Informationweek November 5 2012 2124203

IT hiring surprises 12 | SAPs Hana cloud 14 | Amazon for the long haul 15 IaaS buyers guide 29 | When only
big bang IT will do 36
THE BUSINESS VALUE OF TECHNOLOGY
NOV. 5, 2012
Can emerging big data technologies work in old-school companies? Sears is trying. By Doug Henschen p.18
PLUS: 6 Lies About Big Data p.24
Copyright 2012 UBM LLC. Important Note: This PDF is provided solely as a reader service. It is not intended for reproduction or public distribution. For article reprints, e-prints and permissions please contact: Wrights Reprints, 1-877-652-5295 / ubmreprints@wrightsreprints.com
CONTENTS
THE BUSINESS VALUE OF TECHNOLOGY Nov. 5, 2012 Issue 1,349
[QUICKTAKES]
14 15 16
SAPs Hana Cloud

Its in-memory cloud platform takes on Oracle and Salesforce
Amazon Takes The Long View

Cloud computing isnt just for peak use, Amazon says
Is VMware An OpenStack Threat?

OpenStacks new board is on the right track, welcoming all vendors
Watson Goes To Med School

Hospital uses IBM supercomputer to suggest cancer treatments
COVER STORY
18
14
informationweek.com
Big Data, Big Questions

Can emerging big data technologies work in old-school companies? Sears is trying.
Nov. 5, 2012 3
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CIO Profiles
An aging population is shaking up healthcare IT, says this tech chief
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Global CIO
Six surprises from our research on IT staffing plans
24 Lies, Damn Lies, & Big Data

Too many IT organizations arent using big data effectively
Practical Analysis
Theres a gulf between what mobile users want and carriers provide
Down To Business
How Indias Cipla is transforming its approach to IT
29 Infrastructure On Demand
Our latest Buyers Guide looks at infrastructure-as-a-service offerings in a range of categories
Contacts
6 Editorial Contacts 6 Advertiser Index 32 Business Contacts
Download Our Free iPad App Its easier than ever to get the business technology news you need with our iPad app. informationweek.com/ipadapp
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CIOprofiles
Career Track
How long at Cigna: About a year and a half at this health insurance and health services company. Decision I wish I could do over: The decisions that I replay in my head involve not moving fast enough. It took a few mistakes early in my career to understand that an imperfect decision today is worth a lot more than a more perfect decision made much later.
Read other CIO Profiles at informationweek.com/topexecs
Vision
How I give my team room to innovate: Were creating innovation labs, allowing our teams the freedom to explore new ideas. We also have a company-wide innovation challenge called Inventrepreneurs, with incentives for the best new customer-centric innovation ideas. What I need from tech vendors: We need vendors to be more than just order takers. We want them to proactively engage in frank and open communication if theres a better or faster way to do things, or if there are opportunities for innovation. We also want transparency and visibility into their service delivery models, their problem management processes, and their contingency plans. The most common cause when IT projects go wrong: Common factors that lead to project failures include lack of clarity in business requirements and success criteria, unrealistic schedules, and a lack of engaged sponsorship. The most overrated IT movement: While the public cloud has many potential benefits, the hype factor is large. The public cloud adoption rate remains low compared with private and hybrid cloud models, due in part to many architectural, security, and privacy challenges. This is of particular importance within the healthcare industry, as we must manage the confidentiality of health records and patient information with an absolute zero tolerance for lapses in privacy and security.
On The Job
Top initiatives: >> Customer centricity, being focused on individual needs and personalized relationships, is a big priority. Were engaging customers through diverse channels, requiring delivery through flexible, scalable platforms and infrastructures. >> Were also highly focused on leveraging data. Being able to aggregate, organize, and apply data reveals meaningful insights. We want to use this information to deliver products that support collaboration with doctors and other healthcare professionals. Most disruptive force in my industry: Were facing an aging population, an increase in chronic disease, and growing rates of obesity and diabetes, not just in the U.S., but around the world. Disease states typically found in developed countries are also being seen in less-developed countries, so the challenges of managing lifestyle-based illnesses are playing out on a global basis.
