WAN Governance

The Economic Case for Cloud Computing (Part 1/2)

In Nicholas Carr's work The Big Switch, the development of IT is likened to the development of the modern electric utility grid 100 years ago, when companies stopped generating their own power with steam engines and dynamos and plugged into the newly built electric grid (1). Today, a similar revolution is underway. Hooked up to the internet's global computing grid, massive information-processing plants have begun pumping data and software code into businesses. According to Carr, computing is now turning into a utility. But how will cloud computing change the economics of IT and is it really as simple as signing up to low cost computing-as-a-service?

Reduced IT Capital Expenditure - This is one of the most cited and most immediately obvious benefits of cloud computing. By allowing individuals to access centralized IT resources using network-based computing, cloud reduces the need for investment in hardware and/or software at business locations. Combined with outsourcing of infrastructure and adoption of software-as-a-service (SAAS), up-front hardware and software license costs can be exchanged for a rental model, like any other utility service. The something-as-a-service (XAAS) model means that infrastructure, software and platforms are all provided by third party IT suppliers, effectively removing the need for any up front IT investment.

IT Economies of Scale and Efficiency - Synonymous with cloud computing is centralization of the IT estate and servers, either in a company's own data center or that of a cloud provider. In this circumstance there is the ability to virtualize the IT environment, and this means a server can run multiple applications rather than just one, as was traditionally the case. For instance, say a pharma company purchases a server to utilize in traditional IT models. Regardless of whether or not this server is being utilized, the ongoing cost still exists, with the machine often running well below capacity. With virtualization in a centralized environment, other jobs can be shifted onto the spare capacity of dormant servers and it's possible to run servers at over 90 per cent utilization.

The Opportunity to Contribute - The cloud enables communication at all levels: across the office, across the hall, across the nation and around the globe. Complex genetic sequences and biomarker data are being hosted in the cloud at an increasing rate. Data is available for access by pharma companies according to research needs. This allows an increased collaboration of existing knowledge – and the financial benefit of not having to conduct research when that research has already been done. For instance, advances in nanoscale and microfluidic chemistry means that DNA can be monitored by photographic sensors, producing collected images of up to 800 gigabytes. According to Chris Dagdigian, principal consultant for BioTeam Inc, "this creates a massive data-capture and handling problem. We are now in an era where instruments that are showing up in very small wet laboratories are capable of producing a terabyte or more of data in a day (2)."

Scalability - The ability to expand or contract servers as necessary allows companies to pay for computing time as they need it, rather than maintaining their own servers. With the cloud, using one server for 1,000 hours costs nearly no more than using 1,000 servers for one hour. Such flexibility is, in a sense, priceless. Take this example from Michael Naimoli, Microsoft's National Director of US Life Sciences, about programs to process protein folding (3): "Look at all the data that goes into protein folding. Companies are currently developing large molecule products – usually called monoclonal antibodies. The activity of that molecule is bound up in how it folds itself. During the discovery process they like to look at the primary sequence of that product and they want to do calculations about how it's going to fold. They have traditionally maintained a large number of CPUs that have to be spun up around that activity and it can take 70 hours to finish up the whole protein folding analysis.

Maximizing Efficiency of IT Staff - This is one of those 'hidden' economic benefits of cloud computing, something not immediately recognized, yet still very much a reality. Maximizing the efficiency of IT people occurs in two ways. Firstly, companies make better use of staff as a byproduct of concentrating servers in larger datacenters. This concentration means fewer workers are needed for infrastructure management. There are fewer people per server, freeing up staff for other activities and resulting in financial savings. Secondly, cloud computing allows a company to reduce the mix of skills it maintains on the payroll. Most companies do not want to acquire skills for the management of all applications they're likely to use – the skills to host and manage different applications, for instance, which can require lengthy training of staff. As hosting and managing exists in the cloud and is more often than not delivered by a third party specialist, companies are free to concentrate their energies on what matters: using the applications.

