EMC Utilizes Brocade vadc to Optimize Network Performance and Drive Value for Customers

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1 IDC ExpertROI SPOTLIGHT EMC Utilizes Brocade vadc to Optimize Network Performance and Drive Value for Customers Sponsored by: Brocade Matthew Marden August 2015 Overview In the past few years, organizations that have leveraged the capabilities of social, cloud, mobile, and big data to build new applications have significantly transformed their industries. EMC is supporting these efforts by helping IT organizations accelerate their journey to the hybrid cloud. EMC Managed Services enables organizations to manage cloud-based architectures and applications to avoid large capital expenditures. Recently, EMC decided to upgrade its application delivery control (ADC) load-balancing solution to support its growing business. Many of EMC's largest customers had requested that the company improve throughput, scalability, and performance for its managed services. EMC chose to deploy Brocade vadc (previously Riverbed SteelApp), a software-based load-balancing solution, to optimize service delivery of more than 1 billion transactions on an average day and balance network traffic that can reach 320Gbps of simultaneous throughput. EMC has realized a number of business and IT benefits since deploying Brocade vadc. Chief among these benefits is the ability of EMC to achieve the desired levels of performance, agility, and scalability that its demanding customers request. As a result, EMC has been able to boost customer satisfaction and drive more business. IDC projects the value of benefits that EMC is realizing from its use of Brocade vadc to be an average of $23.35 million per year. Benefits include capturing more revenue, realizing IT staff efficiencies, and cutting costs associated with an alternative load-balancing solution. This results in a five-year ROI of 423% and a payback period for its initial investment in Brocade vadc of 6.5 months. Implementation Business Value Highlights Organization: EMC Location: Hopkinton, Massachusetts Challenge: Deploy cost-effective load-balancing solution to improve the performance, reliability, and agility of its managed services Solution: Brocade vadc Five-Year Cumulative Benefits: $81.0 million (discounted) ROI of 423% Payback in 6.5 months Other Benefits: Up to 20x better network performance 10 15% lower cost per gigabyte of EMC's services 75% reduction in IT staff time for load-balancing provisioning 80 90% less expensive than comparable hardware solution EMC first considered adopting Brocade vadc while evaluating the state of a customer-managed cloud architecture. According to Denos Christofi, Senior Solutions Principal, EMC, "We were getting to the point that our network was getting saturated, so we had to look at re-architecting the infrastructure August 2015, IDC #250469R1

2 including the load-balancing solution to accommodate the increasing customer base and performance and capacity requirements." At about this time, one of EMC's largest managed services customers a global communications service provider requested that EMC upgrade its cloud infrastructure to improve performance and delivery of its services and that EMC make its managed services more scalable for the customer's business use. This customer, like other EMC customers, also challenged EMC to architect its network to allow it to offer the lowest possible per unit service pricing levels so that the customer could then offer its own services at the most competitive price point possible. Before migrating to Brocade vadc, EMC used an on-premise, hardware-based load-balancing solution. EMC initially intended to continue deploying a hardware-based load-balancing solution. However, EMC had lingering concerns about hardware costs and the need for additional investments to enable the type of scalability its customers desired. "Despite our concerns, we were well down the path of going with a hardware solution when we were introduced to Brocade vadc," said Christofi. After an introductory meeting, EMC discovered that Brocade vadc, because of its virtualized nature, could help EMC improve its network's performance and functionality while offering reduced solution and IT staff costs. "When we looked at Brocade vadc's capabilities and compared them with hardware solutions we were considering, we realized that Brocade's solutions were not falling short of the hardware solutions at all and would cost much less," noted Christofi. EMC brought Brocade vadc into its testing lab to evaluate its functionality. When testing, it took into account its service-level agreements (SLAs) with key customers to ensure that Brocade vadc could meet standards that its business required. Within two days, EMC's lab had Brocade vadc running, and EMC made the decision to move to the Brocade vadc virtualized load-balancing solution. "When we looked at Brocade vadc's capabilities and compared them with hardware solutions we were considering, we realized that Brocade's solutions were not falling short of the hardware solutions at all and would cost much less." By early December 2012, EMC had deployed Brocade vadc in two of its European datacenters. Its deployment of Brocade vadc stood at 18 datacenters worldwide as of mid EMC intends to continue to deploy Brocade vadc to other datacenters, including several in South America and more datacenters in the United States and Europe. Integration of Brocade vadc into EMC's network architecture has been aided by the company's user-friendly Web interface, which has helped EMC cut training and product familiarization time. Further, because EMC has deployed Brocade vadc with Linux, it has been able to make tweaks to Brocade vadc that help maximize its positive impact on network operations and business. Benefits EMC has leveraged Brocade vadc to significantly improve its ability to manage data loads, which can create up to 320Gbps of simultaneous throughput with more than 1 billion transactions on an average day, across its networks and datacenters. According to Christofi, network performance, as measured by transactions completed per second, has improved by up to roughly 20 times since the deployment of Brocade vadc. In addition, Brocade vadc helps EMC maintain the levels of network reliability and high service availability that its customers demand while helping make its services more scalable. EMC has been able to reduce the per-gigabyte costs of its services by 10-15% since deploying Brocade vadc, to the benefit of its customers leveraging EMC's services for their own businesses IDC #250469R1 2

