Archive for April, 2013

Accenture’s “cloud broker” bid

April 30th, 2013

At first, it seemed as though cloud computing might pose an existential threat to the IT outsourcing industry. If customers can rent IT capabilities over the Internet without setting up their own infrastructure, why would they need outsourced IT skills?

In truth, there is a lot of extra work associated with using cloud computing. In 2009, Gartner analyst Darryl Plummer spotted the need for a so- called “cloud broker”, a function – internal or external – that makes it easier for a business to adopt public cloud services by certifying approved cloud providers, taking care of integration, managing user identity across services, and more

This is a role that IT services providers are understandably keen to fill. Indian IT outsourcer Infosys was one of the first to market with its Cloud Ecosystem Hub service, which it claims can “enable organisations to rapidly adopt, manage and govern a hybrid cloud environment”.

In the last nine months, meanwhile, outsourcing and consultancy giant Accenture has been developing its own cloud brokerage platform, which it unveiled publicly in April 2013.

The Accenture Cloud Platform is made up of a mix of software and services. Front and centre is a procurement portal that can be deployed internally or hosted in the cloud itself.

This gives IT administrators, or perhaps even business users, a single screen through which they can buy services from Accenture’s ecosystem of approved cloud providers.

They can also procure pre-built integrations – for example, from to NetSuite – that are hosted on Accenture’s infrastructure and paid for on a per-transaction basis.

And thirdly, they can buy pre- configured services from Accenture. For example, the “testing-as-a-service” offering allows customers to rent testing tools on a pay-per-use basis, and spin up cloud infrastructure as a testing environment, in one fell swoop.

All of is this is paid for with a single monthly bill.

“You can look at the platform as an app store, but some of the apps have been pre-integrated,” says Jack Sepple, global senior managing director for Accenture’s cloud practice.

It is a canny idea from Accenture. The platform, the company claims, makes it easier for businesses to govern cloud usage across their organisation. “In the client-server era, there was a big decentralisation of governance for a while, and the same thing is happening with cloud and for valid business reasons,” says Sepple. “Part of the reason for adopting this platform is to help customers pull governance back into one place.”

But it also parks a shop front for Accenture’s services right in front of their IT administrators. In future, Accenture aims to even sell human labour – software testers, for example – through the cloud portal on a pay-per-use basis.

Accenture has yet to announce which suppliers make up its cloud service provider ecosystem, but it has revealed one glaring omission: cloud market- creator Amazon Web Services.

AWS is “definitely on our roadmap”, Sepple says, but for the time being it does not meet the requirements of its enterprise customers. “As a Global 2000 customer, there are certain terms and conditions you expect, and certain service level agreements you need”.

Accenture recently announced that it would be investing a further $400 million in its cloud computing capabilities. The Accenture Cloud Platform will be a part of that, but the company also plans to grow its 6,700- strong cadre of cloud experts.

Cloud computing is already a $1 billion-a-year business for Accenture, Sepple says, which equates to around 3.5% of its 2012 revenues. IDC recently estimated that the global cloud computing market will grow 245% from $40 billion in 2012 to $98 billion in 2016. Accenture expects its cloud business to match or exceed that growth.

But legacy systems are not going away, and Sepple is also confident that Accenture will find work integrating those systems will cloud environments for many years to come. “We did a study looking at how fast our customers want to move to the cloud,” he says. “Even as far out as 2020, they think that are large proportion of the workload will still be based on internal systems.”

“We see a long path ahead of us.”


Qld unions will fight outsourcing plan

April 30th, 2013

Queensland’s government has been accused of using deceitful language to hide the fact it plans to privatise assets.

The government announced on Tuesday that Energex, Ergon and Powerlink aren’t on the chopping block.

But it will investigate offloading other businesses, including Stanwell, CS Energy, the Queensland Investment Corporation, and the ports of Gladstone and Townsville.outsourcing8

Queensland unions say the government is using tricky words such as “contestability” and “outsourcing” of health, transport and other major services instead of privatisation.

To prove the point, public sector union Together wheeled out a person dressed in a duck costume outside parliament house on Tuesday.

“Queenslanders won’t be fooled no matter what this government calls privatisation,” Together secretary Alex Scott said.

“If it walks like a duck and quacks like a duck, it’s privatisation.”

He said the government was scared to fight the 2015 election on its preferred option of privatising assets and services.

Unions are planning a major campaign against outsourcing and privatisation, the Queensland Council of Unions (QCU) says.

QCU president John Battams says the union movement has won the first round because the government has steered clear of selling entire assets.

“But they have decided to reward their mates in the big end of town by outsourcing almost every aspect of government services,” he said.

Mr Battams said there was plenty of evidence that outsourcing pushed costs up and quality down.

