SingTel’s second CIO Day conference in Hong Kong in March kicked off with an upbeat presentation by Peter High, President Metis Strategy, based on his book, “Why Businesses Succeed When IT Triumphs.”
High quoted an Information Week poll revealing that the majority of CIOs are expected by their companies to drive innovation and over a quarter have IT teams dedicated to that purpose, many of them encouraging idea creation with goals, games and awards. A third of IT departments reserve part of their budget to identify and exploit IT trends. “Traditionally, IT has been an order-taker from divisional silos,” said High. “There’s a big cost advantage in collaboration between IT and business units, across the silos.”
He provided five guidelines to achieve ‘World Class IT.’ “First, have the right people doing the right jobs. Business savvy technologists are the essential foundation for an innovatory enterprise. Second, make infrastructure hardware, networks and applications the on-off switch for the business. Third, support a project and portfolio management process to deliver new ideas. Fourth, develop a partnership between IT and the business. Fifth, develop external partnerships, directing them towards the same innovatory purposes.”
The idea behind High’s philosophy is for CIOs to build an ongoing capacity to support innovation and new technology. Each of the broad principles is described in detail and supported with more fine-grained policies.
While few of High’s ideas are in themselves radical, or even new, the value of the whole package is to provide the nuts and bolts of an entrepreneurial philosophy based around exploiting technology. In today’s complex and fast-moving world, this kind of focus supports the alignment of people, resources and technology, and places the CIO at centre stage.
SingTel’s Bill Chang, EVP Business Group, presented a roundup of his company’s dramatic transformation from traditional telco to, arguably, Asia’s foremost ICT vendor.
Chang outlined some of the challenges facing modern businesses in a globalized world, which constantly demands agility, higher utilization of technology, cost optimization and better cash flow. A key point was partnership. “Enterprises need partners and future competition will not be between enterprises, but between value chains – the most powerful value chain will win.” Chang referenced Apple’s power in harnessing thousands of software developers and manufacturing contractors.
Telcos, with their strong networking and communications, are good at supporting value chains. SingTel’s value proposition, said Chang, is: “Simplicity: because, as a telco, we accept full accountability for voice, video and data with end-to-end network security.” IDC surveys show that telcos deliver a 27 per cent TCO saving on ICT services compared with other vendors, noted Chang.
It also seems the trend towards outsourcing IT to telcos is supported by the financial tsunami, which created a powerful trend from capex (capital expenditure) to opex (operating expenditure as service subscriptions).
EMC’s presentation focused on an emerging view that the existing enterprise network infrastructure is archaic and unable to deal with the bandwidth and business agility needed today. “We are trying to build light, nimble, flexible networks, more like a spider’s web,” said Steven Leonard, President AP & Japan, EMC. “When one thread of a web breaks, the rest retain their strength, and networks should have similar resilience.”
EMC is involved with building flexible cloud architecture that can be provisioned when the user needs it, so that enterprises only pay for what they use. “Data analysis is going to be critical in future,” said Leonard. “We are used to going to a data warehouse and spending weeks on analysis. But today’s users need data analysis seconds after an event has happened.”
A concept pushed by Leonard was that of the hybrid cloud. “The need for provisioning and consumption of services is best found not in the public or private cloud, but in the hybrid cloud,” he said.
VCE (Virtual Compute Environment), a global joint venture of EMC, Cisco and VMware for cloud virtualization, will be partnering with SingTel. “We want to be the architecture and engineering guys, but go to market through service providers,” said Leonard.
The CIO Insights Panel, moderated by Geoff McClelland, Program Director, CIO Connect, Hong Kong, took questions from the audience and, unsurprisingly, the first question was about adoption of consumer devices in the enterprise, and what it means for the support commitment, especially security. The inevitability of consumerization was stressed by SingTel’s Bill Chang, who said: “If young people, especially, can’t bring tablets and smart devices in to work, they’ll say this is not a cool place to work. The CIO must figure how to deploy tablets and other devices. So you need to make sure you set boundaries for the use of these devices that you can handle.”
“For road warriors who really need these devices, you have to make sure you have adequate support and security,” said Thomas Dillon, CHTP, VP of IT, Asia, Venetian Macau. “You need the means to lock the hard disk of a laptop and locate and wipe mobile devices, too.”
The risks of selecting cloud vendors provoked a lively discussion. “A one-size-fits-all approach to contracts is not good enough, when there are many companies offering cloud capacity without reliable performance,” said Geofrey Master, a lawyer and partner of Mayer, Brown JSM. “It is essential to deal with trustworthy service providers and the responsibility for assessing them falls on CIOs.”
Some panellists wondered if changing vendors may be harder on the cloud. “We started using Google Apps,” said Henk Ten Bos, CIO Ageas Insurance Co. Asia. “and we want to be confident that we can withdraw our data to change the supplier if necessary.”
Online applications tie you in even more. “If you adopt SaaS and you design your business processes around those services, you have a much bigger problem getting out,” said McClelland. “If the vendor pulls out of the market, you are on your own. That’s why financial services can’t use the cloud in most jurisdictions.”
SingTel claims to do it right. “When we provide cloud services, we give them a sandbox first, to try out the service before signing the contract,” said Chang. “And if clients want to exit at the end of any month, we make sure it’s as easy as joining, and we wipe their data off immediately.”
A related topic was how to find a service provider who will pay damages if the user organization is harmed by service interruption. “SLAs in contracts may quote a “five 9s” availability, but when I ask them for compensation if the service fails, they withdraw,” said Thomas Dillon, CHTP, VP of IT, Asia, Venetian Macau Ltd.
