research: iaas impact on data center design and staffing (uk)
DESCRIPTION
The importance of Infrastructure as a Service (IaaS) is evident in the growing number of companies either already implementing, or planning to implement. Underscoring the strength of IaaS is the responses gathered in each of the last two Tech Pro Research surveys on the topic. The first, in April, detailed what companies were considering when making the move to the cloud. The latest survey, in July, reached out to 124 business and IT professionals to get their take on expected and actual IaaS benefits. Topics covered in the Tech Pro Research survey include IT staffing changes due to IaaS, budget impact from IaaS, current and future plans for implementing IaaS, expectations and overall changes made to the data center as a result of IaaS implementation, and IaaS impact on operational effectiveness.TRANSCRIPT
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Copyright ©2013 by CBS Interactive Inc. All rights reserved.
Tech Pro Research and its logo are trademarks of CBS Interactive
Inc. All other product names or services identified throughout this
book are trademarks or registered trademarks of their respective
companies.
Published by
Tech Pro Research September 2013
Disclaimer
The information contained herein has been obtained from sources
believe to be reliable. CBS Interactive Inc. disclaims all warranties
as to the accuracy, completeness, or adequacy of such information.
CBS Interactive Inc. shall have no liability for errors, omissions,
or inadequacies in the information contained herein or for the
interpretations thereof. The reader assumes sole responsibility for
the selection of these materials to achieve its intended results. The
opinions expressed herein are subject to change without notice.
Tech Pro Research
1630 Lyndon Farm Court
Suite 200
Louisville, KY 40223
http://techproresearch.com
Visit: Site Help & Feedback
Tech Pro Research is a ZDNet Web site.
Credits
Editor In Chief
Jason Hiner
Head Technology Editor
Bill Detwiler
Head Blogs Editor
Toni Bowers
Senior Editors
Mark Kaelin
Jody Gilbert
Selena Frye
Mary Weilage
Sonja Thompson
Teena Hammond
Graphic Designer
Lorraine Vogel
Copyright ©2013 CBS Interactive Inc. All rights reserved.
ContentS
Introduction—————————————————————————————————— 04
Plans—for—IaaS————————————————————————————————— ——05
Expectations—vs.—reality——————————————————————————— 07
Reallocation—of—budget——————————————————————————— 09
Staffing————————————————————————————————————— 10
Importance—of—CSP—contract—negotiations— —————————————— 12
Impact—on—the—data—center————————————————————————— 13
Survey—methodology— ——————————————————————————— 14
Survey—respondent—demographics———————————————————— 15
Conclusion— ————————————————————————————————— 17
Bibliography— ———————————————————————————————— 18
About—us———————————————————————————————————— 19
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 4
Copyright ©2013 CBS Interactive Inc. All rights reserved.
IntroductionInfrastructure as a Service (IaaS) is a growing solution for many organizations, as shown in an April 2013
TechRepublic research report. About 60 percent of respondents were either planning or had already implemented
cloud infrastructure services. This tracks with Gartner’s 2013 forecast that IaaS will continue to be the fastest-
growing market segment, expected to grow 18.5 percent in 2013. Why the growth? Why are organizations
moving to cloud hosted infrastructure?
In a July 2013 survey, Tech Pro Research reached out to business
and IT professionals to get their take on expected and actual IaaS
benefits. Less than one-half of respondents using IaaS expressed
positive results after placing their hardware under someone else’s
control. Further, expectations of those planning to integrate IaaS
into their business processes differ significantly from actual
benefits realized by current subscribers. This suggests a
disconnect between expectations (hype?) and reality.
Another important finding is that IT staffing remained the same in
most IaaS subscribing organizations. However, a shift began to
move IT focus from maintaining infrastructure to meeting business
process needs. This was accompanied in many cases by a
commensurate shift in IT budget. In other words, instead of
simply removing the cost associated with pre-IaaS infrastructure
management, organizations shifted resources to areas where they
add better business value.
...Instead of simply
removing the cost
associated with
pre-IaaS infrastructure
management,
organizations shifted
resources to areas
where they add better
business value.
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 5
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Plans for IaaS The question and related responses in Figure D show that 60 percent of participants have already implemented
IaaS or plan to do so within the next 12 months. The reasons for planning a move to IaaS focus on several
outcomes. Figure E depicts the reasons given by 38 participants who have not yet moved infrastructure to
a cloud service provider (CSP).
