IDC ExpertROI SPOTLIGHT Achieving Organizational Transformation with HP Converged Infrastructure Solutions for SDDC Sponsored by: HP Matthew Marden January 2014 Randy Perry Overview Seeking the business benefits generated by private cloud and to free themselves from the rigid silos of traditional IT infrastructures, organizations are turning to an approach that extends virtualization to all compute, network, and storage resources in their datacenters. This approach requires pooling and aggregating resources into a single utility that can be provisioned, operated, and managed by policy-driven software. Often referred to as a softwaredefined datacenter (SDDC), it places physical, virtual, and cloud resources under a single point of control to speed deployments, reduce costs, and increase staff productivity while providing agility and scalability. One organization benefiting from using such a SDDC solution is a group within a large global financial services institution that functions as an internal service provider to 40,000+ contact center agents. In mid-2013, the group deployed a suite of HP products that together constitute a converged SDDC solution for its datacenters to support its specialists. The call center must maintain ultra-high availability 24 x 7 x 365 service availability of at least "six-nines" (99.9999%) given its customer-facing nature and compliance requirements. Business Value Highlights Organization: Global call centers at a financial services institution Challenge: Deploy datacenter infrastructure solutions to capture the benefits of converged and commoditized IT infrastructure solutions and support ultrahigh availability for premium bank services Solution: HP converged infrastructure solutions for SDDC, including HP BladeSystem, HP Virtual Connect, HP OneView, and HP 3PAR StoreServ Cumulative Benefits: $18.2M (discounted) over five years ROI of 293% Payback in 4.3 months Other Benefits: Reduction in time for technology In summer 2013, the group deployed HP OneView as its infrastructure management platform and HP 3PAR StoreServ Storage products as its storage solution. These HP products were deployed along with HP BladeSystem, buildout from 66 days to one day Projected 50% reduction in storage needs which the group was already using as its blade server infrastructure. The group also uses other HP products, including HP Virtual Connect. January 2014, IDC #246385
Thus far, the group is very pleased with the deployment of this suite of HP converged infrastructure solutions for SDDC. A manager praised the HP products and specifically HP OneView as being "organizationally transformative." He explained that they provide his group with a highly standardized converged infrastructure solution that delivers top-quality services while reducing the time to market for technology rollouts and making it easier to scale. The manager explained, "HP OneView helped us to reduce a technology rollout from 66 days to one day. It's the breakthrough we've been looking for." As a datacenter infrastructure management platform, HP OneView enables the organization to deliver technology platforms to contact center agents more quickly by dramatically shortening rollout times. In addition, it reduces staffing requirements both for rollouts and on an ongoing basis. As a technology, it captures organizational processes, configurations, and best practices in software, which allows it to automate infrastructure deployment and management. "HP OneView helped us to reduce a technology rollout from 66 days to one day. It's the breakthrough we've been looking for." In addition to HP OneView, the group is using HP 3PAR StoreServ Storage to better scale its storage provisioning to actual demand. The manager said that HP 3PAR StoreServ's hardware-enhanced thin provisioning capabilities will allow his group to substantially cut its storage costs but retain the ability to scale up storage capacity without sacrificing critical performance. In addition, HP 3PAR StoreServ offers value for its cost; the manager said that it provides tier 1 service levels at tier 2 prices. By cutting technology provisioning times, improving IT staff productivity, reducing storage costs, and minimizing the costs associated with downtime, this suite of HP converged infrastructure solutions for SDDC, which includes HP BladeSystem, HP Virtual Connect, HP OneView, and HP 3PAR StoreServ, has provided benefits that average $5.30 million annually, resulting in a five-year return on investment (ROI) of 293% and a payback period of 4.3 months. Implementation To achieve its converged infrastructure objectives, the group deepened its existing relationship with HP to form what the manager described as a "true partnership," working with HP to create a suite of HP datacenter infrastructure solutions that addresses specific business demands. The group was already using HP BladeSystem and other HP products and regarded HP as the obvious choice to create a more converged infrastructure driven by software-defined technologies. The manager explained, "HP is a leader in converged infrastructures and one of a very few companies globally that could meet our objectives since it offers software-defined storage, server, and networking solutions." The group deployed HP OneView in summer 2013 over several months. The goal was to find a solution that would "commoditize" the converged infrastructure that the group had put in place over the previous five years. According to the manager, his group had struggled to find the right balance between converged infrastructure and commoditized infrastructure. He believed that his team needed to take the best from both worlds to achieve top-quality results in an environment of limited resources. 2014 IDC #246385 2
