Cloud-Mobile Mega Trends Point to Need for Rapid, Radical Applications Transformation, Says HP

Transcript of a BriefingsDirect podcast on how consumer-driven platform variety and advancing cloud services are requiring enterprises to transform and rationalize their applications portfolios.

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

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

Today, we present a sponsored podcast discussion on the rapid and massive shifts confronting enterprises as they adopt more mobile devices and broaden their uses of cloud services.

In many ways, the mobile device explosion and the cloud computing ramp-up reinforce and support each other. Cloud services make mobile devices -- like smartphone and tablets -- more productive, while making users better connected to enterprise resources and work processes. On the other hand, mobile devices -- with their ubiquitous, non-stop wireless access -- make cloud-delivered applications, data, and services more relevant and more instantly available anywhere.

By leverging cloud and mobile, applications can be supported by a common, strategic, architectural, and converged-infrastructure approach. Furthermore, by making cloud-delivered applications and data context-aware, delivering enterprise applications to any device securely can then be done at a reduced cost (when compared to conventional applications infrastructure models). It therefore makes little sense to have unique stacks beneath each application for each application or device type.

So how do enterprises adjust to these mobile-cloud, dynamic-duo requirements in the strategic and a proactive way? How can they leverage and extend their current applications or identify which ones to fold and retire?

It’s clear that radical, not incremental, adjustment is in order to make sure that the cloud-mobile era is a gained opportunity and not a fatal or devastating misfire for IT operators -- and business strategists alike.

We're now joined by a guest from HP to explore the promises and perils of adjusting to the cloud-mobile shift. I'm here with Paul Evans, Global Lead for Application Transformation with HP Enterprise Business. Welcome back to BriefingsDirect, Paul. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Paul Evans: Hello, Dana. Good to be here.

Gardner: As I've mentioned, we have a lot of active trends unfolding, and we’ve talked about some of the shifts going on. But it seems that this combination of the move to mobile-device adoption and cloud computing is in some ways an enormous opportunity. Yet it’s also making people befuddled. They’re not sure how to tackle these both at the same time.

Radical transformation

Evans: I don't use these words lightly. We have to go through a radical transformation now in terms of our applications. There are these new technologies, part of the megatrends that are affecting organizations. These megatrends encompass things like evolving business models, a changing workforce, and the introduction of new technology.

And all of those are pressured onto an organization today. People are trying to figure out what’s the best route; which one should I ignore, which one should I exploit, and what should I be doing?

In the technological world, we have the world of cloud, and we have the world of mobile. We cannot ignore them. People can’t abdicate and say, "I'm not going to go do it." It's not going to be that way.

At the same time, the CIOs and senior stakeholders are looking outward and asking what are these new technologies, what could they do for me, how could they improve customer service, and what will my competition do?

They also look also over their shoulder and say, "I spend 70 percent of my IT budget keeping the applications I have today working. I probably don’t have enough budget or resource to do both. So the question is, which one of these should I spend more of my time on?"

The answer is that you really can’t afford not to spend time on either. So it's a balancing act between how I encompass the new and exploit it, and at the same time, what do I need to do with my existing applications.

Although we see the world of cloud and mobile as very new-age, very sexy, and all the rest of it, at the end of the day, people have to sit down and deal with what the environments they have right now. They may not be so exciting. They may not be so new-age, but at the end of the day, they make products, count money, and run the organization as it is today. They are the legacy applications.

Gardner: It also seems that they need to find ways to do this holistically. To go at it piecemeal almost subverts the total benefit, particularly if you look at it from a cost-benefit analysis perspective. Have you found in working with large enterprises, as I know you do, that those that attack this strategically or with a master plan, have an advantage?

Evans: Absolutely. It always pleases me when I sit down with a customer who says, "We have to take stock. We have to make a plan. We're not going to do this one day at a time or a week at a time. We have to appreciate how we are going to exploit cloud.

