T-Mobile Ramps Up Quality-Based Business Rewards from Applications Testing Improvements

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas during the week of June 15, 2009.

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

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas. We’re here in the week of June 15, 2009 to explore the major enterprise software and solutions trends and innovations that are making news across the global HP ecology of customers, partners and developers.

I'm Dana Gardner, principal analyst at Interarbor Solutions, and I'll be your host throughout this special series of HP Sponsored Software Universe live discussions.

This customer interview is with another HP Software and Solutions Excellence Award winner, T-Mobile USA. Please join me in welcoming Michael Cooper, director of enterprise quality management at T-Mobile. Welcome back, Michael.

Michael Cooper: Good afternoon, Dana.

Gardner: When you're serving over 33 million mobile customers, you have a lot of apps that are or would be things that those customers need. They become pretty mission critical. You also have a lot of internal apps. Your enterprise resource maintenance applications also, of course, are classified as mission critical.

In order to get apps, customized apps, and new apps out the door in good shape, so that you don’t have downtime, the testing and quality assurance process is pretty important. Tell us a little bit about how you wanted to improve that process and what were the problems that you needed to address?

Cooper: You’re absolutely right. The problem that we needed to address was that testing was expensive. It took a lot of time, and, because we were doing it manually, the tests were not always consistent and repeatable. What we wanted to get to was an automated framework and we decided to focus on the business process that was important to our customers.

Gardner: We often hear that people, process, and product are what all come together to make these things repeatable, more efficient, and effective. Of course, being more efficient these days is top of mind. Tell me little bit more about the test methodologies. When you looked for solutions, what were your requirements or criteria?

Cooper: We were looking for something that was easy to use and that was an industry standard. We were looking for something that would give us good traceability. And, we were looking for something that would allow us to automate and be reusable. So we chose the Business Process Testing (BPT) framework.

Gardner: Tell me more about how that works?

Automating business processes

Cooper: We thought about what our real business processes are -- for example, ordering a phone, activating a phone, sending out bills. We organized components that describe these business processes. We extended those by automating them and used them for our regression testing primarily.

Gardner: So, in order to accomplish that, what actual products did you put in place?

Cooper: The actual products we have put in place were BPT, both for manual and automated testing, quality center and it’s all the modules of quality center. We extended that to leverage those scripts for monitoring with Business Availability Center (BAC). In some cases where we had service-orientated architecture (SOA), we actually used Service Tester, and for our performance testing we used Performance Center and LoadRunner.

Gardner: What were some of the results? Did you have any metrics of success that stick out in your mind as worthy of mentioning?

Cooper: The success metrics were really around time savings.

I would focus on defect prevention rather than defect detection. I would automate your test for reusability and consistency. And, I would like to say that HP has been a great partner in this journey.

We saved about 50 percent of each regression cycle each month. We cut the testing time in half. The second thing, and this is probably the most important one, we reduced the post-production defects by 75 percent. The benefit of that is that it reduced our cost of fixing those plus our operations cost.

Gardner: And that also translates into a lot of more satisfied customers, less churn, and that’s the name of the game, right?

Cooper: Exactly.

Gardner: What advice would you offer to others who are also looking to move from manual and siloed, or at least inconsistent approaches, to app testing and who are looking for a more holistic complete, repeatable methodologically consistent approach?

Cooper: I would focus on defect prevention rather than defect detection. I would automate your test for reusability and consistency. And, I would like to say that HP has been a great partner in this journey.

Gardner: You mentioned SOA. One of the tenets of that is repeatability and reuse. Did you find that using scripts across this more consistent environment saved you money, because those scripts could be used again and again and perhaps across multiple application-development activities?

Cooper: You’re absolutely right. Not only did we use them with each release, it allowed us to use it for monitoring as well.

Gardner: Great. We've been talking about moving to more efficient development test, and therefore, better post-production quality applications. We've been discussing that with the winner at the Awards of Excellence competition here, the HP Software and Solutions Awards, and the winner is T-Mobile, USA. Thanks very much. We've been joined by Michael Cooper, director of enterprise quality management. Thanks, Michael.

Cooper: Thank you, Dana.

Gardner: Thanks for joining us for this special BriefingsDirect podcast, coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas.

I'm Dana Gardner, principal analyst at Interarbor Solutions, your host for this series of HP-sponsored Software Universe Live Discussions. Thanks for listening and come back next time.

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

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas during the week of June 15, 2009. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

In 'Everything as a Service' Era, Quality of Services and Processes Grows Paramount, Says HP's Purohit

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009.

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

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas. We’re here in the week of June 15, 2009 to explore the major enterprise software and solutions trends and innovations that are making news across the global HP ecology of customers, partners and developers.

I'm Dana Gardner, principal analyst at Interarbor Solutions, and I'll be your host throughout this special series of HP Sponsored Software Universe live discussions.

Please now join me in welcoming Robin Purohit, vice president of software products for HP Software and Solutions. Welcome to the show.

Robin Purohit: Thanks, Dana.

Gardner: We’ve heard so much about the external forces that are buffeting the IT department. With the economy, of course, and now with cloud computing, folks are examining a fluid sourcing option future for themselves. This seems to be forcing change. We’re looking at how applications and services are developed, tested, and then deployed. Do you think we’re at a major inflection point in IT?

Purohit: I think there are multiple inflection points, and flexible outsourcing is definitely one of those. Just like the last downturn, severe restrictions on IT budgets force you to rethink things.

One of those things is, what are you really good at, and do you have the skills to do it? Where can you best leverage others outside, whether it’s for a particular service you want them to run for you or for help on doing a certain project for you? How do you make sure that you can do your job really well, and still support the needs of the business while you go and use those partners?

We believe flexible outsourcing is going to really take off, just like it did back in 2001, but this time you’ll have a variety of ways. We can procure those services over the wire on a rateable basis from whatever you want to call them -- cloud providers, software-as-a-service (SaaS) providers, whatever. IT's job will be to make sure all that stuff works inside the business process and services they’re responsible for.

Gardner: We’ve heard this concept of "everything as a service." When we start moving across boundaries and looking at infrastructure, data, and applications, perhaps being separated at some level, a loosely coupled world if you will, the quality of these services goes from "nice to have" to "must have." How do you think the mentality needs to shift in terms of this quality assurance aspect?

Quality is not an option

Purohit: Quality is no longer going to be an option. That’s for sure. I think most customers have started to get that, and they use our quality assurance solutions today to make sure that the production environment is much more rigorous. Do quality better upfront. It's much cheaper to maintain the well-functioning operating environment.

If you think of it as marketplace of services that you're doing internally with maybe many outsource providers, making sure every one of those folks is doing their job well and that it comes together some way, means that you have to have quality in everything you do, quality in everything your partners do, and quality in the end process. Things like service-enabled testing, rather than service-oriented architecture (SOA) is going to become a critical mainstream attribute of quality assurance.

Gardner: What is the role of governance? We’ve heard that word bandied around quite a bit. There is IT governance. There is SOA governance. Perhaps we're going to start to see cloud governance. What’s its role?

