Wednesday, July 23, 2014

Cloud Enables a Big Competitive Advantage for UK Firms

Recovery from the financial crisis in Europe continues across the whole region. Granted, there are structural reasons for the eurozone economy's slow recovery. Regardless, savvy senior executives in leading nations are actively seeks ways to grow their business. For some that means a shift to cloud computing services -- thereby lowering operational costs and boosting productivity.

As an example, forward-looking UK businesses are becoming more competitive as a direct result of their adoption of cloud services, that's according to the latest market study findings from the Cloud Industry Forum (CIF).

Quest for a Competitive Advantage

The CIF research -- conducted in May 2014, polling 250 senior IT managers and other business decision-makers -- found that 55 percent of managers report having experienced a competitive advantage from using cloud services. A further 23 percent of surveyed managers anticipate seeing a meaningful commercial advantage from their cloud service deployments.

The research also found that the migration to cloud computing has resulted in operational business objectives being achieved by many organizations -- 66 percent achieved their objective to increase speed of access to business technology, 65 percent improved up-time or reliability of IT services, and 59 percent improved service levels of their IT applications.

"It is encouraging to see that the flexibility brought by cloud services is translating into competitive advantage for businesses -- particularly for small and medium enterprises (SMEs) who are perhaps best-placed to benefit from more agile and flexible IT," said Alex Hilton, CEO at CIF.


Other findings from the market study include:

  • 47 percent of those who use cloud services, or expect to in the future, consider faster access to technology a tangible benefit, while around two fifths (41 percent) consider flexible access to technology a tangible benefit of cloud service deployment that their organization has achieved.
  • Flexibility of delivery continues to be the most commonly cited primary reason for initial cloud service adoption (17 percent). Operational cost savings come a close second (15 percent), up from a slight dip in 2013, when it was cited as the primary reason for adoption by 9 percent of cloud users.
  • This picture remains relatively consistent across organizations of all sizes, although in the public sector they show a slight preference towards cost savings, 21 percent of which cited operational cost savings as their primary reason for cloud service adoption.

Overall satisfaction rates for this business technology remain high, with 89 percent reporting satisfaction with their use of cloud services. However, 87 percent of cloud service users feel their migration could have been improved in some way, with around two fifths (38 percent) wishing it had cost less.

Many organizations did experience some difficulties in their first migration to a cloud service. Citing the need for improved professional services and technical support, 31 percent struggled with the complexity of migration, while 35 percent would have liked access to cloud management tools from their service provider.

"Although these difficulties do not seem to have impacted UK business leader enthusiasm for cloud in any significant way, improving the overall experience of cloud, from service design to service migration and management, should be an ongoing focus and priority for the industry to further enhance the benefits of cloud computing," concluded Hilton.

Wednesday, July 16, 2014

How to Win Big When Cloud Computing is Pervasive

Some people are never satisfied. These fearless agents of change are everywhere. They're informed, confident and willing to experiment. They seek out the best business technology solution for the job at hand. They act on instinct. Yes, you could say that they're driven.

However, they're also at risk of being labeled as "rogue employees" because they ordered a software-as-a-service (SaaS) offering and perhaps expensed it without prior approval. Sometimes they're the champion of progressive projects that are referred to as Shadow IT -- intentionally bypassing their company's formal evaluation and procurement process. How can this happen?

Is it just because their activities are tolerated, or are they being encouraged? If so, by whom? Why would any business leader applaud a team member that breaks the rules? Maybe, the simple answer is that staying within the confines of the status-quo won't enable a top-performer to fully apply their talent, achieving their absolute best.

On the other hand, having a defined structure does provide benefits. Clearly, standardized business technology purchase processes are often chosen to create a manageable IT environment. But those guidelines also need to be flexible, to accommodate exceptions to the rules.

Truly, this scenario creates a dichotomy; one that will likely occur at greater frequency -- from within the smallest business to the largest enterprise -- as more companies encounter rapid shifts in global markets that tend to reward the most agile and responsive competitors.


