Hybrid Cloud Services for Industry-Specific Applications

More IT managers will turn to cloud services to accelerate their responsiveness to business needs. Quicker IT deployments, end-user self-service, and reduced start-up costs equate to faster time-to-market for many organizations. Others will want to take advantage of the ability to pivot more quickly and adapt to market changes.

Beyond the desire for better, faster and cheaper processes, cloud services will enable entirely new business models and associated revenue streams. Acceptance will advance as cloud architectures prove out the opportunities for real business innovation and new functionality.

There is no single journey to cloud adoption, but rather a wide variety of entrance ramps and paths. On the demand side, organizations have different starting points and different objectives. Fortunately, public cloud computing services can unleash an exciting mix of new technologies, architectures, and organizational approaches.

Let’s consider the needs of the evolving media sector. Innovation in business processes already struggle to keep pace with the rapid advancements in technology. While cloud computing promises to unlock new levels of automation, it could also create new opportunities for value-added systems integration and business process transformation.

Media Company Hybrid Cloud Use-Case Scenario

• The media distribution landscape is rapidly changing from silos of video distribution (within pay-TV, broadcast, retail) to multi-channel or digital distribution.
• Content creators perceive several dangers in digital media: piracy, loss of control or direct relationships, and disintermediation.
• Content creators also see an opportunity in real-time media consumption data integrated across distribution channels and devices.

Role for Cloud Technologies

• A cloud-based content registry that manages content access rights across users, content creators, distributors, and devices offers several benefits.
• For end-consumers, the registry enables convenience, personalization, and community (with access to content on multiple devices, and new social experiences).
• Content creators and other providers of the registry can take advantage of new business models based on real-time data, personalization, and user targeting.
• The registry could drive incremental media purchases and greater consumption with protected content assets, enhanced discovery, and more powerful recommendation engines.

Application Considerations

• A content registry requires significant coordination within the media industry (e.g., agreement on common methods for managing digital rights and common limits to each consumption model with rules for content use).
• The rights of both the content creators and the end-consumers must be protected in terms of how their respective data is accessed, protected, and used.

For this scenario to succeed, a wide range of players must work in concert to deliver on the promise of hybrid cloud services. Substantial opportunities for innovation and value creation exist at all levels of the stack, from data center and virtualization design to foundational systems to end-user applications to business processes.

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Better Way for SMBs to Collaborate Online

Do you know, is there a better way for businesses to meet online, present projects, and share calendars and ideas anytime, from anywhere? Are you ready to share your experience?

Small- and medium-sized business owners can compete for a chance to win up to $2,000 in a reward card and a free consultation with marketing expert Guy Kawasaki -- by entering The Better Way Challenge.

The challenge, a video contest presented by Verizon and Cisco, is designed to encourage businesses to use new collaborative tools to maintain their competitive edge in a fast-changing environment.

"Innovation and technology will power us out of this recession," said Kawasaki. "The Better Way Challenge enables entrepreneurs to share their victories and defeats, tips and tricks, joys and pains of running a business. Online collaboration and social media can generate business, and these videos will accelerate the learning process for entrepreneurs and business owners."

Entering the Contest is Easy
Just submit a video of less than three minutes that describes "the most challenging part of getting your whole team on the same page."

Contest participants must either be subscribers to the Verizon Collaboration Center, located at the Verizon Small Business Center, or they may sign up for a free 30-day trial. Entrants whose videos are accepted for judging in the contest will also receive additional free six-month subscriptions.

In addition, any business that signs up for the free 30-day trial subscription will automatically be entered into a monthly drawing for a chance to win a Flip Mino HD Camcorder. As many as 90 camcorders will be given away during the six-month promotion.

Profiling Advanced Collaboration in Action
A panel of judges will select three contest finalists, based on the originality and relevance of their videos. The grand-prize winner will receive their free consultation with Kawasaki via Cisco TelePresence.

The second-and third-prize winners will each receive a reward card for $1,000 and one-on-one consultations with industry experts from the Cisco Internet Business Solutions Group -- which designs innovative processes and strategic plans for businesses.

All three consultations will be tailored to the specific business needs of the winners and focus on ways in which collaboration and online resources can make their businesses more efficient and competitive.

