Mutual Embrace of SOA and Cloud Computing Builds Into Productivity Waltz Across the IT Landscape

Transcript of a BriefingsDirect sponsored podcast on the intersection of SOA and cloud computing recorded live at The Open Group’s Enterprise Architecture Practitioners Conference in Seattle.

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

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

Today, we present a sponsored podcast discussion in conjunction with The Open Group’s Enterprise Architecture Practitioners Conference held in Seattle, the week of Feb. 1, 2010.

We've assembled a panel to examine service-oriented architecture (SOA) and cloud computing -- the relationships, the inter-reliance and the realities. Three years ago, the IT transformation poster child was SOA, and now we're well into the hype curve around cloud computing, but has one actually given way to the other? Are they linear in their relationship, or perhaps mutually dependent in some ways, and to what degree?

We’ll explore today whether SOA has found new value and relevance as a foundation and perhaps catalyst for cloud computing, especially for so-called private clouds. And, we'll see how the emergence of SOA and cloud may be happening in different places inside of enterprises. Shouldn’t one hand get to quickly know what the other is up to and perhaps even work together?

There are a series of podcasts from The Open Group conference: on cloud computing, enterprise architecture, business architecture, Archimate, and cloud security.

Here with us now, however, to plumb the depths of how SOA and cloud computing do or don’t come together, are a SOA expert from the Open Group, as well as an Oracle expert on architecture, and a Salesforce.com executive on cloud computing.

We're here with Dr. Chris Harding, director of the SOA Work Group at The Open Group. Welcome to the show, Chris.

Dr. Chris Harding: Thank you, Dana.

Gardner: We're also here with Stephen G. Bennett, Senior Enterprise Architect at Oracle. Welcome, Stephen.

Stephen G. Bennett: Thank you. Happy to be here.

Gardner: And, we're here with Peter Coffee, Director of Platform Search for Salesforce.com. Hello, Peter.

Peter Coffee: Hi. Good to be with you all.

Gardner: Let me take our first question to you, Chris. You’ve been working with SOA for some time with a work group at The Open Group. Has the SOA conversation changed in the last several years due to the interest in cloud computing?

Harding: Well, Dana, the conversation has changed in that, five years ago, when we started getting into SOA, there was a huge amount of excitement and a great deal of buzz about it. Now, we can see that the hype cycle has run its course, but we're still seeing a great deal of technical interest in SOA and we're also seeing that companies are using it and are increasing their use of it. So, there is a steady uptake in the use of SOA, although the excitement about it has died down.

Gardner: That’s an interesting effect, where the interest seems to be less, but the actual implementation is more. Peter Coffee, do you have any sense of how SOA is working or not working in your efforts around cloud computing?

Considerable upside

Coffee: I've been covering SOA for a long time. Before I was at salesforce.com, I was with the industry journal eWEEK, so I had a lot of opportunity to talk with people who were in the evaluation and adoption phase. I'd say the people who adopted SOA in the previous decade got considerable upside, but those who did not didn’t really suffer any penalty for not doing so.

In the situation we're in now, where the economics of cloud computing are becoming quite compelling, the downside of not having a SOA is becoming quite apparent. If you don’t have a service environment, then your ability to extend your current assets and integrate them with cloud services is going to be somewhat hampered.

So, people are realizing now that the wait-and-see option is more perilous than it used to be. This is accelerating the actual adoption of what we would call SOA, except that’s no longer the label du jour.

Gardner: Stephen Bennett, from an architecture perspective, do you also see that the SOA activities are no longer a nice-to-have, particularly if you're interested in working towards grid, cloud, utility types of computing models?

Bennett: It's definitely a necessity, and the majority of large enterprises today are doing SOA in one fashion or another at different levels of maturity, whether that’s from the quite immature approach of seeing it as a pure integration play all the way up to seeing it more as a business agility kind of play.

So, it's becoming a norm and, therefore, we don’t need to keep hyping it or pushing it. We need to use the characteristics it offers with other supporting technology strategies such as cloud.

Gardner: Back to you, Chris Harding. When we think about how to approach SOA and about some of the business models that seem to be attractive around cloud computing, do you think that they're happening in different places. Is there a dissonance of some sort in some of the enterprises? That's to say is one hand doing SOA, the other doing cloud, and they're not necessarily coming together very much.

Harding: Enterprises are complex organisms, and often different parts of them aren't completely in sync. It’s very interesting that service orientation is very much a business concept, and SOA has been about the application of that business concept to the technology. Cloud computing, on the other hand, is very much a technical concept. It’s about what you can do with technology over the Internet.

It is a technical concept, but it has had really a big impact on the business structure. So you can see them as complementary. SOA has been the application of business principles into the technology. Cloud is a technical concept, which has had a huge impact on the business. So, yes, there probably are different parts of the organizations looking at cloud and looking at SOA, but there is a big dynamic that says they should be working together on both of them.

Gardner: How about from your perspective, Peter Coffee? Do you see different cultures, priorities, or efforts at work that haven’t quite matched up or connected yet?

Two perspectives

Coffee: I certainly do, and I’d like to look at that from two perspectives. First, without actually disagreeing with Chris, I see things slightly differently. It seems to me that SOA very quickly became a label of products that vendors wanted to sell. So, you saw a lot of things like enterprise service bus (ESB) products and so on.

It became dangerously easy to think that you were doing SOA, if you were buying the tools and failing to appreciate how much of a cultural and management achievement it was to get people to think of themselves not as owners of and the gatekeepers to an IT asset, but instead being publishers of and supporters of a service to other parts of the business.

The second point goes back to what was said just a moment ago by Steven. It’s absolutely critical to understand that you can view SOA as simply a way of integrating the stuff you have, or you can move to the next level and start to think of it as the way you do your business. The way your business units interact with and support each other with the technology is just the enabler for that.