MARK BOXER
Executive VP and Global CIO, Cigna
Favorite sports team manager: Billy Beane, the general manager of the Oakland Athletics, because he applied the science of analytics to decisionmaking in building a team Person Id most like to have lunch with: Winston Churchill; Id love access to his wisdom as the true essence of an inspirational leader (and I hear he truly enjoyed a good lunch) First job: Pumping gas, which taught me to serve customers with a smile and focus on the details If I werent a CIO, Id be ... a college professor, as there are many similarities between being a teacher and being a business leader
Ranked No. 7 in the 2012
10 Nov. 5, 2012
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globalCIO
By Chris Murphy
6 Surprises About IT Hiring Plans
he hiring picture is looking skills, just 16% will rely mostly on hiring OK. Comparing their IT or- to meet the need, which is tied for the ganizations to a year ago, 47% lowest mark. And they dont expect stiff of the 1,391 business technol- competition for talent: Just 16% of comogy pros who responded to Informa- panies looking for social/collaboration tionWeeks 2012 State of IT Staffing pros think their salary demands will be Survey said staffing increased, 35% too high, the lowest percentage of any saw no change, and 18% saw a de- job category. crease. But IT isnt a monolith; demand 3. For big data analytics, companies varies widely by specific skills. Here look outside. Companies arent adding are six staffing areas where interesting lots of big data analytics staff12% of trends popped up in our survey. companies put it among their top two 1. Mobiles a hot skill but might not staffing priorities, middle of the pack. get you hired. Its not that theres a sur- But among those companies looking for plus of mobile talent51% of survey re- analytics talent, 53% think it will be hard spondents think it will be hard to find to findthe highest hard-to-find perthe talent their companies need. But in- centage among the staffing areas in our stead of hiring, most companies will re- survey. And 27% think those pros train employees: Just 17% of respon- salaries will be beyond their means. dents say their companies will rely With talent hard to find and unaffordmostly on hiring, one of the lowest per- able, the 28% planning to rely on hiring centages among 15 skills covered are probably kidding themselves. in our survey, while 57% rely Another 39% will rely mostly BAL C I mostly on retraining. (The on retraining, and 33% a mix. LO rest are a mix of the two.) Big data analytics is a new Retraining can make role at many companies, so sense because industry and some might not know what company knowledge are so they need. A Ph.D. in statisvaluable in creating mobile tics? An expert in Hadoop? apps. Thats the approach Waste What they really need are intangiManagement took last year, for two main bles, like a knack for spotting patterns in reasons: Mobile developers who under- data and framing relevant questions. Its stand enterprise IT were almost impos- absolutely important to groom your talsible to find; and the company found ent internally when you get started, says that quality Java programmers could Neeraj Kumar, a VP at Cardinal Health quickly learn Android development and whos working on its big data efforts. were energized by the opportunity. You will not find resources outside. 2. For social and collaboration proj4. Security hiring is strongand ects, new people arent needed. Many still a manual task? Security is among social networking and collaboration the top two staffing priorities for 17% of projects are happening, but theres not a companies, tied for second in our surlot of hiring to get them done. Just 6% vey. No doubt information security resay social/collaboration is among their mains an indispensable priority, but companies top two hiring priorities, tied shouldnt staff size be leveling off? The for last among 15 areas. Among compa- threats arent getting less severe, but we nies looking for social/collaboration should be making progress in automatO
ing more manual IT security tasksthe monitoring, processing, and alerts. Only 39% say security people will be hard to find, well below other specialties. 5. Help desk is a priority, but for the wrong reasons. End user support/help desk ranks high among staff growth areas16% put it in their top two, making it fourth. (Its also No. 1 on the list of likely cuts among companies cutting.) Half of companies will rely mostly on hiring to fill those needs, only 28% on retraining, and the reasons arent good when it comes to career and salary prospects. First, companies consider help desk skills plentiful46% say theyre easy to find, the highest of any category. Second, people inside a company are unlikely to want to retrain and shift to support, because of its relatively low pay. A few companies are trying to make IT support more appealing. Accounting firm BDO USA made its help desk responsible for creating wiki content on tech topics, and it coaches high performers in leadership. Both Intuit and Starbucks created a help desk modeled after the Apple Genius Bar, where employees can walk up with a support problem. 6. App dev rules. Application development is the biggest staff growth area, with 25% putting it among their top two areas. Thats promising. Companies need to shift IT firepower to new project development and away from runthe-business IT operations, and app dev tends to be about new project work. Its also a promising sign for economic growthcompanies dont add developers unless theyre building new products or supporting new initiatives. Chris Murphy is editor of InformationWeek. Write to him at cjmurphy@tech web.com or on Twitter: @murph_cj.
