This is a transcription of the SiliconAngle.TV interview with Tony Pagliarulo on the first day of SAPphire 2011. interviewers, identified by initials, are John Furrier, founder of Silicon Angle, and david Vellante, co-founder of Wikibon.org.
JF: EMC is obviously a big customer of SAP. You are one of the more innovative operations I've seen, particularly you're drive to the cloud. Please talk about your journey to the private cloud.
TP: We've been on the journey for a long time. We set a target of 100% virtualization. Virtualization is key to getting into the private cloud. We're a huge believer in leveraging our core assets, and virtualization has let us look at and consolidate legacy applications like SAP. It also includes reporting with business objects, and we're virtualizing every tier in the stack.
But virtualization is only one step. Private cloud is all about enabling business & driving results. So once you get virtualized, you drive a lot of benefit – savings in hardware, labor, energy, etc. But the big value-add is accelerating our ability to enable the business, getting capabilities out there in shorter time-frames.
JF: Where are you at today with integration, & what are the top three core areas?
TP: Like lots of F100 companies, we have a lot of legacy. You can't just walk away from those, so the challenge is combining the value add of those legacy applications with new platforms. It is less of a challenge to move to a Vblock green-field platform with SAP or another appliatin, and that's what we've been doing. So anything net new gets virtualized. And we bought into Vblock in a big way. The value proposition in there is it's fully integrated. You buy a Vblock and you can put all your components on top of it.
We've been migrating those legacy applications to that private cloud. The key is integration. So we bought into the VMware Spring Framework – Spring Batch is a really big enabler that hasn't been discussed a lot. Paul Mauritz at EMCworld talked about the Cloud Foundry, and that's really about putting applications in the container hosted internally or externally, so the hybrid cloud option. But integration is key – sharing information seamlessly and securely is huge.
DV: So you're using Cloud Foundry and Spring? That's not legacy.
TP: We need it to knit everything together. We can't walk away from these legacy systems as quickly as we would like. The SAP journey, although we are going fast, is going to take us some time.
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Risk taking with new stuff
JF: You're taking all the new stuff in and playing with it. That's dangerous. Can you share with us?
TP: I've learned a lot. We've made some educated bets. Everything we do, even if it's bleeding edge, we put through a rigorous process, so we test the hell out of it. And we partner with EMC engineering, so a lot of prep work goes it. But there's always something unforeseen. So when you move a 16Tbyte, 20 million-transactions-per-day enterprise database, which we did, onto UCS virtualized, and no one else has done that, some things are going to pop up. So that's one example where we took some pretty significant risk. But it paid off in a huge way.
JF: How do you manage that risk?
TP: You always want to have a Plan B, a fallback plan. But in some cases those migrations don't allow for it. So having that top-down support from Joe Tucci and his team is number one. Two, working with the partners, whether it's SAP, Oracle, Cisco, or VMware. We want to say these are our goals, and they are ambitious. Nobody's done this. So do you guys want to partner with us & hold our hand along the way, and make investments? And they all have given us dedicated engineering support during the test process and after going live. So those are the ways you mitigate the risk.
DV: Many application heads don't want to virtualize. Performance is one area that obviously you must be concerned about. What did you see when you migrated that database?
TP: First we did a lot of performance tests. So we had a baseline of performance. Then we built out a full replica and did performance tests at 30X scale. And we saw results were really good. We were running on a 5-yr-old E25K Solaris platform with about 196 CPUs. With the Nahalen chip set, the new form factor with ECS, the clock speed, the memory footprint, it has been a giant step forward.
DV: This is an opportunity for customers on non-Intel and older Intel hardware to upgrade. That may be a best practice – make sure you get the hardware right. The benefits of vitualization seem to outweigh some of the drawbacks.
TP: It's hard to see drawbacks. If you do the licensing model right, you save money there. From a capital investment perspective, if I were to replace those two UX devices it would have been probably $10 million. Going to the X86 platform, about $2 million. So right there, capital outlay. Then the full TCO, the labor associated with managing it, carbon footprint, electrical consumption, data-center footprint, all less. So I haven't see much downside outside of the apprehension. IT folks are risk averse. It's crossing that chasm, we want to see proof-points out there.
Shifting the cost ratio
DV: Talk about the CIO's dilemma, the 70/30 thing where 70% of the investment goes into running the business and only 30% can go into growing the business. Do you think virtualization and cloud can change that?
TP: I think it's a key step in changing it. We're probably about 50/50 now. That's in the last 3 years. First moving to this virtualized platform, your unit cost goes down dramatically. Our capital targets haven't changed. So we're taking a greater percentage into new technologies to enable the business like SAP. And we have not changed the definitions. In fact we reduced our capital. Towards the end of 2008 with the greatest recession since the Depression we had a mandate to cut our budget by 20%. Virtualization was core to that. We developed business cases that said we could take off this much Capex by virualizaation.
One of the processes I didn't talk about earlier was what we call “sweep the floor”. At one point we had 800 “craplacations”. We rationalized the 800 down to 400, an then we virtualized 90% of the 400.