The same is true of the cloud. It's possible to take the existing IT model of isolated applications, each with their own data stores, and replicate that model in the cloud with elastic scalability of capacity. That would be the level of the cloud industry that’s typically called infrastructure as a service (IaaS).

Or, it's possible to use the cloud as a much more interesting and fluid medium for interaction among much more granular and business-oriented services at the level that’s traditionally been called in the industry either platform as a service (PaaS) or software as a service (SaaS). It depends on the level at which you choose to consume other people’s application work, instead of doing new application development yourself.

So, it’s really important to realize the orthogonality between the technology you're adopting and the manner in which you are using it. It’s possible to do SOA without the cloud. It’s possible to do better SOA with it. It is also possible to do an isolated silo-oriented architecture locally and also to do that in a cloud environment. Neither one necessarily implies or impels the other.

Gardner: But, they certainly seem to have a mutual reinforcing benefit for one another.

It's a combination of technologies that are finally ready for prime time, and an ecosystem that’s ready to support those technologies well.

Coffee: Exactly. As I said earlier, the economics of being able to have elastically scalable capacity to be able to handle peak loads without needing to own the peak capacity and wind up with very low utilization rates on your capacity are becoming so compelling that people are asking how they're going to take advantage of this opportunity of this cloud environment.

It's a combination of technologies that are finally ready for prime time, and an ecosystem that’s ready to support those technologies well -- providers of services and providers of expert assistance in using those services.

That’s a very important enabling ware, when your major system integration firms begin fully to understand how they can incorporate cloud services into the portfolio of technologies that they make available to their customers. When you put that all together, the downside of not moving to an SOA becomes an embarrassing lack of ability to take advantages of these incredible economies.

Gardner: Stephen Bennett, we've been working through maturity models and technology and adoption patterns, but we also had a major recession globally, perhaps the worst in 75 years. One of the things that many people thought derailed the adoption of SOA was the lack of funding for added-on expense or discretionary IT spending.

At the same time, we had cloud come in and say, "We can do more for less, increase your productivity, and perhaps add more capacity into your data centers, preventing you from having to invest in additional ones." It seems that cloud has given SOA an economic boost in terms of the rationale for investing in SOA. Does that make sense to you?

Pragmatic and realistic

Bennett: It definitely makes sense, but we also have to be pragmatic and realistic here. Any disruptive approach or technology such as cloud and SOA -- backing up what Peter said -- is not a pure product or technology play. There are other considerations. You have to take the people and process into account. That will require investment and time, investing in your people to acquire the new skills, to address the change management, and to invest in and review your existing IT processes.

Unfortunately, while from the marketing perspective it sounds great, investment and time need to be put into place to support this trend and roll it out.

Gardner: Let me address for just a second. If we're in a recession and if you're no longer fighting the fires at the gross edge of the curve, which is to say, you are just trying to keep up with demand in your IT adoption patterns, but you've had a little bit of a lull in how much demand there is for products and services in your organization, wouldn't that be the perfect time to invest in your people and processes to elevate them to service orientation?

Bennett: Definitely. I actually see recession as an opportunity within IT, because it gives you opportunity to reset thinking and reset IT's approach to actually delivering IT to the business.

I completely agree that the availability of the cloud is a platform for doing this kind of thing. It's a very fortuitous coincidence with the business needs of enterprises that are short on capital.

Coffee: That's particularly true for the cloud, because you can do development without major capital investments. You can build systems, conduct pilot projects, and have solutions that are ready to go. They've been tested with the appropriate stakeholders, and when business conditions improve and create the opportunity to use those at larger scale, you can scale very rapidly to larger capacity, without needing to go through another round of capital budgeting.

So, yes, I completely agree that the availability of the cloud is a platform for doing this kind of thing. It's a very fortuitous coincidence with the business needs of enterprises that are short on capital.

Gardner: So, not only do you fix your roof when the sun is shining, but you can re-factor or modernize your roof while the sun is shining as well.

Coffee: Very much so.

Gardner: Chris Harding, what's going on in The Open Group's work group, when it comes to this skills and process level? Do you see that the recession and/or interest in cloud has increased the demand for people with architectural skills and perhaps certification that is a part and parcel with SOA?

Harding: It's difficult to measure the effect of the recession on education. You could say that if people aren't being required to do productive work 110 percent of the time, then they will give more thought on training and education.

But, also as far as SOA goes, we’ve gotten past the hype. We're into the steady take up deployment of SOA, and that's precisely the time when companies will be looking for people who can demonstrate their ability, professionalism, and qualification with this particular way of doing things.

Allocation of time

And, it's within the SOA Work Group. You can see that at our conferences. We spend a lot less time on presentations on how SOA is evolving and what the new things are, because really there isn't a lot that’s new coming up. We spend a lot more time putting together assessing tutorials on SOA practice and on the how the standards that the SOA Work Group is producing should be interpreted and used.

So, yes, we're moving very definitely into the period with SOA where establishing skills and certifying skills is going to be more important than developing new ways of doing things. We have those ways and we need to consolidate them and ensure that people can use those skills in their work and do so in a beneficial way.

With cloud, it's too early to do that yet, because we're still looking at the new developments when it comes to cloud.

Coffee: Dana, I’d agree with everything that Chris just said, except the statement about it being too early. When I talk with systems integration firms in India, like Tata and Infosys and Wipro, in Hong Kong with people like IBM, and in Europe with people like Accenture, all of them tell me that they are now actively engaging with customers on cloud-based options, as well as either on-premise based options or combinations of the two. So, I would say that we're well into the practitioner phase and not merely the conceptual phase.

It's very dangerous to oversell any of this as a proposition of cost reduction, when really it's an opportunity to reallocate resources from relatively low-value tasks, like administering a software stack, to higher-value tasks like reengineering a business process.

But, in every other respect, I completely agree with Chris. Chris and Steve have both talked about investments we'll be making in training and the development of new skills. This might make some people say, "Wait a minute, I thought this was about reducing my costs."