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12 Nov. 5, 2012
QUICKTAKES
SAPs In-Memory Cloud Platform Set To Take On Oracle And Salesforce By Doug Henschen
AP jumped into the cloud platform-as-a-service market, launching the first in a series of cloud-based application and database services at the annual TechEd conference in Las Vegas. The new services make SAP a more comprehensive cloud player and open up new points of competition with the likes of Oracle and Salesforce.com. Both services run on the Hana inmemory database, creating what SAP CTO Vishal Sikka describes as a RAMoptimized platform that will set the SAP cloud apart. In-memory-based cloud services would enable companies to reimagine and transform cloud-based apps, not just speed them up, Sikka says, making reference to Oracles recent OpenWorld claims about performance gains with its latest engineered systems. SAPs new Java-based cloud development platform called SAP Net Weaver Cloud will go up against Salesforces Heroku unit. The platforms in-memory performance ensures that it wont require the resource governorsprocessing power caps that can slow performancethat Sikka says Salesforce routinely imposes on customers so it can keep up with cloud computing demands. SAPs new platformthe SAP Hana Cloudincludes both AppServices and DBServices. On the database side, the vendor introduced SAP Hana One, an Amazon Web Services deployment option aimed at companies that want to experiment with Hana, stage proof-ofconcept projects, or put small-scale inmemory applications in the cloud. Hana One can handle up to 32 GB of end user data. Its priced at 99 cents per hour for SAPs software and another
14 Nov. 5, 2012
$2.50 per hour for AWS EC2 compute capacity, for a total cost of $3.49 per hour. SAP had previously offered free Hana developer licenses on AWS, but data loads were limited to megabytes rather than gigabytes. At that price point, its pretty hard not to be interested, says Hana customer Adam Recktenwald, enterprise architect at the University of Kentucky. It would have made it easier to justify an on-premises deployment. The University of Kentucky completed a three-month on-premises Hana deployment in March and then spent two months performing its first proof-of-concept project. Had Hana One been available then, the school could have saved weeks if not months on the effort. Database-As-A-Service Options Beyond Hana One, SAP is planning more database-as-a-service options. Leveraging Hanas in-memory technology processing power, SAPs database services will also include certain application-level services, Sikka says, such as user management, session management, user authentication, HTTP Web services, and language runtimes. The separation of the application server and the database server into different tiers is a construct of inefficient [legacy] infrastructure, Sikka says. That argument echoes what SAP has described as the artificial separation of todays analytical and transactional environments, and its another example of the simplification SAP is promising by consolidating layers of obsolete infrastructure with Hana processing power. On the application services side, SAP announced the general availability of SAP NetWeaver Cloud, which is a Java-based
Reimagine cloud apps, Sikka says
development platform-as-a-service for building, deploying, and managing applications in the cloud. It supports Eclipse and industry-standard tools that will enable the use of Ruby, PHP, and other programming models, SAP says. Given SAP developers familiarity with NetWeaver, applications built on NetWeaver Cloud are most likely to be integrated with SAPs on-premises or cloud-based applications, or used as extensions to them. But the platform is also suitable for building standalone applications from scratch, according to SAP . NetWeaver cloud includes integration, portal, and mobile services, as well as federated ID management and single sign-on capabilities. To make the platform more attractive to cloud developers, SAP has introduced free, unlimited developer licenses that eliminate 90-day usage restrictions. Customer adoption will go a long way toward validating SAPs cloud platform. But adoption by software vendors, integrators, and resellers also will help by making SAP Hana Cloud a more open universe than Oracles go-it-alone, all-red-stack Oracle Cloud. It also might begin to challenge Salesforces AppExchange and vast cloud community.