The group has benefited most of all from the speed with which it can build out technology platforms with the suite of HP converged infrastructure solutions. For example, it reduced the time needed to deploy a new call center platform from 66 days to one day. The speed of the buildout allowed the group to begin realizing benefits from this technology platform, such as captured customer interactions and big data analytical capabilities, weeks earlier than it otherwise would have. It accomplished such a rapid deployment because HP OneView's template-driven automated processes greatly reduced the time required for technology rollouts. The design work and structured wiring for the platform were completed before the deployment began, so it could be set up the next day and plugged in for the systems administrator to deliver the technology to end users in a much shorter time frame. The manager already views these HP converged infrastructure solutions for SDDC as "organizationally transformative" because they have broken down organizational silos within the group and have changed workflows and enhanced overall team productivity. Technology deployments previously occurred only after winding their way through a number of teams, which meant more work, delays, and greater potential for human error. "Previously the work would have been shared across multiple teams," the manager said. "With multiple hands on multiple keyboards, imagine the number of resulting errors and the QA effort required. By including all the transactional details in a scripted automated process, we can do the work in one day at the push of a button and it's repeatable." Benefits The speed of the buildout allowed the group to begin realizing benefits from this technology platform, such as captured customer interactions and big data analytical capabilities, many weeks earlier than it otherwise would have. The group is leveraging these HP converged infrastructure solutions for SDDC to achieve significant staff efficiencies and productivity increases, faster technology rollouts, reduced storage costs, and lower costs associated with downtime and regulatory risk. It has also made its operations more agile and slashed the time needed to deliver technology rollouts to end users. HP OneView is at the core of the value being generated by this suite of HP products by capturing organizational processes, configurations, and best practices in software, which enables automated, one-button infrastructure deployments. As a result, the group's IT staff can deploy new technologies to the desktop in hours with less risk of human error. In the past, such deployments often took upwards of months and required skilled IT professionals to perform repetitive and less productive tasks. Today, the group's IT team is saving significant amounts of time during these deployments and has more confidence that they are done correctly the first time. These time savings translate into higher IT staff productivity on day-to-day tasks such as systems monitoring and maintenance as well as for implementing updates and refreshes. Further, the staff has more time to focus on business enablement. Meanwhile, the group's management can leverage time being saved to give current employees additional responsibilities without hiring more full-time employees (FTEs) or paying for contractors while also achieving the group's strategic goal of becoming more engineering focused. 2014 IDC #246385 3
The group is also reducing the risk it faces from downtime and regulations and cutting its costs to mitigate these risks. HP OneView enables transparent upgrades, so IT team and end-user productivity losses connected with planned downtime instances are avoided. Further, the group has reduced the likelihood of more disruptive and costly unplanned downtime instances because it can carry out upgrades as scheduled. The group is also leveraging the HP SDDC solution to avoid additional staffing or contractor costs that it would otherwise bear to comply with regulations. For example, the group has met a regulatory deadline requiring it to deploy call-recording capabilities in an accelerated buildout time frame with HP OneView. In addition, this suite of HP converged infrastructure solutions for SDDC is helping the group meet ongoing regulations limiting the hours for technology buildouts without having to allocate additional labor resources or hire contractors. The group is also reducing its storage costs with the HP 3PAR StoreServ Storage solution and improving service availability with hardware accelerated thin provisioning and mesh-active clustering orchestrated from HP OneView. HP 3PAR StoreServ's storage architecture is designed for SDDC, so it allocates capacity in fine-grained increments from a single free space reservoir and spreads workloads across every disk and controller. Because it does not require pre-dedication of storage, less capacity is needed. Further, manual allocation of disks or other hardware resources is not necessary, meaning that capacity can be provisioned faster with lower administrative costs. The manager explained, "In the past, we provisioned about four times the storage than what was actually used, so we could potentially realize savings of 80% with HP 3PAR StoreServ." Quantifying the Benefits To quantify the business benefits of the suite of HP converged infrastructure solutions for SDDC, IDC conducted interviews with the group and asked a series of questions about the investment and the benefits achieved from savings realized from cost reduction, increased IT staff productivity, and risks avoided. IDC then projected the results over five years to determine the ROI. Figure 1 shows the breakdown of the annual benefits, which average $5.30 million per year over the five-year period. "In the past, we provisioned about four times the storage than what was actually used, so we could potentially realize savings of 80% with HP 3PAR StoreServ." 2014 IDC #246385 4
