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Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect. Thanks for joining this sponsored podcast discussion on the impact that rapidly evolving customer, citizen, and user expectations are having on the enterprise.
We’ll be looking at how technology advancements are making it possible to drive innovation to meet these new demands for instant gratification.
There are three megatrends shaping the next generation of successful businesses and governments. We're talking about pervasive mobile applications, highly responsive cloud-computing models, and knowledge-adept social collaboration.
Indeed, by the year 2020, The Economist newspaper predicts there will be two trillion devices connected to the Internet. And taking a look at where we are right now, McKinsey Quarterly reported in August that in 2010 some four billion people have cell phones, and 450 million have access to a full web experience.
Moreover, Jupiter Research reports that by 2014 there will be 130 million enterprise users involved with mobile cloud activities. Not only is access pervasive, but the amount of information available is also exploding. The Economist reports that in 2005 mankind created 150 exabytes of digital data … and in 2010 we will create fully eight times more data.
As these trends literally rearrange business ecosystems, a gap will surely emerge between the companies that master change -- and exploit enabling technologies -- and those that fall ever further behind.
For those that do step up to the challenge -- expect a relentless emphasis on rapidly recurring innovation to meet dynamic customer and citizen demands.
We're here to explore these issues, and to better understand how HP is working to help customers make headway, so that the next few years bring about a generational opportunity -- and not a downward complexity spiral.
Here now to discuss HP’s vision and game plan for success on attaining and mastery of the Instant-On Enterprise is Dave Shirk, Senior Vice President of Worldwide Marketing at HP Enterprise Business.
Dave Shirk: Thank you, Dana. Happy to be here.
Gardner: I mentioned a few trends, and clearly we're into a stage here beyond business as usual. There are clearly some changes. How do you see these trends? Are there several that you're focusing on now that you think really represent an opportunity, or even something that needs to be managed in terms of risk?
Shift in the marketplace
Shirk: We're seeing a lot of shift going on in the marketplace right now. When we look at where consumers are driving business or where citizens are driving government, it's fundamentally changing the way they operate. We've seen three core things come out, similar to some of the pieces that you talked about.
One of those is just the business model. The business models are all starting to change the way in which people approach markets across the globe. That's having to really rethink the ways in which they've approached them versus traditional methods.
The second thing we see is this whole shift in mobile computing meeting cloud computing and the enterprise trying to figure out exactly how to take best advantage of that to create this competitive advantage. Then, the overall demographic piece weighs into that.
We've seen the rise of the millennials, as they're being referred to. All of these things are forcing business and government to stop and say, "You know what, if we're going to grow or we're going to create a service differentiation, we're really going to need to do things differently and we're going to have to do it way faster than we've ever done it before."
This is probably best represented in the words of Professor Gary Hamel, who is the foremost business visionary person out there in the marketplace. In his book, Future of Management, he described it as "whiplash change."
That's very much the case when I speak with our clients both on the business side and the government side. That's exactly what they're sitting there and thinking and working through right now. These changes are at a pace they’ve never seen before as they address them and try to drive these into their business or government environments.
Gardner: And, the role of IT in this needs to be more than simply a speed bump -- something that slows things down. IT needs to shift into more of a high-gear cooperative partnership, accelerating impact on the business. So, how does technology fit into this?
Shirk: We look at the technology piece of it and say that you really can't get there any other way -- the pace of it, the speed of it, and some of the complexity associated with it. For a long time, business has tried to use labor as an arbitrage to try to work their way through this and just throw bodies at it. That's quickly dissipating. The speed and the connectedness that we see, and the confidence level that all of these types of services require make it no longer possible to go through that.
What we see is IT completely embedded in the business. Over the next couple of years, that's going to continue to be the trend and the strategy that will play out in the way in which business and government work this. Ultimately, that's going to be the differentiator that drives an ability not only to serve these constituencies but to out-serve them, and that's going to be the name of the game.
