Tuesday, November 09, 2010

Cloud-Based Commerce Network Helps Florida Manufacturer MarkMaster Reach New Markets, Streamline Transactions

Transcript of a BriefingsDirect podcast on using cloud computing as a two-way street between suppliers and buyers.

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

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

Welcome to a sponsored podcast discussion on ways that businesses are using cloud and e-commerce to improve how they do sales, marketing, and online transactions.

We'll examine how one company, Tampa-based MarkMaster, has quickly moved to nearly all-paperless sales transactions, found new customers via online networks, and increased the amount of product it sells to its existing clients. This was accomplished without a lot of additional IT or business-process spending by using cloud-based collaborative business commerce solutions.

To learn more about how MarkMaster is conducting its business better, please join me now in welcoming Kevin Govin, the CEO at MarkMaster.

Kevin Govin: Thanks for having me.

Gardner: Kevin, we're hearing a lot these days about cloud computing and online commerce. How is that having an impact? How is that changing your business?

Govin: It's totally changed our business. I laughed a little bit at your intro, when you talked about going "paperless." One of our main product lines is rubber stamps, and it seems counterproductive to go paperless with what we do.

Yet we have changed a lot. Now, 95 percent of our orders come electronically. We have one location in the United States that services all of the US and Europe. How could we do that without some kind of cloud transacting? It just makes the most sense. Over the last 10 years, I think 99 percent of our new customers have been coming through those kinds of systems.

Gardner: Tell me about MarkMaster. You've been around since 1933. That’s a long heritage. I am sure the company has adjusted to the realities as time has gone on, but tell me about the company now, your reach, and what you do.

Govin: We deal mostly with Fortune 500 companies. We sell what my brother, who is our sales manager, calls necessary needed nuisances. We sell rubber stamps, name badges, name plates, and interior/exterior signage. It's a unique field, kind of a niche market, as rubber stamps are a mature market. But, we seem to be gaining market share, so that’s been great for us.

Changed our reach

E-commerce has definitely changed our reach, which is, as I said, national and international. We have a plant in Birmingham, England, that we fulfill from as well for our American-based companies. We service 9 of the top 10 banks in United States. We do 8 of the top 10 insurance companies. Without cloud computing, there's just no way we would have even considered doing that.

Everything we do is personalized. Because I'm dealing with people’s names, even the fax -- which sounds like it would be a great thing -- was bad, because of the legibility and the readability. So, this all has been just a godsend for us.

Gardner: Tell me how things have changed in terms of how you've found your customers or allowed them to find you? Is there a different way in which this intersection of your value and their need is happening?

Govin: Sure. A lot has changed. We definitely use the cloud-computing models to go out and sell. Our products are products. There is nothing jazzy about a rubber stamp. Name badges are pretty much specified by the customers. So, we are not out there selling anything new or exciting as far as that’s concerned.

We have changed our model, and our salespeople don’t travel with the product. They travel with the computer and they show what we can do online and what kinds of services we can provide.

The investment in hardware has actually come down over time, but we do like to keep up today with the current technologies.



Obviously, we work heavily within the Ariba network, and because of that, now we are an Ariba Silver supplier. So, there's a lot of pluses that go with that, and we use a lot of banner ads and things like that.

We're also a minority-owned business. People are surprised when a minority-owned business comes up to them, says, "Look, I can transact on these, and this works just like anybody else that you are dealing with now."

Most of our products are considered office supplies. So, I have to look like the big Office Maxes, Office Depots, and that kind of thing. That’s how we present ourselves. Even though we're the biggest in our industry we're still a small company.

Gardner: And you're doing this without a whole lot of your own IT, I am taking it, and/or you haven’t had to invest significantly in more IT resources or facilities in order to do this?

Govin: We do it all ourselves. My background was in IT. Maybe that’s just a fallacy of mine, but we do most everything ourselves. It's all internal. We don’t have a large staff. We only have four people that work on IT systems. The investment in hardware has actually come down over time, but we do like to keep up today with the current technologies even in our web catalogs, etc.

Gardner: I guess the point is that with cloud computing, folks like Ariba are supplying a lot of what is intermediary between you and your prospects, rather than you have to build that all out yourself?

Quick turnaround

Govin: Absolutely. We can turn around on a customer in two days, because it's just all uploading something. There are no ports to connect or anything highly technical at all.

Gardner: What was it about the previous ways that things were done that may have been an inhibitor not only to your ability to find, but also to execute or to satisfy? Has there been some sort of process enhancement that you could point to that has allowed you to scale to grow your business or perhaps just be more flexible?