3 EMC is accomplishing this with Brocade vadc without putting security at risk or increasing spending on security. As a virtualized solution, Brocade vadc allows EMC to use less costly virtualized firewalls while still providing full protection to both inbound and outbound traffic. In addition, Brocade vadc has improved the ability of EMC to maintain and service its applications because it can provide faster engineering support for product updates based upon application requirements. EMC Managed Services is realizing significant business benefits from Brocade vadc, including increased reliability and near-infinite scalability of its managed services. Christofi explained that EMC's customers are seeing benefits from the "high availability of a virtual environment." EMC is able to maintain a more robust infrastructure because of Brocade vadc's load-balancing capabilities and fast response times, which enable it to quickly identify and move traffic away from any failures or problem areas in the system and then rebuild and redeploy with efficiency and speed. For EMC's customers relying on these managed services to drive their own businesses, this improvement in reliability and robustness is critical. Further, EMC can now better scale its managed services to meet its customers' evolving needs with Brocade vadc in place. Christofi explained that customer demands fluctuate and change significantly and that "having Brocade vadc allows us to scale to meet customers' demand without having to re-architect or putting the customer in a position where they need to look for a different vendor." Christofi cited the positive impact that Brocade vadc has had on EMC's business relationship with one of the company's most significant customers: "The customer has seen that our services are reliable, well managed, perform well, don't go down, and are secure with Brocade vadc. As a result, we've seen them shift to bring much more capacity and business to EMC." EMC's Managed Services team and cost control efforts have also benefited from Brocade vadc. Because of the solution's scalability, EMC spends much less time re-architecting or adding bandwidth to additional customer datacenters. In addition, the virtualized and software-driven nature of Brocade vadc has allowed EMC to pull several IT staff members away from supporting its legacy hardware-based load-balancing solution and redeploy them on more strategic responsibilities. Christofi praised Brocade vadc for being intuitive, which has helped IT staff quickly develop working knowledge for Brocade vadc and put it to better use. "The customer has seen that our services are reliable, well managed, perform well, don't go down, and are secure with Brocade vadc. As a result, we've seen them shift to bring much more capacity and business to EMC." Brocade vadc also offers EMC further cost advantages as a virtual, software-driven solution. Brocade vadc requires a reduced datacenter footprint compared with the legacy hardware solution, allowing EMC to avoid server purchases and save on maintenance and power costs. Further, Brocade vadc was significantly less expensive for EMC to deploy than other hardware and software solutions that were considered and has not required additional investments to ensure needed scalability. Quantifying the Benefits From its interviews with Christofi, IDC has quantified the benefits EMC is realizing from using Brocade vadc to support its delivery of managed services, including increased revenue, minimizing downtime to the extent possible, more efficient IT staff processes, and cost savings. In total, these benefits average $23.35 million annually over the projected five years (see Figure 1) IDC #250469R1 3

