Part 1 of 4: Web Data Services Extend Business Intelligence Depth and Breadth Across Social, Mobile, Web Domains

Transcript of first in a series of sponsored BriefingsDirect podcasts with Kapow Technologies on Web Data Services and how harnessing the explosion of Web-based information inside and outside the enterprise buttresses the value and power of business intelligence.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: Kapow Technologies.

See popular event speaker Howard Dresner's latest book, Profiles in Performance: Business Intelligence Journeys and the Roadmap for Change, or visit his website.

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

Today, we present a sponsored podcast discussion on the future of business intelligence (BI) -- on bringing more information from more sources into an analytic process, and thereby getting more actionable intelligence out.

The explosion of information from across the Web, from mobile devices, inside of social networks, and from the extended business processes that organizations are now employing all provide an opportunity, but they also provide a challenge.

This information can play a critical role in allowing organizations to gather and refine analytics into new market strategies, better buying decisions, and to be the first into new business development opportunities. The challenge is in getting at these Web data services and bringing them into play with existing BI tools and traditional data sets.

This is the first in a series of podcasts, looking at the future of BI and how Web data services can be brought to bear on better business outcomes.

So, what are Web data services and how can they be acquired? Furthermore, what is the future of BI when these extended data sources are made into strong components of the forecasts and analytics that enterprises need to survive the recession and also to best exploit the growth that follows?

Here to help us explain the benefits of Web data services and BI is Howard Dresner, president and founder of Dresner Advisory Services. Welcome to the show, Howard.

Howard Dresner: Thanks, Dana. It's great to be here today.

Gardner: We're also joined by Ron Yu, vice president of marketing at Kapow Technologies. Thanks for joining, Ron.

Ron Yu: Hi, Dana. Great to be with you today.

Gardner: Howard, let me start with you. We've certainly heard a lot about BI over the past several years. There's a very strong trend and lots of investments are being made. How does this, in fact, help companies during the downturn that we are unfortunately still in and then prepare for an upside?

Empowering end users

Dresner: BI is really about empowering end users, as well as their respective organizations, with insight, the ability to develop perspective. In a downturn, what better time is there to have some understanding of some of the forces that are driving the business?

Of course, it's always useful to have the benefit of insight and perspective, even in good times. But, it tends to go from being more outward-focused during good times, focused on markets and acquiring customers and so forth, to being more introspective or internally focused during the bad times, understanding efficiencies and how one can be more productive.

So, BI always has merit and in a downturn it's even more relevant, because we are really less tolerant of being able to make mistakes. We have to execute with even greater precision, and that's really what BI helps us do.

Gardner: Well, if we're looking either internally at our situation or externally at our opportunities, the more information we have at our disposal the stronger our analytical return.

It is a moving target, because the world continues to evolve. There are lots of information sources.

Dresner: Certainly, one would hope so. If you're trying to develop perspective, bringing as much relevant data or information to bear is a valuable thing to do. A lot of organizations focus just on lots of information. I think that you need to focus on the right information to help the organization and individuals carry out the mission of that organization.

Gardner: And that crucial definition of "right information" has changed or is a moving target. How do you keep track of what's the right stuff?

Dresner: It is a moving target, because the world continues to evolve. There are lots of information sources. When I first started covering this beat 20 years ago, the available information was largely just internal stores, corporate stores, or databases of information. Now, a lot of the information that ought to be used, and in many cases, is being used, is not just internal information, but is external as well.

There are syndicated sources, but also the entire World Wide Web, where we can learn about our customers and our competitors, as well as a whole host of sources that ought to considered, if we want to be effective in pursuing new markets or even serving our existing customers.

Gardner: Ron Yu, we've certainly seen an increase in business processes that are now developed from components beyond just a packaged application set. We've seen a mixture of Web, mobile, and other end points being brought to bear on how people interact with their businesses and these processes.

Give me a sense on the extended scope of BI and how do we get at what is now part and parcel with the extended enterprises.

The right data

Yu: I fully agree with Howard. It's all about the right data and, given the current global and market conditions, enterprises have cut really deep -- from the line of business, but also into the IT organizations. However, they're still challenged with ways to drive more efficiencies, while also trying to innovate.

The challenges that are being presented are monumental where traditional BI methods and tools are really providing powerful analytical capabilities. At the same time, they're increasingly constrained by limited access to not only relevant data, but how to get timely access to data.

What we see are pockets of departmental use cases, where marketing departments and product managers are starting to look outside in public data sources to bring in valuable information, so they can find out how the products and services are doing in the market.

Gardner: Howard, we began this discussion with a lofty goal of defining the future of BI. I wonder if you think that the innovation to come from BI activities is a function of the analytics engine or the tools, or is it a function of getting at more, but relevant, information and bringing that to bear.

Dresner: It's an interesting question. One of the things that I focus upon in my second book, which is about to be published next month, is performance-directed culture and the underpinning or the substrate of a performance-directed culture. I won't go into great detail right now, but it has to do with common trust in the information and the availability and currency of the information, as a way to help the organization align with the mission.

The future of BI is not just about the tools and technology. It's great to have tools and technology. I certainly am a fan of technology, being somewhat of a gadget fiend, but that's not going to solve your organization's problems and it's not going to help them align with the mission.

What is going to help them align with the mission is making sure that they have timely, relevant, and complete information, as well as the proper culture to help them support the mission of the enterprise.

Having all the gadgetry is great. Certainly, making the tools more intuitive is a useful and worthwhile thing to do, but it's only as good as the underlying content and insight to support those end users. The future is about focusing on the information and those insights that can empower the individuals, their respective departments, and the enterprise to stay aligned with the mission of that organization.

Other trends afoot

Gardner: The trend and interest in BI is not isolated. There are other complementary, or at least coincidental, mega-trends afoot. One of them, from my perspective, is this whole notion of community, rather than just company, individual, or monolithic thinking. We are expanding into ecosystems.

Cloud computing is becoming a popular notion nowadays. People are thinking about how to cross organizational boundaries, how to access resources, perhaps faster better cheaper, from across organizational boundaries.

This also brings in this opportunity to start melding, mashing up, and comparing and contrasting data sets across these organizational boundaries. Is there a mega-trend that, from your perspective, Howard, we need to start thinking about BI as a data set-joined function?

Dresner: I fall back on Tom Malone's work, The Future of Work, his book from 2004, where he talks about organizations. Because of the reduced cost of communications, organizations will start to move, and are moving, towards looser bonds, democratized structures, and even market-based structures -- and he cites a number of examples in his book.

The way that you hold together an organization, this loosely bound organization, is through the notion of BI and performance management, which means we certainly have to compare, I wouldn't say data per se, but certainly various measures. We have to share data. We have to combine data and exchange data to get the job done -- whatever that job is. As needs be, we can break those bonds and form new bonds to get the job done.

For every application that IT or line of business develops, it just creates another data silo and another information silo. You have another place that information is disconnected from others.

This doesn’t mean that the future of business is a bunch of small micro-organizations coming together. It really applies to any organization that wants to be agile and entrepreneurial in nature. The underlying foundation of that has to be data and BI in order to function.

Gardner: So, it's about how these organizations relate to one another. Ron, from your perspective, what are some of the essential problems that need to be solved on allowing companies to better understand themselves and then to have this permeability at a process level, a content data, and BI level with other players?

Yu: The term I'd like to use is really about inclusive BI. Inclusive BI essentially includes new and external data sources for departmental applications, but that's only the beginning. Inclusive BI is a completely new mindset. For every application that IT or line of business develops, it just creates another data silo and another information silo. You have another place that information is disconnected from others.

Critical decision-making requires, as Howard was saying earlier, that all business information is easily leveraged whenever it's needed. But today, each application is separate and not joined. This makes the line of business and decision- making very difficult, and it's not in real time.

An easier way

As this dynamic business environment continues to grow, it’s completely infeasible for IT to update their existing data warehouses or to build a new data mart. That can't be the solution. There has to be an easier way to access and extract data exactly where it resides, without having to move data back and forth from data bases, data marts, and data warehouses, which effectively becomes snapshot.

