FS Netmagic - Whitepaper
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This whitepaper discusses the necessity for enterprises to adopt a consumption-based IT services model to meet modern business demands, emphasizing the shift from traditional service delivery to innovative, collaborative approaches. It highlights the benefits of allowing managed service providers to take full ownership of IT strategies, which can enhance operational efficiency, reduce costs, and facilitate quicker responses to market changes. Furthermore, it outlines the transformation journey needed for organizations to successfully implement these services and achieve desired business outcomes.
FS Netmagic - Whitepaper
- 1. 1 The key to business transformation: Future- proofing your Consumption based IT services strategy A strategic whitepaper for enterprise decision makers Co-authored By Dechacca Ponnappa Industry Analyst ICT MENASA, Frost & Sullivan & Mr. Nitin Mishra, SVP - Products & Services, Netmagic.
- 2. 2 Foreword Enterprises of all kinds, from organisations across the industrial spectrum, to governments and entrepreneurs, all are seeking to enter newer business models, drive innovative services and much more. IT being the core enabler of businesses, has forced IT departments to drive tremendous business value from their IT investments. In the past and at present, enterprises have engaged external service providers in traditional service delivery arrangements to handle the ongoing IT operations through models such as staff augmentation, co-owned delivery etc. The traditional models may not suffice to manage the present day expectations of customers and business stake holders such as reduced time to market, cost optimisation, on demand services and much more. Hence a new breed of “next-generation” enterprise and “best in class” service providers are fostering a collaborative approach to bring in newer models of service delivery, laying down the foundation for “Consumption – based IT” that involve a mix of Usage based economies delivered through OpEx models. Consumption – based IT services model ensures that organisations see consistently strong results from their IT investments that positively influence their business outcomes when the service providers are empowered with a sense of ownership, incentivised to think big, innovate and outperform the buyer’s expectations when the IT management is passed on to them. This is the win – win model that this whitepaper intends to cover and how enterprises can get more value from their Consumption based IT Services Provider. Review the business needs in the below table and if the answers to any of these questions is yes, then this paper helps to understand how newer models of Consumption based IT services can assist you to address your business objective. Exhibit 1: Is your business facing these challenges? Managing mission critical IT Infrastructure with higher operational efficiency Lowering IT budgets and increasing productivity Fulfilling business needs, managing multiple user groups and technology platform Responding quickly to meet time to market demands Operating in real time to meet 24-hour demand Is your business in transition? Needs to upgrade, refurbish, move, or relocate existing infrastructure. A merger, partnership, or acquisition is altering operations. A need to increase the coverage range and level of service. The revenue targets depend on implementing new technologies. There is a need to expand into new markets Is your business struggling to increase profitability? Currently witnessing a dynamic business growth while undergoing downsizing and hiring freezes Agree that Consumption based IT is a good strategy for gaining efficiencies and reducing costs We prefer to dedicate resources to our core competencies and mission critical processes rather than IT related activities
- 3. 3 The evolution of the IT landscape and the advent of newer service delivery models The complexity of internal IT can often force in house IT staff to spend most their time reacting to problems rather than bringing in new business processes or provide advanced functionalities to existing processes. The traditional customer/service provider relationship assumed that the service provider was selling a product and ongoing maintenance & management would be part of a “do-it-yourself” solution. Today’s networks are increasingly distributed so the IT assets being managed are generally geographically remote from the IT centre and staff. The complexity and the corresponding costs of monitoring and managing this expanding infrastructure is increasing, and the costs of system down time are increasing. Also, management of IT is not limited to just IT infrastructure, but is expected to deliver consumer-inspired user experience. This raises a need for unified dashboards that replaces traditional monitoring tools in order to monitor business services, applications and provide analytical insights to react faster to problems. Enterprise data centers are going through an evolutionary transformation. The advent and proliferation of virtual infrastructure, is the anchor of this transformation. The management of virtual infrastructure has become the next big obstacle for data center managers. The integration of existing management tools is not mature enough to satisfy the long-term demands of a highly dynamic, service-led data center. Virtualization- specific management tools require integration with higher-level management or orchestration frameworks. Lastly, the management across virtual infrastructure and physical infrastructure that comprises of servers, storage, and networks is still not integrated or automated. This integration is essential to achieving the dynamic, pooled resource environment that is the solid foundation of IT service management and data center transformation, in simple words – Consumption based IT. Over the last several years, private cloud solutions have grown in number, concerns over the public cloud have diminished and hybrid cloud is partially going main stream The questions that most of the IT leaders have are Where does each application