1. IT TransformationViewpoint paper Transform your IT environment for agility and growth. Following the global financial crisis of 2008, and through the recession and troubled recovery that has followed, organizations of all kinds have taken a hard new look at information technology.
2. Table of contentsExecutive summary...................................................1 .Trends and drivers ...................................................1Infrastructure costs....................................................1Applications challenges.............................................2Talent issues. ...........................................................2 .Key transformation considerations...............................2A logical pathway ...................................................3Infrastructure............................................................3Applications transformation........................................3Applications modernization. ......................................4 .Clear benefits of this approach. .................................4 .HP, Intel, and IT transformation...................................4Conclusion..............................................................5
3. Both businesses and public sector agencies havebeen forced to reduce their overall spending onIT. Yet at the same time, astute organizationalleaders realize they simply must leveragetechnology to satisfy hard-pressed customersand constituents, to somehow launch newproducts and initiatives, and to gain the flexibilityneeded to survive these difficult times.It is a daunting challenge—and for manyorganizations—it requires a new andtransformational approach to IT. Executive summary Trends and drivers To meet the demands of today’s more competitive Powerful forces are driving tectonic change in the and challenging environment, forward-looking IT landscape. organizations are seeking leaner and more agile Given the state of most IT infrastructures, many IT solutions. organizations now spend up to 80% of their IT Astute executives demand IT systems that reduce budget on operations and maintenance, and just both costs and risk. They want solutions that drive 20% on new products and innovation. As overall IT productivity, support enterprise-wide standardization budgets shrink, even fewer resources are available and efficiencies, and improve both time-to-market and for growth-oriented initiatives. service-quality performance. In this viewpoint paper, HP and Intel present a Infrastructure costs collaborative strategy for IT transformation. This Physical IT infrastructure is often a major problem. approach harnesses today’s most advanced According to IDC, the typical U.S. data center is now 12 computing platforms and processing technologies. years old, and most were originally designed to support a It addresses the key requirements of infrastructure, limited number of previous-generation servers supported applications, process, and people—and describes by less power and cooling, in smaller footprints, and an IT foundation for future growth and success. with less cabling. Many centers struggle with obsolete management tools and service frameworks.1 Transformation is never easy. But by adopting a rational, best practice-based strategy for IT change, Unfortunately, those out-of-date facilities must now organizations can reduce overall costs, while support a vastly expanded IT landscape. refocusing IT resources on innovation and growth. In 1996, there were an estimated five million physical Forward-looking executives are using this approach servers installed in U.S. data centers, yet by 2008 to accelerate time-to-market, to reduce their energy those facilities supported more than 30 million footprint, and to improve quality, service, and agility. increasingly modern, high-powered devices. “Doing more with less” makes sense in today’s economy. For organizations considering the value of IT transformation, the cost of doing nothing is unacceptable. 1 The Benefits of Datacenter Transformation, ICD Opinion, March 2009 1
4. While the adoption of more standardized, cost-efficient Talent issuesservers based on x86 architecture has helped keepserver spending in check, total data center spending Human resources can become a severe limitation forhas risen significantly. Staffing costs alone are up organizations with older infrastructure and applications.some 600%, to over $120 billion a year, as IT As the baby boom generation ages and leaves thedepartments struggle to service and maintain those workforce, those retiring technical workers take witharmies of servers. Server-related power and cooling them the knowledge, tools, and skill sets needed tocosts grew from $2 billion to $10 billion in that same maintain and operate legacy hardware and software.period. Yet, while the number and cost of servers has Younger workers often do not understand the rulesescalated, many of those costly assets are poorly and logic embedded in aging applications. At thedeployed or underutilized. IDC estimates that more same time, today’s system users—most of whom camethan $140 billion of the installed server asset base— of age in the era of