When line of business is working with these data snapshots, by definition it's out of date. Catalytic CIOs and forward looking information architects understand this dilemma and, given that most enterprises are already Web-enabled, they are turning to Web data services to build bridges across all these data silos.

Gardner: Another trend we mentioned, the permeability of the organization, is this involvement -- people being participants in the social networks, having a great deal of publishing going on, putting content out there that can be very valuable to a company. End users seem to want to tell companies what they want, if the companies are willing to listen. We have this opportunity now to create dialogue and conversation, rather than simply looking at the sales receipts.

Tell me how this whole social phenomena of the community and the sharing fits into Web data services?

Web data services provides immediate access to the delivery of this critical data into the business user's BI environment, so that the right timely decisions can be made

Yu: There is effectively a new class of BI applications as we have been discussing, that depends on a completely different set of data sources. Web data services is about this agile access and delivery of the right data at the right time.

With different business pressures that are surfacing everyday, this leads to a continuous need for more and more data sources. But, as Howard was talking about earlier, how do you handle all of that?

Web data services provides immediate access to the delivery of this critical data into the business user's BI environment, so that the right timely decisions can be made. It effectively takes these dashboards, reporting, and analytics to the next level for critical decision-making. So when we look deeper into this and how is this actually playing out, it's all about early and precise predictions.

Let's talk about a few examples. Government agencies are using Web data services to combat terrorism. So, you can be certain that they have all the state-of-the-art analysis tools, spatial mapping, etc. Web data services effectively turbo-charges these analyst tools and is giving them the highest precision in their threat analysis.

These intelligence agencies have access to open-source intelligence, social networks, blogs, forums, even Twitter feeds, and can see exactly what's happening in real time. They can do this predictive analysis and are much better positioned than ever to avert horrible acts of terrorism like 9/11.

Gardner: Howard, do you think, to Ron’s point, that we need to sidestep IT and the traditional purveyors of BI? Is this something that can be done by the end users themselves?

Competency centers

Dresner: It's a very interesting question, and a provocative one too, I might add. But, sidestep IT? Not all IT organizations are inflexible. Some of them certainly are. One of the things that I have advocated for years is the notion of competency centers, certainly in larger organizations. The idea of a competency center is to get the skills in a place, where they can do the most good and where they can really focus on being expedient.

Delivering something to the end user a year after they ask for it really isn't terribly useful. You need to be as agile as possible to respond to ever-changing business needs. There are a very few businesses out there that are static, where things aren’t moving very quickly. In most organizations and most markets, things move pretty darn quickly, and you have to be able to respond to them.

If you don't respond to the users quickly, they find a way to solve their problems themselves, and that really has become an issue in many organizations. I’d like to say that it's a minority, but it's not. It's a majority of them, where IT is going down a slightly a different path, sometimes a dramatically different path, than the end users.

Surprisingly, there are some IT organizations that are pretty well aligned and they are responsive. So, it's not a situation where the end users need to completely discount IT, but some IT organizations have become pretty inflexible. They are focused myopically on some internal sources and are not being responsive to the end user.

To the extent that they can find new tools like Web data services to help them be more effective and more efficient, they are totally open to giving line of business self-service capabilities.

You need to be careful not to suffer from what I call BI myopia, where we are focused just on our internal corporate systems or our financial systems. We need to be responsive. We need to be inclusive of information that can respond to the user's needs as quickly as possible, and sometimes the competency center is the right approach.

I have instances where the users do wrest control and, in my latest book, I have four very interesting case studies. Some are focused on organizations, where it was more IT driven. In other instances, it was business operations or finance driven.

Yu: There is, in most cases, a middle ground, and IT certainly isn't looking for more things to do. To the extent that they can find new tools like Web data services to help them be more effective and more efficient, they are totally open to giving line of business self-service capabilities.

Gardner: Ron, whether it's the IT department and a fully sanctioned tool and approach that they are supporting or whether it's self-service, we can't just open up the fire hose and have all of this content dump into our business and analytics activities.

What do you bring to the table in terms of not only getting access to Web data services, but also cleansing them, vetting them, putting them in the right format, and making sure it's secure and their privacy issues are being adhered to? What's the value add to go beyond access into a qualitative set of highly valued assets?

Start with the use case

Yu: Sometimes, the problem we face, when we talk about BI, is that we immediately start talking about the software, the servers, and the things that we needed to build. BI really starts with the business use case.

What is it that the line of business is trying to do and can we develop the right facilities in order to work on that project? Yet, if those projects don't become so overbearing that you just create IT project gridlock, then I think we have something new to say.

For example, in leading financial services companies, what they're looking for is on this theme of early and precise predictions. How can you leverage information sources that are publicly available, like weather information, to be able to assess the precipitation and rainfall and even the water levels of lakes that directly contribute to hydroelectricity?

If we can gather all that information, and develop a BI system that can aggregate all this information and provide the analytical capabilities, then you can make very important decisions about trading on energy commodities and investment decisions.

Web data services effectively automates this access and extraction of the data and metadata and things of that nature, so that IT doesn't have to go and build a brand new separate BI system every time line of business comes up with a new business scenario.

Web data services effectively automates this access and extraction of the data and metadata and things of that nature, so that IT doesn't have to go and build a brand new separate BI system every time line of business comes up with a new business scenario.

Gardner: Again, to this notion of the fire hose, you are not just opening up the spigot. You're actually adding some value and helping people manage and control this flow, right?

Yu: Exactly. It's about the preciseness of the data source that the line of business already understands. They want to access it, because they're working with that data, they're viewing that data, and they're seeing it through their own applications every single day.

But, that data is buried deep within the application in the database and the only way that they can do this through the traditional ways is through opening up a new IT ticket and asking their database, their data warehouse, or their application to be updated. That just is very time-consuming and very expensive for everyone involved.

Gardner: To your point earlier, you end up getting a significant latency, and it's probably precisely the kind of Web services data that you want to get closer to real time in order to analyze what's going on.

Voice of the customer

Yu: That's exactly the case. The voice of the customer provides huge financial and exposure protection for product vendors. For example, if a tire manufacturer had the ability to monitor consumer sentiment, they would be able to investigate and even issue early recalls well before tragic events happen, which would create even larger financial loses and huge damage on the brand.

Gardner: Ron, help me understand a little bit better what Kapow Technologies brings in terms of this Web data services support. How does that also relate to a larger BI solution that incorporates Web data services.

Yu: We're going a little bit into the technical side of things now. Effectively, Kapow Web Data Server, which is our product, is a platform that provides IT and some line of business users, who actually have more of a technical aptitude, the ability to visually interact with the data sources through the Web, HTML and the Ajax front-end of an application or Web page or a Web portal.

Effectively, you visually program and give instructions through point-and-click, which gives you precise navigation through all of the forms and as deep as you want to go into that Website or Web application.

As you point and click, you can give instructions about extracting the data and even enriching the data. For example, going to LinkedIn, you see that there are certain images that are assigned to specific data. With our product, you can interpret those graphical images and give them a value.

Our product effectively gives you that precise surgical navigation and extraction of any data from exactly the application that you're working with . . .

Our product effectively gives you that precise surgical navigation and extraction of any data from exactly the application that you're working with to create an RSS feed, a REST service, or, in a case of traditional BI, even loading it directly into a SQL database with a one-button deployment.

There is no programming involved. So, you can imagine how incredibly productive this is for IT. You don't have to waste time writing SQL scripts, application programming interfaces (APIs), and things of that nature. It enables that easy access and moves on to the higher value of what IT can deliver, which is on the application and presentation side.

Gardner: Howard, in your work with your clients and your research for your new book, did you encounter any examples that you can recall where folks have taken this to heart and moved beyond the traditional content types that BI has supported? What sort of experience, paybacks, and benefits have they enjoyed?

Not just internal sources

Dresner: The answer is yes. There are a number of good examples. Obviously, I encourage everybody to order a copy of the new book, which is out next month. But, including other sources than just internal sources gives you a better perspective. It creates a much more interesting and rich tapestry of the business and the market in which it lives.

One of the organizations I dealt with is in the hospitality business. Understanding their market, understanding what their competition is doing, what offers that they are providing means that they have to go to those Websites, as well as accessing some social networking sites.