He said the quality of the United Kingdom’s hospital system had suffered after the government outsourced its health services.

Electrical Trades Union state organiser Jason Young says the government’s plan to privatise generators will drive up the cost of electricity.

“CS Energy lost money (last financial year) but Stanwell didn’t and if you combine the two they still returned a profit to government revenue,” Mr Young told reporters.

The government plans to outsource rail maintenance and infrastructure.

City passenger rail services and infrastructure will be opened up to different providers, including private companies.

And long-distance and tourist passenger rail service will be opened up to “competitive tendering”.

Rail Tram and Bus Union state secretary Owen Doogan says this will be disastrous.

“Maggie Thatcher did this about 25 years ago in the UK and what happened there was an absolute disaster,” he said.

The government has gained the praise of the Chamber of Commerce & Industry Queensland.

The association’s president Nick Behrens says the government has taken a cautious approach to asset privatisation.

He also supported outsourcing services, saying it resulted in better outcomes and would boost the state’s economy.


Hexaware Q1 net profit down 10% at Rs 79.27 cr

April 30th, 2013

IT services firm Hexaware on Monday reported 10 per cent fall in its consolidated net profit at Rs 79.27 crore for the quarter ended March 31, 2013.

The Mumbai-based firm had posted net profit of Rs 88.36 crore in the year-ago period, Hexaware said in a BSE filing.

Its consolidated income rose by 16 per cent to Rs 507.68 crore in the January-March quarter of 2013, from Rs 438.29 crore in the same quarter of 2012.

For the entire 2012 — the firm follows January-December fiscal — Hexaware had a net profit of Rs 327.64 crore, and revenue of Rs 1,948.17 crore.

The company said it expects revenue for April-June 2013 to be in the range of $94-96 million (about Rs 522 crore).

“Revenue for Q2 2013 is likely to be in the range of $94-96 million. A quarter-on-quarter sequential revenue growth in USD terms of 0-2 per cent,” it added.

During the January-March quarter, the firm added 11 clients across all its key focus areas taking the total number of clients to 216.

One client each was added in the banking and financial services (BFS) domain and travel and transportation vertical and two were added in healthcare and insurance (H&I) space.

Besides, six clients are in enterprise solutions, 1 in quality assurance & testing services (QATS) and 2 clients in business process outsourcing (BPO) space.

“Of the 11 clients added in Q1 2013, 5 customers are based in Americas, 2 in Europe and 4 in Asia Pacific (APAC) region,” it said.

The number of clients with annual revenues in excess of $20 million remained steady at 3, while five clients are in the $10-20 million space, 7 clients in the $5-10 million, 40 in the $1-5 million category and 55 clients are in $1 million plus category, it added.

On the revenue breakup in terms of geographies, 66.8 per cent of revenues originated from Americas, 26.3 per cent from Europe and the remaining 6.9 per cent from the Asia Pacific region.

Hexaware signed a deal with revenue estimated at $30 million (about Rs 163 crore), with an existing Fortune 500 client, headquartered in the US. The firm has been associated with this multi-billion corporation for seven years and this contract extends the association by another three years.

Cash and cash equivalents at the end of March 2013 rose to $104.3 million (Rs 566 crore), up by Rs 119 crore from Rs 447 crore at the end of December 2012.

The global headcount was 8,670 by the end of March 2013.

Hexaware inaugurated its third global delivery centre in Mexico. This expansion will allow it to hire 85 IT engineers in the coming months taking the total employee count to 385.


How to Evaluate High Availability Options for Virtualized IT Environments

April 30th, 2013

As virtualization puts more application eggs into fewer server baskets, design principles such as high availability require more attention.

Consultants and IT managers working in the virtualization field say enterprises take a variety of approaches to keeping their apps online. Many use high availability software associated with the widely used VMware hypervisor. Various forms of clustering also aim to minimize downtime. Efforts to boost the reliability of physical hardware are also underway.outsourcing7

The high availability and fault tolerance revivals stem from a couple of factors, among them the greater concentration of applications on consolidated servers. “If you add enough non-mission critical application to the same server, it makes it mission critical,” says Nigel Dessau, chief marketing officer at Stratus.

Overall, continuous availability has become much more important in the cloud era compared with the days of client/server, Dessau contends. Back then, fat clients shared more of the workload, so users could keep working on their PCs in the event of a server crash. Apps that couldn’t afford downtime were backed by fault tolerant servers, which Dessau says only represented perhaps 5 percent of the market.

News: Stratus Acquires Competing HA Software Provider Marathon

The market reach of availability technology may grow amid virtualization and cloud computing, however. “In the cloud world, you have thin clients or even mobile devices,” Dessau says. “In this case, when the server is not available, [users] become severely limited as to what they can do. The server’s availability is much more essential.”