belong, where do you source new applications- in the private cloud, public cloud, hybrid cloud or the organisation’s legacy environment Which model can provide us the best performance, cost and flexibility How can you design today’s cloud in such a way that it will be compatible with the models that will arrive in the next 2 years? IT service management automation forms the underlying structure to private and public cloud architectures effectively providing scale-out, dynamic data center transformation. This is a pre-requisite to provide end- to-end provisioning of workload, server, hypervisor, network, and storage against a service delivery objective. Once the service is commissioned, ongoing monitoring and management of the hosted infrastructure must be conducted in an automated fashion. When sudden-demand conditions are detected, there should be automated workload and resource balancing or tuning to return the workload or service to expected service levels. The ultimate goal of data center transformation is using IT service automation to dynamically allocate workloads across cloud virtual and physical resources based on business-level objectives, achieving economies through usage based models. Current complexity challenges The Road to evolutionary transformation
- 4. 4 Consumption IT oriented Managed service provider as your IT Enabler and trusted partner for continued business sustenance Over the last two decades, the IT operations team has been struggling to provide business team the required services on time. As business requirements have mounted, generations of technology have been implemented side by side. This resulted in data centers characterized by complex, static physical configurations, incomplete virtualization efforts, and multiple silos of management. But the emergence of better virtualization management tools, converged infrastructure, multiple user operating systems, multiple workloads platforms – public, private, hybrid, and hosted data centers has opened the potential to create “Software Defined Data Center (SDDC)” a comprehensive abstraction of a complete data center. Exhibit 2: The potential impact of SDDC The measure of the IT department’s success is about the service quality delivery speed to the business stake holders. For many organisations, this requires a transformation in how they operate and conduct businesses. Enterprises therefore need to address the fundamental assumptions of how IT is managed, delivered and consumed. But the most important decision centres on being able to give importance to not just the right cloud model, but also on the ongoing support model to sustain the solution deployed and provide the desired customer experiences. This creates a strong need for the right managed services partner. Critical decision factors for Consumption IT oriented Managed Service Partners Integrated architecture Cloud computing Workload-centric architectures Single Manageable Domain
- 5. 5 Although SDDC is the vision that many enterprises today have, there are substantial challenges to achieve this vision: Skill gaps in the internal IT team to sort the challenges in this journey. The significant challenge is the legacy mess consisting of applications that are difficult to virtualise or whose owners want them to run on dedicated physical servers only. This haphazard fashion of virtualized resources and legacy applications has led enterprise data centers to in effect bifurcate their management and architectures, leaving large fractions of their infrastructure in two worlds — the virtual and the physical. Also, there is the emergence of new cloud based platforms that the enterprises want to leverage in sync with their existing systems. How does an enterprise benefit from Consumption based IT services? Focus on Core Business: Free up valuable internal resources, enable them to work on more value-added work Increase operational efficiency and scalability Lower Total Cost of Ownership: Ability to redirect cost to other strategic projects Better visibility to IT costs with pay per use price models Enhanced service levels: Ability to make the entire IT Infrastructure accountable Enhance service level visibility through automation and proactive management Faster Time to market: Increased flexibility and responsiveness to your business needs Improved customer satisfaction since IT is provisioned on demand to enable quick services Leverage disruptive technologies faster: Execute corporate strategy and top imperatives with newer technologies with access to expertise Stay ahead of competition with implementing innovative projects with provider’s expertise Implement business productivity metrics: Allow IT to automate business processes Able to measure IT downtime in terms of revenue loss. Business benefits This is the opportunity that Frost & Sullivan envisions for enterprises to engage a consumption IT oriented managed service provider who can take ownership of your present state of IT systems across “plan-build-run” continuum to transform it to a future scalable software defined data center, with delivery models being a combination of OpEx driven, consumption based IT models The result is combination of IT system that has left a hole in the ability of automated service provisioning. In the consumption IT oriented managed services model, the service provider takes complete ownership across “plan-build-run” continuum of your IT strategy. The enterprise has a choice to own or not own the IT assets, delegate the responsibility of a simple router up to a business outcome to the service provider and hold the service provider responsible to provision the required IT needed to achieve any new business decision. The language that an enterprise can talk to the service provider can be about launch of a product / grant access to a particular website for 24/7 demand /Opening a bank account and the IT infra as well as the business process needed to achieve this outcome is taken care by the provider. This ownership gives power to the service provider to think big, innovate and outperform at their own right to help an enterprise win in the market place.