They have to understand what's the customer sentiment is out there and what sort of offers their competition is offering on a Sunday night, for example, in order for them to remain competitive. You have to understand the changing trends, if you want to be a “hip hotel chain.” What does that mean? What's changing socially in those particularly geographies and markets that you play in that you need to be aware of and respond to.

The same thing is true in other industries. Another one of the organizations I worked with is in the healthcare industry. So understanding your patient requirements is important, if you want to be a more patient-oriented organization. What are their changing needs? What are their desires? What are those things that they expect from their service provider? You are not going to get that from your internal database?

Providing access to external content in conjunction with the content from your internal systems gives you a greater perspective. How many times have we heard, "Gee, if I'd only known that, I could have made a better decision or I could have framed the decision-making process more effectively?" That's really where we are in the history of BI right now.

We need to provide a better perspective, more complete and more timely perspective, in order to frame the decision-making processes. Going back to my original point, and really the central point of the book, how do we get everybody in the organization aligned with the mission to make sure that we're all fulfilling our particular role within the organization and using things like BI and the right sorts of data to achieve that purpose?

But, when you look outside the firewall -- and I'm talking about all these public data sources and even partners -- how do you collaborate better with your partners? All of these things are Web enabled.

Yu: I agree, Howard, and I think that's just the tip of the iceberg. If we look at the spirit of what corporate performance management or enterprise performance management is supposed to deliver, BI systems are really dealing with operational data and financial data within the firewall. But, when you look outside the firewall -- and I'm talking about all these public data sources and even partners -- how do you collaborate better with your partners? All of these things are Web enabled.

How do you bring things together from outside the firewall and integrate them with the operational and financial data? That challenge will really be a huge payoff, once IT organizations and CIOs can leverage Web data services for this huge payoff within that enterprise, whether it's the next generation of BI for business-to-employee (B2E) applications, business-to-business (B2B) with their partners, or even business-to-consumer (B2C) applications.

Gardner: Ron, I wonder if you have any examples, folks that have gone out and gathered these Web data services? What sort of uses have they put them to and what paybacks have they encountered?

Partners and B2B

Yu: We've talked a lot about public Web data sources. Let's talk about partners and B2B. One of the Fortune 500 financial services companies was required by regulatory compliance to report on their treasury transactions on 10,000 treasury transactions per day.

They had several analysts fully dedicated to logging in to each of their top 100 banking partners and extracting information, loading it into an Excel spreadsheet, and then normalizing the data and cleansing the data You know that when you use manual efforts, you will never get precise around the data quality, but that was the best facility that they had.

Then, they would take that Excel spreadsheet, load that into a database, and put a BI tool on top of that to provide their transactional dashboard. They spent three years evaluating technologies and trying to build the solution on their own and they failed.

So they came to Kapow Technologies and implemented a proof of concept within three weeks. They were able to get three of their top banking partners to develop a BI dashboard to monitor and manage these transactions and the full deployment in three months. Now, they are looking to expand that to other aspects of their business.

Gardner: I think we've learned a lot here about Web data services. Ron, where do you see it going in the future? How does this move beyond the vision that we already have developed here?

Yu: As Howard has been advocating about getting the right data, once you get the data access right, where the data is accurate, noise-free and timely, then the future of BI will really be about automated decision making.

We got a taste with some of the examples that I talked about with financial services and working with the partners, but also investment decisions and things like that. In the same way that we've seen that in financial decisions around making buy/sell decisions in an automated predictive way, there is this same opportunity that exists across all industries.

Gardner: Howard, do you agree that future BI is increasingly an automated affair?

Dresner: There are certainly places where we ought to be automating BI. Decision automation certainly. But, to my way of thinking, BI is involved in empowering users and making them smarter. There is a tremendous amount of room for improvement there.

As I said, I've been on this beat for 20 years now, and certainly have seen improvements in the tools, across the board, from the bottom of the stack all the way to the top, and we can certainly see increased penetrations in the use.

The next hurdle is applying the technology a little bit more effectively. That's really where we have fallen far short, not understanding why we are implementing the technology -- let's give everybody BI and a data warehouse and hope for the best. Not that there hasn't been any goodness associated with it, but certainly not one that is requisite with the investments that have been made.

Going back to what I said, earlier in the broadcast, the focus upon the performance-directed cultures and using the technology as an enabler to support those cultures is really where I think organizations need to apply their thinking.

Gardner: I'm afraid we'll have to leave it there. We've been discussing how Web data services play a critical role in allowing companies to gather and refine their analytics to engage in better market strategies and better buying decisions and to join and explore business development opportunities. Helping us to deal in a future BI and the role of Web data services, we've been joined by Howard Dresner, president and founder of Dresner Advisory Services. Thanks so much, Howard.

Dresner: My pleasure. Thanks for having me.

Gardner: Also, we have been joined by Ron Yu, vice president of marketing at Kapow Technologies. Thank you, Ron.

Yu: Thanks, Dana. I had a great time.

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. Learn more. Sponsor: Kapow Technologies.

See popular event speaker Howard Dresner's latest book, Profiles in Performance: Business Intelligence Journeys and the Roadmap for Change, or visit his website.

Transcript of first in a series of sponsored BriefingsDirect podcasts with Kapow Technologies on Web Data Services and how harnessing the explosion of Web-based information inside and outside the enterprise buttresses the value and power of business intelligence. In Part Two, Kapow co-founder and CTO Stefan Andreasen and Forrester analyst Jim Kobielus discuss how Web data services provide ease of access to data from a variety of sources. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

Caught Between Peak and Valley -- How CIOs Can Survive Today, While Positioning for Tomorrow

Transcript of a sponsored BriefingsDirect podcast on what CIOs need to do to survive the current economic downturn, while preparing for the coming upturn.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Download the slides. Sponsor: Hewlett-Packard.

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 whether CIOs are making the right decisions and adjustments in both strategy and execution, as we face a new era in IT priorities. The combination of the down economy, resetting of IT investment patterns, and the need for agile business processes, along with the arrival of some new technologies, are all combining to force CIOs to reevaluate their plans.

What should CIOs make as priorities in the short, medium, and long terms? How can they reduce total cost, while modernizing and transforming IT? What can they do to better support their business requirements? In a nutshell, how can they best prepare for the new economy?

Here to help us address new questions during a very challenging time, and yet also a time in which opportunity and differentiation for CIOs begins, is Lee Bonham, marketing director for CIO Agenda Programs in Hewlett-Packard's (HP’s) Technology and Solutions Group. Welcome to the show, Lee.

Lee Bonham: Hi. Thanks very much for having me on.

Gardner: We certainly get the sense that CIOs are shifting in their priorities and making real-time adjustments. So much has happened in just the last six months, as a result of the shifting economic landscape. How do you think, from your vantage point, that IT has to adjust, given these new economic realities?

Bonham: We all recognize that we’re in a tough time right now. In a sense, the challenge has become even more difficult over the past six months for CIOs and other decision-makers. Many people have budget challenges and are having to make tough decisions about where to spend their scarce investment dollars. The demand for technology to deliver business value is still strong, and it perhaps has even increased, but the supply of funding resources for many organizations has stayed flat or even gone down.

To cope with that, CIOs have to work smarter, not harder, and have to restructure their IT spending. Looking forward, we see, again, a change in the landscape. So, people who have worked through the past six months may need to readjust now.

Gardner: Is this what you mean by the new economy -- doing more for less -- or is there more to it than that?

Bonham: Doing more for less has been around for a little while, and will continue. As we look ahead, we see a few new questions emerging. From an economic and financial point of view, hopefully we're close now to the bottom of the downturn. The forecasters suggest that the economy will start to improve slowly, but hopefully steadily, over the next 6 to 12 months.

What that means for CIOs is they need to think about how to position themselves and how to position their organizations to be ready when that growth and new opportunity starts to kick in. At the same time, there are some new technologies that CIOs and IT organizations need to think about, position, understand, and start to exploit, if they’re to gain advantage.

Gardner: From HP’s perspective, what sort of factors are important in terms of moving to improve productivity and to gain that agility.