Kris Lamberth, chief technology officer at Paranet Solutions, a Dallas-based CRM and IT outsourcing company that offers virtualization services, notes that customers are becoming increasingly aware of the cost of downtime. “I think everybody is looking for high availability today just because everyone is so dependent on IT,” he says.

An enterprise’s actual investment in availability ultimately depends on the importance of a given application-and how eager the firm is to pay for uptime.

VMware High Availability Approach Focuses on Clusters

Availability options for virtualized customers often start at the hypervisor level. The VMware vSphere High Availability feature, for example, checks the health of virtual machines and detects problems.

If an operating system failure is detected, VMware HA automatically restarts the virtual machine. If a virtual machine’s underlying physical server fails, VMware restarts the application on another server. (A cluster of vSphere ESXi hosts makes that failover possible.)

Milton Lin, master cloud specialist at Force 3, a Crofton, Md.-based systems integrator, says VMware tends to be the hypervisor of choice among Force 3clients due to its simple availability approach. “For any VMware administrator or environment with VMware already, VMware HA is easy.”

Lin says VMware HA calls for an n+1 design to ensure sufficient resources for failover or server maintenance. A two-host cluster, for instance, should not exceed the CPU and memory performance of one host. In that case, 50 percent of cluster resources would be reserved for failover.

A cluster with more hosts offers higher utilization and diminishes the impact of a host failing, Lin notes. A four-host cluster, for instance, would reserve 25 percent of its resources for failover.

Christian Teeft, vice president of engineering at Latisys, said solutions such as VMware HA are a good fit for customers who seek availability but can tolerate a brief interruption while workloads are reloaded and started on another server. Latisys, a multi-tenant data center company, builds availability into its solutions.

Teeft said some customers-those with big data analytics applications, for example-may run hundreds of virtual machines for number crunching, and the loss of a node in the cluster won’t severely impact overall performance. For organizations with that profile, Latisys builds data center solutions around VMware HA and the Hewlett-Packard Converged Infrastructure platform, Teeft notes.

SQL Server Clusters Provide More Uptime, More to Manage

Customers, however, can move beyond VMware HA for more protection. Lin suggests that customers could look into an additional cluster for a specific application such as SQL Server.

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A cluster, in this scenario, would consist of an active node running a SQL Server database and a passive node on standby. The passive node starts SQL Server when the active node fails. Customers can use Microsoft clustering technology or third-party software such as Vision Solutions’ Double-Take Availability, Lin says.

A cluster specific to SQL Server will provide more uptime than what VMware offers out of the box, Lin says. Clusters of this kind are more tightly integrated with the application itself, he adds, whereas VMware HA “has no idea what application you’re running.”

The drawbacks to this option, Lin says, include the creation of another cluster that customers must manage. If a third-party product is used, there’s also the complexity of an additional piece of software.

Several other vendors have high availability clustering offerings. These include Dell, Enhance Technology, Hewlett-Packard, IBM, Intel and Proxmox.


Secure-24 Launches Backup as a Service

April 30th, 2013

Security-conscious enterprises are cool to the cloud backup market. One IT services provider is looking to to thaw things out.

Ahead of EMC World 2013, Southfield, Mich.-based Secure-24, a provider of hosting, cloud and managed IT services for mid-market and enterprise customers, took the wraps off a new Backup-as-a-Service (BaaS) offering that leverages EMC storage infrastructure and its own data center facilities for high-security data protection. The company specializes in SAP and Oracle hosting, as well as IT outsourcing services.outsourcing6

Secure-24 BaaS employs hardware and software from EMC, including Avamar, Networker and Data Domain deduplication storage systems. The firm is a certified Gold EMC Velocity Service Provider and earned EMC’s Journey to the Cloud Award last year.

For its part, Secure-24 data security, high availability and compliance services.

The company’s ITIL-compliant (Information Technology Infrastructure Library) secure data protection services are anchored by data centers in Michigan, Arizona and Nevada. Each facility houses “an EMC backup architecture with over 1.8 Petabytes of protected data deployed,” stated the company.

Taken altogether, Secure-24 eliminates the security and manageability concerns that are preventing enterprise IT departments from taking the cloud backup plunge.

Keith Bankston, Backup Services Manager for Secure-24, notes that his company’s solution addresses the roadblocks to suitably implementing backup operations for critical data. “Many organizations face challenges in justifying the cost to have all critical applications and data backed up properly. A BaaS solution must integrate into existing infrastructure, and provide a single management interface for all administrators,” he said.

Secure-24 solves all that. “Enterprise-level backup and restore requires a number of critical procedures. We provide our clients with a solution to reduce the costly risks of information loss without the high upfront investment,” said Bankston.