FIGURE 1 Average Annual Benefits Risk avoidance $1.19M Infrastructure cost reduction $1.85M IT staff productivity $2.27M Total: $5.30M Source: IDC, 2014 Infrastructure Cost Reduction The group is already seeing reduced storage costs through its use of HP 3PAR StoreServ and expects that its annual savings on storage will increase over time. The organization supports its call centers with 6PB of storage but has found it challenging to efficiently provision storage resources, often using only a fraction of the 6PB at any given time. The HP 3PAR StoreServ Storage solution and its native thin provisioning capabilities are offering the organization the capability to more closely match the amount of storage it procures with actual demand. IDC believes that by more efficiently provisioning and using storage, the group will achieve average savings of $1.85 million annually over the five-year period. IT Staff Productivity Increase HP OneView is dramatically improving the productivity of the group's IT staff by enabling a single systems administrator to provision, manage, and control all software-defined elements in the datacenters. Single user interface functionality, along with features such as intuitive search capabilities, is saving the staff significant amounts of time. As a result, build and maintenance operations require about 40% less staff time than before, which is an average productivity gain of $1.92 million annually over five years. The group can leverage these time savings to give current employees additional responsibilities that are more often directed by business enablement and also use these efficiencies to staff its team to reflect its increased focus on engineering operations. The group is also benefiting from staff time savings on server refreshes. With a three-year refresh cycle, the group refreshes over 1,000 physical servers a year. Before deploying HP OneView, the group used three FTEs each for 150 days a year to refresh servers; with HP OneView and its softwaredriven processes, one FTE can complete a server refresh in 10 hours. IDC estimates that this results in savings of $168,000 annually over five years. 2014 IDC #246385 5
Infrastructure buildout times have also been cut with HP OneView. For example, the group has already deployed a call-recording platform with HP OneView and reduced the deployment time per site from two weeks with three FTEs to four hours with one FTE. The group typically launches two to three of these platforms per year, so it should achieve productivity increases of $184,000 annually. In total, the group will realize time savings with HP OneView and other HP SDDC products that it can leverage to increase staff productivity significantly, with an average benefit of $2.27 million annually. Risk Avoidance The suite of HP converged infrastructure solutions for SDDC is helping the group significantly reduce risk in terms of downtime. IDC forecasts that the group will record average benefits of $1.19 million annually over five years by minimizing planned and unplanned downtime. In addition, the group is benefiting by leveraging the HP converged infrastructure solutions for SDDC to meet regulatory requirements without incurring additional staffing or contractor costs. IDC estimates these benefits at $1.25 million per year over five years but has not included these benefits in the ROI calculation given the changing nature of regulations faced by the financial services institution. The group has historically found it challenging to carry out scheduled downtime instances to upgrade firmware. This meant that it had to accept some risk of costly unplanned downtime episodes. With HP OneView, upgrades are done transparently and automatically and without notifying or impacting end users. This saves IT staff and end-user time and reduces the likelihood of unplanned downtime, which carries costs to the financial services institution of up to hundreds of thousands of dollars per instance. These HP products are also helping the group meet regulatory requirements cost effectively, which is critical for a financial services institution. The group can now accomplish technology deployments much faster, allowing it to meet deadlines without having to allocate additional staffing resources or hire contractors. These benefits are ongoing in nature; in particular, the group can meet a regulation limiting the hours in which technology buildouts can occur without increasing its staff count or hiring contractors. Return on Investment From interviews with the organization, IDC was able to quantify the benefits and investment associated with the group's deployment of the suite of HP converged infrastructure solutions for SDDC, which includes HP BladeSystem blade servers, HP OneView converged management, HP Virtual Connect, HP 3PAR StoreServ Storage, and other HP back-end solutions, and to develop an ROI analysis from the results. IDC projects that the group will realize a discounted total benefit of $18.2 million in cost savings, productivity gains, and avoided risk from its use of these HP solutions over five years compared with a discounted investment of $4.6 million. This results in a five-year ROI of 293% with payback on the investment occurring in 4.3 months (see Table 1). 2014 IDC #246385 6
TABLE 1 Five-Year ROI Analysis Benefit (discounted) Investment (discounted) Net present value (NPV) $18.2 million $4.6 million $13.6 million Return on investment (ROI) 293% Payback 4.3 months Discount rate 12% Source: IDC, 2014 IDC conducted several interviews with the organization to quantify the benefits and investment associated with its use of the suite of HP converged infrastructure solutions for SDDC 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. 2014 IDC #246385 7
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