Hybrid Cloud Ecosystem Readies for Impact From Microsoft Azure Stack

Transcript of a discussion on what enterprises can do to make the most of hybrid cloud models and be ready specifically for Microsoft Azure Stack solutions.  

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

Dana Gardner: 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 strategies. Stay with us now to learn how agile businesses are fending off disruption -- in favor of innovation.

Our next cloud deployment options interview explores how hybrid cloud ecosystem players such as PwC and Hewlett Packard Enterprise (HPE) are gearing up to support the Microsoft Azure Stack private-public cloud continuum.

We’ll now learn what enterprises can do to make the most of hybrid cloud models and be ready specifically for Microsoft’s solutions for balancing the boundaries between public and private cloud deployments.

Antao

Here to explore the latest approaches for successful hybrid IT, we’re joined by Rohit “Ro” Antao, a Partner at PwC. Welcome, Ro.

Ro Antao: Thanks a lot, Dana. Thrilled to be here, and thanks for having me.

Gardner: We’re glad you are with us. We are also joined by Ken Won, Director of Cloud Solutions Marketing at HPE.

Welcome back, Ken.

Ken Won: Hi, Dana. Excited to be here with you again.

Gardner: Ro, what are the trends driving adoption of hybrid cloud models, specifically Microsoft Azure Stack? Why are people interested in doing this?

Antao: What we have observed in the last 18 months is that a lot of our clients are now aggressively pushing toward the public cloud. In that journey there are a couple of things that are becoming really loud and clear to them.

Journey to the cloud

Number one is that there will always be some sort of a private data center footprint. There are certain workloads that are not appropriate for the public cloud; there are certain workloads that perform better in the private data center. And so the first acknowledgment is that there is going to be that private, as well as public, side of how they deliver IT services.

Now, that being said, they have to begin building the capabilities and the mechanisms to be able to manage these different environments seamlessly. As they go down this path, that's where we are seeing a lot of traction and focus.

The other trend in conjunction with that is in the public cloud space where we see a lot of traction around Azure. They have come on strong. They have been aggressively going after the public cloud market. Being able to have that seamless environment between private and public with Azure Stack is what’s driving a lot of the demand.

Won

Won: We at HPE are seeing that very similarly, as well. We call that “hybrid IT,” and we talk about how customers need to find the right mix of private and public -- and managed services -- to fit their businesses. They may put some services in a public cloud, some services in a private cloud, and some in a managed cloud. Depending on their company strategy, they need to figure out which workloads go where.

We have these conversations with many of our customers about how do you determine the right placement for these different workloads -- taking into account things like security, performance, compliance, and cost -- and helping them evaluate this hybrid IT environment that they now need to manage.

Gardner: Ro, a lot of what people have used public cloud for is greenfield apps -- beginning in the cloud, developing in the cloud, deploying in the cloud -- but there's also an interest in many enterprises about legacy applications and datasets. Is Azure Stack and hybrid cloud an opportunity for them to rethink where their older apps and data should reside?

Antao: Absolutely. When you look at the broader market, a lot of these businesses are competing today in very dynamic markets. When companies today think about strategy, it's no longer the 5- and 10-year strategy. They are thinking about how to be relevant in the market this year, today, this quarter. That requires a lot of flexibility in their business model; that requires a lot of variability in their cost structure.

When you look at it from that viewpoint, a lot of our clients look at the public cloud as more than, “Is the app suitable for the public cloud?” They are also seeking certain cost advantages in terms of variability in that cost structure that they can take advantage of. And that’s where we are seeing them look at the public cloud beyond just applications in terms that are suitable for public cloud.

Public and/or private power

Won: We help a lot of companies think about where the best place is for their traditional apps. Often they don’t want to restructure them, they don’t want to rewrite them, because they are already an investment; they don’t want to spend a lot of time refactoring them.

If you look at these traditional applications, a lot of times when they are dealing with data – especially if they are dealing with sensitive data -- those are better placed in a private cloud.

Antao: One of the great things about Microsoft Azure Stack is it gives the data center that public cloud experience -- where developers have the similar experience as they would in a public cloud. The only difference is that you are now controlling the costs as well. So that's another big advantage we see.

Hybrid Cloud Solutions
for Microsoft Azure Stack

Won: Yeah, absolutely, it's giving the developers the experience of a public cloud, but from the IT standpoint of also providing the compliance, the control, and the security of a private cloud. Allowing applications to be deployed in either a public or private cloud -- depending on its requirements -- is incredibly powerful. There's no other environment out there that provides that API-compatibility between private and public cloud deployments like Azure Stack does. 