Mobile
JF: So what about mobile? Everybody's talking mobile – iPad, iPhone, getting the data out. Vitualization has been an enabler of new applications. So as you sweep the floor of the craplications and have more budget going into the new stuff, mobile's sexy, people can touch mobile. Mobile opens up a can of IT worms – security, privacy, vitualization of the desktop. How are you handling mobile and what have you learned?
TP: Right now I have my iPad running VDI, on VMview. We can actually run a lot of our applications off of that today. So the notion is we will provision a user experience wherever you are, based on your role you will pull down that secure container and have all the applications you need. It's device agnostic. Whatever platform you have – a tablet, a laptop, sitting in a kiosk somewhere at Starbucks, wherever it is. The notion is you will get your unique user experience. We are moving in that direction aggressively. I think we've got 5,000 virtual images out there now across EMC.
JF: How would you grade yourself? What inning are we in?
TP: I think we're in the 4th inning, at the inflection point. New applications are coming out. VMware is coming out with a Web-based solution, so no GUI at all. We're playing with that. I think there'll be a big step forward, and it will go fast.
And we have been enabling our content for mobile consumption. We have a lot of apps up on the Apple App Store, we port some of our in-house applications through our own mobile enterprise application platform. So mobility has lots of different variations. But to me ideally I would love to get out of the PC business. There's no upside, it's just painful.
SAP
DV: When you come to a show like this what are you looking for? And what do you think about what you are hearing from SAP?
TP: My objective is to come away with two or three ideas I an take back with me. So with SAP I'm most interested in roadmaps, so for mobility. When SAP bought Sybase, how are they going to bring those things together to really power application mobility. The old model has been either you build it on your own platform or you go with one of the carriers. So I'm really interested in seeing what SAP does with that.
The other thing is connecting with my peers. Despite the technology – and the technology has come a long way, at the end of the day whether you're moving to private cloud or implementing SAP, it's about business change and business transformation. And that's never easy. I always say my job would be easy if it weren't for the people.
HR Considerations
JF: What's the #1 people problem you're seeing out there? The world's changed significantly. Integrated skill sets are replacing the old siloed experts.
TP: One of my biggest challenges is getting my application architects to speak business lexicon. When I think of IT-as-a-Service, Infrastructure-as-a-Service, it's bits and bytes, but how do you expose IT in a way that the business can consume it? Because frankly we're competing with the Salesforce.coms, the Amazons, and we have to present our value proposition in the same way. So reskilling my organization on the front-end to do that is probably my biggest challenge.
JF: What do you look for when you are looking at the IT athlete?
TP: It depends. There are still skills that are hard to come by. A good SAP administrator is hard to come by.
Speaking of big data – the role of data architect – EMC's talking about data scientists but I think that's going to be an archane skill. But data architect – that's someone who understands the business context and understands business process. So I look for someone who understands business context as well as technical aptitude. It's more than a great Oracle application dba or that great SAP basis expert. We're more looking for the best available athlete.
DV: So what's on the To Do list? It sounds like you want to see some substantive product out of the combination of Sybase and SAP. That's something we've been waiting for.
TP: That's something I would like to see.
I'm interested in where Hana goes. Integrating EMC's strategy with big data with a Hana-like solution could be something powerful.
In memory, especially as it pertains to BI, is an attractive value proposition. Business Warehouse (BWA) is traditionally optimized around SAP and ECC. Most large companies have multiple sources of info, both structured & unstructured. Some you want a solution like a Greenplum that can aggregate that information. So I think some combination of Greenplum with maybe SAP's HANA for BI – it isn't there yet, but I'm hopeful.
I also own the enterprise data warehouses for EMC. People can get their heads around OLTP, and if it's not the best user experience and takes a little longer they know its complicated. But ultimately it's all about getting the information they need to make business decisions. So BI is a huge value add. So to me it is lots of iteration, heads-down development. To accelerate that, instead of spending two weeks writing a report to add a column, if we can expose that information to users, and we leverage between Greenplum and some type of SAP solution to go to BI self-service, that would be a great step forward.
DV: How far ahead do you think you are of the typical peer you talk to?
TP: On the maturity curve we're in the top 25%. But I talk to hundreds of customers. There are some who are right up on the maturity curve. But many are in the middle. I measure that in two ways. We talked about percent virtualized. Paul Ritz talked about mature companies being 40%-50%. We happen to be 85%. But then going beyond that, leveraging that in a strategic way, exposing that capability to drive results in an agile fashion. I think we're right up there.
JF: Are you playing with Hadoop? How does Isilon fit in?
TP: Greenplum is definitely in my space. We weren't a big customer of Isilon before we purchased them, so we're just looking at Isilon. We like the possibilities. Hadoop as well, we're just looking at it from an innovation perspective. Just playing with it.
DV: For your peers wanting to take this journey, what advice would you give them?
TP: First get the executive commitment. Two, have a strong business case & a good, detailed plan and ensure that plan allows for rigorous testing. Because even though we are bleeding edge we go through a rigorous life-cycle management process.