With eye on cloud standard, Apprenda offers free downloadable version of SaaS application server

Apprenda, a software as a service (SaaS) middleware provider, is now offering a free downloadable SaaS stack that provides much of the functionality of its flagship SaaSGrid, an application server for on-demand apps.

The Clifton Park, NY company says that SaaSGrid Express, announced today, provides free access to a foundation with which to deliver .NET applications as mature SaaS offerings with a competitive cost-of-delivery profile.

The model appears simple. Use community and ISV economic imperatives to drive a de facto standard into the market, thereby seeding a strong business to the upgrade-path commercial version. The timing is great, as finding a way to enjoy cloud computing scale and economics is top of mind for ISVs and early-adopter enterprises.

All of the main features and functions of SaaSGrid application server have been ported to the self-installable Express edition. Apprenda says their product has drastically reduced time-to-market and capital requirements for independent software vendors (ISVs), SMBs and enterprises, with some customers experiencing 50 to 70 percent reductions in planned engineering time and associated costs.

I like to think of this as allowing for SaaS "stack bursting," which could easily augment cloud-bursting efforts, seeing as users of Apprenda SaaSGrid can run on Amazon EC2 as well as for on-premises virtualized workloads. The model might also work really well in migration efforts, of going from legacy apps to web and ultimately cloud deployments.

According to Apprenda CEO Sinclair Schuller some 93 percent of ISV-delivered applications have yet to make the transition to on-demand and SaaS-delivered. That's a lot of apps.

In addition to the complex architectural foundation afforded by SaaSGrid Express -- such as low effort multi-tenancy and resilient grid-scalability -- the product also provides some of the other “out of the box” application services found in the full-fledged commercial SaaSGrid offering, including:

• Metering
• Monetization
• Subscription Management
• Application lifecycle management
• Cloud control
• Billing
• Customer provisioning

This new edition enables developers to quickly build, deploy and onboard customers to their .NET applications, letting them build significant revenue streams without any license costs.

Full-licensed version

ISVs leveraging the full-production-licensed SaaSGrid edition pay a per-server, per-month license fee, and benefit from full customization and branding capabilities, as well as additional features. This licensing model, known as the SaaSGrid Monthly Server License, includes free access to maintenance and software upgrades and comprehensive customer service (based upon the number of licensed servers).

In April, Gartner analyst Yefim Natis profiled Apprenda as one of the "Cool Vendors" in the application platform as a service (APaaS) space. He said:

Apprenda's support of ISV (or private cloud application project) requirements for developing and running SaaS-style offerings far exceed the functionality available with the recently delivered Windows Azure SDK. Apprenda's advanced support for fine-grained and adjustable use tracking and billing is particularly valuable for ISVs.

Apprenda achieves this breadth of capabilities largely unintrusively, in part by intercepting and extending the Web and the database communications of the application and in part by modifying the compiled application intermediate language code (adding value and some overhead in the process).

However, Natis does offer one caution:

Apprenda's current business is primarily focused on ISVs. Historically, the business opportunities of middleware providers servicing the ISV market have been limited. With time, the company must develop a product offering that targets enterprise IT cloud application projects as well in order to expand its business opportunities.

If the ISVs' needs and enterprise app migration efforts alone jump-start adoption of SaaSGrid Express it could make for a strong and clear path to clouds, from Amazon to Azure to the home-grown variety at an enterprise near you.

For more information on SaaSGrid Express and how to download it, visit the Apprenda web site: www.apprenda.com.

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BMC Software rolls out cloud-focused lifecycle management solution

Cloud computing is more than just a buzzword, yet it’s not quite mainstream. With its just-released Cloud Lifecycle Management offering, BMC Software is one of the companies working to bridge that gap and deliver on the promise of the managed cloud.

Cloud Lifecycle Management aims to help IT admins deliver and integrate cloud computing strategies more efficiently. It’s an IT management platform that promises more control and visibility in the cloud. And it’s seeing traction among some of the biggest names in high-tech, including Cisco, Dell, Fujitsu, NetApp, EMA, Red Hat and Blackbaud. Altogether, Houston-based BMC has inked more than $100 million in cloud foundation technology deals so far, the company says.

Next-gen cloud services

BMC Cloud Lifecycle Management not only aims to help enterprises build and operate private clouds more efficiently, it also offers opportunities to leverage external public cloud resources and makes way for service providers to develop and deliver cloud services. With so many tech industry heavy-hitters as partners and customers, it’s worth a closer look.