It's very dangerous to oversell any of this as a proposition of cost reduction, when really it's an opportunity to reallocate resources from relatively low-value tasks, like administering a software stack, to higher-value tasks like reengineering a business process.

If you want to have cheaper IT, you can have cheaper IT, but your company won’t be competitive with all of the performance and service that the industry has come to expect. Over time, IT budgets rise because the return on investment (ROI) is so compelling.

The combination of SOA, which makes your various business units able to cooperate more effectively, with cloud environments which allow you to handle very bursty workloads and conduct very cost-effective pilot projects and scale the ones that work very rapidly, increase the ROI of IT spending. Therefore, over time, IT budgets are going to continue to rise.

Bennett: From what I see, I agree with both of you. I see that there are a number of crossover skills, especially the non-technical skills. Both SOA and cloud heighten the need and importance of existing skills, such as governance, good design, portfolio management, and, more importantly, business architecture.

What people are talking about is the opportunity to redirect costs to area such as business architecture, and business architecture is part of enterprise architecture (EA). That's not purely IT focused, but the wider concern -- investing stuff like business capability maps to understand exactly where I should utilize SOA and cloud with my organization -- is going to be key.

Gardner: Now, on this economic issue, many of the executives I see aren't necessarily interested in reducing the IT budget dollar for dollar, but they are interested in reducing the percentage that IT consumes as a function of overall revenues and perhaps also profit. So if we are going to make things more productive, more efficient, even as we grow IT, what is it about SOA combined with cloud computing that could help do that?

Decentralization

Coffee: The sell with SOA very early on was that by making the IT environment more modular, it became more reasonable to have a business process owner be more intimately involved in the implementation of the technology that would execute that process.

You saw a decentralization, to some degree, of functions that had previously been monolithic development of massive applications, which was clearly the IT department’s charter, to more of a decentralized business-process construction task, which also included some development but now that became more exfiltrated out into the business units themselves.

So, the IT budget, as a line item, is not conspicuously bigger. In fact, it may actually shrink, because the IT department now is a composer and integrator of stuff that may now be getting done with the operating budget by personnel, who are on the payroll as members of a business unit, instead of members of an IT organization.

Gardner: As we also move culturally and organizationally, we'll probably see more adoption of shared services and management around the different economic models of how consumption is charged back. Therefore, with market forces as they tend to go, we’ll see higher efficiency. That is, you only pay for what you consume and you only consume that which you’re interested in paying for. If cloud computing allows for that elasticity, then you’ll only need to provision the resources required for those shared services.

This will, in turn, enable the consuming enterprises to concentrate on the things that they are particularly good at.

Now, this is a little bit of a vision, of course, but it strikes me that there is an opportunity for higher utilization, higher productivity, and therefore lower total cost. Any reaction?

Harding: That certainly must be one of the factors that will enable cloud computing to make enterprises more efficient -- the elasticity and the take-up effect. It also has a major effect on the risk that an enterprise needs to take on. But, there is a bigger factor, which is meant to drive down cost, and that is competition.

If you take service orientation and cloud in combination, you’re seeing the ability of people to buy services from different suppliers, for those suppliers to compete, and for those suppliers to concentrate on the services that they are particularly good at. This will, in turn, enable the consuming enterprises to concentrate on the things that they are particularly good at.

So, you don’t need to dissipate your efforts on running an inefficient IT department, which is not your core business. You can outsource that, get a specialist to do it much better, and concentrate on what you're good at. That is the real dynamic that will improve things economically.

Gardner: Do you think that a general adoption of services orientation will allow for those services to be procured based more on the service-level agreements (SLAs) and the requirements, regardless of who is actually sourcing them and building out the data centers? I think this makes a great deal of sense. How does that sit with you?

Harding: I don’t think that people will be switching from supplier to supplier to supplier on a per-transaction basis. They'll be establishing long-term business relationships and partnership with their service suppliers, and it will be in that context that they go out and get more services. But, the fact that they have a choice of suppliers to partner with will mean that those suppliers will be able to provide more efficiently, because they specialize in providing those services.

Now, from an Open Group perspective, there is a danger that you may become locked into a particular supplier. Part of our role in promoting open systems is to push for the standards to be in place so that that doesn’t happen. Provided we can prevent that locking, it’s altogether a very healthy situation.

Gardner: Peter Coffee, I’m sure you have some thoughts on this. It’s sort of the ecosystem question, and the ability to procure based on the differentiation of core and context services.

Granularity is surprising

Coffee: Certainly. The granularity of this marketplace is quite surprising to many people who haven’t looked at it closely. We see already people building applications, in which they have shopped the marketplace and found a cloud storage proposition from one provider, a cloud application development platform from another, social networking algorithms and facilities from yet a third provider and have built some really interesting strategic business solutions.

Starbucks is an example. They built applications that drew information from existing public service directories of community service opportunities, wrapped that in an application shell constructed with our Force.com facilities and packaged that in such a way that it’d be dropped into people’s Facebook pages to create community momentum around projects. They then built a site where, if you did five hours of community service, you could go to your local Starbucks and get a cup of coffee.

This was all implemented in matter of weeks to support President Obama’s call for renewed commitment to public service. It was very strategic from a marketing point of view, lovely from a technology point of view, and dirt-cheap, because there was no capital hardware involved. It was all a composition and integration of existing services from multiple providers. It’s quite startling to many people to realize what a supermarket of services has already come into being.

Gardner: This takes us to another level here, which would be not only thinking about how SOA and cloud come together to do things you had done in the past better, but perhaps be able to do things that you could not have been able to do at all before. We'll have to have this as our closing concept. I’d like to go around the panel. Chris Harding, what is it about SOA and cloud coming together that enables entirely new types of innovation and business benefit?