Minimizing Response Times - Using the cloud is fairly simple. This ease of use, combined with the ability to communicate with a team anywhere across the globe (as information and applications are not tied to a particular location), provides certain economic benefits. Companies can stop or start processes almost instantly. Such rapid responses can be the difference between funds gained or lost. Consider a quote from Eli Lilly's Dave Powers, the firm's associate information consultant for discovery IT, on the firm's usage of Amazon's Elastic Compute Cloud service: "We were recently able to launch a 64-machine cluster computer working on bioinformatics sequence information, complete the work, and shut it down in 20 minutes. It cost $6.40. To do that internally – to go from nothing to getting a 64-machine cluster installed and qualified – is a 12-week process (4)."

(…/…)

References

1. Carr N, The Big Switch: Rewiring the World, from Edison to Google, 2008
2. Mullin R, The New Computing Pioneers, Chemical and Engineering News 87(21): pp10-14, 2009
3. Koroneos G, Pharma and Cloud Computing: Are We There Yet?, http://blog.pharmexec.com/2010/06/16/pharma-and-cloud-computing-are-we-there-yet/, 2010
4. Mullin R, The New Computing Pioneers, Chemical and Engineering News 87(21): pp10-14, 2009

Illustration: « La fée électricité » (details), by Raoul Dufy (1937).

Consolidation: it’s the apps that matter

A post from Nigel Pink, VP and general manager UK, Ipanema Technologies

As a result of acquisitions multinational enterprises often have a plethora of different IT systems. Data centre and server consolidation simplifies complex IT infrastructure and reduces IT cost but increases complexity when delivering applications over the network.

The costs of distributed enterprise infrastructure include hardware, software, maintenance, security, and backup. These costs dramatically increase with the number of disparate systems. Global businesses operate branch offices and data centres at various domestic and international locations and, in addition, are increasingly employing mobile workers. To consolidate IT infrastructure, enterprises typically choose between one or two data centres (particularly for disaster recovery) to which existing applications as well as new applications are migrated. Even though these applications are now hosted in increasingly remote data centres they continue to be used in the same way as before. Practically, this means that enterprise information no longer flows locally in the LAN, but rather over the WAN resulting in slower response times and a considerable increase in data traffic. Ultimately, if unprepared, IT consolidation projects can unwittingly cause application performance to be degraded, impacting user productivity.

More bandwidth isn't the answer to user satisfaction
Bandwidth can be an expensive IT cost. Removing server, hardware and maintenance costs through consolidation loses much of its impact if you then need to double network bandwidth capability to support the distributed infrastructure. As we have found working with lots of organisations bandwidth can be consumed disproportionately by non-critical applications. At one oil company a single user was consuming over 90% of the bandwidth at a site through the use of recreational video applications. A WAN must have controls built in that can allocate resources based on the criticality of the application in question. For example, you must be able to specify objectives such as 'any end user session, anywhere, anytime, must have at least 50kbps if using SAP'. The Ipanema system works at this granular level and that's how we can help organisations to specify SLAs for each application at the individual user level. In the industry this is sometimes referred to as Application Performance Management (APM) but at Ipanema we prefer the term WAN governance.

Consolidation and the WAN
Consolidation of servers and applications means more data traffic flowing across the WAN. As a result application performance suffers due to delay, jitter, and packet losses. According to a study we commissioned in the UK, the cost of poor application performance can amount to additional costs upwards of £500,000 per year, due to reduced productivity, unfilled orders, and decreased customer satisfaction. The research also showed that network bottlenecks resulting from centralisation can generally be eliminated by increasing bandwidth. Although 57% of respondents confirmed this, 75% feel that increasing bandwidth alone does not solve the application usage problems that occur from increased centralisation of IT resources.

Significantly, 93% said that they wish for improved network visibility and control of the data traffic flowing over the WAN.
Access to centrally stored remote information, groupware systems such as Outlook, Sharepoint or Lotus Notes, and important proprietary applications like SAP are all vulnerable to performance issues post-consolidation. WAN Governance allows applications to operate according to their level of business criticality and can guarantee the performance of critical applications at the individual user level.

Governing WAN Infrastructure – it's more than acceleration
Current enterprise services run smoothly in the local environment, but were not designed for operation over a WAN. Using the WAN to access applications significantly increases bandwidth requirements between sites.

To solve this problem a variety of WAN optimisation tactics can be deployed including; compressing data and local caching at various locations, accelerating the transfer protocols used on the network, changing the network topology of information flows. However this tactical acceleration approach alone isn't enough. Imagine a Ferrari travelling round the M25 at top speed – it looks impressive. But now try it in rush hour and the Ferrari can't work to even a fraction of its potential. The same is true of an acceleration system deployed on a congested corporate WAN. Acceleration is part of the battle but it must be viewed within the wider context, which is where WAN Governance comes in.

