Server and Desktop Virtualization Produce Combined Cloud and Mobility Benefits for Israeli Insurance Giant Clal Group

Transcript of a BriefingsDirect podcast on the multiplier effects gained from virtualization in the enterprise.

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

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

Today, we present a sponsored podcast discussion on how a large Israeli insurance and financial services group rapidly modernized its IT infrastructure. We’ll hear the story of how Clal Insurance Enterprises Holdings, based in Tel Aviv, both satisfied current requirements and built a better long-term technology architecture.

The rapid adoption of server virtualization that enabled desktop virtualization that has spawned cloud and mobile computing benefits at Clal clearly illustrate the multiplier effect of value and capabilities from such IT transformation efforts. [Disclosure: VMware is a sponsor of BriefingsDirect podcasts.]

We’ll learn how Clal’s internal IT organization, Clalbit Systems, translated that IT innovation and productivity into significant and measurable business benefits for its thousands of users and customers.

Here to fill us in on Clal’s impressive IT infrastructure transformation journey, is Haim Inger, the Chief Technology Officer and Head of Infrastructure Operations and Technologies at Clalbit Systems. Welcome, Haim.

Haim Inger: Nice to meet you.

Gardner: One of the things that’s interesting to me is the speed and depth of how your organization has embraced virtualization. You went to nearly 100 percent server virtualization across mission-critical applications in just a few short years. Why did you need to break the old way of doing things and why did you move so quickly to virtualization?

Inger: The answer is quite simple. When I got the job at Clal Insurance four years ago, everything was physical. We had about 700 servers, and to deploy a new server took us about two months. The old way of doing things couldn't hold on for much longer.

Regulations in the new businesses that we needed to implement required us to do such things as deploy servers as quickly as possible and simplify the entire process for demanding a new server -- to deploying it and giving it the full disaster recovery (DR) solution that the regulations require.

The physical way of doing things just couldn’t supply the answer for those requirements, so we started to look for other solutions. We tested the well-known virtualization solutions that were available, Microsoft and VMware, and after a very short proof of concept (POC), we decided to go with VMware in a very specific way.

We didn’t want to go only on the development side, the laboratory side, and so on. We saw VMware as a solution for our co-applications and for a long-term solution, not just for islands of simple virtual servers, where we decided from day one to start using VMware on SQL servers, the Oracle servers, and SAP servers.

Full speed ahead

If they held on there very well, then we could, of course, also virtualize the simpler servers. It took us about four months to virtualize those initial servers, and those were very simple. We just pushed the project ahead full speed and virtualized our entire data center.

Gardner: It seems as if you were concerned about DR first and foremost, but that led you on a path to wider virtualization of the servers. Is that correct?

Inger: Yes, that’s correct.

Gardner: As you’ve gone about this journey, why does it seem to be paying off both on the short term and setting you up for longer term benefits?

Inger: That’s very simple to answer. Today, to provision a new server for my customer takes about 20 minutes. As I said, in the past, in the physical world, it took about two months.

DR was the main reason for going into this project. During a DR test in the old days, we had to shut down our production site, start up all servers on the DR site, and hope that everything worked fine. Whatever didn’t work fine, we tested one year after that initial DR was done.

Using VMware with Site Recovery Manager, I can do an entire DR test without any disruption to the organization.

Using VMware with Site Recovery Manager (SRM), I can do an entire DR test without any disruption to the organization, and I do it every three months. Watching our current DR status, if anything needs to be fixed, it’s fixed immediately. I don’t have to wait an entire year to do another test.

So those simple things are enabling us to give our organization the servers that they need, when they need them, and to do the regression in a much simpler way than we did in the past.

Gardner: Tell us a bit more about Clal. I'd like to learn about the size of your organization and the types of responsibilities you have. You’re supporting several different companies within the Clal Group, isn’t that right?

Inger: Clal is a group that contains a very big insurance company and another company that is doing trading on the Israeli international stock market. We have a pension company and insurance for cars, boats, apartments and so on. We even have two facilities running in United States and one in the UK.

We're about 5,000 employees, and 7,000 insurance brokers, so that’s about 12,000 people using our datacenter. We have about 200 different applications serving those people, those customers of ours, running on about 1,300 servers.

Large undertaking

Gardner: That's obviously a very large undertaking. How do you manage that? Is there a certain way that you’ve moved from physical to virtual, but have been able to manage it without what some people refer to as server sprawl.

Inger: I know exactly what you mean about over populating the environment with more servers than needed, because it’s very easy to provide a server today, as I said, within one hour.

The way we manage that is by using VMware Chargeback. We've implemented this module and we have full visibility of the usage of a server. If someone who requested a server is not using it over a period of three months, we’ll know about it. We’ll contact them, and if they don’t require that server, we’ll just take it back, and the resources of that server will be available once again for us.

That way, we're not providing servers as easy as could be. We're taking back servers that are not used or can even be consolidated into one single server. For example, if someone requested five web servers based on Microsoft IAS and we’re sure that it can be consolidated into just one server because CPU utilization is very low, we’ll take it back.

If an application guy requires that the server have eight virtual CPUs, and we judge it's use on peak time is only two, we’ll take six virtual CPUs back. So the process is managed very closely in order not to give away servers, or even power, to existing servers that are not really needed.

We're taking back servers that are not used or can even be consolidated into one single server.

Gardner: Tell me how you’ve been able to develop what sounds like a private cloud, but a sort of dynamic workload capability. Do you consider what you’ve done a private cloud, or is that something you’re looking to put in?

Inger: We do consider what we've done a private cloud. We're actually looking into ways of going into a hybrid cloud and pushing some of our systems to the public cloud in order to control the hybrid one. But, as I said, we do consider the work we've been doing in the past three years as fully partnering a private cloud.

Gardner: Have there been any hardware benefits when moving to a private cloud, perhaps using x86 hardware and blades? How has that impacted your costs, and have you moved entirely to standardized hardware?

Inger: Of course. When we saw that those 20 servers that we initially did in late 2008 and everything worked okay, we decided to do standards. In one of the standards that was decided upon was if it doesn’t work on VMware it won’t get on our data center. So a lot of applications that run on Itanium microprocessors were migrated into Linux and on top of VMware running on x86,

Saving money

We managed to save a lot of money, both in supporting those legacy systems and developing in those legacy systems. They’re all grown. Everything that we have is virtual, 100 percent of the data center. Everything is run on x86 blades, running Windows 2008 or in Linux.

All these systems we have used to run on a mainframe. It’s Micro Focus COBOL running on top of Red Hat Linux latest version, on top of VMware, and x86 blade.

Gardner: Let’s take the discussion more towards the desktop, the virtualization experience you’ve had with servers and supporting such workloads as SQL Server, Oracle, and SAP. This has given you a set of skills and confidence in virtualization that you’ve now taken out, using VMware View, to the desktop. Perhaps you could tell us how far you’ve gone in the virtual desktop infrastructure (VDI) direction?