Gardner: Clearly Microsoft is interested in recognizing that skill sets, platform affinity, and processes are all really important. If they are able to provide a private cloud and public cloud experience that’s common to the IT operators that are used to using Microsoft platforms and frameworks -- that's a boon. It's also important for enterprises to be able to continue with the skills they have.

Ro, is such a commonality of skills and processes not top of mind for many organizations? 

Antao: Absolutely! I think there is always the risk when you have different environments having that “swivel chair” approach. You have a certain set of skills and processes for your private data center. Then you now have a certain set of skills and processes to manage your public cloud footprint.

One of the big problems and challenges that this solves is being able to drive more of that commonality across consistent sets of processes. You can have a similar talent pool, and you have similar kinds of training and awareness that you are trying to drive within the organization -- because you now can have similar stacks on both ends.

Won: That's a great point. We know that the biggest challenge to adopting new concepts

The biggest challenge to adopting new concepts is not the technology; it's really the people and process issues.   

is not the technology; it's really the people and process issues. So if you can address that, which is what Azure Stack does, it makes it so much easier for enterprises to bring on new capabilities, because they are leveraging the experience that they already have using Azure public cloud.

Gardner: Many IT organizations are familiar with Microsoft Azure Stack. It's been in technical preview for quite some time. As it hits the market in September 2017, in seeking that total-solution, people-and-process approach, what is PwC bringing to the table to help organizations get the best value and advantage out of Azure Stack?

Hybrid: a tectonic IT shift

Antao: Ken made the point earlier in this discussion about hybrid IT. When you look at IT pivoting to more of the hybrid delivery mode, it's a tectonic shift in IT's operating model, in their architecture, their culture, in their roles and responsibilities – in the fundamental value proposition of IT to the enterprise.

When we partner with HPE in helping organizations drive through this transformation, we work with HPE in rethinking the operating model, in understanding the new kinds of roles and skills, of being able to apply these changes in the context of the business drivers that are leading it. That's one of the typical ways that we work with HPE in this space.

Won: It's a great complement. HPE understands the technology, understands the infrastructure, combined with the business processes, and then the higher level of thinking and the strategy knowledge that PwC has. It's a great partnership.

Gardner: Attaining hybrid IT efficiency and doing it with security and control is not something you buy off the shelf. It's not a license. It seems to me that an ecosystem is essential. But how do IT organizations manage that ecosystem? Are there ways that you all are working together, HPE in this case with PwC, and with Microsoft to make that consumption of an ecosystem solution much more attainable?

Won: One of the things that we are doing is working with Microsoft on their partnerships so that we can look at all these companies that have their offerings running on Azure public cloud and ensuring that those are all available and supported in Azure Stack, as well as running in the data center.

We are spending a lot of time with Microsoft on their ecosystem to make sure those services, those companies, or those products are available on Azure Stack -- as well fully supported on Azure Stack that’s running on HPE gear.

Gardner: They might not be concerned about the hardware, but they are concerned about the total value -- and the total solution. If the hardware players aren't collaborating well with the service providers and with the cloud providers -- then that's not going to work.

Quick collaboration is key

Won: Exactly! I think of it like a washing machine. No one wants to own a washing machine, but everyone wants clean clothes. So it's the necessary evil, it’s super important, but you just as soon not have to do it.

Gardner: I just don’t know what to take to the dry cleaner or not, right?

Won: Yeah, there you go!

Hybrid Cloud Solutions
for Microsoft Azure Stack

Antao: From a consulting standpoint, clients no longer have the appetite for these five- to six-year transformations. Their businesses are changing at a much faster pace. One of the ways that we are working the ecosystem-level solution -- again much like the deep and longstanding relationship we have had with HPE – is we have also been working with Microsoft in the same context.

And in a three-way fashion, we have focused on being able to define accelerators to deploying these solutions. So codifying a lot of our experiences, the lessons learned, a deep understanding of both the public and the private stack to be able to accelerate value for our customers -- because that’s what they expect today.

Won: One of the things, Ro, that you brought up, and I think is very relevant here, is these three-way relationships. Customers don't want to have to deal with all of these different vendors, these different pieces of stack or different aspects of the value chain. They instead expect us as vendors to be working together. So HPE, PwC, Microsoft are all working together to make it easier for the customers to ultimately deliver the services they need to drive their business.