Purohit: The role is essentially making sure things work the way you want them to, that you can trust people, or you can put informal service level agreements (SLAs). But, there is nothing like measurement, and what IT governance or cloud governance is going to be about is to make sure that you have a clear view of what your expectations are on both sides.

Then, you have an automatic way of measuring it and tracking against it, so you can course correct or make a decision to either bring it back internally or go to another cloud provider. That’s going to be the great thing about the cloud paradigm -- you’ll have a choice of moving from one outsource provider to another.

Gardner: It may be a cliché, but we hear about "people, process, and products," and the need for all three to be addressed. Looking at the people and the process aspect of that,

As you put in governance, you bring in outside parties -- maybe you’re doing things like cloud capabilities -- you're going to get resistance. You’ve got to train your team to how to embrace those things in the right way.

IT departments, if they’re going to be able to make some of these adjustments we’ve been talking about, perhaps themselves need to adjust. What are we bringing to the table, in order to facilitate a change in how to do business as an IT organization?

Purohit: First of all, I absolutely agree that the most important things to get right are the organizational dynamics. As you put in governance, you bring in outside parties -- maybe you’re doing things like cloud capabilities -- you're going to get resistance. You’ve got to train your team to how to embrace those things in the right way.

What we’re trying to do at HP is step up and bring advisory services to the table across everything that we do to help people think about how they should approach this in their organization, and where they can leverage potentially industry-best practices on the process side, to accelerate the ability for them to get the value out of some of these new initiatives that they are partaking in.

Gardner: Well, people and process have to adjust, and we’re going to apparently bring some tools to allow them to get greater visibility into how they operate -- cost-benefit analysis types of benefits. I also want to plumb a little bit into the products.

At HP, you have quite a wide portfolio. There is test and quality assurance (QA), application lifecycle management, governance as we’ve mentioned, traditional IT management, configuration management databases (CMDBs), and associated tools, project and portfolio management (PPM), asset manager, SOA management, and now IT financial management. Can you help me understand how there is a unifying concept, the glue that ties these together?

Running the business of IT

Purohit: We think that what’s been missing in IT is just thinking about of the way that they construct the systems to run the business. For the last 20 years, IT organizations have been building enterprise resource planning (ERP) systems and business intelligence (BI) systems that help you run the business. Now, wouldn’t it be great if there were a suite of software to run the business of IT?

This is what we call Business Technology Optimization (BTO). It’s all about allowing the CEO and their staffs to plan and strategize, construct and deliver, and operate services for the business in a co-ordinated fashion, and link all the decisions to business needs and checkpoints. They make sure that what they do is actually what the business wanted them to do, and, by the way, that they are spending the right money on the right business priorities. We call that the service life cycle.

Gardner: In addition to our process, people and products, there’s the environment. There's a marketplace. It seems to me that HP is at a certain advantageous point. It has a lot of partners, but, as we move towards fluid sourcing, as we become an "everything as a service" world -- certainly not overnight, but perhaps over time -- the way that these ecologies develop becomes important.

In your keynote address, you mentioned a number of partners -- Accenture, Capgemini, SAP, TIBCO, VMware. How does this work, with what you’ve just described, that HP brings to the table from products. How does that relate to a partner ecology?

Purohit: Okay. Well, the first thing is that our partners in the industry are expecting is for us to lead. What we’ve been working on and reinforcing this last year is that we have a blueprint for how to go do this "ERP for IT" concept -- or BTO.

That’s a good thing for the customer, and the vendors like it because it puts them in a bigger context in terms of what we’re all trying to accomplish to the customers, so we look coherent in someway.

We’ve been bringing our products together to fulfill that, and we’ve been trying to articulate to the industry that this is how IT has to change.

What we’ve been doing is saying, "Well, most customer environments have a plethora of different vendors and consultants that are helping them. So, anytime we can help bring one of those consultants or those vendors into this environment, the customer can get to that vision faster." That’s a good thing for the customer, and the vendors like it because it puts them in a bigger context in terms of what we’re all trying to accomplish to the customers, so we look coherent in some way.

There are things that we're doing with Accenture, for example, in helping on the strategy planning side, whether it’s for IT financial management or data-center transformation. We're doing things with VMware to provide the enabling glue for this datacenter of the future, where things are going to be very dynamically moving around to provide the best quality of service at the best cost.

Gardner: Another slide that you presented, which caught my attention, projects a progression that IT is now perhaps accelerating along. It starts with IT financial management. Some news that you’ve made here at the conference is application modernization, which is, I suppose, bringing more platforms, applications, and data into an environment where they can be used, consumed, and propelled forward as services.

Then, there's next-generation data center, cutting the cost, making that more economical and with higher utilization. Then, there's a closed-loop incident and problem management so that app dev can deploy a continuum that's compressed and improved. Lastly, cloud computing. What would come next on this progression?

The unified concept

Purohit: What’s next is making all of that work in that unified concept we were talking about before. We found in talking to the customers that every one of those things that you just mentioned, and that we articulated, is perfectly in line with where they’re trying to go. So we feel pretty good. We’re on the same page as our customers.

We know that they’re trying to do all of that really well and really fast, because they think it all will lead to significant and sustainable cost transformations, and change how they run the business of IT. But, they want one plan. They don’t want seven plans. If there’s one thing they’re asking us to do more, faster, better, and with all of those ecosystem providers is to show them how they can get from their current state to that ideal future state, and do it in a coherent way.

Gardner: You’ve laid all of this out here at the conference. Several thousand people had a chance to chew it over for a few days. What’s been the response? What have you heard?

Purohit: There are a couple of things that we’re really excited about that. We've just seemed to have hit right to the heart of where our customers are trying to go.

Certainly, the IT financial management announcement was a huge hit. Everybody is under a tremendous cost visibility pressure right now. Everybody is gearing up for the FY10 budgeting cycle already, and they think it’s going to be another brutal one. Being able to come to the table with well-informed, accurate financial information, so they can go fight for what they know is right for the business, is just perfect timing.

The other big theme is automation, automation, automation, automation. Basically, everybody wants to talk about it. They know that’s the way they

When we talk about things like requirements, we talk about the requirements that business people have and what they expect of the application, not the functional requirements.

are going to take cost out really quickly.

The last thing, over half the people here at the user conference are application developers, testers, and architects. So, there's a lot of discussion on Agile development, and how they can work with us to accelerate the way they can get these new Agile processes in place, but doing it in a way that they have a great result, and not just move faster.

Gardner: I suppose it’s important if we have a class of developer -- a class of tester and architect, as you mentioned -- that they act in concert in some way.

Purohit: That’s right, and that’s where our focus has always been -- to get those three constituents working together in the center of excellence concepts. Now, it's increasingly around the lifecycle of the application itself, from design to development to delivery, and most importantly, looking at application life cycle linked to the needs of the business.

When we talk about things like requirements, we talk about the requirements that business people have and what they expect of the application, not the functional requirements. That way, you're going to make sure that all of your energy is focused on the right thing, and to get to the end of the project is actually a success. You don’t have to restart, which is not a good thing, especially right now when budgets are so tight. You can’t afford to be wasting money.

