cio decisions november final

7/28/2019 CIO Decisions November Final

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How Mobile IT

is RevampingNetwork Strategies

Mobility is giving CIOs a newperspective on security, network

capacity and IT consumers.

CIONOVEMBER 2012 VOLUME 17

decisions

A LESSON IN TAKING

MOBILITY SKYWARD

AN INSURANCE

POLICY PREDICATED

ON PREDICTIVE

ANALYTICS

THE NETWORK

MOBILE IT EFFECT

SOCIAL STRATEGY

WITH AN EYE

ON THE FUTURE

GLIDING INTO

THE CLOUD

THE PROOF IS

IN THE PAYPAL

PUDDING

Inside:

USERS ARE IT

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CIOS AND IT LEADERS are going to have to

get comfortable with the new language of

consumerizationthat is, stop calling their

employees users and instead call them

what they really are: consumers of infor-

mation technology.

That may get confusing because, of

course, customers are the lifeblood a

business. But its the business internal

consumers that put that technology to

work in helping reach customers and sat-

isfy customer needs.

Dont take my word for it. Madison

(Wisc.) College CIO Igor Steinberg said,

Our internal customers are primarily

faculty, and I guess students are external

customers. ... They are riding the wave of

consumerization and expect to do whatever

they need to do when they need to do it

and in the way they want to do it.

When Art King was the global informa-

tion architecture lead for Nike Inc.,

a primary issue was working on a wire-

less strategy in tandem with mobile device

management, because the people usingwireless devices want to consume enter-

prise services, he said in this issue of

CIO Decisions.

The upshot of the consumerization

movement is not so much that consumer

devices have inltrated the enterprise; its

that internal usersexcuse me, custom-

ersexpect the same performance, ex-

ibility and convenience of their tech in the

enterprise as they have outside the enter-

prise. If they dont, they will either nd a

new job or, worse for the IT department,

nd a way around sanctioned technology

and do things for themselves. Thats when

problems of security, privacy and data in-

tegrity break out.

Consumerization is happening, large

le sharing is happening, and this trend

will continue. It is up to IT to gure out

how to accommodate this, because if we

dont simulate the kind of experience they

get on the consumer side, people will gure

out a way to go around us to get their job

done, said Randy Nunez, senior network

engineer at Ford Motor Co.s Mobile Com-

puting IT Enterprise Technology Research

division.

To help understand this problem further

and consider some solutions from real IT

practitioners, read Executive Editor Chris-

tina Torodes cover story on the mobile IT

network effect. Also in this issue, News

Director Linda Tucci on building a corpo-rate social network; Features Writer Karen

Goulart on cloud implementation project

management and an interview on data

analytics with PayPals former chief data

scientist.

Write to Scot at

[email protected]

Users are IT Consumers Too

EDITOR'S LETTER

Scot PetersenEditorial Director
mailto:spetersen%40techtarget.com?subject=mailto:spetersen%40techtarget.com?subject=


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AMERICAN AIRLINES INC . is what you might

call an upwardly mobile company. Not

only is the airline literally in the business

of ascending into the sky and transport-

ing passengers, but the airline has also

long shown a dedication to promoting

enterprise mobilityand recently, mobile

applicationsto enhance its customer and

workforce experience.

Today, mobile has taken on new meaning

for the nancially challenged airline, which

led for bankruptcy protection last year.

Over the past couple of years, American

has worked at making mobility a core busi-

ness process, most visibly in its offerings

for travelers. A suite of mobile apps that

work on an array of devices, for example,

has become a big selling point for the Fort

Worth-based airline, said Phillip Easter, the

airlines director of mobile applications.

To rev up its enterprise mobile apps

development, IT rst had to concede that

it no longer owned IT, Easter said. Hav-ing ruled the technology playground at the

enterprise, IT was schooled by Apple into

realizing the game has changedespecially

on the front end.

UI is the new song for mobile apps. Ev-

erything about the mobile app has to have

great user interface, said Easter, whose

team develops apps for the consumer space

and consults with internal IT on develop-

ing Americans enterprise mobile apps.

To really make use of those great UIs,

the back end at American had to change,

too. We have over 50 years of legacy data

securely captured in our enterprise. We

dont let it out. And now come these mo-

bile devices needing access, Easter said.

In the past, anything that was mobilized

at American was usually a one-off, built

specically for an application. As mobile

devices matured and could receive data in

a more standardized fashion, IT needed tobuild a middle layer and new application

programming interfaces (APIs) for its back-

end systems to expose data in consumable

chunks for mobile devices.