Monte Beck, Verizon's vice president for small-business product strategy, said, "Small businesses need a lot more than e-mail and Internet access to stay competitive. They need to move fast and utilize tools like the Verizon Collaboration Center that can help them grow their businesses, run them more efficiently and, reduce the cost of doing business."

The Verizon Collaboration Center, powered by Cisco WebEx, offers voice and Web conferencing. It enables users to instantly and effectively collaborate with colleagues, clients and vendors in a virtual environment that is accessible from any web browser.

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New Normal: Bold IT-Based Business Agility

European business leaders believe their companies are more vulnerable to IT-enabled market disruptions than companies in other parts of the world, according to a new market study by McKinsey & Company.

McKinsey found that 74 percent of European business leaders believed their company was 'very' or 'extremely' exposed to IT-based market disruption. Regardless, only 18 percent of European IT executives believed their companies were 'very effective' at introducing business technology faster and better than their competitors.

According to the McKinsey assessment, European companies need to grasp the opportunity to make bold, transformative moves to ensure their business continues to thrive within the "New Normal" environment of ICT-empowered borderless commerce.

A significant number of businesses have recognized the need to adapt, with 31 percent of European executives saying the development of new products and services in response to changing consumption patterns was a high priority.

'Good Enough' isn't a Winning Strategy
McKinsey believes that the attitude of European business leaders towards IT must shift. Organizations have achieved 'satisfactory' results by attaining some success in improving IT productivity, operational productivity, or innovation.

However, the performance expectation bar is now much higher and "IT must truly excel in all of these dimensions to support a winning company." McKinsey's guidance for European companies includes:

• Align IT and the business, upgrade business skills of IT leaders and close performance gaps.
• Improve governance models to facilitate joint decision making and strategic planning between IT and the business.
• Fundamentally restructure the IT function to dramatically improve productivity.
• Transform the company's operating model and cost structure with IT-enabled business processes.
• Enable transformative moves by promoting a mindset that fosters and rewards experimentation with new ideas.
• Identify opportunities for IT-enabled innovations and be prepared to respond to competitors' disruptive moves.
  

Outlook: Prepare for More of the Same
McKinsey says companies have begun to recognize that the current recession is not simply another turn of the business cycle but a restructuring of the economic order -- and that they need to look beyond relieving short-term cost pressures.

In summary, the current economic environment should be treated as the benchmark conditions for the foreseeable future. Where's the upside opportunity? Become that 'agent' of change.

McKinsey research has shown that downturns are times when industry leadership often changes. Forty-eight percent of global IT companies and 40 percent of U.S. industrial companies that were leaders before the 2000-01 recession did not retain their leadership positions afterward.

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The Virtual Computing Environment Coalition

Worldwide spending on data center technology infrastructure and services exceeds $350 billion annually, according to McKinsey and Company estimates, with half of that spent on capital expenses and half on operating expenses.

Further, an estimated 70 percent or more of those costs are expended to maintain existing infrastructures, leaving 30 percent or less for new technology initiatives and applications that can provide breakthrough differentiation for businesses.

It is also estimated that approximately $85 billion, or 20 percent of this total market, can be addressed with data center virtualization and private cloud technology by 2015.

Cisco and EMC, together with VMware, have introduced the Virtual Computing Environment coalition, an unprecedented collaboration of three information technology (IT) industry leaders.

Virtual Computing Environment Coalition Charter
The coalition has been created to accelerate customers' ability to increase business agility through greater IT infrastructure flexibility, and lower IT, energy and real estate costs through pervasive data center virtualization and a transition to private cloud infrastructures.

Cisco, EMC and VMware have worked closely over the past year on a shared vision for the future of enterprise IT infrastructure -- private cloud computing. A private cloud is a virtual IT infrastructure that is securely controlled and operated solely for one organization.

It can be managed either by that organization or a third party, and it can exist on- or off-premise -- or in combination. Private cloud computing offers the controls and security of today's data center with the agility required for business innovation at substantially lower costs.

The Virtual Computing Environment coalition offers organizations of all sizes an accelerated approach to data center transformation with dramatic efficiencies that promise significant reductions in both capital and operating expenses. As a result, organizations will no longer have to choose between best-of-breed technologies and end-to-end vendor accountability.