Gardner: No margin for error, right?

Purohit: No margin for error anymore.

Gardner: Well, great. Thanks very much. We've been discussing some of the announcements and the conceptual framework that they fall into here at Software Universe. We’ve been joined by Robin Purohit, vice president of software products for HP Software and Solutions. Thanks so much.

Purohit: Thank you, Dana.

Gardner: Thanks for joining us for this special BriefingsDirect podcast, coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas.

I'm Dana Gardner, principal analyst at Interarbor Solutions, your host for this series of HP-sponsored Software Universe Live Discussions. Thanks for listening and come back next time.

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

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

SaaS Delivery of IT Lifecycle and Quality Management Functions Evolves Toward an IT Service-Delivery Solutions Approach

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009.

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

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas. We’re here in the week of June 15, 2009 to explore the major enterprise software and solutions trends and innovations that are making news across the global HP ecology of customers, partners and developers.

I'm Dana Gardner, principal analyst at Interarbor Solutions, and I'll be your host throughout this special series of HP Sponsored Software Universe live discussions.

Please join me in welcoming two executives from Hewlett-Packard's Software and Solutions group. We’re here with Scott Kupor, vice president and general manager of software-as-a-service (SaaS). We’re also here with Anand Eswaran, vice president of professional services. Welcome.

Scott Kupor: Thank you, Dana.

Anand Eswaran: Glad to be here, Dana.

Gardner: We’ve heard a lot here at the conference about various new sourcing options, looking to the future and thinking about how to deliver applications in a different way over time. This whole SaaS phenomenon, if you will, over the past several years has had a lot of people thinking about this for business applications.

But, Scott, in your group, there’s been quite a heritage of using SaaS for delivery of infrastructure and productivity in the development and cycle for application creation in IT departments. Tell us a little bit about where SaaS has been, and perhaps we can get a better sense of where it’s going to go.

Kupor: That's a great point. When people think about SaaS, Salesforce.com is obviously what comes to mind, a really traditional application. At HP for the last nine years, we've been selling IT management applications as a service delivery option. If you think about things like testing, performance management, or project and portfolio management (PPM), for example, those are traditional IT applications that we’ve been selling with this similar delivery model.

Gardner: Now that we can get a better sense that there is interest, and now that cost efficiencies have become top of mind for many organizations, where do you suppose this SaaS model can go next?

Kupor: It’s interesting. What we’ve been hearing from customers today at the conference are two key things. Number one, the cost benefits that initially drove them to SaaS are ever present and incredibly more important in this financial environment. The benefits are really coming to fruition. The second is that we’re starting to see a migration of SaaS from what was traditionally testing services toward other more complex and more customizable IT management applications.

The prime example of that is that we’re hearing a lot of interest from customers around IT service management (ITSM), service desk applications, and service management applications. These are things that have traditionally been the domain of inside-the-firewall deployments. Customers are now getting comfortable with the SaaS model so much so that they’re looking at those applications as well for deployment in a SaaS environment.

Gardner: Of course, when we free up these functional sets as services, that gives us more flexibility in how they’re consumed and delivered. Anand, I wonder if you could help us explain how moving from a SaaS deployment helps professional services, organizations, and folks create a better solution approach to some of the problems that IT departments are facing.

A conscious shift

Eswaran: Absolutely, Dana. That’s been the consistent focus and feedback from all the customers over the past 12 months. We’ve made a very conscious shift from what was inherently deployment of products. The approach right now is transformed into what business outcomes can we achieve for the customer, which is something which we would have been unable to do some time back.

We have changed focus now from deploying a single product set to achieving outcomes like reduction of outages by 40 percent, increasing quality, getting service-level agreements (SLAs) to a certain point, and guaranteeing that level of service. That’s been hugely helpful.

The second thing that has been interesting is the huge focus on intellectual property and best practices that we bring to the table right now. This accelerates time-to-market. That was one of the feedbacks we heard last year at the conference. Over the past 12 months, we put a services R&D organization in place. This has massively changed how intellectual property best practices accelerates time to market for the customers, and we're getting very good feedback this year.

The last thing, which is the end game, is that this all gets us to the point of what customers refer to as "killing the game," getting to a point of being able to offer outcome-based pricing and guaranteeing that outcome, as opposed to the traditional consulting model of billing rates and hours.

Gardner: This strikes me as a little counterintuitive. You think of SaaS and you think of a simple delivery of a functional set.

I don’t think people should believe that moving towards a SaaS model necessarily means that they get a lesser degree of service or that they can’t still leverage their own process, their own IT, or their own systems to create meaningful differentiation for their business.

Professional services would be something you’d do for setting up and deploying, crafting, and requirements ahead of a methodological approach. Scott, help me understand, from your perspective, how SaaS and professional services create a whole greater than a sum of the parts?

Kupor: SaaS ultimately is really a deployment option for customers. They’ve always had the option of in-house deployment. SaaS now gives them the option to deploy that application potentially in a third-party data-center environment. It doesn’t obviate the need for the solutions focus, though, that professional services ultimately can bring.

Remember, all these are complex IT management applications, they have third-party integrations. They have custom code that customers are building on top of it. Those are all areas of domains of expertise for the services organization. Through the work that the two of us are doing together, we can deliver a cost-effective delivery option for customers, but without having to sacrifice the complexity, integration, and customization opportunities that they demand for these applications.

Gardner: Then, looking at this as well from a cost perspective, many organizations have gone to SaaS for business applications, because they don’t sense that those applications differentiate them per se, when it comes to a Salesforce automation or human resources.

You’re not going to change your market position by having a better HR department. You might look to outsource. So, is there a same effect within the IT department? Some of these aspects, perhaps PPM, is something that isn’t going to differentiate that IT department. They might look for someone to do a “better, faster, cheaper.”

Kupor: Particularly in this financial environment, “better, faster, cheaper” is still the predominant thing that customers are looking at. I don’t know if it’s a mis-perception or how best to describe it, but I don’t think people should believe that moving towards a SaaS model necessarily means that they get a lesser degree of service or that they can’t still leverage their own process, their own IT, or their own systems to create meaningful differentiation for their business.

It’s really all about just making sure that those people have the best ability to deliver the application expertise with least amount of cost involved. That’s really the sourcing option people are moving towards.

Gardner: Anand, is there something more that you wanted to add to this perception about the intersection of customization and solutions with a SaaS delivery model?

Customers care about outcomes

Eswaran: I'd go back to what I started with, which is that the customers care about the business outcomes they need to create for themselves. As Scott talked about, SaaS is a very viable delivery option right now. When we talk about capital expenditures (CapEx) versus operating expenses (OpEx) and how you shift expenses, it allows customers to have flexibility around that. But, eventually, customers are looking to solve a business problem. They’re looking to create a defined business outcome, where all of this trends forward, it becomes a service for the customer.

All of what we do at the back end, whether it’s how we leverage SaaS, what products we use, what software we use, what consulting and professional services we use, all of that is going to be transparent to the customer. What they care about is a service, which we will deliver to the customer. SaaS enables us to get to that service, get to that time-to-market much faster.