Developers can call an API to get data

and quickly create enterprise mobile apps.

They should not have to worry about how

to open up a channel, how to do the secu-

A Lessonin Taking Mobility Skyward

ON THE JOB

UPFRONTNews, views and reviews for senior technology mana

Everything about themobile app has to havegreat user interface.

Phillip Easter, director o mobile

applications, American Airlines Inc


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to push the envelope on opening up inter-

nal systems to provide innovative mobile

services to Americans travelers. Working

with its partner on IP telephony systems,

Easters teams became intent on pushing

Voice over Internet Protocol (VoIP) into the

mobile space. The result is a soon-to-debut

service that will let passengers chat with

American agents on the ground over a Wi-

Cloud ComputingReinventing IT DepartmentsIn a recent CompTIA survey, 32% o respondents reported restructuring IT around

a cloud computing transition, and hal o those companies reported the creation

o new skills and roles:

BY THE NUMBERS

Source: The Computing Technology Industry Associations third annual Trends in Cloud Computing survey, which polled 500 IT

and business professionals. Note: Percentages do not total 100.

UPFRONT

Fi connectionwhile airborneto adjust

travel arrangements.

Thats the kind of mobile app develop-

ment that revs his engines.

Its an example of bringing together

tested technologyWi-Fi, mobile apps and

Internet-enabled phonesto bring about

a new conversation with the customer.

Linda Tucci

0 10 20 30 40 50 60 70 80

Skills to build private clouds

Departmental liaisons

Integration specialists

Cloud architects

Compliance specialists

69%

64%

63%

61%

44%


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WHATS THIS?

operating ofcer, obviously. I have to make

sure that the company is able to get its

business done efciently and effectively

every daythats really to keep the lights

on. The chief operating ofcer, the CEO,

the underwriting folks and the vice presi-

dent of operationsthe entire team is

really focused on where we need to go next.

What I try to bring in is an awareness of

or discussion about trends in other indus-

tries or in our own industry, asking, Are

they appropriate for us? How can we adopt

them?

So, I really could not pick one person.

I interact with all of the other ofcers of

the company on a daily basis.

What technology are you most interested

in exploring in the next few years?

Well, mobility is where we need to get

to, and thats a real challenge because its

changing daily. Theres a proliferation of

platforms. Theres a proliferation of off-

Source: WhatIs.com

the-shelf applications that may or may not

have good business applications. And our

systems are still designed around the old

business model, which is Windows and a

standard Web browser. The real challenge

for us is to be able to use our existing

systems but deliver [what] our agents and

our customers want in increasingly so-

phisticated ways. You can imagine an agent

wanting to use an iPad or other pad device

on a sales call to get a quote and follow

through and actually issue the business.

We know how to get there, but it is not an

easy task.

Whats appropriate on a smaller device,

on a phone, that is a question we really have

to get intelligence back from the agents on.

What we write is so complex, and there

are so many data elds to input, so just the

screen size on the phone is a big challenge

there. Were looking at how we can make

our applications more ubiquitous and more

mobile for consumption by the agents.

Wendy Schuchart

UPFRONT

Fishbone DiagramA fshbone diagram, also called a cause-and-eect diagram or Ishikawa diagram, is a visu-

alization tool or categorizing the potential causes o a problem in order to identiy its root causes.

In brainstorming a problem, its symptoms and the potential causes are charted to resemble a

fshs skeletal components. Dr. Kaoru Ishikawa, a Japanese quality control expert, is credited

with inventing the fshbone diagram to help employees avoid solutions that merely address the

symptoms o a much larger problem.


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EARLIER THIS YEAR, the OC3 network

for Internet trafc at Kroll Factual Data

reached a saturation point of 80%. Given

that Kroll, a verication services provider

for lenders and creditors, conducts most of

its business online, this was bad news on a

grand scale.

The culprit was streaming media slam-

ming the companys network as employees

used mobile devices to watch videos and

download les. It was starting to have a

detrimental effect on our customers, and

for us that was the end of the story, said

Christopher Steffen, principal technical

architect at Kroll, a Loveland, Colo., divi-

sion of global background screening andsecurity provider Altegrity Inc.

The companys IT team (with manage-

ments blessing) had no choice but to block

and limit outbound network trafc. Sure

enough, the saturation rate went from 80%

to 18%, but the limitations put on mobile

device use went over like a lead balloon

with employees, Steffen said.