Ongoing Quest for Strategic Advantage

As a senior executive, you know that business technology will always be a key part of your own forward-looking planning process. It's assumed that information and communication technology (ICT) will continue to be the business enabler of the 21st Century.

But these platforms are often just the table stakes that enables your business to participate in the Global Networked Economy -- they're not the actual source of a sustainable strategic competitive advantage.

In 2003 Nicholas Carr wrote a provocative article for HBR entitled "IT Doesn't Matter" -- where he suggested that once a technology achieves ubiquity, then the focus must shift to differentiated applications that are very difficult for competitors to replicate. Likewise, in time, cloud will become commonplace. So, when that eventuality comes to pass, what comes next?

That's when value-adding vendor offers of guidance on how to achieve distinct business outcomes will have the edge in this rapidly evolving marketplace. When evaluating cloud companies, such as Cisco, look for a vendor that offers deep domain contextual guidance at every stage of the cloud evolution cycle, for each of the major industry verticals, and for all the key stakeholders within your diverse leadership team.

This will help you implement a cloud-first strategy that brings together your organization, cloud partners and providers, and other technology vendors to form a portfolio and strategy that is open and secure.

Moving Beyond Basic Cloud Readiness

If your organization is an early-adopter of cloud computing, then you're already ahead of the game. You probably know how cloud services can be applied to help you achieve your desired business outcomes.

But are you seeing the full depth and breadth of the upside potential opportunities? If so, then are you ready to respond -- just in time -- when your top performers are ready to act on the next wave of cloud-related capabilities?

According the latest findings from the Cisco Global Cloud Index, 2014 will be the first year when the majority of workloads shift to the cloud -- it's estimated that 51 percent of all workloads will be processed in the cloud. By 2017, it will expand to 63 percent of all workloads.

Furthermore, if you've been following the key business technology trends, then you know that the evolving cloud services debate now incorporates the advent of mobile internet applications -- many of which are inherently cloud-centric. The virtual mobile office will gain momentum in 2014.

Preparing to Navigate the Internet of Everything

When the Internet emerged just over two decades ago, at first it wasn't clear what -- if anything -- would be significantly impacted. Today, we can point to numerous examples of how it has removed traditional boundaries to market entry, leveled the playing field, or recast a legacy industry landscape. Certainly, the disrupted media and entertainment sectors will come to mind.

But what we're about to see will make that transition pale in comparison. The Internet of Everything will change all kinds of industries that may have seemed unscathed by the prior disruptions. For the adventurous among us, that means a vast array of new opportunities.

And yet, many of the same core business-related challenges will likely remain constant. New venture capital investment will still be in short supply. Top-performing employee talent might be difficult to hire and retain.

Meanwhile, cloud services will be abundant. You'll have a plethora of choices -- including public, private and hybrid cloud offerings. But so will every one of your competitors. Therefore, you'll need something extra special, something that truly differentiates you in the marketplace.

If you want to win big, then you'll need to apply the best and brightest minds -- to uncover that special ingredient. Be prepared to seek help and ask for guidance from those who have "been there, and done that" type of forward-thinking ICT project before.

Value-adding vendors have savvy business consulting and technical services staff, plus a multifaceted ecosystem of integration partners that you can depend on to meet your primary goals and satisfy the demands of your top-performers. Be wise, choose carefully. Don't settle for anything less than what you really need to succeed in the coming year.

Tuesday, July 8, 2014

How Cloud Computing Empowers the Agile Enterprise

Public cloud service adoption is already a mainstream phenomenon in most organizations. Meanwhile, many large enterprises see a private cloud in their future. But choosing whether to invest in building an internal cloud infrastructure or buy from a cloud service provider will become more challenging – in anticipation, savvy IT leaders are becoming brokers of dynamic business technology solutions.

Hybrid cloud resource management and progressive operational process adoption are the key focal points in preparation for this transition. Moreover, Line of Business demand for emerging use cases and just-in-time IT workload creation requires speedy access to a managed self-serve DevOps deployment model.