Nothing can really compensate you for bad service. “If you have to rely on the service vendor’s contract, you are lost,” said McClelland. “You need to negotiate to flush out the real issues, but even if you get 6 per cent back because they missed an SLA on your peak trading day, you’ve still lost out big-time.”
Roadmap for cloud adoption
EMC and CISCO made an impressive joint presentation entitled: Emergence of the Converged Cloud: What does it mean to the CIO? advocating that enterprises follow a roadmap through private cloud architecture in order to ease their way into the public cloud. This three-phase roadmap starts with a conventional data centre operation as the first phase, ‘IT production’, which is followed by the second phase, ‘Business Production’ in which cloud disciplines are deployed. “Phase two is the hard part,” said Par Botes, Chief Technology Officer, AP & J, EMC, “You have to fix the corporate policies, processes, and the framework for virtualization and consolidation of IT. After that, phase three, the public cloud, is easy.”
CISCO emphasized another key aspect of the cloud paradigm: interoperability. “CISCO and EMC believe in interoperability, with tools familiar to enterprise IT operations,” said Charleston Sin, GM, Borderless Network & Data Centre, CISCO Greater China, “and there must be interoperability between clouds.”
Botes and Sin also described the VBlock infrastructure platform that has emerged from their joint venture, VCE (Virtual Computing Environment). Instead of worrying about servers and disk farms, CIOs can focus on units of IT available from the cloud, which they said, are like “floor tiles” with predictable performance and operational characteristics.
Identifying security threats
Security was well covered at the conference, kicking off with a review of security in the digital economy, and some predictions about the upcoming year. Wong Loke Yeow, Regional Director & Evangelist, ArcSight, gave a briefing on the notable breaches and security trends of recent years, discussed the top five security threats to expect in 2011, and recommended the top security and compliance best practices to adopt.
One speaker completely demolished the idea that the cloud is a security risk. “Cloud-based security has the potential to open a second front,” said Chris Larsen, Malware Research Team Leader, Blue Coat Systems, “forcing malware authors to spend additional resources overcoming a new set of obstacles.” Larsen compared the effect of Web-based attacks against a traditional antivirus solution to an attack against the new set of hurdles that a cloud defense can impose.
At SingTel’s second CIO Day conference in Hong Kong, the panel of CIOs discussing “The Outlook for Information Security 2011,” was moderated by Vincent Chan, Partner, Advisory Services, Ernst & Young, who canvassed with panelists some current insights on information security program trends.
The panel members were Jojo Dionaldo, Head of IT, The Dairy Farm Co., IKEA Division, Patrick Raths, Head of IT, Asia, Swiss Reinsurance Company, Wong Loke Yeow, and Chris Larsen. The panel discussed topics such as defining security metrics, shifting focus: moving from a network-centered to a data-centered approach, and understanding new threats: mobile computing, social networking and other security game changers.
Powering Business Productivity
Chris Marshall, Director, Service Provider Sales, AP region, Polycom, described how enterprises can deploy cloud based UC solutions, while ensuring flexibility and investment protection. Polycom collaborates with SingTel to deliver a UC service that achieves successful deployment due to interoperability and open standards.
In the struggle for bandwidth, de-duplication technology has been a boon to many enterprises, and it may be critical for linking to clouds. A presentation from one of the leaders in this technology, Peter Elsey, Director, Service Provider Alliances, AP, Riverbed Technology, focused on the key fact that virtualizing servers and consolidating them into a single data centre is likely to exacerbate network congestion.
Elsey pointed out that lean and efficient bespoke software had largely given way to very large packages customized by system integrators. “If you want consolidation and virtualization, there is no way these big, slow applications can fit on to the WAN.”
According to this theory, the private cloud makes real-time de-duplication of software much more important. Elsey gave a dramatic illustration of a 25-second download speeded up so fast by de-duplication that the Windows bar showing the download progress didn’t have time to appear.
A panel on Leveraging Managed Cloud Services for Maximizing Productivity and Cost Optimization got to grips with user concerns, starting with the benefits. “The cloud means lower IT costs, agility, efficiency and speed-to-market,” said Peter Elsey of Riverbed Technology. “It provides a better environment for innovation and helps you recruit and keep world-class skills.”
Communications can be upgraded, too. “Unified Communications is the second wave in cloud technology,” said Chris Marshall, Director Service Provider Sales, Polycom AP, “and in the AP region, a number of carriers are driving that technology.”
IT is more than just time-to-market and cost saving. “When we make a significant step forward in technology,” said August Chan, Head of IT, CASH Group, “it makes things possible that would not be possible without it – the real value of the cloud is in making new things happen.”
The panel discussed the regulatory difference between private and public clouds, especially data flow between countries. “It is easier to centralize data in a private cloud, but there is no regulatory difference between private and public clouds,” said Youngran Kim, Regional Head, IT Strategy & Architecture, AXA. “China, for example, has a clear prohibition on moving data across borders, and that is an issue in the public cloud, but the universal concern is the protection of data where it is located.”
Video traffic can play havoc with voice and data, but “lost packet recovery” could help out. “At Polycom, we have an algorithm to recover lost packets,” said Marshall, “so you wouldn’t notice an interruption.”
Moderator Jerry Wertelecky, Partner, Advisory, Ernst & Young asked: “Cutting costs is fine, but how can the cloud contribute to top-line growth of an enterprise?” Perhaps the cloud can actually improve the work/life balance of users and reduce employee turnover.
“I have a brother-in-law in IT and he deploys software for inventory control,” said Marshall. “Using videoconferencing on the cloud, he can demonstrate many aspects of software operation and business procedures for the benefit of remote employees. He can do this anytime – even Saturday night if necessary – and it really impacts employee moral and turnover.”
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