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Monthly Archives: August 2013

Are You Delivering Speed as a Service?

Author: Joe Chenevey

This week, VMware hosted its 10th annual VMworld in San Francisco. As a company. we’ve announced new products that broaden virtualization’s benefits beyond servers and into network and storage areas. When all data center infrastructure is virtualized, it can be delivered as a service much more completely than ever before. However, virtualizing all infrastructure does not constitute a software-defined data center (SDDC), and that’s key for executives to understand. When control of this virtualized set of network, storage, and server infrastructure is entirely automated by software, it’s only at that point that a traditional data center model has transformed to an SDDC model.

If you’re an executive—in IT, or even more so if you’re in the one of the lines of business—you may ask yourself, “What does that really mean for me, and, can my IT department take advantage of it?” Here are some important points for you to understand:

  • SDDC builds on the skills your IT teams already possess and allows network, storage, and server teams to act as one cohesive team more than they’ve ever been able to before.
  • Policy-based automation—not scripting—is what enables and powers the software-defined data center.
  • It’s not just about provisioning. The biggest impacts of SDDC will be on IT operations by making full lifecycle management much easier than ever before through the same policy-based automation capabilities.
  • Ultimately for the lines of business, it’s all about speed. With SDDC, IT can deliver speed as a service.

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Joe Chenevey is a business solutions architect for VMware Accelerate Advisory Services. You can follow him on Twitter @VIJoe_Chenevey

VMware Accelerate Advisory Services can help you and your key stakeholders understand the IT as a Service value proposition—our consultants quantify the potential benefits, develop architectural designs, recommend organizational and process changes, create a migration plan and advise during implementation. Visit our Web site to learn more about our offerings, or reach out to us today at: accelerate@vmware.com for more information.

Would you like to continue this conversation with your C-level executive peers? Join our exclusive CxO Corner Facebook page for access to hundreds of verified CxOs sharing ideas around IT Transformation right now by going to CxO Corner and clicking “ask to join group.”

How Virtualized Is Your Data Center?

If you’re at VMworld San Francisco today, stop by the VMware Accelerate Advisory Services demo booth in the Solution Exchange, and meet Craig Stanley, Accelerate Benchmarking Practice lead, and Heman Smith, Accelerate Organization Transformation lead. They’ll take you through a software-defined data center (SDDC) education and evaluation process, show you aggregate industry peer results, and create a custom SDDC analysis that will be emailed to you right there on the show floor!

If you’re not at VMworld, you can learn more about the Accelerate Software-Defined Data Center “move the needle” demo in this short interview with Craig and VMworld TV—live from the showroom floor. You can follow Craig @benchmarkguru and Heman @hemansmith on Twitter.

VMware Cloud Compass Tool (powered by Alinean)

Author: Thomas Pisello, Alinean CEO and founder

It can be a challenge knowing which cloud solution is best for your particular workloads and business requirements: a private cloud, public cloud or hybrid solution?

To help you determine the best option, VMware worked with the business value experts at Alinean to create the VMware Cloud Compass Tool.

The VMware Cloud Compass Tool factors your unique workloads, budget goals, risk tolerance and desired business outcomes to provide a customized 3rd party recommendation as to the best cloud option for your unique requirements. The tool factors the most important elements to help guide your cloud decision, all in less than 10 minutes to complete.

Starting with a few simple questions about your company and workload requirements, the tool then provides:

  • A comparison of total cost of ownership (TCO) for various compute options, differentiating the costs for on-premise with public and private cloud options, tallying differences in CapEx, OpEx and business benefits.
  • An assessment of your Risk Tolerance, analyzing the importance of Availability, Governance and Compliance, Security and Privacy and Business Relationship Management in your selection of the right cloud platform.
  • An assessment of Results Expectations, determining how important Accessibility, Business Responsiveness, Scalability and Cost & Accounting is to the cloud decision.

Based on the workloads, TCO, risk and results assessments the tool delivers an online summary of the recommendation results; with an overview of the right cloud recommendation based on your unique factors and requirements.

For a more detailed view, a complimentary customized white paper can be downloaded and shared with your team, personalized for your specific workloads, budget, risk tolerance, desired business outcomes, and most importantly, cloud recommendations.

For a quick introduction to the VMware Cloud Compass, watch the short video below with VMware Accelerate Advisory Services Benchmark Practice lead Craig Stanley, and you can read Craig’s recent blog, The 3 Rules for Making Confident IT Decisions, for a deep dive on VMware’s risk analysis methodology.

