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  1. 1. CIO Page 1 of 6 August, 2010 Page: 40 General News By: Brad Howarth Market: National Circulation: 10695 Type: Australian Magazines Business Size: 3224.82 sq.cms Frequency: Monthly Q JuIylAugust 2010 Copyright Agency Ltd (CAL) licenced copy. Ref: 74690185
  2. 2. CIO Page 2 of 6 August, 2010 Page: 40 General News By: Brad Howarth Market: National Circulation: 10695 Type: Australian Magazines Business Size: 3224.82 sq.cms Frequency: Monthly Beyond the hype, many Australian CIOs are deep in their own cloud implementations BRAD HOWARTH What a difference a year makes. Twelve months ago it was almost impossible to find Australian organisations that had embraced cloud computing. Now pretty much everyone is planning, piloting or executing some form of migration to the cloud. If there was ever doubt that cloud was little more than hype, it was eradicated in April 2010 by Commonwealth Bank of Australia (CBA) group executive for enterprise services and chief information officer, Michael Harte. In a speech to Committee for Economic Development in Australia, Harte declared that never again did he wish to be locked into using proprietary hardware or software and cloud computing was his escape route. Harte is one of many CIOs who have been able to satisfy concerns that initially arose regarding the data security, accessibility and governance of cloud computing. Copyright Agency Ltd (CAL) licenced copy. Ref: 74690185
  3. 3. CIO Page 3 of 6 August, 2010 Page: 40 General News By: Brad Howarth Market: National Circulation: 10695 Type: Australian Magazines Business Size: 3224.82 sq.cms Frequency: Monthly r Commonwealth Bank of.Australia.ClO and group exeeotiua,far errprfse sarxices,. Michael NarTY. The bank has been investigating ways to buy software and fine-grain components and highly granular data, so that our infrastructure as a service for several years. A trip to the US customers enjoy new services. This is not about some technical in May 2007 included a meeting with Google and a chance breakthrough; it is about supplying customers the services they to investigate its cloud-based services for messaging and email. want - and doing that at value." "It freed up so much resource," Harte says. "And we An initial area of activity has been in test and development, thought, `Wow, wouldn't it be nice if you could do other which Harte says can account for up to 40 per cent of the bank's enterprise-scale activities on public infrastructure, and you server resources. CBA is utilising capacity-on-demand from could partition and secure that'." Savvis and Amazon Web Services for part of the workload. At the time, however, there simply wasn't the business "Once we've developed and tested those capabilities, and motivation for suppliers to make the switch. we have them operating at full production, we can determine "The incumbent service providers, whether it's IBM or EDS, whether they stay outside in the public cloud or [should bed were really struggling with the model because they tend towards brought back inside the corporation," Harte says. "We can their own accounting standards," Harte says. "They still have provision those in under 10 minutes and we can do it at up to their own strong business models. They still wanted to continue a tenth of the cost." to `lock'. They do resist contestability. And those things are the Harte is not alone in his thinking. For many CIOs, the cloud antithesis of what we were trying to do." is a chance to move away from technology strategy and embrace CBA's adoption of cloud computing is more a matter of business strategy, although the definitions of cloud computing business philosophy than technological evangelism. remain a grey area. Westpac, for example, has completed a "We only want to pay for what we use," Harte says. trial of an internal private cloud and plans to bring the service "We want to get out of infrastructure computing and into into production. Copyright Agency Ltd (CAL) licenced copy. Ref: 74690185
  4. 4. CIO Page 4 of 6 August, 2010 Page: 40 General News By: Brad Howarth Market: National Circulation: 10695 Type: Australian Magazines Business Size: 3224.82 sq.cms Frequency: Monthly Curtin University of Technology CIO, Peter Nikelotatos, many service providers. According to the chief technology sees cloud computing as part of a strategy to move away officer at Melbourne IT, Glenn Gore, much has been learned from managing assets to managing information. Curtin in a short period. is working with Optus to investigate taking its virtualised Melbourne IT has been running VMware's vCloud servers and desktops to the cloud using VMware's vCloud Express service since September 2009 and is now switching technology. Curtin has also signed on with Microsoft's over to a full vCloud implementation, with vCloud Express Live@edu hosted service for e-mail, calendaring and to be relaunched as an SME-focused service later this year. collaboration, and is examining Microsoft's Azure cloud "What I have realised is that some really good things platform as an