Need to take stock

Bonham: If we think about the priorities and the challenges, as they have been over the past six months, what we’ve been saying is that organizations need to take stock of where they are and implement three strategies:

• One is to standardize, optimize, and automate their technology infrastructure -- to make the best use of the systems that they have installed and have available at the moment. Optimizing infrastructure can lead to some rapid financial savings and improved utilization, giving a good return on investment (ROI).

• Secondly, they needed to prioritize -- to stop doing some of the projects and programs that they’ve had on their plate and focus their resources in areas that give the best return.

• Thirdly, they should look at new, flexible sourcing options and new ways of financing and funding existing programs to make sure that they are not a drain on capital resources. We’ve been putting forward strategies to help in these three areas to allow our customers to remain competitive and efficient through the downturn. As I said, those needs will carry on, but there are some other challenges that will emerge in the next few months.

Gardner: So, I suppose looking backward over the past six months or so, it's been very much a

In general, we’re seeing and suggesting that now is the time for CIOs to move their foot nearer the accelerator and maybe a little bit off the brake.

cost-cutting and cost-saving mode, but you really can’t save your way out of a transformation. How do they know when to make that switch, if you will, from defense to offense?

Bonham: That’s a really good question. The answer is very dependent on the industry, the geography, and the specific environment that each organization finds itself in. In general, we’re seeing and suggesting that now is the time for CIOs to move their foot nearer the accelerator and maybe a little bit off the brake.

If CIOs are not laying the groundwork now and thinking about their plans for when the economy starts to recover, they are in danger of being too late and missing the opportunities as they emerge. There is no hard-and-fast rule, but, at the same time, people should think and take stock and maybe set some plans—or perhaps drop some plans—so that they can get ready for growth over the next few months.

Gardner: I imagine that having a strong ROI analysis associated with certain projects will allow them to get funded. How do they balance the long-term with that need for a short-term use case or cost-benefit analysis story?

Focus on the short term

Bonham: They still have to balance those two things. What we’ve been saying is that firms need to optimize their cost, focus on the short term, and make sure that they can survive in this current period, but also thrive as the economy recovers.

There are a number of different techniques and ways that customers can achieve that. Clearly, an alignment between business and the IT organization is key. CIOs need to work closely with their line-of-business managers and colleagues and make sure they understand business requirements and priorities of the rest of the organization.

There are some tools and techniques that leading CIOs have been putting in place around project prioritization and portfolio management to make sure that they are making the right choices for their investments. We’re seeing quite a difference for those organizations that are using those tools and techniques. They’re getting very significant benefits and savings.

Gardner: I suppose having that visibility, knowing exactly what you have, what works, what doesn’t work, and how to measure those become really critical, when you’re trying to make the transitions, as we said, from long-term and short-term, offense and defense, or the brake and the accelerator.

Bonham: It’s really important to understand what projects are in progress, what projects are

Our survey work shows that technologies like consolidation, virtualization, application modernization and data-center automation have really moved up the scale in terms of importance.

delivering real value, and to optimize the spend. What we’ve seen is that leading organizations are really focusing their resources on projects that are delivering fast ROI, typically, within six months or less, so that they get real benefit, savings, and real business value in the short-term.

But, there is also another set of applications and opportunities as people look to grow. Growth may come in emerging markets, in new industry segments, and so on. CIOs need to look at innovation opportunities. Matching the short-term and the long-term is a real difficult question. There needs to be a standard way of measuring the financial benefit of IT investment that helps bridge that gap.

Gardner: A little earlier, you mentioned new technologies. What is it that that organizations can put in place that maybe is not just process, not just people, but actual technologies to assist them in these crucial times.

Bonham: Well, if we look at the area of financial cost savings and efficiency improvements, there is a whole range of technologies that people are adopting. Our survey work shows that technologies like consolidation, virtualization, application modernization and data-center automation have really moved up the scale in terms of importance.

Just as an example, server and storage consolidation is being implemented by well over 50 percent of the major organizations around the world as a way of saving cost and improving efficiency. That’s not the only area that’s important. I've already outlined the topic of project prioritization, making sure that you’re spending your scarce investment dollars in the right way.

Optimizing the investment

Tools like Project and Portfolio Management (PPM) software help allocate budget and decide which programs and projects are delivering a good return and should be continued, versus those that are maybe not so important and should be delayed or canceled. Those software tools can help in making sure that organizations optimize their investment.

Gardner: I wonder if you have any examples, either use cases or companies that have moved in this direction. What sort of payoffs do they get?

Bonham: We’ve seen quite a few customers who have really taken a great approach and have been ahead of the game in terms of using consolidation and virtualization tools, standardizing their data centers and other technology components.

As an example, Joanne Cummins, chief information officer of Standard Register, a document and print management services company based in Dayton, Ohio, has really used a whole range of techniques to reduce operating cost, simplify the technical infrastructure, reduce the number of servers and server and storage administration costs, and really get the most from her technology investment.

She's delivering yearly savings of $400,000 for the organization, as well as delivering a number of other benefits, like a flexible allocation of resources and faster application development and deployment. A combination of techniques is often the best approach. We're seeing that we can help customers choose the right solution to meet their needs in many cases.

Gardner: When the CIO leadership individual needs to go back to the business leadership --

Tools like the PPM software can help define and outline those financial benefits in a way that financial analysts and CFOs can recognize.

the accountants, the bean counters, if you will -- what sort of metrics do they need to describe in order to get the investments to make these new technology improvements?

Bonham: Over the past six months, the financial community is looking for fast return -- projects that are going to deliver quick benefits. CIOs need to make sure that they represent their programs and projects in a clear financial way, much more than they have been before this period. Tools like the PPM software can help define and outline those financial benefits in a way that financial analysts and CFOs can recognize.

Gardner: I’m also curious about the advice you would give for CIOs listening here today. What’s the general advice that we can offer in terms of getting that new economy bang for the buck.

Bonham: Let’s try and think about this in terms of some metrics. There is a total IT budget metric that CIOs need to think about. Over the past few months, many have been focusing on reducing the total cost of IT and maximizing efficiency, as well as targeting effectiveness. But, there is also a metric of how much you are spending on maintenance and management of existing systems versus innovation and growth. Typically, organizations spend 60-70 percent of their budget on maintenance and management of existing systems.

What CIOs need to think about going forward is how to grow the spend on innovation and applications, so that they can drive real business value and better business outcomes for their organization and be more competitive as the economy emerges.

Gardner: So, for that large chunk of their budget, it’s going to these ongoing operations, maintenance and support. You can consolidate, call out applications that might not be delivering much value, archive and remove data, this whole notion of modernization, and then use virtualization, and I think that can significantly reduce that larger nut of the equation, right?

Transformational approach

Bonham: That’s exactly right. Those organizations that are taking a transformational approach, an end-to-end approach, choosing those technologies that are giving them efficiency are going to lead the way. They are the ones that are going to have investment dollars available to allocate to new projects, which will drive their business in the upturn and give them the growth opportunities they want.

Gardner: So, for a CIO, they want to find that golden strategy that both reduces costs over the long-term, but increases that business agility, and then frees up those funds for those innovations and additional technologies. It's a trifecta, if you will, of consolidate, modernize, and virtualize.

Bonham: Absolutely. We’re seeing many firms on that course.

Gardner: For those folks who are interested in learning more or getting started, where do they go for information, and how do they set up a process?

Bonham: HP has a whole range of services and technologies that can address the specific needs

These organizations and CIOs want to think through their next step and think through where to start and how to make sure their IT strategy is in line with their business needs.

that we’ve talked about -- virtualization requirements, the services to help firms consolidate and standardize their technology, to implement automation tools, to better manage their portfolio projects, and to speed up software development.

Through EDS, an HP company, we have outsourcing, which can take the burden away from CIOs by outsourcing those services. We have HP Financial Services that can help fund through leasing and financing new investment requirements.

These organizations and CIOs want to think through their next step and think through where to start and how to make sure their IT strategy is in line with their business needs. We also have some consulting services and workshops that we call the CIO Agenda that can help people get started and make sure they are on the right course for the next few months to optimize their investment and their business outcomes.

Gardner: We’ve been discussing whether CIOs are making right decisions and how to make adjustments moving forward, both in strategy and execution. We’ve been joined by Lee Bonham. He is the marketing director for the CIO Agenda Programs in HP’s Technology and Solutions Group. I welcome his thoughts and appreciate his input. Thank you for joining us, Lee.