What applications that we have in the back-end server environments are we going to bring forward to the cloud to service a mobile environment? What we are going to do about the use of mobile within our organization and what we are going to do about serving our customers better through mobile devices and the technologies that go with them?"

Some big traps

It always pleases me when people want to make a plan. I may not be the most strategic person sometimes, but I appreciate it in this instance. There are some really big traps that people can fall into here doing something on the fly and then, in six months time, regretting they ever went down that route. Andy Grove, the former head of Intel said that this is a major inflection point.

This year people are predicting that if you count the amount of smart phones and tablets that will be shipped, i.e. bought, that it will be greater than the number of desktop, laptop, and network PCs. So we're tending now toward an inflection point in the marketplace that says more people will interact using mobile devices than they will static devices.

That trend isn’t just a blip for 2011. That continues as we accelerate, as people just get more comfortable with using that technology, as functionality improves, and security and manageability come under control.

We're at that point now. That’s why we use this term radical transformation, because for the people that really want to exploit this, they're making their plans, they're drawing up their action lists of what they have to do, both at the front end with the mobile and cloud environment, but also with their legacy environment.

Gardner: This is really a departure. In the past we've seen trends and rapid changes in IT, but I don’t think we have seen something that’s happened quite as wide spreading and globally. We're seeing this simultaneously in advanced economies across multiples verticals. It's as if even the organizations or regions of the world that may have been catching up in some other ways are leap-frogging and therefore adopting mobile devices even more rapidly.

This isn’t like, "I'll bring in some additional servers and move toward an n-tier architecture, bring in some applications, have coexistence and migrate them out to a branch office over a two- or three-year ramp up process." This is something that’s happening rapidly, more rapidly than we thought, and perhaps more pervasively globally than we thought.

They want to get things delivered. They want decisions made. More and more of the population has grown up with the ability to do things instantly.

Evans: The term that people are using is the consumerization of IT. I'm not quite sure what that actually means. To me, it’s driven by impatience and that’s not a negative thing. Impatience is not regional, and therefore, no matter where you are in the world, people want it now. They want to order things. They want to get things delivered. They want decisions made. More and more of the population has grown up with the ability to do things instantly.

Their impatience is forcing people to do things right now. Therefore, there's the expectation level of I expect, when I click on a device, I should get a response in an amount of time that may be immeasurable. If you wait a second or two, then people say, it’s running slow. You don't have to think really far back, that if you ordered something on the telephone, let’s say, then the normal period was that you will get it within 28 days. We accepted that. That's gone out of the window, gone.

That puts pressure on enterprises to deliver it, and the consumer is not acting alone. The consumer is saying, "I want you to send me a book. I want to download music. I want to order a holiday. I want to get a confirmation of a bank statement, or whatever it maybe, and I expect it right now."

Therefore, the systems that are serving up that information are the back-end systems. These are not new systems. These are the old systems. So, it’s this radical transformation. It’s dealing with the fact that we have to adjust those back-end systems to deliver up information to a wide plethora of different platform types, whether it will be smart phones, tablets, traditional notebook PCs, or desktop PCs.

This is going to be pervasive. This is the way we're going to do things for the foreseeable future. Therefore, if we don’t get it right now, we stand a risk of making decisions about platform types or architectures, or whatever it may be, that within six months, we’re going to say that it wasn’t such a good idea.

Never been here before

I meet so many customers now that are saying, "We’ve never been here before. We’ve never been with this volume of devices. We’ve never been through the fact that over half of our workforce now brings their own device with them into the office."

They're sending out policy documents that say, "you shall not do this," and it's totally ignored. The changing workforce has a totally different level of expectation as it were, of what's possible, just in terms of the amount of transactions that are performed over the net or 20,000 applications downloads in a minute.

These are transactional rates in volumes that we've never seen before. Despite a lot of our previous experience, you just can’t leave it and say, "It worked five years ago. It’s going to work for the next five years." That's what our customers are dealing with today.