Inger: After finishing the private cloud in our two data centers, the next step within that cloud was desktop. We looked at was how to minimize the amount of trouble we get from using our desktops -- back then it was with Windows XP Desktop -- and how to enable mobility of users, giving them the full desktop experience, whether they’re connecting from their own desktop in the workplace or if they’re using an iPad device, connecting from home, or visiting an insurance broker outside of our offices.

We looked at the couple of technologies that would fit in VMware View. Again, after a short POC, we decided to go ahead with the VMware View. We started the project in January 2012 and right now w're running 600 users. All of them are using VMware View 4.6 which is being upgraded, as we speak, to version of 5.1.

The plan is that by the end of next year, all of our employees could be working on VMware View.

It enables us to give those users an immediate upgrade to a Windows 7 experience, by just installing VMware View, instead of having to upgrade each station of those viewers, and without going to those 600 users who are on Windows 7 right now.

And we're delivering it on every device that they're working on. If they’re at work, at home, outside of their office, their devices, iPad as we said earlier, are getting the same experience. The plan is that by the end of next year, all of our employees could be working on VMware View.

Gardner: With those 600 or more users, have you been able to measure any business benefits -- maybe a cost savings or the agility of being able to work remotely. Have you been able to find a return on investment (ROI) in business terms?

Inger: It’s quite hard to calculate down to the last dollar our ROI data sheet on VDI, because the initial cost is very high. But in the past, in a building where I have 300 people working, I had to have two technicians full time working and giving assurance to those end users.

After going to full VDI in that building I don’t have any technician there at all. When a user has a problem on the physical workstation, we usually remote control the station and try to fix it. Sometimes, you have to format the entire station. When the user has a problem in the VDI station, he can just log out, log in, and within less than a minute, get a completely new work station. A technician doesn’t even have to remote control that problem in order to fix it.

Same experience

The ability to give the user the same experience on each device that he works on is sometimes priceless. When I fly from Israel to the United States and have a wi-fi connection in the plane, I can use an iPad and then work on my office application as if I were in the office. Otherwise, if it’s a 12 hour flight, I'd be 12 hours out of work.

If you take into account the entire ecosystem that you’ve built surrounding VMware View, it’s actually priceless, but it’s very hard to quote exactly how many dollars it save us on a daily basis.

Gardner: Has the experience with the initial 600 now prompted you to move to VDI across more of your thousands of workers? How aggressive do you intend to be with your use of View?

If you take into account the entire ecosystem that you’ve built surrounding VMware View, it’s actually priceless.

Inger: By end of the year 2012, our plan and budget was for 1,000 users. So we're on the way to meet our goal in December this year. For next year, 2013, our goal is to add 2,000. So it will cover almost the entire organization. It leaves something like 500 power users. I’m not sure that VMware View is the best solution for them yet. That will be tested in 2014.

Gardner: It certainly sounds as if you’re able to move rapidly to a mobile tier capability using View and also your cloud capacities. That's something that many other companies are seeing that their users are interested in. Do you have sense that VDI is a stepping stone to supporting this mobile capability as well?

Inger: Of course VDI as a stepping stone is an essential element in implementing a bring your own device (BYOD) policy. That’s something we're doing. We're in the initial steps of this policy mainly with iPad devices, which a lot of employees are bringing to work and would like to bring when they're on site, offsite, or at home. Without VDI, it would be impossible to give them a solution. We have tons of iPads today that are connecting to the office via VDI with a full Window Server experience.

Gardner: I'd like to get your thinking around virtuous adoption. As we started talking about DR, your full virtualization of your server workloads, your being able to go to standardized operating systems and hardware, moving to VDI, then moving to hybrid cloud and also now mobile, it truly sound as if there is a clear relationship between what you’ve done over the years with virtualization and this larger architectural payoff. Maybe you could help me better understand why the whole is perhaps greater than the sum of the parts.

Inger: The whole is greater than sum of the parts, because when I chose VMware as a partner combined with EMC on the storage side and their professional services, I had actually done a lot of the work together with my people.

Life gets easier

Life gets easier managing IT as an infrastructure, when you choose all those parts together. An application guy could come to you and say, "I didn’t calculate the workload correctly on the application that's going to be launched tomorrow, and instead of 2 front-end servers I need 15."

Some other person could come to me and say, "I have now five people working offshore, outside of the Israel and I need them to help me with a development task that is urgent. I need to give them access to our development site. What can you do to help me?"

I tell him, "Let’s put in our VDI environment, and they can start working five minutes from now." When you put all of those things together, you actually build an ecosystem that is easier to manage, easier to deploy, and everything is managed from a central view.

Life gets easier managing IT as an infrastructure, when you choose all those parts together.

I know how many servers I have. I know the power consumption of those servers. I know about CPU’s memory, disk I/O and so on. And it even affects the decision-making process of how much more power I'll need on the server side, how many disks I'll need to buy for the upcoming project that I have. It’s much easier decision making process. Back in the physical day, when each server had its own memory, its own CPU, and its own disk, there was much more guessing than deciding upon facts.

Gardner: Very good. I’m afraid we’ll have to leave it there. We’ve been talking about how Clal Insurance Enterprises Holdings, has both satisfied current requirements and built a better long-term technology architecture, all based on virtualization. And we’ve seen how such IT innovation and productivity have translated into significant business benefits for Clal’s users and customers.

I'd like to thank our guest, Haim Inger, the Chief Technology Officer and Head of Infrastructure Operations and Technologies and Clalbit systems. Thank you so much, Haim.

Inger: Thank you very much.

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

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

Transcript of a BriefingsDirect podcast on the multiplier effects gained from virtualization in the enterprise. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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Cloud Approach to IT Service Desk and Incident Management Bring Analysis, Lower-Costs and Self-Help to BMC Remedyforce Users

Transcript of a BriefingsDirect podcast on how SaaS delivery and BMC Software’s “truth in data” architecture deliver big payoffs for IT support at Comverge and Design Within Reach.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: BMC Software.

Join Danielle Bailey and Alec Davis at Dreamforce 2012
Sept. 18-21 in San Francisco.

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 how two companies are extending their use of cloud computing by taking on IT service desk and incident management functions "as a service."

We will see how a common data architecture and fast delivery benefits combine to improve the efficiency, cost, and result of IT support of end users.

Our examples are intelligent energy-management solutions provider Comverge and how it’s extended its use of Salesforce.com into a self-service enabled service desk capability using BMC’s Remedyforce. [Disclosure: BMC Software is a sponsor of BriefingsDirect podcasts.]

We'll also hear the story of how modern furniture and accessories purveyor, Design Within Reach, has made its IT support more responsive even at a global scale via cloud-based incident-management capabilities.

Learn more about improving the business of delivering IT services, and in moving IT support and change management from a cost center to a proactive IT knowledge asset.