The WAN governed as a whole thus becomes a solid asset on which the business can rely at all times. When conducting consolidation projects we urge the industry to consider the delivery of applications up front. After all users won't appreciate the IT efficiency savings you've achieved but they'll sure notice if their applications grind to a halt.

(This article has been previously published in Datacenter Management)

Illustration: The gluttonous Gargantua, as depicted by François Rabelais and etched by Gustave Doré.

Retail business flies over networks

With retailers moving their operations to the cloud, network performance is becoming more diverse, complex and central to the industry than ever before. Major retailers now operate through many disparately located stores, employ multiple suppliers and operate numerous systems such as websites and loyalty cards. Take, for example the French retail giant, Leroy Merlin which employs 19,000 people and has over 150 outlets Europe-wide. An operation of this scale requires a large number of business critical applications such as POS, ERP and CRM not to mention applications such as email and Sharepoint to be delivered over the network simultaneously to many locations such as stores, warehouses and central offices.

High volume traffic generated by a plethora of applications can be problematic especially at peak business times. As retailers add killer applications such as fixed mobile convergence and digital signage or photo booths to the network this problem grows still further. Congestion on the network can build up and lead to significantly slowed application performance or can even interrupt network availability completely.

Whilst this can be disastrous for any business it is particularly so for retail where revenue relies so much on real-time customer experience in-store. Application performance brownouts slow down supply chains, impact on store inventories and lead to long queues at the checkout causing customers to abandon their purchases. Overall, Gartner DataQuest estimates that these problems with application delivery can cost major retailers up to $90,000. Chain Store Age stated that downtime on Black Friday = >$1,500 a minute.

The answer to these problems is not to throw more bandwidth at them: traffic elasticity and constant growth will always create congestions, hence poor performance (without speaking about the induced cost). The solution lies in controlling application flows according to their business criticality in real time, prioritizing the key ones ahead of applications such as email and social media. This means that the delivery of crucial applications remains consistent even at times of peak network traffic. This is here that WAN Governance becomes a critical asset for the retail business.

As Leroy Merlin have recently found, this immediately impacts the in-store experience. The retail group helps customers during the decision making process by providing information, advice and services including sales and financing tools. These critical business applications run on the network and are essential to meeting customer expectations. Customer wait time in the store is reduced, the purchasing process is simplified and as a result, customer satisfaction is improved.

Moreover, by reducing the time and resources spent troubleshooting ongoing problems retailers are free to focus time, personnel and above all money on other projects which will drive their revenue and continue to ensure their success.

Béatrice

Consumption based pricing - Will enterprise network services jump in?

In a recent Telecommunications Online article by Chris Snow, Mike Manzo (Chief Marketing Officer at Openet) commented on wireless network congestion: "consumption based billing is only 3 or 4 years away." He based his prediction on the "ever-increasing global digital content appetite" from new devices like iPad and eBooks (Amazon.com announced that sales of eBooks had outpaced hardcover editions, Kindle sales tripling in the first half of 2010). Usage based pricing will then be a stone to kill two birds in a shot: manage congestion and generate revenues for mobile operators.

It is a recurrent topic for enterprise networking also. The current model for MPLS is "pay per capacity": if your enterprise pays 200$/month for a 1 Mbps access, it would probably cost 250/300$ for getting twice this bandwidth – will it be used partially, temporary or not at all. Will the price model remain stable or evolve to consumption based billing is unclear, as the problem exhibits many different aspects.

On the one hand, flat rates have significant advantages for enterprises:

• They are predictable: the CFO knows exactly how much he has to pay each month for its MPLS, Frame Relay or Ethernet service;
• They are simple: no need for complex budget allocation, handling of exceptional consumption, etc.

On the other hand, they show some limits:

• The bandwidth has to be sized according to peak time requirements – a few hours a day – i.e. only 10-20% of the time;
• Exceptional usages (the "CEO" quarterly speech broadcast) are not easily handled;
• Lack of control does not favor responsible behavior among users and BUs.

