Learn How Enterprise Architects Can Better Relate TOGAF and DoDAF to Bring Best IT Practices to Defense Contracts

Transcript of a BriefingsDirect enterprise IT thought leadership podcast on how governments are using multiple architectural frameworks.

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Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: The Open Group.

Dana Gardner: Hello, and welcome to a special BriefingsDirect thought leadership interview series coming to you in conjunction with the Open Group Conference this July in Washington, D.C. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout these discussions.

The conference will focus on enterprise architecture (EA), enterprise transformation, and securing global supply chains. Today, we’re here to focus on EA, and how governments in particular are using various frameworks to improve their architectural planning and IT implementations.

Joining us now to delve into this area is one of the main speakers at the July 16 conference, Chris Armstrong, President of Armstrong Process Group. His presentation will also be live-streamed free from The Open Group Conference.

Chris is an internationally recognized thought leader in EA, formal modeling, process improvement, systems and software engineering, requirements management, and iterative and agile development.

Governments in particular are using various frameworks to improve their architectural planning and IT implementation.

Chris represents the Armstrong Process Group at the Open Group, the Object Management Group (OMG), and Eclipse Foundation. Chris also co-chairs The Open Group Architectural Framework (TOGAF), and Model Driven Architecture (MDA) process modeling efforts, and also the TOGAF 9 Tool Certification program, all at The Open Group.

At the conference, Chris will examine the use of TOGAF 9 to deliver Department of Defense (DoD) Architecture Framework or DoDAF 2 capabilities. And in doing so, we'll discuss how to use TOGAF architecture development methods to drive the development and use of DoDAF 2 architectures for delivering new mission and program capabilities. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]

So with that, we now welcome to BriefingsDirect, Chris Armstrong.

Chris Armstrong: Great to be here, Dana.

Gardner: Tell our viewers about TOGAF, The Open Group Architecture Framework, and DoDAF. Where have they been? Where are they going? And why do they need to relate to one another more these days?

Armstrong: First of all, TOGAF we look at as a set of essential components for establishing and operating an EA capability within an organization. And it contains three of the four key components of any EA.

First, the method by which EA work is done, including how it touches other life cycles within the organization and how it’s governed and managed. Then, there's a skills framework that talks about the skills and experiences that the individual practitioners must have in order to participate in the EA work. Then, there's a taxonomy framework that describes the semantics and form of the deliverables and the knowledge that the EA function is trying to manage.

One-stop shop

One of the great things that TOGAF has going for it is that, on the one hand, it's designed to be a one-stop shop -- namely providing everything that a end-user organization might need to establish an EA practice. But it does acknowledge that there are other components, predominantly in the various taxonomies and reference models, that various end-user organizations may want to substitute or augment.

It turns out that TOGAF has a nice synergy with other taxonomies, such as DoDAF, as it provides the backdrop for how to establish the overall EA capability, how to exploit it, and put it into practice to deliver new business capabilities.

Frameworks, such as DoDAF, focus predominantly on the taxonomy, mainly the kinds of things we’re keeping track of, the semantics relationships, and perhaps some formalism on how they're structured. There's a little bit of method guidance within DoDAF, but not a lot. So we see the marriage of the two as a natural synergy.

Gardner: So their complementary natures allows for more particulars on the defense side, but the overall looks at the implementation method and skills for how this works best. What has been the case up until now? Have these not been complementary. Is this something new, or are we just learning to do it better?

Armstrong: I think we’re seeing the state of industry advance and looking at trying to have the federal government, both United States and abroad, embrace global industry standards for EA work. Historically, particularly in the US government, a lot of defense agencies and their contractors have often been focusing on a minimalistic compliance perspective with respect to DoDAF. In order to get paid for this work or be authorized to do this work, one of our requirements is we must produce DoDAF.

A lot of defense agencies and their contractors have often been focusing on a minimalistic compliance perspective with respect to DoDAF.

People are doing that because they've been commanded to do it. We’re seeing a new level of awareness. There's some synergy with what’s going on in the DoDAF space, particularly as it relates to migrating from DoDAF 1.5 to DoDAF 2.

Agencies need some method and technique guidance on exactly how to come up with those particular viewpoints that are going to be most relevant, and how to exploit what DoDAF has to offer, in a way that advances the business as opposed to just solely being to conforming or compliant?

Gardner: Well it has prevented folks from enjoying more of that benefit side, rather than the compliance side. Have there been hurdles, perhaps culturally, because of the landscape of these different companies and their inability to have that boundary-less interaction. What’s been the hurdle? What’s prevented this from being more beneficial at that higher level?

Armstrong: Probably overall organizational and practitioner maturity. There certainly are a lot of very skilled organizations and individuals out there. However, we're trying to get them all lined up with the best practice for establishing an EA capability and then operating it and using it to a business strategic advantage, something that TOGAF defines very nicely and which the DoDAF taxonomy and work products hold in very effectively.

Gardner: Help me understand, Chris. Is this discussion that you’ll be delivering on July 16 primarily for TOGAF people to better understand how to implement vis-à-vis, DoDAF, is this the other direction, or is it a two-way street?

Two-way street

Armstrong: It’s a two-way street. One of the big things that particularly the DoD space has going for it is that there's quite a bit of maturity in the notion of formally specified models, as DoDAF describes them, and the various views that DoDAF includes.

We’d like to think that, because of that maturity, the general TOGAF community can glean a lot of benefit from the experience they’ve had. What does it take to capture these architecture descriptions, some of the finer points about managing some of those assets. People within the TOGAF general community are always looking for case studies and best practices that demonstrate to them that what other people are doing is something that they can do as well.

We also think that the federal agency community also has a lot to glean from this. Again, we're trying to get some convergence on standard methods and techniques, so that they can more easily have resources join their teams and immediately be productive and add value to their projects, because they’re all based on a standard EA method and framework.

Gardner: As I mentioned, The Open Group Conference is going to be looking at EA, transformation, security, and supply-chain issues. Does the ability to deliver DoDAF capabilities with TOGAF, and TOGAF 9 in particular, also come to bear on some of these issues about securing supply chain, transforming your organization, and making a wider and more productive use of EA?

Armstrong: Absolutely, and some of that’s very much a part of the new version of DoDAF that’s been out for a little while, DoDAF 2. The current version is 2.02 and 2.03 is being worked on, as we speak.

One of the major changes between DoDAF 1 and DoDAF 2 is the focusing on fitness for purpose.

One of the major changes between DoDAF 1 and DoDAF 2 is the focusing on fitness for purpose. In the past, a lot of organizations felt that it was their obligation to describe all architecture viewpoints that DoDAF suggests without necessarily taking a step back and saying, "Why would I want to do that?"

So it’s trying to make the agencies think more critically about how they can be the most agile, mainly what’s the least amount of architecture description that we can invest and that has the greatest possible value. Organizations now have the discretion to determine what fitness for purpose is.

Then, there's the whole idea in DoDAF 2, that the architecture is supposed to be capability-driven. That is, you’re not just describing architecture, because you have some tools that happened to be DoDAF conforming, but there is a new business capability that you’re trying to inject into the organization through capability-based transformation, which is going to involve people, process, and tools.

One of the nice things that TOGAF’s architecture development method has to offer is a well-defined set of activities and best practices for deciding how you determine what those capabilities are and how you engage your stakeholders to really help collect the requirements for what fit for purpose means.

Gardner: As with the private sector, it seems that everyone needs to move faster. I see you’ve been working on agile development. With organizations like the OMG and Eclipse is there something that doing this well -- bringing the best of TOGAF and DoDAF together -- enables a greater agility and speed when it comes to completing a project?