Here to share their story on creating the services that empower end users to increasingly solve their own IT issues, is Danielle Bailey, IT Manager at Comverge in Norcross, Georgia. Welcome Danielle.

Danielle Bailey: Thank you so much for having me.

Gardner: We are also here with Alec Davis, the Senior System Analyst at Design Within Reach. He's in San Francisco, but the company is based in Stamford, Connecticut. Welcome to BriefingsDirect, Alec.

Alec Davis: Thank you, very much. Thanks for having me.

Gardner: Danielle, when your company started looking at improving your helpdesk solutions and your IT support, I have to assume that -- like a lot of companies -- you had some significant pain and cost when it comes to providing that support, particularly as you change systems and move through the maturation and evolution of IT.

Could you describe for me some of the problems were that you really wanted to solve, that you want to improve?

Pain points

Bailey: We had three pretty big pain points that we wanted to address, as we moved forward. The first was cost. As our company was growing pretty quickly, we were having some growing pains with our financials as far as being able to justify some of the IT expense that we had.

The current solution that we had actually charged by person, because there was a micro-agent involved, and so as we grew as a company, that expense continued to grow, even though it wasn’t providing us the same return on investment (ROI) per person to justify that.

So we had a little over $55,000 a year expense with our prior software-as-a-service (SaaS) solution, and so we wanted to be able to reduce that, bring it back more in line with the actual size of our IT group, so that it fit a little bit better into our budget.

One of the reasons we went with Remedyforce is that rather than charging us by the end user, the license fees were by the helpdesk agent, which would allow us to stay within the scope of what our size of our IT team was.

The second big issue that we had was that a lot of our end users were remote. We have field technicians who go out each day and install meters on homes, and they don’t carry laptops, and the micro-agent required laptops for them to be able to log tickets.

We wanted to be able to use something that would allow us to give our field techs the ability to log tickets on a mobile application, like their iPhones that we have for them to use. So it was important that whatever we went forward with had that aspect, and Remedyforce did have that.

The third issue was that we were Sarbanes-Oxley (SOX) compliant and we needed to make sure that whatever solution we chose would allow us to track change management, to go through approval workflows, and to allow our management to have insight into what changes were being made as they went forward, and to be able to interact and collaborate on those changes.

So that was the third reason we chose Remedyforce. It has the change management in there, but it also has the Salesforce.com Chatter interface that we are able to use to make sure that managers can follow some of the incidents and see as we go through if we have any changes that we can quickly work with them to explain what we may need and that they can contribute to that conversation.

Those were the three biggest things that we were kind of looking at when we were deciding what to move forward with.

Gardner: Alec, does this sound familiar or were there some other concerns that you had in your particular company that you wanted to address?

Different stories

Davis: We have kind of a different story. A couple of years ago we made a huge corporate move from San Francisco to Stamford, Connecticut. At that move we saw that it was an opportunity to look at our network infrastructure and examine what hardware we needed and whether we could move to the cloud.

So Remedyforce was part of a bigger project. We were moving toward Salesforce and we also moved toward Google Apps for corporate email. We wanted to reduce a lot of the hardware we had, so that we didn’t have to move it across the country.

We were also looking for something that could be up and running before that move, so we wouldn't have any downtime.

We quickly signed up with Google, and that went well. And then we moved into Salesforce.com. At Dreamforce 2010, Remedyforce was announced, and I was there and I was really excited about the product. I was familiar with BMC’s previous tools, as well as some of the other IT staff, so we quickly jumped on it.

But as part of that move, something else kind of changed about our IT group. We did grow a bit smaller, but we were also more spread out. We used to all be in one location. Now, we're in San Francisco, Stamford, and also Texas. So we needed something that was easily accessible to us all. We didn’t necessarily want to have to use a virtual private network (VPN) to get onto a system, to interact with our incidents.

And we also liked the idea of a portal for our customers. Our customers are really just internal customers, our employees. We liked the idea of them being able to log in and see the status of an incident that they have reported.

We're also really big on change management. We manage our own homegrown enterprise resource planning (ERP) system. So we do lots of changes to that system and fix bugs as well. And when we add something new, we need approval of different heads of different departments, depending on what that feature is changing.

So we are big on change management, and prior to that we were just using really fancy Microsoft Word documents to get approvals that were either signed via email or printed out and specifically signed. We like the idea of change management in Remedyforce and having the improved approval process.

Gardner: Danielle, let’s learn a little bit more about your company, Comverge. Tell us what it does, what your business is, but then also a little bit about your IT support situation in terms of numbers of users and their distribution around the world?

Bailey: Comverge is a green energy company. We try to help reduce peak load for utility companies. For example, when folks are coming home and starting to wash clothes, turn on the air-conditioning and things like that, the energy use for those utilities spikes.

Join Danielle Bailey and Alec Davis at Dreamforce 2012
Sept. 18-21 in San Francisco.

Hardware and software

We provide software and hardware that allows us to cycle air-conditioning compressors on and off, so that we reduce that peak. And by reducing that peak we are able to help utility companies to meet their own energy needs, rather than buying power from other utilities or building new power plants.

We have been in business for about 25 years. We originally started out as part of Scientific Atlanta, but they have taken on new companies across the country to integrate new technology into what we offer.

We are now nationwide. We provide services to utilities in the Northeast, from Pennsylvania, and then all the way down to Florida, and then all the way west to California, and then to Texas, New Mexico, and different areas in-between. And we’ve recently opened new offices in South Africa, providing the same energy services to them.

Comverge tries to make sure that the energy that we're able to help provide by reducing that load is green. It’s renewable. It’s something we can continue to do. It just helps to reduce cost as well as to save the environment from some of the pollution that may happen from new energy production.

In a nutshell, Comverge is a leading provider of intelligent energy management solutions for residential and commercial and industrial customers. We deliver the insight and controls that enables energy providers and consumers to optimize their power usage through the industry’s only proven comprehensive set of technology services and information management solution.

In January, Comverge delivered two new products, the Intel P910 PCU that includes capabilities to support dynamic pricing programs, and Intel Open Source Applications for the iPhone. The iPhone is very important to us. Our field technicians are using it at residential and commercial installations, and we just want to make sure that we continue with that innovation.

Gardner: And how many IT end users are you supporting at this point?

Bailey: About 600, and those are in South Africa, as well as all around the U.S.

Gardner: And so you are delivering your support through the same infrastructure, the same applications delivery across the globe?

Bailey: That’s right, because it is web-based, everybody can access it. It's great.

Gardner: And what's the new experience in terms of performance on that?

Bailey: As far as the end users, they've all been really happy with it. We transitioned in April to Remedyforce from our old SaaS system, but the users say that Remedyforce is a lot easier for them to use, as far as putting in ticket and for them to see updates whenever our technicians write notes or anything on the tickets. It's a lot easier for them to share with others whenever they have to change what we are working on.