4 ($M) FIGURE 1 Average Annual Benefits $2.37 $2.03 $ $ Business productivity benefits IT infrastructure cost reduction Risk mitigation benefits IT staff productivity gains Total: $23.35 million Source: IDC, 2015 Business Productivity Benefits EMC has leveraged its deployment of Brocade vadc to help drive its business. According to EMC, Brocade vadc's positive impact can be summarized through the experience of one large customer. With Brocade vadc in place, this customer noticed improved performance and scalability from EMC Managed Services, along with lower per-gigabyte costs and it has responded by moving more business to EMC. While acknowledging that customer business decisions are complex, EMC says that this customer has specifically identified network performance and delivery improvements attributable to Brocade vadc as drivers of its decision to deepen its business relationship with EMC. This customer's transition of business to EMC is ongoing, and EMC expects to capture more revenue with this customer in the next few years. Assuming that performance, throughput, and scalability improvements attributable to Brocade vadc are partly responsible for customers' decisions to move more business to EMC's Managed Services Group, IDC projects that EMC is increasing its operating margin by an average of $17.9 million per year over five years. Risk Mitigation Benefits EMC's policy is to maintain a no downtime environment for its managed services. For EMC, downtime impacting the delivery or quality of its managed services has a significant negative impact on its customer relationships and ultimately its business. Since deploying Brocade vadc, EMC has not experienced any downtime attributable to problems related to load balancing. EMC believes that it would incur higher costs to use another load-balancing solution that could ensure a comparably low downtime environment. IDC calculates that EMC is saving an average of $2.0 million per year in costs that it would have had to bear to put in place an alternative load-balancing solution that could deliver the same level of availability and reliability as Brocade vadc IDC #250469R1 4

5 IT Staff Productivity Gains The highly virtualized nature of Brocade vadc makes it easier and more intuitive for EMC's Managed Services team to manage its load-balancing efforts, which has allowed it to move some operations resources to more business-enabling positions. In particular, EMC now devotes fewer IT staff resources to managing individual hardware appliances. Further, fewer staff members are needed for Level 2 and Level 3 incident response efforts because of fewer serious issues. In addition, EMC is able to provision technologies at its datacenters much more efficiently with Brocade vadc in place; load-balancing installation now requires 78% less staff time, and preparing datacenters for Brocade vadc takes 75% less staff time than with the legacy solution. In total, IDC projects that EMC is realizing IT staff productivity gains worth an average of $1.1 million per year over five years with Brocade vadc. IT Infrastructure Cost Reduction Finally, EMC's transition to the highly virtualized Brocade vadc solution has enabled it to avoid server costs, power costs, and maintenance costs related to maintaining a load-balancing solution. In addition, EMC is saving on travel costs associated with deployments of the Brocade vadc solution, as its virtualized nature means that more of deployments can be handled remotely. IDC calculates that EMC is saving $2.4 million per year on average over five years on these types of costs by using Brocade vadc. Return on Investment IDC projects that EMC will realize a discounted total benefit of $81.0 million through its use of Brocade vadc compared with a discounted investment of $15.5 million. This results in a five-year ROI of 423% with payback on its investment occurring within 6.5 months of its initial investment in Brocade vadc (see Table 1). TABLE 1 Five-Year ROI Analysis Benefit (discounted) Investment (discounted) Net present value (NPV) $81.0 million $15.5 million $65.5 million Return on investment (ROI) 423% Payback period 6.5 months Discount rate 12% Source: IDC, IDC #250469R1 5

6 IDC conducted several interviews with EMC to quantify the benefits and investment associated with its use of Brocade vadc and created an ROI analysis from the results. IDC calculates the ROI and payback period in a three-step process: 1. Measure the benefits from increased IT staff and user productivity and other cost savings since deployment. 2. Ascertain the total investment. 3. Project the investment and benefit over five years and calculate the ROI and payback period. The ROI is the five-year net present value of the benefit divided by the discounted investment. To account for the time value of money, IDC bases the ROI and payback period calculations on a 12% discounted cash flow IDC #250469R1 6

7 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA USA idc-insights-community.com Copyright Notice External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2015 IDC. Reproduction without written permission is completely forbidden. *This document was originally published in August Brocade vadc was formerly known as Riverbed SteelApp, which was acquired by Brocade Communications Systems Inc. in March 2015.