Gardner: Help me understand where we’ll start to see more SaaS delivery in the context of an IT department?

Kupor: What we’re seeing, and we’ve heard this a lot from our customers today, is that they’re actually interested in looking at how do I, as an IT department, deploy my own applications in a third party cloud environment. You hear a lot of people talking about infrastructure on demand or computing power on demand.

People are looking toward these third-party products as a way to basically take an application they’ve built in-house and deploy them externally in, perhaps, an Amazon environment or a Microsoft environment. Where the interesting opportunity is for us, as a

That’s really what IT’s job is -- to help deploy business applications and govern the integrity, security, the authenticity, and the performance of those applications.

management vendor, is that customers will still need the same level of performance, availability, security, and data integrity, associated with applications that live in a cloud environment as they have come to expect for applications that live inside their corporate firewall.

We’ve been talking to customers a lot about something called Cloud Assure, which is the first service offering that HP has brought to market to help customers solve those management problems for applications they choose to deploy in a cloud-based environment.

Gardner: This almost sounds like cloud consumption and governance as a service. Is that fair?

Kupor: You’re right. At the end of the day, this is about governance. That’s really what IT’s job is -- to help deploy business applications and govern the integrity, security, the authenticity, and the performance of those applications.

If you go back to where we started this discussion, SaaS, cloud, and all these fancy words, really are different types of deployment models for customers. Whether you deploy it in-house, or whether you deploy it in a third-party cloud environment, you still care about that common theme of governance, security, and all the other things that go along with that.

Gardner: Let’s hear a bit about how to get started. If you’re in an IT department, you like some of this, you want to say to your higher-ups, "I’ve got some evidence of why this will work for us," how would you get started?

Robust education services

Eswaran: There are a couple of things. In addition to all the deployment mechanisms we have in our portfolio, we also have a very robust education services arm. One of the things we’re doing is making sure that education services are available to enable customers on not just the products we have and the solutions we can create, but also the different options they have from a delivery perspective.

We also know that travel budgets and travel freezes are a critical component of why customers are not able to send enough people to get educated. We have also created certain leading-edge portfolios within education services. These enable us to deliver instructor-led training, on a virtual basis, to simulate the exact same interaction that customers need to experience.

So, education services and everything we’re doing about it is a very viable option to help them get enabled on all the different delivery models in addition to solution-based and product-based enablement.

Gardner: How about this notion of professional services over time becoming simply a way of picking and choosing among a variety of different services that could be composed, if you will, into a solution. Do you think that’s where we’re headed?

Eswaran: Absolutely, Dana. We come back to the central theme, which you hear and which we firmly believe in. Everything is eventually going to get transformed into a service for the customer, so that they can actually focus on the core business they are in. When you have things transformed into a service, everything we do to offer that service should be transparent to the customer.

It becomes a services-led engagement, but that’s where we clearly differentiate "services" from "service," the singular, which is the eventual outcome the customer needs to create for themselves. That’s why we really partner well between SaaS and Professional Services. We believe that we are on a path of convergence to eventually get to offering business value and a service to a customer.

Gardner: Scott, how do you see this path of convergence shaping up?

Kupor: Yeah, I really agree with everything that Anand said. At the end of the day, we want to figure out for customers, look, what’s the best way to get the outcome you want?

People have used this term “everything-as-a-service.” It’s a common nomenclature these days, but really does describe where we think the industry is going.

In some cases, that may be a deployment option. It might be engaging a professional services to develop a solution, but, at the end of the day, all these things come together. People have used this term “everything-as-a-service.” It’s a common nomenclature these days, but really does describe where we think the industry is going.

Gardner: Well, great, thanks. We’ve gotten a deeper understanding of where SaaS is headed for IT departments. I want to thank our guests. We’ve been talking with Scott Kupor, vice president and general manager of SaaS at HP Software and Solutions Group. We’ve also been joined by Anand Eswaran, vice president of professional services at HP. Thank you both.

Eswaran: Pleasure was mine, Dana.

Kupor: Thanks, Dana.

Gardner: Thanks for joining us for this special BriefingsDirect podcast, coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas.

I'm Dana Gardner, principal analyst at Interarbor Solutions, your host for this series of HP sponsored Software Universe Live Discussions. Thanks for listening, and come back next time.

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

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

HP's Andy Isherwood on Running IT Like a Business With an Eye to Transformation of IT's Role

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009.

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

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas. We’re here in the week of June 15, 2009 to explore the major enterprise software and solutions trends and innovations that are making news across the global HP ecology of customers, partners and developers.

I'm Dana Gardner, principal analyst at Interarbor Solutions, and I'll be your host throughout this special series of HP Sponsored Software Universe live discussions.

Join me now in welcoming Andy Isherwood, Vice President and General Manager of HP Software and Solutions. Welcome to BriefingsDirect.

Andy Isherwood: Hello, and welcome to you.

Gardner: Clearly a part of doing more for less, which has been, unfortunately, a theme that most people are grappling with these days, has involved the need to run IT more like a business to get more insight into what’s going on from a business requirements and financial expectations perspective.

Tell me a little bit, if you could, about what you’re seeing in terms of how organizations are both dealing with this lack of funds but the need to change the way in which they can deliver the results back to the business?

Isherwood: I've been in IT for quite a long time, and we’ve been talking long and hard about IT being at the core of business, and IT being in the business, but the reality probably hasn’t changed significantly. IT people still operate in their own space, with their own jargon, and don’t really link that well to the business.

Obviously, it’s a huge generalization, but the reality is that, in many organizations, IT is this separate silo, quite often not reporting to the CEO, and therefore quite disconnected from the business drivers.

As we’re seeing more and more CIOs reporting to the CEO and being involved in board meetings, the reality is now changing. People now understand what the core business drivers are. People are being coached heavily, because they might not have come from an IT background. They might have come from the business. They're better able to link the business drivers of the organization to what IT can actually deliver, but not in IT terms. In terms what is the value to the business and how does it address those business drivers.

The other question that's linked is what’s happening with budgets, and, therefore, what are the priorities. Clearly, we are in very uncertain times. A year ago, we moved into a recessionary period. Budgets for ‘09 were set, and they were typically significantly less.

All the conversations I've had with CIOs are that the capital expenditure is typically being reduced by anything between 0 and 40 percent, and operating expenditures being decreased by up to 10 percent. It's less, but still pretty significant.

So you’ve ended up with a significantly smaller budget to do stuff, which can cause big problems for organizations. They have a certain amount of infrastructure in day-to-day activities to maintain. This means that they have to spend all their budget on existing projects and keeping the lights on, rather than any innovation. If you can’t innovate, then you can’t deliver value back to the business and you become just an IT function delivering the core value.

How to innovate

IT budgets, if you’re not very careful, are driving the organization to just do the core IT functions, rather than link back into the business and add real value in a period, in which it’s probably the most important thing to do. So, how do we innovate and how do we use the budget more effectively than we do today to allow us not just to keep the lights on, but to do this huge amount of innovation?