That’s why comprehensive management and provisioning tools -- such as Red Hat CloudForms -- have become essential platforms. Besides, given the pervasive trends in the marketplace, every business will eventually need an actionable hybrid cloud adoption plan. It’s a requirement of the forward-looking agile enterprise.

Public Cloud Services Still Gaining Momentum

International Data Corporation (IDC) has released the latest results from their ongoing global market study. For 2013, the worldwide public cloud services market reached $45.7 billion -- growing at a compound annual growth rate (CAGR) of 23 percent until 2018.

Three major product groups comprise the total public cloud services market in IDC's software taxonomy: Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).

The SaaS market – accounting for 72 percent of the total public cloud services market and forecast to grow at a 20 percent CAGR over the forecast period – is dominated by Enterprise Applications cloud solutions such as enterprise resource management (ERM) and customer relationship management (CRM), followed by Collaborative applications.

System Infrastructure Software cloud solutions – the other major part of the SaaS market, including Security, Systems Management, and Storage Management cloud services – drove 21 percent of the 2013 SaaS market.

The PaaS market – accounting for 14 percent of the market in 2013 with a forecast CAGR of 27 percent – is composed of a wide variety of highly strategic cloud app development, deployment, and management services.

In 2013 and 2014, PaaS spending has been largely driven by Integration and Process Automation solutions, Data Management solutions, and Application Server Middleware services.

The Infrastructure-as-a-Service (IaaS) market – comprised of two major segments, Server and Basic Storage – drove $3.6 billion in 2013 spending and is projected to grow at a 31 percent CAGR through 2018.


On a regional basis, the United States holds almost 68 percent of the market which is much more than what it holds for traditional technologies. Western Europe holds 19 percent and the other six regions IDC tracks hold 5 percent or less each.

However, IDC forecasts that by 2018, the U.S. share will drop to 59 percent, while the Western European share will grow to 23 percent. Emerging regions are also expected to grow above worldwide average.

"We are at a pivotal time in the battle for leadership and innovation in the cloud. IDC's Public Cloud Services Tracker shows very rapid growth in customer cloud service spending across 19 product categories and within eight geographic regions," said Frank Gens, senior vice president at IDC.

Monday, June 30, 2014

Frugal and Agile DevOps - the Cloud Computing Advantage

Accomplish much more, very rapidly, while spending less -- this is the business technology trend that savvy executives everywhere have embraced. Worldwide IT spending will reach a total $3.7 trillion in 2014, that's a 2.1 percent increase from last year, according to the latest global market study by Gartner.

This forecast, however, is down from their earlier projections of 3.2 percent growth.

What's driving the ongoing transition to lower business technology spending? The slower outlook for 2014 is attributed to a reduction in growth expectations for end-user devices, data center systems and IT related services.

Moreover, the typical IT investment is evolving. It's transitioning from a legacy focus on technology and processes, to a focus on new business models and associated strategic outcomes that are purposefully enabled by digitalization.

Transition within Enterprise Mobile Devices

The IT end-user devices market -- which includes PCs, ultrabooks, smartphones, tablets and printers -- is forecast to grow in 2014, reaching $685 billion -- that's a 1.2 percent increase from 2013.

According to Gartner's assement, this trend is due in part to lower price points across smartphones and tablets. Besides, sales of high-priced tablets will decrease, with the next wave of adopters more attracted to low-priced utility tablets.

"Price pressure based on increased competition, lack of product differentiation and the increased availability of viable alternative solutions has had a dampening effect on the short term IT spending outlook," said Richard Gordon, managing vice president at Gartner.


Transition within the Enterprise Data Center

Cloud computing is already impacting traditional business technology spending patterns. Data center systems spending is projected to reach $140 billion in 2014 -- that's just a 0.4 percent increase from 2013.

The server market also shows weakness as enterprises migrate away from high-cost platforms toward lower-cost alternatives. Furthermore, the ongoing adoption of Hybrid Cloud solutions will increasingly become a factor in shifting budget allocations. It's enabling the frugal and agile DevOps movement.

The hyperscale segment, primarily driven by consumer-oriented services, does provide some positive drivers to the market -- albeit for very low-cost platforms, which further impacts overall spending levels on data center systems.