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Different perspectives

Armstrong: Absolutely. When you talk about what agile means to the general community, you may get a lot of different perspectives and a lot of different answers. Ultimately, we at APG feel that agility is fundamentally about how well your organization responds to change.

If you take a step back, that’s really what we think is the fundamental litmus test of the goodness of an architecture. Whether it’s an EA, a segment architecture, or a system architecture, the architects need to think thoughtfully and considerately about what things are almost certainly going to happen in the near future. I need to anticipate, and be able to work these into my architecture in such a way that when these changes occur, the architecture can respond in a timely, relevant fashion.

We feel that, while a lot of people think that agile is just a pseudonym for not planning, not making commitments, going around in circles forever, we call that chaos, another five letter word. But agile in our experience really demands rigor, and discipline.

Of course, a lot of the culture of the DoD brings that rigor and discipline to it, but also the experience that that community has had, in particular, of formally modeling architecture description. That sets up those government agencies to act agilely much more than others.

Gardner: On another related topic, The Open Group has been involved with cloud computing. We’ve also seen some reference materials and even movement towards demanding that cloud resources be used by the government at large through NIST.

The cloud platform has a lot to offer both government and private organizations, but without trivializing it too much, it’s just another technology platform.

But, I imagine that the DoD is also going to be examining some of these hybrid models. Is there something about a common architectural approach that also sets the stage for that ability, should one decide to avail themselves of some of these cloud models?

Armstrong: On the one hand, the cloud platform has a lot to offer both government and private organizations, but without trivializing it too much, it’s just another technology platform, another paradigm, and a great demonstration of why an organization needs to have some sort of capability in EA to anticipate how to best exploit these new technology platforms.

Gardner: Moving a bit more towards some examples. When we think about using TOGAF 9 to deliver DoD architecture framework capabilities, can you explain what that means in real terms? Do you know of anyone that has done it successfully or is in the process? Even if you can’t name them, perhaps you can describe how something like this works?

Armstrong: First, there has been some great work done by the MITRE organization through their work in collaboration at The Open Group. They’ve written a white paper that talks about which DoDAF deliverables are likely to be useful in specific architecture development method activities. We’re going to be using that as a foundation for the talk we’re going to be giving at the conference in July.

The biggest thing that TOGAF has to offer is that a nascent organization that’s jumping into the DoDAF space may just look at it from an initial compliance perspective, saying, "We have to create an AV-1, and an OV-1, and a SvcV-5," and so on.

Providing guidance

TOGAF will provide the guidance for what is EA. Why should I care? What kind of people do I need within my organization? What kind of skills do they need? What kind of professional certification might be appropriate to get all of the participants up on the same page, so that when we’re talking about EA, we’re all using the same language?

TOGAF also, of course, has a great emphasis on architecture governance and suggests that immediately, when you’re first propping up your EA capability, you need to put into your plan how you're going to operate and maintain these architectural assets, once they’ve been produced, so that you can exploit them in some reuse strategy moving forward.

So, the preliminary phase of the TOGAF architecture development method provides those agencies best practices on how to get going with EA, including exactly how an organization is going to exploit what the DoDAF taxonomy framework has to offer.

Then, once an organization or a contractor is charged with doing some DoDAF work, because of a new program or a new capability, they would immediately begin executing Phase A: Architecture Vision, and follow the best practices that TOGAF has to offer.

Just what is that capability that we’re trying to describe? Who are the key stakeholders, and what are their concerns? What are their business objectives and requirements? What constraints are we going to be placed under?

As the project unfolds, they're going to discover details that may cause some adjustment to that final target.

Part of that is to create a high-level description of the current or baseline architecture descriptions, and then the future target state, so that all parties have at least a coarse-grained idea of kind of where we're at right now, and what our vision is of where we want to be.

Because this is really a high level requirements and scoping set of activities, we expect that that’s going to be somewhat ambiguous. As the project unfolds, they're going to discover details that may cause some adjustment to that final target.

Gardner: Chris, do you foresee that for a number of these organizations that have been involved with DoDAF mainly in the compliance area being compliant is going to lead them into a larger consumption, use, and exploitation of EA? Or will the majority of organizations that might be trying to move more towards government work as contractors already have a background?

Is there a trend here? It seems to me that if you’re going to have to do this to be compliant, you might as well take advantage of it and extend it across your organization for a variety of very good reasons.

Armstrong: Exactly. We’ve actually had a recent experience with a defense contractor who, for many years, has been required to do program conformance requirement to deliver DoDAF-compliant content. They're actually saying, "We get all that, and that’s all well and good, but through that process, we’ve come to believe that EA, in its own right, is a good thing for us and our organization."

Internalize best practices

So, we're seeing defense contractors being able to internalize some of these best practices, and really be prepared for the future so that they can win the greatest amount of business and respond as rapidly and appropriately as possible, as well as how they can exploit these best practices to affect greater business transformation across their enterprises.

Gardner: Of course the whole notion of fit for purpose ultimately is high productivity, lower cost, and therefore passing on more of those savings to your investors.

Armstrong: A lot of government organizations are really looking at their bottom line, trying to trim costs, and increase efficiency and operation excellence. EA is a proven best practice to deliver that.

Gardner: We mentioned that your discussion on these issues, on July 16 will be live-streamed for free, but you’re also doing some pre-conference and post-conference activities -- webinars, and other things. Tell us how this is all coming together, and for those who are interested, how they could take advantage of all of these.

Armstrong: We’re certainly very privileged that The Open Group has offered this as opportunity to share this content with the community. On Monday, June 25, we'll be delivering a webinar that focuses on architecture change management in the DoDAF space, particularly how an organization migrates from DoDAF 1 to DoDAF 2.

We’ll be talking about things that organizations need to think about as they migrate from DoDAF 1 to DoDAF 2.

I'll be joined by a couple of other people from APG, David Rice, one of our Principal Enterprise Architects who is a member of the DoDAF 2 Working Group, as well as J.D. Baker, who is the Co-chair of the OMG’s Analysis and Design Taskforce, and a member of the Unified Profile for DoDAF and MODAF (UPDM) work group, a specification from the OMG.

We’ll be talking about things that organizations need to think about as they migrate from DoDAF 1 to DoDAF 2. We'll be focusing on some of the key points of the DoDAF 2 meta-model, namely the rearrangement of the architecture viewpoints and the architecture partitions and how that maps from the classical DoDAF 1.5 viewpoint, as well as focusing on this notion of capability-driven architectures and fitness for purpose.

We also have the great privilege after the conference to be delivering a follow-up webinar on implementation methods and techniques around advanced DoDAF architectures. Particularly, we're going to take a closer look at something that some people may be interested in, namely tool interoperability and how the DoDAF meta-model offers that through what’s called the Physical Exchange Specification (PES).

We’ll be taking a look a little bit more closely at this UPDM thing I just mentioned, focusing on how we can use formal modeling languages based on OMG standards, such as UML, SysML, BPMN, and SoaML, to do very formal architectural modeling.

One of the big challenges with EA is, at the end of the day, EA comes up with a set of policies, principles, assets, and best practices that talk about how the organization needs to operate and realize new solutions within that new framework. If EA doesn’t have a hand-off to the delivery method, namely systems engineering and solution delivery, then none of this architecture stuff makes a bit of a difference.

Driving the realization

We're going to be talking a little bit about how DoDAF-based architecture description and TOGAF would drive the realization of those capabilities through traditional systems, engineering, and software development method.

Gardner: Well, great. For those who are interested in learning more about this, perhaps they are coming from the TOGAF side and wanting to learn more about DoDAF or vice-versa, do you have any suggestions about how to get started?