Low risk, all reward

Gardner: So speed-to-value, super important; common solution cooperation and collaboration synergy among the partners, super important. But another part of this is doing it at low risk, because no one wants to be in a transition from a public to private or a full hybrid spectrum -- and then suffer performance issues, lost data, with end customers not happy.

PwC has been focused on governance, risk management and compliance (GRC) in trying to bring about better end-to-end hybrid IT control. What is it that you bring to this particular problem that is unique? It seems that each enterprise is doing this anew, but you have done it for a lot of others and experience can be very powerful that way.

Antao: Absolutely! The move to hybrid IT is a fundamental shift in governance models, in how you address certain risks, the emergence of new risks, and new security challenges. A lot of what we have been doing in this space has been in helping that IT organizations accelerate that shift -- that paradigm shift -- that they have to make.

In that context, we have been working very closely with HPE to understand what the requirements of that new world are going to look like. We can build and bring to the table solutions that support those needs.

Won: It’s absolutely critical -- this experience that PwC has is huge. We always come up with new technologies; every few years you have something new. But it’s that experience that PwC has to bring to the table that's incredibly helpful to our customer base.

There’s this whole journey getting to that hybrid IT state and having the governing mechanisms around it. 

Antao: So often when we think of governance, it’s more in terms of the steady state and the runtime. But there's this whole journey between getting from where we today to that hybrid IT state -- and having the governing mechanisms around it -- so that they can do it in a way that doesn't expose their business to too much risk. There is always risk involved in these large-scale transformations, but how do you manage and govern that process through getting to that hybrid IT state? That’s where we also spend a lot of time as we help clients through this transformation.

Gardner: For IT shops that are heavily Microsoft-focused, is there a way for them to master Azure Stack, the people, process and technology that will then be an accelerant for them to go to a broader hybrid IT capability? I’m thinking of multi-cloud, and even being able to develop with DevOps and SecOps across a multiple cloud continuum as a core competency.

Is Azure Stack for many companies a stepping-stone to a wider hybrid capability, Ro?

Managed multi-cloud continuum

Antao: Yes. And I think in many cases that’s inevitable. When you look at most organizations today, generally speaking, they have at least two public cloud providers that they use. They consume several Software as a service (SaaS) applications. They have multiple data center locations.  The role of IT now is to become the broker and integrator of multi-cloud environments, among and between on-premise and in the public cloud. That's where we see a lot of them evolve their management practices, their processes, the talent -- to be able to abstract these different pools and focus on the business. That's where we see a lot of the talent development.

Hybrid Cloud Solutions
for Microsoft Azure Stack

Won: We see that as well at HPE as this whole multi-cloud strategy is being implemented. More and more, the challenge that organizations are having is that they have these multiple clouds, each of which is managed by a different team or via different technologies with different processes.

So as a way to bring these together, there is huge value to the customer, by bringing together, for example, Azure Stack and Azure [public cloud] together. They may have multiple Azure Stack environments, perhaps in different data centers, in different countries, in different locales. We need to help them align their processes to run much more efficiently and more effectively. We need to engage with them not only from an IT standpoint, but also from the developer standpoint. They can use those common services to develop that application and deploy it in multiple places in the same way.

Antao: What's making this whole environment even more complex these days is that a couple of years ago, when we talked about multi-cloud, it was really the capability to either deploy in one public cloud versus another.

Within a given business workflow, how do you leverage different clouds, given their unique strengths and weaknesses?

Few years later, it evolved into being able to port workloads seamlessly from one cloud to another. Today, as we look at the multi-cloud strategy that a lot of our clients are exploring this: Within a given business workflow, depending on the unique characteristics of different parts of that business process, how do you leverage different clouds given their unique strengths and weaknesses?

There might be portions of a business process that, to your point earlier, Ken, are highly confidential. You are dealing with a lot of compliance requirements. You may want to consume from an internal private cloud. There are other parts of it that you are looking for, such as immense scale, to deal with the peaks when that particular business process gets impacted. How do you go back to where the public cloud has a history with that? In a third case, it might be enterprise-grades workloads.

So that’s where we are seeing multi-cloud evolve, into where in one business process could have multiple sources, and so how does an IT organization manage that in a seamless way?