Bonham: Well, thanks very much indeed. Have great day.

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. Download the slides. Sponsor: Hewlett-Packard.

Transcript of a sponsored BriefingsDirect podcast on what CIOs need to do to survive the current economic downturn, while preparing for the coming upturn. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

Jericho Forum Aims to Guide Enterprises Through Risk Mitigation Landscape for Cloud Adoption

Transcript of a sponsored BriefingsDirect podcast on cloud security and the role of the Jericho Forum. Recorded live at The Open Group's 23rd Enterprise Architecture Practitioners Conference and 3rd Security Practitioners Conference in Toronto.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: The Open Group.

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 coming to you from The Open Group’s 23rd Enterprise Architecture Practitioners Conference and associated 3rd Security Practitioners Conference in Toronto.

We're going to talk about security in the cloud and decision-making about cloud choices for enterprises. There has been an awful lot of concern and interest in cloud and security, and they go hand in hand.

We're going to find out about some early activities among several groups, including the Jericho Forum. They are seeking ways to help organizations and guide them through this process of approaching cloud with security in mind. You might consider it a journey toward safe cloud adoption.

Welcome with me, please, Steve Whitlock, a member of the Jericho Board of Management. Welcome, Steve.

Stephen Whitlock: Hi, it’s nice to meet you.

Gardner: We’ve seen an awful lot about cloud opportunity, but we haven’t seen a lot of practical steps that organizations can take to decide what goes to a cloud and what stays with internal IT. What is your organization doing up front to try to help organizations sort through what stays in and what goes out?

Whitlock: A lot of discussions around cloud computing get confusing, because cloud computing appears to be encompassing any service over the Internet. The Jericho Forum has developed what they call a Cloud Cube Model that looks at different axis or properties within cloud computing, issues with interoperability, where is the data, where is the service, and how is the service structured.

They've also coupled that with the layered model that looks at hierarchical layer of cloud services, starting at the bottom with files services and moving up through development services, and then full applications.

Gardner: The sense here, I think, is that you are offering an accordion -- not necessarily the organization, but the marketplace -- where there are security issues, cost, and risk, but there are also rewards. The approach to cloud seems to be how to best balance that accordion of options best suited to your organization. Is this something that’s going to be standardized or is this really a one-off approach for each organization?

Standards lacking

Whitlock: It would be nice if the cloud-computing providers had standards in this area. I don’t see them yet. I know that other organizations are concerned about those. In general, the three areas concerned with cloud computing are, first, security, which is pretty obvious. Then, standardization. If you invest a lot of intellectual capital and effort into one service and it has to be replaced by another one, can you move all that to the different service? And finally, reliability. Is it going to be there when you need it?

Gardner: This sounds familiar. We’ve gone through these sorts of cost-benefit analysis when it’s come to other aspects of IT over the past couple of decades. Is there anything fundamentally different about cloud?

Whitlock: In the IT historical sense, maybe not. It’s, "Is this the right model for your business?" From a technology sense, there are some differences.

The Jericho Forum made its name early on for de-perimeterization or the idea that barriers between you and your business partners were eroded by the level of connectivity you needed do the business. Cloud computing could be looked at the ultimate form of de-perimeterization. You no longer know even where your data is.

Gardner: I have seen some of the papers you have presented on the notion of a Cloud Cube Model. Could you dig into that a little bit, explaining what we mean by a Cloud Cube?

Whitlock: The Cube came with a focus on three dimensions: whether the cloud was internal

The in-source-outsource question is still relevant. That’s essentially who is doing the work and where their loyalty is.

or external, whether it’s was open or proprietary, and, originally, whether it was insourced or outsourced.

The current model focuses more on whether you’ve developed your cloud services in following the de-perimeterization guidelines that the Jericho Forum has issued, which really means how flexible it is and how your service is interacting with the cloud services. There are a couple of other dimensions to consider as well. The insource-outsource question is still relevant. That’s essentially who is doing the work and where their loyalty is.

Gardner: So, for an enterprise that is enticed by the economic benefits in cloud computing, how would they approach this model? Do you sort of plug yourself into this Cube somewhere and find that you are either high or low risk is-à-vis your use of insourced or outsourced? How do you use it practically?

Determining the viability

Whitlock: The combination of the axis -- and it gets problematic to represent more than three or four dimensions on paper -- may determine the viability of a specific cloud service. For example, if your organization has no skill in building a cloud service, but want to do it internally, then you may outsource the development to a cloud service provider that’s skilled at building those services.

If you don’t want internal infrastructure and want to leverage the agility of the cloud service, then you may find yourself in the external and outsourced services of leveraging one of the common commercial providers.

Gardner: This notion of your cloud model as a way of grasping the trade-offs and potentials around cloud is only about six months old. Some of these concepts been around for quite a while, but the packaging, at any rate, is fairly new. Have you yourself been impressed or surprised by the amount of interest in cloud computing in just the last six to 12 months?

Whitlock: It’s grown very fast. A part of me has been surprised, but I also see a relabeling of existing services as cloud services -- SOA and other services. The growth doesn’t surprise me too much, given the flexibility. I am worried about the accompanying risks.

Gardner: You mentioned service-oriented architecture (SOA). Is there a relationship between that and cloud? Is cloud perhaps an oversimplification or a simplification of some of the concepts that people have gotten a little too caught up with in terms of complexity when it came to SOA?

Whitlock: Cloud is a broader concept. There is still a lot of hype in this area. I believe there is something there that may not resemble all of the hype and the press we’ve seen about it.

Cloud is a broader concept. There is still a lot of hype in this area.

Similar to SOA, the idea of direct interactive services on demand is a powerful concept. I think the cloud extends it. If you look at some of these other layers, it extends it in ways where I think services could be delivered better.

Gardner: And, finding this right combination, in order to be secured to reduce risk but to avail yourself of the benefits, Jericho Forum is positioning itself, how? What role are you chunking off for yourselves?

Whitlock: As the Jericho Forum did with handling de-perimeterization -- which is not something we invented, but reacted to -- it’s writing a set of position papers, guidelines, and architecture to guide usage of cloud services. The Jericho Forum is also working with the Cloud Security Alliance on their framework and papers.

Gardner: And what is the relationship between the two? Is this a complementary effort or is one a subset of the other? How would you characterize these two organizations in their relationship to the evolution of cloud?

Formal relationship

Whitlock: It's very complementary. They arose separately, but with overlapping individuals and interests. Today, there is a formal relationship. The Jericho Forum has exchanged board seats with the Cloud Security Alliance, and members of the Jericho Forum are working on several of the individual working groups in the Cloud Security Alliance, as they prepare their version 2.0 of their paper.

Gardner: We have, of course, seen lots of service being relayed from some of the major providers, and that would include Amazon, Google, Salesforce.com, Microsoft, and others. Then, we’ve seen lots of interest on the buy side -- in the organizations and the enterprises. Is there a lot of communication going on between these, and would some organization like yours or the CSA perhaps fill a role as intermediary of some sort?

Whitlock: I haven’t seen any direct intermediary role, but I believe that both the buy

At a really crude level, the cloud providers are probably doing a better job than many of the small non-cloud providers and maybe not as good as large enterprises.

side and the vendors are reading the documents and getting influenced that way.

Gardner: Do you have a sense from the enterprises as to what they would like to see additionally from the cloud providers, even at this early stage?

Whitlock: There are concerns, as I mentioned before -- where the data is and what is the security around the data -- and I think a lot of the cloud providers have good answers. At a really crude level, the cloud providers are probably doing a better job than many of the small non-cloud providers and maybe not as good as large enterprises. I think the issue of reliability is going to come more to the front as the security questions get answered.

Gardner: We are going to be talking a little bit later at this conference about cloud and security, but I am curious, from your perspective, what can organizations do in moving toward cloud by deciding what’s most secure across this spectrum of sourcing options?

Are there any rules of thumb to get started, as to what you might not want to get in your cloud at all and some things that would be the “low lying fruit” of what should go to cloud?