application development layer that can grow come along with cloud, but with those good things come a with the university. different set of responsibilities and accountabilities," Gore "[We want to] move away from a capital demand-driven says. "Supporting cloud-like infrastructure is more complex budget to one that's a utility-based model, that is much more than we anticipated, and that's even with our decade of predictable and reliable in terms of determining what our hosting experience." ongoing costs will be," Nikelotatos says. "But this is not Melbourne IT is one of several service providers to about saving money; it is about reducing risk and improving launch cloud service offerings, and they are finding customers business continuity." quickly. The earthmoving equipment maker Komatsu, for He says that the experience for students is going to example, has signed with Telstra to have its IT infrastructure change significantly in the next 10 years, requiring greater delivered as a service. flexibility in how data is handled. Komatsu CIO, Ian Harvison, says the decision was "Unless you have a bottomless pit of funding to help catalysed by the expiration of the leases on several of its build things organically, you have to be thinking differently servers, coupled with the infrastructure in its data centre about how you deliver services," Nikoletatos says. "It's about beginning to show its age. Harvison supports 1200 staff getting the foundation right and, as you mature areas that spread across 43 branches around Australia, New Zealand you can move to the cloud, you slowly progress them and and New Caledonia. move them once you satisfy the governance-related issues." He invited three organisations - Hewlett-Packard, As the deputy chair of the Council of Australian Fujitsu and Telstra - to investigate Komatsu's requirements University Directors of IT (CAUDIT), Nikoletatos says and propose a new infrastructure plan. HP withdrew, many other universities are looking to cloud computing as a and the solution that stood up from a cost perspective way of reducing costs and increasing functionality, including was Telstra's. Komatsu has signed a five-year, whole-of- through collaboration. "The University of Melbourne, business agreement for Telstra to provide infrastructure-as- Monash and RMIT are all working collectively on a model a-service in a virtual private cloud, and has also renewed with a Fujitsu data centre in mind," Nikoletatos says. its communications contract with Telstra. "This really That large organisations are treating cloud computing is about aligning our resources to focus on the strategic seriously reflects the rapid maturity of the capabilities of and the core things we need them to do," Harvison says. Tickit Svstem new functionality. And clients love that, because we are quite re5oonsive to their feedback " Customers have v ted with their chequebooks as well, with Philip Saying that almost all have moved across to the Many Australian ocgani tions ere willingly adopting cloud cloud service. ,eh+rC@5, but tam a may find themselves with few alternatives. "We had a few that had customisations that were The success of web-hosted applications such as particular to them,. he says- One decided to n ovq on to 5alesforce-corn is not just insperi*rg the cre on of loear, another platform, and the other one decided they would born-in-tlte-cloud applications such as S.ascr and Xero, it is take the old code and rrtairltain it themselves." also leading Borne application developers to migrate their The rest are now using Tickit On Demand, including the offlirse applications to the doud- federal Department of Treasury, Phil Ip says tlrat the software's It is exactly what Tickit Systems has done with its risk tenancy on an offshore server has riot been an issue- management and compliance application, rewriting its "We actually offered them a local hosting option," Philip software to run oc Amazon Web Services. says. "But they decided that they would in this instance go "We'+re Found it to be a differentiator for us," says sales with Amazon Web Services- and rrrarketirig director, Tarun Philip. "We have new features "So lar there have been questions about it, but it hasn't going out pretty ms,6eh every t varter, with new reports and been a stumbling block.,, Copyright Agency Ltd (CAL) licenced copy. Ref: 74690185