As you can see in Figure E, the biggest reason our respondents gave for moving to the cloud is improved
infrastructure elasticity. Herbst, Kounev, and Reusser (2013) define elasticity as
“…the degree to which a system is able to adapt to workload changes by provisioning and
deprovisioning resources in an autonomic manner, such that at each point in time the available
resources match the current demand as closely as possible” (p. 2).
Infrastructure elasticity is a measure of how quickly IT can respond to changing business needs. It is a function
of how well a CSP can provide on-demand resource scaling. Scaling includes responding quickly to demands for
new solutions, increasing processing power or bandwidth to adapt to monthly or seasonal business cycles, etc.
Business managers expect IT to help them remain competitive; IT must adapt, and IaaS provides a new approach.
29%
31%
40%
Current and future plans for IaaS
Percentage of organizations responding, n=124
Already implemented for one or more systems
Will implement within the next 12 months for one or more systems
No plans to implement within the next 12 months
Figure D
Percentage of all organizations responding, n=124
CURRENT AND FUTURE PLANS FOR IAAS
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 6
Copyright ©2013 CBS Interactive Inc. All rights reserved.
The next two biggest reasons for implementing IaaS are increasing overall effectiveness (68 percent) and
decreasing operational costs (63 percent). No organization for which I worked during the last 30 years had a large
enough infrastructure engineering team. New solution implementation tasks often fell victim to daily maintenance
tasks necessary to keep existing systems operational. Further, many servers already implemented were not used
efficiently, and new system projects included budget for even more systems. Virtualization certainly helps, but it
often does not go far enough.
Virtualization helps organizations reduce data center hardware costs. However, much of the cost reduction
is shifted to virtualization management. This shift continues to delegate a significant portion of IT budget to
maintaining operations instead of applying those dollars to business solutions design, implementation, and
management. According to Josh Ames (2012), proper use of IaaS can release these dollars, and improving
business continuity issues surrounding virtual servers, storage, and backups tend to disappear from day-to-day
data center tasks. These changes release staff to perform activities focused on supporting increasing business
growth and competitiveness. Our respondents support this change in budget application, with 55 percent
asserting their expectations that IaaS will improve customer satisfaction.
Only 39 percent of respondents selected the final item: More structured change management process. A future
survey might help clarify why respondents do not consider change management, an important element of risk
management (Olzak, 2012), a value-added target of IaaS. Hopefully it is because they already have a strong in-
house change management program. In any case, change management must find its way into any CSP contract.
25%
71%
68%
63%
58%
55%
53%
50%
39%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Overall increase in effectiveness
Decreased operational costs for affected systems
Improved customer satisfaction
Decreased energy costs
More structured change management process
Improved infrastructure elasticity (ability to quickly adjust to changing business demand for additional servers, data repositories, etc.)
Improved response to hardware failure (less business process downtime)
Improved business support (time to production of new solutions reduced)
Expectations once IaaS is implemented
Percentage of organizations responding, n=38 Figure EPercentage of all organizations responding, n=38
EXPECTATIONS ONCE IAAS IS IMPLEMENTED
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 7
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Expectations—vs.—realityNow that we understand the expectations of organizations not yet initiated into IaaS implementation, let’s take
a look at how current IaaS subscribers (36 of our respondents) describe actual results. Figure F shows a wide
gap between expectations and reality, as described by our respondents. Only 39 percent claim overall operational
improvement, with 8 percent answering that they actually saw a decline. This implies that 53 percent of respon-
dents experienced no change in operational effectiveness. This is reflected in the small number of organizations
(19 percent) where customers were better off. The perceived business value of IaaS is disappointing for anyone
attempting to reduce costs, improve elasticity, improve performance, etc. Figure G adds to the list of IaaS
shortfalls, with only 42 percent of respondents perceiving a reduction in business risk. In fact, one out of three
claimed risk increased.
39%
39%
39%
39%
36%
36%
33%
19%
19%
8%
8%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Overall increase in effectiveness
Improved business support (time to production of new solutions reduced)
Improved response to hardware failure (less business process downtime)
Better system performance
Decreased operational costs for affected systems
Decreased energy costs
More structured change management process
Improved customer satisfaction
No change
Overall decrease in effectiveness
Impact of IaaS on improving operational effectiveness
Percentage of organizations responding, n=36
Improved infrastructure elasticity (ability to quickly adjust to changing business demand for additional servers, data repositories, etc.)
