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HCLT Whitepaper: Cloud, Offshoring and SAP on Demand
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HCLT Whitepaper: Cloud, Offshoring and SAP on Demand

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http://www.hcltech.com/it-infrastructure-management/overview-More on Infrastructure Management …

http://www.hcltech.com/it-infrastructure-management/overview-More on Infrastructure Management

http://www.hcltech.com/ - More on HCL Technologies

There is no doubt that all IT decision makers will have to confront Cloud sooner or later. - Optimizing your own Infrastructure: Cloud is a natural next step in the optimization of the infrastructure. After consolidation, virtualization and automation of IT systems, cloud becomes a natural next step to take in the process by increasing scalability, offering self-provisioning, and increased transparency of the IT resource for each individual department. - Provide necessary services: Employees today expect to be able to work independently of time and place, and on different devices, cloud computing allows just that. - Select, manage, integrate and secure cloud services: Users expect to have the same opportunities at work as they have at home. If the company's own systems aren't flexible enough or don't have the right "look and feel" employees often tend to use other solutions. This is for several reasons not desirable, why it is important that the company selects a number of approved solutions which can be integrated safely without locking the feature that the employees wish for.

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  • 1. WHITE P APER Cloud, Offshoring and S AP on Demand Sponsored by: HCL, EMC Annsofie Petersson januari 2012 Where are we today? There is no doubt that all IT decision makers will have to confront Cloud sooner or later. - Optimizing your own Infrastructure: Cloud is a natural next step in the optimization of the infrastructure. After consolidation, virtualization and automation of IT systems, cloud becomes a natural next step to take in the process by increasing scalability, offering self-provisioning, and increased transparency of the IT resource for each individual department. - Provide necessary services: Employees today expect to be able to work independently of time and place, and on different devices, cloud computing allows just that. - Select, manage, integrate and secure cloud services: Users expect to have the same opportunities at work as they have at home. If the companys own systems arent flexible enough or dont have the right "look and feel" employees often tend toP.46.8.751.0415 use other solutions. This is for several reasons not desirable, why it is important that the company selects a number of approved solutions which can be integrated safely without locking the feature that the employees wish for. IDC research shows that Nordic companies see improved productivity/efficiency as well as improved service quality as their most important organizational priorities.Box 1096 Kistagangen 21 S-164 25 Kista, Sweden When it comes to IT priorities, quality of services and implementation of new systems top the list. And even though Cloud Computing in general, still isnt a primary investment area, Infrastructure Optimization is; in other words, private cloud. The research also shows that 50% of the Nordic market doesnt have enough knowledge about cloud and what it represents. We also see that this comes down to the fact that IT vendors tend to use their own definitions and sometimes call an old solution cloud, which doesnt really classify as such. This of course, causes confusion. Looking at challenges seen with cloud, we learn that security is an inhibitor of relevance. Questions arise such as has there been unauthorized intervention with my data? What if I lose my data, am I guaranteed to get it back and in what kind of format? Public cloud spending is forecasted to increase with a CAGR of around 27% in the next five years, and we do believe that private cloud spending will increase even more. Research also shows that even though more companies are using public cloud solutions today, we see an even larger increase in private cloud solutions looking forward. Especially the IT department is looking at private cloud solutions, possible reasons to this could be that public clouds are seen as a threat. We also see that there is somewhat of a war going on between the IT organization and line of business, where it is essential that the CIO remains in control over which cloud
  • 2. systems that are bought into the various business lines. The lack of doing so couldresult in a situation where many different solutions exist which makes a futureintegration of systems difficult to manage. Furthermore, IDC believes that cloudcomputing will change the IT organization by giving the CIO more of a strategic role inthe company with less focus on operation and development and at the same time,more of a purchasing role where things like legal aspects, contract management andsecurity and risk will be important factors.Trends within OffshoreIDC believes offshoring is a natural progression in outsourcing and fundamental tosustaining the financial benefits it provides. Further, Nordic companies are currentlyexperiencing challenges resourcing not only key technology roles but also morecommon positions such as operations and systems management. Global sourcingprovides Nordic businesses better access to skilled resources and choicesconcerning the vendors and delivery models to meet their requirements.Virtually all Nordic companies is impacted by offshoring, whether it is the rawmaterials needed to manufacture products or it is the additional distribution channelsto expand sales. IDCs research has found that leading companies approachoffshoring as a strategic component of their overall business plan. Among otherthings, offshoring strategies include ongoing evaluation of new markets and theirimportance to the company. Leading companies also learn from their offshoreexperience, both positive and negative, and invest in broadening their markets,reshaping the buyer. These changes need to be accounted for in the business case,transition plan, and ongoing management of the relationship.As shown in figure 1 below, what we have seen since 2008 is an increasedacceptance for offshoring in the Nordics. The economic downturn forced manycompanies to look at ways to cut down on costs and as a consequence, the amountof respondents using offshoring went from 10% in 2008 to a whopping 27% in 2009and has since then continued to increase. This indicates that customers who has triedoffshoring, has had a satisfactory experience.2 #IDCWP ©2012 IDC