Gardner: This isn’t just happening with applications delivered through an employee local area network (LAN), we’re talking about business-to-business (B2B) applications and data being served up, consumers increasingly being part of the revenue mix when applications are delivered through their mobile devices. It’s increasingly important for the organization to be delivering applications across different types of users, different parts of the globe, different types of device interfaces.

So it gets back to this common notion of a singular comprehensive infrastructure. We have mobile and shifting requirements and we’re also seeing the need for efficiency on how applications are served up.

One of the questions we get all the time is what percentage of my applications or products should I be moving to the cloud?

Paul, what are you seeing in terms of how organizations are putting the numbers together, and say, "What’s hybrid cloud or a hybrid cloud model bringing to the table in terms of how to solve this?"

Evans: There are two critical questions have to get answered. One is the organizations that are going to move applications to a cloud environment are not going to move all of them. One of the questions we get all the time is, What percentage of my applications or products should I be moving to the cloud? And of course the answer is ... It’s not a percentage thing. It’s the type of application.

It’s still formative times, but in HP’s view, clearly applications that probably are not embodying intellectual property would be a type of application that's well served moving into the cloud. And, any form of application including servicing, providing a service across a wide population of users as well, especially those who are obviously in a mobile environment; applications that are productivity-centric.

You really want to drive the cost down as low as possible for any of these productivity applications. There's no sense in running on aging infrastructure where the costs are high. You really want to be getting the cost down, because if it’s a productivity application, it doesn’t differentiate you. And if it doesn’t differentiate you, then why would you spend anything more than the minimal cost?

So put those productivity applications onto the lowest cost environment where you couldn't provision an infrastructure that has this elasticity that the cloud environment provides.

No clear line of sight

That's the first thing, organizations are focusing on and saying, "How are we going to start to bring forward some of our applications that we’ve had buried in the data center?" And some at extremely high-cost. We find working with people that there still are some applications where there may not be a clear line of sight into just how much that application is costing and the infrastructure it’s running on.

You might say we are spring-cleaning a little as we go into organizations and help them understand what are the top candidates for applications to move to the cloud. What we're doing is unearthing the portfolio of application through the work we do, and saying to the CIO saying, "Did you realize that you have this number of applications and that you're spending this amount on those?" Of course, the usual answer is, "No, I didn’t know I had that many." Usually, what we uncover is there is about twice as many as people thought.

They do consume a lot of cash. So, in this spring-cleaning. We're moving applications from back-end environment to the cloud. Then we have an opportunity to rationalize the portfolio. Rationalizing the portfolio had two big impacts. One, it takes cost out, which means that you can consider that as saved money or money that can reinvested in the mobile world.

But also you're taking out complexity. Every organization, I think, would agree at the moment that their environments are too complicated, and by virtue of being to complicated, it makes it difficult to change them, and people are looking for agility and flexibility.

So first things first. When we're talking to organizations, what we're trying to understand is what are the candidates that can move to the cloud, and that’s a big hot topic. A lot of our users and customers say, "We sort of get our head around cloud. That’s okay. We can see it’s a different paradigm. It has a different cost model. It helps me with provisioning. Life’s good."

The technical challenge is to support this environment agnostically and say, 'We don’t care what you're using.'

So they can get their head around that, and as you can tell by just reading the press and listening to what goes on in the world, you would say people are on the move with cloud.

On the other hand, when they are looking from the outside in with mobile, there is less of a precedent there. The sharp customers that we are working with are saying, "We don’t want to fall into traps. We're going to build an environment that suits one type of mobile environment and we are going to be able to test it and manage it." They know that they don’t have that order of control. The days when it was, "You shall use this device, and that device we know how to work," have gone.

If you think back to mainframe days, people had to use a 3270 device. That was it. It was defined by IBM. That’s the way you're going to do it. And if you didn’t have one, then you didn’t get to participate. The world is now totally the other way around.

