Why Effective IoT Adoption is a Team Sport

Transcript of a discussion on how the complexity and novel architectural demands of IoT require a rethinking of the edge of nearly any enterprise.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: HewlettPackard Enterprise.

Gardner

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of the Customer podcast series. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on digital transformation. Stay with us now to learn how agile businesses are fending off disruption -- in favor of innovation.

Our next case study highlights how Internet of things (IoT) adoption means more than just scaling-up networks. The complexity and novel architectural demands of IoT require a rethinking of the edge of nearly any enterprise. We'll now explore how implementing IoT strategies is not a one-size-fits-all endeavor -- nor can it be bought off the shelf. What’s more, those new to the computational hive and analytical edge attributes of IoT are discovering that it takes a team approach.

To explain how many disparate threads of an effective IoT fabric come together, we're joined by Tushar Halgali, Senior Manager in the Technology Strategy and Architecture Practice at Deloitte Consulting in San Francisco.

 Halgali

Tushar Halgali: Dana, thanks for having me.

Gardner: We're also here with Jeff Carlat, Senior Director of Technology Solutions at Hewlett Packard Enterprise (HPE) Strategic Alliances. Welcome, Jeff.

Jeff Carlat: Thanks. It’s nice to be here, Dana.

Gardner: What are some of the top trends making organizations recognize the importance of IoT? What’s making them examine the architectural implications?

Carlat: We're at the cusp of a very large movement of digitizing entire value chains. Organizations have more and more things connected to the Internet. Look at your Nest thermostats and the sensors that are on everything. The connectivity of that back to the data center to do analytics in real-time is critical for businesses to reach the next level of efficiencies -- and to maintain their competitiveness in the market.

Gardner: Tushar, this is a different type of network requirement set. We’re dealing with varied data types, speeds, and volumes in places that we haven't seen before. What are the obstacles that organizations face as they look at their current infrastructure and the need to adapt?

Halgali: One of the really interesting things we've seen is that traditionally organizations have been solving technology-related problems as all information technology (IT)-related problems. There was this whole concept of machine to machine (M2M) a while back. It connected machines to the Internet, but it was a very small segment.

Now, we're trying to get machines to connect to the Internet and have them communicate with each other. There are a lot of complexities involved. It's not just the IT pieces, but having the operational technology (OT) connect to the IT world, too. It creates a very complex ecosystem of components.

Gardner: Let’s parse out the differences between OT in the IT. How do you describe those? Why should we understand and appreciate how different they are?

Carlat

Carlat: When we think of OT, you think of long-standing companies out there, Bosch, National Instruments (NI), and many other companies that have been instrumenting sensors for operations, shop floors, oil and gas, and with every pump being sensed. The problem is that humans would have to interact a lot around those sensors, to remediate or to understand when something like a bearing on a pump has failed. [Learn more on OT and IoT.]

What's key here is that IT, those core data-center technologies that HPE is leading the market in, has the ability of run analytics and to provide intelligence and insights from all of that sensor data. When you can connect the OT devices with the IT -- whether in the data center or delivering that IT to the edge, which we call the Intelligent Edge -- you can actually do your insights, create your feedback, and provide corrective actions even before things fail, rather than waiting.

Gardner: That failed ball bearing on some device isn't just alerting the shop floor of a failure, it's additionally automating a process where the inventory is checked. If it’s not there, the supply chain is checked, the order is put in place, it’s delivered and ready to install before any kind of breakdown -- or did I oversimplify that?

End of downtime

Carlat: That’s a fair representation. We're working closely with a company called Flowserve. We’re building the telemetry within the pumps so that when a cavitation happens or a bearing is starting to wear out, it will predict the mean time for failure and alert them immediately. It's all truly connected. It will tell you when it’s going to fail. It provides the access to fix it ahead of time, or as part of a scheduled maintenance plan, rather than during downtime, because downtime in an oil production facility or any business can cost millions of dollars.

Gardner: Tushar, are there any other examples you can think of to illustrate the power and importance of OT and IT together?

How to Gain Business Insights
From the Intelligent IoT Edge

Halgali: If our readers ever get a chance to check out one of the keynote speakers [at HPEDiscover London 2016] on the Intelligent Edge, there's a good presentation by PTC ThingWorx software, which is an IoT platform and the HPE Edgeline servers in a manufacturing facility. You have conveyor belts that need certain improvements, they're constantly producing things, and they're part of the production facility. It’s all tied to the revenue of the organization, and the minute it shuts down, there are problems.

Maintenance needs to be done on those machines, but you don’t want to do it too soon because you're just spending money unnecessarily and it’s not efficient. You don’t want it too late, because then there's downtime. So, you want to find the equilibrium between the two.