Govin: Because both on the buyer and the supplier supply side we are having hosted solutions or in the cloud it makes it a lot easier. There used to be a real reluctance from the customers to want to put us on board, because I might only be $100,000 year in spend, and they were going to outlay a lot of IT to connect me.

Now, with the cloud solutions, there is very little IT on either end. I'd imagine that it's even easier now than it was with the paper system before, because we can communicate to their end-users that we’re out here, and we’re ready to be bought from.

Gardner: It's interesting, Kevin, that we’re really talking about a two-way street here. You're putting your goods up on a network, a cloud, Ariba, and saying, "Here, come and get me." But, there's also that way in which someone in the field has a need, and they say, "How do I find the supplier that can get this to me fast?" That’s what's new and interesting about this cloud.

That’s huge for us, because it puts us in front of all those users that are looking for somebody like us.



Perhaps you could tell me a bit about Ariba as one specific way in which this two-way street is now a bit more flexible, but also something that gets the job done faster, better, cheaper.

Govin: Obviously we’re posted out on Ariba’s Discovery area, so they can find us very easily, and when they look at that, they see number of connections, and we get instant credibility on top of that. Then, of course, we even use the Ariba LIVE event. That’s huge for us, because it puts us in front of all those users that are looking for somebody like us.

Gardner: Maybe we can look at some examples. We have been talking about this at a fairly abstract level. Any specific customers? You don’t have to name them necessarily, but maybe you can tell the story of how this has worked, what the metrics of success may have been, and how others might learn from the way in which you’ve been doing this commerce?

Govin: One of the larger banks that we deal with, when we originally started with them, weren’t even considering us as a supplier, but they found us on the Ariba Discovery network. They called us and said, "Can you really do all of this. You're a small supplier?"

We showed them our list of what we have, where we’d already made Silver. So they knew we were vetted already by the supplier and we ended up with the business. It wasn't necessarily in a RFQ kind of environment either. It was "Wow. You can do this, and you’re the supplier we want and, in our case, you’re a minority supplier." So, it was just having that all together.

Can't always be there

But, they found us on Ariba. We didn’t solicit them. I mean, we had been soliciting them, and they knew of us, but we can't always be there when the customers need these products now. It's just too hard, because our products are needed everyday. So, that came out very well for us.

Gardner: I suppose that’s every salesperson’s dream is to be there right at that point of need.

Govin: It is.

Gardner: And you don’t have to do the heavy-lifting, but you want to be responsive as well.

Govin: Our salespeople have always worked in an environment of just continuing to keep contact with the customer. Hopefully, they remember us or that particular buyer hasn’t been moved to another commodity, which is one of the issues that we were into with the large corporations as well. This definitely keeps our face out there, especially when they know that Ariba is a resource to find a supplier.

Gardner: Now, what are the metrics? I see from some of your information that there have been some growth patterns, new clients, and even your existing clients seem to be using more of your products as a result of this. Your transactions are more swift. So, give me some meat? How is this really impacting your top-line and your bottom-line? What's the result?

Govin: Well, top-line, our sales are growing at least 10 to 15 percent a year for the last 10 years, and that’s the same time-frame that we’ve been on e-commerce and computing that way. So we have to believe that that’s a lot of it. Our industry is shrinking as well. There were 1,200 rubber stamp makers, now there are 400. None are of our caliber -- of course I’d say that, but that has made a big change.

Bottom-line, we had that year-over-year growth, and our customer service department has not grown, or added anybody to that staff.



Bottom-line, we had that year-over-year growth, and our customer service department has not grown, or added anybody to that staff. How does that work, because we've grown exponentially? The reality is online systems.

We proactively give them the information as to the status of their order, and they can actually see it go through our plan step-by-step. Does everybody need that information? No, but it does keep them from calling customer service. So it’s definitely changed.

Now, 10 years ago, we were 95 percent paper, and it's just totally flipped. So, you can count on your hand the overhead that this gets rid of.

Gardner: Let's go to the future. How do you see things panning out? Is there another step that you can take in terms of how you would exploit or use cloud? How do you see cloud coming to your aid as a business?

Govin: One of the things we’re always talking about is transacting in the cloud and getting orders and billing. The billing part is where we want our customers to go next, because it seems like the front-end integration is great, but on the back end there are 100,000 different ways that people want us to bill them and get paid -- EDIs or ACH or whatever.

