Research Report. Remote Office/Branch Office Technology Trends. July 2011

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1 Research Report Remote Office/Branch Office Technology Trends By Bill Lundell, Jon Oltsik, and Lauren Whitehouse With John McKnight and Jenn Gahm July Enterprise Strategy Group, Inc. All Rights Reserved.

2 Introduction Research Objectives Research Report: Remote Office/Branch Office Technology Trends In order to determine the IT priorities and challenges currently faced by remote office/branch office (ROBO) locations, and how organizations plan to address those challenges, ESG recently surveyed 454 North American senior IT professionals representing midmarket (100 to 999 employees) and enterprise-class (1,000 employees or more) organizations. All respondents worked at headquarters locations or other centralized corporate sites and were responsible for ROBO IT operations and/or strategy, including the delivery of IT services to these locations, authorization of expenditures, or establishment and enforcement of corporate IT policies for remote/branch offices. Respondent organizations were required to have at least two ROBO locations to qualify for the survey. The survey was designed to answer the following questions: How many ROBO locations do organizations currently support? What is the average number of employees that work at each ROBO location? What is the largest ROBO in terms of number of employees? What percentage of ROBO locations has dedicated on-site IT staff? How do organizations determine which locations qualify for on-site resources? What percentage of an organization s total IT budget is dedicated to supporting ROBOs? What are the top ROBO IT priorities? What are the top networking and security challenges when it comes to supporting the IT needs of remote/branch offices? How are the majority of corporate applications and/or IT services delivered to users at ROBO locations? What benefits do organizations derive from delivering corporate applications and/or IT services to its ROBO locations? What challenges do organizations face in delivering corporate applications and/or IT services to its ROBO locations? What steps have they taken to address these challenges? How many servers do organizations have deployed at a typical ROBO location? How does this vary by the average number of employees per ROBO? How extensive is server virtualization usage at ROBO locations? What benefits has the technology yielded? On average, approximately how much data storage capacity is deployed at the typical ROBO location? How does this vary by the server count or number of employees at the typical ROBO location? What type of external disk storage system is the most widely used at ROBO locations? How does this vary by average ROBO storage capacity levels? What is the primary data protection process organizations deploy at their ROBO locations? For those organizations performing on-site backup operations at ROBOs, is disk or tape the preferred storage media? Who is typically responsible for backup operations and media management at these locations? Do these organizations have any plans to centralize their backup processes? If yes, why? For those organizations backing up their data to a central location, what drove them to this model and what challenges if any have they experienced? Survey participants represented a wide range of industries including manufacturing, financial services, communications and media, health care, retail, government, and business services. For more details, please see the Research Methodology and Respondent Demographics sections of this report.

3 Research Methodology To gather data for this report, ESG conducted a comprehensive online survey of IT managers from private- and public-sector organizations in North America (United States and Canada) between April 19, 2011 and May 2, To qualify for this survey, respondents were required to be senior IT managers working at headquarters locations or other centralized corporate sites and personally responsible for or familiar with the IT operations and strategies at their organization s remote/branch offices. All respondents were provided an incentive to complete the survey in the form of cash awards and/or cash equivalents. After filtering out unqualified respondents, removing duplicate responses, and screening the remaining completed responses (on a number of criteria) for data integrity, we were left with a final total sample of 454 IT managers. Please see the Respondent Demographics section of this report for more information on these respondents. Note: Totals in figures and tables throughout this report may not add up to 100% due to rounding.