IoT determines the right window for when that maintenance needs to be done. If there's a valve problem, and something goes down quickly, sensors track the data and we analyze the information. The minute that data goes off a certain baseline, it will tell you about this problem -- and then it will say that there’s the potential in the future for a major problem.

It will actually generate a work order, which then feeds from the OT systems into the IT systems, and it’s all automatic. Then, when mechanics come in to try to solve these problems, they can use augmented reality or virtual reality to look at the machine and then fix the problem.

It’s actually a closed-loop ecosystem that would not have happened in the M2M base. It’s the next layer of maturity or advancement that IoT brings up.

Gardner: We can measure, we can analyze, and we can communicate. That gives us a lot of power. We can move toward minimum viable operations, where we're not putting parts in place when they're not needed, but we’re not going down either.

It reminds me of what happened on the financial side of businesses a decade or two ago, where you wanted to have spend management. You couldn't do it until you knew where all your money was, where all the bills had to be paid, but then doing so, you could really manage things precisely. Those were back office apps, digital ledgers.

So, it’s a maturity coming to devices -- analog, digital, what have you, and it’s pretty exciting. What's the impact here financially, Jeff?

Carlat: Well, huge. Right now, IDC predicts IoT to represent about a $1.3 trillion opportunity by2020. It's a huge opportunity, not only for incremental revenue for businesses, but increased efficiencies, reducing cost, reducing downtime, reducing risk; so, a tremendous benefit. Companies need to strongly consider a movement for digitizing the value chains to remain competitive in the future.

Bigger and Better Data at the Edge

Gardner: Okay. We understand why it's important and we have a pretty good idea of what you need to do. Now, how do you get there? Is this big data at the edge? I heard a comment just the other day that there's no bigger data than edge data and IoT data. We're going to have to manage scales here that we haven’t seen before.

Carlat: It’s an excellent point. Jet engines that are being used today are generating 5 TB of data every time they land or take off. Imagine that for every plane, every engine that’s flying in the sky, every day, every year. The amount of data is huge. This brings me to the unique way that HPE is approaching this, and we truly believe we are leaders in the data center now and are leaders within IT.

We're taking that design, that implementation, that knowledge, and we're designing infrastructure, data center quality infrastructure, that’s put on the edge, ruggedized compute or analytics, and providing the ability to do that analysis, the machine learning, and doing it all locally, rather than sending all that data to the cloud for analytics. Imagine how expensive that would be.

That's one approach we're taking on within HPE. But, it’s not just about HPE tackling this. Customers are asking where to start. "This is overwhelming, this is complex. How do we do this?" We're coming together to do advisory services, talking our customers through this, hand-holding, building a journey for them to do that digitization according to their plans and without disrupting their current environment.

Gardner: Tushar, when you have a small data center at the edge, you're going to eke out some obvious efficiencies, but this portends unforeseen circumstances that could be very positive. What can you do when you have this level of analytics, and you take it to a macro level? You can begin to analyze things on an industry-level, and then have the opportunity to drill down and find new patterns, new associations, perhaps even new ways to design processes, factory floors, retail environments? What are we talking about in terms of the potential for the analytics when we capture and manage this larger amount of data?

Halgali: We've noted there are a lot of IoT use cases, and the value that generates so far has been around cost optimization, efficiencies, risk management, and those kinds of things. But by doing things on the edge, not only can you do all of those, you can start getting into the higher-value areas, such as revenue growth and innovation.

A classic example is remote monitoring. Think of yourself as a healthcare provider who would not be able to get into the business of managing people's health if they're all located remotely. If we have certain devices in homes through sensors and everything, you can start tracking their behaviors and their patterns. When they're taking medicine and those kinds of things, and have all the information created through profiles of those people. You have now distributed the power of taking care of all the constituents in your base, without having to have them physically be in a hospital.

Gardner: Those feedback loops are not just one way where you can analyze, but you can start to apply the results, the benefits of the analysis, right back into the edge.

Carlat: Health and life sciences are great examples of using IoT as a way of more efficiently managing the hospital beds. It costs a lot of money to have people sit in a hospital when they don't need to be there. To be able provide patient access remotely, to be able monitor them, to be able to intervene on an as-needed basis, drives much greater efficiencies.

We’ve talked a little bit about industrial IoT, we’ve talked a little bit about health and life sciences, but this extends into retail and smart stores, too. We're doing a lot with Home Depot to deliver the store of the future, bridging the digital with the brick-and-mortar across 2,200 stores in North America.

