Dana. Glad to be here.

Gardner: We are also here with Jay Mellman, Senior Director of Product Marketing in the HP Networking Unit. Good to have you with us, Jay.

Jay Mellman: Thanks, Dana. Glad to be here too.

Gardner: Helen, tell us a little bit about the environment now for DCT. Why are organizations focused on this? Why is it such an important element in how they can plan their future, and begin to take more and better control over their IT efforts?

Tang: Great question, Dana. As we all know, in 2010 most IT organizations are wrestling with the three Cs -- reducing cost, reducing complexity, and also tapping the problem of hitting the wall with capacity from a base, space, and energy perspective.

The reason it's happening is because IT is really stuck between two different forces. One is the decades of aging architecture, infrastructure, and facilities they have inherited. The other side is that the business is demanding ever faster services and better improvements in their ability to meet requirements.

The confluence of that has really driven IT to the only solution of embracing change and starting a strategic project of transformation, which is a series of integrated data center projects and technology initiatives that can take them from this old integrated architecture to an architecture that’s suited for tomorrow’s growth.

Gardner: How does networking fit into that? What's the traditional role of the networking, versus where it should be?

Generic term

Tang: Let me set the context a little bit, before we dive into the role of networking within DCT. DCT is a fairly generic term. We don’t have a unified definition.

I'm a little biased, of course, coming from HP, but I do think HP has the most comprehensive answer for what people need to think about in terms of DCT. That includes four things: consolidation, whether it's infrastructure, facilities or application; virtualization and automation; continuity and sustainability, which address the energy efficiency aspect, as well as business continuity and disaster recovery; and last, but not least, converged infrastructure.

So networking actually plays in all these areas, because it is the connective tissue that enables IT to deliver services to the business. It's very critical. In the past this market has been largely dominated by perhaps one vendor. That’s led to a challenge for customers, as they address the cost and complexity of this piece.

Gardner: Okay, Jay, how has HP adapted to this in recognizing the need for change? What's been its response?

Mellman: The response that we've had is to recognize that it's one thing to say we want to have cost and more responsiveness, when we do a DCT, but it's really the understanding how and why that’s there. There has been a dramatic change in what's demanded of networking in a data center context.

The sheer number of connections, as we went from single large servers to multiple racks of servers, and to multiple virtual machines for services, all of which need connectivity. We have management integration that has been very difficult to deal with. We have different management constructs between servers, storage, and networking. Finally, there are things like cost and, more important, time to service.

HP has been recognizing that customers are increasingly not being judged on the quality of an individual silo. They're being judged on their ability to deliver service, do that at a healthy cost point, and do that as the business needs it. That means that we've had to take an approach that is much more flexible. It's under our banner of FlexFabric.

Today’s architecture, as Helen said, is very rigid in the networking space. It's very complex with lots of specialized people and specialized knowledge. It's very costly and, most importantly, it really doesn’t adapt to change. The kind of change we see, as customers are able to move virtual machines around, is exactly the kinds of thing we need in networking and don’t have.

Gardner: I'd like to get into some examples a little later, but maybe it would be good to just understand what some of the paybacks are if you do this properly, if you architect and design your data center well. If the networking, as a connective tissue, plays its role properly, what sort of paybacks are typical?

Tang: The power of transformation is great to the IT organization. It's along three axes. One is increasing agility and time to market, improving service levels to a point that we can now deliver any application perhaps in a couple of weeks, as opposed to months and months. The second aspect is about mitigating risk. We're looking at reducing manual errors through some of the automation capabilities.

Tremendous cost reduction

Last but not least, of course, is reduction in cost. We've seen just tremendous cost reduction across the board. At HP, when we did our own DCT, we were able to save over a billion dollars a year. For some of our other customers, France Telecom for example, it was €22 million in savings over three years -- and it just goes on and on, both from an energy cost reduction, as well as the overall IT operational cost reductions.

Mellman: Let me see if I can jump in and give some specifics as well of the relationship to the networking. When we look at agility and ability to improve time-to-service, we are often seeing an order of magnitude or even two orders of magnitude [improvement] by churning up a rollout process that might take months and turning it into hours or days.

With that kind of flexibility, you avoid the silos, not necessarily just in technology, but in the departments, as requests from the server and storage teams to the networking team. So, there are huge improvements there, if we look at automation and risk. I also include security here.