  5. 5. CIO Page 5 of 6 August, 2010 Page: 40 General News By: Brad Howarth Market: National Circulation: 10695 Type: Australian Magazines Business Size: 3224.82 sq.cms Frequency: Monthly "And in running infrastructure, that we are thinking about its [Telstra's] core capability. - giving people more and They can do that - we don't need to be doing it." This is not about more capability - because what we want to do is get the The first phase has been to port Komatsu's saving monn ; it statistics out there as easily as possible." SAP environment to the cloud, followed by ancillary about reducing is Similarly, the Catholic Education Network has applications including Microsoft Exchange and file risk and improving created its own internal private cloud. and print servers. Komatsu will also co-locate its mainframe business ContifLuit CENet services the IT needs of 15 Catholic dioceses and remaining servers in the encompassing 705 schools Telstra facility. Its data centre will be shut down, but all data across NSW, Queensland and the ACT and Darwin, with a will remain in Australia. student population of 250,000 and 20,000 teachers. Harvison says the decision enables Komatsu to take CENet chief executive officer, Bede Ritchie, explains that advantage of new technologies such as Microsoft's managed when faced with the need to refresh its server environment, the enterprise services for the smartphones. network opted in January 2010 to virtualise using technology "It was something we'd wanted to do but the problem in from NetApp and VMware, giving it the basis of a private the traditional model is you have to go and buy a server, put it cloud. The initiative has also taken advantage of the Catholic in, and put the whole disaster recovery environment in place," Network Australia program that has improved the bandwidth Harvison says. "This model means we don't have to worry so to the majority of schools across the country. much about having to procure the servers ourselves and get The new configuration enables CENet to offer infrastructure- them up and running." as-a-service to the dioceses to run their own discrete services. "The big benefit from my perspective is taking away the Do it yourself cloud responsibility for them to have to worry about hardware," Komatsu turned to an external provider, but other Ritchie says. "A diocese can request a VM, request some organisations are choosing to create their own clouds as a storage, run it up, and three months later just make it disappear more effective way of servicing clients. and go back in the pool again. The Australian Bureau of Statistics (ABS) is one example. "They can be freed to use their smarts to assist teachers to The constrained resources available to the ABS have meant that implement ICT in classrooms, rather than having to kick tin." it has long operated a chargeback model for its 3200 staff and 1000 field researchers. The business case But whereas the old model was based on CPU cycles, The reasons for adopting could services are often very specific. ABS director of infrastructure, Tony Marion, says that by For the property company Savills, it was about commoditising reorganising its data centre using virtualisation technology, certain backend functions, particularly disaster recovery. it has been able to configure it as a private cloud and charge Infrastructure manager, Justin Gillfeather, says Savills is clients based on variable overall resources. trialling Optus' cloud service. By connecting across the Optus "It is a variable charge, but it allows areas that want to do network he does not have to risk reaching out to public services. a lot of research and run really long jobs that don't necessarily "We expect it will take some load off our internal IT need a lot of capability [to not be] charged horrendously per department," Gillfeather says. "Especially things like disaster CPU cycle," Marion says. "So it is more enabler or an `evener' recovery - that all becomes somebody else's problem. for everybody - all receive an even share of the pie." "The reason we are in beta is to find out whether it is going Chargeback is handled through VMware's Virtual Centre, to be cost effective for us to do this, whether it is really going with the ABS recording the main variables of CPU, memory and to save us as much money as we thought, and the degree of disk. Marion says the ABS is now able to provision a test and flexibility it will really give us." development environment for its offices almost instantaneously, Gillfeather says Savills is currently geared towards acquiring whereas previously it might have taken two or three months. other businesses, which means potentially needing resources at Marion is also looking into desktop virtualisation within its short notice. cloud to enable staff work from anywhere on any device. "If we had cloud running we might be able to do that far "Everybody has a virtual machine, so that your data never more easily than we are currently able to," Gillfeather says. leaves the bounds of ABS," Marion says. "And if we want to "If we can buy those resources from somebody else and know allow people to connect with us from outside, maybe we can set upfront how much it is going to cost, that allows us to do them up with a virtual machine. "These are the sort of things longer-term planning than we are otherwise able to. Copyright Agency Ltd (CAL) licenced copy. Ref: 74690185