Transition within IT Services, Software and Telecom

IT services is forecast to total $967 billion in 2014, up 3.8 percent from 2013. Modestly improved spending is expected through 2014. IT outsourcing is growing slower than anticipated, as sharply reduced pricing by the largest vendors is impacting the cloud storage services market.

In addition, public cloud services are proving increasingly cannibalistic to more traditional data center outsourcing services. Implementation services are also growing slower than expected as risk-averse buyers remain focused on smaller, safer projects.

In the enterprise software market, spending is on pace to total $321 billion -- that's a 6.9 percent increase from 2013. Slightly increased growth expectations for infrastructure software are balanced out by slightly lower growth expected for applications software.

Slower growth is expected in the applications market, specifically office suites and digital content creation (DCC), which are being impacted by slow PC sales and the rapid move to cloud-based offerings by many organizations and professionals.

Telecom services spending is projected to grow 0.7 percent in 2014, with spending reaching $1,635 trillion. Voice average revenue per user (ARPU) will decline by about 10 percent annually through 2018 because of a decline in consumer use of voice services -- particularly among prepaid mobile users.

Friday, June 13, 2014

Mobile Location-Based Services will Drive Business Apps

Internet usage is evolving, and so are the application scenarios for business technology. In the foreseeable future, desktop personal computers will produce a much smaller share of commercial internet protocol (IP) traffic. Mobile and portable devices -- other than PCs -- will drive the majority of traffic by 2018.

According to the latest findings from Cisco Visual Networking Index, in 2013, just 33 percent of IP traffic originated with non-PC devices. However, by 2018, the non-PC share of IP traffic will grow to 57 percent. Moreover, commercial mobile location-based services will be the fastest growing application -- with a 24.9 percent CAGR -- during the forecast period.

PC-originated traffic will grow at a 10 percent compound annual growth rate (CAGR), while other devices or connections will have higher traffic growth rates over the forecast period -- including TVs (18 percent), tablets (74 percent), smartphones (64 percent) and M2M connections (84 percent).

According to Cisco's assessment, global IP traffic will increase nearly three-fold over the next five years due to more Internet users and devices, faster broadband speeds and more video viewing.


Key Internet Application Growth Trends

Global IP traffic for fixed and mobile connections is expected to reach an annual run rate of 1.6 zettabytes -- more than one and a half trillion gigabytes per year by 2018. The projected annual IP traffic for 2018 will be greater than all IP traffic that has been generated globally from 1984 – 2013 (1.3 zettabytes).

The composition of IP traffic will shift dramatically in the coming few years. As an example, Wi-Fi traffic will exceed wired traffic for the first time and high-definition (HD) video will generate more traffic than standard definition (SD) video.

The Internet of Everything is also gaining momentum and by 2018 there will be nearly as many machine-to-machine (M2M) connections as there are people on earth. Smart cars will have nearly four M2M modules per car.

Traffic originating in metro networks surpassed traffic traversing long-haul links in 2013. Metro traffic will grow nearly twice as fast as long-haul traffic from 2013 to 2018. This growth is due in part to content delivery networks, which will carry more than half of total Internet traffic by 2018.

Key Regional and Country Growth Projections

  • The Asia-Pacific (APAC) region will generate the most IP traffic by 2018, with 47.6 exabytes (36 percent of the global IP traffic) per month. With the world's largest population and the most devices/connections, APAC's increased network usage will maintain its position as the top traffic-generating region through 2018.
  • The Middle East and Africa (MEA) region will continue to be the fastest growing IP traffic region from 2013 – 2018 with a five-fold growth and a 38 percent CAGR.
  • By 2018, the highest traffic-generating countries will be the United States with 37 exabytes per month and China with 18 exabytes per month.
  • The countries with the fastest IP traffic growth will be India with a 39 percent CAGR from 2013 to 2018, followed by Indonesia with a 37 percent CAGR.


The Cisco VNI Global Forecast and Service Adoption for 2013 to 2018 rely upon independent analyst forecasts and real-world mobile data usage studies. Upon this foundation are layered Cisco's own estimates for global IP traffic and service adoption.