Write to Doug Henschen at dhenschen@techweb.com.
informationweek.com
Amazon Sells Customers On Long-Term Use
By Charles Babcock
ommends that 50% to 60% of an Amazon users servers be Reserved Instances. The higher the percentage, the greater the savings, assuming the servers are being utilized. Learning Curve Many EC2 users choose the seemingly safe, middle-of-the-road mediumutilization Reserved Instances when they would operate more efficiently with the light- or heavy-utilization options. But Cloudyns customers are getting smarter about that. Since May, use of medium instances has dropped from 35% to 19%, while light instance use has climbed from 2% to 10%, and heavy instance from 26% to 36%. Another cloud-usage analysis firm, Newvem, has also noticed an uptick in use of Reserved Instances. CEO Zev Laderman says thats a reflection of the cloud learning curve. As customers gain experience, they look for ways to drive down costs. Theres another twist to this pricing model. In September, Amazon launched a Reserved Instances marketplace where customers can buy and sell unused time on their contracts. That removes some of the risk of signing up for Reserved Instances by allowing no-regret purchases, Laderman says. Companies can save on the cost of on-demand EC2 servers, even if the Reserved Instances arent needed for the full length of the contract. They may not be able to resell their Reserved Instances at full value, but they can recoup some of their investment. Says Laderman, Its another way Amazon ensures the customer stays with them for the long haul.
Write to Charles Babcock at cbabcock@techweb.com.
Nov. 5, 2012 15
any companies use cloud computing to support their websites and publicfacing applications during peak traffic periods. Amazon appears to be increasingly successful at getting them to use the cloud for long-term, steady-state purposes, too. Amazon Web Services Reserved Instancesan alternative to the companys on-demand virtual serversare available through one- and three-year agreements. Reserved Instances dont have to run continuously, although one of the options for purchasing them, heavy utilization, assumes they will run most of the time. Customers who use Reserved Instances routinely save a third of the hourly cost of a similarly sized, on-demand instance. Skillful use of Reserved Instances can even save up to 71% over on-demand rates, according to an Amazon spokeswoman. The company doesnt disclose how much of its cloud business comes from Reserved Instances. Amazon introduced Reserved Instances in 2009, and last December it tailored Reserved Instances to better match the types of applications its customers run, giving them the option of light-, medium-, or heavy-use instances. The difference among them is the amount of time the server is used each day. The additional choices appear to be driving demand for Reserved Instances. Cloud monitoring and analytics specialist Cloudyn has seen use of the service among its customers climb from 28% in January to 48% at the end of September, says CEO Sharon Wagner. On Oct. 22, Cloudyn launched a calculator that imports data on a customers Amazon Elastic Compute
Cloud (EC2) usage and recommends the most efficient Reserved Instances configurations. Cloudyns customers typically spend around $250,000 a year on cloud services. Use of Reserved Instances saves about 30%, in exchange for an upfront payment of about 30% of the total bill, Wagner says. With Amazons light-, medium-, and heavy-utilization options, the savings can be even higher. But selecting the right types of Reserved Instances to maximize sav-
Public Cloud Plans
Companies adopting or increasing use
On our 2012 IT project list 29% Among our top two 2012 IT initiatives 13%
Data: InformationWeek survey of 453 business technology pros, March 2012
ings can be complicated. Cloudyns calculator uses a rules engine and analytics to help with that. Customers are not always selecting the right pricing model, Wagner says. In an analysis of 200 of its customers who use Reserved Instances, Cloudyn found that two-thirds had one-year contracts, a third had three-year agreements, and many had both. The greatest potential savings are to be found in three-year contracts, Wagner says. Without doing the math, it might seem as though signing up for Reserved Instances and using it only 37% of the time would be wasteful. However, even at that usage level, the Reserved Instances light-utilization option is 24% cheaper than on-demand servers, according to Cloudyn. The calculation is based on using a large Linux server for a year in Amazons East 1 zone in the United States. Based on its analysis, Cloudyn rec-