It also has to do with the experience around campus and branch networks. At Levi’s Stadium in Santa Clara, California, HPE built that out with indoor Global Positioning System (GPS) and built out a mobile app that allows indoor wayfinding. It allows the patrons visiting the game to have a totally new, immersive experience.

They found uploads and downloads of photos, and they found hotspots by mapping out in the stadium. The hotspots had a great unobstructed view of the field, so there were a lot of people there taking pictures. They installed a food stand nearby and they have increased revenues because of strategic placement based on this IoT data. Levi’s Stadium recognized $1 million in additional revenue in the first season and 10 times the growth in the number of contacts that they have in their repository now.

Gardner: So, it's safe to say that edge computing and intelligence is a gift that will keep giving, at levels organizations haven’t even conceived of yet.

Carlat: I believe it’s a necessity to stay competitive in the world of tomorrow.

How to Gain Business Insights
From the Intelligent IoT Edge

Gardner: If your competitor does this, and you don't, that’s going to be a big question mark for your customers to mull over.

While we are still on the subject of the edge technical capabilities, by being able to analyze and not just pass along data, it seems to me it's also a big help when it comes to compliance and security, which are big concerns.

Not only does security get mitigated by hardening or putting up a wall, probably the safest bet is to be able to analyze when something is breached or something is going wrong, and then to control or contain that. Tell me why the HPE Edgeline approach of analyzing data fast and on the edge can also be a big boost to security risk containment and other compliance issues.

Carlat: We do a lot around asset tracking. Typically, you need to send someone out there to remediate. By using Edgeline, using our sensor data, and using asset tagging, you can ensure that the right person can be identified as the service person physically at the pump to replace it, rather than just saying that they did it, writing on paper, and actually being off doing something else. You have security, you have the appropriate compliance levels with the right people fixing the right things in the right manner, and it's all traceable and trackable.

Halgali: When you begin using edge devices, as well as geolocation services, you have this ability to do fine-grained policy management and access control for not just the people, but also devices. The surface area for IoT is so huge there are many ad-hoc points into the network. By having a security layer, you can control that and edge devices certainly help with that.

A classic example would be if you have a camera in a certain place. The camera is taking constant feeds of things that are going on that are wrong or right; it’s constantly recording the data. But the algorithms that have been fed into the edge device allow it to capture things that are normal, so it can not only alert authorities at the right time, but also store feed only for that. Why store days and day’s worth of images, when you can pick only the ones that truly matter?

As Jeff said, it allows workplace restrictions and compliance, but also in an open area, it allows you to track events that are specific.

In other cases, let’s say the mining industry or the oil and gas industry, where you have workers that are going to be in very remote locations and it’s very hard to track each one of them. When you have the ability to track the assets over time, if things go wrong, then it’s easier to intervene and help out.

Carlat: Here is a great personal example. I went to my auto dealership and I pulled into the garage. Immediately, I was greeted at my door by name, “Hello Mr. Carlat. Are you in for your service?"

I thought, “How do you know I came in? Are you tracking me? How are you doing that?” It turns out, they have radio-frequency identification (RFID) tags. When you come in for service, they apply these tags. As soon as you pull in, they provide a personalized experience.

Also, it yields a net benefit of location tracking. They know exactly where my car is at all stages. If I moved to a rental car that they have there, my profile is automatically transferred over there. It starts their cycle time metrics, too, the traceability of how they're doing on remediating whatever my service level may be. It's a whole new experience. I'm now a lifetime-loyal customer of this auto dealer because of that personalization; it’s all coming from implementation of IoT.

Gardner: The implications are vast; whether it’s user experience, operational efficiency, risk reduction, or insights and analysis at different levels of an industry and even a company.

It's very impressive stuff, when you can measure everything and you can gather as much data as you want and then you can triage, and analyze that data and put the metadata out to the cloud; so much is possible.

We've established why this is of interest. Now, let’s think a little bit about how you get there for organizations that are thinking more about re-architecting their edge in order to avail themselves of some of these benefits. What is it about the HPE and Deloitte alliance that allows for a pathway to get on board and start doing things in a proper order to make this happen in the best fashion?

Transformation Journey, One Step at a Time

Halgali: Dana, anytime you do an IoT initiative, the key thing to realize that it should be part of a major digital transformation initiative. Like any other transformation story, there are the people, process, and the technology components of it. Jeff and I can talk about these three at a very high level when you begin talking about the process and the business model.
 
Deloitte has a huge practice in the strategy and the process space. What we're looking at is digital industrial value-chain transformation. Let’s look at something like a smart factory.
 
What’s the value chain for an organization that's making heavy machinery, end-to-end, all the way from R and D and planning, to procurement and development and shipment, and after-sale repairs, the entire value chain? What does that look like in the new IoT era? Then, decompose that into processes and use cases, and then identify which are the most high-value use cases, quantifying them, because that’s important.