If we don’t do it now, we won’t be able to do it in the future, because, as demand picks up, it’s just going to be "all hands to the pump" to be able to deliver just the demand that picks up, as we come out of the recession.

It will be interesting, as we go into the new budgeting period for FY '10. Are there enough green shoots of recovery to allow people to have confidence to increase budgets and invest or are we going to have another year of kind of tight budgets? People are very much at the crossroads of needing to innovate and do things differently, but are constrained by budgets, which is a difficult balance.

Gardner: We also see, as they’re grappling with these organizational transformational issues, similar opportunities in the form of a variety of sourcing options. We’re hearing awful lot about the interest in cloud, questions about cloud computing. People are opening up to this notion of the need to examine what we do internally, and find some aspects of that that are better served more economically and just as well outside the organization.

We’re dealing with more than, just services software solutions. We’re now looking at sourcing. That, to me, is a decision beyond just technology.

We can go sell solutions. We can deliver stuff through the cloud and via software-as-a-service (SaaS) offerings. We’ve got the complete breadth of offerings to allow people to make those choices.

It’s about transforming how your business works. How are the folks you’re talking to here managing this new dimension of sourcing options?

Isherwood: As you say, people are being given a number of different options. Now that can be good and bad. People have a lot of choice, but they quite often find it difficult to make a decision on the best choice. Other people feel that the choice gives them a lot more scope to do things differently, to manage budgets in a different way, and do things more effectively.

Whether it’s insourced, outsourced, a partner activity, whether it's on premise or off premise, all of these options give people choices. From an HP standpoint, we have the ability to give people the choice. Our recent acquisition of EDS clearly adds the last pillar of choice, given that we have now an outsourcing business, which is significant.

We can go sell solutions. We can deliver stuff through the cloud and via software-as-a-service (SaaS) offerings. We’ve got the complete breadth of offerings to allow people to make those choices.

We’re finding that people want advice around the choices. It’s all well and good to have all these choices equivalent to modes of transport, but people need to be given direction, which we’re trying to do. What I'm hearing from customers is that they want advice on what should they insource, what should they outsource, what should they put in the cloud, and what should they have as a SaaS offering.

That’s a really important job and an important role for someone like an HP, which actually doesn’t have a bias, because we've got all the options. If we were only a cloud computing or any outsourcing company, we’d be giving customers one option. Our role as a consultant to not only evaluate what is best for those organizations, but what is good for them financially, is a very important part of the role HP can play and should play.

The good news

Sourcing is important. The good news is we’ve got all the options, and the good news is we now have consulting capability to advise people -- not tell people, but advise people -- on what those options are and what we think is the right strategy for them as an organization.

The pricing pressures and the budget pressures that we talked about earlier may force people to outsource or put stuff into the cloud, which is going to be a different driver in a year’s time, when we’re through recessionary period. The financial situation at the moment is driving a more intense look at those sourcing options and what it does from a financial point of view for that particular organization.

SaaS is a great offering. We’ve been in that business for nine years and we have 700 customers. So, we know that business well. We know that in times, in which capital expenditure is being restrained, they can move to a more operating expense oriented budget, but still be able to innovate, which is a pretty compelling proposition. As we move through, and capital expenditure is freed up, that might change, but at least people have the option.

Gardner: Part and parcel with these options is to assess risk and to understand not only what you might be able to do, but what penalties might be involved. This, to me, is a function of governance -- being able to forecast, implement, and then to adjust and amend a

What they need to do is manage the service that’s being delivered by people outside of their organization. It becomes more of a management of the service, than management of the infrastructure that develops or delivers the service.

few policies and automate that across organizations or across boundaries. So, when we look at this process going forward through the lens of governance, how do you see that unfolding and what does HP bring to the table on that?

Isherwood: The management of all of these sourcing options is a key consideration. Take the example of an organization putting things onto a public cloud. They’re still going to have the same requirements from a governance and management standpoint, but it might be a lot harder than having it in-house.

Management requirements on governance around what data is out there, what performance is like, and what scalability is like, are all considerations and discussions that we help with. It can make the whole world a lot more complex for CIOs. Therefore, the management capability that we have around all of those options becomes even more important.

It’s less important for them to understand and worry about that in-house infrastructure. What they need to do is manage the service that’s being delivered by people outside of their organization. It becomes more of a management of the service, than management of the infrastructure that develops or delivers the service. So, our role is about, governance, management, and control of the services that are delivered to an organization, rather than the product, power, or the storage that’s delivered to a company.

Gardner: Great. We’ve been discussing some of the larger issues that are top of mind here at Software Universe. We’ve been joined by Andy Isherwood, vice president and general manager of HP Software and Solutions. Thank you so much.

Isherwood: Thank you very much.

Gardner: Thanks for joining us for this special BriefingsDirect podcast, coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas.

I'm Dana Gardner, principal analyst at Interarbor Solutions, your host for this series of HP-sponsored Software Universe Live Discussions. Thanks for listening, and come back next time.

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

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

EDS's David Gee on Spectrum of Cloud and Outsourcing Options Unfolding Before IT Architects

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009.

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

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas. We’re here in the week of June 15, 2009 to explore the major enterprise software and solutions trends and innovations that are making news across the global HP ecology of customers, partners and developers.

I'm Dana Gardner, principal analyst at Interarbor Solutions, and I'll be your host throughout this special series of HP Sponsored Software Universe live discussions.

Please welcome now David Gee, vice president of marketing at EDS, an HP company. Welcome back to BriefingsDirect, David.

David Gee: It’s great to be here. Thanks for having us.

Gardner: I'd like to hear what you’re gathering from the many, I suppose you could call them, hardcore IT folks here at Software Universe. With a recession, this isn’t necessarily a fringe IT crowd. This is a core crowd. From EDS’s perspective, sourcing decisions and visions about cloud computing are dancing in folks’ heads. What are you hearing from the crowd?

Gee: In general, we’re different things. One is absolute recognition of the challenging economic headwind and the impact that’s having on overall IT spend. With that as the backdrop, the decision points come down to a couple of things.

One is how you free up more of your IT spend and spend less on maintenance to drive a transformation or innovation. One of the fastest ways to do that is to flip the knob between capital expenditure and operating expenditure and to look at a third party or an outsourcer for some help and guidance. Maybe they can take off your hands some of the less core activities or, in some cases, core activities, so that they can free up cash flow and drive an innovation agenda. We're still in a harsh economic climate, and that’s proved to be a pretty compelling message, particularly this flip between capital expenditure and operating expenditure.

Gardner: Do you think that, at this point in this cycle, we're looking at IT through a strictly financial lens? Are people not necessarily seeing the forest or are they more involved with the trees at this point?

Gee: There are a couple of interesting sound bytes that you hear. "Flat" is the new "up," in terms of what the opportunities are. We're also seeing a recognition that 6 months is the new 12. How do you get to a faster return on investment (ROI)? Don’t show up with a project that has a 12-, 24-, or 36-month timeframe. What is non-core that maybe an outsourcer can help you do?

For example, one of the things we hear people at Software Universe talking about is performance and quality testing, and do you need all the resources in-house to be able to do that?