We see it coming. People are migrating to the pay element, so that everything is integrated, and that’s great for us. It turns money faster. I don’t deal with credit cards as much, all of which cost me a lot of overhead.

Remember, my products are $5 or $6. People buy one at a time. So, handling invoices is just a nightmare. I get 20,000 invoices every day. We need to upload them, link them, and know the bill is okay.

My clients are not the kind of clients that aren’t paying me because they don’t have the money. They're the kind of clients that aren’t paying because I didn’t do the paperwork correctly. So having that end-to-end order-to-pay integration is where we see it's coming next for us in integrating the whole cycle. Some of my larger banks have definitely gotten on-board with that and it's great, and for a small company, it changed my cash-flow as well.

Gardner: We’ve been talking about how one company -- Tampa, Florida based MarkMaster -- has been moving to sales transactions online, and finding new customers. We’ve been joined by Kevin Govin, CEO with MarkMaster. Thanks so much.

Govin: Thanks for having me.

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: Ariba.

Transcript of a BriefingsDirect podcast on using cloud computing as a two-way street between suppliers and buyers. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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Wednesday, October 27, 2010

HP's Managed Paths to Private Clouds Provide Swifter Adoption at Lower Risk for More Enterprises

Transcript of a sponsored BriefingsDirect podcast on the role of effective management in moving enterprise applications to the cloud.

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 finding low-risk, high-reward paths to cloud computing.

Businesses are looking to cloud-computing models to foster agility and improve time-to-market for new services. But attaining cloud benefits can founder without higher levels of unified server, data, network, storage, and applications management.

These typically disparate forms of management must now come together in new ways to mutually support a variety of different cloud approaches -- public, private, and hybrid. Without adoption of such Business Service Automation (BSA) capabilities, those deploying applications on private and hybrid clouds will almost certainly encounter increased complexity, higher risk, and stubborn cost structures.

Using increased automation and proven reference models for cloud management -- and by breaking down traditional IT management silos -- the progression toward cloud benefits will come more quickly, at lower total cost, and with an ability to rapidly scale to even more applications and data.

We're here with two executives from HP Software & Solutions to learn more about what BSA is and why it's proving essential to managed and productive cloud computing adoption.

Please join me now in welcoming our guests, Mark Shoemaker, Executive Program Manager for Cloud Computing in the Software & Solutions Group at HP. Welcome Mark. [Read an exclusive interview with Shoemaker.]

Mark Shoemaker: How are you Dana? Great to talk to you again.

Gardner: Good to be with you, too. We are also here with Venkat Devraj, Chief Technology Officer for Application Automation, also in HP’s Software & Solutions Group. Welcome, Venkat.

Venkat Devraj: Thank you, Dana. Good to speak with both of you.

Gardner: Mark, I know you've been out and about talking with a lot of folks about cloud computing. It's a really hot topic around the world nowadays. What is driving the latest wave of demand and interest in cloud? What has people really excited?

Shoemaker: There are several things, Dana, and it certainly is an exciting time for us. There is hardly a place we go that we don’t end up talking to our customers about cloud.

Universally, it's the same things that have been driving a lot of the work that IT has been doing over the last few years. They want to improve their productivity, definitely get better utilization out of what they have already got. They want to be your better partner in the business. What that means is to shorten the time that the business has to wait for the services. It's all of those things, and there’s a lot to do to get there.

Gardner: Now, we have talked about these different models, even software as a service (SaaS), thrown in there from time to time. Is there any particular type of cloud approach that you see as the first step or the early path to more types of cloud?

The private cloud

Shoemaker: Most of the enterprise customers we talk to are looking at private cloud, the internal cloud solution that they own, that they then provide to their business partners, whether that’s the development teams or other elements in their business. So, that’s the first step. Most of them are looking to build on the virtualization work that they've already done.

Devraj: Mark is absolutely right. Coupled with that intention that IT has, there is also an interesting micro trend that’s occurring. A lot of the application teams, end-user business teams, are getting increasingly sophisticated. They're learning about private cloud implementations. They're privy to the same articles and magazines that IT is reading these days. Consequently, they're demanding levels of service from IT that are difficult to provide without a private cloud.

For example, because of things like agile development methodologies, application teams are doing a lot more application deployments and code releases than ever before. It's not uncommon to see dozens of application releases for different applications happening during the same day.