4 Respondent Demographics The data presented in this report is based on a survey of 454 qualified respondents. The figures below detail the demographics of the respondent base, including organizations total number of employees, primary industry, and annual revenue. Respondents by Number of Employees The number of employees in respondents organizations is shown in Figure 1. Figure 1. Survey Respondents, by Number of Employees How many total employees does your organization have worldwide? (Percent of respondents, N=454) 20,000 or more, 22% 100 to 249, 12% 250 to 499, 9% 500 to 999, 9% 5,000 to 19,999, 18% 2,500 to 4,999, 13% 1,000 to 2,499, 18% Source: Enterprise Strategy Group, Respondents by Annual Revenue Respondent organizations annual revenue is shown in Figure 2. Figure 2. Survey Respondents, by Annual Revenue What is your organization s total annual revenue ($US)? (Percent of respondents, N=454) Not applicable (e.g., public sector, nonprofit), 11% Less than $50 million, 11% $20 billion or more, 12% $50 million to $99 million, 11% $10 billion to $ billion, 6% $5 billion to $9.999 billion, 8% $1 billion to $4.999 billion, 15% $100 million to $499 million, 15% $500 million to $999 million, 11% Source: Enterprise Strategy Group, 2011.

5 Respondents by Industry Research Report: Remote Office/Branch Office Technology Trends Respondents were asked to identify their organization s primary industry. In total, ESG received completed, qualified respondents from individuals in 19 distinct vertical industries, plus an Other category. Respondents were then grouped into the broader categories shown in Figure 3. Figure 3. Survey Respondents, by Industry What is your organization s primary industry? (Percent of respondents, N=454) Other, 19% Manufacturing, 22% Retail/Wholesale, 7% Business Services (accounting, consulting, legal, etc.), 7% Communications & Media, 9% Health Care, 9% Government (federal/national, state/province/county /municipal/other local government), 10% Financial (banking, securities, insurance), 16% Source: Enterprise Strategy Group, Respondents by Area of Technology Responsibility Respondents current area of technology responsibility is shown in Figure 4. Figure 4. Survey Respondents, by Area of Technology Responsibility Which of the following would you consider to be your primary area of technology responsibility? (Percent of respondents, N=454) Senior IT Management (e.g., CIO, VP/Director of IT, etc.) IT Operations General IT staff Applications/Database Administration Networking/Telecommunications Servers/Systems Administration IT Architecture/Planning Information Security Data Protection (e.g., backup/recovery, archive) Storage Administration Other 7% 6% 6% 4% 3% 2% 1% 2% 11% 14% 45% 0% 10% 20% 30% 40% 50% Source: Enterprise Strategy Group, 2011.

6 Contents List of Figures... 3 List of Tables... 4 Executive Summary... 5 Report Conclusions... 5 Introduction... 7 Research Objectives... 7 Research Findings... 8 Remote Office/Branch Office Demographics... 8 Remote Office/Branch Office IT Priorities Networking Challenges at Remote Office/Branch Office Locations Security Challenges at Remote Office/Branch Office Locations Application Deployment Models for Remote Office/Branch Office Locations On-site IT Infrastructure Supporting ROBO Locations Data Protection Processes for ROBO Locations Research Methodology Respondent Demographics Respondents by Number of Employees Respondents by Annual Revenue Respondents by Industry Respondents by Area of Technology Responsibility... 54