Core business

Gardner: And it seems that your core business is involved with getting more data and information and making that useable in terms of management of energy resources. I suppose the same effect is being employed here at the IT level.

Is there something about the information that you are able to glean from your interactions, from these tickets, and from your IT workforce that you are then bring back into how you provide IT better, to make it either proactive or building a better knowledge base asset?

Bailey: We are. We just implemented Remedyforce in April. So we are still building our knowledge base. We didn’t have that capability previously. So we are able to use some of the tickets that we have come in as we process and update those and control and close those. We are able to build articles that our technicians can use going forward.

I have recently switched my ERP analyst, but because I was able to pull some of that information out of Remedyforce, where I had my prior ERP analyst, it actually helped me to train this new person on some of the things they can do to troubleshoot and resolve problems.

We are also able to use the automated reporting out of Remedyforce so that I can schedule reports on our tickets, see how many we have open, and for what categories and things like that, and take that to our executive management. They're able to see our resource needs, see where we may have bottlenecks, and help us make decisions that help our IT group move faster and more efficiently.

Gardner: Alec at Design Within Reach, help us better understand your company, what it does, and then also some of the requirements that are unique to your organization, when it comes to IT support.

Davis: Design Within Reach is a modern furniture retailer. We've been around for 12 years, starting in San Francisco. We have a website that has the majority of our sales. We also have “studios” that are better described as showrooms. We have usually about five reps in those studios, and we have about 50 studios around the U.S. and Canada.

So those [reps] are our users that we support. We've become a very mobile company in the last couple of years. A lot of our sales reps are using iPads. One of the requirements we've had is to be able to interact with corporate in a mobile fashion. Our sales reps walk around the showroom and work with our customers and they don’t necessarily want to be tied to a desk or tied to a desktop. So that is definitely a requirement for us.

Our IT staff is small. We have an IT group, information technologies, and we also have our information systems, which is our development side. In IT we have about six people and in our IS department we also have about six people. We have kind of a tiered system. Tickets come in from our employees, and our helpdesk will triage those incidences and then raise them up to a tiered system to our development side, if needed, or to our network team.

We do have also some contractors and developers. As I mentioned before, we have our own ERP system. We do a lot of the development in house, so we don’t have to outsource it. It's important for those contractors to be able to get into Remedyforce and work the change management we have into the requirement, and also in some cases look at incidences to look how bugs are happening in our ERP environment.

Self-help improvement

Gardner: Given that you have a fairly concentrated group that is accomplishing significant amount of work, is there anything about the Remedyforce approach that's given you self-help improvement? How have you been able to empower those end users to find the resources they need, to keep you fairly lean and mean when it comes to IT?

Davis: Well, we have put most of the onus on our IT department to know how to resolve an issue, and we did have a lot of transition with new employees during our move. So building a knowledge base with on-boarding new IT people is also very important. Again, we're a small team and we support a larger internal customer base, so we need them to start and have the answers pretty quickly.

Time is money, and we have our sales reps out there that are selling to our large customer base. If there's an issue with the reporting, we need to be able to respond to it quickly.

Gardner: And the conventional wisdom is that helpdesks are still costly, and the view has been that it’s a cost center. Is there anything about how you have done things that you think is changing that perception? Is it becoming more of a proactive approach, and is there a way of defining IT support more as a collaborative interaction rather than just a necessary evil?

Davis: Well, essentially the reporting has helped us to isolate larger issues, and to also identify employees that put a lot of incidents in. With the reporting, which is very flexible, and with reporting for management, requirements can change. With the Remedyforce reporting, I can change those existing reports, create new ones, or add new value to those reports.

Mainly you see how many tickets are coming in. We can show management how many incidents we are handling on a daily basis, weekly, monthly, and so forth. But I use it mainly to identify where are the larger issues. Managing an ERP system is a large task, and I like to see what issues are happening and where can we work to fix those bugs. I work directly with the developers, so I like to be as proactive as I can to fix those bugs.

And we are very spread out and very mobile, so we like the flexibility to be able to get into Remedyforce without VPN or traditional methods.

Gardner: It sounds as if you are gaining almost a business intelligence (BI) insight as to what's going on with your IT operations through the perceptions and needs of your end users. I assume that is allowing you to be more proactive, rather than simply trying to firefight all the time?

Davis: Absolutely. And I didn't answer your second question about collaborating. Collaboration is becoming very important to us. We did roll out Salesforce.com Chatter to most of our company, and we are seeing the benefits in our sales team especially. We are trying to use Chatter and Remedyforce together to collaborate on issues. As I said, we are spread out, and our IT group has different skill sets.

Depending on what the issue is, we talk back and forth about how to resolve it, and that's so important, because you do build up knowledge, but the core of our knowledge is in every one of our employees. It's very important that we can connect quickly and collaborate in a more efficient way than we used to have.

Support scrum

Gardner: That's interesting. So it sounds as if it's almost a “support scrum,” as opposed to a development scrum effect, is that fair?

Davis: That's fair, yeah.

Gardner: Danielle, similar question. How has the perception of IT support been shifting for you? Is there a shift afoot there at Comverge around the perception that IT support is a cost center?

Bailey: Yes, we have been able to show where IT is actually starting to save money for the rest of the company by increasing efficiency and productivity for some of our groups. There are some of the development works that we are able to do by being able to track and change processes for folks, making them more efficient.

For example, one of the issues that we had was that we were tasked with trying to reduce our telecom expense. We were able to go through and log all of the different telecom lines and accounts. We had to trace them down and see where they were being used and where they may not be used anymore. We worked with some folks within the team to reduce a lot of the lines that we didn’t need anymore. We have been moving over to digital, but we still had a lot of analog lines.

Before, we didn’t have a way to really track those particular assets to figure out who they belonged to and what their use was. Just being able to have that asset tracking and to work through each of those as a group, we were able to produce a lot.

The first quarter of the year we reduced our telecom expense over $50,000 a year and we are continuing with that effort.

Gardner: It sounds as if you're able to codify best practices, instantiate them into other areas, and then gain quite a bit of efficiency in the process.

Bailey: Exactly, as well as being able to track and recognize what some of the assets are, and be able to end the lifespan of those that we no longer need.

Gardner: Is there something about having a common repository, or configuration management database (CMDB) in this case that you think is extensible? Is there a way of not only gathering more information in terms of knowledge, but then applying it in other ways?

Bailey: With the knowledge base that we're building, we're able to let a lot of users begin to self-help. We have a pretty small IT team. We have only two people on what we call helpdesk support. Then we have 2 network team members, and we have about 10 people on our information services team, where we do development for the software and data services.

Support staff

So our IT support team is really small, but by being able to track assets that we have, manage problems that we have, and maintain the trends for those, we're able to better utilize an external company that we have. There are only about three people on that team as well, to make our processes a little bit more efficient.

We're able to reach out to them when we need to by assigning tickets to them. They're able to log in without being inside of our corporate network. They're able to track and complete issues for us, and we're able to keep all of that knowledge going forward. If we have a similar issue again, we're able to go back, review that, and fix the problem.