Access the VMware Cloud Compass to determine the best cloud solution for your workload and business requirements.

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Craig Stanley is the Benchmarking Practice Lead for VMware Accelerate Advisory Services. You can follow him @benchmarkguru and Thomas Pisello @tpisello on Twitter.

If you’re at VMworld San Francisco today, stop by the VMware Accelerate Advisory Services demo booth in the Solution Exchange, and meet Craig in person!

 

The 3 Rules for Making Confident IT Decisions

Author: Craig Stanley

When presented with a choice between two solutions with an obvious difference in cost and value, you should always choose the cheaper one, right?  We all know that’s not the case, as it’s just not that simple. In fact, many times the more expensive choice may be the right one when all factors are considered. But it’s important that the cost premium delivers a value that exceeds the cost differential and potential for failure.

The other intangible factors that influence decisions are what can be generalized as “risk.” The major components of risk are: risk exposure, risk tolerance, confidence and trust, probability and chance, and the size of the risk or decision. Counterbalancing risk is return, which is comprised of the same factors, but refers to the ability to achieve value goals. A robust risk analysis establishes a framework for identifying, measuring, evaluating, and objectively comparing these factors.

VMware’s process to analyze risk identifies specific areas of risk, assesses your reaction to the potential for problems to occur and risk tolerance, and computes an inherent risk/return factor that can be applied to the total cost of ownership (TCO). This process is used to create a risk-adjusted TCO by increasing or decreasing the benefit with respect to the perceived risk.

As an IT decision maker, your response to risk is an emotional reaction that influences your decision and even your ability to make a decision. When deciding between two options, the decision you make that will likely deliver the most favorable outcome adheres to three general rules:

  1. The ratio of the investment to the expected return influences the decision between financial risk and performance risk.
  2. The level of risk tolerance should exceed the level of risk exposure.
  3. The upside value potential should exceed the value being put at risk.

In the first rule, your emotional connection to financial and performance risk is evaluated. First, you have consider how the decision will impact you or your organization if the decision turns out to be a bad one.

  • What if this doesn’t turn out as expected?
  • What if it ends up costing more and taking longer to implement?
  • Am I getting locked into something I’ll have trouble getting out of?

As the uncertainty of these types of concerns increase, the likelihood of your decision stalling will increase as well, because it may appear that doing nothing is less risky. But making no decision carries risk exposure as well in terms of lost opportunities and unmitigated risk exposure. This type of risk can be categorized as performance risk as it is associated with the success and probability of failure in the competing solutions.

And, the size of the decision’s cost and the potential revenue or value being put at risk also makes your decision more of an emotional one. This type of risk can be categorized as financial risk, being associated with the ratio of the investment to the outcome. For example, the game of poker is basically the same whether you’re playing a friendly game for pennies or playing with $1,000 chips in Las Vegas. But you play the game very differently when the stakes of losing are significantly higher and, consequently you are less willing to take chances.

If you were presented with an opportunity to make a sizeable return on an investment, but the amount you needed to investment was large, then you might not be inclined to accept the opportunity without much consideration. But if the same situation was presented and you only had to make a very small investment, then you might accept the opportunity immediately.

The second rule of the decision process is that the level of risk that is acceptable to you should be greater than the level of risk you’re being exposed to. Analyzing these risk factors involves:

  • Identifying the most comment incident events that might occur
  • Determining how each event would impact your decision
  • Determining how much risk you can tolerate for each event
  • Evaluating the probability of the event occurrence in each of the decision choices

These risk factors are evaluated to arrive at a risk exposure and risk tolerance value for each solution. The gap between the tolerance and exposure is termed “inherent risk.” If this result is negative, then the inherent risk of your decision is unfavorable and indicates that there may be unmitigated risk in the decision since the exposure is greater than what you are willing to accept. Conversely, if the gap is positive, then inherent risk is favorable and suggests opportunity for you to assume some additional risk to gain additional value opportunities. The inherent risk can be applied to the decision investment to create a risk-adjusted investment value.

The third rule of the decision process is that the upside potential should value be placed at risk. The upside potential is based on the value differential between the solutions. The value being placed at risk, or downside, examines the potential losses that could be incurred within the context of the rated risks. Ideally, the former should be greater than the latter.

For example, let’s assume you can make $1,000 performing some task, but if anything goes wrong, you’re out $100,000. Would you take that risk?  Probably not, since there’s just not enough profit in that scenario to assume a 100:1 risk, unless you have extreme confidence that you have effectively removed the potential for failure.