web-based interaction and real-representing three full years of new server spending— time responses—have expectations far beyond theis currently underutilized. capabilities of most legacy applications. Few now question the need for a more flexible,Applications challenges responsive IT environment. But before embarking onApplications present another daunting challenge. At a transformational journey, business and IT leadersa time when organizations need maximum efficiency should first address several fundamental issues.and productivity, many legacy applications are failingthat test. Aging software systems are often fragile, Key transformation considerationspoorly documented, and increasingly expensive tomaintain and operate. First and foremost, even when focused primarily on the IT environment, any migration should be based onMuch of the code is redundant, and after years of enterprise-level strategic thinking. While informationmake-shift patching, legacy programs have grown technology has traditionally been driven by singularin both size and complexity. Updates are riskier and and specific technical projects, that granular modelmore expensive, and can seldom meet the pace has severe limitations in today’s environment.of business change. When those mission-criticalapplications are running on obsolete proprietary By stepping back to take a more expansive perspectiveinfrastructure—these shortcomings are compounded. on the enterprise, savvy leaders are increasingly adopting more comprehensive and transformative ITSecurity, regulatory compliance, and business strategies. HP believes that when executives envisioncontinuity are of growing importance in many for- their future organizations, they should seek threeprofit and nonprofit organizations—challenges that critical attributes in a transformed IT environment.aging software simply cannot meet. Not surprisingly, • Line of sight. Business and government increasinglybusiness and technology leaders increasingly must “see around the next corner” to mitigate risk,recognize the need to address those application- improve performance—and simply survive. To dorelated difficulties. that, they need better data, stronger governance,In a 2009 finding, Gartner Research cited the critical and keener insights.challenges of vital but aging application portfolios, • Innovation. Even in a down economy—especiallyparticularly in the current economy.2 A June 2009 in lean times—innovation will separate the winnersreport from Forrester Research found that technology from the losers. Organizations simply must leverageand business leaders in Europe and North America technology to create and exploit opportunity, towere painfully aware of this legacy application reduce costs and drive productivity.problem. Fully 64% of those surveyed cited “updating • Agility. Now more than ever, organizations mustand modernizing key legacy applications” as a top- have the instant ability to adjust to dynamic marketthree software planning priority.3 and constituent demands. They must scale quickly up or down, pivot in pursuit of new revenue streams, and have the flexibility to reinvent themselves in part or in whole.2 artner research note, G00165086 “Key Issues for IT Modernization, G 2009”—27 April 20093 orrester Research report, The State of Enterprise Software: 2009, F June 5, 2009. 2
5. History shows that in a downside economic By offloading applications from the mainframeenvironment, the cost of “doing nothing” can be environment to a modern, converged infrastructure,prohibitive. The recession of 1998-2002, in fact, had organizations can enjoy equal or greater performancea dramatic and lasting impact on a number of at a fraction of a mainframe total cost of ownership.market-leading organizations. In an analysis of that The new generation of virtualized data centers, withdownturn, McKinsey and Company found that only advanced servers running on next-generation Intel60% of brand leaders emerged from the recession in Xeon and Itanium Processors, are now deliveringa similar position of strength.4 accelerated performance and greatly reduced round-trip latency. Transitioning from mainframe toThat is why forward-looking organizations now seek modern servers, IT managers can gain dramaticallythe IT solutions needed to survive and succeed in this higher transactions-per-second processing capacities,challenging environment. improved system response times, and optimized security and resource utilization.5A logical pathway Those improvements translate directly into better ITBased on extensive experience with enterprise-class system reliability, availability, and responsiveness.IT environments, HP recommends a phased anddeliberate progression for any IT transformation. Applications transformationThe first critical step should be to gain a clear and Business and government run on applications, andhonest understanding of the organization’s current software systems of all kinds and sizes are used tostate. Early planning should include a review of broad perform and automate a vast array of activities. Anyenterprise strategies, the definition of a clear future mission-critical initiative—whether a new product