Cisco also publishes the highly regarded Global Cloud Index. That in-depth market study has produced some equally thought-provoking insights. It's forecast that as more workloads transition to Open Hybrid Clouds, rapidly increasing cloud-related traffic will dominate data centers around the globe.

Monday, June 2, 2014

Open-Source Cloud: Explore the Commercial Applications

During the course of the last twelve months the OpenStack community has advanced as more users of the leading open-source cloud technology have been reporting their progress -- with the help of their partners -- towards making a meaningful impact on their business goals and objectives.
We've also learned how these progressive technology users are pioneering changes in their own organizations -- enabling them to become more competitive in the Global Networked Economy.
The OpenStack Summit 2014 opened with a keynote on the first day of the conference featuring lessons learned from industry leading organizations that have already deployed these open cloud technologies. Each case study had multiple instances of OpenStack that have been applied for a variety of commercial application scenarios.
Jonathan Bryce, the Executive Director of the Foundation, introduced the growing community of OpenStack Superusers. Glenn Ferguson, Head of Private of Cloud Enablement at Wells Fargo Bank and Chris Launey, Director of Cloud Services & Architecture at the Walt Disney Company described their IT environment and how they’ve adopted OpenStack as a solution to their company’s varied cloud infrastructure requirements.
Addressing the needs of enterprise workloads is only part of the evolving adoption story told at this year’s Summit. Several broadband service providers are also early-adopters of OpenStack.
How Network Operators Apply OpenStack Platforms
During a lunch session on the same day, Fernando “Fred” Oliveira, cloud architect at Verizon, described his experience building OpenStack clouds with Red Hat enterprise-grade software.
He explained how the company’s network is growing faster than they can monetize the infrastructure, and so they’re looking at open-source technology as a way to proactively control costs – but their motivation goes beyond bottom-line savings.
Verizon will use OpenStack as a key enabler of its go-to-market business strategy – essentially compressing the time it typically takes them to reach significant new service revenue attainment.
Moreover, Verizon looked to this rapidly evolving software technology as a way to become more agile – from the initial service launch to the ongoing operational requirements. They have been a pioneer of Network Functions Virtualization (NFV), and OpenStack became a natural choice to use within their numerous proof-of-concept tests and ongoing pilot projects over the last year.
Throughout this progressive exploratory experience, Oliveira mentioned how Verizon has relied upon Red Hat Consulting professional services to augment their own internal expertise with OpenStack platform adoption.
Seeking the Full Potential of NFV Applications
On the second day of the OpenStack Summit Toby Ford, Assistant VP, IT Operations Strategic Realization at AT&T, described his personal experience with cloud offerings -- both internally and externally focused. He started his talk by disclosing that when he first arrived at AT&T (as part of an acquisition) “open-source was pretty much forbidden.” Today, it’s an integral part of their IT strategy.
The commitment to explore NFV is an example of their evolving strategy in action – and the company’s contribution to the OpenStack community. In fact, Ford said that the adoption of OpenStack has become a somewhat unique proxy to introduce more innovation into their DevOps process. Moreover, he sees a tremendous value in the ecosystem that has formed around this open-source cloud technology.
AT&T first introduced OpenStack in their lab environment during 2010. Moving quickly, they had already progressed to production workloads by the end of 2011. Today, they have approximately 120 applications deployed on OpenStack. The platform has been deployed in seven data centers. At the end of 2014, it’s anticipated that three more data centers will join those in production.
The virtualization use cases have expanded from the more typical back-end applications to now include new things – such as Big Data usage scenarios. Over the next two years, AT&T plans to expand their deployment from 10 to 20 data center sites. Why so many locations? Ford says it’s all being driven by the promise of NFV – particularly within the mobility systems arena.
Change Agent: Why Open-Source is Now Pervasive
Keeping in mind that AT&T is experiencing aggressive new competition from outside of their traditional realm, Ford acknowledged that the company’s executive leadership knows that they must change – and OpenStack is seen as a catalyst to rapidly advance a flexible and agile DevOps environment.
As an example of key areas of innovation, Ford pointed to the opportunities to transform how video entertainment content is stored and eventually delivered to AT&T U-verse customers. By going beyond prior constraints of the legacy vertically integrated infrastructure model, AT&T will be able to re-engineer their network architecture. This will allow them to distribute both key functions and multimedia content – thereby placing them much closer to the ultimate user.
Ford believes that the inherent capabilities of Cinder and Neutron will enable AT&T to have a more productive relationship with infrastructure vendors – leveraging the peer pressure within the ecosystem that naturally drives all vendors to produce high-quality code that works and scales as intended.
In addition to direct benefits, OpenStack adoption is also helping Ford and his team to propagate agile methods throughout AT&T’s vast IT organization. Besides, there has been a trickle-down effect from the early results. Now, AT&T has looked more closely at Software Defined Networking (SDN), and Ford says that he’s really excited by the opportunity to advance substantive change in the core network.
Ford believes that it’s the federation – the binding cohesion – that will ultimately make OpenStack succeed. Granted, there are recognized challenges in a number of key areas, but Ford is confident that the current path for OpenStack is both sound and stable. He anticipates more forward-thinking service providers, globally, will follow the lead of the early adopters. The positive impact is truly remarkable.