Here’s what BMC Cloud Lifecycle Management includes: a policy-driven service catalog that personalizes the list of available service offerings and customizations based on a user's role, a self-service Web portal for requesting and controlling private and public cloud resources, and dynamic provisioning of the entire service stack across heterogeneous infrastructures. The platform also offers out-of-the-box cloud management workflows that automate the assignment of compliance policies and performance monitoring tools, along with pre-built IT service management (ITSM) integration for ITIL process interaction and compliance.

eWeek notes that BMC Software was an original partner of Cisco System in the Unified Computing System initiative in 2009. eWeek continues:

In the original UCS partnership scheme, BMC provided the provisioning, change management and configuration software in the stack. Cisco, of course, provided the networking and a new central server.

EMC and NetApp provided the storage capacity, VMware and Microsoft added their virtualization layers—depending upon the choice of the customer—and Accenture shaped the individual product deployments for customers.

Since then, UCS has added vBlocks, smaller modules of some of the aforementioned components, which can be integrated on a smaller scale and are not as daunting as a full-blown forklift overhaul to existing midrange and enterprise IT systems. vBlocks, too, include BMC middleware.

During all this iteration, BMC has been taking copious notes and has come up with its own new cloud-computing layer, BMC Cloud Lifecycle Management, which works with just about all data center-system-maker components, not just the UCS.

BriefingsDirect contributor Jennifer LeClaire provided editorial assistance and research on this post. She can be reached at http://www.linkedin.com/in/jleclaire and http://www.jenniferleclaire.com.

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Apptio launches demand-based forecasting for IT budget and spend management

Apptio is betting big on the market for demand-based budget forecasting. A new feature in its technology business management solutions software suite aims to help business managers plan and budget more accurately by inputting departmental forecasts into its software.

The Bellevue, Wash., company is calling it a “closed-loop” approach to financial planning, cost management, and transparency. The promised result: tighter alignment with business priorities, improved cost efficiency, and transparent reporting on the cost and value of IT services.

Michel Feaster, vice president of products at Apptio, is convinced the company’s closed-loop financial planning process will “close the gap between IT and the business” by letting companies update budgets and forecasts based on real business priorities.

“Demand-based forecasting gives IT the data it needs to respond more effectively, and plan accordingly with minimal variance so they aren’t over- or under-committing resources,” Feaster said.

Budgeting and planning = painful and inaccurate

Indeed, Apptio’s latest feature intends to remedy a notoriously painful and inaccurate IT budgeting and planning process. It was General Electric CEO Jack Welch who once said, “The budgeting process at most companies has to be the most ineffective practice in management. It sucks the energy, time, fun, and big dreams out of an organization. It hides opportunity and stunts growth.”

The budgeting process . . . hides opportunity and stunts growth.

Apptio’s demand-based forecasting works on the premise that past performance is not an indicator of future trends. Many variables can change and those changes can make a ripple effect across the organization’s IT services needs. In essence, Apptio’s demand-based forecasting is applying best practices from the supply chain management world to IT budgeting and planning.

Companies like Starbucks, Cisco, and Volkswagen are reporting savings with Apptio solutions to determine how changes in key business drivers affect IT services. In fact, Starbucks has seen $1.4 million in savings in nine months while Volkswagen reports a 50 percent reduction in annual budgeting costs through Apptio’s automation. Apptio believes the new demand-based forecasting will drive even stronger returns.

BriefingsDirect contributor Jennifer LeClaire provided editorial assistance and research on this post. She can be reached at http://www.linkedin.com/in/jleclaire and http://www.jenniferleclaire.com.

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IBM adds Sterling Commerce to Websphere, expands scope of B2B integration

This guest post comes courtesy of Tony Baer’s OnStrategies blog. Tony is a senior analyst at Ovum.

By Tony Baer

We should have seen this one coming. IBM’s offer to buy Sterling Commerce for $1.4 billion from AT&T on Monday closes a major gap in the WebSphere portfolio, extending IBM’s array of internal integrations externally to B2B.

It’s a logical extension, and IBM is hardly the first to travel this path: Software AG’s webMethods began life as a B2B integration firm before it morphed into EAI, later SOA and BPM middleware, before getting acquired by Software AG. In turn, TIBCO recently added Foresight Software as an opportunistic extension for taking advantage of a booming market in healthcare B2B transactions.