IT executives across enterprises are

trying to get a handle on how to address

mobile ITs effect on network capacity in

the bring-your-own-device (BYOD) era. As

Steffen put it theres 15 to 20 ways to skin

this cat.

The solutions at Kroll were rewall

blockers and network controllers to pre-

vent employees from going to sites like

YouTube, as well as the creation of a guest

network that handled all the dirty Internet

trafc, Steffen said. This guest network let

employees surf the Internet while keeping

the trafc separate from the core network

and the backend systems used for business

processes.Managing the impact of mobile devices

on the network, however, doesnt lend itself

to a re-and-forget kind of approach,

Steffen cautioned. Even with its technol-

ogy measures in placeand policies that

prevent access to certain sitesmobile de-

vice trafc management continues to be a

moving target at Kroll, requiring exceptions

The NetworkMobile IT EfectBring-your-own-device programs are stretching enterprise

networks to the breaking point. Heres how some IT executives

are adapting to the new reality. BY CHRISTINA TORODE

COVER STORY


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on a case-by-case basis to identify employ-

ees who need mobile access to corporate or

network resources to get their job done.

THE MANY MOBILE PATHS

TO CAPACITY ENGLIGHTENMENT

Randy Nunez, senior network engineer

at Ford Motor Co.s Mobile Computing

IT Enterprise Technology Research divi-

sion, said there is no one right answer for

everybody when it comes to dealing with

mobile IT trafc, while the cause is pretty

straightforward.

Mobile device trafc is absolutely a

major problem as more and more people

can afford smartphones and tablets, which

are Wi-Fi devices that are now becoming

more powerful, with more content avail-

able, especially with things like multime-

dia, Nunez said.

People have come to expect free Wi-

Fi wherever they go. The problem is that

wireless LANs were not originally built for

this kind of capacity. They were designed

for occasional laptop Wi-Fi users, and

there was a point where laptops were very

expensive so they were limited. But now

you have laptops, smartphones and tab-

lets using a network that wasnt designed

for that amount of trafc. And it was also

originally built for specic purposes, such

as within a conference room or certain

locations in a plant, he said.Nunez said there are three primary ways

enterprises are attempting to accommodate

mobile device trafc:

Keeping up to date with the latest wire-less LAN standards and understanding

the impact of legacy devices. Deploying

802.11n can increase throughput, and

many wireless devices now support this

standard. Also, be aware that devices

that support only older 802.11b/g stan-

dards can impact the performance of the

802.11n network, so organizations should

upgrade those devices where possible.

Redesigning the wireless LAN infra-structure from an autonomous access-

point environment to a controller-based

architecture with lightweight access

points. These networks are typically

easier to scale and have more robust-

ness, he said.

Building a guest network. It may nothelp with throughput, but it will help

with security concerns. For BYOD trafc,

different companies are taking different

approaches. Some are pushing mobile

device users onto the guest network

while others are setting up different

logical networks with different levels

of access for BYOD versus corporate

devices.

Consumerization is happening, large

le sharing is happening and this trend will

continue, Nunez said. It is up to IT to g-

ure out how to accommodate this, because

if we dont simulate the kind of experience

they get on the consumer side, people will

gure out a way to go around us to get their

job done.

NETWORK MANAGEMENT? JUST DO IT

Sporting goods giant Nike Inc. gets it.

Internally, Nike has learned that wireless

is the digital oxygen employees live and

breathe to do their job. During a session at

the Enterprise 2.0 event in Boston in June,

THE NETWORK MOBILE IT EF


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Art King, who at the time was Nikes global

information architecture lead, said his

companys network was denitely feeling

the impact of mobile devices.

Weve been retrotting our Wi-Fi and

working on deep, blanket wireless cover-

age because of the stress [mobile devices]

put on our Wi-Fi network, said King, who

has since left Nike and is now director of

enterprise services and technologies at

Spidercloud Wireless Inc.

The network issues cant be solved in a

vacuum, King said. Nike is working on its

wireless strategy in tandem with mobile

device management because the people

using wireless devices want to consume

enterprise services.

When these people were on outlawed

wireless services, nobody complained

about the network capacity. But now, since

Nike has a sanctioned BYOD program,

everyone has the right to complain and say

x it, so we had to change the infrastruc-

ture, he said.

Sanctioned or not, mobile device use is

putting pressure on networksand there-

fore on ITto change its tune. In a world

of desktops and laptops, it was easy to lock

down devices and limit use. The same does

not hold true for mobile devices, as many

CIOs have acknowledged: The rewards of

increased employee productivity and on-

the-y customer interactions trump the

associated risks. As King explained, I workfor the business, and that is challenging my

[IT] organization to go as fast as [the busi-

ness] goesso its a very different world.