launch,state objective, and the setting of precise business or an acquisition-driven integration, or a constituentprocess requirements. Based on those goals, the next service effort—depends heavily on the quality andstep should be a rigorous assessment of in-place IT capabilities of enabling applications. Applicationhardware, software, methods, and capabilities. development, testing, deployment, and managementWhile a comprehensive strategy is ideal, even the often determine the success of a larger project. Andbroadest transformation initiatives should proceed in a for these reasons, applications transformation is vitallogical and focused progression. Successful efforts often to any larger IT transformations effort.begin by tackling low-risk, medium-visibility projects Applications transformation is a multiyear effort thatwith a defendable pay-as-you go model—a strategy must be carefully planned and customized to fit thethat can deliver the quick results needed to gain specific needs of each organization. HP recommends ainstitutional support for the broader transformation. By stepped method designed to improve business agilitycontinually re-evaluating progress against specific and reduce total cost of IT ownership, while creating abusiness and functional objectives, IT transformation more rationalized and productive applications portfolio.can succeed even in a tough economic climate. To achieve applications transformation,To see and follow the most productive migratory organizations should:pathway, it may help to examine the logical sequenceof infrastructure change, application transformation, • Inventory their applications, ideally through theand modernization—and the best practices needed to use of application discovery and dependencyget from here to there. mapping tools • Assess alignment of technology strategies—suchInfrastructure as cloud services, SOA, converged or shared infrastructure—to business and organizationalThe past decades have seen exceptional advances in requirementscomputing technology and related productivity. Micro-processors continue to evolve toward smaller, more • Assess application-related cost, risk, and quality,powerful, and more intelligent designs. The move and how those variables align to business andaway from mainframe computing platforms—and technology strategiestoward more open, more scalable, and more efficient • Define an applications “future state” consistent withindustry-standard technologies—enables organizations larger business objectivesto make remarkable gains.4 cKinsey and Company, McKinsey on Finance, Number 23, M 5 o evaluate the cost-benefit of upgrading servers, use the Savings T Spring 2007. Estimator Tool at http://www.intel.com/itcenter/system/server/index.htm 3
6. • Develop a transformation road map consisting of • Improved performance. Virtualized data actionable projects centers can reduce hardware costs, decrease• Construct a business case to justify the transformation administrative overhead, and accelerate time- to-market. Modernized applications multiply the• Implement the transformation road map, leveraging performance improvements provided by modernized visual intelligence tools and methods to accelerate infrastructure and virtualized data centers. In real- the results of this modernization world implementations, HP servers running on Intel®• Utilize software life cycle management tools and Xeon® processors have improved virtualization processes to maintain long-term control of the IT performance up to 21 fold, while reducing round-trip environment virtualization latency by up to 40%.7 • Greater availability—lower risk. A well-plannedApplications modernization transformation can consolidate large numbersApplications modernization should be a keystone of any of servers, data stores, and applications into abroader transformational effort. While modernization tighter and more productive footprint. Advancedhas often been perceived as risky and expensive— systems for throughput, redundancy, and reliabilityand when done poorly, it can be—organizations can can ensure those streamlined systems reduce bothrealize substantial gains by updating and modernizing cost and risk. Transformed applications improvelegacy software. operational availability, reduce the risks associated with legacy infrastructure, and eliminate the risksWithout a robust applications modernization of the business relying on antiquated software orcomponent, the outcomes of a broader transformation hardware technologies.effort will be severely limited. In a recent report,Forrester Research found that top IT leaders cite • Business and IT alignment. Transformation is usedmodernizing legacy applications, consolidating to ensure the applications and infrastructure areredundant packaged applications, and updating older completely aligned to the business and technologypackages as top priorities.6 strategies of the organization. They are “fit for purpose” and “fit for future.” Transformation canBy modernizing applications, companies and be used to improve business processes, drive moreagencies can fully realize the benefits of service-based consistent policies, and to leverage