Gardner: This gets us to that element of the workforce, younger folks and, in particular, folks in emerging markets, where they've always been more focused on mobile devices than perhaps a traditional PC. They're the ones that I suppose are driving this change, because to them it’s not changing, it's their norm.
Part of the workforce
Shirk: It's absolutely the case, if you look around the world at the quantity of graduates, for example. According to the Society for Engineers, you now have over 800,000 graduates in China, over 300,000 graduates in India, 100,000 some in Japan, etc. It's over the last 10 to 12 years that each of those graduation rates has occurred. They are part of the workforce now.
When they went through that process, they were always connected and they always were involved in a social network-based environment. They have a level of their lifestyle that is all tied to this always-connected environment. When you think about the ubiquitous computing that that has brought to them, as they enter the workforce, they are looking at things a lot differently than ever before.
They bring new ideas. They bring new ways to that. They're looking for businesses that will support that kind of methodology and structure. They're looking for ways in which technology is used in a whole slew of new avenues to innovate and drive new business models and to drive new products and offerings in the marketplace. They want to be a part of that. So, when we think about that Gen X group that's out there, we see them driving an enormous part of this change.
The last statistic I saw was that they are now over 50 percent of the workforce. The analogy that's always used is that, to them, being connected and always involved in some type of networking-based collaboration or information sharing of some sort is about the same as it is for you and me to pick up our remote controls and turn on our television sets. That's already having a very profound effect on how business and government are changing and the expectations that are out there in the marketplace.
Gardner: Right. It's the expectations of the younger folks, and we are not talking about kids, but basically people under 35. They’ve been developed through their careers with an always-on mentality, and so their expectations are for their governments and their providers of services and products, even their employers, to be much quicker and more direct. If they can't find it there, they know that they can go somewhere else. So, the expectation is for this always-on instant gratification. Is that part of what got you into this notion of an Instant-On Enterprise?
Shirk: Yeah, it's a big part of it. The always on is very important in the backdrop that’s there. As you pointed out, it's this immediate or instant gratification. If I can't get what I want in the following way, I’ll find the business or government environment where I can. While the government piece maybe a bit harder to change, the business piece isn't, and so the competitive pressure to serve this audience, both as the consumer and also as employees, is a big part of that shift.
We call that the "Now Problem." They want this, they want it done now, and they want it to work a certain way. We see technology as the cornerstone to being able to solve some of these trends and some of these challenges.
Gardner: If you’re an enterprise or a government, you’re large, and a lot of what you have in place has been put there over a period of 20 or maybe 30 years, or more. There's a disconnect between the requirements that you had to rely on and these different expectations from your workforce, consumers, and a dynamic, changing business environment. How do we convert to Instant-On? How do we recognize that business as usual, IT as usual, isn't quite up to the task?
Shirk: First, it starts with a desire to change and to drive innovation in a different way. We sit and we think about the fundamental change in this. We talked for years that the business was focused on business processes and business process reengineering. While that’s still very important, it isn't going to go away any time soon.
It's becoming obvious that the bigger driver and the more significant trend is the information process, understanding the segments of business or government that need to be addressed. What their needs are, what they want, what they want to talk about, the ways in which they want to interact is all part of this change that’s taking place.
Closing the gap
So, as we start to pull back and step back from this, we look at that and we look at this vision that we have for the Instant-On Enterprise and how we’re enabling end-users to become a part of that, how we’re enabling businesses and governments to provide that type of capability. It really is about closing the gap between what IT can provide and what the business needs to be able to serve each of those audiences.
It's a big part of the solution capability and the path that we’ve been trying to go down in the marketplace. What we’ve launched with this vision is to put the foundations in place to make that possible and take a journey with our clients both from the business side and government side and help them move down that particular path, find ways to navigate these challenges and these trends, and to out-serve and to over-serve all the audiences that they need to meet the needs of.