It's been a lot of help for us to just start building that knowledge repository. Whereas before, if someone left the company, you would lose years and years of knowledge because there was no place that it was documented.

Gardner: I think we can even look to IT as being a bit of a pioneer here. Is there a way of taking this model, and maybe even the very tools that you are using, and bringing that to other forms of support within your organization? Perhaps it's HR support. It might even be extending beyond the boundaries of the organization to your actual customers, rather than your internal employees.

Any thoughts about how what you've been doing and learning might apply to other types of support functions within your overall organization?

Bailey: We're actually still in our infancy with this, because we just implemented it in April. But we have multiple call centers that actually provide support to our utility and for residential customers who go through a separate ticketing system that's part of software that we have had, that's actually going away.

We're talking about now replacing that call center ticketing system with Remedyforce, so that we all use the same ticketing system and we are able to maintain that information in one place.

Because Remedyforce also ties into Salesforce.com, we'd be able to track some of our residential and utility customers in the Salesforce side as well, so that if the salesperson is aware that there is an issue going on with their utility, they can follow the information as it applies to that contact. Then, they're able to also reach out directly to the utility and make sure that things get handled the way they need to be handled according to contracts or relationships. So it's certainly something we are hoping to expand on.

We are also planning to use, and have already started using, Remedyforce for our HR group. When we have new hires or terminations, they're able to able to put in IT support tickets for that. We're able to build templates for each individual, so that as we receive notification that someone has been terminated, we can immediately remove them from the system too. HR has that access to put in those tickets and build those requests, and that helps maintain our SOX compliance.

Synergy and benefits

Gardner: I should think too that when you combine your data around what's going on for your employees with what's going on with your customers, there's going to be some synergies there, and some other analysis benefits that will extend to how you might start defining new products and services in the market, and how you would implement them.

Bailey: Yes, we're hoping so. We're still having those conversations and trying to find out where we can just bring truth into our data. If we can bring everything together so that we have insight and reporting, and all of the master data is in one place -- or at least tied together in one place -- there's definitely going to be synergy and efficiency and more “truth” in our information.

Gardner: Alec, how might you be able to extend what you have been doing with Remedyforce into other service support, call center, or ticketing activities?

Davis: Information is very important to us, very important to myself. I like to see what is happening in organizations from a support standpoint. We haven’t really pushed out Remedyforce to a lot of other departments outside of HR, who of course is helping us with on-boarding the new employees and off-boarding as well.

But all of our internal support teams, our operations team that support our sales teams, some people in finance, and of course HR, are all using Salesforce cases.

So we have all of our customer information. We have all of our vendor information. That would be the IT vendors, but we're also a retail company, so our product retailers are in there too.

We've also moved it out to our distribution center. They have the support team there. We've also started bringing in all of our shipping carriers and all the vendors that they work with. So we have all of our data in one place.

We can see where a lot of issues are arising, and we can be more proactive with those vendors with those issues that we are seeing.

It's great to have all of our data, all of our customer information, all of our vendor information, in one location. I don’t like to have all these disparate systems where you have your data spread out. I love having them in one location. It's very helpful. We can run lots of reports to help us identify what’s happening in our company.

Gardner: I'm afraid we'll have to leave it there. We've been talking about how two companies are extending their use of cloud computing by taking on IT service desk and incident management functions as a service. And we have seen how they have used BMC Software’s Remedyforce to improve the business of delivering IT services and business services -- and to move IT support and change management from a cost center to more of a proactive knowledge asset.

I'd like to thank our guests, Danielle Bailey, IT Manager at Comverge. Thank you so much, Danielle.

Bailey: Thank you for having me.

Gardner: And Alec Davis, Senior Systems Analyst at Design Within Reach. Thank you so much, Alec.

Davis: You’re welcome. It's been my pleasure.

Gardner: And this is Dana Gardner, Principal Analyst at Interarbor Solutions. I would like to thank our listeners too for joining, and don’t forget to come back next time.

Join Danielle Bailey and Alec Davis at Dreamforce 2012
Sept. 18-21 in San Francisco.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: BMC Software.

Transcript of a BriefingsDirect podcast on how SaaS delivery and BMC Software’s “truth in data” architecture deliver big payoffs for IT support at Comverge and Design Within Reach. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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Performance Management Tools Help Services Provider Savvis Scale to Meet Cloud of Cloud Needs

Transcript of a BriefingsDirect podcast on how an IT-as-a-service provider Savvis has met the challenge of delivering better experiences for users at scale.

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

Dana Gardner: Hello, and welcome to the next edition of the HP Discover Performance podcast series. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your co-host and moderator for this ongoing discussing of IT innovation and how it's making an impact on people’s life.

Once again, we're focusing on how IT leaders are improving performance of their services to deliver better experiences and payoffs for businesses and end users alike. Our next innovation case study interview highlights how cloud infrastructure and hosted IT services provider Savvis has been able to automate out complexity and add deep efficiency to its operations.

Using a range of performance, operations orchestration and Business Service Automation (BSA) solutions from HP, Savvis has improved its incident resolution and sped the delivery of new cloud services to its enterprise clients.

To learn more about how they did it, we're joined by Art Sanderson, Senior Manager Enterprise Management Tools at Savvis. Welcome, Art. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Art Sanderson: Hi, Dana. Thank you.

Gardner: Tell me first a little bit about Savvis. What kind of organization is is, what you’re doing, what is your main service drivers in the marketplace?

Sanderson: Savvis is recognized as a global IT leader in providing IT as a service (ITaaS) to many of today’s most recognizable enterprise customers around the world. We offer cloud services and hosting infrastructure services to those customers.

Gardner: What are some of the challenges you've faced in terms of managing the scale, building out the business, adapting to some of these new requirements for infrastructure as a service (IaaS)?

Sanderson: Being an IT department of IT departments, or a dynamic service provider, has a lot of unique challenges that you don’t face in every IT shop that you run into. In fact, we have thousands of customers that we have to support with their own IT departments. So our solutions have to be able to scale beyond what you would find in a typical IT organization.

Gardner: And I should think that efficiency is super-important. It's all margin to you, when you can save and do things efficiently?

Better SLAs

Sanderson: Absolutely. There are just the efficiencies alone for operational cost, as well as the value that we provide to our customers, being able to provide better service-level agreements (SLAs), so their businesses are up and running and available to them to service their own customers.

Gardner: So, in effect, you have to be better at IT than your customers, or they wouldn’t be interested in using you.

Sanderson: Absolutely. There are definitely some economies of scale there.

Gardner: So tell me a bit about what you've done in terms of management and allowing for better automation, orchestration, and then, how those benefits get passed on.