Gardner: It certainly seems inevitable that the choice of such a cloud continuum configuration model will vary and change. It could be one definition in one country or region, another definition in another country and region. It could even be contextual, such as by the type of end user who's banging on the app. As the Internet of Things (IoT) kicks in, we might be thinking about not just individuals, but machine-to-machine (M2M), app-to-app types of interactions.

So quite a bit of complexity, but dealt with in such a way that the payoff could be monumental. If you do hybrid cloud and hybrid IT well, what could that mean for your business in three to five years, Ro?

Nimble, quick and cost-efficient

Antao: Clearly there is the agility aspect, of being able to seamlessly leverage these different clouds to allow IT organizations to be much more nimble in how they respond to the business.

From a cost standpoint, and this is actually a great example we had for a large-scale migration that we are currently doing to the public cloud. What the IT organization found was they consumed close to 70 percent of their migration budget for only 30 percent of the progress that they made.

And a larger part of that was because the minute you have your workloads sitting on a public cloud -- whether it is a development workload or you are still working your way through it, but technically it’s not yet providing value -- the clock is ticking. Being able to allow for a hybrid environment, where you a do a lot of that development, get it ready -- almost production-ready -- and then when the time is right to drive value from that application -- that’s when you move to a public cloud. Those are huge cost savings right there.

Clients that have managed to balance those two paradigms are the ones who are also seeing a lot of economic efficiencies.

Won: The most important thing that people see value in is that agility. The ability to respond much faster to competitive actions or to new changes in the market, the ability to bring applications out faster, to be able to update applications in months -- or sometimes even weeks -- rather than the two years that it used to take.

It's that agility to allow people to move faster and to shift their capabilities so much quicker than they have ever been able to do – that is the top reason why we're seeing people moving to this hybrid model. The cost factor is also really critical as they look at whether they are doing CAPEX or OPEX and private cloud or public cloud.

One of the things that we have been doing at HPE through our Flexible Capacity program is that we enable our customers who were getting hardware to run these private clouds to actually pay for it on a pay-as-you-go basis. This allows them to better align their usage -- the cost to their usage. So taking that whole concept of pay-as-you-go that we see in the public cloud and bringing that into a private cloud environment.

Hybrid Cloud Solutions
for Microsoft Azure Stack

Antao: That’s a great point. From a cost standpoint, there is an efficiency discussion. But we are also seeing in today's world that we are depending on edge computing a lot more. I was talking to the CIO of a large park the other day, and his comment to me was, yes, they would love to use the public cloud but they cannot afford for any kind of latency or disruption of services because that means he’s got thousands of visitors and guests in his park, because of the amount of dependency on technology he can afford that kind of latency.

And so part of it is also the revenue impact discussion, and using public cloud in a way that allows you to manage some of those risks in terms of that analytical power and that computing power you need closer to the edge -- closer to your internal systems.

Gardner: Microsoft Azure Stack is reinforcing the power and capability of hybrid cloud models, but Azure Stack is not going to be the same for each individual enterprise. How they differentiate, how they use and take advantage of a hybrid continuum will give them competitive advantages and give them a one-up in terms of skills.

It seems to me that the continuum of Azure Stack, of a hybrid cloud, is super-important. But how your organization specifically takes advantage of that is going to be the key differentiator. And that's where an ecosystem solutions approach can be a huge benefit.

Let's look at what comes next. What might we be talking about a year from now when we think about Microsoft Azure Stack in the market and the impact of hybrid cloud on businesses, Ken?

Look at clouds from both sides now

You will see that as a break in the boundary of private cloud versus public cloud, so think of it as a continuum. 

Won: You will see organizations shifting from a world of using multiple clouds and having different applications or services on clouds to having an environment where services are based on multiple clouds. With the new cloud-native applications you'll be running different aspects of those services in different locations based on what are the requirements of that particular microservice. 

So a service may be partially running in Azure, part of it may be running in Azure Stack. You will certainly see that as a kind of break in the boundary of private cloud versus public cloud, and so think of it as a continuum, if you will, of different environments able to support whatever applications they need.

Gardner: Ro, as people get more into the weeds with hybrid cloud, maybe using Azure Stack, how will the market adjust?

Antao: I completely agree with Ken in terms of how organizations are going to evolve their architecture. At PwC we have this term called the Configurable Enterprise, which essentially focuses on how the IT organization consumes services from all of these different sources to be able to ultimately solve business problems.

To that point, where we see the market trends is in the hybrid IT space, the adoption of that continuum. One of the big pressures IT organizations face is how they are going to evolve their operating model to be successful in this new world. CIOs, especially the forward-thinking ones, are starting to ask that question. We are going to see in the next 12 months a lot more pressure in that space.