standardizedarchitectures, composite applications, and more robust tools and processes across the organization.”computing platforms. Modernized software costs • Business agility. Through IT transformation, aless to maintain and run. It can be updated more simplified, modernized applications portfolio,quickly and at a lower risk. More to the point, modern supported by a modernized infrastructure andapplications give organizations of all kinds the agility aligned to business and technology standards,needed to respond and succeed in a more difficult can be adapted more quickly to dynamic marketbusiness and service environment. conditions and changing end-user requirements.Clear benefits of this approach HP, Intel, and IT transformationBy adopting this more comprehensive, value-driven HP and Intel have forged a collaborative relationshiptransformational model, organizations can realize to offer effective, value-driven information technologymeasurable IT and business advantages. transformation. The HP model for IT transformation• Cost reductions. IT transformation can yield addresses business processes, systems, and applications, significant savings in real estate, network, and and a flexible architecture closely attuned to each staffing costs. When compared to legacy mainframe organization’s specific goals. Next-generation Intel systems, today’s advanced computing platforms processors power today’s most capable computing can deliver exceptional performance at about platforms, and literally thousands of applications are one-eighth the total cost of ownership. Applications now optimized for the Intel Architecture. modernization efforts have reduced software-related operating and maintenance costs by up to 60%, and new development expenses by up to half. Those savings allow executives to shift spending away from day-to-day upkeep—and toward strategic, growth- oriented innovation. 7 erformance results on VMmark benchmark. HP ProLiant ML370 G5 P6 orrester Research, Application Modernization and Migration Trends in F server platform with Intel Xeon processors. For more details, 2009/2010, November 2009 visit www.intel.com/xeon 4
7. HP and Intel can help organizations progress toward This joint HP and Intel partnership helps organizationsa desired future state through: address the key challenges of reducing operational• IT strategy and transformation planning and supply chain costs, accelerating time-to-market, and improving overall business performance along a• Execution of the transformation program successful IT transformation journey.• Software and hardware solutions• Next-generation application and server management Conclusion• IT governance In today’s more challenging global economy,• Enterprise architecture organizations need a new and transformationalHP backs this model with a comprehensive portfolio of approach to information technology. They must use ITtransformation-related services, including assessment to find, hold, and better serve hard-pressed customers.and dependency mapping, visual intelligence Astute executives seek strategies that controlcapabilities, transformation workshops, applications operational costs, while shifting capital spendinglife cycle management, applications management, toward innovation and new opportunities.service-oriented architecture capabilities, and One thing is clear: The cost of doing nothing is farconverged IT infrastructure solutions. HP and Intel too high.drive this transformation strategy by applying people, By adopting an enterprise-wide, value-driven modelprocess, and technology best practices. for IT change, organizations can address the criticalLeading by example, HP has undergone its own internal variables of infrastructure, applications, process,IT transformational journey. Over a five-year period, and people. This holistic approach fully leveragesthe company reduced 85 data centers to just three proven methods of automation, virtualization, andpair of fully redundant facilities, converted more than modernization to realize those measurable gains.700 data marts to just over 50, and rationalized some In a difficult business environment, a carefully6,000 applications into a tighter and more efficient transformed IT environment can lay the foundation forportfolio of about 1,500 systems. That effort has survival, competitive success, and long-term growth.allowed HP to reduce operational expenses, improvecompany-wide data quality and reporting, and freestaff to focus on innovation and strategic value—withjust 30% of personnel time spent on day-to-daysupport and about 70% devoted to new projects.Intel’s IT transformation journey looks beyondcomponents to address the larger transformationalenvironment across networks and servers, computeand storage environments, and enterprise processesand architectures. Today, Intel-based serversincorporate transformed and modernized applications,and have been successfully used to replace legacymainframe and mid-range systems based on bothvalue and performance. Intel-based solutions areavailable for manufacturing, healthcare, ERP, energy,financial services, database, graphic, cloud, businessintelligence, and other sector-specific applications. 5