Are there places where there are some good resources that they might use to begin the journey in one direction or the other -- maybe starting from scratch on both -- that would then lead them to better avail themselves of the information that you and The Open Group are going to be providing in the coming weeks.

Armstrong: On APG’s website, we have a free introduction to EA in TOGAF, a web-based tutorial. It’s about 60 minutes, or so, and is designed to get people to have familiarity with some of this content, but would like a little deeper dive. That’s one resource.

EA comes up with a set of policies, principles, assets, and best practices that talk about how the organization needs to operate.

Of course, there is The Open Group’s website. I'm not sure that I would refer people to the TOGAF 9.1 specification as the first starting point, although there is some really good content in the first introduction chapter. But there's also a manager’s guide, or executive guide, that can provide a little bit of a higher-level view of EA from a business perspective, as opposed to a architect practitioner’s perspective.

Of course, there is quite a bit of content out there on the DoD architecture framework and other government frameworks.

Gardner: Thank you so much. I'm afraid we are going to have to leave it there. We’ve been talking with Chris Armstrong, President of the Armstrong Process Group on how governments are using multiple architecture frameworks to improve their architecture planning and IT implementation.

This was a lead-in rather to his Open Group presentation on July 16, which I would like to point out will be live-streamed and free. He's going to be discussing using TOGAF 9 to deliver DoDAF 2 capabilities, and Chris will be exploring the ways at various architecture frameworks, from either perspective, that will be complementing one another as we go forward in this field.

This special BriefingsDirect discussion comes to you in conjunction with The Open Group Conference, July 16 - 20 in Washington D.C. You’ll hear more from Chris and many other global leaders on the ways that IT and EA supporting enterprise transformation. His presentation will also be live-streamed free from The Open Group Conference.

A big thanks to Chris Armstrong for this fascinating discussion. I really look forward to your presentation in Washington, and I encourage our readers and listeners to attend that conference and learn more either in person or online. Thank you, sir.

Armstrong: You are more than welcome, Dana, and thanks so much for the opportunity.

Gardner: You’re very welcome. This is Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator through these thought leader interviews. Thanks again for listening and come back next time.

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July 16-18 in Washington, D.C.

Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: The Open Group.

Transcript of a BriefingsDirect enterprise IT thought leadership podcast on how governments are using multiple architectural frameworks. Copyright The Open Group and Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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Le Moyne College Accelerates IT Innovation with Help from VMware View VDI Solution Provider SMP

Transcript of a sponsored podcast discussion on how a mid-sized college harnessed server virtualization as a stepping stone to VDI.

Listen to the podcast. Find it on iTunes/iPod. 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 higher education technology innovator, Le Moyne College in upstate New York, has embraced several levels of virtualization as a springboard to client-tier virtualization benefits.

We'll see how Le Moyne worked with technology solutions provider Systems Management Planning, Inc. to make the journey to deep server virtualization and then move to virtual desktop infrastructure (VDI), and we will see how they've done that in a structured, predictive fashion.

Learn here how a medium-sized, private college like Le Moyne teamed with a seasoned technology partner to quickly gain IT productivity payoffs via VDI, amid the demanding environment and high expectations of a college campus. [Disclosure: VMware is a sponsor of BriefingsDirect podcasts.]

Here to share their virtualization journey story are Shaun Black, IT Director at Le Moyne College in Syracuse, New York. Welcome, Shaun.

Shaun Black: Good morning, and thanks for having me, Dana. It's wonderful talking to you.

Gardner: We're glad to have you. We're also here with Dean Miller, Account Manager at Systems Management Planning or SMP based in Rochester, New York. Hello, Dean.

Dean Miller: Good morning, Dana.

Gardner: Shaun, let me start with you. I'm thinking that doing IT at a college comes with its own unique challenges. You have a lot of very smart people. They're able to communicate well. They're impassioned with their goals and tasks. Is doing IT there like being in a crucible? And if it's a tough environment, given the user expectations, why did you choose to go to VDI quickly?

Black: I think you characterized it very well, Dana. There is tremendous diversity in the college and university environment. Our ability to be responsive as an IT organization is incredibly crucial, given the range of different clients, constituents, and stakeholders that we have. These include our students, faculty, administrators, fundraisers, and the like. There's a wide variety of needs that they have, not to mention the higher education expectations in a very much open environment.

We've been leveraging virtual technology now for a number of years, going back to VMware Desktop, VMware Player, and the like. Then, in 2007 we embraced ESX Virtual Server Technology and, more recently, the VMware VDI to help us meet those flexibility needs and make sure that the staff that we have are well aligned with the expectations of the college.

Gardner: Why don't you give us a sense of the size, how large of an organization you are? For people who aren’t familiar with Le Moyne, maybe you can tell us a little bit about the type of college you are.

Equal footing

Black: Le Moyne is a private, Catholic, Jesuit institution located in Syracuse, New York. We have about 500 employees and we educate roughly 4,000 students on an annual basis. We're the second youngest of 28 Jesuit college universities nationally. Some of our better-known peers are Boston College, Gonzaga, and Georgetown, but we like to think that we're on an equal footing with our older and more esteemed colleagues.

Gardner: And you're no newbie to virtualization, but you've moved aggressively. And now you're in the process of moving to VDI. Maybe you can just give us a brief history of how virtualization has been an important part of your IT landscape.

Black: It started for us back in the early 2000s, and was motivated by our management information systems program, our computer science-related programs, and their need for very specialized software.

A lot of that was started by using movable hard drives in very specific computing labs. As we progressed with them, and their needs continue to evolve, we just continued to find that the solutions that we had weren't flexible enough. They needed more and different servers in very specific needs.

From an IT workforce perspective, we were having the same problem most organizations have. We were spending a tremendous amount of time keeping existing systems working. We were finding that we weren't able to be as responsive to the academic environments, and to some degree, were potentially becoming an impediment in moving forward the success of the organization.

We started experimenting with it initially within a few classrooms and then realized that this is a great technology.

Virtualization was a technology that was out there. How could we apply this to our server infrastructure, where we were spending close to six months a year having one of our people swapping out servers?

We saw tremendous benefits from that, increased flexibility and an increased ability for our staff to support the academic mission. Then, as we start looking in the last couple years, we saw similar demands on the desktop side with requirements for new software and discussions of new academic programs. We recognized that VDI technology was out there and was another opportunity for us to try to embrace the technology to help us propel forward.

Gardner: And so given that you had a fairly good backing in virtualization generally -- and a very demanding and diverse set of requirements for your users -- tell me about how Systems Management Planning, or SMP, came into play and what the relationship between you two is?

Black: Our relationship with SMP and the staff there has been critical from back in 2006-2007, when we began adopting server virtualization. With a new technology, you try to bring in a new environment. There are learning and assimilation curves. To get the value out of that, to get the bang for the buck as quickly as possible, we wanted to identify a partner to help us accelerate into leveraging that technology.

They helped us in 2007 in getting our environment up, which was originally intended to be an 18-month transition of server virtualization. After they helped us get the first few servers converted within a couple weeks, we converted the rest of our environment within about a two-month period, and we saw tremendous benefits in server virtualization.

Front of the list

When we started looking at VDI, we had a discussion with a number of different partners. SMP was always at the front of our list. When we got to them, they just reinforced why they were the right organization to move forward with.

They had a complete understanding of the impact of desktop virtualization and how it has an impact on the entire infrastructure of an environment, not just the desktop itself, but the server infrastructure, storage infrastructure, network infrastructure.

They were the only organization we talked to, from the start, that began with that kind of discussion of what the implications are from a technology perspective, but also understanding what the implications are, and why you want to do this from a business perspective, and particularly an education perspective.