- 6. 6 Focus on Core Business: Place workloads in platforms best suited for them -public/private/hybrid/on premise –helps achieve cost reduction and strong foundation for future IT architecture Increase operational efficiency and scalability • Integration and management of legacy systems Beat obstacles of process integration or incompatibility with the provider’s expertise Cost to run application decreases as more application are added.(economies of scale) Technology benefits More transparency, flexibility and predictability Transparent Consumption meter will lead to transparent costs Ability to quickly change solution portfolio driven by changing business strategy Cost of introducing new services for now and future can be clearly outlined Increase operational efficiency and scalability Adherence to accurate sizing of infra rather than experience based estimation The enterprise pays only for the consumption and hence accurate sizing of infra will be done Vendor agnostic solutions that solve the business need will be deployed rather than being biased by specific vendor’s solutions End to end management- legacy/new systems The service provide will be willing to assume risk and “pain-share” The underlying legacy hardware or applications will be given a vendor agnostic and a holistic approach for management. The main objective would be to achieve a business outcome rather than just infra uptime Outcome rather than just infra uptime and scalability End to end management- legacy/new systems The variety of demand, seasonal peaks, trough and events that trigger volume spikes are understood Historical data of the pattern of IT demand will be studied and taken to consideration to design your future infra. Coverage for compliance, security and standardisation Meeting regulatory compliance requirements and adopting standardisation of processes across global locations can be made simpler. Security policies specific to your industry/location/customer/any other stake holders can be implemented faster. Management of various delivery platforms in a single window Service provider can manage holistically all delivery platforms spanning across public, private, on premise and any other legacy systems on a single window to deliver the business outcome as per contract. This concept creates an infinite data centre or a borderless IT “The collaborative capabilities and behaviours of both enterprise and service provider of IT services will determine the extent of success of the Consumption based IT services delivery. Establishing effective governance mechanisms and managing change in a planned manner are also critical requirements for success”
- 7. 7 Transformation Journey of managed services provider – Transition from managed infra to managed outcome, from fixed contracts to consumption based IT contracts Exhibit 4 “Service providers are moving from simple risk-free contracts to end to end ownership contracts as shown in the exhibit above” Exhibit 3: Roadmap of managed services provider’s service catalogue – from core infra management to software defined data center. The commercial model roadmap has gained new flavours that have extended from fixed price to consumption based pricing to gain-share. Core systems (servers, storage, network) Virtualisation and Orchestration management Multiple Platforms management – Public, Private and Hybrid clouds Application integration Software defined data center-managed outcome Time & material contracts Performance based pricing User based pricing Application based price Gain-share Fixed price Deliverable, Scope and workloads are well defined Repeatable services linked to applications Commoditized services centred around users Need a dramatic improvement in processes and want a strategic partner to lead this project A varied range of services is expected Large work volume but requires low per-unit effort Common application maintenance, testing, infrastructure and business process services contracts Transaction based pricing
- 8. 8 New application roll out cycle in the present is much faster than how it was in the future due to dynamic business decisions. This calls for quick evaluation of numerous existing technologies to make right decisions. Hiring skill sets to test and manage various new technologies can be very expensive and tedious. Getting the legacy and new platforms in your enterprise to seamlessly connect and provide the service quality that business expects in limited time can be expensive if provisioning and management is not automated at every level. Therefore a managed service provider transitioning to Consumption based IT services provider can help with the end to end IT strategy plan, build scalable architectures and manage the daily operations. A managed service provider is thus moving up the service catalogue from not just managing the core infrastructure, but building an automated software defined architecture for your enterprise by leveraging the combination of new cloud platforms and legacy systems, delivered through OpEx based models Service providers are signing up managed services contracts in different types of outcome based commercial models depending on the nature of processes that the enterprise runs. The commercial models in trend are - per user/per device/per outcome based pricing which is directly related to consumption pattern. While the right timing for your enterprise to involve a managed service provider may still be under internal discussion, Frost & Sullivan believes that it may severely risk your enterprise in relative to peers who embrace it early. “It is important to know that the foundation that was laid in the past is the present day legacy systems that may be not be very flexible due to traditional architectures and the foundation that is laid for the applications today will be the future. Hence, each additional step taken today has to be right”