The technical challenge is to support this environment agnostically and say, "We don’t care what you're using." What we can do is understand how to manage and provide the right level of security to that device, whatever that device may be. Maybe you come inside the network and that’s going to be a high performance network these days, because of the whole issue of impatience.

As I said, the volume and the variety of platforms are unprecedented. Even though we had the PC world, the PC as the client was a single entity. It had some interesting characteristics initially, but there was one brand. What we're dealing with now is many different ways. Therefore, we have to understand this from an agnostic standpoint, so that the consumer can continue to use the device of their choice and can get the services they require from this new cloud and server environment.

Virtuous adoption

Gardner: I've been speaking to some organizations recently where, as they’ve moved to cloud to support these new requirements, they’ve also recognized that there is virtuous adoption benefit in terms of efficiency. As they solve some of these issues around wide area network (WAN), around converged infrastructure supporting applications, transforming applications from their older platforms into new modern ones. And they're also gaining efficiencies through virtualization, and higher utilization rates.

They're able to do disaster recovery more quickly. They're able to reduce the total amount of data, because they're consolidating and they're removing redundancies of data. They're able to remove redundancies of application instances. They were able to license at the data center levels, and so on.

Suddenly, they say, "We're doing more. We're doing it differently, but we're actually doing things at a far more efficient level, and therefore, our costs over time are coming down, particularly if you focus on the operational level." So is there is a daunting challenge to moving to cloud in order to support many different things, including mobile, but in doing so, are you setting yourself up for longer-term efficiency?

Evans: The sharp customers and the sharp organizations out there have realized that already. Over the last 30 or 40 years in computing it's been totally organic. Unfortunately, we as vendors keep bringing out new things. While someone is trying to work with the old, we bring out something new, and they say, "How on the earth are we meant to develop an architecture and understand how to get the best out of this?"

What's happening now is that by virtue of the tidal wave, computing is going to be pervasive. It’s not going to be just the realms with data center and the few selected people that used to get access. Everybody is going to have this. Then it’s not only everybody, but it’s also these 13 trillion devices that are going to be connected to the internet, that don’t have people attached to them at all.

As people look at things like cloud, they're beginning to realize the applications that they can class as productivity.

They are devices that are monitoring things, whether it’s energy usage or whatever and then pumping that data into the Internet. As organizations begin to realize that the world is going to change, their view is going to be "We need architecture."

By virtue of developing an architecture, people are beginning to realize, as they begin to take stock of where they have been spending their money, that they have in the past and may have an opportunity to drive more efficiency and effectiveness into that organization, whilst at the same time delivering innovation.

So I think this inflection point can have some really good signs about it. As people look at things like cloud, they're beginning to realize the applications that they can class as productivity.

We ask them where they run certain productivity applications And everyone would say HR. Invariably we get the answer that it runs on a mainframe. And we ask why they run the HR system on a mainframe? Well, because it’s important. Of course it’s important and it’s vital, but it isn’t differential. It doesn’t give you some competitive advantage in the marketplace. It’s definitely absolutely necessary as a core part of your business. Just provide that service, but it’s not core in the sense that it gives you differentiation.

So you're right. It’s forcing decisions on people now, because the people that appreciate that this radical transformation is something that they can’t stop and they should exploit, rather than trying to ignore. People are actually seeing that there are significant efficiencies to be gained from deploying these new technologies.

Radical nature

Gardner: Let’s revisit the radical nature of this response that organizations need to have. In order to appreciate how rapidly and radically they need to shift, they need to appreciate how their requirements and the demands and their expectation are shifting, and a very good example is the travel industry, because the vertical is clearly needing to respond.

All of us or many of us travel, some more frequently than others. And, we have a sense of how fast things are changing just in a matter of months. We've seen going to the gate at an airport become a different experience with different expectations. People are using mobile devices and not even going near paper anymore, recognizing that a scan device works just fine.

It’s amazing to me how consumers have adopted this very rapidly. They see something that works better and they go to it. It then becomes incumbent upon the airline businesses to support that.