But neither Software AG’s or TIBCO’s moves approach the scope of Sterling Commerce’s footprint in B2B trading partner management, a business that grew out of its heritage as one of the major EDI (electronic data interchange) hubs.

The good news is the degree of penetration that Sterling has; the other (we won’t call it bad) news is all the EDI legacy, which provides great fodder for IBM’s Global Business Services arm to address a broader application modernization opportunity.

Sterling’s base has been heavily in downstream EDI and related trading partner management support for retailers, manufacturers, and transportation/freight carriers. Its software products cover B2B/EDI integration, partner onboarding into partner communities (an outgrowth of the old hub and spoke patterns between EDI trading partners), invoicing, payments, order fulfillment, and multi-channel sales.

In effect, this gets IBM deeper into the supply chain management applications market as it already has Dynamic Inventory Optimization (DIOS) from the Maximo suite (which falls under the Tivoli umbrella), not to mention the supply chain optimization algorithms that it inherited as part of the Ilog acquisition which are OEM’ed to partners (rivals?) like SAP and JDA.

[Editor's note: At the Ariba Live 2010 conference in Orlando, the news of an IBM-Sterling marriage was seen as making IBM more complementary to Ariba's spend management SaaS and cloud offerings. This does not necessarily put IBM and increasingly SaaS-based Ariba into a competitive stance. More on that to come ... Dana Gardner.]

A game changing event such as Apple’s iPad entering or creating a new market for tablet could provide the impetus for changes to products catalogs, pricing, promotions.

Asked if acquisition of Sterling would place IBM in competition with its erstwhile ERP partners, IBM reiterated its official line that it picks up where ERP leaves off – but that line is getting blurrier.

But IBM’s challenge is prioritizing the synergies and integrations. As there is still a while before this deal closes – approvals from AT&T shareholders are necessary first – IBM wasn’t about to give a roadmap. But they did point to one no-brainer: infusing IBM WebSphere vertical industry templates for retail with Sterling content. But there are many potential synergies looming.

At top of mind are BPM and business rules management that could make trading partner relationships more dynamic. There are obvious opportunities for WebSphere Business Modeler’s Dynamic Process Edition, WebSphere Lombardi Edition’s modeling, and/or Ilog’s business rules.

For instance, a game changing event such as Apple’s iPad entering or creating a new market for tablet clients could provide the impetus for changes to products catalogs, pricing, promotions, and so on; a BPM or business rules model could facilitate such changes as an orchestration layer that acts in conjunction with some of the Sterling multi-channel and order fulfillment suites. Other examples include master data management, which can be critical when managing sale of families of like products through the channel; and of course Cognos/BI, which can be used for evaluating the profitability or growth potential of B2B relationships.

Altimeter Group’s Ray Wang voiced a question that was on many of our minds: Why AT&T would give up Sterling? IBM responded about the potential partnership opportunities but to our mind, AT&T has its hands full attaining network parity with Verizon Wireless and is just not a business solutions company.

This guest post comes courtesy of Tony Baer’s OnStrategies blog. Tony is a senior analyst at Ovum.

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HP shows benefits from successful application consolidation with own massive global supply chain project

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: HP.

Access more information on Application Consolidation.
Read the full-length case study on HP's Application Consolidation.
Learn more about the Application Transformation Experience Workshop.

Our latest BriefingsDirect interview is with an executive from HP to look at proper planning and execution for massive application-consolidation projects, specifically by examining an HP project itself.

By unpacking this multi-year application consolidation project across global supply chains, we can learn about best practices and execution accelerators for such projects, which often involve hundreds of applications and impact thousands of people.

These are by no means trivial projects, and often involve every aspect of IT, as well as require a backing of the business leadership and the users to be done well. The goal through these complex undertakings is to radically improve how applications are developed, managed, and governed across their lifecycle to better support dynamic business environments. The stakes, therefore, are potentially huge for both IT and the business.

The telling case-study, the Global Part Supply Chain project at HP, was initially undertaken in 2006 but typically became bogged down by sheer scale and complexity. After some changes in management approach and governance, however, the project quickly became hugely successful.

We learn how and why from Paul Evans, Worldwide Marketing Lead on Applications Transformation at HP. The interview is conducted by BriefingsDirect's Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Evans: We have always said that the experiences we gain from our own work we would share openly, and sometimes we’re quite happy to say where we did go wrong. In this instance, we’ve written up a case study to give people an insight in more detail than I could possibly provide today. We're going to post that on our portal. If people want to go there, it’s relatively simple: HP's Application Consolidation case study.