The layered model

Whitlock: In addition to the cube model, there is the layered model, and some layers are easier to outsource. For example, if it’s storage, you can just encrypt it and not rely on any external security. But, if it’s application development, you obviously can’t encrypt it because you have to be able to run code in the cloud.

I think you have to look at the parts of your business that are sensitive to needs for encryption or export protection and other areas, and see which can fit in there. So, personally identifiable information (PII) data might be an area that’s difficult to move in at the higher application level into the cloud.

Gardner: Lastly, I wonder if you'd give us a little peek into the crystal ball in terms of the Jericho Forum. What initiatives are there? What interests you? What areas might you be moving toward in the future? I know you can’t talk in any great detail, but is this something that you are going to be expanding in terms of your contributions?

Whitlock: The focus on cloud computing was initially formed as a year-long effort. I think it will probably be more than a year. I think the interest in how to protect data, no matter

It’s very important to be able to withdraw from a cloud service, if they shut down for some reason. If your business is relying them for day-to-day operations, you need to be able to move to a similar service.

where it is, is what it really boils down to. IT systems exist to manipulate, share, and process data, and the reliance on perimeter security to protect the data hasn’t worked out, as we’ve tried to be more flexible.

We still don’t have good tools for data protection. The Jericho Forum did write a paper on the need for standards for enterprise information protection and control that would be similar to an intelligent version of rights management, for example.

Gardner: I'm also wondering. Is there a rule of thumb for organizations that are experimenting with cloud? Is it important for them to be able to reverse course, if that becomes necessary? I'm getting at this issue of portability. Is it essential to get portability clear and understood before any meaningful movement to cloud takes place, and then testing the waters, around security? Or, is that really not the case?

Whitlock: It’s very important to be able to withdraw from a cloud service, if they shut down for some reason. If your business is relying them for day-to-day operations, you need to be able to move to a similar service. This means you need standards on the high level interfaces into these services. With that said, I think the economics will cause many organizations to move to clouds without looking at that carefully.

Gardner: Very good. We’ve been discussing some of the movement in several organizations, including Jericho Forum, around safe cloud computing and how to get started and think about this thoughtfully to reduce risks, while empowering benefits around services and economics.

Helping us in this deep-dive discussion, we’ve been joined by Steve Whitlock, a member of the Jericho Board of Management. Thanks, so much, Steve.

Whitlock: Thank you very much, Dana.

Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. We are coming to you from the Open Group’s 23rd Enterprise Architecture Practitioners Conference and the associated 3rd Security Practitioners Conference in Toronto. Thanks for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: The Open Group.

Transcript of a BriefingsDirect sponsored podcast on cloud security and the role of the Jericho Forum. Recorded live at The Open Group's 23rd Enterprise Architecture Practitioners Conference and 3rd Security Practitioners Conference in Toronto. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

Economic and Climate Imperatives Combine to Elevate Green IT as Cost-Productive Priority

Transcript of a sponsored BriefingsDirect podcast on making progress toward Green IT and on what companies can do to improve energy efficiency, reduce carbon footprints and save money.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: Hewlett-Packard.

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 Green IT and the many ways to help reduce energy use, stem carbon dioxide creation, and reduce total IT costs -- all at the same time. We're also focusing on how IT can be a benefit to a whole business or corporate-level look at energy use.

We'll look at how current IT planners should view energy concerns, some common approaches to help conserve energy, and at how IT suppliers themselves can make "green" a priority in their new systems and solutions.

[UPDATE: HP named "most green" IT vendor by Newsweek.]

Here to help us better understand the Green IT issues, technologies, and practices impacting today's enterprise IT installations and the larger businesses they support, we're joined by five executives from HP: Christine Reischl, general manager of HP's Industry Standard Servers. Welcome, Christine.

Christine Reischl: Welcome to you.

Gardner: We're also joined by Paul Miller, vice president of Enterprise Servers and Storage Marketing at HP. Hello, Paul.

Paul Miller: Well, thank you.

Gardner: And Michelle Weiss, vice president of marketing for HP's Technology Services. Welcome Michelle.

Michelle Weiss: Hello.

Gardner: Also Jeff Wacker, an EDS Fellow. Welcome, Jeff.

Jeff Wacker: Thank you. Glad to be here.

Gardner: Lastly, Doug Oathout, vice president of Green IT for HP's Enterprise Servers and Storage. Welcome Doug.

Doug Oathout: Good afternoon. Thank you.

Gardner: Doug, let's start with you. Tell us a little bit about what the major concerns are for those who are creating and consuming IT and apparently trying to reduce the amount of energy that they're consuming as well.

Cost of energy

Oathout: The major issue that customers are wrestling with is the current cost of energy. The current cost of energy continues to rise. The amount of energy used by IT is not going down. It continues to rise. So, it's becoming a larger portion of their budget. They're very concerned with managing their expense and, therefore, want to look at energy use and how they can reduce it, not only from a data center perspective, but also from consumption of the monitors, printers, and desktop PCs as well. So, the first major concern is the cost of energy to run IT.

The second one they run into is that they want to extend the life of their data center. They don't want to have to spend $10 million, $50 million, or $100 million to build another data center in this economic environment. They want to extend the life of their data center. So, they want to know anything possible, from best practices to new equipment to new cooling designs, to help them extend the life of the data center.

Lastly, they're concerned with regulations coming in the marketplace. A number of countries already have a demand to reduce power consumption through most of their major companies. We have a European Code of Conduct, that's optional for data centers, and then the U.S. has regulations now in front of Congress to start a cap-and-trade system.

As regulations get passed around the world, clients and customers are going to have to react to them, and they're going to have to know how much energy they're using, as well as their carbon footprint, so they can act upon it to meet the regulatory environment.

Gardner: So, Doug, this is by no means just a "nice to have," this is pretty much a "must-do."

Oathout: This is a must-do. The business environment is saying, "You've got to reduce cost," and then the government is going to come in and say, "You're going to have to reduce your energy." So, this is a must-do.

Gardner: The role of IT is I suppose, fairly prominent, and not just a rounding error.

Oathout: No, it's a big opportunity for the clients, because they can use IT to fix their inefficient processes or to fix how things are running. They can use IT to put intelligence behind some of their processes to reduce the amount of energy and carbon they produce.

Gardner: That means that IT perhaps is more of a solution to the general energy problems than simply the amount of energy that it consumes as a department?

Backbone of digitization

Oathout: It's exactly that. IT can multiply the effects of intelligence being built into the system. IT is the backbone of digitization of information, which allows smart business people to make good, sound decisions.

Gardner: Let's go to Paul Miller now. What are some common issues that you're seeing among the users of your services and solutions at HP? What's the common thought around some of your infrastructure efficiency demands?

Miller: One of the key issues is who owns the problem of energy within the business and within the data center. IT clearly has a role. The CFO has a role. The data center facilities manager has a role. One of the key issues, when we go into a customer, is determining who owns the problem and who owns the decision to change the problem?

The other key element, and we talk about this, is that you can't manage what you can't see. There are very limited tools today to understand where energy is being used, how efficient systems are, and how making changes in your data center can help the end customer.

That's where HP has assembled a set of tools and services that can come in and help customers instrument their data centers. Our expertise in knowing where and how changes to different equipment, different software models, and different service models can drive a significant impact to the amount of energy that customers are using and also help them grow their capacity at the same time.

We recently introduced a product called our Environmental Edge, which instruments an entire data center from those to services to help customers deploy and build brand new data centers.

Technologies like our containers, which we call our Performance-Optimized Data Center (POD), have been designed specifically to enable customers to achieve the highest power utilization and lowest cost for building out a data center. Those are some of the options that we can bring to a customer that has infrastructure energy issues.

Gardner: When we factor in the cost of energy, it seems that the return on investment (ROI) equation moves quite a bit closer to a short-term calculation. Is there some sort of an energy arithmetic that you're seeing among folks, as they examine their spending?

Everyone needs rapid ROI

Miller: In today's economy, everyone needs an ROI that's as quick as possible. It's gone from 12 months down to 6 months. With our new ProLiant G6 servers, the cost and energy savings alone is so significant, when you tie in technologies like virtualization and the power and performance we have, we're seeing up to three months ROI over older servers by companies being able to save on energy plus software costs. It's just not focusing on the energy as energy's sake, but also looking at the efficiencies of the rest of the data center that we take into account.