Gardner: Dave, when I was looking into the Instant-On Enterprise, looking at some research for this discussion, I saw that you’re trying to do enablement around innovation, agility, optimization, and then managing risk. It struck me that this is very ambitious, especially if you try to do those all at once. Do we have any choice? Is this something that we have as a "nice to have" or is this really challenging and daunting, but inevitable?
Shirk: You're right. It is inevitable. Different businesses and governments will have, at different times, one of these four elements be more important or more significant to them at different points. All of them share the innovation requirement. We see that in all things.
A lot of folks confuse innovation with ideation. Our view is that the innovation has to take place throughout that information process. It doesn’t matter whether it happens back at the data center or at every touch point. Innovation has to take place throughout for the business to meet the needs of those segments I’ve referred to earlier -- how it services it, how it conducts itself, and ultimately how it meets our needs or exceeds the needs of the audiences.
Agility, optimization, and risk all vary in and out with innovation in terms of their need and their level of importance. It's hard today to hide from risk. Fundamentally, we can't eliminate it, but are we in a position that we can manage it. Can we use it to our advantage to differentiate ourselves and understand how to navigate within security threats, the regulations, and the data and information sources that are coming through?
Agility really is about instant expectations, and can we turn things on and off, instead of just setting them up for a rainy day and hoping that they will be used. A big part of technology’s trouble in the past was that we created all of these things and we never had a plan for ending their lifecycle or turning them down slightly, so that we could turn up other activities or other possibilities in an instant-on environment and an instant-on enterprise. A core part of the vision that we see is being able to drive that agility to meet those changing business needs.
Gardner: It sounds very rational and necessary, but for those folks trying to really grasp this vision, are there some examples? Are there some poster-children organizations of which you can say, "They’re doing it. They’re gaining the results that we expect and now others can follow their lead." Do you have any bellwethers for us?
Shirk: There are a few examples. I’ve had interactions with a number of CIOs, CTOs, and CEOs. One of those that comes to mind very quickly is the insurance industry. There is a particular insurance company that’s been out there for years, and years, and years.
They have been a bedrock. It’s a household name. You’d look at them and say that they totally built the business and the business model on a dealer or agent network and that is the interaction point between the consumer and ultimately their products and services.
They’ve been cranking along very successfully for years. All of a sudden, they met with a competitive threat, where another company has come along and has almost disintermediated the agent channel with an entire set of online and mobile-based applications that interacts right to the consumer, when the consumer wants and how they want.
So, this company finds itself in a situation as an insurance provider, where it literally is reinventing the way in which it plays in that industry by using technology to shift from that traditional model to a hybrid approach of both the agent being important and this whole set of self-service applications. That’s an example where the fundamental competitive threat is there.
Another example where we’ve had some very interesting success is a large company that provides warranty services. Again, it's another household name. They have an offering in which they traditionally provided warranty services as a third-party provider to a lot of other companies in the marketplace.
One of the things that they wanted to do was take that traditional process, which is very phone- and service-center based, and find a way to move the claims processing and that model to a whole new set of applications online and drive that environment forward. As a result, they watched the registrations that they had skyrocket by 500 percent. The online product registrations -- which is always the Holy Grail for up-sell and cross-sell for any company -- they watched that go from a 15 percent level to a 99 percent level.
As a result of those changes and using technology to meet the needs of the end-user community that they were trying to serve, they’ve put themselves in a situation now where a lot more business has come their way from a number of companies that use them to fulfill their warranty services.
It's another example where we’ve seen that kind of change take place pretty prolifically in the marketplace.
Gardner: Again, while I was researching your Instant-On Enterprise initiative, you expect that IT needs to become more flexible, secure with added speed to what they do, leveraging automation, and providing not just function but the insight to their constituents, to their business brethren.
But, at the same time, it also strikes me that IT is operating with millstones around their necks, as they try to adapt and take on these more fleet characteristics. There are aging applications. There are unknown threats within the existing infrastructure. They are looking at development and deployment strategies and processes that are dated, perhaps linear, perhaps sequential, and with this rigid infrastructure, not to mention the fact that many of them are fighting fires around data explosion and trying to manage helpdesk and other types of remedial activity.