There are so many lessons learned here, addressing what people have in terms of portfolio and then also delivering new, contemporary, revised types of applications and/or infrastructure. They’ll find videos and other materials of other customers who have embarked on these journeys, whether they’ve been driving that from the top down, from an application’s nature, or whether it’s people who are coming in from the infrastructure.

As you can imagine, HP is an extremely large organization. It makes products, as well as sells services, etc. In terms of product, just imagine your average PC, or your average server, and think of the number of components that are made up inside of that device. It runs into hundreds of thousands, whether it's memory chips, disk drives, screens, keyboards, or whatever.

For a company like HP, in the event that someone needs a spare part for whatever reason, they don't expect to wait a significant period of time for it to turn up. They want it delivered 24 hours later by whatever means that suits them.

So, it's essential for us to have that global supply chain of spare parts tailored toward the ones that we believe we need more -- rather than less -- and that we can supply those parts quickly and easily and, at the same time, cost effectively. That's important for any organization that is dealing in physical components or in the provision of a service. You want to maintain customer satisfaction or increased customer satisfaction.

Customer centric

For us, it was essential that a massive global supply chain organization was extremely customer-centric, but at the same time, very cost-effective. We were doing our utmost to reduce costs, increase the agility of the applications to service the customers, and fuel growth, as our organization and our business grows. The organization has got to respond to that.

So the primary reasoning here was that this is a large organization, dealing with multiple components with pressures on it both from the business and the IT sides.

One of the primary reasons we had to do this is that HP has been an amalgam of companies like Hewlett-Packard, originally, Compaq, Tandem, DEC. All of these organizations had their own bills of materials, their own skills, and basically this thing has just grown like Topsy.

What we were trying to do here was to say that we just couldn't continue to treat these systems as un-integrated. We had a lot of legacy environments that were expensive to run, a lot of redundancy, and a lot of overlap.

The whole notion of this coming about through mergers and acquisitions is very common in the marketplace. It's not unique just to HP.

The goal here clearly was to produce one integrated solution that treated the HP customer as an individual, and in the back-end consolidated the applications -- the ones we really needed to move forward. And also, a goal was to retire those applications that were no longer necessary to support the business processes.

The whole notion of this coming about through mergers and acquisitions is very common in the marketplace. It's not unique just to HP. The question of whether you just live with everybody’s apps or you begin to consolidate and rationalize is a major question that customers are asking themselves.

From the IT side, there was clearly a view from the top down that said living with 300 applications in the supply-chain world was unacceptable. But also from the business side, the real push was that we had to improve certain metrics. We have this metric called Spend-to-Revenue ratio which is, in fact, what are we spending for parts as opposed to what we are getting in terms of revenue? We were clearly below par in those spaces.

We had some business imperatives that were driving this project that said we needed to save money, we needed to be able to deliver faster, and we needed to be able to do it more reliably. If we tell a customer they're going to get the part within 24 hours, we deliver in 24 hours -- not 36 or 48, because we weren't quite sure where it was. We had to maintain the business acumen.

The rationalization that has taken place inside HP around its IT organization and technology is that because we are human beings, most people think in a very siloed way.

They see their suite of applications supporting their business. They like them. They love them. They’ve grown up with them, and they want to continue using them. Their view is, "Mine is perfect to suit my business requirement. Why would I need anything else?"

That's okay, when you're very close to the coalface. You can always make decisions and always deem to the fact that the applications you use are strategic -- an interesting word that a lot of people use. But, as you zoom out from that environment and begin to get a more holistic view of the silos, you can begin to see that the duplication and replication is grossly inefficient and grossly expensive.

So, our whole goal here was to align business and IT in terms of a technological response to a business driver.

When we submitted the project, we were basically driving it by committee. Individual business units were saying, "I need applications x, y, z." Another group says, "Actually, we need a, b, c." There was virtually no ability to get to any consensus. The goal here is to go from 300 apps to 30 apps. We’re never going to do it, if you could all self-justify the applications you need.

What we did was discard the committee approach. We took the approach, basically led by one person from the business side, who had supply chain experience, and one from the IT side who had supply chain experience, but both had their specialist areas. These two people were the drivers. The buck stopped with these people. They had to make the big decisions.