Sanderson: Sure. We've adopted the HP BSA set of tools as our automation platform and we’ve used that in a number of different ways and areas within Savvis. It's been quite a journey. We’ve been using the tools for approximately three to four years now within Savvis. We started out with some of our operational uses, and they've matured to the point now where a lot of our automation-type monitoring is solved by automation rather than by our operational staff.

There is definitely labor saving there, as well as time savings in mean time to resolution values that we’re adding to our customers. That's just one of the benefits that we’re seeing from the automation tools, not to mention the fact that we build a lot of our own key product offerings for the marketplace that we service, using the BSA offerings on the back end as well.

Gardner: What's an example of some of those services that you've built out?

Sanderson: Our premier services are our Symphony cloud offerings, our Symphony VPDC, Symphony Open and Dedicated cloud, as well as Symphony Database. All, in some form or fashion in various degrees, use the BSA tools on the back end to do their own offerings, and their own automations that we offer our customers.

Gardner: How do you measure performance benefits? You had a couple of numbers there about efficiency, but is there a set of key performance indicators (KPIs) or some benchmarks? How do you decide that you’re doing it well enough?

In just this first quarter of 2012 alone, we recognized somewhere in the neighborhood of $250,000 in labor savings.

Sanderson: From an operational perspective, we do monitor the number of automations that we run that we can capture from the operational side of the house. For example, on a typical day we run anywhere from 10,000-20,000 types of automations through our systems, and that would actually add value back to the business from a labor-savings perspective.

In just this first quarter of 2012 alone, we recognized somewhere in the neighborhood of $250,000 in labor savings just from the automations from an operational perspective. Again, it's hard to quantify the value of adding to the business side, because those are solutions that we’re offering to the market space that are generating new value back to the organization as a whole.

Gardner: So it's important not only to reduce your cost, improve your productivity but you have to create new revenue as well. So, it's sort of a multiple-level trick here. You’re cutting cost and you’re also creating new products and services.

Tell me a bit about the process behind that? How are the people adapting to some of these systems? How do you manage the people and process side of this in order to get those innovations out?

Mature process

Sanderson: From the people and process side, we didn’t start out necessarily doing it the right way from the operations side of the house. But we have matured the process to where we're now delivering solutions in a much more rapid fashion. The business is driving the priorities from an operational perspective as far as what we’re spending our time on.

Then, we can typically turn around automations in a very short time. In some cases, we’ve built frameworks using these tools where we can turn around an automation that used to take two to three weeks. Now, it can take less than an hour to turn around that same automation.

So we’ve gotten really smart at what we’re doing with the tools, not just building something net new every time, but also making the tools more reusable themselves.

From the value to the organization, we’ve also had many groups within the product engineering side of the house take on and learn tools like HP Operations Orchestration (HPOO) and HP Service Activator (HPSA), and leverage their own domain knowledge as network engineers or storage engineers to build net new solutions that we then turn around and offer to our customers.

That eliminates a lot of the business analyst type of work and things like that that would typically go into the normal systems development lifecycle (SDLC)-type process that you would see. We’re able to cut the time to market for the offerings that we’re producing for our customers.

It does make us much more agile and responsive to the needs of our customers and the industry.

Gardner: And of course, that has a direct bearing on how you can compete in the marketplace, a very dynamic and fast moving marketplace?

Sanderson: Yes, absolutely. It does make us much more agile and responsive to the needs of our customers and the industry.

Gardner: Let's go back to the scale of what you’re doing here just for our audience’s benefit. How large is Savvis? How many physical and virtual servers do you have? Are there any wow numbers you can provide for us about the extent and the size of your operations?

Sanderson: Today, we have about 25,000 servers under management, spread across 50 data centers worldwide, and just to give you an idea, we have approximately 9,000-10,000 automations on a typical day running through HPOO.

As far as the scale and break down of the servers, two-thirds of our servers today are virtualized, and either through the cloud or actual traditional orders that customers are placing. So, we’re seeing a lot of growth in the virtual machines (VMs) and the cloud space. This is where things are going for our organization as well as the industry.

Gardner: That's really impressive. I understand you've got a self-service portal and you've been talking about things called self-healing. Maybe you could explain why it's important to have self-service, but then also explain how behind-the-scenes you have self-healing?

Self healing

Sanderson: Our self-healing infrastructure is what I was referring to earlier, where we’ve actually matured our process and recognized the reusability of using a meta-model to drive our HPOO flows that we’re writing. We've taken those patterns that we’ve identified and have been able to build a meta-model that we now have built a user interface in front of.

That's what I was referring to earlier when I said that if somebody wants a new request, they can go in and request that from us, and then we can, within a matter of minutes, produce the data through the user interface and publish a new flow, without ever having to write new operations orchestrations flows.

Gardner: Tell me a little bit about what your future plans are? Do you have an upgrade path? You’re here at Discover learning about new products and services. Do you have any idea of what some of the next steps will be for continuing on this march to improve both innovation and productivity?

Sanderson: Obviously, the reason we come to these conferences, is to learn about where HP is going, so we can make sure that we're in alignment, both from our business needs, as well as where the products are going that we use to drive our own solution.

It's critical that we're able to maintain an upgrade path and we're able to support our business. We've already started to plan, based on what we see coming down the path from HP's future infrastructure and even dedicated infrastructure as our business continues to grow. For example, for the Symphony products that we were referring to earlier, we have to break off more-and-more dedicated infrastructure to the scale and capacity that they’re growing.

We've already started to plan, based on what we see coming down the path from HP's future infrastructure and even dedicated infrastructure as our business continues to grow.

We would have never have anticipated, when we started a few years ago, that a customer would have come to us to say that we want to order 400 VMs or we want to order 1,000 VMs, but customers are coming us today doing that. That's the kind of scale that we’re seeing, even just a year into the offerings that we’re providing to the marketplace.

Gardner: So clearly, there's an opportunity for you to be able to dig in and provide that scale when it's called for, and I guess that's almost a definition of cloud is having that elasticity and dynamic agility.

Sanderson: Absolutely. That's spot on.

Gardner: Very good. We’ve been talking with Savvis, a cloud services provider, and I want to thank our guest. We were talking with Art Sanderson. He is a Senior Manager of Enterprise Management Tools at Savvis. Thank you very much.

Sanderson: Thank you, Dana.

Gardner: And I also want to thank our audience for joining this special HP Discover Performance podcast. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HP sponsored discussions. Thanks again for listening and come back next time.

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

Transcript of a BriefingsDirect podcast from HP Discover 2012 on how an IT-as-a-service provider has met the challenge of delivering better experiences for users. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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Why Success Greets NYSE Euronext's Community Platform for Capital Markets Cloud

Transcript of a BriefingsDirect podcast from the 2012 VMworld Conference focusing on applying the cloud model to providing a range of services to the financial industry.

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

Get the latest announcements about VMware's cloud strategy and solutions by tuning into VMware NOW, the new online destination for breaking news, product announcements, videos, and demos at: http://vmware.com/go/now.