Friday, May 23, 2014

What's Driving Business Technology Spending Disruption?

It's a given, this year more CIOs will shift their focus from selective IT efficiency to overall IT effectiveness. In 2014 and beyond, enterprise IT leadership will be judged on their ability to meet the demands of tech-savvy Line of Business users.

This is the type of meaningful progress that CEOs have been anticipating. But that organizational realignment won't always translate into higher budgets. Here's why.

According to the latest market study by International Data Corporation (IDC), worldwide IT spending will increase by just 4.1 percent in constant currency this year -- that's down from their previous forecast of 4.6 percent and also down from 2013 growth of 4.5 percent.

IDC believes that pent-up demand should eventually drive more business technology capital spending in the second half of 2014, as some organizations replace ageing infrastructure -- including servers, storage and networking equipment. So, what caused this dip in IT spending?

"As smartphone growth continues to cool from the phenomenal expansion of the past few years, tablet shipments have also performed weaker than expected over the past couple of quarters," said Stephen Minton, vice president at IDC.

Cloud Services will Disrupt Traditional IT Budgets

Around 10 percent of software spending will have already moved to the cloud by the end of 2014, while Infrastructure as a Service (IaaS) will represent 15 percent of all spending on servers and storage.

While this shift is creating significant disruption, it's also driving equally significant short-term opportunities for smart CIOs and IT managers that can successfully deploy cloud-based solutions.


Meanwhile, both cloud and traditional IT spending will be driven by the underlying demand for server and storage capacity, fueled by the data generated from the previous explosive growth of mobile devices in the workplace.

The opportunity to extract value from this accumulated Big Data repository is also driving strong demand for analytics tools. How they decide to deploy these tools will be the subject of much debate among IT leaders.

Many organizations will choose a gradual journey to adopt cloud services -- with security, reliability and regulatory factors in mind, they'll likely deploy more open hybrid cloud solutions.

Global Pockets of New Business Technology Spending

Based upon IDC's regional assessment, Western Europe is forecast to reach IT growth of 2 percent in constant currency terms, as most countries continue to shake off the debt crisis and return to a more stable business climate.

Similarly, business confidence is gradually improving in the U.S. market, after the sequester and government shutdown of last year. Server and storage spending will rebound to positive growth after last year's slowdown, while IT services growth will accelerate to more than 2 percent.

In Canada, IT spending growth will accelerate from 3.3 percent last year to 5 percent in 2014 -- mostly due to stronger spending on PCs, servers and storage.

Japan is a different story. The prior demand was largely consumed in 2013, when the government's deflation-busting policies boosted business confidence and when IT buyers moved to take advantage of lower prices before new taxes came into effect at the beginning of 2014.

 As a result, IT spending in Japan increased by 3.4 percent last year, but will decline by 1 percent in 2014.