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February 5, 2015updated 21 Oct 2016 5:35pm

Who trusts IT to deliver business value?

The path to the cloud is strewn with good (and bad) intentions. Here Hitachi Data Systems’ UK MD Richard Gadd and EMEA CTO Bob Plumridge talk business with CBR’s Ambrose McNevin.

By Sam

IT is not yet trusted to deliver business value and must continually prove itself worthy.

The end user customer continues to have over-riding concerns and priorities which haven’t changed radically. These are reducing costs, building business value and ensuring risk and compliance adherence.

But what has changed is that these requirements are set in a technology landscape which is fundamentally changing at an alarming rate of knots.

In the old world it was a case of IT telling the business what it could do and to which the business had no choice to say: ‘OK’.

Today it is the other way around and the business drives change to IT.

"Now we’re moving to what we call the third platform. This consists of millions of users accessing billions of records. HDS customers are faced with fundamentally different models which are creating new challenges. That means we’re changing how we go to market and how we address the client."

The four paragraphs above go some way to encapsulating the market as seen by Richard Gadd, UK MD at HDS (also see Box One).

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The description is of a roadmap on which are many curves.

As Gadd sees it UK companies continue to struggle and strive to grasp the size of the challenge involved in harvesting data driven business value.

Gadd accepts that we are low on the adoption curve of enterprises turning to their IT departments for fundamental change. Confidence levels in the rest of the business that IT can deliver business value must rise, he says.

Gadd says: "We’re at low end of curve. There is a recognition that IT will play an increasing role but there are shifts to be made in how organisations make the transition to IT based business value."

Data classification

Bob Plumridge, EMEA CTO at HDS, says: "One of the problems IT is facing revolves around being asked to collect and store huge volumes of data for long periods without understanding what the data is. So there is still a huge gap in the business in terms of the business classification of data. Businesses are looking at how they can classify data even before it gets to IT. This is a fundamental shift."

The driver for this is competitive advantage.

Gadd gives the example of the banks. "When a bank sees a competitive opportunity it wants to be first to market with new products. So if it is a ‘best case’ that a bank has a three month product development and delivery cycle and a ‘worst case’ of a six to nine month cycle – then this is simply not fast enough. Response times need to be down to weeks or days. And that means understanding how to get value from data. How existing data is analysed."

Changed approach to the market

HDS is undergoing a global sales transformation with its EVP of Global Sales Michael Cremen shaking up the organization and delivery of sales across the company.

Relationships between HDS and Systems Integrators have changed says Gadd. Where once the vendor was selling through or to SIs today it is selling alongside them.

"Look at some of other things we sell. In cloud infrastructure terms we are focused on the converged platform as a base layer for cloud infrastructure.
Organizations are today using Openstack for test and development. Indeed HDS is delivering internal cloud on Openstack. And the HDS unified compute platform can be delivered with Microsoft, VMware or SAP as a converged stack."

The rise of the web scale public cloud player has also fundamentally changed the market for traditional storage vendors.

"AWS is now one of our biggest competitors and at the same time we integrate with AWS with our content platform from which we can migrate directly to an AWS platform," Plumridge says.

In areas such as HDS storage management and infrastructure management, all have blueprinted service levels and HDS says it can go beyond that to also offer service levels such as support response times against the requirements of the application

"In the UK and EMEA 80% of our customer base looking at private cloud infrastructure, very few at public cloud and even fewer at hybrid right now. Adoption of private cloud is mostly driven by security concerns as it considered the most secure. But this is not a rip and replace tactic. Typically what we see is people moving existing infrastructure to a private cloud platform. The reasons for this are cost control and avoiding disruption to the business. We have yet to see organizations going from traditional IT today to cloud tomorrow. There are some very basic infrastructure steps. First virtualisation, then security, then a move to self service type models – part of the motivation is the ongoing shift away from capex to opex models offered by pay per use and self service and service level models.

Storage was once monolithic and storage vendors reflected this.

We’ve moved completely away from one size fits all. We are a long way from selling storage as technology without any interest in what you use it for, says Gadd.

The UK market

HDS has only one strong vertical market focus and then only in particular segments. In the public sector it says it is strong within health and education where it is heavily pushing its content platform.

For most other markets it is structured along account lines with the top 75 UK accounts assigned. "Our proposition plays best in large enterprises," says Gadd.

"Then the next focus layer is on the next 250 accounts. Those are firms that look like or could become large enterprises."

At the channel level alongside the already mentioned maturity within the SI space the focus is on loyal resellers who can offer scale and reach into new accounts and markets.

UK market prospects

Gadd says: "What we’re seeing is a change from cautious to organizations with an imperative to transform. We’re hoping we’ll see it continue. We’ll continue to see price erosion but we’re confident we’ll continue to take market share."

For the first time in a very long while companies are beginning to believe that through deeper analytics IT can help with business differentiation, identifying new markets and new product development and delivery. At the same time IT will improve productivity through mobility.

The biggest change when it comes to saving money through IT is through moving to the cloud and utility pricing

"One of the things we’re seeing is customers willingness to transfer risk to 3rd parties through IT operations and infrastructure outsourcing transformation.

They [Our customers] are looking to save and ultimately moving to cloud consumption models and utility pricing either through capacity on demand or pure utility delivered through managed services, SIs and capacity on demand."

"We’re creating a proposition around cloud, content and converged platforms – and model of which is convergence.

We talk a lot in metaphors. For us [and our customers] this is a hard turn left. Along with keeping on with the core infrastructure proposition is a software proposition, tier one, virtualised, automated and cloud ready."

Who is selling it? HDS describes itself as now selling above the line. The profile of the account manager is now of an individual who has deep understanding of customer requirements."

At a corporate scale the future for HDS is a far closer alignment with Hitachi Group –
The diversified engineering and technology parent group.

This means HDS believes it will increasingly play in the Internet of Things space and built on Hitachi’s industry vertical experience in healthcare and transport.

The competition will change, it says, getting closer to offerings from companies such as Siemens.

This will be delivered under the moniker of Social Innovation which its sees as a strategy alignment between patent and business division.

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