From a Telco perspective:

• Broadband technologies (xDSL, fiber to the home) decouple capacity and costs: offering 1, 2 or 10Mbps requires exactly the same amount of "resources";
• Costs come more from the service organization: people and tools that make efficient, always on, reliable enterprise networks;
• Core networks are not congested. Enterprises use more and more the Internet as a business network (Cloud computing, SaaS, hybrid networks...)
• The enterprise traffic is and will remain minimal compared to consumer traffic. Unlike mobile networks, resource scarcity will not fuel pricing differentiation for enterprise network services.

  In a sense, bandwidth based pricing can be seen as a primitive consumption based pricing (assuming that enterprises size their network according to their actual needs).

  So what's next?

  Modern enterprise network services will natively embed control features, providing application visibility and per user resource allocation, opening a new field of possibility. Will we see pure flat rates with no bandwidth dependency? A user based pricing copying the SaaS model? A hybrid model?

  If this question is finally of second importance for enterprises (don't expect fundamental change in your network cost, rather increased flexibility and better control), it will become a vital question for Telcos in the next few years.

  Illustration: M. C. Escher ((1898-1972)

Application performance brownout: 5 minutes = 1%

What is the real cost of poor application performance for an enterprise? This is a question that IT managers always find tough to deal with. Whatever the aspect from which you try to catch it, it has a tendency to escape out of your hand.

Line-of-Business directors explain that when their collaborators get a poor quality of experience (QoE), not only they lose their time, but also it affects their efficiency, motivation and the average level of quality decreases. Would the employees be at the contact of customers? The business itself will be impacted. From their point of view, all these aspects combine to build a very compelling case for sustained user application performance: unavailable (blackout) or poorly performing (brownout) applications lead to enormous economic impacts for the company.

On the other hand, when carrying on our Total Savings Impact (TSI) study applied to WAN Governance in large enterprises, when it come to employees productivity, CFOs and CIOs more than often make the remark that "it is hard to evaluate", "no one will accept such high figures", or even "it's my business, let it with me please": poor performance impacts are evanescent and virtual threats that do not harm the business in a clear manner.

If we just look to employees lost time, simple math tells us that if we can save 5' per day (reasonable, isn't it?) for a 1,000 employees company, yearly paid at 50 k$, working with business applications and assuming that these 5' stay productive (why not?), the yearly savings are of 500k$+, i.e. approximately a direct gain of 1% of productivity (in other words, 5' per day represents 1% of daily working time). If we add the cost of housing, infrastructure, central services, etc. the productivity gain will even extend to other parts of the company (without speaking about more indirect impacts like customers' satisfaction and people's motivation).

Where is the truth? Of course, the easy answer is "it depends", or "who knows?" – Nevertheless it will be too disappointing to leave this topic totally unaddressed: at the end of the day, making an enterprise productive looks like eating an elephant: one bite at a time, day after day, topic after topic.

Illustration: "Le tricheur à l'as de trèfle" - Georges de La Tour (1593–1652)

Network rightsizing (3/3): tuning to cost - example

We previously discussed the impact of the different sizing policies on user's Quality of Experience (QoE). Let's now understand its consequences on budget: would the impact be insignificant, IT managers should actually decide not to care about oversizing.

Continuing the example of the preceding post, we can size our access line (equipped with an efficient traffic management system able to differentiate applications) from three different points of view:

• Usage-based sizing (aka 'Oversizing'): the performance is good for all applications, including recreational ones. The bandwidth demand being uncontrolled, inflation is high. It starts at 10 Mbps, with a demand increasing by +10% per quarter.
• Rightsizing: the performance is excellent for all business applications, and a few degradations are accepted for non critical ones. While significant, inflation is more reasonable than when Facebook and Dailymotion lead the demand. It starts at 4 Mbps, and inflates at 8% per quarter.
• Undersizing: the performance is 'acceptable' only for critical applications with important brownouts for others. Inflation is small. Access starts at 2 Mbps and demand inflates at +6% per quarter.

The combination of the different ingredients (initial traffic, demand inflation and available thresholds proposed by Telcos) leads to the following access bandwidth over a 3-year period:

We consider here bandwidth price ranging from 2,000€/month (@2 Mbps) up to 8,000€/month (@40 Mbps). This provides 3-year cumulated expenses of approximately 200 k€ (oversizing), 120 k€ (rightsizing) and 90 k€ (undersizing).