It's very critical, as part of these, that security be embedded in what we're doing, and the network is a great agent for that. In terms of the kinds of automation, we can offer single panes of glass to understand the service delivery and very quickly be able to look at not only what's going on in a silo, but look at actual flows that are happening, so that we can actually reduce the risk associated with delivering the services.

Finally, in terms of cost, we're seeing -- at the networking level specifically -- reductions on the order of 30 percent to as high as 65 percent by moving to these new types of architectures and new types of approaches, specifically at the server edge, where we deal with virtualization.

Customers were telling us that there were so many changes happening in their environments, both at the edge of the network, but also in the data center, that they felt like they needed a new approach.

There are opportunities where we go from more than 210 different networking components required to serve a certain problem down to two modules. You can kind of see that's a combination of consolidation, convergence, cost reduction, and simplicity, all coming together.

Gardner: Jay, give us a little historical context for this. HP has obviously been involved with networking for some time, and now the rules have changed. What's the pattern and what’s the expertise that’s been developing over the years to come together now?

Mellman: It's a real meaty question Dana and I appreciate that one. We've been in the business for 25 to 30 years and we are successfully the number two vendor in the industry selling primarily at the edge. Within the last couple of years, we've recognized that beyond the business opportunity, customers were telling us that there were so many changes happening in their environments, both at the edge of the network, but also in the data center, that they felt like they needed a new approach.

Look at the changes that have happened in the data center just in the last couple of years -- the rise of virtualization and being able to actually take advantage of that effectively, the pressures on time to market in alignment with the business, and the increasing risk from security and the increasing need for compliance.

Tie all these together, and HP felt this is the right time to come to market. The other thing is that these are problems that are being raised in the networking space, but they have direct linkage to how you would best solve the problem.

Special Offer: Gain insight into best practices for transforming your data center by downloading three new data center transformation whitepapers from HP at www.hp.com/go/dctpodcastwhitepapers.

Bringing talent together

Instead of solving it with just networking technology, we can do a better job, because we can actually bring the right engineering talent together and solve it in an appropriate way. That balances the networking needs with what we can do with servers, what we can do with storage, with software, with security and with power and cooling, because often times, the solution may be 90 percent networking, but it involves other pieces as well.

We saw a real requirement from customers to come in and help them, as Helen said, create more flexibility, drive risk down, improve time to service and take cost out of the system, so that we are not spending so much on maintenance and operation, and we can put that to more innovation and driving the business forward.

A couple of these key rules drive simplicity. The job of a network admin needs to be made as simple and have as much automation and orchestration as the jobs of SysAdmins or SAN Admins today.

The second is that we want to align networking more fully with the rest of the infrastructure, so that we can help customers deliver the service they need when they need it, to users in the way that they need it. That alignment is just a new model in the networking space.

Finally, we want to drive open systems, first of all because customers really appreciate that. They want standards and they want to have the ability to negotiate appropriately, and have the vendors compete on features, not on lock-in.

Open standards also allow customers to pick and choose different pieces of the architecture that work for them at different points in time. That allows them, even if they are going to work completely with HP, the flexibility and the feeling that we are not locking them in. What happens when we focus on open systems is that we increase innovation and we drive cost out of the system.

The traditional silos between servers and storage and networking are finally coming down. Technology has come to an inflection point.

What we see are pressures in the data center, because of virtualization, business pressures, and rigidity, giving us an opportunity to come in with a value proposition that really mirrors what we’ve done for 25 years, which is to think about agility, to think about alignment with the rest of IT, and to think about openness and really bringing that to the networking arena for the first time.

Tang: The traditional silos between servers and storage and networking are finally coming down. Technology has come to an inflection point. We're able to deliver a single integrated system, where everything can be managed as a whole that delivers incredible simplicity and automation as well as significant reduction in the cost of ownership.

Gardner: We’ve talked quite a bit about the technical issues that can lead to rigidity and complexity, being ill-equipped to support heterogeneity, and so forth. But there is a non-technical side of this problem as well: different teams, different cultures, lack of collaboration, and lack of a common language in many cases. What does moving toward the DCT level do for that?

Mellman: What a great challenge organizations have. Increasingly we do see our customers pulling these separate teams together more and more. It’s just been forced to happen, because the applications are more complex. Where we used to have single large applications, now data is pulled from a lot of different places.