Ecosystem Collaboration and Open Innovation
The Virtual Computing Environment coalition already has partners committed to the coalition. This includes representation from the entire partner ecosystem, including systems integrators, value added resellers, service providers, and independent software vendors.

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IT Power Users Will Lead the Way

Have you ever wondered if your company's utilization of Business Technology is in line with the creative market leaders? The Harvard Business Review recently published an interesting commentary by Susan Cramm entitled "How to Support Your IT Innovators."

Ms. Cramm believes that to realize the full potential from business technology, all enterprises need IT-smart business leaders -- up, down, and across the organization.

According to the results of her ongoing survey, however, business leaders apparently don't feel very smart about their IT adoption and application practices.

• Only 11% personally use and fully leverage the capabilities of the technology currently in place.
• 50% agree with the statement that "business leaders don't understand how to use their systems and technologies."
• And, only 25% of business leaders consider themselves "IT-smart."
  

Liberate the Business Technology Innovators
One person she interviewed said "business groups that have somebody on their team who is an IT expert do much better -- in terms of leveraging technology to meet their needs -- than those who do not." While that may not be profound, it's a noteworthy comment.

Tech-savvy business users perform a valuable function for their less-informed peer group. They are able to determine what is truly possible, with current technology. Why? It's because power-users sometimes have better productivity enhancing tools in their home-based office than they do at their place of work.

How can this be possible? Well, IT managers focused on total control of all physical infrastructure are consumed by operational tasks and remedial user support activity. They have little or no time available to research, test and adopt the best-fit productivity tools for their business user needs.

Don’t Assume, Follow the Informed User
Moreover, there's often a major disconnect between what business users say they need, and what their IT team assumes they would apply. Most organizations use only 64 percent of their enterprise systems core functions, according to a recent Accenture survey.

"About half said they don't need all the capabilities, while a fifth explained that they didn't make use of all the functionality due to lack of time to learn how to apply them," said Accenture.

In summary, Ms. Cramm says that you should identify your lead users, give them more of what they really need, free up your IT team's time to study what they are doing (and why), and then decide how to standardize and scale the most promising innovations to benefit the whole enterprise.

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Can Managed Services Rescue Financial Services?

Turmoil and struggles in the financial services sector are splashed daily on the front page of newspapers around the world. The industry faces a number of monumental challenges that are threatening and shaping its future. To remain competitive, forward-looking firms need to:

• Reduce costs
• Improve cross-sell and up-sell results from existing customers
• Shift capital expenditures to operational expenditures through variable costing and on-demand capabilities
  

Progressive companies in the financial services sector are aggressively using managed services technology to address some of these current challenges.

Serving Market Growth
The financial services sector currently spends more than 2.5 times more on technology than other industries. The way they can attack challenge number one is to shift the management of desktops, data centers, and call centers to a managed services model. Companies are using this option not just to reduce costs, but as a way to reallocate investment into growth initiatives.

One regional U.S. bank came to Cisco ISBG (the company's strategic consulting arm), wanting to quickly enter a new niche market faster than a competitor and increase its market share. Its tactic: deploy an end-to-end managed service, including both technology and business processes.

The economics of managed services lower the barriers of entry to niche markets that might not have been economical before; it also helps them determine success or failure more quickly, and act accordingly.

Managed Services Increase Customer Ties
In developing markets, companies are looking to use managed services to target customers who might not have used banks at all previously. A managed service that offers the underlying network infrastructure, including phones, provides them with an on-demand and scalable service that they can roll-out ahead of competitors.

To increase the amount of business conducted with customers, financial services firms are looking beyond the traditional world of financial transactions and services. One large bank we're working with wants to expand its relationship with its small and mid-size customers by providing them with essential services as payroll, procurement, and human resources.

Because the bank wants to roll out these services quickly, they will be created, delivered and managed by another entity through a managed services model.

Next generation managed services offer a real opportunity to transform the financial services sector. But success will require creative thinking, as well as both the development of strategic partnerships with managed services providers and proper governance models.

About the author: Stuart Taylor is a Director in Cisco IBSG. Stuart leads thought leadership and engagements with key Service Providers in managed services. He has over 15 years of experience focused on strategy, corporate development, business unit strategy, M&A and operational improvement with large mobile and wireline operators and high technology clients.

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Small Businesses: The Greatest IT Innovators of All?