- 9. 9 a) Thought leadership and transformation services: Providing organizations with thought leadership is a critical anchor to Netmagic’s consumption driven IT managed services. Netmagic leverages its heritage and extensive skills in data centre managed services to help organizations develop road maps and blueprints that align their data centre architecture with business objectives. A key element of this approach is Netmagic’s ability to assess, design, and implement these capabilities utilizing deep knowledge in technology, process, and industry with the goal of ensuring effective transformation, uninterrupted business operations, and operational excellence. b) Modularity via services catalogue: Netmagic provides its consumption driven managed infrastructure services as a set of modular options such as colocation, managed hosting, cloud solutions and other auxiliary services such as managed security, disaster recovery strategy in order to approach IT holistically. Netmagic also offers to organizations the ability to select only those micro elements across managed services, such as basic monitoring, security management, or cloud services , where in enterprises can align their requirements at a more granular level with the goal of consuming just what they need and optimizing their investments while minimizing their costs. Additionally, organizations can utilize services that help localize their needs to specific geographies, where critical regulations might need to be met, as well as personalize services that can support role-based needs as determined by individual users, such as with the increased adoption of mobility and bring your own device (BYOD). Enterprises indicated that a key reason for working with Netmagic is the flexibility of the contract and excellent after sales support. c) Depth and breadth of capability: Netmagic’s services support a full range of multivendor IT environments, including data center infrastructure (e.g., servers, storage, databases); workspace environments that include traditional PCs and laptops as well as smart devices (e.g., mobile phones and tablets); business continuity/disaster recovery (BC/DR); and a comprehensive set of network environments. Netmagic has partnerships across technologies with multiple OEMs and also supports platforms across IT spectrum (OS, Database, Network, Storage, Virtualisation, Web application servers, security, SAP-basis, Mail platforms). Additionally, these capabilities align with emerging technologies and address disruptive service delivery models involving cloud, mobility, social media, and analytics. Netmagic will also act as the single point of contact (SPOC) for all customer requirements, thereby eliminating the potential challenges that arise for customers that are managing disparate vendors. d) Industry specific expertise: Netmagic’s experience across various industries has given them the perspective to provide infrastructure that is custom sized to your specific industry based on the workloads that would be run. Also the future trends in the industry and other influential factors are kept in mind while designing the enterprise’s data centre solution. What powers their efforts on this unique journey is the faith and support entrusted by market leaders like Ratnakar Bank, Flipkart, India Infoline, Thomson Reuters, H&R Johnson, Hungama, Yatra, Eureka Forbes, Mahindra Holidays, C-Edge and others. The breadth of customers cuts across diverse industry verticals including banking and financial services, Insurance, e-commerce, Healthcare, Manufacturing, Media & Entertainment, IT & ITeS, Logistics, Hospitality, and Education. e) Global delivery and localisation: Netmagic provides organizations with a global footprint of data centres by which it can ensure that services are provisioned with consistency of quality and integration of multiple offices across geographies with standardisation of IT architectures. Services are localized to specific Profile of Netmagic as a service provider – Strategic differentiators
- 10. 10 geographies where local regulations often need to be met. The global data centers are built to provide maximum uptime and business continuity. Key Highlights of Mumbai Data center 5: • 300,000 sq ft Data Center space in a 'state-of-the-art' facility, with space for more than 2,700 high-density racks. Has full access to 20 MW of power (expandable to about 28 MW) and cooling facilities • Apart from multiple UPS, backed by batteries, there are gensets that can ensure 48 hours of nonstop power on full load. The gensets are backed with four underground tanks in the premises that hold 200,000 litres of diesel at any given time, to face any emergency • Being carrier neutral, Netmagic's DC5 has abundant network connectivity from all the major service providers, resulting in adequate redundancy on this front. Add to this, 4 distinct fibre paths ensure reduced latency and better network performance • Comprehensive physical and logical security arrangements: CCTV camera surveillance, entry barriers and man-traps at DC floor, Access Card / Biometric authentication for entry, etc. besides others The Global- Netmagic Advantage: • Built to the exacting global design standards of NTT Communications (the largest Data Center provider in the world; managing over 140 Data Centers worldwide), defining a higher level of redundancy and uptime for its IT and other deployed equipment • The latest in global Data Center technology in India, with no dearth of space for future business expansion • Benefit from Netmagic's expertise in serving the unique IT infrastructure needs of the Indian enterprises for over 17 years and NTT Communications' globally benchmarked engineering and technological practices • Support for custom configurations of compute, storage, networking as well as power, cooling and type of deployment (custom high density racks, caged rack, etc.) Netmagic’s New Data Center in Mumbai – Global Scale Centre for Delivery of Consumption driven IT