Rightsizing provides savings of 40% compared to uncontrolled access Oversizing, with an excellent QoE. Undersizing proposes 55% of savings to Oversizing scenario, at the detriment of application performance.

To finally decide about her/his sizing policy, the IT manager needs to balance bandwidth expenses with the cost of application brownouts. As this point may be a bit controversial, I realize it would deserve a dedicated post, to come soon…

Illustration: Charlie Chaplin in "Modern Times" (1936)

Network rightsizing (1/3): conciliating Oliver’s strength with Stan’s format

More than often, IT and network sizing remain based on an intuitive mix of facts (measures), expectations (what should be the traffic in a few months) and a few drops of magic sauce (rule of thumb). It is actually a difficult task, as IT managers don't want to be short on resources, can't justify the budget for unused infrastructure and lack of a clear relation between sizing, quality of experience (QoE) and business impact for their company.

Looking to the network, the usual way to decide about the size of links is typically to ensure that congestions will not occur: the network manager looks to the traffic at peak time of a business day (say 11 am or 3 pm), add a security factor of its own (20% to 50%) and order for the next available bandwidth her/his Telco can provide. The outcome is acceptable in term of performance (there is generally no undersizing) but is not cost efficient, as the lines will be mostly oversized. Moreover this decision is always hard to justify to the management and the Business Units that pay for it.

Let's note that this decision process is more and more dangerous to apply to a traffic the critical business portion (~15%) of which is much lower that the recreational one (~50%) in most of today organizations. It finally consists to open doors without giving a sense of responsibility to users, encourage bad habits and set unreasonable expectations.

WAN governance proposes to shift from this empirical method in favor of a business driven logic. Beforehand, let's examine briefly two ideas generally accepted (even by experts):

• Conventional Wisdom #1: good network sizing will prevent congestion to happen à FALSE! And this is BAD news. TCP flows are elastic; their 'mission' is to fill the pipe up to the point where packets drop. Servers (and their Windows or Linux TCP stacks) are more powerful than ever and can burst very quickly. Applications and GUI get richer and embed heavy content. Cannibals (bandwidth greedy applications like YouTube, Facebook and all sorts of peer-to-peers applications) are on the prowl.

• Conventional Wisdom #2: network congestion means performance issues à FALSE! And this is GOOD news. Modern traffic management solutions, able to understand applications and to manage individually each flow according to its nature and behavior, are able to guarantee good performance even in the most congested situations.

The consequences are that congestion does not mean restriction: it is a normal situation where the enterprise can use the totality of the resources it pays for, while getting the right performance its business applications deserve.

How to conciliate Oliver's strength with Stan's format? What are the right criteria to rightsize network accesses? How to get sure that rightsized networks provide users with the required level of performance?

Total Savings Impact (3/3): The Silver Lining

The two main categories of WAN Governance economic impact, i.e. higher IT efficiency and better use of resources can then be combined to compute CFO friendly figures, like Net Present Value (NPV), Pay-back time and Return on Investment (ROI).

Of course, beyond pure financial computation, the tricky part is to figure out what is the meaning of all of this, and which hypotheses have to be taken into account. Although there are many ways to address this question, our proposal here is to organize the study around four scenarii:

	Without bw downsizing	With bw downsizing
Network impact only	Less bandwidth Easier operations	Less bandwidth Easier operations
Network, IT and productivity impacts	Less bandwidth Easier operations Less servers More productive users	Less bandwidth Easier operations Less servers More productive users

Not being too optimistic nor too pessimistic, there is a fair chance that the final economic reality will take place among these values. With the hypotheses presented in this study's former sections, we find in any case a solid financial situation:

	Without bw downsizing	With bw downsizing
Network impact only	ROI: 150% Payback: 14 months NPV: 1.9 M€	ROI: 316% Payback: 6 months NPV: 4.0 M€
Network, IT and productivity impacts	ROI: 544% Payback: 6 months NPV: 6.9 M€	ROI: 709% Payback: 4 months NPV: 9.0 M€

Would we compare the relative values of costs and savings associated to this project, we'll find the following graph:

Well, allying good practices, measurable achievements and significant savings, WAN governance could be the IT and network silver lining of these cloudy economic times…

Total Savings Impact (2/3): More with less

Following the discussion about WAN Governance economic impact, let's see now its Yin aspect: resources optimization, which is basically doing more with less.