7 List of Figures Figure 1. Total Worldwide ROBO Locations... 8 Figure 2. Employees per ROBO Location: Average vs. Maximum Figure 3. Percent of ROBO Locations with Dedicated On-site IT Staff Figure 4. Percent of ROBO Locations with Dedicated On-site IT Staff, by Average Number of Employees per ROBO Figure 5. How ROBO Locations Qualify for On-site Staff, by Company Size Figure 6. Overall IT Budget Allocated for Support of ROBO Locations Figure 7. Centralized vs. Distributed IT Processes at ROBO Locations Figure 8. Centralized IT Processes, by Percent of ROBOs with On-site IT Staff Figure 9. Top ROBO IT Priorities Figure 10. Biggest ROBO Networking Challenges Figure 11. Biggest ROBO Security Challenges Figure 12. How ROBOs Access Corporate Applications/IT Services Figure 13. Preferred Delivery Models for Specific Applications to ROBO Locations Figure 14. Benefits of Delivering Corporate Applications and/or IT Services over the WAN to ROBO Locations Figure 15. Challenges of Delivering Corporate Applications and/or IT Services over the WAN to ROBO Locations25 Figure 16. Business Impact of Challenges Delivering Corporate Applications and/or IT Services over the WAN to ROBO Locations Figure 17. Improving the Delivery of Corporate Applications and/or IT Services over the WAN to ROBO Locations Figure 18. Benefits of WAN Optimization Technology Figure 19. Plans to Improve the Delivery of Corporate Applications and/or IT Services over the WAN to ROBO Locations Figure 20. Number of Physical Servers at the Typical ROBO Location Figure 21. Usage of Server Virtualization Technology at ROBO Locations Figure 22. Usage of Server Virtualization Technology at ROBO Locations, by Average Server Count per ROBO Figure 23. Benefits of Using Server Virtualization at ROBO Locations Figure 24. Average ROBO Storage Capacity Figure 25. Most Widely Used Disk Storage Systems at ROBO Locations Figure 26. Most Widely Used Disk Storage Systems at ROBO Locations, by Average Storage Capacity per ROBO. 37 Figure 27. Most Significant ROBO Storage Challenges Figure 28. Most Significant ROBO Storage Challenges, by Average Storage Capacity per ROBO Figure 29. Current Primary Data Backup Processes Used at ROBO Locations Figure 30. Plans to Back Up ROBO Data over the WAN to a Centralized Location Figure 31. Drivers for Consideration of Backing Up ROBO Data over the WAN to a Centralized Location Figure 32. Typical On-site Backup Process at ROBO Locations Figure 33. Typical On-site Backup Process at ROBO Locations, 2007 vs Figure 34. Responsibility for On-site Data Protection Figure 35. Drivers for Backing Up ROBO Data Directly over the WAN to a Centralized Corporate Site Figure 36. Challenges Backing Up ROBO Data over the WAN to a Centralized Corporate Site Figure 37. Survey Respondents, by Number of Employees Figure 38. Survey Respondents, by Annual Revenue Figure 39. Survey Respondents, by Industry Figure 40. Survey Respondents, by Area of Technology Responsibility... 54

8 List of Tables Table 1. Total Worldwide ROBO Locations, by Company Size... 8 Table 2. Average Number of Employees per ROBO Location, by Company Size Table 3. Maximum Number of Employees per ROBO Location, by Company Size Table 4. Overall IT Budget Allocated for Support of ROBO Locations, by Number of ROBO Locations and Percent of ROBOs with On-site Staff Table 5. How ROBOs Access Corporate Applications/IT Services Today, by Percent of ROBO Locations with Dedicated On-site IT Staff Table 6. Use of WAN Optimization Technology to Improve the Delivery of Corporate Applications and/or IT Services, by Number of ROBO Locations Table 7. Number of Physical Servers at the Typical ROBO Location, by Average Number of Employees per ROBO 31 Table 8. Average ROBO Storage Capacity, by Average Server Count per ROBO and Average Number of Employees per ROBO Table 9. Top ROBO IT Priorities, by Average Storage Capacity per ROBO Table 10. Significant Increase in Remote Backup Usage at ROBO Locations Since Table 11. Plans to Back Up ROBO Data over the WAN, by Company Size and Number of ROBOs Table 12. Typical On-site Backup Process at ROBOs, by Average Server Count and Storage Capacity per ROBO Table 13. Responsibility for On-site ROBO Data Protection, by Average Server Count and Storage Capacity per ROBO All trademark names are property of their respective companies. Information contained in this publication has been obtained by sources The Enterprise Strategy Group (ESG) considers to be reliable but is not warranted by ESG. This publication may contain opinions of ESG, which are subject to change from time to time. This publication is copyrighted by The Enterprise Strategy Group, Inc. Any reproduction or redistribution of this publication, in whole or in part, whether in hard-copy format, electronically, or otherwise to persons not authorized to receive it, without the express consent of the Enterprise Strategy Group, Inc., is in violation of U.S. Copyright law and will be subject to an action for civil damages and, if applicable, criminal prosecution. Should you have any questions, please contact ESG Client Relations at (508)

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