Gardner: Does the general movement towards conservation across the corporation require a bit of an organizational shift? Do the folks in IT now need to relate to other groups in the organization that they perhaps didn't have to before?

Miller: Absolutely. As I mentioned earlier, typically, the energy costs come at an aggregate level of facilities organizations, and being able to communicate what changes we can make from an IT standpoint into those organizations is critical. It goes all the way up to energy utilization being a corporate issue in helping build the corporate brand by implementing technologies that help a corporation put on a green set of initiatives and help build the entire brand for the company.

Gardner: Let's go next to Christine Reischl. Christine, with millions literally of servers pouring off of assembly lines, what do you do in terms of bringing energy efficiency into the design? Is there a great deal being done across the life cycle of the products themselves?

Reischl: Yes. Energy efficiency is one of our critical design objectives for our product, and we have been innovating in power cooling and software for years now. We have quite a significant amount of HP Labs activity going on with process applications, and so forth. Our customers are benefiting from that hardware right now.

As an example, the G6 servers, the new generation of our x86 servers, which use 50 percent less power, are 50 percent more energy efficient and have 50 percent less power utilization than servers sold several years ago. In addition to that, there is a claiming capacity possibility, as well as extending the life of the data center.

How did we do that for our G6 servers? It was really coming with innovation. The first one, as an example, involves the Sea of Sensors, which are 32 smart thermal sensors across our servers that constantly optimize the energy use, the fan speed, and the acoustics.

Another example is the Dynamic Power Capping, where we have a safe way of limiting the power

Energy efficiency is one of our critical design objectives for our product, and we have been innovating in power cooling and software for years now

draw or power consumption without impacting performance, so that customers can really fill up their racks and up to triple their service in the data center.

Another example is the common power supply, which allows the power supply to run at efficiency levels of 92 percent and above, which again helps with the power consumption tremendously. Those are the examples of our G6, a broad new generation of x86 servers which came out end of March and is here, filling out the portfolio.

At the same time, we also have announced just recently a new product family, the SL product family, which allows for specific energy savings of 30 percent for a current generation of products. This is specifically, from a design objective, targeting a low-Watt environment per server.

Gardner: As we pointed out earlier, this whole ROI equation is so important, assuming that we're only getting a certain distance into what's potentially possible at energy savings. How far into this potential efficiency drive do you think we are?

Continuous innovation

Reischl: Well, we have been investing in that area for several years now. We will have an energy power cooling roadmap and we will continuously launch innovation as we go along. We also have an overall environment around power and cooling, which we call the Thermal Logic environment. Under this umbrella, we are not only innovating on the hardware side, but on the software side as well, to ensure that we can benefit on both sides for our customers.

In addition to that, HP ProCurve, for example, has switches that now use 40 percent less energy than industry average network switches. We also have our StorageWorks Enterprise Virtual Array, which reduces the cost of power and cooling by 50 percent using thin provisioning and larger capacity disks.

So, not only are we talking about servers, but we are also talking about storage and ProCurve

That is clearly a big benefit for winning deals and helping our customer to operate efficiency.

switches in this context. The greater HP environment around innovation is on those greater types of divisions and engagements.

Gardner: I've received questions about Energy Star ratings and what that means. Are there certain incentives in terms of whether you adopt an Energy Star-rated device or not, how does that work?

Reischl: The high-volume products or our G6 servers have the Energy Star rating. Clearly, what it documents and demonstrates is that we are the only ones in the industry who are able to certify for Energy Star, which again speaks to the fact of how power- and cooling-efficient our servers are. That is clearly a big benefit for winning deals and helping our customer to operate efficiency.

Gardner: Thank you so much. Michelle Weiss, when it comes to people and process, when we look at solutions level approaches to IT and overall energy conservation, what is HP doing? What are some of the general solution approaches to helping your customers get greener?

Weiss: Well, Dana, for us it's pretty simple, because it's really all about helping clients use their resources -- using what you've got more efficiently and effectively.

You can start with those infrastructure resources. We just heard Christine speak to those and Paul as well. We can help clients with things like consolidation, whether simple consolidation or all the way up to a big data-center consolidation, like HP did, going from 85 data centers down to 6 locations.

We could help with virtualization. We could also help with networking, a more efficient network design, or more efficient installation. Christine spoke about storage. We could certainly go to and help people profile their data to see if there is wasted space or if the data needs to be tiered or consolidated.

Obviously, we're talking about energy and energy-efficiency analysis. Paul was talking about the facilities and the IT person coming together and having a discussion.

Hands-on assessment

We can go in and do a hands-on assessment of the actual power use in the data center and provide people with a report that says, "Here's what you're using and here's our recommendation." We can go from a very low cost recommendation, like, "You should shut down an air conditioner," all the way up to a very extensive recommendation.

Let me talk for just a second about the human resources, because you spoke about that, and I think it's an often-overlooked area about getting more efficiency out of our human resources.

We have a lot of HP education, very much geared for IT personnel around getting them more capable and effective around technology areas like virtualization. But, we also have a lot of capability to help people with training in the use of things like videoconferencing with Halo technology, etc. So, it's all of those things together, using those resources more efficiently.

Gardner: Now, there is more than energy when it comes to being green. There is reducing

. . . by 2010, HP will have recycled over two billion pounds of product.

waste, recycling, and examining the lifecycle of a device from cradle to grave, and then also being mindful of how to properly dispose of those parts that can't be recycled. Tell us about the solutions are for how equipment gets sunset.

Weiss: This is a really interesting area. I don't know if you know this, Dana, but by 2010, HP will have recycled over two billion pounds of product. For someone that's always trying to lose weight, I think about that -- my God, that's a lot of product.

We've won a lot of recycling awards throughout the U.S. and abroad. We we’re the first computer company to actually have a recycling plant -- it's actually located near to me -- which we opened about a dozen years ago. So, we do a lot of that.

We also provide other options for disposal, other options to purchase recycled or refurbished products for our customers, and we also have HP Financial Services that come in and ensure that IT equipment that has passed its prime can actually be disposed of in a way that will help meet local environmental laws. We have a lot of work on asset recovery and a lot of work on that end stage of the lifecycle.

Gardner: Is there a great deal of education that needs to take place with IT? Are IT folks generally already thinking about life cycle and recycling, or is this an educational issue as well?

Thinking of a lifecycle

Weiss: It's both. IT tends to think in terms of a lifecycle. If you think about ITIL and all of the processes and procedures most IT people follow, they tend to be more process oriented than most groups. But, there is even more understanding now about that latter stage of the lifecycle and not just in terms of disposing of equipment.

The other area that people are really thinking about now is data -- what do you do at the end of the lifecycle of data? How do you keep the data around that you need to, and what do you do about data that you need to archive and maybe put on less energy-consuming devices? That's a very big area.

Gardner: Having high redundancy of data, of course, is basically wasted cycles, wasted electrons, and wasted money.

Weiss: Exactly. That footprint is very large when you really think about that entire supply chain of energy.

Gardner: Thanks so much. Let's go over to Jeff Wacker at EDS, an HP company. As a fellow there at EDS, Jeff, tell us a bit about what EDS, as a very large global hosting organization, is doing in regard to going green.

Wacker: We're a services play. We look for total solutions, as opposed to spot solutions, as we approach the entire ecology, energy, and efficiency triumvirate. It's all three of those things in one. It's not just energy. It's all three.

My colleagues have talked very eloquently about data centers and hardware. I'll mention a little more on data centers. One of the things I wanted to bring up was that we look from the origination all the way through the delivery of the data in a business process. Not only do we do the data centers, and run servers, storage, and communications, but we also run applications.

You may not have heard of green applications, but, indeed, applications are also high on the order of whether they are green or not. First of all, it means reconciling an application's portfolio, so that you're not running three applications in three different places. That will run three different server platforms and therefore will require more energy.

It's being able to understand the inefficiencies with which we've coded much of our application services in the past, and understanding that there are much more efficient ways to use the emerging technologies and the emerging servers than we've ever used before. So, we have a very high focus on building green applications and reconciling existing portfolios of applications into green portfolios.