IT operations are just bombarded with these requirements, and requests, and they are just unable to keep up based on yesterday’s processes, which are relatively static. A lot of these processes are based on standards like ITIL and they have a certain level of static nature to them. They are there for stability and predictability and they're not evolving to accommodate the kind of dynamism that’s expected from IT ops.

Unfortunately, or fortunately, these application teams and business unit teams are quite influential. They're even willing to fund specific initiatives to allow their teams to work in self-service mode, and IT ops are finding themselves in reactive mode. They have to support them, make their internal processes more fluid and dynamic, and leveraging technology that allows that kind of dynamism.

IT really has to get in front of this. They have to manage all this.



Gardner: So, Mark, it sounds as if cloud isn’t just a new way of doing computing, it's really changing the way IT is defined.

Shoemaker: Absolutely. Just to add to Venkat’s comment, we're seeing the business driving IT and demanding that agility and that flexibility. We talk to a lot of our customers, where their own coworkers have taken corporate credit cards and gone out into the public cloud, procured space, and have begun developing outside of them. IT really has to get in front of this. They have to manage all this.

Gardner: One of the things that’s been interesting for me in watching this unfold is how, not that long ago, IT only had to compete with its past record. As long as they were showing improvements, riding Moore's Law, getting higher productivity, then everyone was pretty satisfied. Now, the competition for IT is not necessarily against its past track record, but they are competing against these other cloud providers, whether it's for platform as a service (PaaS) or spinning off into actual deployment.

Back to you, Venkat. IT really can't sit around and wait. They're now under the gun to accelerate the way in which they go about change in terms of a private cloud type of a development and deployment capability.

Devraj: That’s right. It's easy to say that, though, because when you look at this picture a little more closely, you find that the third-party companies, the cloud providers, the pure-play server enablers, have an unfair advantage. Because they were started relatively recently, in the last few years, they have the advantage of standardized platforms and delivery units.

A lot to deliver

They can say, "Okay, I'm going to deliver only Linux-based platforms, Windows-based platforms, or certain applications." When you look at the typical enterprise today, IT has a lot more to deliver. There is a lot of prevailing heterogeneity in terms of multiple software platforms and versions. There is a lack of standardization. It's very difficult to talk about cloud and delivery within the enterprise in the same breath, when you look at these kinds of technical challenges.

As a result, IT is undergoing a lot of pressure -- but they have to deliver given the kind of challenges that they face. That’s going to require a lot of education and access to the right kind of technology, training, and guidance. That’s where HP really comes into help.

Gardner: So this pressure on IT now can't necessarily lead them to leap before they look. This is still something they need to do with a great deal of planning and foresight. The governance needs to be in place.

Mark, tell me about what needs to come together in order for IT internally to progress toward cloud models, but at low risk, and perhaps transform the way they manage things, so that the services can be created swiftly, but without it being some sort of complexity at the same time.

Shoemaker: The one thing that’s different about cloud is that it really is a supply chain. It’s the supply chain of IT technology that the business consumes. If you think about what a supply chain is, it’s something that’s got to be repeatable. As you said, it has to be governed, to some extent, and it provides a baseline or foundation and building blocks to build those services that you can then customize on top of the business.

So, the farther up that you can go with your standard building blocks, the less difficult it is to manage and focus on the custom business-facing functions on the front-end.



So, the farther up that you can go with your standard building blocks, the less difficult it is to manage and focus on the custom business-facing functions on the front-end.

To do this, cloud has helped us out in a lot of ways. One of the challenges IT has always had is to get the business to consume standards. Because of a lot of hype in the market, the business absolutely is convinced that they get it and they want the business benefits that cloud offers.

To consume that, as you said, you have to start with standards. I'd wager that the majority of technology inside of most of our data centers, as much as 70 percent, is the same every time. It's the same hardware, a lot of the same software, and a lot of the same application packages.

You have to look at your total footprint and understand what those common elements are and then start building those inside the cloud catalog or the inventory of what would be consumed inside of the cloud. These can be OS images with applications, common applications, like SQL Server or Apache Web Server, that then get loaded into the service catalog. That’s what the developers or whoever the users are going to be get to select.

So, you control the base building blocks, and then they get consumed and can be developed on top of. Does that make sense?

Gardner: It does. It sounds like it's really something that’s aligned with these multiple clouds and sourcing options as well, whether it's hybrid, private, public, because if things align with that service catalog, regardless of where the services originate, there is that opportunity to leverage them, but in some sort of a managed fashion.

