Best practice in datacentre transformation

At a recent Computer Weekly roundtable, in association with Oracle, IT directors discussed best practices for transforming the datacentre and the challenges of such a project. Lisa Kelly reports

At a recent Computer Weekly roundtable, in association with Oracle, IT directors discussed best practices for transforming the datacentre and the challenges of such a project. Lisa Kelly reports



Roundtable attendees included:


  • Keith Duncan, head of datacentre design and delivery at Telefonica O2
  • Bill Limond, CIO at the City of London Corporation
  • Adam Wallace-Scott, group IT disaster recovery manager at SABMiller
  • David Watts, vice president of hardware sales at Oracle UK
  • Manuel Restrepo, head of shared services centre at BNP Paribas
  • Jack Scard-Morgan, UK CIO at City broker ICAP
  • Deane Copson, global datacentre architect at Deloitte
  • Dafydd Hughes, head of vendor management Ð GHS, at oil giant BP
  • Guy Rudduck, vice-president of operations, datacentre services at Colt
  • David Rajan, Oracle technology director



The word "transformation" is on the lips of many IT leaders when discussing the datacentre, but how far are organisations along the road towards optimising their critical IT operations? IT directors met at a recent roundtable event hosted by Computer Weekly, in association with Oracle, to hear from their peers and learn from the best practices in use across the industry for transforming the datacentre and the challenges such a project presents.


There is a wide range in the levels of virtualisation implemented so far within organisations.

Keith Duncan, head of datacentre design and delivery at Telefonica O2, said the mobile network provider had virtualised 20% of servers, but no more yet because of "a high volume of legacy systems and a number of challenges embracing change".

"We don't have a specific target. It may be 40% in three or four years, but it will take time and we are being realistic," he said.

The main driver for more virtualisation is the business requirement for flexibility. "Cloud-based providers are also helping achieve agility," said Duncan.

Bill Limond, CIO at the City of London Corporation, said the local authority has achieved 80% virtualisation. "We are dealing with perpetual change, and virtualisation and cloud gives you lots of benefits. Local government is undergoing a period of change and that concentrates the mind."

Adam Wallace-Scott, group IT disaster recovery manager at SABMiller, said the brewer is moving away from one provider in the US and moving towards centralisation of datacentres in Europe where the firm is growing its footprint after making one major acquisition a year for the past four years.

"We are aligning closer to the business and trying to do things in a different way, which is taking us down the virtualisation path," he said.

David Watts, vice-president of hardware sales at Oracle UK, cited a survey by analyst Quocirca that suggested virtualisation is not as widespread as many believe, with only 11% of respondents undertaking an in-depth rationalisation, virtualisation and consolidation programme.

Into the cloud

Cloud computing - referred to as "the c-word" by several delegates - provoked a cautious response from the IT leaders due to concerns over data security, lack of control and cost.

"Cost of ownership is actually quite expensive - costs escalate, so we are rolling out an internal cloud, but don't underestimate the expense of cloud," said O2's Duncan.

Manuel Restrepo, head of shared services centre at BNP Paribas, said the financial services group is an early adopter of the cloud, but highlighted two concerns: how critical the information within the constraints of financial services is; and where you have dynamic change, how do you come back from the cloud into an in-house datacentre if needed?

"There is no clear definition or distinction about the way to come down from the cloud into a localised production environment - cost and savings are completely different," he said.

Jack Scard-Morgan, UK CIO at City broker ICAP, said the cloud still means different things to different people. "There are 20 different definitions of what cloud is and we have different comfort zones of what we are happy to put in the cloud, but we are all using some sort of software-as-a-service."

Limond said organisations need to see the opportunity in the cloud, not just the concerns. "In the context of change, the cloud has accelerated change and made the internal enterprise compete. Change is always there, but change has made us more agile. The c-word means big competition and opportunity," he said.

Deane Copson, global datacentre architect at Deloitte, said certain businesses have a model that fits cloud better than others. "If you factor cloud into change, we see it as a tool or delivery mechanism that you can use. For example, when a spike in capacity around Christmas means the additional cost of cloud for a month is cheaper than having to build."

Another challenge presented by the cloud is the implied breakdown of the traditional IT command and control structure, as users bypass the IT department to buy cloud-based services.

"Cloud allows people to take services on their corporate credit card. Is this good or bad?" asked Scard-Morgan.

Dafydd Hughes, head of vendor management - GHS, at oil giant BP, said: "Do your consumerisation stuff first, before you let someone muck around with corporate data. It doesn't seem right to let go of control with corporate data."

Limond said that up to 80% of people will use their own computing devices for work purposes in a year or two, but in the public sector the problem is more to do with government security mandates.

"It's not the devices, it's the data," he said. "There's always a tension between personal privacy and what's open. We need to provide security and control openness."

Scard-Morgan said the boundaries between corporate and personal IT are blurring. "We like people to have their own personal devices, but we sandbox what's corporate and what's personal. It's culture and data that's important, not the technology," he said.


Duncan said O2 has managed to consolidate sufficiently to close three datacentres, virtualising and consolidating into strategic sites.

"With two of the sites, we used the support of third parties and one we did ourselves. It was easier using our own experience as we have a number of people with intimate knowledge of the applications," he said.