Identifying the use cases that will deliver immediate tangible value in the near term provides the map of where to begin the IoT journey. If you can’t quantify concrete ROI, then what’s the point of investing? That addresses the reason of what IoT can do for the organization and why to leverage this capability. And then, it's about helping our clients build out the business cases, so that they can justify the investments needed from the shareholders and the board — and can start implementing.
 
At a very high level, what’s the transformation story? What's the impact on the business model for the organization? Once you have those strategy questions answered, then you get into the tactical aspects, which is how we execute on it.
 
From an execution standpoint, let’s look at enablement via technology. Once you have identified which use-cases to implement, you can utilize the pre-integrated, pre-configured IoT offerings that Deloitte and HPE have co-developed. These offerings address use cases such as asset monitoring and maintenance (in oil and gas, manufacturing, and smart cities), and intelligent spaces (in public venues such as malls, retail stores, and stadiums), and digital workplaces (in office buildings). One must also factor in organization, change and communication management as addressing cultural shifts as one of the most challenging aspects of an IoT-enabled digital transformation. Such a holistic approach helps our clients to think big, start small, and scale fast.

Gardner: Tushar just outlined a very nice on-ramp process. What about some places to go for information or calls for action? Where should people get started as they learn how to implement on the process that Tushar just described?

How to Gain Business Insights
From the Intelligent IoT Edge

Carlat: We're working as one with Deloitte to deliver these transformations. Customers with interest can come to either Deloitte or HPE. We at HPE have a strong group of technology services consultants who can step in and help in partnership with Deloitte as well.

So, come to either company. Any of our partner representatives can get all of this and our websites are loaded with information. We're here to help. We're here to hold the hand and lead our customers to digitize and achieve these promised efficiencies that can be garnered from digital value chains.

Gardner: So the buzzwords to track or to follow to get into your organizations are Internet of Things, Operational Technology, did I leave anything out?

Halgali: Digital Analytics, Edge Computing.

Gardner: I'm afraid we will have to leave it there. We've been exploring how IoT adoption means more than just scaling up networks. The complexity and novel architectural demands of IoT require a rethinking of the edge of nearly any enterprise.

And we’ve learned how to rationalize the many disparate parts to produce an effective IoT fabric through a team approach. So thanks to our guests Tushar Halgal, Senior Manager in the Technology Strategy and Architecture Practice at Deloitte Consulting, and Jeff Carlat, Senior Director of Technology Solutions at HPE Strategic Alliances.

And a big thank you to our audience as well for joining us for this BriefingsDirect Voice of the Customer digital transformation discussion. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing series of HPE-sponsored interviews. Thanks again for listening, and do please come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Transcript of a discussion on how the complexity and novel architectural demands of IoT require a rethinking of the edge of nearly any enterprise. Copyright Interarbor Solutions, LLC, 2005-2017. All rights reserved.

You may also be interested in:

• TasmaNet Ups its Cloud Game to Deliver a Regional Digital Services Provider Solution
• Logicalis chief technologist defines the new ideology of hybrid IT
• Converged IoT systems: Bringing the data center to the edge of everything
• IDOL-powered appliance delivers better decisions via comprehensive business information searches
• OCSL sets its sights on the Nirvana of hybrid IT—attaining the right mix of hybrid cloud for its clients
• Fast acquisition of diverse unstructured data sources makes IDOL API tools a star at LogitBot
• How lastminute.com uses machine learning to improve travel bookings user experience
• Veikkaus digitally transforms as it emerges as new combined Finnish national gaming company
• HPE takes aim at customer needs for speed and agility in age of IoT, hybrid everything
• WWT took an enterprise Tower of Babel and delivered comprehensive intelligent search
• Strategic view across more data delivers digital business boost for AmeriPride
• Swift and massive data classification advances score a win for better securing sensitive information

TasmaNet Ups its Cloud Game to Deliver a Regional Digital Services Provider Solution

Transcript of a discussion on how regional cloud services providers are assembling partner ecosystems to add more customization to cloud procurement. 

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise. 

Gardner

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of the Customer podcast series. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on digital business innovation and how it’s making an impact on people’s lives.  

Our next cloud-computing innovation and transformation discussion explores how regional cloud services providers are assembling partner ecosystems to add more customization to cloud procurement. 

We'll learn how integration of the latest cloud tools and methods help smooth out the difficult task of creating and maintaining cloud-infrastructure services contracts. The results are more flexible digital services that both save cloud consumers money and provide the proper service levels and performance characteristics for each unique  enterprise. 