Gardner: These are, after all, still early days of hybrid cloud and hybrid IT. Before we sign off, how should organizations that might not yet be deep into this prepare themselves? Are there some operations, culture, and skills? How might you want to be in a good position to take advantage of this when you do take the plunge?

Plan to succeed with IT on board

Won: One of the things we recommend is a workshop where we sit down with the customer and think through their company strategy. What is their IT strategy? How does that relate or map to the infrastructure that they need in order to be successful?

This makes the connection between the value they want to offer as a company, as a business, to the infrastructure. It puts a plan in place so that they can see that direct linkage. That workshop is one of the things that we help a lot of customers with.

We also have innovation centers that we've built with Microsoft where customers can come in and experience Azure Stack firsthand. They can see the latest versions of Azure Stack, they can see the hardware, and they can meet with experts. We bring in partners such as PwC to have a conversation in these innovation centers with experts.

Gardner: Ro, how to get ready when you want to take the plunge and make the best and most of it?

Hybrid Cloud Solutions
for Microsoft Azure Stack

Antao: We are at a stage right now where these transformations can no longer be done to the IT organization; the IT organization has to come along on this journey. What we have seen is, especially in the early stages, the running of pilot projects, of being able to involve the developers, the infrastructure architects, and the operations folks in pilot workloads, and learn how to manage it going forward in this new model.

You want to create that from a top-down perspective, being able to tie in to where this adds the most value to the business. From a grassroots effort, you need to also create champions within the trenches that are going to be able to manage this new environment. Combining those two efforts has been very successful for organizations as they embark on this journey.

Gardner: Sounds like good advice. I’m afraid we’ll have to leave it there. We have been exploring how hybrid cloud ecosystem players such as PwC and HPE are gearing up to take the most advantage of Microsoft Azure Stack, and to help enterprise organizations gear up and proceed well in managing the continuum of hybrid cloud options.

And we have learned how enterprises can do that by taking on more of a process, people and technology perspective when it comes to hybrid IT. So please join me in thanking our guests, Ro Antao, a Partner at PwC, and Ken Won, Director of Cloud Solutions Marketing at HPE.

And a big thank you as well to our audience for joining this BriefingsDirect Voice of the Customer digital transformation strategies discussion.

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-sponsored interviews.

Thanks again for listening, please pass this content along to your IT community, 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 what enterprises can do to make the most of hybrid cloud models and be ready specifically for Microsoft Azure Stack solutions. Copyright Interarbor Solutions, LLC, 2005-2017. All rights reserved.

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Advanced IoT Systems Provide Analysis Catalyst for the Petrochemical Refinery of the Future

Transcript of a discussion on how IT combines with Internet of Things to help create the refinery of the future for a Texas chemical company.

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

Dana Gardner: 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 success. Stay with us now to learn how agile businesses are fending off disruption -- in favor of innovation.

Our next Internet of Things (IoT) technology trends interview explores how Information Technology (IT) combines with IoT to help create the refinery of the future. We’ll now learn how a leading-edge petrochemical company in Texas is rethinking data gathering and analysis to foster safer working places and greater overall efficiency.

Smith

Here to help us define the best of the refinery of the future vision, we’re joined by Doug Smith, CEO of Texmark Chemicals in Galena Park, Texas. Welcome, Doug.

Doug Smith: Thank you, Dana, it’s good to be here.

Gardner: We’re also joined by JR Fuller, Worldwide Business Development Manager for Edgeline IoT at Hewlett Packard Enterprise (HPE). Welcome, JR.

JR Fuller: Thank you, sir. I appreciate it.

Gardner: What are the top trends driving this need for a new refinery of the future? Doug, why aren’t the refinery practices of the past good enough?

Smith: First of all, I want to talk about people. People are the catalysts who make this refinery of the future possible. At Texmark Chemicals, we spent the last 20 years making capital investments in our infrastructure, in our physical plant, and in the last four years we have put together a roadmap for our IT needs.

Through our introduction to HPE, we have entered into a partnership that is not just a client-customer relationship. It’s more than that, and it allows us to work together to discover IoT solutions that we can bring to bear on our IT challenges at Texmark. So, we are on the voyage of discovery together -- and we are sailing out to sea. It’s going great.