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you from the 2012 VMworld Conference in San Francisco. We're here the week of August 27 to explore the latest in cloud computing and software-defined datacenter infrastructure developments.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, and I'll be your host throughout this series of VMware sponsored BriefingsDirect discussions.

It has been a full year since we first spoke to NYSE Euronext at the last VMworld Conference. We heard then about their Capital Markets Community Platform of vertical industry services cloud targeting the needs of Wall Street IT leaders.

As an early adopter of innovative cloud delivery and a groundbreaking cloud business model, we decided to go back and see how things have progressed at NYSE. We will learn now, a year on, how NYSE's specialized cloud offerings have matured, how the business of the financial services industry has received them, and explore how providing cloud services as a business has evolved.

We're joined by Feargal O'Sullivan, the Global Head of Alliances at NYSE Technologies. Welcome to BriefingsDirect, Feargal. [Disclosure: VMware is a sponsor of BriefingsDirect podcasts.]

Feargal O'Sullivan: Thank you very much, Dana. Nice to be here.

Gardner: Tell me how it's going. The Capital Markets Community Platform, as we discussed, is a set of cloud services that you're providing to other IT organizations to help them better support their companies and their customers. How have things progressed over the past year?

O'Sullivan: We've been very happy with the progress we've made over the past year. When we announced at VMworld last year, we had just gone into early access for our first clients in our data center in the New York, New Jersey, Connecticut tri-state area, where we have all of our US-based markets running the New York Stock Exchange Markets, the Arca Electronic Markets, and AMEX.

That has since gone into production, has a number of clients on it, is being perceived very well by the community, and is really driving as a lynchpin of our strategy of building a global capital markets community.

Since the success of that, we've actually progressed further, to the point of having deployed the same environment in a second data center that we own and run just outside of London, in a town called Basildon, which is where we run all of our European markets, the Euronext side of NYSE Euronext.

We now have an equivalent VMware-based cloud environment and a range of ancillary services for the capital markets industry available in that location. Clients can now access, as a service, both infrastructure and platform capabilities in both of those facilities.

Furthermore, we've extended to two other financial centers in the world, one in Toronto and one in Tokyo. That's a slightly more stripped-down version of the community platform, but it's very useful for clients who are really expanding the business and gone globally.

Four locations

Now, we have those four locations up and running in production with production clients, so we are very happy with that progress.

Gardner: That's very impressive growth. In order to move this set of capabilities across these different geographies and in the data centers that you have created or acquired there has the whole software-defined datacenter model helped? I would think that in the older days -- 10 or 15 years ago with individually supported applications on individual stacks of hardware and storage -- that that would have been a far more difficult expansion project.

So what is it about the way that we're doing things now in the modern data center that's allowed you to build out so quickly?

O'Sullivan: Clearly, the technology has advanced significantly from the old days. The capability around virtualization on the the hardware server level with the VMware Hypervisors, and in particular the vCloud service, gives clients their own control over their environment.

Also on the networking side, it's become much more viable for clients to actually deploy into shared environment, still maintaining confidence that they're going to get both the security profile that they're looking for, as well as the performance capability.

We use the EMC VNX array with the FAST Cache capability to give a very stable performance profile based on demand. It allows different workloads, and yet each gets very good performance and response time. So there are many components along the way. Also, management and monitoring of these types of infrastructures have improved.

Our clients have certainly seen that enhancement in the technology. The financial services industry is unique in the way it leverages technology on two aspects.

One, security profile is absolutely critical. Security isn't just around customer data, but around application development and tools of the trade, intellectual property that firms might have, trading strategies, different analysis, analytics, and other types of components that they develop and build,. They feel they're highly proprietary in nature and don't want to allow anybody to get access to them. So they place security extremely high on the list.

The other unique aspect is performance aspect. It's a slightly different performance model from your typical sort of three-tier web store type of environment. Financial services, first of all, push very high volumes of content through their applications. They need to do so in microseconds, or at least milliseconds, of response time and latency measurements, and they also most importantly need to do so predictably.

With a big batch job of some kind, say a genetic folding job, you drop off a job, go away for 12 hours, and you come back. A little bit of clearly inefficient processing time is not great, because that drags out the whole thing over time, but there is no sort of critical "need it here," "need it now" requirement. So latency spikes are less of a problem.

Latency spikes

But in our industry, latency spikes are a real problem. People look for predictive latency, so we had to make sure that we applied a very tight security profile to our cloud, and a very high performance profile as well.

Gardner: So as you've expanded across different market regions and brought this into more of your portfolio for more of your customers, have you also increased the services? Last time, we talked about some services that were very impressive, but how have you been able to build on this cloud in terms of those value-added services that you deliver specifically to a financial clientele?

O'Sullivan: That's why we built our cloud, because there are many service providers who offer very valuable cloud capabilities that are based on core infrastructure and core computing capabilities, and they do so very well. However, we consider ourselves a vertical industry community. We're specifically focused on capital markets participants. We try to support and make it cheaper, more cost-effective, and more readily accessible to a wider range of participants to be able to get access to the markets.

So in our cloud and our community, we provide a range of platform and services that we have added. The core is "Come into our vCloud Director environment and access your compute infrastructure." By the way, we have a Compute On Demand Virtual Edition, we also have a Compute On Demand Physical Edition for those cases where that latency issue is of the utmost importance.

Then, we provide clients with the value-added features that we know they need, because they're in the capital markets business. The key one is market data. This is something that is absolutely critical in financial services, because every trade, no matter what you are buying or selling, always starts with a quote. Even if you walk into the shop and you ask how much it would it be for a can of soda, they say it's $1 or $1.20, whatever it is, and then you decide if you want to buy.

So in the financial services industry market data is the starting point, the driver of all the business. And the volumes on this, the sheer size of the content that comes down, is really outstanding. It's at the point now that even if you were to just subscribe to all North American equities and options, you'd need a 10-gigabit Ethernet pipe, and at points during the day, you're probably using upwards of 8 gigabits of that pipe just to get all that content.

Obviously, we can provide raw content, but we've added a range of services into our cloud and into the community. We can say, "We can offer you a nice filtered market data feed, where you just present us with the list of instruments you want, and we can add value-added calculations, do analytics, and provide that to you."

We've also developed an historical market-data access service. So if you want to go back and test your strategies against previous days of trading, back for many, many years, we have a database that's deployed in the cloud. So you can query the database, load it into your virtual environment, and analyze and back-test your strategies.

We've added order-routing capabilities, so when you are ready to send your orders to the market, if you are a market maker yourself, you might go direct to our gateway. If you're a sponsored participant, you might go through our risk-managed gateway, which would be sponsored by a broker.

Or if you are just a regular buy-side firm, a money manager, you might use our routing network and ask us to write your orders to the different brokers or the different markets, and we can handle that. Those are either ends of the trade.