So let’s look at an example of how things are shifting and let’s visit the vertical industry of travel. What would you see happening there that is a harbinger of what others might expect in other businesses?

Evans: What’s interesting is that there are always industry "skews" of technology. We have a tool in HP called the Business Value Framework. What that tries to do is interpret where the business wants to go.

If you can serve people better, if you can give them better information, then there is highly likely that they are going to come back as a repeat customer.

Ignore the technologies for a moment. Where are the line-of-business people wanting to drive their business going forward? If you're in a business where it's relatively difficult to differentiate yourselves, where it’s more commoditized -- and you could argue the airline industry is relatively commoditized -- then what people are going to look for is how we're going to have that small differentiation that makes us better than the rest of the world.

When you look at this business value framework and you look at things like services and transportation, what comes through very loudly is customer service and customer satisfaction is key. If you can serve people better, if you can give them better information, then there is highly likely that they are going to come back as a repeat customer.

You don't want to spend a truckload of money dragging people to your airline and then displeasing them, so they go to somewhere else, because that's makes the whole initial effort worthless.

What people are looking for is obviously loyal and devoted customers who come back and back and back, and that all comes down to deliver customer satisfaction. One of the customers we've been working with, Delta Air Lines, has really put that at the forefront. They can provide very rich, very high quality information, so that people know what's going on.

Range of devices

Working with Delta, they've been providing to a range of mobile devices, like smart phones, tablets, etc., but also to traditional desktop environment, rich information, not only when you're waiting for the plane, but also when you're on the plane by virtue of seat-back videos screens so that people get a continuous feed.

If you're flying from A to B to C, you're going to change planes in the middle. If you're going to miss your connection, you usually sit on the plane, knowing you're going to miss your connection, and then what are you going to do? That means you get off the plane, queue with 500 other people, and then you eventually get another plane -- eventually -- all the time trying to figure out how you can tell your family why you are late and rest of it.

Delta is trying to provide an environment that says while you're on one of your airplane, it's already working out the next connection and it will give you that information on the plane. It will give the e-boarding card. It will send you the vouchers that would allow you to get some refreshment, all to your mobile device, so that all of that stress and angst that you’ve had traditionally gets taken out. In a commodity industry that's the sort of thing you have to do to be different from the rest.

We see that in a number of industries. We see people today delivering and developing mobile applications, particularly in the commodity world, to deliver up a much higher level of customer service and satisfaction.

That's the thing that means we're going to go back again and spend our money with them again, as opposed to a competitor, because in this world of internet it's so easy to switch. Brand loyalty, customer loyalty, may not be things of the past, but something you have to work incredibly hard to achieve. That's what people are utilizing these new technologies for predominantly.

What they value are things like structured workshops, to have an open debate between technology and business.

Gardner: So to recognize that convenience is the killer application, the ability to serve up the data in real-time to any device, to allow the participants in a business process to interact with that process, to make changes, basically what we would call change management, for a consumer is simply convenience.

This requires an awful lot to happen in the back end. What is HP bringing to the table to help organizations like Delta or others that don't have a precedent to fall back on that are finding themselves faced with fairly complex challenges and looking for that strategic view? How is HP adjusting to the market itself in order to accommodate these kinds of clients?

Evans: What we are definitely doing in some respects is using the experience we built up in dealing with people's legacy environments and understanding what they value. What they value are things like structured workshops, to have an open debate between technology and business that says who is leading, who is following, where are we going, and what do we need?

A lot of the things we do in terms of those initial services set the scene, so that we just don't leap in and decide, "Well, we're going to support X device. We're going to provide this app on it." And then, six months later, we're struggling with how we're going to deploy that app over multiple platforms and how we're going to use new technologies like HTML5 etc. to give us that agnostic approach?