ON THE NETWORK HORIZON

Its fairly common for enterprises to man-

age mobile device trafc by assigning one

SSID that directs an employees mobile

device to content behind the corporate

rewall and another SSID for guest users

that gives customers or partners access to

just the Internet, said Charles Golvin, a

principal analyst at Forrester Research Inc.

in Cambridge, Mass.

What is not so common is providing

connectivity for mobile devices using the

cellular connection rather than simply rely-

ing on Wi-Fi. Instead of installing large and

expensive distributed antennae systems for

wireless, some CIOs and network archi-

tects are looking at ways to use femtocells,

or tiny cell towers, to take mobile device

trafc off the core cellular network, Golvin

said.

Its still the early days for this, but with

these tiny cell towers inside the building, if

an employee goes to Google or any Internet

service, the carrier does not see that traf-

c because it is routed directly over your

pipe, he said. Because you are now taking

a bunch of trafc off of the cell operators

network, you could negotiate better pricing

or services with the provider because you

are helping them free up trafc on their

network.

Given that mobile device trafc is on the

rise, freeing up network and cellular band-

width stands to be a core goal for many

CIOs. About 13% of Internet page views

in August hailed from mobile phones and

tablets, according to a recent comScore Inc.Device Essentials report. And, according

to Ciscos Visual Networking Index Global

Mobile Data Trafc Forecast Update, by

the end of this year, more than 100 million

smartphones will use more than 1 gigabyte

of data each month. As for the future? The

forecast predicts that, by 2016, there will be

more than 10 billion mobile devices.

THE NETWORK MOBILE IT EF


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keeping in touch internally.

In 2009, however, when Cuomo was

charged with architecting a corporate

social network, two big cultural changes

were brewing, one internally and one in

the world at large. First, MITREs CEO had

challenged the organization to extend its

expertise by engaging with the best brains

in the world.

We are smart, but we are 7,500 people.

The charge was to use IT to do more multi-

organizational and strategic relationships,

Cuomo said.

A study MITRE undertook with nearby

Babson College reinforced the point. The

research showed that what added the mostvalue to employee interactions on social

networks was not the size of the networks

or frequency of use, but the uniqueness of

people in their networks. In other words,

social media tools spawned the most in-

novation when users employed them to

make connections outside their local work

group. You may be talking to each other all

Social Strategy withan Eye on the FutureHow do you build a corporate social network for some of the

smartest people on the planet? At one organization, the answer

was a Facebook-like platform built with open source tools.

BY LINDA TUCCI

ENTERPRISE SOCIAL MEDIA

DONNA CUOMO MIGHT have thought twice

about building a corporate social network

at MITRE Corp. The chief information

architect had witnessed the rollout of a

social collaboration tool or two (or 10) in

her 25 years at MITRE, a privately owned

systems engineering and scientic research

rm in Bedford, Mass. Do we really need

another one? was her CIOs rst question.

What business value does it have? was

his second.

Besides her CIOs concerns, Cuomo was

dealing with a hyper tech-savvy user base.

With a second headquarters in McClean,

Va., and experts around the globe, MITRE

operates federally funded research anddevelopment centers (FFRDCs) that help

government agencies develop sophisticated

technology to address thorny issues. Thats

thorny, as in developing systems to thwart

terrorists, communicate in remote terrain

and root out tax fraud. The organization

already had a sophisticated intranet, Share-

Point sites aplenty and lots of listservs for


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The Elgg software provides the ability

to put access controls on every eld on the

Facebook-like Handshake page, allowing

users to determine which information (a

phone number, for example) they want to

share with whom. Handshake comes with

lots of functionality, from discussion posts,

wiki pages, photo albums and rudimentary

le sharing to the activity river that al-

lows users to track the goings on of their

groups and connections. As a nudge to spur

participation, we built this group metrics

box to show what level of activity your

group had, Cuomo said.

Because the enterprise social network is

open source software, hundreds of public

domain gadgets can be added. It was very

extensible, Cuomo said. In turn, her team

has published its customizations back to

the open source community, so anyone can

leverage our effort.

Among the MITRE customizations:

color-coded lock symbols showing the ac-cess controls for every piece of information

in the Handshake system. Even within a

single group, you can have information that

is available to our external partners and

some that is MITRE-only, she said.