Harris

Stay with us now as we hear from a Tasmanian digital services provider, TasmaNet, about their solution-level approach to cloud services attainment, especially from mid-market enterprises. To share how proper cloud procurement leads to new digital business innovations, we're joined by Joel Harris, Managing Director of TasmaNet in Hobart, Tasmania. Welcome, Joel.

Joel Harris: Good morning, Dana. I'm excited to be here. 

Gardner: Let’s start at a high level, looking at the trends that are driving how cloud services are affecting how procurement is going to be done in 2017. What has changed, in your opinion, in how enterprises are reacting to and leveraging the cloud services nowadays? 

Harris: We're seeing a real shift in markets, particularly with the small- and medium-sized businesses (SMBs) in their approach and adoption of cloud services. More and more, there is an acceptance that it's okay to buy products off the Internet. We see it  every day within personal cloud, iPhones, the Apple Store, and Google Play to buy movies. So, there is now the idea in the workplace that it's acceptable to procure business services online through cloud providers. 

Because of the success of personal cloud with companies such as Apple, there's a carry-over in that there is an assumed equivalent success in the commercial sense, and unfortunately, that can cause some problems. What we're seeing is a willingness to start procuring from public, and also some private cloud as well, which is really good. What we're finding, though, is a lack of awareness about what it means for businesses to buy from a cloud provider.

Gardner: What is it that the people might have wrong? What is it that they've not seen in terms of where the real basis for value comes when you create a proper cloud relationship? 

Solutions for
Hybrid and Private Cloud
IT Infrastructure

Harris: Look at the way personal cloud is procured, a simple click, a simple install, and you have the application. If you don’t like it, you can delete it. 

When you come into a commercial environment, it’s not that simple, although there can a perception that it is. When you're looking at your application, the glossy picture, it may talk about functionality, business improvement, future savings, and things like that. But when you come to the implementation of a cloud product or a cloud service into a business, the business needs to make sure that it has met its service levels, from internal business requirements or external business requirements, and from customers and markets. 

But you also need to make sure that it has also married up the skills of your workforce. Cloud services are really just a tool for a business to achieve an outcome. So, you're either arming someone in the workforce with the tool and skills to achieve an outcome or you're going to use a service from a third-party to achieve an outcome. 

Because we're still very early in the days of cloud being adopted by SMBs, the amount of work being put into the marrying up of the capabilities of a product, or the imagined capabilities of a product, for future benefits to internal business processes and systems is clearly not as mature as we would like. Certainly, if you look into the marketplace, the availability of partners and skills to help companies with this is also lacking at the moment. 

Cloud Costs

Then, comes the last part that we talked about, which is removing or changing the application. At the moment, a lot of SMBs are still using traditional procurement. Maybe they want a white car. Well, in cloud services there’s always the ability to change the color, but it does come at a cost. There’s traditionally a variation fee or similar charge.

SMBs are getting themselves in a bit of trouble when they say they would like a white car with four seats, and then, later on, find that they actually needed five seats and a utility. How do they go about changing that? 

The cost of change is something that sometimes gets forgotten in those scenarios. Our experience over the last two years is companies overlooking the cost of change when under a cloud-services contract. 

Gardner: I've also heard you say, Joel, that cloud isn’t for everyone, what do you mean by that? How would a company know whether cloud is the right fit for it or not?

Harris: Simply look for real, deep understanding of your business. Coming back to the ability to link up service levels, it's the ability to have a clear view into the future of what a company needs to achieve its outcomes. If you can’t answer those questions for your customer, or the customer can’t answer the questions for you as a cloud provider, then I would advise you to take a step back and really start a new process of understanding what it is the customer wants out of the cloud product. 

Change later on can cost, and small businesses don’t have an amount of money to go in there and continue funding a third party to change the implementation of what, in most cases, becomes a core piece of software in an organization.

Gardner: For the organizations that you work with that are exploring deeper relationships to private cloud, do you find that they're thinking of the future direction as well or thinking of the strategy that they’d like to go hybrid and ultimately perhaps more public cloud? Is that the common view for those that are ready for cloud now?

Harris: In the enterprise, yes. We're definitely seeing a huge push by organizations that understand the breakdown of applications between suitable for private cloud and suitable for public cloud. 

As you come down into the SMB market, that line blurs a little bit. We have some companies that wish to put everything in the cloud because it’s easy and that’s the advice they were given. Or, you have people who think they have everything in the cloud, but it’s really a systems integrator that has now taken their servers, put them in a data center, and is managing them as more of a hosted, managed solution. 