To support them, they had a sponsorship committee of senior executives, to which they could always escalate, if there was a problem making a final decision about what was necessary.

Randy Mott, the HP CIO, has the direct support of Mark Hurd, the HP chairman and CEO. In my experience, that's absolutely essential in any project a customer undertakes. They have to have executive sponsorship from the top.

If you don't, any time you get to an impasse, there's no way out. It just distills into argument and bickering. You need somebody who's going to make the decision and says, "We're going this way and we're not going that way."

Getting on track

So for us, setting up this whole governance team of two people to make the hard decisions, and their being supported by a project management team who are there to go off and enact the decisions that were made was the way we really began to move this project forward, get it on track, get it on time, and get it in on budget.

When we started by saying let's have a big committee to help my decisions, it was the wrong approach. We were going nowhere. We had to rationalize and say "no."

Access more information on Application Consolidation.
Read the full-length case study on HP's Application Consolidation.
Learn more about the Application Transformation Experience Workshop.

Two respected individuals, one from the IT side and one from the business side, who were totally aligned on what they were doing, shared the same vision in what they were trying to achieve. By virtue of that, we could enforce throughout decisions, sometimes unpopular.

We had to focus on driving this both from business and IT. As I said in this example, we went from 300 apps to 30 apps. We had a 39 percent reduction in our inventory dollars. We reduced our supply chain expenses. We reduced the cost of doing next day delivery. We're heading toward reducing our CO2 emissions by 40 percent on those next-day deliveries.

But overall, the global supply chain, this measure of spent revenue, we drove down by 19 percent. We're running a better, faster, cheaper organization that is more agile. As you said, it positions us better to exploit situations as they change and feel that they’ve become more of an opportunity rather than a threat.

We'd like to think that those organizations that are out there with a supply chain challenge could now look at this and say, "Maybe we could do the same thing." Definitely the alignment between business and IT is probably one of the most paramount of facets. Let me do with which platform, which network, which disk drive, or which operating system. You can have a lot of fun with that. But, in this instance, a lot of the success was driven by setting up the right governance and decision-making structure with the right sponsorship.

Over the last 12 months what people have realized that it is now time for those organizations that want to remain competitive and innovative. Unfortunately, I still see a lot of companies that believe that doing nothing is the thing to do and will just wait for the economy to rebound. I don't believe it's going to rebound to the same place. It may come back and it may be stronger, but it may end up on a different place.

The organizations that are not waiting, but are trying to be innovative, competitive, move away from the competition, and give themselves some breathing space are the ones who are going to sustain themselves.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: HP.

Access more information on Application Consolidation.
Read the full-length case study on HP's Application Consolidation.
Learn more about the Application Transformation Experience Workshop.

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Kapow delivers Web Data Server 7.2 to make BI easier to extract from across web-based activities

Aiming to meet the needs of enterprises building, testing and deploying web data services, Kapow Technologies last week released Web Data Server 7.2, the lastest iteration of its flagship software.

The update features a new design studio to develop, test, deploy and manage web data services. Developers can review collected data with any browser, and a Web-based scheduling interface allows for timing and automating data retrieval. Users can therefore easily develop and deploy automated processes, or "robots," said Kapow.

The value behind the updated version centers on real-time, actionable business intelligence (BI). Web Data Server 7.2 automates access to and integration with any Web data source, from Web applications inside the firewall to data stored in the cloud to data found across the Web. [Disclosure: Kapow is a sponsor of BriefingsDirect podcasts.]

Serving the needs of both IT and line-of-business users, Web Data Server 7.2 saves time and resources in the quest for actionable BI by significantly shortening application and data integration project timelines.

The web-based data explosion

“The proliferation of Web-based data, both inside and outside the company, continues to explode, providing enterprises with remarkable potential to leverage Web data services for market insights and analytics,” said Stefan Andreasen, CTO of Kapow Technologies.

Web Data Server 7.2 offers some interesting features that could turn the heads of BI and social media analytics and trends gathering practitioners looking for a user-friendly solution that provides quick results.

Sneak peak at Web Data Server 7.2

Among the new features in Web Data Server 7.2 Design Studio is a Data Viewer that lets users see collected data within the Design Studio and load it directly into Microsoft Excel, perhaps the predominant BI results delivery interface on the planet.

The proliferation of Web-based data, both inside and outside the company, continues to explode.

In other Kapow developments, the Palo Alto, Calif. firm was recently recognized as a Laureate by IDG's Computerworld Honors Program.