QUICKTAKES
Is VMware A Fox In The OpenStack Henhouse? Watson Goes To Med School penStack is the main open AT&T, Hewlett-Packard, IBM, Nebula,
source initiative contesting VMwares growing dominance in running private cloud data center infrastructure. OpenStack has momentum as an expanding open source project, and a recent step to create a governing board adds to the momentum. But can OpenStack attract a broad support base, and should VMware be a part of this new organization? OpenStack is software to control the building blocks of cloud computing: server, network, and storage management, with virtual machine provisioning built in. It has monitoring and reporting through its Horizon dashboard, plus image management in Glance. In addition to VMware, it competes with Amazon-compatible open source code Red Hat, Rackspace, SUSE, and Ubuntu. There now are two key elements to watch in OpenStacks development. One, OpenStack must attract independent developers, and doing so means keeping the project above the interests of any one company or small group of vendors. Code contributions to the latest OpenStack release shows progressRackspace is still the largest contributor, but there are at least five other significant contributors. Cisco just released its own version of OpenStack, and Red Hat plans to do so. Xen, an open source hypervisor project, offers a warning of what not to do. XenSource, the company formed to back Xen, was acquired by Citrix Systems, and Xens direction appeared to be dominated by the interests of Citrix, IBM, Oracle, and other large vendors that wanted a vehicle with which to compete against VMware. Xen has struggled as a project. That leads to the second big question: Did the fox buy its way into the henhouse when VMware became a gold sponsor? Board member Boris Renski, co-founder of OpenStack consulting firm Mirantis, said admitting VMware was a mistake. Board chairman Alan Clark called it a very positive move. For the OpenStack Foundation to have turned down VMware would have been cutting off its nose to spite its face. Open source projects are supposed to be open to contributors, and Nicira was a primary contributor to the OpenStack Quantum working group before VMware acquired it. Yes, that puts the fox in the henhouse, but with so many watchdogs circling, VMwares likely to remain on its best behavior.
Charles Babcock (cbabcock@techweb.com) Its been more than a year since IBMs Watson computer defeated several Jeopardy game show champions. Now its time for a much more serious challenge: cancer. New Yorks Memorial Sloan-Kettering Cancer Center and IBM are applying Watsons capabilities to Sloan-Ketterings database on outcomes for 1.2 million patients over more than 20 years. They hope to use Watsons natural-language processing to make sense of the textcentric information in that database, along with outside medical literature. Watson would then apply algorithms to analyze that data along with a patients specific conditions, and then suggest diagnostic and treatment options with a confidence rating for each one. Theyre trying to build an intelligence engine to provide specific diagnostic test and treatment recommendations, says Pat Skarulis, CIO at Sloan-Kettering. Sloan-Kettering doctors have about 2,000 order sets they can use for a cancer treatment. Watsons first test will be on nonsmall-cell lung cancer cases. Lung cancer specialist Dr. Mark Kris will help develop training cases for Watson to work on, focusing on 14 to 20 data elements, such as the size and location of a patients tumor, the presence of any genetic mutations, and whether the tumor has spread to other tissues. Skarulis hopes to launch by the end of this year a pilot program that will allow the supercomputer to work on real cases. Paul Cerrato (pcerrato@techweb.com)
informationweek.com
OPENSTACKS BOARD
>> Eight companies, each paying $500,000, each get a seat on the board >> Thirteen companies, sponsoring OpenStack developers, choose representatives for eight seats >> The 5,600 project contributors elect eight at-large seats