Gardner: JR, it’s always impressive when a new technology trend aids and abets a traditional business, and then that business can show through innovation what should then come next in the technology. How is that back and forth working? Where should we expect IoT to go in terms of business benefits in the not-to-distant future?

Fuller

Fuller: One of powerful things about the partnership and relationship we have is that we each respect and understand each other's “swim lanes.” I’m not trying to be a chemical company. I’m trying to understand what they do and how I can help them.

And they’re not trying to become an IT or IoT company. Their job is to make chemicals; our job is to figure out the IT. We’re seeing in Texmark the transformation from an Old World economy-type business to a New World economy-type business.

This is huge, this is transformational. As Doug said, they’ve made huge investments in their physical assets and what we call Operational Technology (OT). They have done that for the past 20 years. The people they have at Texmark who are using these assets are phenomenal. They possess decades of experience.

Learn From Customers Who
Realize the IoT Advantage
 Read More

Yet IoT is really new for them. How to leverage that? They have said, “You know what? We squeezed as much as we can out of OT technology, out of our people, and our processes. Now, let’s see what else is out there.”

And through introductions to us and our ecosystem partners, we’ve been able to show them how we can help squeeze even more out of those OT assets using this new technology. So, it’s really exciting.

Gardner: Doug, let’s level-set this a little bit for our audience. They might not all be familiar with the refinery business, or even the petrochemical industry. You’re in the process of processing. You’re making one material into another and you’re doing that in bulk, and you need to do it on a just-in-time basis, given the demands of supply chains these days.

You need to make your business processes and your IT network mesh, to reach every corner. How does a wireless network become an enabler for your requirements?

The heart of IT 

Smith: In a large plant facility, we have different pieces of equipment. One piece of equipment is a pump -- the analogy would be the heart of the process facility of the plant.

So your question regarding the wireless network, if we can sensor a pump and tie it into a mesh network, there are incredible cost savings for us. The physical wiring of a pump runs anywhere from $3,000 to $5,000 per pump. So, we see a savings in that.

Being able to have the information wirelessly right away -- that gives us knowledge immediately that we wouldn’t have otherwise. We have workers and millwrights at the plant that physically go out and inspect every single pump in our plant, and we have 133 pumps. If we can utilize our sensors through the wireless network, our millwrights can concentrate on the pumps that they know are having problems.

To have the information wirelessly right away -- that gives us knowledge immediately that we wouldn’t have otherwise.

Gardner: You’re also able to track those individuals, those workers, so if there’s a need to communicate, to locate, to make sure that they hearing the policy, that’s another big part of IoT and people coming together.

Safety is good business

Smith: The tracking of workers is more of a safety issue -- and safety is critical, absolutely critical in a petrochemical facility. We must account for all our people and know where they are in the event of any type of emergency situation.

Gardner: We have the sensors, we can link things up, we can begin to analyze devices and bring that data analytics to the edge, perhaps within a mini data center facility, something that’s ruggedized and tough and able to handle a plant environment.

Given this scenario, JR, what sorts of efficiencies are organizations like Texmark seeing? I know in some businesses, they talk about double digit increases, but in a mature industry, how does this all translate into dollars?

Fuller: We talk about the power of one percent. A one percent improvement in one of the major companies is multi-billions of dollars saved. A one percent change is huge, and, yes, at Texmark we’re able to see some larger percentage-wise efficiency, because they’re actually very nimble.

It’s hard to turn a big titanic ship, but the smaller boat is actually much better at it. We’re able to do things at Texmark that we are not able to do at other places, but we’re then able to create that blueprint of how they do it. 

You’re absolutely right, doing edge computing, with our HPE Edgeline products, and gathering the micro-data from the extra compute power we have installed, provides a lot of opportunities for us to go into the predictive part of this. It’s really where you see the new efficiencies.

Recently I was with the engineers out there, and we’re walking through the facility, and they’re showing us all the equipment that we’re looking at sensoring up, and adding all these analytics. I noticed something on one of the pumps. I’ve been around pumps, I know pumps very well.

I saw this thing, and I said, “What is that?”

“So that’s a filter,” they said.

I said, “What happens if the filter gets clogged?”

“It shuts down the whole pump,” they said.

“What happens if you lose this pump?” I asked.

“We lose the whole chemical process,” they explained.

“Okay, are there sensors on this filter?”

“No, there are only sensors on the pump,” they said.

There weren’t any sensors on the filter. Now, that’s just something that we haven’t thought of, right? But again, I’m not a chemical guy. So I can ask questions that maybe they didn’t ask before.