Shoemaker: You're right. One of the things you can't overlook is the fact that the business is the same. We want cloud, and IT is not ready for it. Even if the business decides to go to a public cloud, they still have to consume those elements in a standard fashion. There's no way out of that.

Doesn't work like that

We got kind of spoiled with virtualization, because there is that big physical-to-virtual (P2V) button, where you could take a physical server and basically pull it into a virtual image on another physical server. The cloud doesn’t work like that. There is no P2V button inside a cloud. Cloud has to be manageable, and to do that, you have to be able to set some standards and get those building blocks together to be offered.

Devraj: One of the things I see, to add to Mark’s point, is that a lot of CIOs look at the standardization part as something they need to solve before they embark on the cloud journey. That's one way of doing it. Definitely, you try to get some standardization in place, applying the 70/30 rule, as Mark alluded to.

But, it is also important to remember that the cloud requires a different set of dynamics, a lot more pragmatic approach, wherein CIOs need to look at standardization as a process that they undertake as part of the journey towards the cloud, rather than trying to do it all upfront.

If they take one of their mission-critical applications, that's a natural starting point. They look at, does this meet the requirement of being able to deliver value within a certain amount of time? Does it meet the requirement of being very close to the business users, being in high demand, and a lot of IT work goes into maintaining and managing that application stack. If that’s the right candidate for moving to the cloud, then they have to decide how do they do that? Having P2V like capabilities is one option.

It is also important to remember that the cloud requires a different set of dynamics, a lot more pragmatic approach.



The other option is that there are lots of application modernization capabilities that HP and Stratavia have brought to the table. One of the examples that I'd like to talk about is a lift-and-shift capability, where you can take a composite application running on a legacy environment like Sybase, for example. Let's say that Sybase is not part of the cloud implementation. They can choose to have that Sybase database converted in a fairly lights-out manner to a SQL Server or an Oracle environment and then launch it into the cloud.

So, there is a little bit of standardization as part of the journey towards the cloud that IT managers and stakeholders need to look at.

Gardner: You mentioned Stratavia, and for the benefit of our listeners, HP has now acquired Stratavia, and there was also quite a bit of product and service news on Sept. 15 around BSA.

Mark, why don’t you give us a recap, before we delve a little bit more into this methodology, and the crawl, walk, run approach to this that Venkat is getting at. Let's get into the news and then come to that strategic and technical discussion.

Shoemaker: Several things have happened in the last 60 days. Obviously, we had VMworld and we presented a cohesive strategy for infrastructure and even PaaS built on the BladeSystem Matrix hardware platform that we have, Converged Infrastructure. We've combined that with two other pieces and a piece of Cloud Service Automation (CSA) software.

The other pieces, and it goes back to what Venkat is talking about as the how-to, is a thing we call CloudStart, which is a consulting and a professional services-led engagement, where we come in and work with the customer to get that transformation process nailed, so we can quickly get them moving into the cloud benefits.

On the back end of that, there is another piece that we announced called Cloud Maps, which is really more knowledge, but in a different capacity, in that it offers downloadable templates, preconfigured applications, and best practices for sizing.

Cloud is a solution

As you said, if you had an application that you wanted to shift, or lift and shift to cloud, it's our best practices about sizing and other things around common applications like Outlook, SAP, and some others, that we are constantly adding to. We see the Stratavia acquisition fueling that fire, because in the end, cloud is a solution, and a solution needs content, and content wins. Content is what the customer is able to consume and use day one, when the solution is in. So it's important. We've done a lot there.

Obviously, the Stratavia acquisition was a huge, huge win for us, and puts us in a great position to help our customers transform their infrastructure.

Gardner: Mark, you painted a big picture of where these announcements go, but what are some of the constituent parts?

Shoemaker: We've been really busy over the last two months. We've had significant announcements at VMworld around the BladeSystem Matrix, where we have now got Converged Infrastructure and we have embedded the CSA software inside of it, combined that with the best practices on the front-end, and what you need to get up and running, and then the templates and the quick start pieces on the back-end, to really let you establish a cloud offering quickly.

But, all that sits on a recently refreshed BSA portfolio, with significant enhancements and new capabilities across network, automations, servers, and storage, that really makes all this happen. It's really the brains and the heavy lifting of what goes on to manage infrastructure, whether it's in a cloud or not.

On top of that, we've got a best-in-class content provider in Stratavia that’s come on board to help round out the capabilities and add more into what the customer can get out of our solutions in very quick order.

All that sits on a recently refreshed BSA portfolio, with significant enhancements and new capabilities across network, automations, servers, and storage, that really makes all this happen.