Figure F
Percentage of all organizations responding, n=36
IMPACT OF IAAS ON IMPROVING OPERATIONAL EFFECTIVENESS
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 8
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Our respondents did tend to meet one expectation: overall IT budget reduction. As shown in Figure H, 67 percent
of respondents experienced some level of IT budget reduction. The remaining organizations in our survey either
saw no change or an increase in overall IT budget. Several conditions might cause an organization’s IT budget
to grow or remain the same after IaaS implementation, including
• Reallocation of operations budget to business process improvements
• No staff reduction following shift of operations tasks to IaaS
• Failure to negotiate a CSP contract that leverages business expectations to describe and mandate
successful service levels
Impact on risk of overall security and regulatory compliance with affected systems
Percentage of organizations responding, n=36
8%
34%
25%
25%
8%
Significant risk decrease
Some risk decrease
No change
Some risk increase
Significant risk increase
Figure G
Percentage of organizations responding, n=36
IMPACT ON RISk OF OVERALL SECURITy AND REGULATORy COMPLIANCE wITh AFFECTED SySTEMS
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 9
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Reallocation of budgetThe first impact of moving one or more business systems to IaaS is a shift from CAPEX (capital expenditures)
to OPEX (operational expenses). This reflects the trend to perceive IaaS as a utility: a service. Many CIOs see
OPEX as a shortcut to meeting business demands; CAPEX approvals take a lot of time and extend new solution
implementation timelines (Mishra, 2012). A shift to OPEX does not necessarily support cost decreases, but it does
support several other IaaS objectives as listed in Figure D.
In our survey, respondents claimed transfer of at least some savings to other capital projects (33 percent) and to
increased training (25 percent), as shown in Figure I. Transferring dollars to OPEX improves IT capabilities and
allows increased value by directly supporting business operation.
Figure H
8%
Effect of IaaS implementation on overall IT budget
Percentage of organizations responding, n=36
Significant reduction
Minor reduction
Stayed the same
Minor increase
Significant increase
25%
42%
6%
19%
Percentage of organizations responding, n=36
EFFECT OF IAAS IMPLEMENTATION ON OVERALL IT BUDGET
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 10
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Although moving the infrastructure for one or more systems to the cloud does affect some costs, Figure J shows
that data center management still requires staffing and significant OPEX. The difference is in focus. 33 percent of
respondents applied additional resources to managing critical systems. This tracks with the findings of a March
2013 TechRepublic survey in which 58 percent of respondents saw security concerns as the biggest obstacle to
placing sensitive systems at a CSP location. Consequently, many business-critical systems remain in organization
data centers. Reallocating staff and budget to improving customer satisfaction with core applications limits overall
budget decreases.
StaffingThe increase in training shown in Figure J reflects the impact on staffing for organizations currently using IaaS.
Only 19 percent saw a decrease in staffing, with 64 percent either seeing no change or an increase in staff count.
It appears employees were shifted to enable outcomes related to increased efficiency when providing business
solutions support and services.
Figure K depicts the staffing intentions of organizations just now planning IaaS implementation. Only 40 of the
74 respondents for this question selected one of the staffing increase/decrease options. Out of those, 30 percent
plan to decrease staff, 62.5 percent plan no change, and 1.6 percent expect an increase in staffing. In this case,
expectations seem to match outcomes.
33%
33%
25%
17%
17%
8%
0% 5% 10% 15% 20% 25% 30% 35%
Decreased overall IT budget
Transferred expense savings to capital budget
Increased training budget
Improved security and compliance controls
Created a more aggressive business solutions project portfolio
Increased staffing and focus for business solutions analysis
IaaS budget savings reallocation
Percentage of organizations responding, n=12 Figure I
Percentage of organizations responding, n=12
IAAS BUDGET SAVINGS REALLOCATION
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 11
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Staff reduction
Staff count stays the same
Staff increase
Staff retraining
Staff reallocation
Begin IT shift fromimplementer to solutionsmanager
Plans for IT staffing changes once IaaS implementation stabilizes
Percentage of organizations responding, n=74
4%
11%
17%
34%
16% 18%
According to an Information Week staffing survey analysis by Neil Roiter (2010), cost savings from moving to the
cloud will likely come from areas other than staffing reductions. Our survey results support this.
In summary, the primary drivers of IaaS implementation, as supported above in Plan for IaaS and Reallocation of
budget, are not largely driven by staffing reductions. Rather, organizations plan to refocus efforts on improving
service delivery. As Roiter writes, “Efficiency is the grail” (p. 12). Our findings support this as many of our IaaS
subscribing respondents retrain existing staff (28 percent), reallocate staff to other IT functions (22 percent), or
begin a shift to a solutions management posture (39 percent). Maintaining hardware in house does not seem to
add enough value for each related OPEX dollar spent.