Her team also tweaked the email alerting

mechanism so users can respond without

having to go off the Handshake website.

day long, but if I am talking to three differ-

ent people who are not connected to each

other, I am getting more innovative value

out of the tool, she said.

The second major change facing Cuomo?

Facebook, YouTube and Twitter were be-

coming household tools.

I thought, If I can know every detail of

my nieces life, who lives in upstate New

York, pretty effortlessly, why cant I get

that same situational awareness of what

people in one of our project teams are do-

ing? Cuomo said.

But, she found, it wasnt nearly as easy.

LEVERAGING OPEN SOURCE TOOLS

MITREs listservs gave users an email

address but not the ability to leave mes-

sages on a contacts wall. SharePoint teams

couldnt see what their other connections

were up to. Building an enterprise social

network for the extended enterprise that

included people outside MITRE added to

the challenge.

At the time, most enterprises were de-

ploying social networking tools inside the

rewall for internal use only, and most of

the products were consumer-grade, Cuomo

said. Her team landed on social software

from Elgg, an open source platform used

by universities, and decided that a single

enterprise social networkdubbed Hand-

shakewould not only serve internal em-ployees, but would also extend to external

partners as well. That meant dealing with

security and intellectual property, among

other issues.

But we needed to address those anyway,

because this was the way of the future. We

cant stay locked in our walled gardens,

she said.

SOCIAL STRATEGY WITH AN EYE ON THE FUT

Among the MITREcustomizations:

color-coded lock symbolsshowing the accesscontrols for every pieceof information in the

Handshake system.


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works have gone viral.

Still, quantifying business value of the

social network in terms of productivity

and innovation remains a challenge, ac-

cording to Cuomo, in part because many

of the groups are closed and value is tied

to the nature of the group. Groups that

add members over time indicate success,

but the dissolution of a group formed

for a nite event doesnt indicate failure.

Its hard to interpret the metrics without

knowing what kind of group it is, she said.

For now, the numbers at least signal the

platform is popular: Six thousand MITRE

employees belong to the system, so we

are almost at saturation for internal users,

Cuomo said. The enterprise social network

has 2,400 external participants and con-

tinues to grow. Almost 1,000 groups have

been formed and 7,800 les createdthis,

in an organization with an extensive Share-

Point universe.

The big challenge now, Cuomo said,

is building a secure, fully functional en-

terprise social network platform for that

external brain trust MITRE wants to tap.

Sponsors and other people outside the re-

wall now are invited individually through a

secure invitation from a MITRE employee,

but that will not scale, she said, so work

is underway on cracking a trusted iden-

tity model.

And outsiders can tap into some of the

Handshake functionality, but not every-thing they nd is useful. Architecting and

measuring the value of an enterprise social

network for the extended enterprise wont

happen overnight, Cuomo said. Thats

in the 10-year plan.

Handshake is integrated with the MITRE

intranet, which is built on the Apache

Rave Web engine. We built a gadget in the

middle, so you can see what people in your

groups are doing, Cuomo said. Its like

your personal newspaper when you walk

in in the morning. This really gives people

the situational awareness they were miss-

ing.

When a person joins a Handshake group,

their followers tend to also join. I call it

the baby duckling effect, she said.

MEASURING BUSINESS VALUE

The team conducted dozens of one-on-

one interviews to gain insight into how the

platform was being used, and then funneled

that data into a variety of visualization

tools (including the free interactive InfoVis

Toolkit). The interviews revealed, for ex-

ample, that Handshake was changing busi-

ness processes, from how disaster recovery

support was provided for MITRE Colorado

employees during this past summers wild-

res to the way individuals participated in

the application development lifecycles.

With Handshake, hundreds of people

now weigh in on the app development

process early on, developers reported, and

users can share their feedback with each

other, something not possible through a

listserv. Handshake has allowed one of

MITREs military clients to publish apps tomilitary personnel in the eld and respond

to requests with potentially life-saving

iterations in less than 24 hours. MITRE

public briengs that normally would be

conned to the employee and partner net-

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IN 2011, University of Nebraska CIO Walter

Weir was charged with swapping out an

email system for one that was better, faster

and cheaper. It sounded like a tall task,

but within a years time, his IT team suc-

ceeded in moving 13,000 staff and faculty

members from an on-premise legacy Lotus

Notes system to a cloud-based solution.

The cloud migration cut the IT costs of

providing and supporting email nearly in

half and will save the university an addi-

tional $2 million over the next ve years.

Maybe even better, in the six months since

those 13,000 people started working on the

new system, Weir has elded exactly four

complaints.The calls Ive gotten have been relative-

ly minorI used to be able to see this and

this on the same screen, and now I cant.