Harding: I don’t know that there is necessarily anything special, but maybe it’s because when you solve one set of problems you're able to turn your attention to other things and new things that pop up. It’s very difficult to foresee what new developments there will be, but you do get them, and it’s good news.

Those basic principles are going to allow us to take evolutionary technologies and approaches and probably revolutionize the way that IT actually interacts with the business.

Gardner: At least we move from "if you build it," the productivity, services, or innovation will come to "let’s just go and do the innovation" and we’ll find a way to do it without having to build very much or anything at all.

Harding: Right.

Gardner: Stephen Bennett, how about you? Do you see an opportunity for SOA and cloud to come together to enable entirely new ways of doing business?

Bennett: I won’t say new ways of doing business, but ways that we were trying to achieve probably over the last 5-10 years. The combination of cloud and SOA obviously brings together kind of speed and modularity. Those basic principles are going to allow us to take evolutionary technologies and approaches and probably revolutionize the way that IT actually interacts with the business.

So, in terms of IT being siloed -- "please develop and look after this application" -- it’s going to be more a move towards collaboration of how we can actually deliver business solutions to the ever-changing business dynamics.

Gardner: That really integrates IT more deeply into the business, I suppose, right?

Bennett: Exactly. It's being invited to the table at long last.

Gardner: And, Peter Coffee, the last word to you. What is your perception on being able to do things that hadn’t been done or been able to be done before with this unique combination and interplay between SOA and cloud in its various forms?

Coffee: Steve is exactly right that many of the concepts that are now receiving tremendous attention are not new concepts. I distinctly remember discussions almost 30 years ago about modular applications composed of various components, developed by different parties with different expertise, coming together for the first time in a connected environment. This was going to be one of the things that object-oriented modules of development were going to bring to us.

Very resilient

Finally, we have an environment in which connectivity and real-time linkage and integration of data and function instead of being costly, brittle, and time-consuming are now nearly free, very resilient, and can be done almost more quickly than they can be described.

This means that people are going to be doing more challenging work and working more closely with business units instead of having their time consumed by arduous, necessary, but relatively low-value tests of infrastructure maintenance.

So the ROI will rise. The relevance to the business of IT will increase. The sophistication of the skills of the person who does IT for a living will be greater 10 years from now than it was 10 years ago or even today, but we’ll all be pretty happy with the results.

This means that people are going to be doing more challenging work and working more closely with business units.

Gardner: It strikes me that perhaps the perception of IT itself might benefit in that IT could be perceived as the enabler of innovation that others will actually do rather than IT being perceived as a bottleneck of innovation that IT needs to have enabled themselves.

Coffee: I've also heard it suggested that we should evolve the title of Chief Information Officer, which refers to a relatively static asset, to the title of Chief Process Officer, which suggests someone who is much closer to the present and future of the business.

Gardner: Or we could go Chief Innovation Officer and we won’t have to change the stationery.

Well, thanks so much. We’ve been listening here to a panel of experts talking about the interplay between SOA and cloud computing. I want to thank our panelists Dr. Chris Harding, Director of the SOA Work Group at The Open Group. Thank you, Chris.

Harding: Thank you, Dana. It’s been a pleasure.

Gardner: Steven G. Bennett, Senior Enterprise Architect at Oracle. Thank you, Stephen.

Steven G. Bennett: Thank you very much.

Gardner: Peter Coffee, Director of Platform Search for salesforce.com. Thanks so much, Peter.

Coffee: Enjoyed the conversation, thank you.

Gardner: You’ve been listening to a sponsored BriefingsDirect podcast that’s been done in conjunction with The Open Group’s Enterprise Architecture Practitioners Conference held in Seattle the week of February 1, 2010.

This is Dana Gardner, principal analyst at Interarbor Solutions. Thanks for listening and come back next time.

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

Transcript of a BriefingsDirect sponsored podcast on the intersection of SOA and cloud computing recorded live at The Open Group’s Enterprise Architecture Practitioners Conference in Seattle. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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Interview: HP's Virtualization Services Honcho John Bennett on 'Rethinking Virtualization'

Transcript of BriefingsDirect podcast with Hewlett-Packard's John Bennett on virtualization and its role in the enterprise.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod. Sponsor: Hewlett-Packard.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you're listening to BriefingsDirect. Today, a sponsored podcast interview about rethinking virtualization. [See news from HP on virtualization, panel discussion, IDC white paper.]

Virtualization in information technology (IT) has become a very hot topic in the last several years, and we're approaching a tipping point in the market, where virtualization's adoption and acceptance is really rampant, and it's offering some significant benefits in terms of cost and performance.

So, we're going to talk about rethinking multiple tiers of virtualization for applications, infrastructure, desktop, and even some other types of uses.

We're also going to look at this through the lens of a contextual approach to virtualization, not simply a tactical standalone benefit, but in the context of larger IT transformation activities. These include application modernization, data center consolidation, next generation datacenter (NGDC) architectures, energy considerations, and of course, trying to reduce the total cost of IT as a percent of revenues for large organizations.

To help us sort through these issues of context and strategy for virtualization, as well as to look at a number of initiatives that Hewlett-Packard (HP) is now embarking upon, we're joined by John Bennett. John is the worldwide director of data center transformation solutions, and also the HP's Technology Solutions Group (TSG) lead for virtualization. Welcome to the show, John.

John Bennett: Thank you very much, Dana. It's a pleasure to be with you today.

Gardner: When we talk about virtualization as a red-hot trend, just how big a deal is virtualization in the IT market right now?

Bennett: Virtualization is certainly one of the major technology-oriented trends that we see in the industry right now, although I'm always reminded that virtualization isn't new. It's been available as a technology going back 30-40 years.

We see a great deal of excitement, especially around server virtualization, but it's being extended to many other areas as well. We see large numbers of customers, certainly well over half, who have actively deployed virtualization projects. We seem to be at a tipping point in terms of everyone doing it, wanting to do it, or wanting to do even more.