We’ve got all sorts of different connectivity going on and going to different storage banks and server banks. But, what you have to do, if you're going to do this effectively, is not assume that you're going to get everyone understanding each other. You want to build systems that allow people to be in their universe and be in their roles, but collaborate better.

Different technologies

It’s sort of the old, "You can’t assume away the problem." I can’t just build product and assume that the networking team is going to suddenly go work with the server team. As you said, they’ve got different languages and frankly, it’s different technologies. What you want is the ability to have management tools and capabilities that allow these teams to better work together.

For example, we have a product called Virtual Connect, which has a management concept called Virtual Connect Enterprise Manager. It allows the networking team and the sever teams to work off the same pool of data. Once the networking team allocates connectivity, the server team can work within that pool, without having to always go back to the networking team and ask for the latest new IP address and new configurations.

HP is really focused on how we bring the power of that orchestration, and the power of what we know about management, to allow these teams to work together without requiring them, in a sense, to speak the same language, when that’s often the most difficult thing that they have to do.

Tang: I want to add to that. To some extent, Dana, it really is a cultural shift, and that kind of cultural change is going to meet resistance along the way. It needs to be effected all the way from the top down. This needs to be something that the CIO actively promotes. HP actually has a service offering, which really helps with this --- it’s called the Datacenter Transformation Experience Workshop.

We bring all the stakeholders into the same room -- the server team, networking team, storage, and facilities, and even the financial side of IT, so that we achieve alignment across all of them. They talk about the standard issues everybody needs to tackle when thinking about doing any kind of transformation, across not just the technology areas, but also processes, management tools, governance, etc. Coming out of it, you do achieve alignment and you come up with an actionable roadmap specifically customized for that organization.

We can’t afford to have customers have to rip and replace or throw away their existing infrastructure for the promise of some new future.

Gardner: Okay. Moving to the solution level here and looking at the future, a lot of organizations really can’t predict exactly what situation they are going to be in, in 5 or 7 years and data centers are often designed to last 20 years or more. So where does the ability to forecast come in and also bring in the legacy? I'm wondering about what the design elements are here that allow for the past, present, and the future to all be accommodated, particularly with the networking part of the equation.

Mellman: A point that HP is always taking a look at is this issue that we can’t afford to have customers have to rip and replace or throw away their existing infrastructure for the promise of some new future.

There are quite a few vendors out there who are saying that the future is all about cloud and the future is all about virtualization. That ignores the fact that the lion's share of what's in a data center still needs to be kept. You want an architecture that supports that level of heterogeneity and may support different kinds of architectural precepts, depending on the type of business, the types of applications, and the type of pressures on that particular piece.

What HP has done, and we do this in combination with HP Labs and with our services organization, is try to get a handle on what is that future going to look like without prescribing that it has to be a particular way. We want to understand where these points of heterogeneity will be and what will be able to be delivered by a private cloud, public cloud, or by more traditional methods and bring those together, and then net it down to architectural things that makes sense.

We realize that there will be a high degree of virtualization happening at the server edge, but there will also be a high degree of physical servers for especially some big apps that may not be virtualized for a long time, Oracle, SAP, some of the Microsoft things. Even when they are, they are going to be done with potentially different virtualization technologies.

Physical and virtual

Even with a product like Virtual Connect, we want to make sure that we are supporting both physical and virtual server capabilities. With our Converged Network Adaptors, we want to support all potential networking connectivity, whether it’s Fibre Channel, iSCSI, Fibre Channel over Ethernet or server and data technology, so that we don’t have to lock customers into a particular point of view.

We recognize that most data centers are going to be fairly heterogeneous for quite a long time. So, the building blocks that we have, built on openness and built on being managed and secure, are designed to be flexible in terms of how a customer wants to architect. At the core and aggregation levels in the data center what we do to actually power and make sure that people get connectivity, we are already looking at technologies like our Intelligent Resilient Framework, which allows clustering.

We're looking at a tier, across-tiers, across-geographies, and how customers can use that to create standard three-tier, a new collapsed two-tier architecture, distributed active geographically dispersed data centers that are managed from a single IP address.

We don't want to have to tell a customer they have to take something in a particular way, when we know that not only the state of their equipment, what their assets are in IT, and what they may have to accomplish in five years may be something that hasn’t even been thought of yet.