These three rules describe results that can be integrated into an overall decision framework that produces a risk-adjusted investment or TCO in an IT decision; a return on risk; and an estimation of value impact.

The risk adjustment is a function of the inherent risk and the investment. When I’m working with IT decision makers, we compare the inherent risk of the decision that’s being evaluated with the competing TCO values to determine a mitigation-versus-value opportunity offset. This offset is applied to the TCO to arrive at a risk adjusted TCO, or a TCO that reflects the impact of the inherent risk. The risk adjusted TCO will reflect an increase or decrease depending on the inherent risk factors.

We can determine the return on risk by the ratio of the upside opportunity to the downside exposure as a function of the inherent risk and the investment ratio. If, as described in the first rule above, the financial risk of your decision is very small, then your return on risk may be largely driven by the inherent risk factors. Otherwise, a large financial risk tends to take precedence over the inherent risk. A positive return on risk suggests the potential for success in your decision is good, while a negative suggests a higher likelihood of failure.

Lastly, we can estimate the overall impact on the value stream by factoring the investment or TCO adjustments within the context of the investment ratio. This result will estimate the potential revenue or budgetary impact you may see of your decision with competing or comparison solutions.

Because the risk analysis process reveals both risk and opportunity, these three results enable you to make a more confident decision. Measuring your emotions and beliefs about one solution versus another helps your decision-making process and removes the fog of uncertainty.

The Accelerate risk analysis methodology described here is straight-forward to use and delivers results that are relevant, accurate, and easy to understand. The results are provided in a format that can be readily shared throughout the enterprise as needed. Applying risk analysis to the public/hybrid cloud decision process and other major IT initiatives will help you gain insight into the risk factors involved for each alternative, quantify the real value of the risk and opportunity, and increase your confidence in the decision.

Learn more in our white paper How Risk Analysis Streamlines Decision Making for Major IT Initiatives

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Craig Stanley is the Benchmarking Practice Lead for VMware Accelerate Advisory Services. You can follow him on Twitter @benchmarkguru.

If you’re at VMworld San Francisco tomorrow, stop by the VMware Accelerate Advisory Services demo booth in the Solution Exchange, and meet Craig in person!

Want to continue the conversation with your C-level executive peers?  Join our exclusive CxO Corner Facebook page for access to hundreds of verified CxOs sharing ideas around IT Transformation right now by going to CxO Corner and clicking “ask to join group.”

Decoding the DNA of the IT Organization

In this final video of a three-part interview, Paul Chapman, VMware’s VP of IT Global Infrastructure and Cloud Operations, explains why VMware’s IT organization has transformed to a different model—one that’s built around delivering services in a completely different way.

Missed the first two videos? Here are links to parts 1 and 2 — and to learn more about VMware’s own journey visit our IT Transformation site
Follow @PaulChapmanVM on Twitter

If you’re coming to VMworld next week, don’t miss below sessions to learn more about the evolution of the IT organization. You can add these and other related sessions in the Operations Transformation track to your VMworld Schedule Builder today—we hope to see you there!

OPT5215 – Organizing for Cloud Operations – Challenges and Lessons Learned — This session addresses the organizational changes that must take place for IT to successfully operate a cloud environment and to provide hybrid-cloud services; the challenges IT organizations face when making these changes; what lessons we’ve learned from customers who have undertaken the change; and how both the adoption of the software-defined data center as well as scale impact the approach taken.
OPT5315 – Transform IT Into a Service Broker – Key Success Factors — This panel is packed with those who understand the challenges, tricks, and benefits of the service broker model. We’ll draw on the real world experience of the panelists and the audience to help you identify and apply the secrets of successful transformation.

Is Your Infrastructure Holding You Up?

In this second video from a three-part interview, Paul Chapman, VMware’s VP of IT Global Infrastructure and Cloud Operations, shares the benefits he’s experiencing firsthand with the software-defined data center—from efficient utilization and dramatically reduced time to provision, to the ability to decompose the costs to deliver those services.

You can view the first video here—and learn more about VMware’s own journey on our IT Transformation site
Follow @PaulChapmanVM on Twitter

Does VMware’s IT Organization Deal with the Same Complexities as Yours?

Paul Chapman, VP of IT Global Infrastructure and Cloud Operations, recently shared his thoughts on VMware’s IT transformation journey in a three-part interview with Accelerate strategist Mark Sarago. In this first video, Chapman explains why he thinks about things across three pillars: efficiency, agility, and control.