Gardner: Are they doing this on a piecemeal basis, on a tactical basis? Is it being done properly in the methodological framework across the board? What sort of a market trend are we looking at in terms of adoption pattern?

Bennett: In terms of adoption patterns, especially for x86 server virtualization, we see virtualization being driven more as tactical or specific types of IT projects. It's not uncommon to see customers starting out, either to just reduce costs, to improve the efficiency in utilization of the assets they have, or using virtualization to address the issues they might have with energy cost, energy capacity or sometimes even space capacity in the data center. But, it's very much focused around IT projects and IT benefits.

The interesting thing is that as customers get engaged in these projects, their eyes start to open up in terms of what else they can do with virtualization. For customers who've already done some virtualization work, they realize their interesting manageability and flexibility options for IT. "I can provision servers or server assets more quickly. I can be a little more responsive to the needs of the business. I can do things a little more quickly than I could before." And, those clearly have benefits to IT with the right value to the business.

Then, they start to see that there are interesting benefits around availability, being able to reduce or eliminate planned downtime, and also to respond much more quickly and expeditiously to unplanned downtime. That then lends itself to the conversation around disaster recovery, and into business continuity, if not continuous computing and disaster tolerance.

It's a very interesting evolution of things with increasing value to the business, but it's very much stepwise, and today tends to be focused around IT benefits. We think that's kind of missing the opportunity.

Gardner: So we've been on this evolution. As you say, virtual machines, hypervisors, this approach to isolating activity at a level above the actual metal, the binaries, has been around for some time. Why is this catching on now? Is it not just economics, and, if you're talking about a business outcome, why are they important and why is virtualization being applied to them now?

Bennett: It really did start with economics, but the real business value to virtualization comes in many other areas that are much more critically important to the business.

One of the first is having an IT organization that is able to respond to dynamically changing needs in real-time, increasing demands for particular applications or business services, being able to throw additional capacity very quickly where it's needed, whether that's driven by seasonal factors or whether it's driven by just systemic growth in the business.

We see people looking at virtualization to improve the organization's ability to roll out new applications in business services much more quickly. We also see that they're gaining some real value in terms of agility and flexibility in having an IT organization that can be highly responsive to whatever is going on in the business, short term and long term.

We also see, as I highlighted earlier, that it really does connect into business continuity, which we see in many of the market research surveys we do year after year. It continues to be a top-of-mind concern for CEOs and CIOs alike.

Gardner: Perhaps we're at this point in time where IT has become so essential to so many aspects of how businesses operate -- the ability of making IT dynamic and responsive, of having redundancy and failover and many of the mission critical aspects that we expect of perhaps certain transactional systems -- we're now able to extend almost anything we do with IT, if it's being supported to a virtualized environment.

Bennett: Well, it's actually being supported through any environment, and it's why we at HP have such a strong focus on business technology. There are very few modern enterprises, whether they're private or public entities, that really could address their mission and business goals without IT.

It is just a completely fundamental fabric of the business today. And, having that environment be responsive, protected, reliable, and delivering quality of service are key attributes of that environment.

This is why we see, next-generation data centers and adaptive infrastructure from HP as being key to that, and it's why we speak about the idea of data center transformation. If that's the IT environment you want, including virtualization, how do you get there from wherever you are at?

Gardner: I suppose it's also important to point out that we're not just talking about virtualization, but we're also talking about mixtures, where there are going to be plenty of physical infrastructure and technology in place, but increasingly virtualized instances here and there. I suppose it's managing these together that is the most important discussion at this point in time.

Bennett: It certainly is one of the more topical points right now. What we see is that customers start to deploy virtualization more broadly, and, as they want to run more and more of their applications in virtualized environments, two challenges arise.

One of them is want of diversity. Customers are accustomed to diversity of the infrastructure, but now we have diversity with the virtualization base. The virtual machines that they're using, the number of suppliers involved in it, and diversity brings complexity, and complexity brings increased risk usually.

One aspect of that diversity is controlling management. You have different virtual machines, each with their own management tools and paradigms. How do you manage from an applications, quality of service, or service-level agreement point of view, across physical and virtual resources and infrastructure that are being used to deliver those services to the business? And, how do you deal with managing physical infrastructure from different manufacturers, and virtual resources from different manufacturers.

Another complication that comes up from a control and management point of view, as customers strive to use virtualization more pervasively in the data center, is that you have to deal with the skill sets of the people you have in the IT organization, as well as the resources available to you to help implement these projects.

One of the virtues of looking at virtualization more comprehensively is that you're actually able to free up resources to focus more on business services and business priorities and less on management and maintenance.

If you look at virtualization more strategically, you say it's not just the servers, but it's my storage and network environment around them. It's my management tools and processes. It's how I do everything together.

When I look at it comprehensively, I not only have a very clean set of controls and procedures in place for running and managing the data center, but now I have the opportunity to start making significant shifts in resources, away from management and maintenance and into business priorities and growth.

Gardner: So we are faced with a potential tipping point, but I suppose that also brings about a new level of risk, because you're moving from a tactical implementation into a variety of implementations, at the application, the infrastructure, and the server levels. Increasingly we're seeing interest in desktop virtualization, but we're also seeing a mixture of suppliers and technologies, and we're also seeing this in the context of other initiatives, with the goal being transformation.

It seems that if you don't do this all properly with some sort of a framework, or at least a conscious approach of managing this from beginning to end in a lifecycle mentality, there could be some serious pitfalls. You could actually stumble and subvert those benefits that you're looking to enjoy.

Bennett: Yes, we see both pitfalls, i.e., problems that arise from not taking a comprehensive approach, and we see missed opportunities, which is probably the bigger loss for an organization. They could see what the potential of virtualization was, but they weren't able to realize it, because their implementation path didn't take into account everything they had to in order to be successful.