Gardner: Let's delve into that a bit. Venkat, you've come to HP Software & Solutions from Stratavia. Tell me about Stratavia and what it brings to the table in terms of this larger equation that Mark just described in terms of a progression towards cloud?

Devraj: Sure, Dana. As Mark mentioned, HP already has a very comprehensive set of technology platforms within BSA, as well as consulting capacity and educational prowess. However, the gap that existed was around specific domain knowledge and out-of-the-box content to manage specific composite application software stacks within the cloud.

These include being able to enable provisioning config management of heterogeneous database and middleware products, doing things such as code releases, performing maintenance work, and other functions around these stacks, in self-service and lights-out mode.

At Stratavia, that was precisely the area of focus. We had built a patented technology to manage and control varied software stacks, such as databases, web servers, application servers, and even well-known packaged applications, including Microsoft Exchange, Oracle E-Business Suite, and SAP.

The software used by these enterprises, which are common customers for both Stratavia and HP, tends to be disparate, heterogeneous, and requires a lot of domain knowledge to be able to manage, resulting in significant delays and bottlenecks associated with service delivery. Those processes just don’t scale in the cloud.

Different platforms

For example, just at the database layer, within the enterprise, it's very common to see four or five different platforms in use, such as DB2, SQL Server, Oracle, and so on. By automating the operations management lifecycle around these layers, Stratavia made it possible for the enterprise to deliver and manage these assets as a service within the context of the cloud. As more and more of HP’s and Stratavia’s joint customers started seeing value in that capability, HP brought Stratavia into its BSA/Business Technology Optimization umbrella.

Gardner: Mark, let's pull this back into this notion of being able to get to cloud quickly. IT is under pressure, and there are new kinds of competition, even competing against other companies that have had more of a greenfield approach. A startup might be able to get into cloud benefits much sooner, so there is another element of competition there.

But, to attain these cloud values without risk what is it about the announcements on the 15th that you think really is sort of the lynchpin to that? I am thinking that CloudStart, being able to manage as a service, coupled with whatever you have got on premises is part of that, but I would like to hear what your thoughts are.

Shoemaker: It's really about taking our experience, dealing with numerous customers in this area, and being able to apply into your IT. So we give them a running start at cloud, rather than trying to figure out everything.

Face it, a lot of the CIOs are looking at a data center that’s packed full of applications that they probably don’t feel as if they have got a good handle on. Now, cloud is coming into the picture, and they've got two things to do here. Number one, they need to start applying those new business methodologies to IT around providing cloud and the things that go with that, but also they have got a transformation piece to go along. And that can be very daunting.

We can quickly take the customer through the book of our experiences and best practices, help them get that plan, start that transformation, and look at the applications that can be pulled over, what needs to be modernized or what needs to be standardized.



What we've done is looked at the experience of helping previous customers do that work and we have applied that into the CloudStart and Cloud Maps, CloudStart being the planning and the upfront work that you need to get done.

So, we're right there with you. You don’t have to read chapter one of the book.

Then, as we put the infrastructure in with CSA for Matrix in the frame, we're embedding some of the CSA software inside of the Blade Matrix frame. So, you've got a way to build infrastructure as a service (IaaS) and manage it through the platform throughout the lifecycle.

Then, on the back end of that, we've got the preconfigured application templates. If I need a SQL Server image to put into the system, I can pull that from Cloud Maps, build it into a framework and offer that very quickly. I don’t have to go and figure out how to size for this piece or what golden template looks like for this application.

It's really about a running start into the cloud, and one that’s not going to leave you wanting in a year or two. You have to be careful. Cloud is a great enablement technology and a lot of people are looking at IaaS, but that’s the starting point for it, and then you have to manage everything that you put inside of that as well.

Gardner: Venkat, a similar question to you. What do you feel is the most important aspect or lynchpin to being able to get to cloud fast, but without it spinning out of control and/or being able to scale, if in fact you are successful?

Key areas

Devraj: There are a couple of things that become key areas. Number one, you have to be able to integrate with an existing ecosystem within the enterprise.

Companies have already spent millions and millions of dollars over the last several years on things like monitoring systems, ticketing systems, metering systems, and service catalogs. So the technology that they adopt for the cloud cannot be a radical redefinition of these existing assets. They have to be able to leverage these assets, where it makes sense, and tie them all together.