Gardner: Another thing that I often hear is the need -- when compliance, regulations, and security are brought into the equation -- of doing that all comprehensively. Trying to do a spot security approach and compliance approach runs into trouble. So, is there a payback here beyond the technical, when you have a comprehensive data center architecture in mind that includes the networking elements along with these others, so that you get a payback in terms of being able to manage comprehensively, and therefore, catch those security practice quirks and/or provide for regulatory and compliance adhesion?

Step one is to protect the infrastructure, and we can do that both at the infrastructure level and increasingly at the application level.

Mellman: Let's focus on the security and compliance issue. They are really two issues here that are critical. The first is what I might call the traditional network security and protection. How do I use the components to actually protect the infrastructure, but more importantly the applications and the data?

So we have the leading intrusion prevention system on the market today, powered by our TippingPoint Assets, that helps really do this in a very easy fashion. Instead of having to have policies that you have to continually update on different firewalls and on different parts of the network and servers and all across the infrastructure, you impose a policy centrally and they're automatically managed within the TippingPoint infrastructure.

The idea is that that’s automatically updated with leading researchers from around the world, so that the infrastructure never has to experience the malware. It's never taken down. It's zero day protection. You do it in an easy way. And easy is critical, because security is the place where, when it starts to get hard, people stop doing it. They stop updating their viruses. They stop their policies. They figure nothing has happened.

Step one is to protect the infrastructure, and we can do that both at the infrastructure level and increasingly at the application level. The compliance and risk management then gets to how well we're actually operating our environments. So whether it's payment card industry (PCI) or the Health Insurance Portability and Accountability Act (HIPAA), those requirements mean that you have to have a more orchestrated and, in some cases, automated approach across the whole infrastructure.

If an organization has a separate networking structure, think of the overhead involved in trying to help that come to the table with the rest of the IT organization in meeting those standards. It's going to be much, much easier, when we take a converged approach, when the network is actually a first citizen in the IT organization. If nothing else, it will be more efficient. But, in many cases we actually see it being more effective as well in terms of being able to proactively meet compliance requirements and the needs of particular verticals in doing that.

Reduction in risk

We see it really in two fashions that we can improve not only the security and protection of the network, the applications and the assets, but also the alignment and the reduction in risk plays into how well we can help an organization comply.

Gardner: I'm fond of hearing how this works in practice. Are there any customer stories perhaps, either named ones or use cases that you can share, which demonstrate what happens when you properly architect, converge, and bring networking into the modern data center approach?

Mellman: We have quite a few. The best one that gets people’s attention is our own HP IT. They looked at a variety of different approaches to architecting their data centers and selected HP networking, so much so that they said, "Even if you don’t buy the company, in this case 3Com, we're going to use the product."

They’ve been able to now re-architect one of their six data centers that run all of HP -- that is all 300,000 employees, plus partners, plus supply chain, by re-architecting around HP networking gear that includes Core Aggregation, Edge, and the Security Products.

They're getting half the power utilization and twice the performance out of the HP device than they were getting out of their previous vendor, which is quite a good outcome in and of itself.

Instead of having to cable everything multiple times and have people sent in to remove wires, it takes a wire-once approach.

But, the other thing it demonstrates that is really critical is that customers usually think they have to bite everything off at once. They moved one of these data centers, but it's completely interoperable now with their existing infrastructure or their previous infrastructure that was built on a competitor's technology. So, we're seeing that those kinds of benefits are easily gainable in those environments.

Gardner: I should point out just for our listener’s sake that you did actually go out and buy 3Com, and it's now fully part of HP, isn’t that right?

Mellman: That’s exactly right. It fits into the product lines that we are offering as HP Networking -- the A-Series, which is our most advanced, and the E-Series, which is our essential and comes with the lifetime warranty. Our V-Series is targeted at the small and medium business (SMB) market, and then the S-Series is powered by TippingPoint and is really focused on enterprise network security.

Another example is what we're seeing at the server edge with a product like Virtual Connect, where we virtualize the connections at the back of the servers. Instead of having to cable everything multiple times and have people sent in to remove wires, it takes a wire-once approach, virtualizes the connections and the bandwidth, so that you can operate four separate virtual pipes on a single 10 gig pipe and deliver huge amounts of value.

What we're seeing when customers move to this approach in a data center is up to 95 percent reduction in network gear required, upwards of a 70 percent to 80 percent reduction in cabling, time to market improvements, taking weeks to hours or days, and dramatic cost reductions, because it's simply much less gear.