This is where we introduce the idea of rethinking virtualization, and we describe it as rethinking virtualization in business terms. It means looking at maximizing your business impact first by taking a business view of virtualization. Then, it maximizes the IT impact by taking a comprehensive view of virtualization in the data center. Then, it maximizes the value to the organization by leveraging virtualization for client implementations, where it makes sense.

But, it's always driven from a business perspective -- what is the benefit to the business, both quantitative and qualitative -- and then drilling down. It's like unpeeling an onion, if I can borrow the analogy from the "Shrek" movie. You go from, "Okay, I have this business service. This business service is delivered through virtual and physical resources, which means I need management in control and governance of both physical and virtual resources."

And then, underneath that I want to be able to go from insight and control, into management and execution. I want to be able to drill down from the business processes and the business service management and automation tools into the infrastructure management, which in turn drills down into the infrastructure itself.

Is the infrastructure designed to be run and operated in a virtualized environment? Is it designed to be managed from an energy control point of view for example? Is it designed to be able to move virtual resources from one physical server to another, without requiring an army of people?

So, part of the onus is on HP in this case to make sure that we're integrating and implementing support for virtualization into all of the components in the data center, so that it works and we can take advantage of it. But, it's up to the customer also to take this business and data center view of virtualization and look at it from an integration point of view.

If you do virtualization as point projects, what we've seen is that you end up with management tools and processes that are outside of the domain of the historical investments you've made, whether it's an IT service management in Information Technology Infrastructure Library (ITIL), or in business service management.

We see virtual environments that are disconnected from the insight and controls and governance and policy procedures put in for IT. This means that if something happens at a business-services level, you don't quite know how to go about fixing it, because you can't locate it. That's why you really want to take this integrated view from a business-service's point of view, from an infrastructure and infrastructure management point of view, and also in terms of your client architectures.

Gardner: Now, as we are rethinking infrastructure, and in the context of virtualization, we also are looking for these business outcomes. Are we at the point yet where the business leaders are saying, "We need virtualization?" Have they connected the dots yet, or do they just know what they want from business outcomes and really don't care whether this virtualization gets there or not?

Bennett: From a business leader's point of view, they don't care about virtualization. Whether it's a CEO, a line of business manager, even a CFO their focus is on, "What are the business priorities? What is our strategy for this business or this organization? Are we going to be trying to grow the business organically, grow it through acquisitions, are we going to be driving a lot of product or service innovation? I need an organization that is going to be responsive to rolling those out."

And, of course, there is always the pressures to reduce cost and reduce risk that apply throughout the business, including to IT. They will not tell you that virtualization is what you have to do if you're in IT.

IT wants to deliver these kinds of benefits, to be able to do things quickly, to be able to dynamically put resources where they're needed, mitigate the risks in the data center environment, whether the risk is related to power and cooling, to the capacity of individual server and its ability to support a particular application, or the risk associated with people and processes that can cause downtime.

Those are IT projects, and for IT, virtualization is a fascinating technology, which allows them to address multiple sets of data center issues and provide the benefits that the business is looking for. It's revolutionary in that sense. It's pretty cool.

Gardner: This is not another "silver bullet," is it? We're really talking about something that's fundamental and that is transformative.

Bennett: Oh, absolutely. We believe that virtualization is a very important attribute of an NGDC. It's been an instrumental part of our adaptive infrastructure, which defines our view of an NGDC for a quite a while, and we see virtualization projects as core to successful transformational initiatives as well.

Gardner: Nowadays, and actually for several years, incremental improvements in IT don't get the funding or the attention. We really need some dramatic improvements in order to get the investment and the move through the inertia. Even on the tactical level, what sort of benefits are some organizations that you're familiar with enjoying and getting returns on from their virtualization activities?

Bennett: It really depends on whether you're looking at it from a business point of view or from an IT point of view.

Gardner: Let's look at it both ways.

Bennett: From an IT point of view, it's clear that they can decrease capital costs, and they can decrease operating expenditure (OPEX) costs associated with depreciation of assets by getting much better utilization of the assets they have. They can either get rid of excess equipment or, as they do modernization projects, they can acquire less infrastructure to run the environment, when they have it effectively virtualized.

When they blend it with integrated management, they can manage the physical and virtual resources together and build an IT environment that really supports the dynamics of virtualization.

They can lower the cost of IT operations implicitly by reducing the complexity of it and explicitly by having very standardized and simple procedures covering virtual and physical resources, which in conjunction with the other cost savings, frees up people to work on other projects and activities. Those all also contribute to reduce costs for the business, although they are secondary effects in many cases.

We see customers being able to improve the quality of service. They're able to virtually eliminate unplanned downtime, especially where it's associated with the base hardware or with the operating environments themselves. They're able to reduce unplanned downtime, because if you have an incident, you are not stuck to a particular server and trying to get it back up and running. You can restart the image on another device, on another virtual machine, restore those services, and then you have the time to deal with the diagnosis and repair at your convenience. It's a much saner environment for IT.

Gardner: Do you have any examples of companies that have moved through this sufficiently that they can look back and determine a return on investment (ROI) or total cost of ownership (TCO) benefit, and what sort of metrics are we seeing in those cases?

Bennett: Certainly, we are looking to do ROI types of benefits. I must confess I don't have any that are explicitly quantified, but we do have customers able to articulate some of the tangible and intangible benefits. One good example is Mitel Corporation, which went through a project of infrastructure modernization, but especially virtualization, in order to address the business needs. They had to both reduce costs and be more responsive to the business.

They were able to drive about $300,000 annually out of their IT budget. That's a significant amount, because they are organized by individual business units there. I love the quote from the datacenter manager with regard to the relationship with the business, "We can now just say, yes."

So it addresses that flexibility and agility type of question. If you get engaged in larger transformational projects, where virtualization is the key element, we have Alcatel-Lucent, which is expecting to reduce their IT operational cost by 25 percent from virtualization and other transformational projects.