Guy Rudduck, vice-president of operations, datacentre services at Colt, said infrastructure challenges were an issue when the hosting firm consolidated sites. "Infrastructure was an issue as we threw more high-energy and bandwidth equipment into sites not designed for that, so we had to retrofit."

Oracle technology director David Rajan said when Oracle consolidated its datacentres, the real opportunity came from focusing on the consolidation of data not just servers.

"Datacentre consolidation is enormously valuable - Oracle made a $1bn consolidation cost saving. But that was not just about servers, it was our focus on the consolidation of the data and processes that subsequently empowered our integration of new acquisitions," he said.

BP's Hughes said data is the reason to consolidate. "Cloud will fail as it causes data sprawl. The question of how you manage a data model that is spread over disparate systems is not fixed."

He added that one of the biggest barriers to datacentre consolidation is legacy equipment. He said a mainframe switching cost of $20m compared with a $4m annual running cost means there is little business case for change. "A four to five-year payback on that investment doesn't work," he said.

"We run one of the datacentres at nearly 90% capacity - others are 50-60% utilised. We balance the datacentre strategy with how dense we want to drive these things. We acquire and diversify all the time, and the IT is simple in terms of consolidation. The big issue is integrating [acquisitions'] business processes into BP," Hughes said.

Aligning datacentre transformation to business

Duncan was asked about the scale and approach to transformation at O2, and whether it was driven "bottom-up" or "top-down".

"When we set out on the journey it was a local initiative, and with the acquisition [of O2] by Telefonica we now have the challenge of global consolidation. Our approach is top-down with the introduction of consolidation and virtualisation technology," he said.

"A big thing was standardisation with defined standard templates for server build. If you choose from standard templates, it's quick. We don't promote bespoke and don't provide anything that's not in the service catalogue. We started with three templates but that has got bigger over time."

Duncan said his datacentre transformation saw better alignment to the business to create a model where compute power could be sold to business divisions over time, with depreciation handled accordingly. "We pulled in finance through creating a position of trust - over time they said, now we will allow you to buy ahead. We have centralised depreciation in finance. We don't recharge to the business - we recharge to projects."

Cultural change

Transformation of organisational culture is as important as transformation of the datacentre, said Duncan.

"Our experience is that support teams are aligned to technology and you have to get them to think about service and customers as people are very technology-focused," he said. "One of the biggest challenges is that people like the comfort of legacy infrastructure."

A major incentive was reducing time to market. "Instead of days and months, provisioning is down to hours," said Duncan.

Stakeholder engagement and change management is important, said Oracle's Watts. "Ignore it at your peril. If you build and tell people they must use it, it will not be well received. The consultative approach works best," he said.

"It's all about continuous change and how you support that in the best and most economical way possible. Information and data management is what it's all about," Limond said.



Case study: Telefonica O2's datacentre transformation

Keith Duncan, head of datacentre, design and delivery at Telefonica O2, has been overseeing datacentre transformation at the mobile operator for the past four years and has faced a number of challenges along the way.

"The biggest challenge was to close three sites. We are now on our fourth and knocking off one a year. Virtualisation and consolidation within a site is all very well, but closing non-strategic sites is where you get the benefit," he said.

Duncan still has a long way to go, tackling the "sprawling estate" consisting of 10 key sites with major datacentres, shared sites and 3,500 physical devices across key sites, as well as shops, and three petabytes of data, consisting of data records and customer data which is growing.

"In 2007 we realised datacentre resource constraints was the biggest challenge, with no place to put new equipment. Now around 20% of the estate is virtualised, but we still have a long way to go," said Duncan.

He said the recent massive data growth on the back of smartphones, with around a third of the population owning them, is a huge challenge for the mobile operator.

"The exponential increase in the volume of data must be balanced with the transformation processes," said Duncan.

Other issues include Telefonica's growth - organically and by acquisition - and the problem of integration into the overall operation of the organisation, along with obsolescence and the difficulty of switching off big number-crunching machines.

"More challenges we face are with operational expenditure - running a datacentre is expensive," said Duncan.

Datacentre transformation is crucial to solving the problem of growth being linear with costs. "More servers mean more costs and we are trying to break that. Virtualisation is a big opportunity for us," said Duncan.

He is also focusing on flexibility and speed. "Time to market is a key driver as we need to launch new services quickly," he said.

Duncan's approach when embarking on the transformation programme was to be bold in tackling the challenges and to focus on two key principles: server virtualisation first and then storage consolidation.

Bringing the finance department on board was fundamental. "The acknowledgement that finance was happy for us to build shared infrastructure ahead of demand and charge back on discreet projects was crucial," he said.

Duncan has four points for IT chiefs considering datacentre transformation:

  1. Be bold and confident. "We all live in a zero tolerance environment so pay close attention and be realistic in execution."
  2. Align datacentre transformation to the business programme. "This is a big one to take away. Rather than taking the technological approach, tack more to the business programme and projects and dovetail with them."
  3. "Take the business with you, get stakeholder investment and sell it to the business."
  4. Cultural change is very important. "It is not just about technology. Transformation of culture of the organisation is just as important as the introduction of new technology."


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