Lean IT practices such as moving equipment from stores to centralized data centers, consolidating and virtualizing equipment, and maximizing store equipment functionality can help retailers reduce IT costs. Outsourcing IT operations to wholesale and retail data centers stood at 16.3% in 2012, and is expected to grow significantly as cloud traffic increases to an estimated 69% of total data center traffic by 2017. While internal IT cost savings are valuable, larger cost reductions can be realized by helping other business units identify unnecessary spending.

1. Lean technologies
T r e n d a g r a m
Lean IT practices and outsourcing reduce costs
The main tenets of Lean Retail are:
• Move IT equipment from the store to the data center
• IT equipment in stores and the data center should be consolidated and virtualized
• Maximize the functionality of IT equipment in store. (1)
Every process
must add value
+
- - -
16.3%
– if no value is
added, eliminate
it (3)
By 2017 69%
of data center
traffic will
be cloud
Factors contributing
traffic (4)
to traffic remaining
in the data center
include functional
separation of
application
servers, storage
and databases,
which generates
replication, backup
and read/write
traffic traversing
the data center. (4)
69%
18.9% of
retailers
surveyed said
cost containment was a
major action item over
the next 18 months (5)
The portion of
the IT load
outsourced to
wholesale and
retail data centers
in North America
stood at 16.3% at
the end of 2012 (2)
5x
the growth
Growth of workloads in cloud
data centers is expected to be
the growth in traditional
workloads between 2012-2017 (4)
5x
While the savings that IT can
generate within its own operations
are worth having, these savings
are dwarfed by the much larger cost
reductions that IT can help to identify,
initiate and realize across the rest
of the enterprise. (6)
Sources: 1 – Lean Retail – Doing More with Less, Cisco, 2011; 2 – North America Outsources 16% of Data Center Load; Europe Lags, IHS
Electronics & Media, July 2013; 3 – What is a Lean Supply Chain?, Ryder, ; 4 – Cisco Global Cloud Index: Forecast and Methodology 2012-2017,
Cisco, 2013; 5 – Retail at the Speed of Change, RIS News, April 2013; 6 – IT Cost Reduction: Using New Technology to Cut Costs Across the
Enterprise, Accenture, 2012
14
NOVEMBER 2013
14.TrendaGramEarthLinkCisco_1113_v2.indd 1
Annual global
cloud IP traffic will
reach 5.3 zettabytes
by the end of 2017,
or 443 exabytes
per month (4)
More than 1.3 gigawatts
of leased IT capacity will
be added during the next
five years between North
America and Europe. (2)
S P O N S O R E D B Y:
RIS NEWS.COM
10/28/13 10:24 AM