- 11. 11 The Last Word: What it means? • If your enterprise has a heterogeneous mixture of multiple legacy systems that exhibit deep seated reluctance to run new business models, the Managed service provider turned Consumption based IT Service provider can take over to study the environment and bring the best out of old systems along with new platforms, through optimal combination of CapEx – OpEx based models, to help you achieve the desired outcome. The solution can be a combination of on premise, public, private and hybrid cloud technologies that will be provisioned on a single management console. • This transformed service provider can manage your multi-vendor IT assets that spans across multiple geographies to bring about standardisation and then automate IT provisioning to an extent that every new business requirement can be addressed faster, eliminating manual resource provisioning. • Evaluating multiple technologies from multiple vendors and integrating new technologies by your self can create integration or performance gaps. However, a consumption based IT service provider will wrap the most appropriate technology around each workload to provide unmatched performance, security, or potentially both. • This scenario is not to imply that the IT and security organizations can retire. On the contrary, they are re-purposed to focus more on how IT and security technologies can be put to use in support of strategic business initiatives. Also, they become liaisons with the MSP to ensure that the needs of the business are understood and followed through by the MSP as he transcends to becoming a Consumption based IT service provider Critical success factors to business transformation is future proofing your managed service strategy Frost & Sullivan believes that “A Consumption based IT Service Provider can provide more incremental value in many forms than what an enterprise can achieve on their own since the solution deployment approach will be holistic and will be subject to continuous improvisation through automation.” “This consumption oriented MSP ownership concept will create a borderless IT .This ownership will allow the MSP to not just build-run, but can be part of your strategic decision making to outline what the technology implication would be to a business change.” “In a manner of speaking, the MSP’s roles transform from extensively operational to leadership; and, positively, the business directs more of its in-house talent into contributing to those aspects of the business that differentiate itself in the marketplace”.
- 12. 12 Appendix About Frost & Sullivan • Frost & Sullivan is a leading global strategy consulting company, headquartered in the United States. Established in 1961, in New York City, the company today has 43 offices across the globe. It has eight offices in the MENASA Region, in Bengaluru, Chennai, Delhi, Kolkata, Mumbai, Pune, Bahrain and Dubai. • Frost & Sullivan has tracked the Information and Communication Technologies market globally. Coupled with our successful history of addressing the growth strategy needs of our global and regional clients, Frost & Sullivan is well placed to assess the opportunity, analyze the customer segments and provide strategic recommendations for array of business line. • Frost & Sullivan also recognizes that a failure to respond to customer needs can have long-term implications for a company’s growth strategy. That is why we are dedicated to helping our clients prioritize their customers across the organization. More specifically, our experienced team of analysts and consultants enable our clients to: – Sense, anticipate, and prioritize customer needs and preferences – Act on insights through improved product innovation, customer engagement, and communication – Establish a value proposition that is succinct, unique and defensible – Revisit and modify their customer strategy over time • Since 1961, Frost & Sullivan has been at the forefront of researching new markets and technologies in a variety of industries. We offer 50 years of experience in creating dynamic research teams with expertise in multiple industries. These teams provide our clients with combined synergies that are unmatchable at research and consulting firms that focus exclusively on one industry. Our synergies include a deep understanding of many aspects of the Industrial Markets. Frost & Sullivan also offers a unique global perspective from analysts and consultants in 40 + offices across 25 countries around the world DISCLAIMER Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan is not responsible for incorrect information supplied to us by manufacturers or users. Our research services are limited publications containing valuable market information provided to a select group of customers. Our customers acknowledge, when ordering, subscribing or downloading, that Frost & Sullivan research services are for customers’ internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold, or disclosed to noncustomers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher. COPYRIGHT NOTICE The contents of these pages are copyright © Frost & Sullivan. All rights reserved. Except with the prior written permission of Frost & Sullivan, you may not (whether directly or indirectly) create a database in an electronic or other form by downloading and storing all or any part of the content of this document. No part of this document may be copied or otherwise incorporated into, transmitted to, or stored in any other website, electronic retrieval system, publication or other work in any form (whether hard copy, electronic or otherwise) without the prior written permission of Frost & Sullivan.