Secure-24 joins a growing number of cloud backup providers hoping to lure big companies with demanding data security and compliance requirements.

MezeoCloud introduced a number of updates to its enterprise cloud storage platform in March, including Amazon S3 and OpenStack storage connectors with encryption support. NetApp and Equinix also teamed up last month to provide businesses with secure, Amazon Web Services-based cloud storage. In December, InfraScale boasted that it takes a “three-tiered encryption” approach for its FileLocker cloud storage platform.


Gartner Says Worldwide IT Spending on Pace to Reach $3.8 Trillion in 2013

April 30th, 2013

Worldwide IT spending is projected to total $3.8 trillion in 2013, a 4.1 percent increase from 2012 spending of $3.6 trillion, according to the latest forecast by Gartner, Inc. Currency effects are less pronounced this quarter with growth in constant dollars forecast at 4 percent for 2013. outsourcing5

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.

“Although the United States did avoid the fiscal cliff, the subsequent sequestration, compounded by the rise of Cyprus’ debt burden, seems to have netted out any benefit, and the fragile business and consumer sentiment throughout much of the world continues,” said Richard Gordon, managing vice president at Gartner. “However, the new shocks are expected to be short-lived, and while they may cause some pauses in discretionary spending along the way, strategic IT initiatives will continue.”

Worldwide devices spending (which includes PCs, tablets, mobile phones and printers) is forecast to reach $718 billion in 2013, up 7.9 percent from 2012 (see Table 1). Despite flat spending on PCs and a modest decline in spending on printers, a short-term boost to spending on premium mobile phones has driven an upward revision in the devices sector growth for 2013 from Gartner’s previous forecast of 6.3 percent.

“The global steady growth rates are a calm ocean that hides turbulent currents beneath,” said John Lovelock, research vice president at Gartner. “The Nexus of Forces — social, mobile, cloud and information — are reshaping spending patterns across all of the IT sectors that Gartner forecasts. Consumers and enterprises will continue to purchase a mix of IT products and services; nothing is going away completely. However, the ratio of this mix is changing dramatically and there are clear winners and losers over the next three to five years, as we see more of a transition from PCs to mobile phones, from servers to storage, from licensed software to cloud, or the shift in voice and data connections from fixed to mobile.”

The outlook for 2013 for data center systems spending is forecast to grow 3.7 percent in 2013, down 0.7 percent from Gartner’s previous forecast. This reduction is largely due to cuts to the near-term forecast for spending on external storage and the enterprise in the economically troubled EMEA region.

Worldwide enterprise software spending is forecast to total $297 billion in 2013, a 6.4 percent increase from 2012. Although the growth for this segment remains unchanged from Gartner’s previous forecast, this belies significant changes at a market level, as stronger growth expectations for database management systems (DBMS), data integration tools and supply chain management compensate for lower growth expectations for IT operations management and operating systems software.

While the outlook for IT services remains relatively unchanged since last quarter, continued hesitation among buyers is fostering hypercompetition and cost pressure in mature IT outsourcing (ITO) segments and reallocation of budget away from new projects in consulting and implementation.

The global telecom services market continues to be the largest IT spending market and will remain roughly flat over the new several years, with declining spending on voice services counterbalanced by strong growth in spending on mobile data services.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data upon which to base its forecast. The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges.


SMEs lose $24b annually to involuntary IT management

April 30th, 2013

Small businesses are losing $24 billion and 300 hours annually in business productivity to involuntary IT management, according to a new survey conducted by Microsoft and AMI Partners.

The findings were drawn from a survey of 538 small businesses across Australia, Brazil, Chile, India and the United States, which examined the impact of non-IT professionals managing technology in small businesses.outsourcing4

The survey found that approximately 3.8 million businesses used non-IT employees to manage internal IT processes, costing billions of dollars in lost productivity. At the same time, such businesses also spent US$83 billion on IT and communications.
While firms globally indicated a proportion of involuntary IT managers were confident in their technical skills, 30 per cent felt that IT management was a “nuisance” and 26 per cent felt they were not qualified to manage IT. Moreover, six in 10 indicated a desire to simplify their company’s technology solutions to allay the difficulty of day-to-day IT management.

According to CEO of AMI Partners, Andy Bose, these results stem from a lack of funds for formal IT support.

“Many small businesses don’t have the budget for formal IT support, so they rely on the company’s most tech-savvy individual to manage their technology. Relying on an involuntary IT manager can have an adverse impact on small business productivity, which can negatively affect revenue and translates into a very high opportunity cost.”

Small businesses can alleviate the burden on their involuntary IT managers by using cloud computing or outsourcing their IT requirements.


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