Web Data Server 7.2 also offers Native XML Support, FTP and File System Interaction, new converters to XML, JSON and CSV formats, improved database functionality, enhanced production monitoring and more than 50 other improvements that significantly enhance the robot development, deployment and management experience, said Kapow.

Building on Kapow's mashups strengths, Kapow Web Data Server 7.2 includes updates to Kapow’s browser and Javascript engine to handle complex, dynamic web sources driven by Ajax and Google Web Toolkit. Finally, improvements were included in the browser-based management and scheduling console, including production monitoring and notifications, and new logging functionality for databases, Log4J and e-mail.

BriefingsDirect contributor Jennifer LeClaire provided editorial assistance and research on this post. She can be reached at http://www.linkedin.com/in/jleclaire and http://www.jenniferleclaire.com.

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IT's new recipe for success: Modernize applications and infrastructure while taking advantage of alternative sourcing

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: HP.

The latest BriefingsDirect panel discussion centers on improving data-center productivity by leveraging all available sourcing options and moving to modernized applications and infrastructure.

IT leaders now face a set of complex choices, knowing that discretionary and capital IT spending remain tight, even as demand on their systems increases. Economists are now seeing the recession giving a way to growth, at least in several important sectors and regions. Chances are that demands on IT systems to meet this growing economic activity will occur before IT budgets appreciably go up.

So what to do? A panel of experts examines here how to gain new capacity from existing data centers through both modernization and savvy exploitation of all sourcing options. And -- by outsourcing smartly, migrating applications strategically, and modernizing effectively -- IT leaders can improve productivity while still under tightly managed costs.

One choice that may be the least attractive is to stand still as the recovery gets under way and demands on energy and application support outstrips labor, systems supply, and available electricity.

Learn more on managing for growth by examining three data-center transformation examples that uncover how effective applications and infrastructure modernization improves enterprise IT capacity outcomes. The panel also examines modernization in the context of outsourcing and hybrid sourcing, so that the capacity goals facing IT leaders can be more easily and affordably met, even in the midst of a fast-changing economy.

Please welcome the panel: Shawna Rudd, Product Marketing Manager for Data Center Services at HP; Larry Acklin, Product Marketing Manager for Applications Modernization Services at HP, and Doug Oathout, Vice President for Converged Infrastructure in HP’s Enterprise Services. The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Oathout: When you look at the budgets still being tight, but business is starting to grow again, IT leaders really need to look strategically at how they're going to tackle their budget problems.

What they need to do is to start to think about how, and what major projects they want to take on, so that they can improve their cash flow in the short-term while improving their business outcomes in the long-term.

In the past, companies have looked at outsourcing as a final step, versus an alternate step in IT. We're seeing more clients, especially in the tight economy, that we have gone through, looking at a hybrid model.

There are multiple sourcing options, there are multiple modernization tasks as well as application culling that they could do to improve their cost structure. At HP we look at modernization of the software and we look at outsourcing options and cloud options as ways to improve the financial situation and to improve the long-term cost structures.

There is a model evolving, a hybrid model between outsourcing and in-sourcing of different types of applications in different types of infrastructure.

Acklin: If you look at your current spend and how you are spending your IT budgets today, most see a steady increase in expenses from year-by-year, but aren't seeing the increases in IT budgets. By doing nothing, that problem is just going to get worse and worse, until you're at a point where you're just running to keep the lights on. Or, you may not even be able to keep up.

We call that "the cost of doing nothing." That's the real challenge.

The number of changes that have been requested by the business continues to grow. You're putting bandages on your applications and infrastructure to keep them alive. Pretty soon, you're going to get to a point, where you just can't stay ahead of that anymore. This is the cost of doing nothing.

If you don’t take action early enough, your business is going to have expectations of your IT and infrastructure that you can't meet. You're going to be directly impacting the ability for the company to grow. The longer you wait to get started on this journey to start freeing up and enabling the integration between your portfolio and your business the more difficult and challenging it's going to be for your business.

Rudd: Clients or companies have a wider variety of outsourcing mechanisms to choose from. They can choose to fully outsource or selectively out-task specific functions that should, in most cases, be able to provide them with substantial savings by looking at their operating expenses.

It's not going to get any cheaper to continue to do nothing. To support legacy infrastructure and applications, it's going to require more expensive resources. It's going to require more effort to maintain it.