When you're a start-up company or a small business, you enjoy a key freedom: You don't have any legacy equipment and you can make sure your IT dollars drive innovation.

But over time -- as your staff, network and application infrastructure grows -- you'll wind up spending more and more IT budget on maintenance rather than innovation.

According to various estimates, mature businesses spend anywhere from 80 percent to 90 percent of their IT dollars maintaining systems they already have in place. That's pathetic. And it's also impractical. Small businesses must either innovate or die.

So, how can a small business remain focused on innovative IT solutions? I've found the answer in my own company. Generally speaking, we outsource just about every piece of IT possible. Here's how we do it:

1. Get Predictable: We seek managed service providers, web hosting companies, developers and other partners who can handle day-to-day maintenance issues at a reasonable, predictable monthly cost.

More than 90 percent of PC and network issues can now be solved remotely, according to ConnectWise CEO Arnie Bellini, whose company specializes in professional services automation (PSA) software. With that fact in mind, small businesses can depend on managed service providers for the vast majority of their support needs. Plus, MSPs typically have technicians they can dispatch to fix any on-site issues that aren't resolved remotely.

2. Build Assets, Not Technology Temples: Empowering your employees with the latest technologies can be fantastic. But that doesn't mean you necessarily need to "own" the technology.

Through leasing programs and managed service programs, you can ensure your technology tools remain ahead of most rivals. And you won't need to open your wallet for big hardware upgrade cycles every few years.

3. Explore Hardware as a Service: Yes, even your network hardware (switches, routers, servers, desktops) can move to a managed service model. Fact is, small businesses can't afford to "buy" many of the latest hardware and broadband solutions. But they still need the capabilities of those services.

A prime example: Small businesses can't build out $300,000 TelePresence centers. And they often can't afford to fly to all corners of the world meeting customers and business prospects. Still, those same small businesses can use shared TelePresence locations (available in more and more hotels) to network with peers across the global.

4. Oh, And Innovate: Now that you've shifted all the "maintence" issues to a service provider, you can focus on driving new innovative applications across your organization.

My small (but growing) business, for instance, leveraged a mix of contract developers and MSPs to launch a series of major media Web sites. We "own" the completed Web sites, but all of the site underpinnings (the content management system, database, server, broadband, etc.) are outsourced to managed service providers and data center partners.

The result: We did not purchase a single piece of software or hardware to launch immensely popular, profitable Web sites. And yet those sites run on state-of-the-art software and hardware.

With the help of our managed service providers, we'll keep innovating.

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Gaining the Freedom to Fuel BT Innovation

Without a doubt, the reason why most business decision makers consider an out-tasked solution -- based upon a managed service offering -- is still primarily the need for cost-reduction.

Clearly, that's a valid motivation for any business leader. But, it's only a part of the inherent benefit that can be attained by choosing to play this particular game with a very different set of rules.

Ask yourself, if your IT organization can rarely find the time to invest in meaningful business innovation activity, then shouldn't you consider the common reasons why -- and seek out the proven methods to proactively apply an alternative approach?

Innovation stuck in a holding pattern
According to a Forrester Research market assessment, a fundamental "lack of time available to invest in innovation" is one of the main reasons given by CIOs and their staff to explain why they're unable to participate in substantive new business impact activity.

In reality, they're consumed by routine IT operations and associated voice and data network management work. Better project management practices can ease the load, since adding new headcount to the team really isn't an option for many companies.

However, tweaking the current model rarely delivers significant results, because most IT teams have diligently squeezed every single ounce of efficiency from their daily routines.

Granted, sometimes the only way to gain a quantum leap in effectiveness is by applying a totally different model. Also, we already know what the typical "wait and see" attitudes will likely deliver. Enough said.

A profound new way of thinking
Therefore, people who have chosen to deploy a managed service solution have, in essence, taken themselves off the treadmill of perpetual drudgery by applying swift and decisive action.

No longer victims of legacy-thinking about how their IT role should function, they've evolved. Now, they're on a new path of creative Business Technology (BT) enlightenment, by choice.

Imagine what your traditional IT team could accomplish, if only they had the time. Better yet, now take the first step towards enabling them to gain the freedom to fuel their business technology innovation ideas that have been placed "on-hold" for way too long.

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