Number two, the new value that the cloud brings in comes in through out-of-the-box content. The out-of-the-box content needs to be able to manage and control all the layers of the cloud stack. The one thing that the cloud doesn’t change dramatically is that in order to deliver IT services, you still have to do it with network, storage, servers, databases, web servers, and application servers.

These are the fundamental building blocks and they have to be brought together using out-of-the-box content, automation content, as well as doing it in a manner where the application language is presented through a service catalog to the end users. The application that drives the business has to be the de-facto delivery unit for the cloud.

So both the out-of-the-box content and integration are the two main lynchpin areas in my opinion.

The whole content that I talk about becomes an abstraction layer, where the customer, the end user, the people who consume the services, see a very easy to understand service catalog.



Gardner: I guess it gives you that opportunity to keep the plane flying while changing the wings, as it were. So, you can go to a cloud model but you are really using the same technologies and assets, you are just perhaps abstracting them a little bit.

Devraj: Precisely. The whole content that I talk about becomes an abstraction layer, where the customer, the end user, the people who consume the services, see a very easy to understand service catalog. They can click on it. They can choose some menu options, some values from a drop-down box, and then specify exactly what they need, and have the response come back in minutes and in hours, rather than days and weeks, as is traditionally the case.

Gardner: Mark, as Executive Program Manager for Cloud, you've been traveling around the world quite a bit. We're talking about this in sort of a theoretical mode, but how about on the street? Are there folks who are doing this now? What are their experiences? What sort of paybacks are they getting, and is the business noticing?

Shoemaker: There's good news on all those fronts. Yes, we're talking with and helping a lot of our customers start to move into the cloud and move down that path.

I'll be honest with you. A lot of people we talk to are looking at drawing that line in the sand and creating those new standard services that the business can start to consume, but there are a couple of things.

Number one, it buys them some breathing room. The business is putting pressure on them to move into the cloud. The second part is that it lets them get experience on how things work and how they are going to work inside the cloud, because then it lets them go back, look at their legacy infrastructure and application portfolio, and try to figure out how that’s going to transform over time.

Some things will stay

We've talked about it in previous conversations. Everything doesn’t move into the cloud. Some things are going to stay in the physical elements. Some things will stay virtual, things that you've already virtualized and that you really can't standardize.

Then you've got cloud. As Venkat said, everything from the physical, all the way up to the application, whether it's in the physical infrastructure or the virtual or the cloud, still has to be managed, every element that you perform today. Compliance, patching, all of the service level management, being able to barebones provision servers, all of that is still going to occur in the data center, and we really have to pay attention.

Taking that first step, creating those new services, and building on those for the new applications that come in does a good job of pulling the rest of it, and lets the IT organization become more familiar with what it takes and raises their success ratio.

Gardner: Venkat, a similar question to you. For those folks who have already been progressing in this direction, doing this the proper way, what are some of the paybacks that they get and how well does both IT and the business benefit?

Devraj: One of the things I am seeing, Dana, is that there is a lot of qualitative analysis being done in this area. A lot of the customers that I work with are not sure yet what the baseline is for success in the cloud, given the newness of it and the rapidly changing definition of the cloud. So, not a lot of people are able to have publishable metrics that they can stand behind and say that this is the value that they've got.

In data warehousing, there is a saying that data never lies. That is true with cloud deployments as well.



A lot of them are in a wait and watch, or pilot, mode, and they're doing what I call a micro-cloud implementation, wherein they take a subset of their environment and do a pilot around a cloud deployment.

This is the data point that we're seeing. Of course there is a lot more maturity in some retail environments, for example, financial services, banking, insurance, etc., but a lot of it is wait and watch and there is a lot of qualitative stuff that’s going around. I'd love to see them apply some financial discipline and get some quantitative data around it, based on things like their ticketing system.

In data warehousing, there is a saying that data never lies. That is true with cloud deployments as well. Enterprises already have a wealth of data in their ticketing system, their incident management systems, and their change management systems, regarding which applications and environments are consuming the most IT admin time, which are violating the service level requirements of end user business teams the most, and which require the most caring and feeding.

One school of thought that will help them enable more quantitative analysis and measuring ROI would be to start the deployment with an application that offers the biggest bang for the buck.

They could start reviewing and mining their ticketing system data and choose the environment that cost the most to deploy and manage and maintain and has the toughest problems related to service level agreements (SLAs) and get those guys into the cloud.

Another school of thought is all about being risk averse and safe. Start with your least strategic system and get that into that cloud. If that works, fine. Then, you can start going to better, bigger, and harder to solve problems.