from Eucalyptus Systems, and a more polished, OpenStack-like package in Apaches CloudStack, contributed by Citrix. OpenStack is off to a great start but needs the commitment of many talented developers, with independent open source developers as well as those paid by large vendors. Independence is why it needed a governing board: Rackspace, which founded OpenStack along with NASA, had become a de facto primary sponsor and leader. The new OpenStack Foundation has platinum backers
16 Nov. 5, 2012
Sears is embracing Hadoop to get a grip on its big data. Can emerging tech fit in a legacy infrastructure and help Sears compete? By Doug Henschen
ike many retailers, Sears Holdings, the parent of Sears and
Kmart, is trying to get closer to its customers. At Sears scale, that requires big-time data analysis capabilities, but three years ago, Sears IT wasnt really up to the task. We wanted to personalize marketing campaigns, coupons, and offers down to the individual customer, but our legacy systems were incapable of supporting that, says Phil Shelley, Sears executive VP and CTO, in a meeting with InformationWeek editors and his team at company headquarters in suburban Chicago. Improving customer loyalty, and with it sales and profitability, is desperately important to Sears as it faces fierce competition from Wal-Mart and Target, as well as online retailers such as Amazon.com. While revenue at Sears has declined, from $50 billion in 2008 to $42 billion in 2011, big-box rivals Wal-Mart and Target have grown steadily, and theyre far more profitable. Meantime, Amazon has gone from $19 billion in revenue in 2008 to $48 billion last year, passing Sears for the first time. A Shop Your Way Rewards membership program started by Sears in 2011 is part of a five-part strategy to get the company back on track. Behind the scenes is a cuttingedge implementation of Apache Hadoop, the high-scale, open source data processing platform driving the big data trend. Despite Sears less-than-cutting-edge reputation as
Get an online version of this story at informationweek.com/1349/sears

18 Nov. 5, 2012
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BIG DATA
[COVER STORY]
a retailer, the company has been an innovator in using big data. In fact, Shelley is leading a Sears subsidiary, MetaScale, thats pitching services to help companies outside retail use Hadoop. But will companies be interested in buying big data cloud and consulting services from Sears? And can Sears own big data efforts help the company regain its footing in the retail industry? Fast And Agile Sears process for analyzing marketing campaigns for loyalty club members used to take six weeks on mainframe, Teradata, and SAS servers. The new process running on Hadoop can be completed weekly, Shelley says. For certain online and mobile commerce scenarios, Sears can now perform daily analyses. Whats more, targeting is more granular, in some cases down to the individual customer. Whereas the old models made use of 10% of available data, the new models run on 100%. The Holy Grail in data warehousing has always been to have all your data in one place so you can do big models on large data sets, but that hasnt been feasible either economically or in terms of technical capabilities, Shelley says, noting that Sears previously kept data anywhere from 90 days to two years. With Hadoop we can keep everything, which is crucial because we dont want to archive or delete meaningful data. Sears is still the largest appliance retailer and appliance service provider in the U.S., for example, so its in a strong position to understand customer needs, service trends, warranty problems, and more. But Sears has only been scratching the surface of using available data. Enter Hadoop, an open source data processing platform gaining adoption on the strength of two promises: ultrahigh scalability and low cost compared with conventional relational databases. Hadoop systems at 200 terabytes cost about one-third of 200-TB relational platforms, and the differential grows as scale increases into the petabytes, ac-
SEARS AT A GLANCE
Bricks And Clicks
Sears Holdings includes Sears and Kmart stores (more than 2,600 stores) and Lands End. This year, it spun off Sears Hometown and Outlet stores.
Digital Ties
Its Shop Your Way loyalty program offers points and promotions.
IT Operations
IT staff in the U.S. and India, with data centers in Chicago and Detroit areas.
Hadoop Startup
MetaScale will run Hadoop clusters in Sears data center or remotelyon subscription basis, plus do consulting.