Unfortunately, what we are seeing is that a lot of companies don’t know the difference between moving into the cloud and having a systems integrator manage their hardware for them in a data center where they don’t see it.

There's definitely a large appetite for moving to the as-a-service model in companies that have a C-suite or some level of senior management with ownership of business process. So, if there is a Chief Information Officer (CIO) or a Chief Technology Officer (CTO) or some sort of very senior Information Technology (IT) person that has a business focus on the use of technology, we're seeing a very strong review of what the company does and why and how things should be moved to either hybrid or 100 percent in either direction.

Gardner: So, clearly the choices you make around cloud affect the choices you make as a business; there really is a transformational aspect to this. Therefore, the contract, that decision document of how you proceed with your cloud relationship, is not just an IT document; it’s really a business document. Tell us why getting the contract right is so important.

Harris: It’s very, very important to involve all the areas of a business when going into a cloud services contract.

Ecosystems of Scale

Gardner: And it’s no longer really one relationship. That is to say that a contract isn’t often just between one party and another. As we're finding out, this is an ecosystem, a team sport, if you will. How does the contract incorporate the need for an ecosystem and how does TasmaNet help solve that problem of relationship among multiple parties?

Harris: Traditionally, if we look at the procurement department of a company, the procurement department would draft a tender, negotiate a contract between the supplier and the company, and then services would begin to flow, or whatever product was purchased would be delivered. 

More and more, though, in the cloud services contract, the procurement department has little knowledge of the value of the information or the transaction that’s happening between the company and the supplier, and that can be quite dangerous. Even though cloud can be seen as a commodity item, the value of the services that come over the top is very much not a commodity item. It’s actually a high-value item that, in most cases, is something relevant to keeping the company operating.

What we found at TasmaNet was that a lot of the companies moving to cloud don’t have the tools to manage the contract. They're familiar with traditional procurement arrangements, but in managing a services contract or a cloud services contract, if we want to focus on what TasmaNet provides, you need to know a number of different aspects. 

We created an ecosystem and we said that we were going to create this ecosystem with all of the tools required for our customers. We put in a portal, so that the finance manager can look at the financial performance of the services. Does it meet budget expectations, is it behaving correctly, are we achieving the business outcomes for the dollars that we said it was going to cost?

Then, on the other side, we have a different portal that’s more for the technology administrator about ensuring that the system is performing within the service-level agreements (SLAs) that have been documented either between the company and the service provider or the IT department and the big internal business units. 

It’s important to understand there are probably going to be multiple service levels here, not only between the service provider and the customer, but also the customer and their internal customers. So, it’s important to make sure that they're managed all the way through. 

We provide a platform so that people can monitor end to end from the customers using, all the way through to the financial manager on the other side.

Gardner: We've seen the importance of the contract. We understand that this is a complex transaction that can involve multiple players. But I think there is also another shift when we move from a traditional IT environment to a cloud environment and then ultimately to a hybrid cloud environment, and that’s around skills. What are you seeing that might be some dissonance between what was the skill set before and what we can expect the new skill set for cloud computing success to be?

Sea Change

Harris: We are seeing a huge change, and sometimes this change is very difficult for the people involved. We see that with cloud services coming along, the nature of the tool is changing. A lot of people traditionally have been trained in a single skill set, such as storage or virtualization. Once you start to bring in cloud services, you're actually bundling a bunch of individual tools and infrastructure together to become one, and all of a sudden, that worker or that individual now has a tool that is made up of an ecosystem of tools. Therefore, their understanding of those different tools and how they report on it and the related elements change.

We see a change from people doing to controlling. We might see a lot of planning to try to avoid events, rather than responding to them. It really does change the ecosystem in your workforce, and it’s probably one of the biggest areas where we see risk arise when people are moving to a cloud-services contract.

Gardner: Is there something also in the realm of digital services, rather than just technology, that larger category of digital services, business-focused outcomes? Is that another thing that we need to take into consideration as organizations are thinking about the right way to transform to be of, for, and by the cloud?

Solutions for
Hybrid and Private Cloud
IT Infrastructure

Harris: It comes back to a business understanding. It's being able to put a circle around something that’s a process or something we could buy from someone else. We know how important it is to the company, we know what it costs the company, and we know the service levels needed around that particular function. Therefore, we can put it out to the market to evaluate. Should we be looking to buy this as a digital service, should we be looking to outsource the process, or should we be looking to have it internally on our own infrastructure and continue running it?

Those questions and the fact-finding that goes into that at the moment is one of the most important things I encourage a customer looking at cloud services to spend a lot of time on. It’s actually one of the key reasons why we have such a strong partnership at Hewlett Packard Enterprise (HPE). The hardware and infrastructure is so strong and good, the skill set and the programs that we can access to work with our customers to pull out information and put it up into things like enterprise nets to understand what the landscape looks like in a customer is just as important as the infrastructure itself.