Two main resources can be optimized: network and servers.

The most classical source of Network savings is bandwidth reduction. Wan optimization allows data compression between sites, with average reduction factors that span between 2 and 10 according to the type of traffic. This data reduction requires a device on datacenters and branch offices, which may not be appropriate to all cases.

Another way to save network resources is to provide a much better use of the available bandwidth by applications. Autonomic networking enables global optimization that can reach an extra load factor of 1.5 to 3 with equipments on datacenters only. Additional techniques like Rightsizing network accesses according to application SLA will provide extra reduction with total confidence in the results.

Then the enterprise has two options: 1) reduce its bandwidth to the minimum 2) or simply keep same bandwidth and postpone further upgrades. We must say that we see in general the second option (postponing upgrades for an extra 2 to 4 years) with bandwidth reduction on a few selected sites only; but all depends on traffic inflation, network price, etc.

Installing Wan optimization appliances on 20% of a 350 sites network and activating global optimization to the entire network can provide a 3-year network savings between 3 M€ and 6 M€ (with bandwidth needs doubling and bandwidth price reducing of 30% during the 3-year period).

On the other hand, Application acceleration allows enterprise to consolidate servers in a few datacenters, sparing remote servers Capex and Opex. All depends on the enterprise organization and application delivery scheme, of course.

If we assume that one server will be progressively removed (over 12 months) in 50 branch offices of the previously described network (the one that are equipped) we'll get a 600+ k€ savings over the 3-year period.

If a full ball of wool can go through a needle hole, why not application flows through a limited bandwidth network?

Total Savings Impact (1/3): Energizing the enterprise

We previously discussed the various aspect of WAN Governance economic impact: Yang (more productivity) and Yin (more savings). Let's have a deeper look at the former one: productivity increases.

Both enterprises employees and IT teams directly benefit from the WAN Governance umbrella and it is actually reasonably easy to estimate this impact.

Users' productivity can be computed from an estimation of the time saved by good and stable application performance, like the one provided by Application performance management, Application acceleration and Wan optimization. This saved time can then be transformed in 'money' by using average employee hourly rate (adding salaries, benefits and all the extra costs supported by the company, like offices, furniture, etc.)^(*). The figure beside shows the monthly impact (€) for 3,000 employees that would all save 4 minutes each day thanks to less application performance brownouts and a fraction of them an additional 3 minutes because of faster data transfers. At an hourly rate of 30€, this sums up to >5 M€ over 3-year, even with a reasonable initial learning curve.

On top of this, IT team productivity will also getting better thanks to automation and more efficient operations processes as well as the reduction of the management burden for useless devices. For example, deploying an Autonomic Networking solution over a 350 sites networks would save a minimum of 400 k€ over 3-year (@ 60€/hour for network engineers) while a progressive consolidation of 50 servers will save another 200/300 k€ over the same period of time.

I must recognize that this approach is often challenged by CxO. What does saving 5' or 10' a day means, actually? Will employees use it to finish early, spend extra time at the coffee machine or doing more things? I'd recently a discussion with a senior Infrastructure Manager who works for a very large international company and had the opportunity to expose the same type of impact (although on a totally different topic) to his company's executive board. The CEO quickly turned to him and said: "then, give me the list of the saved people!" Of course, there was none, as saving was divided among many individuals…

On the other hand, improving enterprise productivity is a day-to-day effort that starts with good practices, efficient tools, and adapted processes that will all participate to the company success. Efficient IT is also a source for employees' motivation that should not be underestimated. There is no reason to just ignore this at network and IT level. Moreover, there are also special situations (like telepresence or desktop virtualization projects, for example) that make the case immediately compelling.

Even an elephant can be eaten, patiently, steadily, piece per piece, till the last bite of meat on the last bone of its last leg…

(*) Of course, it is also possible to perform the evaluation according to the added-value or other indirect impacts that more productive/reactive teams would have to the enterprise business.

 

With rhyme and reason

 The other day, I found in Paul Jaillard's blog a sentence that nearly perfectly summarizes what we try to achieve with Wan governance: "When we concentrate on costs, quality decreases - When we concentrate on quality, costs decrease"(*).