They brought very experienced people to help us through the process of assimilating.

They are already working with a number of different higher education institutions in the New York region. So they understood education. It's just a perfect partnership, and again, they brought very experienced people to help us through the process of assimilating and getting this technology implemented as quickly as possible and putting it to good use.

Gardner: Dean Miller at SMP, how typical is Le Moyne's experience, in terms of the pilot, moving toward server virtualization and then starting to branch out and take advantage of that more holistic approach that Shaun just described that will then lead to some of these VDI benefits? Is this the usual path that you see in the market?

Miller: It is, and we like to see that path, because you don't want to disappoint your users with the virtual desktop. They just want to do their job and they don't want to be hung up with something that's slow. You want to make sure that you roll out your virtual desktops well, and you need the infrastructure behind that to support that.

So yes, they started with a proof of concept which was a limited installation, really just within the IT department, to get their own IT people up to speed, experimenting with ThinApp and ThinApping applications. That went well. The next step was to go to the pilot, which was a limited roll out with some of the more savvy users. That seemed to go pretty well, and then, we went for a complete implementation.

It's fairly typical, and it was a pleasure working with this team. They recognized the value of VDI and they made it happen.

Gardner: And is there anything unusual or specific to Le Moyne in this regard?

Miller: No, I don't think there was anything unusual. It went pretty smoothly. We've been doing quite a few rollouts, and it went well.

Gardner: Tell us a bit about SMP. What type of organization are you? Are you regional, across the globe, or the country? We want to know a little more about your services and your company?

Focus on data center

Miller: We're Systems Management Planning. We're a women-owned company. We're headquartered in Rochester, New York, and were founded in 1997. Our focus is in the data center, implementing virtualization, both server and desktop virtualization, storage virtualization, and networking.

Our expertise in VMware and its complementing technologies allowed us to grow at a rate of about 30 percent year over year. We're recognized in the "Rochester Business Journal Top 100." This past year, we're ranked number six, based on growth.

We have offices in Rochester, Albany, and Orlando, Florida, and we use virtual desktops throughout our organization. This gives us the ability to spin up desktops or remote offices quickly. You could say we practice what we preach.

It's a technical organization. In fact, we have more engineers than salespeople on staff, which in my experience is pretty unusual. And we have more technical certification than any partner in upstate or western New York that I know of. I'm pretty sure of that.

VMware has recognized SMP as a premier partner. We're also on the VMware technical advisory board and we're really proud of that fact. We work closely with VMware, and they bounce a lot of ideas and things off our engineering team. So, in a nutshell, that’s SMP.

We are still in the process of rolling this out and we will be for another 12 months.

Gardner: Shaun, Dean has brought up an interesting point. If you're going to do VDI, you’ve got to do it right, having the word get out across the campus that the apps are slow or the storage isn't there sufficiently, it's going to really sound the death knell for the cause.

What did you do to make sure that that initial rollout was successful, that the performance was either at or better than the previous methods? Then, tell us a little bit about what you came back with in terms of their impression.

Black: It's what we continue to do, because we are still in the process of rolling this out and we will be for another 12 months. That’s probably the key component, as Dean mentioned.

We've been very methodical about going through an initial proof of concept, evaluating the technology, and working with SMP. They been great at informing us what some of the challenges might be, architecting an underlying infrastructure, the servers and the network.

Again, this is an area where SMP has informed us of the kinds of challenges that people have in virtual desktop environments, and how to build an environment that’s going to minimize the risk of the challenges, not the least of which are bandwidth and storage.

Methodical fashion

Then, we're being very deliberate about how we roll this out, and to whom, specifically so that we can try to catch some of these issues in a very methodical fashion and adjust what we're doing.

We specifically built the environment to try to build in an excess capacity of roughly a third to support business growth, as well as to support some variations in utilization and unexpected needs. You do everything you can in IT to anticipate what your customers are going to be doing, but we all know that on a day-to-day basis, things change, and those can have pretty dramatic consequences.

So we try to factor in enough head room to make sure that those kinds of situations wouldn’t negatively impact us. But the biggest thing is really just being very methodical and measured in throwing these technologies out.

With regard to the members of the pilot team, I’ll give a lot of kudos and hats-off to them, because they suffered through a lot of the learning curve with us in figuring out what some of these challenges are. But that really helped us, as we got to what we consider the second phase of the pilot this past fall. We were actually using a production environment with a couple of our academic programs in a couple of classrooms. Then we began to go into full production in the spring with our first 150 production users.

Gardner: And just to be clear, Shaun, what VMware products are you using? Are you up to vSphere 5, is this View 5, or you're using the latest products on that?

There are a couple different ways that we like to measure. I’d like to think of it as both dollars and delight.

Black: I understand that View 5.1 has recently been released. But at the time we rolled it out, vSphere, ThinApp, and View 5, were the latest and greatest with the latest service patches and all, when we initially implemented our infrastructure in December.

It's one of the areas where we're going to be leveraging SMP on a regular basis, given that they're dealing with the upgrades more frequently. My staff is helping us maintain the current and make sure we are taking maximal advantages of the incremental features and major innovations that VMware adds.

Gardner: Now, as you're rolling this out, it's probably a bit early to come up with return on investment (ROI) or productivity improvement metrics for the VDI, but how about the server virtualization, in general, and the modernization that you're going about for your infrastructure? Do you have a sense of whether this is a ROI type of benefit? What other metrics do you use to decide that this is a successful effort?

Black: Certainly, there's an ROI. There are a couple different ways that we like to measure. I’d like to think of it as both dollars and delight. From a server virtualization perspective, there's a dollar amount. We extended the lifecycle of our servers from a three-year cycle to five years. So we get some operational as well, as some capital cost savings, out of that extension.

Most significantly, going to the virtual technology on the servers, one motivator for us on the desktop was what our people are doing. So it's an opportunity-cost question and that probably, first and foremost, is the fundamental measure I'm using. Internally, we're constantly looking at how much of our time are we spending on what we call "keep the lights on" activity, just the operations of keeping things running, versus how much time we're investing on strategic projects.

Free up resources

Second to that, are we not investing enough time such that strategic projects are being slowed down, because IT hasn’t been able to resource that properly. From the perspective of virtualization, it certainly allowed us to free resources and reallocate those to things that the colleges deem more appropriate, rather than the standard kind of operational activities.

Then, just in regard to the overall stability and functionality in an environment is what I think of as a delight factor, the number of issues and the types of outages that we've had as a result of virtualization technology, particularly on the server front. It's dramatically reduced the pain points, even from hardware failures, which are bound to happen. So generally, it increased overall satisfaction of our community with the technology.

On the desktop front, we were much more explicit in building a pro forma financial model. We're going forward with that, and the expectation is that we are going to be able to reallocate, once we complete the rollout, a full-time equivalent employee. We're not going to have someone having to spend basically a year’s worth of time every year just shuffling new PCs onto desktops.

We're also expecting, as a result of that, that we're going to be able to be much more responsive to the new requests that we have, the various new software upgrades, whether it would be Windows, Office, or any of the various packages that are used in the academic environment here.

So we're expecting that’s going to contribute to overall satisfaction on the part of both our students, as well as our faculty and our administrators, having the tools that they need to do their job in the databases and be able to take advantage of them.

We're also expecting, as a result of that, that we're going to be able to be much more responsive to the new requests that we have.

Gardner: Just quickly on the cost equation for your client hardware, are you going to continue to use the PCs as these VDI terminals or are you going to be moving at some point to thin or zero clients? What are the implications for that in terms of cost?