It’s this convergence between the mobile world and the traditional world, because we believe that’s the big thing. We can talk about the sexy front end, the smart phones, the pad environment -- and it's great to talk about those -- but at the end of the day, those devices only really get to do what they are paid to do, when they connect to rich and meaningful information at the back end. So for this convergence we sit with users, sit with the CIO, and understand what is it that they're going to be converging in terms of information from the back end and the utilization of the mobile device on the front end.

Put into context

Then, how do we connect those together? How do we sit down and say, "What sort of speed of transaction, what volume of information are we talking about here," and obviously understanding that. That information has to be put into context now for the device of the front-end. If you're delivering this to a smart phone, it has to be represented in a totally different way than if you were going to deliver it to a desktop PC or, in the middle, a pad.

So the point being is we've got to be aware of those. We’ve got to be aware of the user’s context and understand what we can and cannot deliver to them. But I think behind the scenes, and of course, this is where the consumer says, "I don’t really care," but the whole management and security that you put in place, and HP has spent a lot of time, and a lot of effort, and a lot of money in acquisitions and development of technologies that allow people to manage and also provide a secure environment, to those devices that are at the front-end.

Gardner: Of course, this does require the complete view of network storage, hardware, software, integration, hybrid cloud development. It’s really astonishing to me how this really impacts just about everything when it comes to IT. This is not something that’s a bolt-on type of affair.

Evans: Absolutely not. As I said earlier, those are sort of the quick wins that people are saying that you can just bolt-on. "Oh well, we used to send out data to desktop PCs and then laptops or whatever. This is just an extension." This is not. This is different. This is a paradigm shift. This is an inflection point. Whatever managerial business term you want to use, this is a big deal in their mind.

There are serious challenges. I wouldn’t for a second say this is a piece of cake. Just ring us up, and 30 days later you get a solution. It is not like that. This is a big deal. There are serious challenges and therefore they need serious people to fix them. We're into understanding how you get this end-to-end view, because if you only look at a piece of the puzzle, you aren’t going to build what is absolutely necessary.

There are serious challenges. I wouldn’t for a second say this is a piece of cake. Just ring us up, and 30 days later you get a solution. It is not like that.

Gardner: Before we sign off Paul, are there some salient resources to which you could point people to acquaint themselves more with what we've been discussing, particularly on how to solve some of these issues?

Evans: On hp.com -- if you type in hp.com/go/applicationtransformation, there are a plethora of different links there for people to read up on things, watch videos, whatever. We're also developing a digital repository for predominantly video material. We find that our customers are very clear in telling us that they like watching short, sharp pieces of materials that are being videoed, so they can get the message quickly and get offline.

Maybe the days of reading a 20 page white paper are gone, which I am not sure is true, but definitely our clients told us very clearly that they like watching videos. So we're developing a whole series of video-based material, whether it's on application rationalization, application modernization, mobility in the enterprise world, or infrastructure.

The intention here is not to hear from HP, because we will do what we're paid to do, which is trying to convince you we have some very smart people in technologies and products, but also hear from industry experts, hear from our customers about what they're doing, how they're doing it, and the sort of benefits.

So if you stay in touch through hp.com/go/applicationtransformation, we'll always point you to materials that in some instances are not being delivered by HP, but just hear from our customers and hear from industry analysts about really what is now possible.

Gardner: Well, great. You’ve been listening to a sponsored podcast discussion on the rapid and massive shifts confronting enterprises as they adopt more mobile devices and also broaden their uses of cloud services. We've heard ways of the cloud mobile era is a potential opportunity, but also has some pitfalls in terms of how to approach this and that are comprehensive and strategic overview, seems to be working for many of the early adopters that are succeeding.

So I want to thank our guest, Paul Evans, Global Lead for Application Transformation at HP Enterprise Business. Thanks, Paul.

Evans: Thanks, Dana.

Gardner: 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: HP.

Transcript of a BriefingsDirect podcast on how consumer-driven platform variety and advancing cloud services are requiring enterprises to transform and rationalize their applications portfolios. Copyright Interarbor Solutions, LLC, 2005-2011. All rights reserved.

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