Either way the data is there

Either way, whichever is the approach that companies can adopt, the data is already is there in the ticketing systems and incident and change management systems. What is required is some level of guidance and education for these companies to start tracking this data and approaching this problem in a quantitative and easy-to-measure approach. Then, we should start seeing a lot more success stories that come out of the market.

Gardner: That, of course, will build on itself, and we'll see adoption patterns emerge. We look forward to charting that along the way.

Mark, how do folks get started? Any thoughts about where some resources are, how to educate yourself and to recognize that this is comprehensive? This isn't necessarily a piece that you plug in. You really have to think about the strategic and holistic view of doing this?

Shoemaker: This is similar to a lot of the things we have been talking about for the last few years. Cloud is an evolutionary process for IT. We've been talking about service-oriented architecture (SOA) and we have been talking a lot to our customers about data center automation over the last few years. Cloud just builds on that.

A lot of the different methods, no matter what they are, are what we already know inside of IT, and are what HP has been helping customers with. We've got significant experience and significant mindshare in workshops that we can help with. From the point of view where, "I don’t know what cloud is, but I know I need to do something," we've got one-day workshops that can come in and help educate.

You have to make sure you put in place a closed-loop process that’s going to allow you to be successful without all those hands in the middle of it, because you're not going to be able to keep up with it.



We've got longer engagements that come in and work with our customers to look at their processes and their level of maturity, along with the complexity in their applications, and help them build a set of steps that help them move into cloud.

Certainly, with what we've announced, with IaaS, with our rich legacy of data center automation, which really is what CSA is built on, we have got a history of providing ROI for customers around this. Cloud builds on that, but adds some challenges. There are a lot fewer human hands in the middle of it. Cloud’s whole purpose is to run on its own.

You have to make sure you put in place a closed-loop process that’s going to allow you to be successful without all those hands in the middle of it, because you're not going to be able to keep up with it. Plus, the customer is your actuation point. They push the button to get this thing going.

Leveraging the experience that we have, a great investment and the series of workshops we work with our customers on, being able to pull in the Converged Infrastructure offering, the transformation technology that we have, applying the cloud experience, and now bringing in the content maturity that Stratavia brings to the table for us, really just makes this a one-stop shop for what you need to do to transform.

Gardner: Venkat, last word to you. Given that automation is such a big part of this, what would you say is sort of an important stepping stone or a bridge to being automated in this and not stumbling in terms of sprawl or complexity? So, the question is how to be mindful about automation, as you progress towards these cloud values?

Devraj: The key thing to be mindful of is, what are the admins doing today that makes the environment run like clockwork. If you look at most IT enterprises, most of the people working there are very hardworking. They do a lot of good things. They do a lot of right things. And, they do that because of a lot of tribal knowledge that they have in their heads.

So, when you approach automation, one has to be very cognizant of the value that these people bring to the table. There is a level of education that’s required that tells them not to be threatened. It's not about job loss when automation comes in, but it's about job improvement.

Big gap

When you talk about improvement, there's a big gap in IT today, which is IT/Ops Engineering or IT/Ops Architecture. That’s a big missing silo within IT/Ops. And lot of the operators today that rely on scripts, command-line stuff, and point-and-click tools need to evolve themselves to more of an architect approach. They need more of taking stock of the big picture, and taking the tribal knowledge that they have in their heads and looking at the out-of-the-box content that HP provides and selecting the right content that corresponds to their tribal knowledge.

When they go into the cloud, the underlying management, things like compliance and governance, are not out of whack. They're able to successfully take that knowledge, put it in there, and then, in their new role as architects or engineering folks, they're able to watch, measure, and make modifications as appropriate.

So, the role that people play, that key subject matter experts play, is very crucial as part of walking before running with automation.

Gardner: Very good. We've been discussing finding the path to low-risk, but high-reward cloud-computing adoption. We have been enjoying the thoughts and leadership from HP’s Software & Solutions Group. I want to thank our panelists, Mark Shoemaker, Executive Program Manager for Cloud Computing at the Software & Solutions Group at HP. Thank you, Mark.

Shoemaker: Great, Dana. Thanks so much. I appreciate your time.

Gardner: And also Venkat Devraj, Chief Technology Officer for Application Automation at HP Software & Solutions. Thank you so much.

Devraj: Dana, Mark, thank you very much. I enjoyed the discussion.

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 BriefingsDirect podcast on the role of effective management in moving enterprise applications to the cloud. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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