Black: We do intend to extend the existing systems. We had been on a four-year lifecycle. We're expecting to extend our existing systems out to about seven years, but then, replacing any of that equipment with thin or zero clients, as those systems age out. Certainly, one of the benefits we did see of going to virtual is the ability to continue to use that hardware for a longer period of time.

Gardner: Okay. Dean Miller, is this experience that we are hearing from Le Moyne and Shaun, indicative of the ROI and economics of virtualization generally? That is to say a really good return on the server and infrastructure, but then perhaps higher financial benefits when you go to the full VDI, when you can start to really realize the efficiencies and cost-reduction of administration?

Miller: Absolutely. Le Moyne College, specifically Shaun Black and his team, saw the value in virtualizing their desktops. They understood the savings in hardware cost, the energy cost, the administrative time, and benefits from their remote users. I think they got some very positive feedback from some of the remote users about View. They had a vision for the future of desktop computers, and they made it happen.

Gardner: In looking to the future, Shaun. Is this setting you up for perhaps more ease in moving toward a variety of client endpoints. I'm thinking mobile devices. I'm thinking bring your own device (BYOD) with students working from campus, but then remotely on the weekends from home, that sort of thing. How does this set you up in terms of some of these future trends around mobile, BYOD, and consumerization?

Laying the foundation

Black: It lays the foundation for our ability to do that. That was certainly in our thinking in moving to virtual desktop. It wasn’t what we regard as a primary motivator. The primary motivator was how to do better what we’ve previously done, and that’s what we built the financial model on. We see that just as kind of an incremental benefit, and there may be some additional costs that come with that that have to be factored in.

But from the perspective of recognizing that our students, faculty, and everyone want to be able to use their own technology, and rather than having us issue them, be able to access the various software and tools more effectively and more efficiently.

It even opens up opportunities for new ways of offering our academic courses and the like. Whether it would be distance or the students working from home, those are things that are on our shortlist and our radar for opportunities that we can take advantage of because of the technology.

Gardner: Then, also looking at value from a different angle, is there anything about the VDI approach, the larger virtualization efforts that brings more control to your data, thinking about security, compliance, protecting intellectual property, storage, recovery, backup, even disaster recovery (DR). So how about going down that lane, if you will, of data lifecycle implications?

Black: That’s another great point, and again another one of the areas that was in our thinking in regard to the strategy. The idea, particularly for our mobile workers who have laptops, instead of them taking the data with them, to keep that data here on campus. We'll still provide them with the ability to readily access that and be just as effective and efficient as they currently are, but keeping the data within the confines of the campus community, and being able to make sure that’s backed up on a routine basis.

It's not just a control perspective, but it's also being able to offer more flexibility to people.

The security controls, better integration of View with our Windows server environment, and our authentication systems are all benefits that we certainly perceive as part of this initiative. It's not just a control perspective, but it's also being able to offer more flexibility to people, striking that balance better.

Gardner: Dean Miller, back to you. I should think that given that you have a large cross-section of customers, global concerns, and large US companies as well as small and medium-sized organizations like Le Moyne, that these data lifecycle management control security issues must be a big driver. Is that what you’re finding?

Miller: We’re seeing that in higher education as well as in Fortune 500s, even small and medium businesses (SMBs), the security factor of keeping all the data behind the firewall and in the data center, rather than on the notebooks out in the field, is a huge selling point for VDI and View specifically.

Gardner: Let's talk about lessons learned and sharing some of that. Shaun, if you were to do this over again, or you wanted to provide some insights to somebody just beginning their virtualization journey, are there any thoughts, any 20/20 hindsight conclusions, that you would share with them?

Black: For an organization that’s our size, a medium business, I'd say to anybody to be looking very hard at this, and be looking at doing it sooner, rather than later. Obviously, every institution has its own specific situation, and there are upfront capital costs that have to be considered in moving forward this. But if you want to do it right and if you’re going to do that, you have to make some of the capital investment to make that happen.

Sooner rather than later

But, for anybody, sooner rather than later. Based on the data we've seen from VMware, we were in the front five percent of adopters. With VDI, I think we’re somewhere in maybe the front 15 or something like that.

So, we're a little behind where I’d like to be, but I think we’re really at the point where mainstream adoption is really picking up. Anyone who isn’t looking at this technology at this point is likely to find themselves at a competitive disadvantage by not realizing the efficiency that this technology can bring.

Gardner: Let me just explore that a bit more. What are the competitive advantages for doing this now?

Black: For us, it really gets down to, as I said earlier, opportunity cost in strategic alignment. If your staff are not focused, from an IT perspective, on helping your organization move forward, but just on keeping the existing equipment running, you’re not really contributing maximally, or as I would say, contributing maximally to move your organization forward.

So to the extent that you can reallocate those resources toward strategic type initiatives by getting them off of things that can be done differently and therefore done more effectively, any organization welcomes that.

In five years or whatever, the market will be matured enough that we could go to a desktop-as-a-service type environment and have the same level of flexibility and control.

Gardner: I guess I am thinking too that getting all your ducks lined up on the infrastructure, getting the planning in place and having these rollout milestones set and ready to be implemented frees you up to start thinking more about applications, making your innovation move from support to that innovative level.

Again, we talked about changing the types of applications, whether it's in delivery, maybe it's moving towards multitenancy, private cloud types of models. Before we sign off, any thoughts about what the implications long-term are for your ability to be leading agile vis-à-vis your application set?

Black: There's a lot of debate on this, but I've told many individuals on the campus, including my vice president, that I expect this to very likely be the last time that Le Moyne is required to make this kind of investment in capital infrastructure. The next time, in five years or whatever, the market will be matured enough that we could go to a desktop-as-a-service type environment and have the same level of flexibility and control.

So we can really focus on the end services that we’re trying to provide, the applications. We can focus on the implications for those, the academics, as opposed to the underlying technology and letting the organization have the time and the focus on the technology, maintaining that underlying infrastructure, take advantage of their competencies and allow us to focus on our core business.

We’re hoping that there's an evolution. Right now, we are talking with various organizations with regard to burst capacity, DR-type capabilities and also talking about our longer term desires to outsource even if some of the equipment is posted here, but ultimately, get most of the technology and underlying infrastructure in somebody else’s hands.

Insight question

Gardner: Dean, I just want to run that same kind of insight question by you. Clearly, Shaun has a track record, but you've got quite a bit more across different types of organizations. Is there a bit of advice that you would offer to companies as they’re beginning to think about virtualization as a holistic strategy for IT? What're some good concepts to keep in mind as you're beginning?

Miller: Well, that’s interesting. We were talking about virtual desktops, maybe two-and-a-half, three years ago. We started training on it, but it really hadn't taken off for the last year-and-a-half. Now, we’re seeing tremendous interest in it.

Initially, people were looking at savings for a hardware cost and administrative cost. A big driver today is BYOD. People are expecting to use their iPad, their tablet, or even their phone, and it's up to the IT department to deliver these applications to all these various devices. That’s been a huge driver for View and it's going to drive the View and virtual desktop market for quite a while.

We can really focus on the end services that we’re trying to provide, the applications.

Gardner: I am afraid we’ll have to leave it there. We’ve been talking about how higher education technology leader, Le Moyne College in upstate New York, has embraced server-level virtualization as a springboard to client-tier virtualization benefits, and we heard how technology solutions provider, SMP, helped them make that journey in a structured predictive way.

I’d like to thank our guests for joining us on this BriefingsDirect podcast. We’ve been here with Shaun Black, IT director at Le Moyne College. Thank you so much, Shaun.

Black: Thank you.

Gardner: And we’ve been here with Dean Miller, Account Manager at SMP. Thank you, Dean.

Miller: Thanks, Dana. Thanks for the opportunity.