So I said, “How do you solve this problem today?”

“Well, we have a scheduled maintenance plan,” they said.

They don’t have a problem, but based on the scheduled maintenance plan that filter gets changed whether it needs to or not. It just gets changed on a regular basis. Using IoT technology, we can tell them exactly when to change that filter. Therefore IoT saves on the cost of the filter and the cost of the manpower -- and those types of potential efficiencies and savings are just one small example of the things that we’re trying to accomplish.

Continuous functionality

Smith: It points to the uniqueness of the people-level relationship between the HPE team, our partners, and the Texmark team. We are able to have these conversations to identify things that we haven’t even thought of before. I could give you 25 examples of things just like this, where we say, “Oh, wow, I hadn’t thought about that.” And yet it makes people safer and it all becomes more efficient.

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Gardner: You don’t know until you have that network in place and the data analytics to utilize what the potential use-cases can be. The name of the game is utilization efficiency, but also continuous operations.

How do you increase your likelihood or reduce the risk of disruption and enhance your continuous operations using these analytics?

Smith: To answer, I’m going to use the example of toll processing. Toll processing is when we would have a customer come to us and ask us to run a process on the equipment that we have at Texmark.

Normally, they would give us a recipe, and we would process a material. We take samples throughout the process, the production, and deliver a finished product to them. With this new level of analytics, with the sensoring of all these components in the refinery of the future vision, we can provide a value-add to the customers by giving them more data than they could ever want. We can document and verify the manufacture and production of the particular chemical that we’re toll processing for them.

Fuller: To add to that, as part of the process, sometimes you may have to do multiple runs when you're tolling, because of your feed stock and the way it works.

By using advanced analytics and the predictive benefits of having all that data, we're looking to gain efficiencies.

By usingadvanced analytics, and some of the predictive benefits of having all of that data available, we're looking to gain efficiencies to cut down the number of additional runs needed. If you take a process that would have taken three runs and we can knock that down to two runs -- that's a 30 percent decrease in total cost and expense. It also allows them produce more products, and to get it out to people a lot faster

Smith: Exactly. Exactly!

Gardner: Of course, the more insight that you can obtain from a pump, and the more resulting data analysis, that gives you insight into the larger processes. You can extend that data and information back into your supply chain. So there's no guesswork. There's no gap. You have complete visibility -- and that's a big plus when it comes to reducing risk in any large, complex, multi-supplier undertaking.

Beyond data gathering, data sharing

Smith: It goes back to relationships at Texmark. We have relationships with our neighbors that are unique in the industry, and so we would be able to share the data that we have.

Fuller: With suppliers.

Smith: Exactly, with suppliers and vendors. It's transformational.

Gardner: So you're extending a common standard industry-accepted platform approach locally into an extended process benefit. And you can share that because you are using common, IT-industry-wide infrastructurefrom HPE.

Fuller: And that's very important. We have a three-phase project, and we've just finished the first two phases. Phase 1 was to put ubiquitous WiFi infrastructure in there, with the location-based services, and all of the things to enable that. The second phase was to upgrade the compute infrastructure with our Edgeline compute and put in our HPE Micro Datacenter in there. So now they have some very robust compute.

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With that infrastructure in place, it now allows us to do that third phase, where we're bringing in additional IoT projects. We will create a data infrastructure with data storage, and application programming interfaces (APIs), and things like that. That will allow us to bring in a specialty video analytic capability that will overlay on top of the physical and logical infrastructure. And it makes it so much easier to integrate all that.

Gardner: You get a chance to customize the apps much better when you have a standard IT architecture underneath that, right?

Trailblazing standards for a new workforce

Smith: Well, exactly. What are you saying, Dana is – and it gives me chills when I start thinking about what we're doing at Texmark within our industry – is the setting of standards, blazing a new trail. When we talk to our customers and our suppliers and we tell them about this refinery of the future project that we're initiating, all other business goes out the window. They want to know more about what we're doing with the IoT -- and that's incredibly encouraging.

Gardner: I imagine that there are competitive advantages when you can get out in front and you're blazing that trail. If you have the experience, the skills of understanding how to leverage an IoT environment, and an edge computing capability, then you're going to continue to be a step ahead of the competition on many levels: efficiency, safety, ability to customize, and supply chain visibility.