Learn more about VMware’s own journey on our IT Transformation site
Follow @PaulChapmanVM on Twitter

IT’s Next Step—Are You Ready?

Leading-edge companies are seeing notable results from making the transition to a true broker of strategic business services, according to a recent CIO MarketPulse survey of IT decision makers conducted by IDG Research. And, one of the foundational building blocks enabling IT’s metamorphosis to service broker is the software-defined data center.

IT’s evolution to a service broker also requires organizational and process changes in addition to a game-changing architectural approach. Defining the business value for the transition and aligning it to measurable metrics is a mandatory first step. Much of the process and related cultural change can be addressed through a cloud center of excellence (COE) to promote standards, foster knowledge sharing, and codify best practices.

As shown in the diagram below, survey respondents most often view better alignment between IT and business and increased productivity as important potential benefits of a cloud COE.

Also new on CIO.com this week, Accelerate strategist Mark Sarago shares his insight in an IDG Enterprise webcast on the results of the survey, and why more and more corporate executives are evaluating the benefits of migrating to a software-defined data center.

While IT’s journey to service broker to the business will be challenging, companies that are actively pushing virtualization to the next stage and embracing new concepts as part of a software-defined data center have a solid head start. The companion white paper, IT’s Next Step: A Journey to the Software-Defined Data Center, provides more information on the results of the survey and the concept of a software-defined data center.

 

Getting Started on Your Journey: On-Demand Services

Author: Michael Francis

IT organizations are experiencing the change from monopoly holder of IT service delivery to being a supplier of many IT services to the business. And as a supplier of services, IT needs to engage with the business with competitive differentiation.

As CIO, you know that your business customers will migrate to paths of least resistance to achieve their desired business outcomes—many times this means engaging public cloud services. The risk to your IT organization and the enterprise is a lack of governance and the risk of increased cost. Inevitably this approach, which initially may result in agility for the business customer, can quickly become detrimental to achieving broader business initiatives for the enterprise.

I see a second bump on the hype curve of public cloud in my region—Australia. Many of my customers are planning the relocation of assets to the public cloud, with the assumption that it must be more cost-effective. But as the CIO, it’s critical to understand what you’re gaining from relocation and why. Analyzing what drives costs in your private cloud and why these will be reduced in the public cloud is a critical element for success.

Public cloud does play a role in extending enterprise IT capabilities—everything from SaaS-based applications to IaaS-platforms—and today’s CIO needs a strong financial and capability-centric business case to act as a service broker. Transforming your IT organization to deliver more value to the business requires a focus on enabling new business capabilities in a more agile way—a focus on the business needs rather than on a commodity that may or may not be more cost effectively delivered by a third-party supplier.

To successfully transition to an IT broker, the transformation of people, process, and technology must begin with the CIO. Without the support of the CIO, any change will likely be incomplete and focus on only one axis of the people, process, and technology composition.

The next step in architecting an IT broker environment is to envision what the environment may look like in the future and why it will look this way. The image below depicts a progressive, mature enterprise IT architecture. IT services are delivered to the presentation layer and consumed through the brokerage layer implemented in the corporate services cloud. This enables the consumer to access a service with an SLA-based agreement between the consumer and IT. The brokerage layer located in the corporate services cloud is responsible for vendor management and SLA reporting.

Once the CIO and enterprise architects share a common vision for the future, the next step is to identify the existing business services offered by the IT organization and their common SLA requirements. This commonality forms the basis to define the initial IT service offerings. Initially this process would only consider infrastructure-level SLA requirements such as availability, recovery, performance, and security. Start with the infrastructure layer, as it tends to have a high degree of commonality and minimal differentiation. It is also the foundation for more advanced IT service offerings like PaaS and SaaS.

To recap, as CIO you will maximize the probability of success at the onset of your journey to becoming an IT service broker by having a shared vision with your enterprise architects—I can’t overemphasize the importance of a clear and shared understanding of the desired future state. The next step is to implement a brokerage capability—the combination of people, process, and technology operations. Lastly, identify the common SLAs defined for existing business services—these will form the first IT service offerings.

On-demand services can provide the efficiency and agility needed to transform your IT organization from reactive provider to engaged service broker, and finally, to a strategic partner driving the goals of the business.

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Michael Francis is a principal systems engineer at VMware, based in Brisbane.

Would you like to continue this conversation with your C-level executive peers? Join our exclusive CxO Corner Facebook page for access to hundreds of verified CxOs sharing ideas around IT Transformation right now by going to CxO Corner and clicking “ask to join group.”