Real opportunities

These are real things, real opportunities, that customers could take advantage of that allow them to operate more effectively and have dramatically less complexity in their data center architectures.

Gardner: For those interested in pursuing more and getting more information about the convergence and the commonality of the design for networking, as well as other components within the modern data center, where can they go? What are some resources and how do they get started?

Tang: On a high level, a good place to go is www.hp.com/go/dct. That’s got all kinds of case studies, video testimonials, and all those resources for you to see what other customers are doing. As I recommended earlier the Data Center Transformation Experience Workshop is a very valuable experience. It's only half a day and has no PowerPoint. Customers really love that, and that’s something I highly recommend.

Mellman: What we ask in terms of networking is for customers to think about where their biggest pain points are. Certainly, exploring hp.com is a good start, but it's understanding where a customer is feeling the most pain. Is it at the server edge, because you're struggling with how many virtual servers you have to manage and what it is taking to deal with that? Is it at the network core, because you feel that your current gear is out of gas and maintaining a hierarchical approach to networking, when you’ve got to fan out across the data center, is just causing too much pain and too much cost? It may be security that's the biggest pain point.

Once you identify that, we simply advise engaging with HP’s services organization or our sales organization or one of HP’s partners and having the discussion of what's possible.

Start with a small workable project and get a good migration path towards full transformation.

What we hear from our customer is, "The level of simplicity that you can bring, the level of automation that’s possible or orchestration, the fact that you're bringing breakthroughs that really demonstrate convergence." Whether it’s FCoE between networking and storage, a Virtual Connect and the virtualization of connectivity for wire-once on demand between servers and networking, or the deep integration between networking and the management software at HP, they recognize that convergence at the technology level is paying out in real benefits.

It’s having the customer just step back and say, "Where is my biggest pain point?" The nice thing with open systems is that you can generally address one of those, try it out, and start on that path. Start with a small workable project and get a good migration path toward full transformation.

Gardner: I suppose that the pain that most folks are dealing with will probably only increase should they stand still. We're starting to see recovery in a number of economies around the globe. Things like virtualization have certainly been growing quickly and implemented more deeply into organizations, and we're looking at a lot of interesting private clouds and other infrastructure approaches to improve on efficiency and that flexibility. So the pain, the rationale for looking at networking differently and rethinking it will probably only get worse, I expect.

Mellman: That’s going to be true for a number of technology areas, but I think that what we really see are customers looking at convergence and the opportunity with cloud and either getting confused with it being the means or the end.

Means to an end

We see a lot of vendors out there thinking about virtualization and cloud as the end in and of itself. In reality, HP feels very strongly that these are the means to the end. The end is how you deliver services, and how you align, and allow someone to do that in a cost-effective way that we believe will use convergence, but helps them have the flexibility to deliver that service and meet changing services requirements over time effectively.

Customers that don’t look at this in the appropriate way will find themselves falling further and further behind. A lot of this is accelerating and what we believe at HP, and we’ve said for years, is that we focus on the outcome. So, if it turns out that virtualization is an inappropriate tool, we will leverage that to the extent that it makes sense -- and we're doing that today.

But, we won’t sit there and say, "Here, we're going to give you a strict virtualization solution, because we may think that that’s only part of the way to the end." Our goal is to help customers focus on what they are trying to accomplish and then bring them the appropriate set of products, solutions, services, and even things from partners, to make that happen.

If the appropriate way for a customer to be able to deliver that service is through a private cloud or a public cloud that gets interwoven with the other offerings that they are going to deliver via resources on premise, then we are here to help them do that. That’s really where we think the rubber will meet the road, and where customers that take the approach that HP is delivering will end up ahead.

Gardner: Great. We’ve been discussing how networking is changing and how organizations can better architect networking into their data centers for simplicity and automation, and how the issues impacting the business as well as the technology side of the house. We've been joined by Helen Tang, Worldwide Datacenter Transformation Solutions Lead at HP. Thanks, Helen.

Tang: Thank you, Dana.

Gardner: And we’ve also been joined by Jay Mellman, Senior Director of Product Marketing in HP Networking. Thank you.

Mellman: Thank you, Dana, for the opportunity.

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.

Special Offer: Gain insight into best practices for transforming your data center by downloading three new data center transformation whitepapers from HP at www.hp.com/go/dctpodcastwhitepapers.

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

Transcript of a sponsored podcast discussion on modernizing data centers to make them adaptable and flexible. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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