So, how do we do this? How do we change the wings in the airplane while we're flying, without crashing?
Shirk: We're faced with this all the time. That's partially why I say that when HP looks at the Instant-On Enterprise, the enablement of that is really a journey, and we’ve got to figure out what pieces make the most sense. There are some things that are much easier to focus on first and then, over time, to gain more and more of an Instant-On nature.
Critical success factors
When you mentioned flexibility, security, speed, automation, and insight, those absolutely are attributes that we look for. We see them as the critical success factors in the way in which every part of the environment that IT leverages, drives, and embeds in the business has to come forward.
And yet, as you point out, everybody is stuck in this mode of an enormous legacy that they have to deal with, and that gets in the way of being able to provide some of these new capabilities.
The challenge in all of these, as I said, is where you start first. Our view is that we work with our clients and figure out ways that they can, as we say, shift that equation. How do you shift from 70 percent of that equation being focused on operational management, and 30 percent, if you are lucky, being spent on new and innovation-based capabilities to help or assist the business and its growth versus shifting it the other way? How do you get to 30 percent operational mode, and move forward with 70 percent focused on the business?
We help our clients work their way through that with a series of workshops that we do to get in and investigate. We ask a series of questions, do a series of exploratory-based activities that help prioritize where we think the quickest return on investment is, because all these require some level of return to feed the next one and then the next one.
We’ve spent a lot of time and gotten a lot of expertise over the years trying to figure out the best ways to do that and address these albatrosses that are keeping IT from being able to deal with the needs of the business. In the Instant-On Enterprise journey, that's a big part of the set of steps that we have to work through and work with our clients to make sure that they understand where to prioritize.
Gardner: This also strikes me as a rather fresh perspective, particularly for a technology provider like HP. Many times we hear, "Here's what the technology is capable of and here is what you can do with it." But, you seem to be coming from the perspective of, "Here’s what the customers need. Let's re-engineer and back up from that."
It's sort of a fresh perspective. You've been at HP since April and you’ve had a chance to look deeply into the company, back up, and rearrange some thinking. Perhaps you could walk me through that process. How did you get to this point of Instant-On Enterprise, vis-à-vis customer needs?
Shirk: A lot of this has to do with just spending time with our clients and understanding their viewpoint. In the first few months that I have been here, one of the things that I've learned is that HP, as a company, has this incredible breath and depth of portfolio.
We're in a unique position, because we're the only company in the marketplace that has a full suite of consumer products, and yet we stretch all the way back through to the data center. All the capability, all the offerings, that are in between, all the services that are necessary to address each of those pieces, are contained inside the portfolio capability that HP has of hardware, software, and services.
Changing business models
When I spend time with clients and listen to them, a big part of what they're asking for is, "We’ve got these pressures. We're seeing the business models change and we're experimenting with some things. We're seeing the mobile and the cloud computing pieces coming at us like a freight train. At the same time, we're seeing the demographic shift both on the end-user consumer side and on our employee side. We need strategic partners to help us with this. How do we navigate this? What is the way in which we should do that? HP, do you have a point of view?"
So, as we stepped back and looked at where we would want to go with this, we thought that a big part of this is coming to the marketplace and sharing a strategy and a vision for where we would like the clients that we work with to end up and what that destination looks like and how we're going to get them there.
We looked at this and said, "How do we take the best combination of that breadth of portfolio and bring those together in a set of solutions to best address what we are hearing over-and-over from some of the research that we’ve done and listening that we’ve done with our clients?"
They need to figure out how to modernize their applications. We want to make sure that we are there and we’ve got a set of solutions for that. They’ve got huge data-center issues in terms of how they're going to transform their data centers and deal with more virtualization-based techniques and capabilities and bring networking and storage and compute power together in some fashion.