Gardner: So, the customer needs to know themselves and see how they fit into these new patterns of business, but as you are a technologist, you also have to have a great deal of visibility into what's going on within your systems, whether they're on your premises, or within a public-private cloud continuum of some kind. Tell me about the TasmaNet approach and how you're using HPE products and solutions to gain that visibility to know yourself even as you are transforming.

Harris: Sure, so a couple of the functions that we use with HPE … They have a very good [cloud workload suitability] capability set called HPE Aura with which they can sit down with us and work through the total cost of ownership for an organization. That’s not just at an IT level, but it's for almost anything, to look at the work with the accounting team, to look at the total cost, from the electricity, through to dealing with resources, the third party contractors in construction teams. That gives us a very good baseline and understanding of how much it costs today, which is really important for people to understand. 

Then, we also have other capabilities. We work with HPE to model data about the what-if. It's very important to have that capability when working with a third-party on understanding whether or not you should move to cloud. 

Gardner: Your comments, Joel, bring me back to a better understanding of why a static cloud services contract really might be a shackle on your ability to innovate. So how do you recognize that you need to know what you don't know going into cloud, and therefore put in place the ability to react in some sort of a short-term basis iterate, what kind of contract allows for that dynamic ability to change? How do you begin to think about a contract that is not static?

Harris: We don’t know the answer yet. We're doing a lot of work with our current customers and with HPE to look at that. Some of the early options we are looking at is that when we create a master services agreement with a company, even for something that may be considered a commodity, we ensure that we put in a great plan around innovation, risk management framework side, and continuous service improvement. Then there's a conduit for information to flow between the two parties around business information, which can then feed into the use of the services that we provided.

I think we still have a long way to go, because there's a certain maturity required. We're essentially becoming a part of another company, and that’s difficult for people to swallow, even though they accept using a cloud services contract. We're essentially saying, "Can we have a key to your data center, or the physical front door of your office?"

If that’s disconcerting for someone, well, it should be equally disconcerting that they're moving to cloud, because we need access to those physical environments, the people face-to-face, the business plan, the innovation plan, and to how they manage risk in order to ensure that there is a successful adoption of cloud not just today, but also going forward.

Gardner: Clearly, the destiny of you and your clients is tied closely together. You need to make them successful, they need to let you show them the tools and the new flexible nature and you need to then rely on HPE to give you the means to create those dashboards and have that visibility. It really is a different kind of relationship, co-dependence, you might say.

Harris: The strength that TasmaNet will have going forward is the fact that we're operating under a decentralized model. We work with HPE, so that we can have a workforce on the ground closer to the customer. The model of having all of your cloud services in one location, a thousand kilometers away from the customer, while technically capable, we don’t believe is the right mix in client-supplier relationships. We need to make sure that physically there are people on the ground to work hand-in-hand with the business management and others to ensure that we have a successful outcome. 

That’s one of the strong key parts to the relationship between HPE and TasmaNet. TasmaNet is now a certified services provider with HPE, which lets us use their workforce anywhere around Australia and work with companies that want to utilize TasmaNet services.

Gardner: Help our readers and listeners understand that your regional reach is primarily in Tasmania but you're also in Australia and you have some designs and plans for an even  larger expansion. Tell us about your roadmap?

No Net is an Island - Tasmania and Beyond

Harris: Over the last few years, we've really been spending time gathering information from a couple of early contracts to understand the relationship between a cloud provider and a customer. In the last six months, we put that into a product that we actually call  TasmaNet Core, which is our new system for delivering digital services.

During the next 18 months we are working with some large contracts that we have won down here in Tasmania, having just signed one for the state government. We certainly have a number of opportunities and pathways to start deploying services and working with the state government on how cloud can deliver better business outcomes for them. We need to make sure we really understand and document clearly how we achieve success here in Tasmania.

Then, our plan is, as a company, to push this out to the national level. There are a lot of regional places throughout Australia that require cloud services, and more and more companies like TasmaNet will move into those regional areas. We think it’s important that they aren’t forgotten and we also think that for any business that can be developed in Tasmania and operate successfully, there is no reason why it can’t be replicated to regional areas around Asia-Pacific as required.

Gardner: Joel, let’s step back a moment and look at how to show, rather than tell, what we mean, in the new era of cloud, by a proper cloud adoption. Do you have any examples, either named or generic, where we can look at how this unfolded and what the business  benefits have been when it’s done well?