Gardner: You’re welcome. This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks again for listening and come back next time.

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

Transcript of a sponsored podcast discussion on how a mid-sized college harnessed server virtualization as a stepping stone to VDI. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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Cloud-Powered Services Deliver New Revenue and Core Business Agility for SMB Travel Insurance Provider Seven Corners

Transcript of a sponsored BriefingsDirect podcast on the benefits achieved from a private cloud infrastructure, and how that makes makes IT into a new revenue center for the business.

Listen to the podcast. Find it on iTunes/iPod. 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 small-to-medium sized business (SMB) Seven Corners, a travel insurance provider in Indiana, has created and implemented an agile and revenue-generating approach to cloud services.

We'll see how Seven Corners went beyond the typical efficiency and cost conservation benefits of cloud to build innovative business services that generate whole new revenue streams. Stay with us to learn more about how a VMware-enabled cloud infrastructure allowed Seven Corners to rapidly reengineer its IT capabilities and spawn a new vision for its agility and future growth. [Disclosure: VMware is a sponsor of BriefingsDirect podcasts.]

Here to share their story on an SMB's journey to cloud-based business development is George Reed, CIO of Seven Corners Inc., based in Carmel, Indiana. Welcome to BriefingsDirect, George.

George Reed: Thanks, Dana, glad to be here.

Gardner: When you began this journey to transform how Seven Corners does IT, did you have a guiding principle or vision? Was there a stake in the ground that you could steer toward?

Reed: I did. I was brought in specifically to be an innovative change agent to take them from where they were to where they wanted to get as a business. They just weren’t there at the time. My vision was to come in, stop the bleeding, pick off the low hanging fruit to step up to the next level, and then build a strategic road map that would not only meet -- but exceed -- the needs of the business, and reach out 5-10 years beyond.

Gardner: How long ago did you join Seven Corners?

Reed: I joined Seven Corners in June of 2010.

Gardner: So a fairly short amount of time.

Reed: Correct, but you're going to find, as we have this discussion, that a lot of things have occurred in a remarkably short amount of time.

Gardner: Is there anything specifically about an SMB that you think enabled such agility? I know it’s very difficult in large companies to make such a change in short order. Do you have a certain advantage being smaller?


Authority to move

Reed: You do. If you're in a privately held SMB, your goal is to identify a problem or an opportunity, categorize what it would cost to resolve it or achieve it, and show the return on investment (ROI). If you communicate that in a passionate, effective way with the ownership and the executive group, you come out of the room with authority to move forward. That’s exactly what I did.

Gardner: Before we learn more about that approach and process, perhaps you could explain for our listener’s benefit what Seven Corners is, how large you are, what you do, and just describe what you are doing as a business.

Reed: Seven Corners started in 1993 as Specialty Risk International, and as we began to grow around the globe with customers in every time zone there is, the company changed its name to Seven Corners.

It started out providing specialty travel insurance, trip cancellation insurance, then began providing third-party administrator, general insurance services, and emergency assistance services around the globe. We have about 800 programs in five major product lines to span hundreds of thousands of members.

The company itself is about 170-175 people. We've been enjoying double-digit growth every year. As a matter of fact, I believe that at the end of February they hit the double-digit growth goal for 2012. So we're going to exceed that as the year goes on. You are going to see the technology has driven some of that growth.

Gardner: Who do you consider your primary customers? Is it travel agencies, or do you go direct to the travelers themselves, or a mixture?

If you communicate that in a passionate, effective way with the ownership and the executive group, you come out of the room with authority to move forward.

Reed: About 50 percent of the business is online. You go to the website to fill out a form to figure out what you need. You buy it right then and there, collect your virtual ID card, and you're on your way.

We have customers that are high-tech companies who are sending their people all over the world. They'll buy, at the corporate level, trip cancellation, trip assistance, and trip major medical insurance.

Then, there are universities and other affinity groups. They have students traveling abroad. We have companies sending people to work in the United States. Then, we are doing benefit management and travel assistance for numerous government agencies, US Department of State, Bureau of Prisons, AmeriCorps, and the Peace Corps as well.

Gardner: And on one side of your business equation, of course, you have these consumers and customers, but you also must have quite a variety of partners, other insurance carriers, for example, medical insurance providers, and so forth. So you need to match and broker services among and between all these?

Multiple carriers

Reed: Correct. We have multiple carriers and do some of the advances around Seven Corners. We’ve got about four more carriers starting to move business our way. So you have to meet all of their needs, reporting needs, timeliness of service, and support their customers. At the same time, we've got all the individuals and groups that we're doing business with and we are doing it across five different revenue-producing lines of business.

Gardner: Let's move back to what it is that you've done, maybe at a high level, an architecture level. As you had that vision about what you needed, and as you gathered requirements in order to satisfy these business needs, what did you look for and what did you start to put in place?

Reed: The first thing I did is assess what was going on in the server room. On my first day, walking in there and looking around, I saw a bunch of oversized Dell desktops that were buffed up to be servers. There were about 140 of those in there.

I was thinking, "This is 2000-2003 technology. I'm here in 2010. This isn't going to work." It was an archaic system that was headed to failure, and that was one of the reasons they knew they had to change. They could no longer sustain either the applications or the hardware itself.

What I wanted to do was put in an infrastructure that would completely replace what was there. The company had grown to the point where there was so much transactional volume, so many thousands of people hitting the member portals. The cloud started to speak to me. I needed to be serving member portals out on a private cloud. I needed to be reaching out to the 15,000 medical providers around the world that we're talking with to get their claims without them sending paper or emails.

It was an archaic system that was headed to failure, and that was one of the reasons they knew they had to change.

I looked at an integrating partner locally in the Midwest. It's called Netech. I said, "Here is my problem. I know that within four months my major servers that are backing up or providing our insurance applications are going to fail. You can't even get parts on eBay for them anymore. I need you to come back to me in a week with a recommendation on how you understand my problem, what you recommend I do about it, and what it's going to cost, wheels-on, out the door."

Gardner: Just to be clear, did you have a certain level of virtualization already in place at this point?

Reed: No, there was nothing virtual in the building. It was all physical. Netech went away and came back a week later, after looking at the needs and asking a ton of questions, as any good partner would do. They said, "Here's what we think you need to do. You need something that's expandable easily for your compute side. We recommend Cisco UCS. Here is a plan for that.

"You need storage that can provide secure multitenancy, because you've got a lot of different carriers that don't want their information shared. They want to know that it's very secured. We recommend NetApp’s FlexPod solution for that.

"And for your virtualization, hub and going to the cloud, we're seeing the best results with VMware's product."

Then, we started with VMware Enterprise, and when it became available, upgraded to vSphere 5.0.

Up and running

They came in with a price, so I knew exactly what it would cost to implement, and they said, they could do it in three months. I went to the owners and said, "You're losing $100,000 revenue a month because of this situation in your server room. You'll pay for this entire project in six months." They said, "Well, get it done." And so we launched. In about two and a half months we were up and running. Our partnership with Netech has had a dramatic impact on speed-to-production for each phase of our virtualization.

Gardner: When you looked at creating a private-cloud fabric to support your application, were these including your internal back-office types of apps? Did you have ERP and communications infrastructure and apps that you needed to support? Clearly, you talked about portals and being able to create Web services and integrate across the business processes, all the above. Did you want to put everything in this cloud or did you segment?

Reed: I wanted to get off the old analog phone system that was there and go to a Cisco Unified Communications Manager, which is a perfect thing to drop into a virtual environment. I wanted to get everybody on the voice-over-IP (VOIP) phones. I wanted to get my call center truly managing 24×7×365, no matter where they were sitting.