In the case of HP IT, we actually have reduced our operational costs by 50 percent, and virtualization is very much a key factor in being able to do that. It can't take full credit, of course, because it was part of a larger set of transformational projects. But, it was absolutely critical to both lowering costs, improving quality of service, improving business continuity, and especially helping the organization to be much more flexible and agile to meeting changing needs.

Gardner: And, as you pointed out earlier, we are able to shift the ratio from ongoing maintenance and support costs into the ability for innovation, new systems, new approaches, investments, and productivity.

Bennett: Absolutely. We see a large number of customers spending less than 30 percent of their IT budget on business priorities, and growth initiatives, and 70 percent or more on management and maintenance. With virtualization and with these broader transformational initiative, you can really flip the ratio around. HP has gone to, I think, 80-20, and I know that that's an area that Alcatel-Lucent has also focused on changing substantively.

Gardner: When you say 80-20, you mean 80 percent for new initiatives?

Bennett: Yes, 80 percent for new initiatives in business priorities, and 20 percent on management and maintenance.

Gardner: That is significant.

Bennett: Yeah.

Gardner: Well, obviously HP has been rethinking virtualization. Of course, it has been rethinking infrastructure as well for some time, given its NGDC activities and some of the things that it has done internally in terms of reducing the number of data centers, and reducing the number of applications. More than that, HP has new go-to-market initiatives in its Sept. 2 announcements.

Can you run through some important aspects of these announcements, and tell us which ones will help people understand the rethinking of virtualization, the strategic approach to virtualization, and also the business outcomes that they should be enjoying from virtualization?

Bennett: Certainly. The first thing that I would like to highlight is that all of the products and services that we are announcing reflect the fact that we are not just encouraging customers to rethink virtualization, but that we at HP have as well. In particular, we realize that it's critically important that the products and hardware, software, and services that we provide need to embrace the virtual and the physical world together.

The customers are going to be able to implement this successfully. They need the expertise. They need the products that will actually let them do it, and that's a lot of what this set of announcements in September is about.

It starts with a new HP ProLiant BL495c virtualization blade, which is really designed and optimized for the virtualization environment. What we have seen impacting the ability of servers to effectively increase the number of virtual machines they can support or support growth of virtual machines is not so much CPU power as it is memory, network bandwidth, and connectivity.

So, we have doubled the memory capacity of the environment, and we have increased the number of network connections that are possible on a single blade, and that will provide much more headroom for these kind of customer's environments at the infrastructure level.

At the business service management level, what we are introducing is a number of enhancements to the HP software portfolio for business service management and automation. The tools that we provide in what is today the industry's leading portfolio for business service management and automation work with both physical resources for insight and control and management and governance purposes, and also with virtual resources, supporting applications and services being delivered through virtual machines provided by VMware, Citrix, or Microsoft.

This is the first wave of announcements from HP software, basically building in integrated and comprehensive support for the virtual environment, as well as the physical environment. That's complemented by new services capabilities. We recognized that not everyone wants to have custom service projects, or expertise helping them with virtualization.

We have some new services that are much more tactically and specifically oriented. They very clearly articulate what the outcomes of the project are, what the time frames are, and also what the costs project are.

We're augmenting our capabilities. I think we are the leading platform provider for all of the key virtualization vendors out there. We are also the leading training vendor for virtualization and we are announcing new offerings in both of those portfolios -- for support and for education services around these virtual environments and virtual capabilities.

Integrated support is really key. When customers experience difficulties in their data centers with a business service or application running in the environment, they don't want finger pointing across vendors. Since we are able to support the virtual machine software, as well as our operating environments, including Microsoft, and of course, the HP servers underneath them, we can provide an integrated approach to dealing with corrective issues and get them fixed on the customer's behalf.

On the desktop side, we have had a portfolio of virtual desktop infrastructure (VDI) services in place already for VMware. We are announcing a new set of capabilities there for Citrix XenDesktop, both for products and for services for client virtualization. Just as important, the work we are doing in those offerings also lays the foundation for supporting Microsoft's Hyper-V when that becomes available in the marketplace as well.

In addition to those capabilities, we have a new storage offering. If you look at the architecture of the data center, you clearly need to move away from direct-attached storage, and move to network shared storage.

We have a new product that integrates our enterprise virtual array, which is a leading self optimizing storage solution for virtualized environments, with PolyServe NAS, which augments the virtualized environment with a clustered file system, making it easy for customers to move to a network attached or a shared storage model, as they make virtualization a more foundational technology in the data center.

Then, in addition to the investments in the data center environment itself, we are announcing a new family of thin clients, some new blade workstations, which articulates the point of that, when it comes to client virtualization, it's really key to have a portfolio of desktop choices, so that customers can get the right solution on the right desktop.

In many cases. it might be thin clients, but in other cases, it might be blade PCs or workstations, depending on the end user's needs. We support all of those, and we support them in different kind of environments.

We also recognize that even if thin clients meet most of the functional needs, people sometimes still want to have either a strong multimedia or 3D performance on some of these desktops. We're announcing a new remote-graphic software offering, which will allow customers to provide a rich multimedia or 3D experience, even to a client environment not equipped with that hardware.

This is the first wave, if you will, of announcements that we are making. It builds on some announcements we made last March, especially with Insight Dynamics VSE for infrastructure management, as well as the blades announcements with an Integrated Lights-Out (ILO) capabilities that we announced a year or so ago. So, we're continuing to build out this portfolio to make this real for customers, and provide the foundation for them to really exploit virtualization for their business benefits.

Gardner: You mentioned VDI, and for those folks who might not be too familiar with desktop virtualization, what we are talking about is bringing back onto the servers the whole presentation of the entire desktop, not just an application or two, but the entire experience.

Therefore, every time a user starts up a client device, they are actually getting a fresh new instance of the operating system, which means it could be updated, it could be patched, it could be serviced entirely without the impacting the client device. There are a number of other benefits to desktop virtualization. Is there anything I've missed in terms of those people who are just getting their feet wet around desktop virtualization?