I tell them how to do it and theyre OK,

Weir said.

How did he pull off adopting a new

technology with hardly a hitch? Chalk it

up to old-fashioned planning and project

management, along with a deep knowledge

of his teams technical capabilities.

For Weir, the cloud migration of the

universitys email system was as much

if not moreabout the people involved

as it was about the technology product

being deployed. After reviewing bids from

Google, Microsoft, Dell and IBM, Weir

determined that Microsoft Ofce 365s

Software as a Service cloud solution best

met the universitys needs in terms of cost

and security. To avoid consulting costs, the

work would be completed by Weirs own

staff.

I thought, Were pretty smart, weve

got some pretty talented people, we knowabout Active Directory and federation,

all those backend kinds of concerns, Weir

said. We put a project team together. We

had a charter, a project manager; we had

various entities across the structure work-

ing on creating the backend environment

to support it, and it worked very well for

us.

Gliding into the CloudA focus on people, planning and project management can

make cloud implementation a breeze, a university CIO learned.

BY KAREN GOULART

CLOUD COMPUTING


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ronment, mail experts were still needed

for certain provisioning and administrative

activities, but they too were retrained to

take on other primary tasks, with email on

the back burner.

We have more work than we have

people. I look at our task lists and wonder

how were ever going to get it all done,

Weir said. [T]his was an opportunity to

repurpose people so we wouldnt have to

hire new people. Not everybody looks at it

that way, but thats how we looked at it.

TRANSPARENCY EASES

CULTURAL CHALLENGES

With his technical team set, Weir didnt

forget the other 13,000 people invested in

the project. The change could be a big ad-

justment for faculty and staff accustomed

to the Lotus Notes email, scheduling and

other tools upon which many had re-

lied for the past 15 years. Weir was deter-

mined that everyone have an opportunity

to be educated about and get comfortable

with the change.

Weir set up communication teams on

each of the schools four campuses and

scheduled informational sessions on why

the change was being made. User-training

sessions showed side-by-side differences

in the systems and how to carry out tasks

in Microsoft 365. Any sort of change is

culturally challenging, but we were verypublic about what we were doing. Weir

said, There was a lot of communication.

Weirs team also reached out to users for

the vital task of application rationaliza-

tion, the process of nding out whether an

application is still needed by asking why it

was built, what it costs to maintain, what

platform its on and what value it holds.

IT SKILLS FOR A CLOUD MIGRATION

Weir was not talking through his hat about

the capabilities of his team of 40 IT pros.

For several years he has conducted skills

inventories of his technical staff to assess

each individuals level of knowledge; that

way, hed know where the group stands as a

whole.

I look at all the things that could hap-

pen within an IT shop involving program-

ming languages, developmental tools,

databases. I have a whole list of things that

anyone in the IT business could possibly

know about, Weir said.

His employees score themselves on a

scale of 0 to 5 on each item0 meaning

they know nothing about it, 5 meaning

they could teach others about it. Supervi-

sors then review those lists to see whether

they agree with the self-assessments. As

a result, Weir has a running inventory of

the skills his workers possess so that, when

projects come in, he knows whether the

work can be done in-house.

CLOUD LEADS TO STAFF REPURPOSING

A major goal of Weirs cloud migration was

to cut costs, but he was clear from the out-

set of the project that this wouldnt happen

by cutting jobs.

We saw the savings that would accrue

by virtue of not having the hardware here

and having a different cost-model struc-ture for licensing of the environment, so

we repurposed our staff, Weir said. It was

an opportunity to say, Where do we need

staff?

The primary answer to that question was

in security, so staffers formerly focused

on email management were retrained ac-

cordingly. Even with the new cloud envi-

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bers theyre looking at.

While Weir bypassed outside experts for

his email cloud solution deployment, such

experts have their place. His team got good

advice from Stamford, Conn.-based con-

sultancy Gartner Inc. We invited them to

come talk about what they thought about

email in the cloud in terms of strategy

was it all hype, or were there hard savings?

Whats real? Whats not real?

Additionally, he said, its important for

CIOs to have a conversation with their staff

about their willingness and ability to adapt

to a new way of doing business, because its

vital they be on board. Leaving unanswered

questions can incite fear. You want to be

upfront and tell them, Were doing this for

the following reasons, and this is how its

going to play out.