I wanted to get users, both customer users, partner users and then the people from Seven Corners to get to where it didn't matter what they were connecting to the Internet with. They could connect to my system and see their data and it would never leave my server, which is one of the beauties of a private cloud, because the data never leaves a secure environment.

Gardner: Did you get a vision to bring all of your apps into this or did you want to segment, sort of was this a crawl-walk-run approach to bringing your apps into this cloud or was this more of a transformation, even shock therapy, to kind of do it all at once to get it done?

That got everybody thinking, "Hey, IT can deliver."

Reed: The server virtualization was a shock therapy, because the infrastructure was very outdated, and any piece of it failing is a failure. It doesn’t matter which one it was.

So we took a 144 servers virtual and took all the storage into the NetApp controller, achieving an immediate 50 percent de-duplication rate. And the efficiency in spinning up servers for a development group to support them, was such that we were cutting a ton of manpower that was required to spin those up. Instead of 4-5 days to set up a server for them to work on a new application, it's now 4-5 minutes.

Gardner: So you were fairly smart in thinking, "I’ve got to find success stories and implement those and that's going to then feed the goodwill and the investment to move across the board."

Reed: Exactly. In the first three days here, inside IT and out in the business, I said, "I need a list by Friday, please, of the top five things we need to keep doing, stop doing, or start doing."

I got great input and then I picked the pain points. That's what I call the low-hanging fruit. We knocked those out the first month, just general technology support. That got everybody thinking, "Hey, IT can deliver." Originally they had a nickname for the department --"The Island of Dr. No." ... No, we can't do this, no, we can't do that.

Getting champions

We said, "Let's find a way to say, "Yes," or at least offer a different solution." When we killed some of those early problems, we ended up getting champions out of opposition. It became very easy to get the company to do business differently, and to put up with the testing, user acceptance process, and training to use different technology services.

Gardner: Sometimes, I hear that culture will trump strategy. It sounds as if in your organization -- maybe because you're an SMB and you can get the full buy-in of your leadership -- you actually were able to make culture into the strategy?

Reed: Absolutely. By changing the culture and getting the departments out there to ask, "Is this stuff you're doing going to help me with this problem?" "Well, yes it will," and then you deliver on that promise.

When you make a promise and you deliver on it, on or ahead of schedule and under budget people begin to believe, they're willing to participate and actively suggest other possible uses with technology that maybe you didn't think of. So you end up with a great technology-business relationship, which had the immediate result for the owners who were out looking to buy an insurance services application or rent one.

They said, "We're a very entrepreneurial company with so many different lines of business that there is nothing out there that would really work for us. We believe in you IT. Build us one." This year we rolled out an application called Access that is so configurable you could run any kind of insurance services through it, whether you're insuring parrots, cars, people, trucks, or whatever.

When you make a promise and you deliver on it, on or ahead of schedule and under budget people begin to believe.

Gardner: Let's learn some more about that. One of the nice things about early successes is that you get that buy-in and the cultural adoption, but you've also set expectations for ongoing success. I suppose it's important to keep the ball rolling and to show more demonstrable benefits.

So when it came to not only repaving those cow paths, making them more efficient, cutting cost, delivering that six-month return on investment, what did you enable? What did you then move forward to to actually create new business development and therefore new revenue?

Reed: By continuing to lower IT cost, when we virtualized the desktops using VMware's View, and then VMware's Horizon which makes it device-independent, it’s easier for everybody to work. That had appreciable productivity improvements out in the departments.

At the same time, my apps development group began designing and building an application called AXIS. What this came out of was that when we went to insurance conventions, talked to carriers and asked, "What are the top 10 reasons you want to fire your third-party administrator today?"

Technology was always part of those top 10 answers. So we devised and developed an application that would eliminate those as problems. The result is that this year, since February, we have four insurance carriers that were working with either their own stuff or third-party administrator, big COBOL mainframe monsters that are just so spaghetti-coded and heavy you can never really get out of it.

Already implemented

They see what our tool is doing and they ask these questions. "What are the specs for me to be able to connect to it?" "Well, you have to have an Internet connection and something smarter than a coffee cup." "That’s it?" "Yeah, that’s it." "Well, what’s the price for us to implement your solution?" "None. "It’s already implemented. You just import your business."

The jaws drop around the table. "How will I be able to see my data?" "You’ll all get in and look at it." "You mean I don’t ask for a report?" "You can, but it’s easier if you just log and look at your report."

They're flocking in. The biggest challenge is keeping up with the pace of the growing business and that goes back to planning for the future. I planned a storage solution and a compute solution. I can just keep adding blades and adding trays of storage without any outage at all.

Gardner: Pay as you go?

Reed: Yes, and the neat thing is that that the process of closing transactions will run about $7 million in revenue a year. It will cost about $1.5 million to service that revenue. Not a bad profit base for an SMB. And it’s because we're going to come in at 45 percent less than their existing service provider, and we're going to provide services that are 100 times better.

Gardner: So if I understand correctly, George, you're saying that you went from being a broker of services, finding insurance carrier services, and then packaging and delivering them to end users, to now actually packaging insurance as a service. You're packaging the ability to conduct business online and packaging that, in addition, to the value-added services for insurance. Does that capture what’s happened?

With a solid, virtual, private-cloud solution, the cost of delivering technology services is just very low per-member serviced.

Reed: It does, and providing immediate access to what any stakeholder in that insurance lifecycle needs improves the quality of the end product. It lowers the cost of the healthcare.

We're starting to get into the state Medicaid benefits management as well. We're saying, "You're spending too much." The first slide in the proposal is always, "You're spending too much on Medicaid healthcare. We're going to help you cut it down and we are going to do it right now." You get attention, when you just walk in bold as brass and say that.

With a solid, virtual, private-cloud solution, the cost of delivering technology services is just very low per member service. In insurance, there are only so many ways to improve profit. One is to grow business. We all know that. But, two is to reduce the time and price of processing a claim, reduce the time and price to implement new business and collect the premium.

We’ve built an infrastructure and now an application platform that does those things. In the old system, the time to process a claim around here was about 30 minutes going through a complex travel medical claim with tons of lines. Now it’s about 15 seconds.

Gardner: This is really fascinating. It strikes me that you’ve sort of defined the future of business. Being an early adopter of technologies that make you agile and efficient means that you're not only passing along the ability to be productive in your traditional business, but you’ve moved into an adjacency that allows you to then take away from your partners and customers the processes that they can’t do as well and embed those into the services that you provide.

When, of course, you can charge back to them at a rate that was lower for them in the first place. You can really grow your definition of being a business within your market.

Think big

Reed: That’s correct, and you can do this in any industry. There is a talk that I’ve given a couple of times at Butler University about how you can never stop being small, until you think big. You have to say, "What would it take for me to do that? Everything is on the table. What would it take?"

My boss does that to me and my direct reports as well. "What would it take for us to accomplish this thing by this time? Don’t worry about what it is. Just tell me what it would take. Let’s see, if we can’t do it." That’s the philosophy that this company was built on.

By the end of the year, we're not only going to be doing all that kind of service for carriers, but we are going to stand up an instance of AXIS to be software as a service and every small third-party administrator (TPA) in the country is going to have an opportunity to buy seats at this servicing application that is easily configurable to whatever their business rules are.

Gardner: I think what distinguishes you, or characterizes you, is being able to do this because you’ve been bold in your IT investments and adoption of modernization. Yet also as an SMB, you can be agile and fleet, get the buy-in, and make the decision.

Then, you're also in a brokering role. You're between a group of businesses, the carriers, and customers, so that you're in a hub role within your business and that gives you this opportunity. Those are some interesting takeaways, but let’s focus a little bit on the technology, George.

