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How can an Enterprise stop becoming obsolete?

Level 1

In my last blog, I talked about the need for Enterprise businesses to go on a journey by digitising their businesses in order to stay relevant in the market place and thereby ensuring their future survival.

Whilst the feedback I received to my first blog was pleasing, it was suggested in one response I received, that I hadn’t pointed out about the inability of many companies to react and change fast enough to simply keep up. In fact, the larger they are the more difficult they find such change. This is very true, and so the next question is whether there is anything they can do to help themselves? Well, yes there is. It is all down to how companies decide to allocate their resources, and in particular, their budgets and people.

Talking of budgets, the first thing to state, is that the reasons why a board of directors will approve a large I.T. expenditure spend will ultimately boil down into one of the following 3 categories or combinations thereof…

1. It will help grow their business (top line)
2. It will help cut their costs (bottom line)
3. It will help mitigate their risks (business survival)

Vox copy 8 (002).jpgBack in 2009, McKinsey’s published a piece of research called their ‘3 horizon’s model’…

It was aimed at helping businesses understand how they should allocate their resources (people, budgets etc) in order to maintain a semblance of innovation which will prevent their businesses from entering a state of inertia. They suggested that for an Enterprise business, their resources should be split into 3 very uneven buckets, split 70%, 20% and 10% respectively, attributed to each horizon…

1. The first bucket takes 70% of the resources to improve, extend and reduce cost in their existing infrastructure that supports their existing lines of business. There are many classic examples of how this is done, but for me, the move to All Flash Storage in recent years is a classic example of improving, extending and reducing bottom line costs in existing infrastructure.

2. The second bucket of 20% is used to fund new technology that exists today, but is not part of their existing infrastructure. This new technology should allow the business to enter new markets that it currently doesn’t play in, allowing top line growth. An example of this maybe utilising new SDS, IOT or AI technologies.

3. The final 10% should be spent on exploring new technologies that don’t actually exist yet, that will drive whole new markets for the business – so again top line growth. Examples of this could include utilising future memory centric computing technologies (replacing our current processor centric models) or utilising Robotics perhaps?

Whilst the above is McKinsey’s view, Gartner also have a similar model with similar % splits. If nothing else, it is a good debating point with a customer as to how they align against this ‘best practice’. Those companies that have more than 70% of their resources in bucket 1 and invest less than 10% in bucket 3 are likely to stagnate and eventually fail. Unfortunately, far too many Enterprises are not adopting this type of best practice and are simply investing far too much in bucket 1 and far too little to nothing in bucket 3.

Given that Veritas focus on Data Management and Protection (risk mitigation), where can we help here? Well on a number of fronts actually. Firstly, utilising our tools and products we can easily help a business reduce the amount of data they hold dramatically. Our research shows that only 15% of an Enterprise’s data is actually clean data that the business relies actively on today. Additionally, another 33% is categorised as Redundant, Obsolete or Trivial (ROT) data, which can probably simply be deleted. The rest, 52%, is classed as dark data that the business isn’t aware of and is just sat there, consuming valuable resources. It may be useful, but no-one knows. It may certainly be burning huge amounts of expensive primary storage that is simply overkill for this data. Therefore, what is useful could be moved to more inexpensive secondary storage tiers or even archived to the cloud. Taking these actions will dramatically help to cut costs in existing infrastructure.

Secondly, whilst we are investing in bringing data management and protection to the cloud  in particular, we are also investing in our own SDS technologies. We now have a range of appliances that can be used for long term retention of data as well as a fantastic Cognitive Object Storage (COS) solution that will be extremely useful for those customers who need help storing huge amounts of unstructured data. In fact, Veritas is now the #1 SDS vendor in the market place, so we can be a great help in solving bucket 2, and thereby aiding business growth.

Finally, we pride ourselves in our ability to backup new workloads faster than any of our competitors. Recent announcements have shown that our NetBackup (NBU) technology can be used to not only to back up traditional business applications like Oracle, SAP, VMware and Office365, but can now be used to backup new workloads like Hadoop, Containers and NoSQL databases. This allows customers to invest via the second bucket, whilst reducing risk and without having to adopt new additional technologies to support their new lines of business growth.

This leads me on neatly to my final point. In order to free up resources for buckets 2 and 3 we have to reduce our costs in bucket 1. This means simplifying our approach to make it easier. It is a fact of life that the more complex an IT environment is, then the costlier it becomes. To reduce complexity, and therefore cost, it is best to reduce the number of vendors that you currently deploy to support bucket 1. So rather than choosing a raft of different backup vendors to support various point solutions in their infrastructure, surely it makes business sense to choose one who can back up the whole lot.

This is why Veritas is partnering with some of the largest IT infrastructure and System Integrators in the business. By building joint solutions with our partners, we can offer our mutual customers fully tested and approved reference architectures, backed with full service capabilities that will ultimately reduce costs, whilst at the same time give flexibility for the customer to grow their business.