How you use IT

Moving onto the business processes, the best data delivered into the worst process will not improve that process at all. It will just have extended it. Business process outsourcing, business process consulting, and understanding how you use IT in the business is continuing to have a very large impact on environmental and green.

Gardner: Now, given that you have high stakes in cutting your cost and reducing redundancy and waste, I'd think this goes right to your bottom line as an outsourcer. What metrics of success do you use, how do you measure, and how do you know when you're doing the right things?

Wacker: It's a good question. There are a lot of metrics out there, and a lot of them were built with the efficiency of buildings in mind, and some, directly with data centers in mind. The defense council on integration and efficiency has created a data-center infrastructure efficiency (DCIE). There is a power-usage effectiveness (PUE), or essentially an inverse of one over the other. What they do is ask, "How many Watts does it take for you to run the infrastructure of the data center in order to drive a watt of power at a server?"

These are traditional metrics. Quite frankly, right now we, as well as others in the industry, are looking at new metrics, because it's both sides of the equation. You want an efficient data center. You want efficient use of the watts that are going into the servers. So, you now have to consider how many partitions am I running, how smart are the power supplies and the fans on these servers, everything that's been talked about before.

Moving into the data center, we're looking at capabilities that are using, for example, air

. . . if you know where you're getting your IT from, you can ask that supplier how green is your IT, and hold that supplier to a high standard of green IT.

handling in the proper locations that allow you not to use compression. Anybody who runs their air conditioner during the summer knows that a lot of their electricity charges are running that compressor, which is actually creating the cooling capability for their house.

If we are locating some of our data centers in locations where the air is of a certain temperature that allows us to run data centers without compression 97 or 98 percent of the year, you can imagine that we have created quite a bit of savings for us.

Gardner: That's true, of course, for your data centers. Other organizations that are looking at how to place their data centers, I suppose, have more sourcing options. We've heard a lot about cloud computing recently. How impactful is this long-term decision about how many data centers? I suppose also at the architectural level of what sort of applications and architectures you want to support, is this top of mind for all the folks you're dealing with?

Wacker: Well, it is becoming top of mind, and you've already identified the major culprit in this. That is that the cost of energy is going to continue to accelerate, and to be higher and higher, and therefore a major component of your cost structure in running IT. So yes, everybody is looking at that.

One of the things about what has been called cloud or Adaptive Infrastructure is that you've got to look at it from two sides. One, if you know where you're getting your IT from, you can ask that supplier how green is your IT, and hold that supplier to a high standard of green IT. That's the type of a standard that HP seeks to meet at all times.

But, not everybody who is going to be running computing infrastructure within the cloud is going to meet that. So, one of the big challenges of cloud computing is how green are they. You, as a corporation, have to identify all of your green for cap-and-trade or for the regulations. You're going to have to know that. So there are going to be some interesting disclosures that will be coming up as we move down the road.

A two-sided sword

On the other hand, cloud is, by its definition, moving a lot of processes into a very few number of boxes -- ultra virtualization, ultra flexibility. So it's a two-sided sword and both sides have to be looked at. One, is for you to be able to get the benefits of the cloud, but the other one is to make sure that the cost of the cloud, both in terms of capabilities as well as the environment, are in your mindset as you contract.

Gardner: Unfortunately, we're asking even more of our beleaguered IT executives and strategists. They're being asked to do more for less now in terms of productivity, but we're going to be asking them to do less in terms of their energy use, and then thinking outside the box when it comes to the sourcing options and how to factor the green across an ecology of providers.

I'd like to take the question to both Paul and Michelle. How do these IT strategists get a handle on this? What are some first steps for them?

Weiss: Let me start and then I can turn it over to Paul. One of the really clear things we have seen in our experience is that taking a set of uncoordinated approaches to this whole area just doesn't work. You really are better off if you have a top-down view of what you're trying to do. So, always understand your strategy and build the plan around that.

Certainly, we've got services both from our Technology Services organization and from Jeff in

We can help make that case in business language, because this is all about business technology.

EDS about helping people make the case. As Paul was talking earlier today, many people are actually making the case to their CFO. It's no longer always a CIO concern.

We can help make that case in business language, because this is all about business technology. It's all about driving business outcomes. We can help make that case in plain business terms, either around energy efficiency that you can do, around adopting, for example, the G6 servers, or around a virtualization project. We can do that in business language.

Gardner: Paul, what sort of approaches won't work? The first thing that comes to my mind is doing nothing. It sounds like proactive is the message of the day.

Miller: Yeah, two things ... One is doing nothing. The other is jumping at a lot of claims out there. There are multiple claims out there. Every time I see a press release or I see an advertisement, it has a claim on energy efficiency. As Jeff pointed out, you need to have an approach on this that looks at it from a data center, from a PUE, standpoint, and just not jump on the claim of the day.

The other element is that the claim of the day is done a lot around a specific application or a specific setup that may not be appropriate for your business. So, take time to research. Look for companies like HP that have power calculators that you can plug your own unique configurations into, but then go beyond that.

Coordinated approach

One of the other things, and this goes to what Michelle was talking about, is a coordinated approach. A coordinated approach is not just about buying energy efficient equipment. It's about managing them very effectively.

We have our power capping tool, which enables you to set specific power limits within the data center, so that you can guarantee an outcome for your energy, an outcome for your power, an outcome for your performance that you're going to have from a service-level agreement (SLA). Building intelligence into them is critical for the long-term success and long-term savings of power for your environment.

Gardner: A last set of questions. Doug, at this point, what should we expect in the future? Are we undertaking a journey and we're only in the very first steps, now that energy and the environment have become so prominent?

Oathout: Dana, this is an ongoing process. This process of energy efficiency never ends. As Michelle and Paul pointed out, once you undertake a simple assessment of figuring out how much energy you're consuming, where it’s being consumed, then you develop a roadmap for virtualization, you develop a roadmap for consolidation, you develop a roadmap for application efficiency, then you start all over again.

It's an ongoing, continuous process improvement that you do every day, every week, every month. It's a journey that bears fruit. It can be a small project or it can be a large project, but the key is to have a snapshot of where you are today and then measure yourself on an ongoing basis on your progression.

The servers are more efficient than they were three years ago. Our storage is more efficient than

It's an ongoing, continuous process improvement that you do every day, every week, every month. It's a journey that bears fruit.

it was three years ago. Our networking is more efficient. There are all different kinds of projects based on technology, but there is also technology in software and services that can help you gain even more efficiencies. This is the beginning of a never-ending process, but it does bear fruit on an ongoing basis.

Gardner: I have to imagine that a lot of people feel pretty strongly about this, and the community approach could be quite powerful. Do we have avenues for how folks in the field who might have some ideas themselves about process, technology, and perhaps even other aspects of this equation can contribute?

Oathout: We have both an internal and an external green website that is continually taking questions and being monitored for ideas. Our internal sales team can go through our green website, and our external clients and consultants can take advantage of HP's knowledge, as well, through our external green website.

Gardner: Well, I'm afraid we're about out of time. We've been discussing green IT and the many ways that IT can help reduce energy and play a larger role in the "greenification" of enterprises at large.

We've been joined by a panel of five executives from HP. We've been joined by Christine Reischl, general manager of HP's Industry Standard Servers. Thank you, Christine.

Reischl: Thank you.

Gardner: Paul Miller, vice president of Enterprise Servers and Storage Marketing at HP. Thank you, Paul.

Miller: Thank you, Dana.

Gardner: Michelle Weiss, vice president of marketing for HP's Technology Services.

Weiss: It's been a pleasure.

Gardner: Jeff Wacker, an EDS Fellow. Thank you, Jeff.

Wacker: Thank you, Dana.

Gardner: And Doug Oathout, vice president of Green IT for HP's Enterprise Servers and Storage.

Oathout: Thank you, Dana.

Gardner: This is Dana Gardner. You have been listening to a sponsored BriefingsDirect podcast. Thanks for joining and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: Hewlett-Packard.

Transcript of a sponsored BriefingsDirect podcast on making progress toward Green IT and on what companies can do to improve energy efficiency, reduce carbon footprints and save money. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.