   

A brutal financial approach is a sign of an organization in crisis. It has not been able to adapt in time to the economic situation, for internal (poor management, limited quality of products, unreasonable cost structure...) or external (technology revolution, credit crunch, regulation changes...) reasons.  Survival is now the only concern, the true purpose of the enterprise (manufacturing goods, servicing people, etc.) being shadowed. While in enterprises' life, it may happen that situation is so difficult that such emergency decisions must be taken, it is crystal clear that the cost of these savings is extremely high. We cut an arm and a leg to save the body, fair enough - but no wonder if the body will remain handicapped for a long time.

   

A pure performance approach might be the right one in early stage of an organization with deep pockets: it lies so far away from its goals that any mean to move it forward is welcome, whatever the cost. Here, the priority is to maximize, not to optimize. The bad news is that this policy can only apply for a short time, as the enterprise will either fail - and run out of cash - or succeed and reach its adult stage where external factors (market size, social environment, natural resources, etc.) will start to limit its expansion.

   

Mature organizations would rather adopt a thoughtful quality approach that balance expenses and benefits, short and long term impacts, direct and indirect improvements. They should praise managers that think and act about what is important for the enterprise (its customers, its products, its financial health…) not just for their own team or career. Of course, it may be seen as a more difficult road, as many parameters have to be taken into account and new questions will arise (starting with an accurate identification of the important needs). However, well aligned with the enterprise's goals and successfully implemented, it makes the difference between good and great organizations.

Applied to network governance, it is the philosophy at the core of autonomic networking and objective-based management systems that provide automated tools to allow teams in charge of the network to spend their time on the objective definition and achievements rather than on the day to day implementation.

The economic impact of good performance across WANs is huge: there is room for amazing improvements here: IT flexibility, users' productivity, bandwidth cost, operation workload, incident reduction, etc. To maximize the benefits, all these aspects have to be optimized globally. I expect to provide you with some examples and figures in further post that would illustrate how to save real money with WAN governance.

(*) From "Le client retrouvé" by Philippe Detrie

Less haste, more speed

I am often required to participate in hiring interviews. At a recent one, the candidate repeatedly made the point that “I’m really energetic”. It seemed fairly true from his body language and general attitude and I saw this as a really cool quality. However I failed miserably to understand, or even get the guy to properly explain, what this significant amount of energy was and what it would be used for in his potential new job.

Having recently talked about the dual (Yin/Yang) structure of Global Economic Impact of WAN Governance, I will now discuss the first point of the Yang (productivity increase) aspect: ensuring an appropriate, predictable and stable level of performance.

As this point is often confused with the acceleration of applications over networks, I will be specific and isolate it: neither the goal nor the implementation are similar. We will talk more about acceleration in a later post; let’s concentrate a moment on guaranteed performance.

The goal here is to obtain stable business processes (like customer-facing transaction, purchase orders, financial consolidation…) through guaranteed performance of applications, in all cases, everywhere over the global network.

Application performance over the network and hence the processes they support, is impacted by many factors that relate more to the usage and traffic load than to the network itself:

·      Time matters: like in consumer networks, business network traffic changes, dependent on the moment you look at it. Each working day has its own peak times (usually up to 11 am, then up to 3 pm, with a lull for lunch). Monday and Friday traffic can differ from the other days (more or less activity, depending on enterprises). In some cases, monthend is critical (for example, financial consolidation for public companies). According to their market sector, enterprises may have very important traffic seasonal fluctuations (e.g. the end of the year for retail). On top of all this, time zones, bank holidays and so on all differ between regions…

·      Asynchronous events: the network is used for many types of activities, implying a lot of people working in different departments. Many events depend on poorly planned causes (e.g. anti-virus signature updates, data-base synchronization, data replication, video conferencing, etc.).While some enterprises still ask some of their employees to stop working on the network in order to protect critical applications periodically, this has become more painful, very hard to explain and justify and finally quite ineffective.

The impact of application brown-out depends on many parameters (the most important being the enterprise domain of activity). Consequences to the business are generally so important that IT managers often feel the need to put in place processes and tools to assess and manage the performance of business applications over the WAN, in order to provide their end-users with guaranteed performance - and prove it to their management.