They’ve got this issue of enterprise security. They need to figure out how to secure the enterprise. I don’t mean desktops, but all points, all touch points of the enterprise -- how they build applications, how this information is accessed inside and outside of the organization, and then fundamentally optimizing that information, the ways in which you store it, the way in which you deliver it, the way in which you print it for that matter, all those pieces.
Then, they need to underpin that by the best way to figure out how to deliver it. Do we do it for them? Do they build it themselves with our architecture, and our capability set, and our consulting expertise? What combination of ways makes the most sense to set that up?
I looked at all of that and listened to the clients. There are some really rich stories that were shared with me. As we pulled all the stuff together, this is the underpinning of that capability, trying to push HP’s leadership in the marketplace through all the work that it’s been doing and then set this vision and destination where we really want to try to take our clients.
Gardner: Let’s come back in more detail to some of the news that you’ve made around the Instant-On Enterprise. You’re talking about hybrid delivery benefits. I wonder if we could just briefly get into those. What does that bring to the table? How would that help an organization start moving and transitioning to gain the attributes that we’ve been describing today?
Shirk: Hybrid delivery for us is our answer to the multiple ways in which a customer or client has to go through the process of building or delivering on these various technology services to their enterprise or their government.
There’s an enormous amount of talk about cloud in the marketplace today. HP has been at the forefront of that, but we have a little different position. We think it’s unique and we think we're the only ones out there that are really positioned to do this, which is the concept of hybrid IT, where you’ve got a mix. You’ve got a mix of traditional on-premises-based capabilities, but then you figure out what private cloud or public cloud-based capabilities best serve your business on a global basis.
HP comes in and, unlike other companies that try to force you into a one-size-fits-all structure, we sit down with the client. Our unique IP in this area is that we have an incredible depth of intellectual capital in this particular area, which is helping the clients figure out the best balance or mix of the delivery methods.
We can help them build it. They can host it or we can host it for them. We can provide those services from our public cloud-based capabilities or from our private cloud based capabilities. We really don’t care, if that blend changes over time. That’s the beauty to the journey to this Instant-On Enterprise.
Our data says that most customers still start with a small private cloud implementation to really understand the value of the cloud and demystify it. We’ve said that there is going to be something after cloud. We don’t know what that level or that style of computing is going to be, but our architecture is built such that we’ll be ready for that. For our clients, we’ll help navigate them through each of these pieces, and that’s the important thing for us.
Gardner: For those interested in pursuing more and understanding about Instant-On and the HP approach to these problems, is there an HP enablement process? Is there a way to get started with some resources?
Shirk: All of the above. There are a number of materials that we’ve made available to help begin the education process for folks who are interested in understanding a bit more about the Instant-On Enterprise and how to take or begin that journey. That’s one piece.
The other piece is that we have a whole series of workshops globally that our teams are set up to do, everything from a small couple-of-hour based interaction to a full suite of in-depth analysis and consulting engagements to work with a client. But, we usually recommend that one of our newly announced services would be the starting point.
We’ve got our new HP Hybrid Delivery Strategy Service, which is a place for a client to start, get a basic orientation, sit down and understand kind of where we think they might consider beginning that journey. So that, along with a number of other capabilities that we have to help them through these various workshops, I think is really the best place for them to start.
Gardner: Well, we’ve been talking about how some of the mega-trends of the day, cloud, mobile, social, Gen X have been buffeting organizations and how the speed of business is accelerating, and IT needs to play a bigger role in keeping up with the speed and isn't slowing the organization down. We’ve been talking about how HP has defined the Instant-On Enterprise as the means to start ameliorating these problems and setting up organizations for opportunity, rather than disappointment.
We’ve been discussing this here today with Dave Shirk. He is the Senior Vice President of Worldwide Marketing at HP Enterprise Business. Thanks for joining us, Dave.
Shirk: I appreciate it, Dana. Thank you for the time.
Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. You’ve been listening to a sponsored BriefingsDirect podcast. Thanks for listening, and come back next time.
Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP. Learn more.
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