You can never stop being small, until you think big.

What’s the platform that you put in place? What are the actual VMware products that you're using? And is there a developing virtuous pattern of benefits? That is to say, is there a whole greater than the sum of the parts at some point in this?

Reed: There definitely is. We're running on vSphere 5.0 and have put in a vCenter Configuration Manager and Operations Manager. We're doing our virtual desktops using the power of ThinApp and VMware Horizon.

Of course, we're a beta user for VMware View. We were just doing a pilot project on that, but the speed was so much better than their actual desktops that the whole company said. "To heck with the pilot. Roll it out." So we ended up rolling it out fairly quickly and aggressively.

Then to make the cloud come to being we got the vCloud Director and vShield in. We're doing a lot of business with the government, and with government agencies we have to be Federal Information Security Management Act (FISMA) compliant which makes HIPAA compliance look kind of easy.

We’ve got SAS 70 compliance we have to do. By putting in these kinds of technology platforms, we configure it from day one and we're compliant with all the controls that are supposed to be in place.

The other technology that the VMware is living on is the Cisco UCS, and it’s all being stored on NetApp FlexPod with data replication. In a few months, it will be live mirror for both compute and the data.

Disaster recovery

Gardner: How about disaster recovery (DR)? Have you been able to develop some more automated approaches to that as a result of this cloud activity? Is there a sense of reduced risk which, of course, for insurance broker and services provider would be very important?

Reed: Absolutely. It's the first question I get asked every time a due diligence comes in. This year, I’ve had to get pretty good at due diligences from carriers and big healthcare networks. That’s another area we’ve started branching and taking over.

Site Recovery Manager (SRM) is your friend, because it makes it so easy to say, "We went down at the Carmel location. Well, we’ve got a live mirror and duplicate compute sitting down at the lifeline. Pull that SRM, direct production to there, rebuild the Carmel site and then SRM will turn it back on in no time at all."

The most time down we could possibly have right now is about a minute-and-a-half, and it’s going to be down to seconds, once the live mirror is there.

Gardner: So these folks come to you and say, "You're showing us a price and performance level that you can do these services better than we can." But it also sounds like you can be compliant, face all the various regulations, and develop a sense of no risk.

We looked at a lot of the huge cloud service providers. If you read the fine print of the licensing agreements, they don’t actually take full responsibility for the security of their infrastructure and/or your data.

Reed: Correct. I designed the approach based on the things that always made me raise my eyebrow and say, "Yeah, cloud computing." We looked at a lot of the huge cloud service providers. If you read the fine print of the licensing agreements, they don’t actually take full responsibility for the security of their infrastructure and/or your data.

Some of them don’t even agree that they have to give your data back if you stop working with them. That makes big companies that aren’t tech savvy really leery. "Do I really want all of my patients or all of my insured information sitting out there?" We also see things about information breaches everyday in the news.

That’s why I went after something that I could put in the US Department of Defense facility and not have a problem. I know there's no chance that I'm going to have a challenge, a data breach, or a data loss. That is the first question on every due diligence questionnaire, data recovery and continuity of operations.

Gardner: Now, you’ve mentioned the use of View, is that the View 5, the latest version?

Reed: It is. It is.

Gardner: What percentage of your desktops, your users are virtualized on a full desktop experience?

Reed: We’ve got 99.9 percent. We have one user, a remote user out in Arizona, and we just haven’t gotten to her yet, but we’re just about to lose her desktop.

Mobile devices

Gardner: And how does that now set you up for perhaps moving toward the use of mobile devices? Clearly, you've got some of those interface issues resolved by going fully virtual. Is there a path to allowing choice, even bring your own device (BYOD) types of choice by your users going to new classes of devices?

Reed: We’re working on the BYOD program now. A lot of the department heads have been issued devices through our secure wireless in the building. A couple of them have iPads and a couple of them have Android OSes. Several of us with the new Cisco phone systems have the Cisco tablet that's your actual VoIP phone station and your thin client.

To get ready to go to a meeting, I get off the phone, pull the tablet out of the docking station, and into the meeting. I have my desktop right there. I've never logged off. When I need to go home for the night, I take it home, and log in through my wireless. I have my Voice over IP handset, and I'm calling from my desk phone from anywhere in the world.

So we're already doing what I would call a pilot program to prove it out to everybody and get them used to it. Right now, our sales guys love the fact that they just pull that thing out of the docking station and go off to show a client what our software and services really are.

Gardner: It really shows how the technology enables the business and then the business agility enables the business development. It becomes quite an impressive adoption pattern that's really going to a virtuous adoption pattern, I suppose.

A lot of the department heads have been issued devices through our secure wireless in the building.

Reed: The key is that with the BYOD setup, we put a Cisco IronPort secure wireless in the building. Once you’re in our network, that's very secured and controlled. Then, we tell anybody who brings in their own device, "Here’s what you have to do. These are the steps and encryption levels that you have to do to use your own device on our system."

People in the pilot program are going through that and their device is being signed off on. It comes all the way up to my desk to approve it at this point. I'm sure that down the road, it’ll be just the company security officer signing off on it.

But those people are now connecting from wherever with their own device and they have a responsibility to support the device. If their device goes down, they can still log in to their virtual desktop from anywhere through View 5.

Gardner: We all know how empowering it is when you can have it your way, remain within compliance and security parameters, and also delivering on the business processes and requirements that your company sets out for you. It’s a really nice combination.

Reed: For people with smartphones and tablets, when they’re connecting through VMware Horizon, they get other benefits. If you have to get a new phone, all you do is let Seven Corners know.

Virtual ID cards

They withdraw Horizon and everything attendant to it from the smart device remotely without impacting anything else on it. You take your smartphone down to Verizon, get a new phone, have the stuff that belongs to you transferred over to the new phone come, and that will reinstall.

We're going to be writing Android and iPad applications for our AXIS solution, which will then mean is a traveler doing a backpack tour on the Great Wall of China falls off, breaks his leg, and gets carried off to the medical provider that’s in our network -- after he calls our 24×7 assistance center -- we’ll use virtual ID cards that could be scanned by the tablet computers.

We're going to send those out to every one of our providers, and they can confirm eligibility right there, give the treatment, submit the claim, watch it auto-adjudicate in our system, and see the payment launched. This makes providers want to work with us, because they know that they are going to get paid and they watch it happen.

Gardner: That's a really impressive story, George, and you've been able to do this in just a couple of years. It’s really astonishing. Before we close out, could you provide some advice to other SMBs that have heard your story and can see the light bulbs for their own benefits going off in their heads? Do you have any advice in hindsight from your experience that you would share with them in terms of getting started?

Reed: The key is that you can’t get to where you’re going if you don’t set the vision of what you want to be able to do. To do that, you have to assess where you’re at and what the problems are.

You can’t get to where you’re going if you don’t set the vision of what you want to be able to do.

Phase your solutions that you’re going to recommend to solve big problems early and get buy-in. And when you’ve got executive buy-in, you have department heads and users buying in, it’s easy to get a lot of stuff done very quickly, because people aren’t resisting the change.

Gardner: We’ve been talking about how travel insurance provider Seven Corners has created and implemented an agile and revenue-generating approach to cloud services. We’ve seen how as an SMB, Seven Corners has used a VMware-centric infrastructure to rapidly reengineer its IT capabilities and build innovative business services that are generating whole new revenues.

So thanks to our guest, George Reed, CIO of Seven Corners. Thanks so much, George.

Reed: Thanks for having me on.

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

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

Transcript of a sponsored BriefingsDirect podcast on the benefits achieved from a private cloud infrastructure, and how that makes makes IT into a new revenue center for the business.
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