Or, if you have peak load, why don’t you use a third party to help you do performance, quality, and security testing and, from a software standpoint, maybe even do that in the cloud. You can either use a third party or have it delivered as a service to you inside of your infrastructure.

Gardner: Maybe we should do a little descriptive analysis in terms of terms. We hear, of course, about outsourcing. It’s been around for many years. Now, we’re hearing a lot more about cloud. Maybe the means to accommodating a cloud in terms of provisioning and the underlying infrastructure and what you might get from a outsourcer might be different, but aren’t they essentially the same thing?

Understanding cloud

Gee: Cloud means a lot of things to different people. Right now, the objective, particularly for large enterprises, is to experiment to understand what the implications are.

Architecturally, it’s very different, particularly as enterprises want to offer services to their end customers. Equally, how does an enterprise deal with or adopt private cloud infrastructure to be able to offer Web services in an architecturally sound, distributed, and scalable way?

First, we can help in a number of different ways from a consulting standpoint, in terms of how to architect around those things. Second, we can build them for our clients and we do that already today in terms of private cloud infrastructure. And, third is to provide maybe just core infrastructure to third parties, and they then build their clouds to offer to the marketplace overall.

There is a spectrum of different things. The inhibitors to cloud are still pretty significant, as they get more and more core to a business process. Email is a pretty good example. There's a lot of new talk in the industry around using third parties as cloud providers for email.

If it’s a mission-critical application and there are regulatory requirements, intellectual property requirements and it’s a core mission critical app,

My experience thus far has been that clients are looking for leadership, some direction, and flexibility.

do you want -- and does it make sense -- to have a third party host that for you as a cloud application? Or, do you go to somebody like EDS, which manages hundreds of thousands of instances of Exchange, for example, on behalf of their clients?

There’s pretty good delineation in my mind that the more core an application is to the functioning of a business today, particularly where the data lives, is a hinge factor on the decision to adopt a cloud service.

Gardner: That probably means that a lot of thinking about cloud makes your job in marketing EDS little easier. Folks are now thinking about the options in that spectrum in front of them, but they might then fall back to wanting to be mission critical and enterprise caliber.

Gee: Yes, and this comes through a sourcing discussion. We have the flexibility and the domain expertise, where we deliver multiple services to multiple clients and multiple business processes to multiple clients in the public sector and financial services and the telecommunication space across the board.

My experience thus far has been that clients are looking for leadership, some direction, and flexibility. Certain things I absolutely want to control and retain within my own firewall. Certain things I'm going to want EDS to help me manage, host, drive down operational cost, and provide some level of innovation -- and to deliver those services as effectively private cloud services to my client base and ultimately to their customers as well.

Gardner: That sort of raises the question in my mind: is EDS a cloud provider?

Creating the model

Gee: No question. In my mind we’re a cloud provider. EDS created the outsourcing industry over 40 years ago. Think about everything that we do today in delivering services to our client base. If you then extend that, those services are effectively cloud-based services, depending on what your definition is. In my mind, we’re absolutely a cloud company.

We’re at the forefront of delivering that in multiple countries, across multiple industries and in some cases, highly mission-critical services for airlines and financial institutions. Do they have a consumer orientation to them? Probably not. In fact, you may not even realize that we're doing that behind the scenes for some of the most well-known brands on the planet.

Gardner: Given that we’re looking at this spectrum of possibilities, there are boundaries that are being crossed in ways that we probably wouldn’t have thought of too long ago. For some of the more conservative thinkers in IT departments, managing those boundaries, which is, I suppose, what you call governance, becomes paramount. EDS has, as you point out, cloud resources, values, and services and HP has governance. Tell me a little bit about how they come together to form something interesting.

Gee: We can actually do a number of different things collectively, now that EDS is part of HP. First and foremost, from an IT leadership standpoint, how do you prioritize what you’re going to do in a harsh economic climate? This would include project and portfolio management (PPM) and matching demand and supply, where demand is always going to be greater than supply of IT resources in this marketplace.

That can be a services led discussion. It could be a software led discussion. And, that capability can also be delivered as software as a service (SaaS) effectively in the cloud. The engagement model is around what you would want sourced in-house. Now, we have this enormous expanded capability to be able to deliver multiple different services in the workspace from a networking and an end-user management standpoint. As I said, service offerings are either number one or number two in every market. So, it’s a pretty interesting place to be right now.

Gardner: Of course, for the foreseeable future, many IT decisions will be viewed through the lens or in the context of the economic conditions and climate. When it comes to factoring a cost-benefit analysis between what you may traditionally have been doing on premises involved low utilization, quite a bit of labor, and manual processes to support those instances of applications and data.

If you wanted to compare that to this new spectrum of options -- outsourcing, cloud, SaaS -- you need to have a pretty good handle on what your true costs are internally. How does that bear on bringing about a rational and therefore lower risk decision process?

Gee: The first data point is about making rational decisions, actually understanding your IT costs. It’s not about the spreadsheet where

We can help you assess what those are upfront to help make an informed decision as to what services makes sense to be outsourced and what other services makes sense to remain inside of your own organization.

you’re putting out the IT budget. It’s "What is the cost of service delivery?" In fact, one of things I’m sure, your listeners have been hearing about this week from an announcement standpoint has been around this concept of IT financial management -- the matching of asset management inside of your organization to service delivery, so you understand the true cost and the profit and loss (P&L) of service delivery.

Once you get underneath that, how much can you automate? You want to do a labor-to-technology arbitrage in some cases. What processes can you automate? Do you want to do those yourself or would you want to go to the world leader in automation of certain IT processes and have them handled by EDS in this instance?

That's kind of a two-step process. We also have a lot of process and domain expertise about understanding the costs of IT delivery. We can help you assess what those are upfront to help make an informed decision as to what services makes sense to be outsourced and what other services makes sense to remain inside of your own organization.

Gardner: This decision process, I believe, will go over several years, perhaps 5 to 10 years, across various industries and requires a professional service approach. There are a lot of partners that you work with traditionally. You have your own internal professional services. How would you characterize the role of a professional services and methodological approach to this decision around the granular services decision?

Ecosystem of partners

Gee: There is a pretty rich ecosystem of partners. If you look at the overall outsourcing marketplace, once you take out the five or six largest players, 70 percent of the market is serviced by "other."

If you think about what the opportunities are for third parties who are working with their client base and their customer base to develop options, the main driver today is around cost reduction, or freeing up dollars for innovation. We have a strong relationship with a number of those partners. It can be global, but also region-by-region and, in many cases, country-by-country, where these make the most sense to go do.

There’s a world of opportunity out there. What we're seeing now, as a part of HP, is a pipeline or a funnel, an access to HP’s installed base. There was a limited overlap between EDS’s customer base and HP’s large customer base. We see that as opportunity for growth and we’ll expand our footprint. We’ll also expand our footprint built on the best intellectual property that’s out there in the market.

