Tell us a bit about HDS’ Global Solutions business.
It’s all about the customer experience. We go from the design and implementation of a solution, to its ongoing support. It could be an on-premises offering, a managed service or a cloud service. We have a solutions engineering team, a delivery organisation, data centres and global operating centres in five locations for remote support. We can offer global technical support and there’s an on-site maintenance organisation too. But from a customer point of view we try not to delineate.
Do you exclusively offer services around HDS’ information management software or storage hardware?
It’s almost exclusively about bringing in our IP [intellectual property] or enabling our IP, yes.
How do you differ from other services organisations?
We do measurable gains assessments. We look at the measurable gain possible, the financial ROI. Then we have check-points and dashboards to see, ‘are we on time’? We track the metrics which customers find really useful, and in some cases we’re asked to contractually commit to certain savings.
Can you tell us a bit more about how this measurable gain approach works?
We do a storage economics study to find a baseline: for example how much is your data storage really costing you per Gigabyte per month? Then we’ll guarantee to cut that by 40%, for example. That becomes your new baseline. But we do this as a managed service, and so this isn’t something that you achieve months down the road – it’s 40% cheaper from day one. There’s no up-front investment – I don’t want people to have to spend money to save money – and you don’t pay up-front for hardware, software, maintenance or data migration. We’re moving it from capex to opex.
Doesn’t that impact on HDS’ revenue recognition?
It does, with opex everything stretches. It’s a different business model because we are recognising the investment over five years instead of up-front. You can do a $100m deal and it won’t show up on your accounts just yet, but you’ve built a really good annuity and you’ve locked competitors out for a number of years.
But typically you’re doing this on the customer’s premises rather than in the cloud?
We can do it in the cloud but most commonly it’s in your environment. It’s not outsourcing at all – it’s an alternative to public cloud. We started doing private cloud three years ago and it’s the fastest-growing business for us.
But surely I’m going to get even better economics from public cloud?
A lot of companies want to keep their data on-premise or they want a hybrid. This gives you many of the benefits of cloud – for example business units now have a simple portal when they need storage, they don’t need to raise a ticket and go through all of that hassle. You get benefits like rapid provisioning, improved pricing, flexibility. Many of the benefits of public cloud.
Do you see public cloud from the likes of Amazon and Google as competition?
I see it as a positive. Amazon and Google are forcing the industry to adapt. Our offerings are more tailored to the enterprise, but if someone wants to burst out to an Amazon they can do that using our adapter. It’s not an ‘either-or’. People can do both.
Cloud is here to stay. The ease-of-use, flexibility and so on are very compelling. So where people may have done disk-to-disk-to-tape, more and more are doing disk-to-disk-to cloud.
We also have something called HCP Anywhere, which is like Dropbox but for the enterprise. Some customers have concerns with Dropbox and the like, that they lose control of their information because there is no governance. With HCP Anywhere you can share and synch files, but restrict access to users or what they can do to the data.
What do you make of the Big Data hype?
I think its value is largely unknown if you don’t really know what you’re looking for. We think there’s Big Data today and Big Data tomorrow. When we talk about Big Data, there have been a number of use cases, and I think some of those really lack teeth. But to me analysing machine data, and increasingly all of the data that will be generated by sensors – what some are calling the ‘Internet of things’ – that’s going to be very powerful because it will help you deliver a better quality of service.
I also think cloud and big data will merge. A jumbo jet generates 2 Petabytes of machine data in 24 hours – do you really want that in your data centre? But if you could analyse it, it might help with predictive maintenance.
Do you have capabilities that compete with [machine data analytics firm] Splunk?
Some customers have come to us and asked us to build an alternative [to Splunk] and we’ve done that. Customers have used it for different things. Some use it for security, for fraud detection and intrusion detection; telcos have used it to detect and reduce network congestion in near real-time.
What do you call that offering?
The Hitachi Stream Data Platform, although we’ve not publicly announced that yet.
HDS recently announced a new Global Office of Technology and Planning (Global OTP). What’s that all about?
It’s a way of aligning our R&D properties across all of Hitachi. Instead of taking a product-out view, we’re trying to take market-in view. What should we be working on now and into the future? It’s about the cross-pollination of different R&D groups inside Hitachi. Bear in mind that we have over 30 R&D labs globally. We want to accelerate that innovation.
Is HDS Global Solutions expanding?
We’re hiring all the time. Last year we grew in double digits, and software and services now accounts for 50% of HDS’ revenue. The Global Solutions business is critical to demonstrating and driving the value of everything we do.