  6. 6. CIO Page 6 of 6 August, 2010 Page: 40 General News By: Brad Howarth Market: National Circulation: 10695 Type: Australian Magazines Business Size: 3224.82 sq.cms Frequency: Monthly "If we were starting a brand new business tomorrow would Reality check I buy any server hardware at all? At the moment I would, but The enthusiasm with which many CIOs are embracing cloud two or three years from now, maybe not.,, computing in no way detracts from satisfying their concerns Australian surfwear retailer City Beach certainly isn't keen around data security, accessibility and governance. to spend the money to find out. When it came to upgrading According to CBA's Harte, these issues are not all settled all from a static Web page to a full e-commerce service based on at once, but they are not all necessarily new, either. Security, for WebSphere Commerce, it opted to host it on Brennan IT's example, has been a concern with each new IT delivery model, infrastructure-as-a-service platform. City Beach is Australia's including outsourcing, offshoring and virtualisation. largest independent retailer of surf, skate and urban wear, with "Security is definitely a concern, but wherever there is a large 60 stores nationwide and a turnover of about $300 million. arbitrage to be had people will decide whether or not they are CIO, Paul Downs, says that hosting with Brennan was going to have it," Harte says. "If they need further compliance, more cost effective than what he could achieve himself, and it you can work with regulators and the risk community to figure enabled the company to deploy its site in less than 100 days in out what to build back to ensure that robust security." the lead-up to a Christmas deadline. Komatsu's Harvison says it is important that CIOs "I have quite a lean-team here, so my strategy is to outsource investigate these models now to meet the agenda being placed as much as possible, because we just don't have the resources upon them to do more with less, because hands-on experience to provide 24 by 7 monitoring and break-fix," Downs says. is the only way to answer these concerns. "When you stack up the cost of the wrap-around services "The technology now is there, its proven," Harvison says. versus the cost if I had to employ two or three people to provide "And as long as you have some comfort around the security the coverage over a year, it's significantly cheaper, and Brennan aspects and the partner you've chosen, then I don't think there's places an SLA around it." reasons to put it up as a barrier anymore." Service through the cloud Marketing departments are often the first group within large "Using the Amazon service allows us to scale out really organisations to experience cloud computing through their quickly, and absorb all of that traffic, and then downscale close links with digital marketing agencies. The Melbourne- it again on the other side," Fisher says. "So it is very based digital marketing agency Citrus, for example, works cost-efficient, and the end-user customers don't even know with brands including Sportsgirl, Adidas, Ford, Borders and what is going on behind the scenes. They don't see any the Melbourne Cup, providing Web, e-mail and mobile slow-down." marketing and advertising services. In the case of the Melbourne Cup, Fisher says a website Citrus's head of operations, Andrew Fisher, says that that normally receives a few thousand visitors a day to one marketing services is often the first area where businesses will that ramps up into a million over the four days of the carnival, experiment with cloud services. Citrus works with Melbourne requiring it to grow from one server to 20. IT and Amazon Webs Services to deliver cloud services. "If you had those 19 extra servers sitting there all year "The concerns that ClOs have for infrastructure and round doing nothing, it's massively redundant," he says. enterprise IT stuff aren't necessarily the same at the marketing One of those lessons has been with regard to e-commerce end of things," Fisher says. "In marketing we are doing things systems and the structure of how data is going to flow. Citrus that are campaign-driven, so you can experiment quite won't run e-commerce sites or anything that holds sensitive heavily across a campaign by throwing in different types of personal information in the public cloud. servers and storage systems, or network provisioning." "We might set that up so that the scalability comes Before the cloud, Fisher says Citrus would develop from a bunch of servers running out of Amazon, but all the campaigns to fit within the infrastructure that was available. data is stored out of a data service in Melbourne IT, and the While hosting on US services can cause some issues connection between the two is secured," Fisher says. "You regarding latency, he says they are much less than would need to start rethinking the way that you build applications, occur should the company not be able to increase its and you've got to break it down into components and infrastructure to meet demand. subcomponents and think of the implications. The company uses Amazon's S3 storage services, "When I'm talking with all of these different businesses particularly in support of e-mail-driven campaigns that last they are all interested in it, and they are all exploring it, but short periods but drive large volumes of traffic to the website. the nice thing for us is we get to play with it," Fisher says. Copyright Agency Ltd (CAL) licenced copy. Ref: 74690185