Most important, though its often

overlooked: CIOs should be sure to have

a similar conversation with the business

side, Weir said. A project that makes per-

fect sense from an IT perspective requires

an equally compelling business case. Talk

to the senior administrators youre sup-porting, and make sure all those players are

onboard with what youre doing. Its one

thing to have great ideas as an IT person;

its another thing selling it to the organiza-

tion.

Over the years, hundreds of applications

were developed within the Lotus Notes

development suite, and before the switch-

over to Microsoft, Weir needed to know

whether they would be missed.

If you cant justify it, its a candidate for

elimination, Weir said. Through the ap-

plication rationalization process, his team

was able to eliminate 90% of the Lotus-

developed apps. Just a handful of workow-

related apps remained, and they are being

remade to t into the new structure.

EMBRACING CLOUD SOLUTIONS

AS THE FUTURE NORM

As for Weirs next foray into cloud? De-

spite a successful rst major outing, he is

proceeding with caution. Hes got his eye

on cloud-based storage and is intrigued by

the possibilities of ERP in the cloud.

Were starting to see things like Work-

day, where HR and nance are being pushed

out to cloud environments, Weir said.

Whether its private, public or hybrid

clouds, I think youre going to see more of

the cloud as people struggle to gure out

how to provide more services at less cost.

For CIOs who havent taken the rst

steps toward cloud, Weir pointed to factors

that played a part in his success, starting

with talking to professional colleagues who

have been there and done that. For Weir,

this meant striking up conversations withIT leaders at the University of Arizona and

Louisiana State University. Somewhere

out there is an early adopter; nd them,

reach out, talk to them, he said. Ask what

theyre doing and why, what kind of num-

GLIDING INTO THE CL

If you cant justifyit, its a candidate

for elimination.Walter Weir, CIO,

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PAYPAL INC.S DATA comes in torrents.

Embedded in it is everything the business

wants to know about the merchants and

buyers who use PayPals systems. Its

Mok Ohs job to gure out how to use big

data analytics to get at that particular

information.

What does the chief data scientist at

PayPal Inc. do? For me, it means anything

and everything science-y within PayPal,

said Mok Oh, who until recently headed the

data science teams at the San Jose, Calif-

based electronic payments provider.

With a doctorate in computer science

from Massachusetts Institute of Technol-

ogy, Oh has a longstanding interest in con-necting the ofine to the online world. The

eclectic Ohhe concentrated in computer

science, art history and studio art as an

undergraduatesaid he ultimately wants to

understand the psychology and sociology

of consumer behavior.

At PayPal, at the time of this inter-

view, Oh was immersed in big data and

big science. His data sets were insanely

large. The enormous task was to better

match up vendors and buyers in order

to maximize the likelihood of a trans-

actionin other words, to help PayPal

make money.

What type of data analysis are you doing at

PayPal? Is the business aim to get merchants

to advertise with you because you are sending

buyers to them?

It is to make them more successful. We are

in a kind of awesome position where we

can enable that. We have over 100 million

active users in PayPal. We have millionsand millions of merchants, from very large

to small.

With that information, depending on the

contextthe time of day, what the mer-

chants wants to dowe can create demand,

very efciently and in a very targeted way,

to match consumers with the merchants

and vice versa.

Q&AThe Proo isin the PayPal PuddingFind out how the electronic payment providers chief data scientist

extracted the highest value from massive data sets.BY LINDA TUCCI

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delightful experience. Basket-size increases

because serendipitous stuff happens: I

am looking at shoes and, by the way, here

are some awesome socks. I am going to get

those, too.

We are really trying to increase peoples

appetites or trying to delight them more,

making sure that they are looking at certain

things. So, yes, I am trying to model the

subconscious piece of that shopping expe-

rience.

This does sound a lot like what Amazon and

the credit card companies are doingthey

must be trying to tap this value of big data.

Its the holy grail, yes. I certainly implore

all your CIO readers to do the same. I dont

think this is a big hype.

So, yes, if you generalize, well all do

similar things but, at the end of the day,

PayPal will go use case by use case. We

want to make sure there is a highly efcient

and strong connection between merchants

and consumers.

We talk a lot of about volume, velocity and

variety being characteristics of big data. For

companies that dont have millions and mil-

lions of customers, like PayPal, or for compa-

nies that are more specialized, is there value

in doing this type of big data analytics?

I think so. It might be small science/smalldata. It always helps. A lot of startups, for

example, dont have enough data to prove

or disprove that their widget works. As

time goes by, more and more people are

realizing that data is an asset, or something

that they should own and capitalize on.