Solutions for
Hybrid and Private Cloud
IT Infrastructure

Harris: One of our customers, about three years ago, moved into a cloud services environment, which was very successful for the company. But what we found was that some of the contracts with their software services, while they enabled them to move into a cloud provider, added a level of complexity that make the platform very difficult to manage ongoing. 

Over a number of years, we worked with them to remove that key application from the cloud environment. It’s really important that, as a cloud provider, we understand what’s right for the customer. At the end of the day, if there's something that’s not working for the customer, we must work with them to get results.

It worked out successfully. We have a very strong relationship with the company. There's a local company down here called TT-Line, which operates some boat vessels for shipping between Tasmania and Mainland Australia, and because of the platform, we had to find the right mix. That’s really important and I know HPE uses it as a catch phrase. 

This is a real-world example of where it’s important to find the right mix between putting your workloads in the appropriate place. It has to work both ways. It’s easy to come in to a cloud provider. We need to make sure it’s also easy to step back out as well, if it doesn’t work.

Now, we're working with that company to deeply understand the rest of the business to see what are the workloads that can come out of TasmaNet, and what are the workloads that need to even move internally or actually move to an application-specific hosting environment?

Gardner: Before we close out, Joel, I'd like to look a bit to the future. We spoke earlier about how private cloud and adjusting your business appropriately to the hosting models that we’ve described is a huge step, but of course, the continuum is beyond that. It goes to hybrid. There are public cloud options, data placement, and privacy concerns that people are adjusting to in terms of location of data, jurisdictions, and so forth. Tell me about where you see it going and how an organization like yours adjusts to companies as they start to further explore that hybrid-cloud continuum?

Hybrid Offspring

Harris: Going forward, the network will play probably one of the biggest roles in cloud services in the coming 10 years. More and more, we're seeing software-defined network suppliers come into the marketplace. In Australia, we have a large data center, NEXTDC, which started up their own network to connect all of the data centers. We have Megaport, which is 100 percent software-defined, where you can buy a capacity for up to one hour or long term. As these types of networks become common, it enables more and more the fluid movement of the services on top.

When we start to cross over two of the other really big things happening, which are the Internet of Things (IoT) and 5G, you have, all of a sudden, this connectivity that means data services can be delivered anywhere and that means cloud services can be delivered anywhere.

More and more, you're going to see the collection of data lakes, the collection of information even by small businesses that understand that they want to keep all the information, and analyze it. As they go to cloud service providers, they will demand these data services there, too, and the analysis capabilities will become very, very powerful.

In the short term, the network is going to be the key enabler for things such as IoT, which will then flow on to support a distributed model for cloud providers in the next 10 years, whereas traditionally we are seeing them centralized into key larger cities. That will change over in the coming years, because there is just too much data to centralize as people start gathering all of this information.

Gardner: Well, I look forward to circling back and talking with you, Joel, in a year or two to see that how that decentralization concept works. I think that you are right -- it’s a huge new departure and it can be extremely powerful.

I'm afraid we'll have to leave it there. We've been discussing how regional cloud services providers are assembling partner ecosystems to add more customization to private cloud procurement, and we've heard how ecosystem-level integrations of the latest cloud tools and methods help smooth out the difficult task of creating and maintaining cloud infracture services contracts.

So, please join me now in thanking our guest, Joel Harris, Managing Director of TasmaNet in Hobart, Tasmania. Thank you, Joel.

Harris: Thank you very much, Dana.

Gardner: And I would like to thank our audience as well for joining us for this BriefingsDirect Voice of the Customer digital business innovation discussion.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing series of HPE-sponsored discussions. Thanks again for listening, and do come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Transcript of a discussion on how regional cloud services providers are assembling partner ecosystems to add more customization to cloud procurement. Copyright Interarbor Solutions, LLC, 2005-2017. All rights reserved.

You may also be interested in:

• Logicalis chief technologist defines the new ideology of hybrid IT
• Converged IoT systems: Bringing the data center to the edge of everything
• IDOL-powered appliance delivers better decisions via comprehensive business information searches
• OCSL sets its sights on the Nirvana of hybrid IT—attaining the right mix of hybrid cloud for its clients
• Fast acquisition of diverse unstructured data sources makes IDOL API tools a star at LogitBot
• How lastminute.com uses machine learning to improve travel bookings user experience
• Veikkaus digitally transforms as it emerges as new combined Finnish national gaming company
• HPE takes aim at customer needs for speed and agility in age of IoT, hybrid everything
• WWT took an enterprise Tower of Babel and delivered comprehensive intelligent search
• Strategic view across more data delivers digital business boost for AmeriPride
• Swift and massive data classification advances score a win for better securing sensitive information