The same applies for any non-virtualized or unconsolidated environment. It costs more to manage more boxes, more software, more network connections, more floor space, and also for more people to manage all of that.

Greater risk

The risk of managing these more heterogeneous, more complex environments is going to be greater -- a greater risk of outages -- and the expense to integrate everything and try to automate everything is going to be greater.

We help clients maintain their legacy environments and increase asset utilization, while undertaking those modernization and transformation efforts. From an outsourcing standpoint, the types of things that a client can outsource could vary, and the scope of that outsourcing agreement could vary -- the delivery mechanism or model or whether we manage the environment at a client’s facility or within a leveraged facility.

Working with a service provider can help provide a lot of that insurance associated with the management of these environments -- and help you mitigate a lot of that risk, as well as reduce your cost.

The risk to the client, to the client's business, should be better mitigated, because they're not having to coordinate with four or five different vendors, internal organizations, etc. They have one partner who can help them and can handle everything.

Oathout: As you look at service providers or outsourcers, there is a better menu of options out there for customers to choose from. That better menu allows you to compare and contrast yourself from a cost, service availability, and delivery standpoint, versus the providers in the marketplace.

IT managers have choices on where to source, but they also have choices on how to handle the capacity that fits within their four walls of the data center.

We see a lot of customers really looking at: How do I balance my needs with my cost and how do I balance what I can fit inside my four walls, and then use outsourcing or service providers to handle my peak workloads, some of my non-critical workloads, or even handle my disaster recovery for me?

So IT managers have choices on where to source, but they also have choices on how to handle the capacity that fits within their four walls of the data center.

... We can get a 10:1 consolidation ratio on servers. We can get a 5-6:1 consolidation ratio on storage platforms. Then, with virtual connectivity or virtual I/O, we can actually have a lot less networking gear associated with running those applications on the servers and the storage platform.

When you look at modernizing your applications and look at modernizing infrastructure, they have to match.

So, if we look at just standard applications, we have a way to migrate them very simply over to modern infrastructure, which then gives you a lower cost point to run those applications.

When you look at modernizing your applications and look at modernizing infrastructure, they have to match. If you have a plan, you don't have to buy extra capacity when you start. You can buy the right capacity then grow it, as you need it.

Acklin: Outsourcing can drive some initial savings, maybe up to 40 percent, depending on the scope of what you're looking at for a client. That's a significant improvement on its own.

Not every client sees that high of a saving, but many do. The next step, that migration step, where we’re also migrating over to a consolidated infrastructure, allows you to take immediate actions on some of your applications as well.

In that application space, you can move an application that may be costing you significant amounts of the dollars whether it be, license fees or due to a lack of skilled resources and so forth on a legacy platform. Migrating those or keeping the application intact, running on that new infrastructure, can save you significant dollars, in addition to the initial work you did as part of the outsourcing.

A phased journey

The nice thing, as you do these things in parallel, is that it's a phase journey that you are going through, where they all integrate. But, you don't have to. You can separate them. You can do them one without the other, but you can work on this whole holistic journey throughout.

The migration of those applications, basically leaves those applications intact, but allows them to have a longer lifespan than you may typically would. ... We can still drive significant 40-50 percent saving, just through this migration phase of moving that application onto this new infrastructure environment and changing the way that those cost structures around software and so forth are allocated toward that. It frees up short-term gain that can turn around to be reinvested in the entire modernization journey that we're talking about.

As you continue that journey, you're starting to get your cost structures aligned and you're starting to get to a place where your infrastructure is now flexible and agile. You’ve got the capacity to expand. When you move into that modernized phase, you're really trying to change the structure of those applications, so that you can take advantage of the latest technology to run cloud computing and everything operating as a service.

... The idea of putting the outsourced, migrated, modernized phases together is that they're not sequential. You don't have to do one, then the other, and then the other. You can actually start these activities in parallel. So, you can start giving benefits back to the business immediately.

For example, while you're doing the outsourcing activities and getting that transition set up, you're starting to put together what your future architecture is going to look like for your future state. You have to plan how the business processes should be implemented within the application and the strategic value of each application that you currently have in your portfolio.

You're starting to build that road map of how you are going to get to the end state. And then Even as you continue through that cycle, you're constantly providing benefits back to both the business and IT at the same time.

France Telecom as example

Oathout: One example that we worked very closely was in services with our customer France Telecom. France Telecom transitioned 17 data centers to two green data centers. Their total cost of ownership (TCO) calculation said that they were going to save €22 million (US $29.6 million) over a three-year period.