Impossibility to forecast is the main challenge to consider when setting-up methods and tools to guarantee application performance over the WAN in large organizations. Such tools must then be able to automatically adapt to new situations, extremely rapidly. No wonder that Autonomic Networking, with its Objective-based management model, fits so well with performance guarantees: this is exactly the challenge it was designed to address.

Guarantee, first: the faster the car, the more stable it needs to be. Performance assessment and guarantee is the foundation on which enterprises may, when required, build additional performance enhancement mechanisms such as desktop virtualization, data caching and protocol acceleration.

Despite the fact that the economic impact of stable and predictable application performance over the network is difficult to evaluate in a standard manner (being tightly coupled with the enterprise organization and business), it is closely related to IT and WAN governance, extending well above “just” the IT, up to fundamental business processes. Like other “must have” capabilities, application performance guarantees are so essential that calculating its value to the business may even lead to very strange discussions (what it the NPV of your electricity supply?). Among many aspects to be considered are:

1.    Employee productivity: no wasted time because people wait for transactions to complete;

2.    Organization reactivity: antivirus definitions are updated in real time, financial reports are ready for their publication date, voice calls have the right quality, etc.

3.    Customer satisfaction: the waiting time to complete a purchase or reservation is acceptable, not too many people lining up at the desk…

4.    Employee satisfaction: nothing is less motivating for employees than having the impression that IT systems (like the other company systems, processes, organization, etc.) prevent them from performing well.

Workaholic people do not frighten me; however I decided not to hire this candidate. I was too unclear about how to channel his energy, and even wondered if it would not just disturb his colleagues and the environment without alignment to our own business and responsibility. Sometimes, less is really more…

(Thanks to Mark for this post Burtonification)

The two faces of Economic Impacts

As economic pressure keeps growing, enterprises' CxOs require (almost) systematically studying the financial impact of each new IT project. We propose to discuss this quite complex topic in a suite of posts to come.

Like many (if not all) things in life, economic impacts can be considered under two very different angles:productivity increase (“Yang”)and expenses reduction (“Yin”).

When this question is addressed by enterprises at global and strategic level, the network can actively participate to both of them.

1. YANG: Productivity increase

a) Ensuring an appropriate, predictable and stable level of performance, no matter where or when. The goal is here to improve business operations thanks to the sustainability and predictability of good performance in every circumstance: peak time of the day, end of week activity increase, end of month financial consolidation, antivirus database update and all the many unplanned events that occur on the enterprise network and impact users’ quality of experience. It is possible to achieve this predictability through various techniques like Quality of Service (QoS), application SLAs, network optimization, etc. the mixture of them depending on the nature of the business application (real-time  voice, time sensitive transactional apps, ...) and on the characteristic of the network (its size, reach, access technology, etc.). Objective-based management and Autonomic networking have proven exceptional effectiveness towards such a goal.

b) Maximizing the performance of business applications over the network may reduce users' waiting time and provide them with direct and personal productivity improvements. Often called Wan Optimization, application acceleration is achieved by using different techniques (according to the nature of applications and networks) like redundancy elimination, caching, protocol acceleration, etc.

c) Providing IT agility in order to facilitate strategic transformations of the infrastructure: centralization of application servers, desktop virtualization, collaborative applications, etc. The productivity improvement comes here from a better managed and more cost effective IT organization at the global enterprise level. The network is always a key part and very often the most impacting success (or failure) factor of such transformation, so its contribution must be carefully understood.

2.    YIN: Expenses reduction

a) Bandwidth reduction, would it be immediate decrease or differed network access increase, can be achieved through network efficiency increase and redundancy elimination (compression) approaches. It is current to achieve an x3 reduction factor (or an increase postponed by 3+ years), which drives a significant impact on the network cost.

b) Network operation simplification actively participates to cost reduction, thanks to proactive incident elimination and shorter resolution time. It makes use of active techniques, deep application understanding and crystal-clear visibility and reporting.

c) Investment reduction, the purpose of which being to limit the deployment of dedicated technologies that might have negative consequences in cost, logistics and operation complexity. Asymmetric deployments and different flavor of virtualization are examples of solutions that participate to such reduction by limiting the hardware deployed in branch offices.

We will talk soon about each of these aspects, diving progressively into more details and providing examples and discussions. I expect you to share your experiences and advices in this multi-face area.