Get the latest announcements about VMware's cloud strategy and solutions by tuning into VMware NOW, the new online destination for breaking news, product announcements, videos, and demos at: http://vmware.com/go/now.

Integration pieces

On Thursday, Aug. 30, I'm going to be presenting with VMware and EMC in one of the breakout sessions about us moving up the stack to start offering more of the integration pieces of this. We're using the Spring environment and a range of other VMware tools, GemFire, and so on, to demonstrate a full trading system deployed in the virtual environment with the integration tools -- all running hosted in our environment.

It's more of a framework that we're showing, but it provides platform as a service (PaaS), not just the market data in, which is our specialty, and the order routing out. Once you're within your environment, the range of additional tools makes it easy for you to develop and customize your own trading tools and your own trading strategies. That's something I will be talking about on Thursday.

Gardner: That's very interesting. It appears that what you've done here with your intermediary cloud is developed a fit-for-purpose value to such things as data services. Then, you've applied that to other value services like order services and now even integration services.

I think it's a harbinger of what we should expect in many other industries. Rather than a fire hose of either services or data, picking and choosing and letting an intermediary like yourselves provide that with the value-add, seems to be more efficient and valuable.

Looking at this as a value proposition, how has this been going as a business? Have you been enjoying uptake? I know you can't go into too much detail, but has the reception in the market satisfied your initial or hopeful business requirements around this as a business, as a profit and loss center?

O'Sullivan: The good news is that we've definitely had great progress here. We have a number of clients in all of the locations I mentioned. We're continuing to grow. It's a tough environment, as you can imagine, both just in the general economy and in particular in the financial services industry. So we expect to continue to grow this significantly further.

We have been certainly very happy with the uptake so far. We knew that we were going out well ahead of everybody else and we were very keen to do so, because we see and understand the vision that VMware and EMC in particular have been promoting over the past few years. We agree with it fully. We feel like we're uniquely positioned within the capital markets industry as the neutral party.

Remember, we're just a place where people go to trade. We don't decide what you buy or what you sell or how much it should be. We just provide the facility, the rules, and the oversight to ensure an orderly market. We wanted to make it easier and more cost-effective for firms to get access to that environment.

So by providing all of this capability, we think we're in a fantastic position now, that as more and more firms continue to explore virtualization and outsourcing of non-business critical functions, which for a while used to be running on your own servers, but which are now nothing but overhead.

We see them moving more and more into the cloud. We expect over the next two or three years, that this is really going to explode. We intend to be there, established, fully in production, tried and tested, and leading the industry from the front, as we think we should be with the a name like the New York Stock Exchange.

Well-known brand

That’s a brand that's so well-known globally. It's the best place to trade. It's the most reliable and most secure place to trade stocks, with the best oversight, and we want to apply that model to all of the services that we offer our clients.

Gardner: Let's drill just a little bit down into the notion of being able to add on these services, whether it's integration orders or data services. Is there something particular about the architecture that you've adopted that allows you to progress into these newer areas, maybe even in the future delivering feeds through a different format, satisfying needs around mobile devices, say HTML5.

I'm not focused so much on the application that you will be pursuing, but the ability to pursue more applications without necessarily a whole lot of additional infrastructure investment. How does that work?

O'Sullivan: The key for us was that we developed and built our own data center, which we operate and manage. It's a unique environment in Mahwah, New Jersey. We also built and developed our own in Basildon, just outside London. Those two facilities were built as Tier-4 guided data centers to the highest standards of reliability and security. Every time I go there, I'm amazed at the level of attention, the attention to detail that our engineers put into designing it to handle all sorts of occurrences.

The reason is that there is so much content created in these facilities. Traders gravitate towards liquidity, and we're a source of liquidity. We're probably the single biggest equity and options venue in North America, so traders are attracted to be there.

Given the electronic nature of the market, forgetting about high frequency trading, everything is electronic. So rather than take applications and deploy them in Timbuktu or wherever you choose to deploy your application, somewhere away from this facility and pay the expense of wide area network connections and so on, it makes more sense to deploy your applications close to the content that you care about.

If there is 8 gigabit bursts of market data on the network, why would you try to bring that 50 miles away to your own office? Why not take the applications that process that data and deploy them in there? With that sort of thought process in mind, we continue to build out a range of value-added services that we think clients would require.

We're also well aware that our main purpose in life is to be this neutral venue that creates markets and allows people to come and trade. So we're never going to be the best person, the best firm, or the best vendor at developing every possible requirement that every particular capital market’s participant might need. That's where our Global Alliance Program comes in.

I've been focused on working on our partnerships and ensuring that, as clients deploy into the cloud and they need market data, routing, risk management, back-office processing, and historical analysis. They also need different types of analytics, and they might need other services like email archiving and storage. They need to comply with regulation and so they need regulatory reporting services.

Not generic

There is such a wide range of capabilities required that are very specific. They're not generic. You're not going to go to some telco provider’s cloud and have all these firms that can offer you all these services there. There needs to be enough potential clients before a vendor is going to want to deploy their applications in this environment.

So we're building this community. We're basically saying that we have over 2,000 firms connected to our network, hundreds in our data centers. We have a wide range of vendors and we're continually working to add more so that it can offer services to those firms.

You can use our infrastructure, our cloud, and some of the integration capability that we've developed, both ourselves and through our relationships with vendors like VMware and EMC, to add on these capabilities that the firms are going to need and make a one-stop shop, a community, a place where you can go to get all the applications needed, similar to the app store model.

Gardner: You've defined what we should expect for public-cloud services. There is some thinking in the marketplace that there will be two or three public cloud providers, and everyone will go there, but I really think you have defined it by having a community close to their customers, recognizing that the architecture and the association with data and the integration is essential. Then, that value-add for applications and services on top of that means an ecosystem of cloud providers and not just a handful. So I really think you've painted the picture of the true future on cloud.

O'Sullivan: Thank you. We certainly see it that way. Our clients have taken us up on it already. While we still think it's early days, we're confident that we're going in the right direction, and that this will definitely, definitely take off in a big way, and within five years we will be looking back at how quaint this conversation was.

Gardner: I really enjoyed speaking with you, Feargal. We have been talking about the success of specialized vertical industry cloud delivery models and how they are changing the IT game in such mission critical industries as financial services.

I would like to thank our guest, Feargal O'Sullivan, the Global Head of Alliances at NYSE Technologies. Thank you, sir.

O'Sullivan: Thank you very much, Dana. I really appreciate the time to speak with you.

Gardner: And I also thank our audience for joining this special podcast coming to you from the 2012 VMworld Conference in San Francisco. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of podcast discussions. Thanks again for listening and come back next time.

Get the latest announcements about VMware's cloud strategy and solutions by tuning into VMware NOW, the new online destination for breaking news, product announcements, videos, and demos at: http://vmware.com/go/now.

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

Transcript of a BriefingsDirect podcast from the 2012 VMworld Conference focusing on applying the cloud model to providing a range of services to the financial industry. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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