Smith: It surely allows our Texmark team to do their jobs better. I use the example of the millwrights going out and inspecting pumps, and they do that everyday. They do it very well. If we can give them the tools, where they can focus on what they do best over a lifetime of working with pumps, and only work on the pumps that they need to, that's a great example.

I am extremely excited about the opportunities at the refinery of the future to bring new workers into the petrochemical industry. We have a large number of people within our industry who are retiring; they’re taking intellectual capital with them. So to be able to show young people that we are using advanced technology in new and exciting ways is a real draw and it would bring more young people into our industry.

Gardner: By empowering that facilities edge and standardizing IT around it, that also gives us an opportunity to think about the other part of this spectrum -- and that's the cloud. There are cloud services and larger data sets that could be brought to bear.

How does the linking of the edge to the cloud have a benefit?

Cloud watching

Fuller: Texmark Chemicals has one location, and they service the world from that location as a global leader in dicyclopentadiene (DCPD) production. So the cloud doesn't have the same impact as it would for maybe one of the other big oil or big petrochemical companies. But there are ways that we're going to use the cloud at Texmark and rally around it for safety and security.

Utilizing our location-based services, and our compute, if there is an emergency -- whether it's at Texmark or a neighbor -- using cloud-based information like weather, humidity, and wind direction -- and all of these other things that are constantly changing -- we can provide better directed responses. That's one way we would be using cloud at Texmark.

When we start talking about the larger industry -- and connecting multiple refineries together or upstream, downstream and midstream kinds of assets together with a petrochemical company -- cloud becomes critical. And you have to have hybrid infrastructure support.

You don't want to send all your video to the cloud to get analyzed. You want to do that at the edge. You don't want to send all of your vibration data to the cloud, you want to do that at the edge. But, yes, you do want to know when a pump fails, or when something happens so you can educate and train and learn and share that information and institutional knowledge throughout the rest of the organization.

Gardner: Before we sign off, let’s take a quick look into the crystal ball. Refinery of the future, five years from now, Doug, where do you see this going?

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Smith: The crystal ball is often kind of foggy, but it’s fun to look into it. I had mentioned earlier opportunities for education of a new workforce. Certainly, I am focused on the solutions that IoT brings to efficiencies, safety, and profitability of Texmark as a company. But I am definitely interested in giving people opportunities to find a job to work in a good industry that can be a career.

Gardner: JR, I know HPE has a lot going on with edge computing, making these data centers more efficient, more capable, and more rugged. Where do you see the potential here for IoT capability in refineries of the future?

Future forecast: safe, efficient edge

Fuller: You're going to see the pace pick up. I have to give kudos to Doug. He is a visionary. Whether he admits that or not, he is actually showing an industry that has been around for many years how to do this and be successful at it. So that's incredible. In that crystal ball look, that five-year look, he's going to be recognized as someone who helped really transform this industry from old to new economy.

You're going to see the pace pick up. We're going to get faster, smaller, cheaper, and become more ubiquitous.

As far as edge-computing goes, what we're seeing with our converged Edgeline systems, which are our first generation, and we've created this market space for converged edge systems with the hardening of it. Now, we’re working on generation 2. We're going to get faster, smaller, cheaper, and become more ubiquitous. I see our IoT infrastructure as having a dramatic impact on what we can actually accomplish and the workforce in five years. It will be more virtual and augmented and have all of these capabilities. It’s going to be a lot safer for people, and it’s going to be a lot more efficient.

Gardner: I'm afraid we’ll have to leave it there. We have been exploring how IT combines with the Internet of Things and modern operations methods to create the refinery of the future. And we've learned how a leading-edge chemical processing company in Texas is rethinking data gathering analysis to foster a safer working environment, as well as greater efficiency.

Please join me in thanking our guests, Doug Smith, CEO of Texmark Chemicals in Galena Park, Texas. Thank you, sir. 

Smith: Thank you. This was lot of fun, Dana.

Gardner: We’ve also been here with JR Fuller, Worldwide Business Development Manager for Edgeline IoT, at Hewlett Packard Enterprise. Thank you, JR.

Fuller: Thank you sir, it’s been a pleasure.

Gardner: And a big thank you to our audience as well for joining this BriefingsDirect Voice of the Customer digital transformation success story. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-sponsored interviews. Thanks again for listening. Please pass us along in your IT community if you found it valuable, 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 IT combines with Internet of Things to help create the refinery of the future for a Texas chemical company. Copyright Interarbor Solutions, LLC, 2005-2017. All rights reserved.

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