With that said, it will get tougher and

tougher to get data. That would be my pre-

Can you spell out how, exactly, you connect

a customer and a merchant?

Lets say Neiman Marcus has some won-

derful sale and they want to make sure they

spend their marketing dollars correctly, or

have more delightful or relevant informa-

tion in the advertising for their consumers.

We can create that list. We can target those

people much better than others can.

The reason we call this data science is

that there is a science component to it. We

have great scientic leaders; we are very

connected to academia, where a lot of the

latest and greatest things happen.

On the data side, PayPal has awesome

datawe have transactional data. And that

itselfI am going to be very bold and bull-

ishis the strongest signal from which we

can start predicting peoples buying behav-

iors. As opposed to strictly online data, this

is behavioral data. People look at this, they

look at that, they go to this website, that

website. There are signals there that help

us predict, but in commerce, transactional

data is the strongest signal.

So, by plotting our buying behavior over time,

the idea is that you will know more about our

buying habits than we do, that this data sci-

ence taps into the subconscious of the buyer?

Absolutely. You can break that down into

a couple of buckets. One is explicit shop-

ping intentions. On the other hand, peoplewho really want a delightful shopping

experience may have intentions they are

not aware of. Lots of marketers, especially

on the retail side, are spending tons and

tons of money to optimize the layout and

the trafc patterns that people are going

to walk through. Lots of research has been

poured into that to make sure there is a

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for a while now. One of the biggest assets

will be understanding unstructured data

out there, because I will argue that 99.9%

of the information that we have is unstruc-

tured, meaning computers cant put it into

a table, cant sort it into a table. These are

things like email or tweets or reviews or

blogs.

With Likes, theyre structured: You

either like it or you dont. Whereas when

you say, I love the taco truck; I wish they

had a location here, thats very, very valu-

able information. If somebody tweets that,

I want to understand it: I want to know

who said that; I want to know the mer-

chants who can benet from this as well,

so we can make sure we connect those

two. Again, 99.9% of the data out there is

something that computers cannot easily

understand.

So the problem then becomes, how do

we make sure that they can? If there are

images and videos and email, audio, songs,

there is no real way to understand beyond

the category. We need to nd a better way

to understand that data, especially with the

explosion of information out there. You-

Tube gets, what, 50 to 60 hours of video

every minute? Thats ridiculous.

How do you know what is relevant to you?

Similarly, we are learning a lot more

about merchants and the things they say. I

call them digital artifacts or digital infer-

encesthere has got to be ways to struc-ture that output and leverage that for all

our customers. Thats the bigger pie in the

skymaybe that is 3.0! Natural languages,

analog-to-digital conversions and making

sure there is very little lost in translation.

diction for the future, because people are

going to be more and more grabby. There

are going to be a lot of players popping

out that are making a business model out

of this need. Youre a startup or youre a

company that needs data? We got itbut

you have to pay for it or trade for it. There

are tons of those companies that are data

providers out there, so companies can cer-

tainly leverage that as well.

But, again, common sense should prevail.

If youre in the business of selling tacos,

the strongest signal is going to be, who

bought tacos? Even if there is tons of data

out there, there are very obvious things to

look at. People who bought tacos probably

will continue to buy tacos, and I need to

nd like-people who will also buy my tacos.

I think the patterns going forward will

be that people will leverage data as an as-

set. They are going to invest more in data,

and I am sure there will be more walled

gardens going up, just looking at Apple and

Facebook. Those are walled gardens, not

just because of PII [personally identiable

information], but because they know their

data is very valuable for them.

You can be very creative in how you get

your datayou can acquire it yourself, buy

it, make deals with others.

Since you are in charge of all things

science-y, what problem are youthinking through right now that is related

to your science-y duties?

Overall, I think a lot of people see big data

as a structured-versus-unstructured-data

problem. I have been thinking about this

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CHRISTINA TORODEis executive editorfor SearchCIO.com.Write to her [email protected].

KAREN GOULARTis features writerfor SearchCIO.com.Write to her at

[email protected].

LINDA TUCCIis news directorfor SearchCIO.com.Write to her [email protected].

CIO Decisionsis a

SearchCIO.come-publication.

Rachel Lebeaux

Managing Editor

Linda Koury

Director o Online Design

Scot PetersenEditorial Director

Christina Torode

Executive Editor

Linda Tucci

News Director

Karen Goulart

Features Writer

Wendy Schuchart

Site Editor

Ben Cole

Associate Editor

Emily McLaughlin

Assistant Editor

Corey Strader

Director o Product Management

[email protected]

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