My hope would be that this would be built on many things that HP does today, but we’re also helping HP build better products as we scale certain things

Are you going to build an innovative set of capabilities that’s actually going to help your business grow and be aligned with a business objective? At the end of the day, that’s really the value add.

out and have mission critical examples of what’s going on. We'll help improve features and functionality, not just in the software part of our business, but in the hardware and the support services that align with us as well. So, it’s a very healthy connection point.

Gardner: Going back to the decision process for enterprises, where do you start? Do you have a sense of an application, a data set, a particular use case, or a business case? What would be the right low-hanging fruit for stepping into this cloud process?

Gee: There are a couple of different angles to that. One is, how do you deal with the peak load, when you simply don’t have the infrastructure in place or you don’t want to put the infrastructure in place?

QA testing is a pretty good low-hanging fruit, to use your terminology. New applications are coming online, and you’re doing a migration from one version of a large application to the next version of a large application, and the skills and resources aren’t in-house. You can go to a service provider like EDS, for example, to do that or you can have some of that capability delivered to you as SaaS. The two very interlinked.

Another one is to pick key business processes. Service management is another good example. Do I want to have that helpdesk capability and fault resolution in-house or do I go to a third party in the cloud that is dedicated in providing a high quality service at potentially a significantly lower cost with more value to the business?

Again, those dollars get freed up, and what are you going to do with them? Are you going to build an innovative set of capabilities that’s actually going to help your business grow and be aligned with a business objective? At the end of the day, that’s really the value add.

The bottom line

Gardner: Let’s go to a bottom-line question. With the renewed interest, or the building interest, in cloud and what I think would be renewed interest in outsourcing, can we safely say that in two, three, or five years the total cost of IT in large organizations will decrease significantly as a percent of revenue?

Gee: You’re already seeing that. I don’t think there’s any mystery that IT, as a percentage of revenue, will stagnate, as businesses grow. Actually, in dollar terms it might rise a little bit, but as a percentage of revenue, it’ll probably remain flat. If you look at the most recent quarter across the IT industry generically, what you’re seeing is that the PC and server markets have shrunk.

There's no question about it. They've shrunk in dollar terms, year-over-year. The services marketplace is flat or growing at a low single digit, and you’re seeing a shift of dollars or contraction of dollars on the hardware side.

What that will do is create a pent-up demand for a refresh cycle. Historically, that might have been three years, but it’ll go to four or five. It’s going to come, and then the question is do I refresh that infrastructure in-house or do I go with a cloud provider or a outsourcer, for want of a better word, to take that infrastructure on, do the refresh for me, and produce a set of services and a service level that I wouldn’t have been able to do internally.

There's going to be this transformation over the next two to three years and it’s being driven by a contraction in overall spend, but that’s going to have to be made up from a refresh standpoint. Your crystal ball is probably as good as mine, whether that’s a year out or two years out, but it will have to have happen that, at some point, your PC and your service are going to have be refreshed.

Gardner: Well, it certainly seems that there’s a significant amount of important decisions that will be coming to the IT decision makers, and I look forward to tracking that along with you. I want to thank our guest. We’ve been joined by David Gee, vice president of marketing at EDS, an HP company. Thanks so much.

Gee: Dana it was a pleasure to talk to you. Thanks so much.

Gardner: Thanks for joining us for this special BriefingsDirect podcast, coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas.

I'm Dana Gardner, principal analyst at Interarbor Solutions, your host for this series of HP sponsored Software Universe Live Discussions. Thanks for listening, and come back next time.

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

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

HP Software Marketing Head Anton Knolmar Delves into Creating New IT Economies of Performance

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod and Podcast.com. Sponsor: HP.

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas. We’re here in the week of June 15, 2009 to explore the major enterprise software and solutions trends and innovations that are making news across the global HP ecology of customers, partners and developers.

I'm Dana Gardner, principal analyst at Interarbor Solutions, and I'll be your host throughout this special series of HP Sponsored Software Universe live discussions.

Now, please join me for our latest discussion. We’re now joined by Anton Knolmar, vice president of marketing for HP Software and Solutions. Welcome to the show, Anton.

Anton Knolmar: Hi, Dana. Welcome.

Gardner: We’ve heard a lot here at Software Universe about IT departments and their overall businesses having to do more with less and doing additional productivity, but spending less money to do so. It sounds simple, but it's very complex. How do companies, particularly IT departments within companies approach that problem?

Knolmar: It’s the right question at the moment because, as you said, IT budgets are not going up at the moment. They have to invest their money in what they have at the moment. They have to prioritize the projects that they have.

We have the right solution, the portfolio around this, at the moment. They can get a good insight into what’s happening in their current environment and what they’re doing in terms of development, application modernization, and claims around the operational environment.

We provide them with all the data that they would need to make these decisions and to make the decisions about what’s right to take forward and what has the best business impact and business outcome for the projects they want to try to bring forward within their company.

Gardner: And what specifically are we hearing from attendees? What’s top of mind for these folks at this point in time?

Knolmar: We've just come out of an executive track. We had about 70 people gathered for the discussion. What is at the top of their minds is all about linking IT with the business. This is a story that we've been telling now for more than 10 or 15 years, and the storyline is not over.

They’re still trying to bridge the gap and talk business language, instead of IT language. One the other hand, they're trying as well to look at the emerging trends.

. . . a lot of these activities that were going on in the past -- utility computing, adaptive enterprise, eServices -- failed because they couldn’t be managed . . .

What the heck does this cloud means for them? How can you do cloud computing here? Does this bring added value to them? What’s the business outcome they can drive out of those activities?

That’s definitely on their radar screen, as we’re moving then a little bit away from the maintenance mode and investing into more innovative approach for the CFO to perceive the future and the next fiscal year, 2010.

Gardner: Another element of complexity is entering for folks as they plan for the future. You mentioned cloud computing. I suppose we could even simplify that in terms of multiple source options or more options for sourcing.

We’re dealing with software decisions, services decisions, "everything-as-a-service." We’re seeing solutions approaches and now we’ve got sourcing. So, basically, we have four S's. It’s a third dimension or a fourth dimension. Do you have any suggestions for folks as to how to begin to approach that sourcing issue in particular?

An important piece

Knolmar: For us, an important piece around sourcing and the offering that we have around the cloud is two-fold. As you mentioned, there are different acronyms out there, everything as a service, platform as a service (PaaS). We're offering software as a service (SaaS) and we’ve been offering this for quite a long time.

What companies are facing at the moment is that a lot of these activities that were going on in the past -- utility computing, Adaptive Enterprise, eServices -- failed because they couldn’t be managed, but it was out there on the Web, on the Internet.

Our offerings around the cloud at the moment are governance tools along with the cloud. You can really manage the cloud. You can really secure the cloud. And, you can get the right performance out of the cloud. That’s our offering at the moment to our customers. They can take the first step, getting this one right, and move into the cloud environment, instead of [just] looking at a different sourcing options.

These are very customized ways for a lot of customers if they want to move into private cloud, if they want to extend the private cloud, or they want to go to the public cloud. Whatever offering they take, we want to be equipped, on behalf of HP, to provide the flexibility in terms of sourcing to our customers, so that they have the choice. They have to believe that we are the right path to work with.