  • 3. FIGURE 1Offshore AcceptanceSource: IDC, 2012The case of DanfossDanfoss is a global company based in Denmark with 78 years experience withinenergy efficient technologies and with over 23 000 employees. Danfoss has beenusing SAP since 1987, but with every division having their own SAP landscape, andin some cases, even some business units having their own landscape, there was aneed for integration of the systems.The economic downturn in 2009 hit the company hard with a negative growth for thefirst time ever and halted investments as a result. This forced the management toimplement a so called "Core & Clear" strategy to decide on what the core businesswas and what to outsource. The IT department recognized that its model of fixedcosts was not suitable for a more flexible operating model hence a reorganization of©2012 IDC #IDCWP 3
  • 4. how IT Hardware and Services are sourced was kicked off. The strategy led to apartnership with HCL where the IT vendor gradually takes over Danfoss currentinternal data center in Nordborg by leveraging the IaaS services of HCL from its clouddata center in Stockholm. Indeed, Danfoss will rent space as required from HCL. Theagreement means that Danfoss has an on demand IT infrastructure, which is payableonly for the servers and storage being used. This way, Danfoss avoids investment inexpensive hardware and can instead concentrate on its core business. And so aprocess started of deciding what in Danfoss IT infrastructure was ready for the cloudand what wasnt. For example, the mail system will move into the cloud by 2015 asthe current SaaS offerings like Microsoft and Google are too rigid to customize to theneeds of Danfoss – however and the entire SAP on Demand is being bought fromHCL. The first wave of the SAP implementation has now been completed and the rdsecond wave is currently being built by HCL. The 3 wave will be built in June andthen the move to the data center in Stockholm. Danfoss has already started to seebenefits associated with the SAP on demand implementation.Dos and donts for the CIOCloud computing as a part of the IT service delivery is here to stay and to simplyignore it is not an option.CIO AdviceOrganizations need to consider several important factors when moving to a public ora private cloud: Make sure to have a clear strategy when it comes to cloud computing and step forward as the authority in the area. The failure of doing so could result in various business units going out shopping for their own cloud solution, making it difficult for the IT department to integrate in the end. With the growth of cloud computing, the role of the CIO will become more of a strategic business role with an increasing need of competences such as negotiators, lawyers, contract managers, security specialists and risk managers, and at the same time less skills within competences such as operations and application development. Consider the costs of today and tomorrow. Deciding which cloud solution to manage or deploy your environment is a large decision. It is vital to think about not just the up-front hardware costs but the ongoing costs of powering, cooling, and managing this infrastructure. Try to think of the value of offloading some of the more mundane everyday tasks to the cloud (public or private) and freeing up that manpower to focus on adding value to the business Think beyond virtualization and convergence. Clouds true potential is unleashed only when the infrastructure is self-serviced and automatically provisioned. Many IT organizations are at least partially virtualized, but its these last few steps of automation and self-service portals that will save on soft costs like management time, downtime risk, and increase flexibility.4 #IDCWP ©2012 IDC
  • 5.  Choose cloud offerings based on workload. Different cloud offerings fit best with specific workloads. Increasingly, hardware and middleware are being tailored to fit specific workloads, such as database, email, or collaboration. Thinking in these terms instead of general computing capacity may help ensure a best-fit scenario for an IT organization.HCL and EMCs point of viewHCL sees that the real value for enterprises is to find out how cloud service optionscan be used to impact business problems for customers beyond the hype of thepublic cloud. They see cloud adoption in four different waves: Wave 1 is infrastructureapplications; Wave 2 is Test & Dev; Wave 3 horizontal applications like SAP andWave 4 include vertical/custom applications. HCL works with its customers to identify– what aspects of a cloud solution can be made to impact enterprise IT including whatall workloads would fit into a public cloud type offering – while disaggregating theservices across different clouds – HCL takes end to end responsibility for managingthe user experience for customers thru a Web based interface called the MyCloudwhich essentially helps in provisioning, de provisioning, service management,metering and billing across a heterogeneous services environment.HCLs strategy focuses on being not only a system or service integrator but alsoparticipate as a cloud service provider which provides an enterprise Class Cloudoffering where Data Security, Regulation aspects are more deterministic andauditable – at the same time HCL is also clear that Amazon, Rackspace and the likeare complimentary to its offerings and finds a way to integrate these in its solutions forcustomer’s where it would make sense in a customer environment.HCLs value proposition for cloud is about connecting its competencies in applicationsand infrastructure to its skills and expertise in engineering services. HCL stresses thatit can integrate multiple viewpoints within its clients organizations — a valuable rolefor an external service provider.HCL strives to collaborate with customers, offering a flexible approach at a strategiclevel in contrast with vendors that typically want an all or nothing locked in solution.The strategic flexibility should not be misunderstood to be complete flexibility wrtsolutions and offerings – where typically because of the shared nature of the servicesthe offering is best practice and certified architecture based.For example HCL has chosen EMC as its strategic partner for the shared storage andbackup environment in Sweden - EMCs automation makes the back-up and storageof data more efficient and the continuous data protection (CDP), records alltransactions in order to be able to go back and manage data in the best possible way.It also decrease the recovery time and efficiently move data between datacenters tomaximize the data usage and storage. The solution is customized to run and operatelarge complex SAP environments in a multi-tenant environment and decrease theoverall cost of SAP storage while still providing the advanced features needed forSAP environments.©2012 IDC #IDCWP 5
  • 6. Copyright NoticeExternal Publication of IDC Information and Data — Any IDC information that is to beused in advertising, press releases, or promotional materials requires prior writtenapproval from the appropriate IDC Vice President or Country Manager. A draft of theproposed document should accompany any such request. IDC reserves the right todeny approval of external usage for any reason.Copyright 2012 IDC. Reproduction without written permission is completely forbidden.6 #IDCWP ©2012 IDC