Bennett: Well, the real driver for desktop virtualization initiatives that we see are organizational concerns around management and security of the client environment. You articulated that what they get is a nice, clean desktop environment whenever they start up the PC. What you didn't say was that it's not uncommon for end users to visit sites they shouldn't have, or open mail they shouldn't have, and get their environment infected by spyware, malware, viruses or anything else.

Client virtualization solutions can really give you a strong handle on management and security, and reducing the cost of both, while increasing the control of both. Also, in environments where customers have a lot of knowledge workers, one goal for corporate risk protection is the protection of end-user data that's on the desktop. In a client virtualization environment, you are able to do much better control of protecting end user data. And/or by the way, if the end users move around, either to different offices or different locations, they still have access to their data no matter where they connect from.

Gardner: So, when we look at virtualization in this larger context, we're seeing that the applications can be virtualized. It's bringing everything back into a server and datacenter infrastructure, but that has a lot of benefits in terms of control, manageability, doing things on a productive level of utilization and continuity.

It's almost going back to the future. Are we, in a sense, enjoying the best of the era 30 or 40 years ago around mainframes and control, with the best of the latest iterations of IT around flexibility, applications and services, Internet, and browser activities? Am I overstating it by saying we get the best of the older and the newer aspects of IT, now that we are doing this contextually?

Bennett: I'm glad that you stated this as combining the best of both worlds. While the world we had 30-40 years ago with mainframes, and indeed with mini computers, was still one of the centralized control of environments that were not necessarily responsive to changing needs of the business, or individual departmental of business unit needs.

That clearly is seen as a great attribute of the modern data center and modern IT environment, but it was an environment that was able to really control, manage, and secure that environment in all the areas that that managed. So, yes, we're combining the two, having the agility and flexibility that people want, having the control and discipline that people want, and also providing access to the innovation that's taking place in the outside world.

We bring them the best of all these worlds, but if a customer is going to realize this, they are not going to get those benefits just by doing server virtualization projects.

Gardner: So, we've seen how virtualization does have an economic benefit. It can bring control, security, and manageability back into a managed approach, a professional approach, for the IT people. At the same time, it's providing some of these business outcomes -- agility, flexibility and responsiveness -- that are so important now in a global economy, and in a fast moving marketplace. Of course, as you mentioned, this is a wave of announcements on Sept. 2, but there are much more to come in a not to distant future.

Bennett: Oh, yes. You will see us continuing to do enhancements and innovation in the infrastructure, server storage, networking, and the input-output fabrics that link them all together. You will see us continuing to innovate and drive more capability and value to the people, whether it's in the support or education side, or in the project and strategy side. You will see us continuing to invest in enhancements in the software portfolio to really provide a comprehensive view of everything going on in the data center.

We continue to be a leading innovator on the client side, both in the devices that sit on the desktop themselves -- whether they are standalone or client virtualization -- and with the software and tools that make client virtualization work. This is just really the first wave of what are the pretty serious investment area for HP.

Gardner: And, clearly has the opportunity to accommodate a lot of the needs of IT, but still give them the opportunity to do that almost important and impossible task, which is to do more for less.

Bennett: We all have that task, and the challenge is how you crack that nut. When we talked about data center transformation last spring, we introduced the concept of “Spend to Save, to Spend to Grow.” The key is finding a way to bootstrap yourself into this, and that's why we look at these things not from a fork lift perspective, because nobody is going to do that frankly, but rather what are the kind of projects you can undertake, and then link the projects together over time for transformational purposes, and also realize benefits from them. So, it becomes self-funding after a while.

An example that I like to use for that is that consolidation is a best practice in data centers today. It's a way of life, but if you really want to significantly change the outcome of some consolidation, which can be substantial, it's worthwhile investing in a virtualization initiative, because when you do that you can consolidate to even less infrastructure.

But before you invest in virtualization, or after you have done it, you might look at investing in an applications modernization project, because the more applications that can be virtualized, the more you can virtualize, the more you consolidate.

So you get savings from the individual projects, but you're kind of multiplying the results together overtime, and that's when it gets really interesting for a customer.

Gardner: So, we have these overlaps, these interdependencies that make it complex, and it needs to be thought through in a total contextual framework, but, as you say, the end result is true transformation.

Bennett: Right, and the easiest way to think it through is from a business perspective. If you look at it from the bottom up, there are so many interconnections and possible paths forward that it's easy to get lost in the weeds. And, if you start popping down, you'd say, "What are the business services I am providing? What are the applications I am running for the business? What are the characteristics that we need to have in place for these, from a business perspective?"

Now, what does that mean in terms of what I do in IT and what I do in the data center? It doesn't make sense to virtualize it or not. If not, carve it aside, manage it on its own. If it does, what am I going to do to effectively both implement virtualization, and manage it from a business perspective? There's a much, much smaller pool of applications business services being provided, than there are of servers and storage devices.

Gardner: Well great, I think we will have to leave it there. We have been talking about rethinking virtualization and putting it in the context of business outcomes, as well as IT transformation. We have been discussing this also in the context of a number of new initiatives and announcements that HP has made, and we have been joined by John Bennett. He is the worldwide director of data center transformation solution, and the HP TSG lead for virtualization. Thank you so much, John, it was very interesting and edifying.

Bennett: Thank you very much, Dana, for this opportunity. We think there is so much promise in virtualization, and we think by rethinking it in business terms, one can maximize the potential for your own organization.

Gardner: Great. This is Dana Gardner, principal analyst at Interarbor Solutions. You have been listening to a BriefingsDirect podcast. Thanks and come back next time.

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Transcript of BriefingsDirect podcast with Hewlett-Packard's John Bennett on virtualization and its role in the enterprise. Copyright Interarbor Solutions, LLC, 2005-2008. All rights reserved.