Gardner: Of course, as folks move into new decisions or outsourcing, to move into anything of that magnitude too soon involves risks. What is HP bringing to the table in order to reduce the risks, allow people to exploit these new efficiencies, but remain true to their mission-critical nature at the same time?

Knolmar: That’s exactly the point. You have to make the steps. Are those steps business-critical to where the customers are moving at the moment?

Our approach at this time is that we enable them to have the appropriate developing and testing tools in terms of quality, performance, and security.

Is this meeting the business needs and demands of their lines of business in their companies? It comes back to what we talked about briefly before, as well about prioritization. Does this have a business impact? What’s the revenue impact of driving a new approach forward?

Mitigation of risk will never go away. At the moment, everyone is talking about reduction of costs, but there is always a risk factor attached to it. Hopefully, the outcome will be that a lot of companies can talk about their revenue growth again, moving from 2009 into 2010.

We are ready to drive those three angles. How we can help customers drive revenue growth? How we can help them mitigate the risk? And, on the other side, how can we help them get their costs under control? These are the three angles will be on the table for quite some time, as well for next year. We are ready to have these conversations with our customers.

Gardner: Infrastructure as a service (IaaS) is really in its infancy. Companies are, in many cases, just becoming acquainted with some of these concepts. But, developers, in particular, have become quite enamored of cloud, using tools and PaaS, but that’s only one part of a lifecycle approach to applications, moving through test and quality assurance, and into full production. Do you have any insights as to where HP would fit into this notion and appeal for developers?

Finding appropriate tools

Knolmar: The developer community, as you said, has different concerns in terms of developing the applications and developing things for the cloud as well. Our approach at this time is that we enable them to have the appropriate developing and testing tools in terms of quality, performance, and security. These are essentially for those people who have to develop applications well for the cloud. Those are blocked in immediately, are ready to go out there, and can be managed across the lifecycle.

Gardner: In many cases, the expectation, at least among many fellow analysts and me, is that an initial major application for clouds will be for business intelligence (BI) and data mining. This is because of the size of the data sources and the need for availing massive performance capabilities, but perhaps not all at the same time. There is a need for elasticity, when you address data mining and business intelligence issues. This perhaps explains the need for a private cloud. What is your perspective from HP and what it can bring to the table for BI as a killer app for cloud computing?

Knolmar: BI, as you said, deals with the information explosion, what is going on at the moment. There was a little video during the opening at the main stage. BI, information overflow, and how to manage information are essential pieces. Getting the right information at the right place and making the appropriate decisions are still on top of the agenda for lot of our customers at the moment. It’s been the number one issue for quite some time, and I think it will be the number one issue for quite some time.

We have an offering in these four lines of business in HP Software & Solutions. One is, you gather around the BI piece.

Talking with customers, there's huge interest about how can we accelerate, how can we move faster, what are the different options, and how can be very cost effective at the end of the day.

What we are investigating at the moment is really about how can we bring those offerings as more of a direct offering to our customers in terms of purchasing and licensing? How can you bring those offering into kind of a cloud offering?

But, that still needs some further negotiations inside the company, as well, about development products. But that’s definitely an interesting angle. Talking with customers, there's huge interest about how can we accelerate, how can we move faster, what are the different options, and how can be very cost effective at the end of the day.

Gardner: Another big area of interest for clouds is the need to mitigate risk, as we pointed out earlier, but also to gain some sense of neutrality and openness, so that if one were to move assets from their IT department into a third party cloud, would they have portability? Would they be able to move it around or would they be in some new abstraction of lock in? They’re looking, I think, for certification and trust and some guarantee of flexibility. What role can HP play? Is there a need for a Swiss neutral approach in the cloud ecology?

Knolmar: That's interesting. I was driving through Switzerland, and they still keep the neutrality, so it’s very difficult to get across the border. That’s not the approach we want to take on behalf of HP. HP was always a very open company in terms of approaching new standards, getting new standards in house, and giving the customers the flexibility to give them the best choice about how they want to move forward here with a way.

So, I assume that we’ll be very open in terms of not being a closed environment. What we’re going to offer to all customers is keeping them alive and giving them the choices they want, as we are moving forward in the cloud environment.

Gardner: We’ve also seen trend-wise in the industry an interest in appliances and of optimizing hardware and software together. Not all companies have both hardware and software. For those that do, like HP, do you have any insight into whether an appliance model makes sense for a private cloud delivery mechanism?

Struggling with the cloud

Knolmar: I think it is going a little too detailed. People are still struggling to understand what the cloud can offer to them. Is it hardware? Is it software? Is it a combination appliance? What we are offering and what we want to offer more the moment is a kind of awareness workshop around the cloud, which means getting customers understanding what the cloud is, what it can provide to them, and what it's offering. Then, it will be a very customized approach from a customer-to-customer perspective.

Potentially, it’s a combination, getting into the appliance pieces, but also potentially only a SaaS model for customers for the foreseeable future. It comes back to a customer perspective, but we haven't drilled down into the appliances piece at the moment.

Gardner: All right. And the issue of governance is also important for cloud not spinning out of control, as some folks have experienced with virtualization, and not wanting to lose control vis-à-vis cloud deployments.

For the governance piece, many of us analysts have also recognized that having a background in services-oriented architecture (SOA) and moving towards service enablement on premises,

That’s where we're investing at the moment with our portfolio, helping and providing the customers in terms of cloud governance.

even well before a cloud engagement of any kind, makes good sense as a preparatory step. Is cloud another good reason to embark on SOA methodologies?

Knolmar: You mentioned a couple of different buzzwords. IT governance or governance is an important piece for companies at the moment. It will be even more important moving forward here, because you touch on cloud governance, it's an essential piece. Otherwise, these things will not survive in the market here. That’s where we're investing at the moment with our portfolio, helping and providing the customers in terms of cloud governance. Cloud Assure is one piece of it, helping them to get this going.

Underlying architectures, like moving SOA forward, has moved a little bit away from the top 10 priorities, as Gartner is saying. SOA has moved a little bit down the list at the moment here. It's not essential. It’s not important any longer on the list of the CIOs in terms of deploying a SOA.

It’s more about coming back to what we said before about what is the outcome and what I can get with my investments in these different architectures? Does it help me and enable me to try future investments? What are the new technologies or emerging business needs popping up here? Can I deploy them and can I implement them? Can I roll them out as well for the future?

Gardner: Well great. Thanks for taking time from a very busy conference. We’ve been talking with Anton Knolmar, vice president of marketing for HP Software & Solutions, thanks so much!

Knolmar: Thank you, Dana.

Thanks for joining us for this special BriefingsDirect podcast, coming to you on location from the Hewlett-Packard Software Universe 2009 Conference in Las Vegas.

I'm Dana Gardner, principal analyst at Interarbor Solutions, your host for this series of HP sponsored Software Universe Live Discussions. Thanks for listening, and come back next time.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod and Podcast.com. Sponsor: HP.

Transcript of a BriefingsDirect podcast recorded at the Hewlett-Packard Software Universe 2009 Conference in Las Vegas the week of June 15, 2009. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.