Transcript David Metcalfe, PhD

Organic IT: Coming To A Data Centre
Near You
David Metcalfe, PhD
Research Director
Forrester Research
Theme
Organic IT will deliver
business innovation
Organic IT
Computing infrastructure built on cheap, redundant
components that automatically shares and manages
enterprise computing resources -- software,
processors, storage, and networks -- across
applications.
Agenda
 What are the key trends in corporate IT
today?
 How does Organic IT help IT deliver value
to the business?
 How are firms embarking on the Organic
IT journey?
Deep-seated trends impact IT
 High IT spending doesn’t translate into
better financial performance
High financial performers spend just 3.3% of
revenue on IT
Percent of
revenue
spent on IT
4.2%
2.6%
4.5%
3.3%
Company financial performance
Forrester Report October 2002 “Linking IT Spend To Business
Results”
Deep-seated trends impact IT
 High IT spending doesn’t translate into
better financial performance
 Executives don’t think IT provides
business innovation
The IT organization plays a limited role in
business innovation
Forrester Report December 2002 “Putting Innovation Back In IT”
Deep-seated trends impact IT
 High IT spending doesn’t translate into
better financial performance
 Executives don’t think IT provides
business innovation
 Centralization of IT organizations
continues to grow
In 2003, 74% of firms expect to have
centralized IT organizations
Forrester Report June 2003 “How Companies Govern Their IT
Spending”
Deep-seated trends impact IT
 High IT spending doesn’t translate into better
financial performance
 Executives don’t think IT provides business
innovation
 Centralization of IT organizations continues to
grow…
 … even as European IT headcount continues to
shrink
European IT departments are still
shrinking
“Which one describes the status of your full-time IT
staff?”
Don't know
2%
We're
downsizing
34%
We're hiring
21%
We're
holding staff
flat
43%
Base: 490 European IT decision-makers
Deep-seated trends impact IT
 High IT spending doesn’t translate into better
financial performance
 Executives don’t think IT provides business
innovation
 Centralization of IT organizations continues to
grow…
 … even as European IT headcount continues to
shrink
 Cost reduction remains top of IT’s agenda.
45% of European IT managers focus on
lowering operating costs
“What is the top priority for IT to
support?”
Driving new offerings and business
practices
Acquiring and retaining customers
Improving workforce productivity
Improving product and process
quality
Lowering the company's operating
costs
0% 10% 20% 30% 40% 50%
Base: 490 European IT decision-makers
Agenda
 What are the key trends in corporate IT
today?
 How does Organic IT help IT deliver value
to the business?
 How are firms embarking on the Organic
IT journey?
The problem: Fragmented infrastructure
ERP
Software:
Monolithic
code
Processors:
Single
purpose
servers
Storage:
Isolated
disks
SAP
HP
Hitachi
Finance
CRM
Peoplesoft
Siebel
Dell
Sun
EMC
NetApp
Network:
Fragmented
LAN
WAN
Internet
The solution: Organic IT
ERP
Software:
Web
services
Processors:
Computing
fabric
Finance
• XML
• SOAP
Peoplesoft
• WSDL
• UDDI
SAP
Siebel
CPU RAM CPU RAM
• Computing nodes
• High-bandwidth
networks
• Fabric OS
Fabric
switch
Dell
HP
Net
Storage:
Shared
pool
Hitachi
Network:
Redundant
array of
Internet
Links (RAIL)
CRM
LAN
Fibre
chan.
• IP/FC- bridging
• NAS
• TCP offload
EMC
WAN
Sun
NetApp
• VPN hardware
• Route optimization
Internet
Dealing
with today's IT infrastructure
Scenario: Manager wants to share production data from inventory system w
Steps
Today's IT
“I need to
integrate
with Acme’s SAP
R/3” 1
2
“Uh oh, we use Baan.
We'll
need to hand
6 months/$$$$
code the integration.”
6m
“Hmm, we'll have to
build1amonth/$$
new server and
OS image for that.”
1m
“Ohhh. We'll research a
Fibre
RAID
2 Channel
months/$$
array for reliability.”
2m
“Well.... we need to
pull6amonths/$$$
leased line and
coordinate the carrier.”
6m
Software guy
Server guy
3
4
T
Disk guy
Network guy
Total:
Total: 6 m
8 months/$$$$$
Dealing with an
array for reliability.”
Disk guy
4
“Well.... we need to
Organic IT infrastructure
pull a leased line and
Network guy coordinate the carrier.”
Tota
Organic IT
“I“Ineed
needtotointegrate
integrate
with
SAP
R/3.”
withAcme's
Acme’s
SAP
R/3”
1
Organic IT
administrator
“Ok, we'll use the fab
industry XML spec to
link the Web services
interfaces. We've got
processors, but we'll
“How’s next Tuesday?”
need to drop a new
Tot
disk in the pool. And
we've got plenty of
bandwidth. How
does Tuesday sound?”
Total:
1 week/$
Agenda
 What are the key trends in corporate IT
today?
 How does Organic IT help IT deliver value
to the business?
 How are firms embarking on the Organic
IT journey?
Awareness of IBM’s On Demand is
growing
41% of IT execs think On Demand is a credible
offering, 26% think its pure marketing
Firms Can Prepare Now For Organic IT
With Simple Steps
Firms Should Move To Organic IT In
Three Phases
Choose the right Organic IT strategy
Summary
 Business executives see IT as a costly
barrier not as a cash generator
 Organic IT offers flexibility at lower cost
increasing IT’s business value
 Selective investments in Organic IT are a
reality today
Thank you
David Metcalfe, PhD
+44 207 323 7684
[email protected]
www.forrester.com
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