Steps taken to adapt IT staffing to introduction of IaaS
Percentage of organizations responding, n=36
19%
56%
8%
28%
22%
39%
3%
0% 10% 20% 30% 40% 50% 60%
Staff reduction
Staff count stayed the same
Staff increased
Staff retraining
Staff reallocation
IT began shift from systems implementation/management to solutions management
Replaced existing staff with individuals with non-hardware related skill sets
Figure JPercentage of organizations responding, n=36
Figure K
Percentage of organizations responding, n=74
STEPS TAkEN TO ADAPT IT STAFFING TO INTRODUTION OF IAAS
PLANS FOR IT STAFFING ChANGES ONCE IAAS IMPLEMENTATION STABILIZES
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 12
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Importance of CSP contract negotiationsCSPs may have a different perspective when pitching the benefits of cloud services. In many cases, they try to
reinforce the perception that cloud-hosted services save money. As we have seen, this is not the primary reason
given for making the shift to IaaS. Joe McKendrick (2012) writes,
“Cloud has been around in its current form for a few years now… and it is seen as an enabler of
topline growth, beyond the cost reduction imperative…” (p. 5).
Making sure the CSP shares an organization’s IaaS objectives is critical to realizing expected outcomes. This
requires clearly defined SLAs describing what the CSP must accomplish every day to ensure outcomes like
process transparency, elasticity, business continuity, and overall increase in effectiveness. For more information
on cloud SLAs, see:
Hazy cloud contracts are hurting everyone: Four ways to put them right
Four things to know about cloud SLAs
Best practices to develop SLAs for cloud computing
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 13
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Impact on the data centerPost-IaaS implementation changes to the data center demonstrate IaaS subscriber attempts to meet outcomes
previously described. As shown in Figure L, 39 percent of organizations already subscribing to IaaS at least began
a focus shift from system operations to better business customer management. This was supported by one-third
of respondents indicating a greater focus on critical systems management.
Data center activities related to increased efficiency tended to be more important than those intended to shrink
the size of in-house infrastructure. While 31 percent of responding organizations experienced data center
contraction, 39 percent either increased data center size or saw no significant changes. However as we have
seen, organizations tend to keep critical systems in-house. Further, moving infrastructure to the cloud might
force some organizations to upgrade their networks.
Figure L
14%
31%
39%
33%
28%
25%
11%
25%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Data center expansion
Data center contraction
More focus on critical systems management
Moving to a fully virtualized data center
No significant changes
Shifting from system operations to service, quality and availability management
More focus on network traffic management and quality of service
Data storage or backup management moved to cloud service provider
Changes made to data center because of IaaS implementation
Percentage of organizations responding, n=36
Percentage of organizations responding, n=36
ChANGES MADE TO DATA CENTER BECAUSE OF IAAS IMPLEMENTATION
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 14
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Survey methodologyIn July 2013, Tech Pro Research opened the online IaaS survey to IT professionals around the world. Tech Pro
Research promoted the survey through editorial coverage and newsletters. Participation was voluntary and
124 respondents completed the survey.
When: July 17 to July 29, 2013
To whom: The IT decision-makers in organizations across the U.S., Canada, Europe, India, Asia-Pacific, China,
Australia, and New Zealand
Approach: Quantitative study, fielded online
Topics:
• Current and future plans for implementing IaaS
• IT staffing changes due to IaaS
• IaaS impact on operational effectiveness
• IT budget impact from IaaS
• IaaS expectations
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 15
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Survey respondent demographics124 people participated in our survey. They represent a wide range of industries, as depicted in Figure A.
Questions posed to each participant varied based on his or her organization’s current or planned implementation
of IaaS. Figure B shows that most respondents reside in Europe and the US (73 percent) and work for small
businesses with less than 250 employees (57 percent), as shown in Figure C.
Respondents’ primary industry sector
Percentage of organizations responding, n=124
10% 2%
3% 3% 4% 5% 5% 6%
6%
6%
6%
7%
8%
28%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
IT & Technology
Telecommunications
Government
Finance/Banking/Insurance
Education
Retail & Wholesale
Business Services/Consulting
Logistics & Transport
Healthcare
Engineering & Construction
Manufacturing (FMCG)
Legal & Professional
Utilities
Other
Figure A
Percentage of organizations responding, n=124
RESPONDENTS’ PRIMARy INDUSTRy SECTOR
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 16
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Respondents by region
Percentage of organizations responding, n=124
2%
4% 6%
15%
34%
39%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Europe US Asia-Pacific Australia / New Zealand India Canada
Figure BPercentage of organizations responding, n=124
Respondents by organization size (number of employees)
Percentage of organizations responding, n=124
38%
19%
14%
30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1000 or more
250-999
50-249
Fewer than 50
Figure C
Percentage of organizations responding, n=124
RESPONDENTS By REGION
RESPONDENTS By ORGANIZATION SIZE (NUMBER OF EMPLOyEES)
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 17
Copyright ©2013 CBS Interactive Inc. All rights reserved.