They embarked on this journey by looking at how they were going to modernize their infrastructure and how they were going to set up their new architecture so that it was more flexible to support new mobile phone devices and customers as they came online. They looked at how to modernize their applications so they could take advantage of the new converged infrastructure, the new architectures, that are available to give them a better cost point, a better operational expense point.

France Telecom emphasized the migration. They migrated a number of applications to newer architectures and they also modernized their application base. They focused on the modernization and the migration as the key components for them in getting their cost reductions.

Rudd: The things we're talking about don't have to occur in this particular order. I know of other clients for whom we've saved around 20 percent by outsourcing their mainframe environments.

Then, after successfully completing the transition of those management responsibilities, we've been able to further reduce their cost by another 20 percent simply by identifying opportunities for code optimization. This was duplicate code that was able to be eliminated or dead code, or runtime inefficiency that enabled us to reduce the number of apps that they required to manage their business. They reduced the associated software cost, support cost, etc.

Then there were other clients for whom it made more sense for us to consider outsourcing after the completion of their modernization or migration activities. Maybe they already had modernization and migration efforts under way or they had some on the road map that were going to be completed fairly quickly. It made more sense to outsource as a final step of cost reduction, as opposed to an upfront step that would help generate some funding for those modernization efforts.

Acklin: We offer something that's called the Modernization Transformation Experience Workshop. It's basically a one-day activity workshop, a slide-free environment, where we bring you and take you through the whole journey that you'll go on.

We'll cover everything from how to figure out what you have, what you are planning, how to build the road map for getting into the future state, as well as all the different ways that will impact your business and enterprise along the way, whether you are talking technology infrastructure, architecture, applications, business processes, or even the change management of how it impact your people.

You come out understanding what's you're getting yourself into and how it can really affect you as you go forward. But, that's not the only starting point. You can also jump into this modernization journey at any point in the space.

We can do a full assessment of your environment and figure out how your apps and your infrastructure are working for your business or, in most cases not working for your business. HP can help you figure out the right place for beginning that journey.

... Many of our clients we talk to, don’t know how they would pay for a journey like this. Actually, you have a lot of options right in front of you. There are good methods on how to cover this, how to put things together like these three-phase activities (outsource, migrate, and modernize), or how to go on these journeys that can still work for you even in tough financial times.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: HP.

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Ariba steps up cloud efforts with StartContracts, on-demand contract management for SMBs

Ariba, the spend and procurement management solutions provider, hopes small- to mid-sized businesses will take their enthusiasm for cloud computing to the business processes around contract management.

Ariba’s latest solution, StartContracts, works to do just that. An on-demand solution, StartContracts combines technology and best practice processes to help organizations manage buy and sell side agreements with greater speed and lower costs. The solution also promises to mitigate risk, drive compliance and increase revenue, says Ariba. [Disclosure: Ariba is a sponsor of BriefingsDirect podcasts.]

Those are tall promises, but ones that Steve Markle, senior director of Solutions Management at Ariba, is willing to stand by. As he sees it, effective contract management is a “critical lever” that companies can pull to find contract information, optimize profits, and identify risks and opportunities quickly.

Here’s what you get with this new software-as-a-service (SaaS) solution:

• Create a central, online contract repository
  
  
• Specify important fields and terms within agreements to be monitored
  
  
• Manage contracts across the organization using robust free-text search and reporting capabilities
  
  
• Establish task-driven reminders based on important dates and milestones to drive use and compliance
  
  
• Go paperless and sign agreements electronically
  
  
• Optional electronic signature capabilities streamline and make contract execution more affordable and more secure.

Ariba is billing StartContracts as affordable, enterprise-class software that is delivered on demand. Markle went so far as to say that the solution makes possible capabilities that were once only affordable for large enterprises. How affordable? The company is offering an introductory price of $199 a month.

Like a lot of cloud services, this may take hold in SMBs, but migrate into departments and then more of the enterprise core. And, as with most SaaS and cloud services, contract management as a service can quickly become a dynamic process ingredient for more transformative efficiencies. I expect that the analytics from these pure services-composed processes will also prove quite powerful.

BriefingsDirect contributor Jennifer LeClaire provided editorial assistance and research on this post. She can be reached at http://www.linkedin.com/in/jleclaire and http://www.jenniferleclaire.com.

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