Conclusion • Use of IaaS allows a budget shift from CAPEX to OPEX. This helps shrink implementation timelines
and reallocate capital budget for projects held hostage by in-house infrastructure needs.
• Staff reduction is not the primary focus of most organizations considering IaaS. Rather, increased
efficiency — providing better services to business customers — is the preferred outcome.
• Organizations using IaaS are not usually seeing the benefits they expected. Strong SLAs and
continuous CSP relationship management are key elements of meeting IaaS planning objectives.
Do not let potential IaaS vendors try to sell cost as the primary driver.
• Change management must transfer to the CSP, and the subscribing organization must periodically
review change processes along with SLA-governed outcomes.
• Data centers are not always significantly affected by IaaS. Many organizations retain critical systems
in house, improve network infrastructure, or focus on data center improvements that support IT’s
desire to improve business customer service delivery.
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 18
Copyright ©2013 CBS Interactive Inc. All rights reserved.
BibliographyAmes, Josh. Cloud Computing vs Virtualization: There is a Difference. December 4, 2012.
http://blog.appcore.com/blog/bid/128515/Cloud-Computing-vs-Virtualization-There-Is-A-Difference
(accessed August 13, 2013).
Herbst, Nikolas Roman, Samuel Kounev, and Ralf Reusser. “Elasticity in Cloud Computing: What It Is,
and What It Is Not.” USENIX. 2013.
https://www.usenix.org/conference/icac13/elasticity-cloud-computing-what-it-and-what-it-not
(accessed August 9, 2013).
McKendrick, Joe. Cloud Providers Pitch Cost Savings, But Enterprises Want More: Survey. August 16, 2012.
http://www.forbes.com/sites/joemckendrick/2012/08/16/cloud-providers-pitch-cost-savings-but-enterprises-
want-more-survey/ (accessed August 14, 2013).
Mishra, D. CAPEX or OPEX: A CIO’s Dilemma. June 26, 2012.
http://www.dynamiccio.com/2012/06/capex-or-opex-what-should-cios-choose.php (accessed August 14, 2013).
Olzak, Tom. Risk Management - Chapter 2. January 20, 2012.
http://resources.infosecinstitute.com/risk-management-chapter-2/ (accessed August 13, 2013).
Roiter, Neil. “A Hazy Outlook: Changing Role of IT as Services Ascend.” InformationWeek. June 2010.
http://reports.informationweek.com/abstract/5/3435/Cloud-Computing/research-cloud-it-staffing.html
(accessed August 14, 2013).
RESEARCH: IAAS ImpACT On DATA CEnTER DESIGn AnD STAffInG 19
Copyright ©2013 CBS Interactive Inc. All rights reserved.
About Tom OlzakTom Olzak is a security researcher for the InfoSec Institute and an IT professional with over 30 years of
experience in programming, network engineering, and security. He has an MBA and CISSP certification.
Tom has held positions as an IS director, director of infrastructure engineering, director of information security,
and programming manager at a variety of manufacturing, healthcare, and distribution companies. He has written
three books, Just Enough Security, Microsoft Virtualization, and Enterprise Security: A Practitioner’s Guide
(to be published in Q1/2013). Before joining the private sector, he served 10 years in the United States Army
Military Police with four years as a military police investigator.
About Alfred Lee, PhDAlfred Lee, PhD, completed his academic training in experimental condensed matter physics before transitioning
to a career making big data useful for business decisions. Former projects have ranged from coding an early
version of the data reduction pipeline for an astronomical research camera to investigating low-temperature,
micro-scale magnetic phenomena with a force microscope. Currently a data analyst at bitly, a leading social
intelligence platform, Alfred enjoys projects that reveal hidden insights in otherwise chaotic data. As a technology
generalist, his curiosity about the latest innovations is insatiable.
About Tech Pro ResearchTech Pro Research provides the information that IT leaders need to make informed decisions and solve today’s
toughest IT problems. We encourage you to explore all we have to offer:
Original, in-depth research reports on global IT trends
Analyst briefings on the latest tech from industry experts
Ready-made, time-saving policies, templates, and tools
Comprehensive ebooks compiled from the best of TechRepublic and ZDNet (our award-winning
sister sites)
Visit us at www.techproresearch.com.