cording to Sears. With Hadoops massively parallel processing power, Sears sees little more than one minutes difference between processing 100 million records and 2 billion records. The downside of Hadoop is that its an immature platform, perplexing to many IT shops, and Hadoop talent is scarce. Sears learned Hadoop the hard way, by trial and error. It had few outside experts available to guide its work when it embraced the platform in early 2010. The company is now in the enviable position of having big data experience among its employees in the U.S. and India. MetaScale will leverage Sears data center capacity in Chicago and Detroit, just as Amazon Web Services takes advantage of Amazons massive e-commerce compute capacity. Open Source Moves In Sears embrace of an open source stack began at the operating system level, with Linux. Sears routinely replaces legacy
Unix systems with Linux rather than upgrade them, Shelley says, and it has retired most of its Sun and HP-UX servers. Microsoft server and development technologies are also on the way out. Moving up the stack, Sears is consolidating its databases to MySQL, InfoBright, and TeradataEMC Greenplum, Microsoft SQL Server, and Oracle (including four Exadata boxes) are on their way out, Shelley says. Hadoops power comes from dividing workloads across many commodity Intel x86 servers, each with multiple CPUs and each CPU with multiple processor cores. Since early 2010, Sears has been moving batch data processing off its mainframes and into Hadoop. Cost is the big motivator, as mainframe MIPS cost anywhere from $3,000 to $7,000 per year, Shelley says, while Hadoop costs are a small fraction of that. Sears says it has surpassed its initial target to reduce mainframe costs by $500,000 per year, while also delivering at least 20, sometimes 50, up to 100 times better performance on batch times, Shelley says. Eliminating all of the mainframes in use would enable it to save tens of millions of dollars, he says. ETL Must Die Sears move to Hadoop began as an experiment using a single node running on a netbook computerthe netbook that still sits on Shelleys office desk. Sears deployed its first production cluster of 20 to 30 nodes in early 2010. A major big data processing bottleneck then was extract, transform, and load processing, and Shelley has become a zealot about eliminating ETL. ETL is an antiquated technique, and for large companies its inefficient and wasteful because you create multiple copies of data, he says. Everybody used ETL because they couldnt put everything in one place, but that has changed with Hadoop, and now we copy data, as a matter of principle, only when we absolutely have to copy. Sears cant eliminate ETL overnight,
Nov. 5, 2012 19
so it has been moving the slowest and most processing-intensive steps within ETL jobs into Hadoop. Shelley cites an ETL process that took 20 hours to run using IBM DataStage software on a cluster of distributed servers. One step that took 10 hours to run in DataStage now can run in 17 minutes on Ha doop, he says. One downside: It takes 90 minutes to FTP the job to Hadoop and then bring results back to the ETL servers. That FTP time is a trade-off in Sears approach of picking off one ETL step at a time. Shelley intends to keep moving steps in that process until the entire data transformation workload is on Hadoop. The reason we do it this way is you get a very big hit quickly, he says, noting it takes less than two weeks to get COMMENTARY
[
each step into production. Shelley vows to get rid of ETL eventually, but you do it in a very nondisruptive, nonscary way for the business. Shelleys ETL must die view has its doubters. Coming to the defense of
CTO Shelley: big data zealot
ETL, Mike Olson, CEO of Cloudera, the leading Hadoop software distributor, recently told InformationWeek, Almost without exception, when we see Hadoop in real customer deployments, it is stood up next to existing infra-
Is Sears Big Data Startup A Distraction?
iven all of the headwinds Sears faces, should its CTO be spending much of his time building a startup? Sears Holdings had operating losses four of the last five quarters. Sears chairman Eddie Lampert, whose hedge fund owns more than 60% of the company, started his chairmans letter back in February with this assessment: Our poor financial results in 2011, culminating in a very poor fourth quarter, underscore the need to accelerate the transformation of Sears Holdings. In that environment, launching a technology startup is risky, given the potential for distraction from meeting the IT needs of a $42 billion-a-year retail business that includes Sears and Kmart. With the MetaScale venture, CTO Phil Shelley is looking to take advantage of Sears broad experience with using the Hadoop big data platform. MetaScale sells subscription services to manage large data sets using Hadoop, and it offers big data consulting. Shelley doesnt see such a startup as risky. Lampert, he says, sets the expectation that executives need to make such moves. Its a very innovative environment, Shelley says. The concept of generating new business, a new business model, a whole new business, is very much encouraged. Sears is doing cutting-edge work when it comes to Hadoop and big data management. Some of the most practical workwork that other big companies might buy as a ser -
viceis moving big batch processing data loads off of mainframes, cutting hours of processing time. Applied to Sears own business, eliminating mainframes could save tens of millions of dollars. But when it comes to applying big data tactics to change Sears, it feels like Sears could be doing more and moving faster. One of the most promising areas is for customized marketing promotions, using Sears growing loyalty card program to know what customers bought in the past and what theyre now buying, and to give them an intensely relevant offer to get them to buy more. Sears is just beginning to do that kind of personalization at scale. Youre starting to see that much more personal, targeted, digital engagement, Shelley says. Its a big company to change, so it will take awhile, but it is changing. A critical advantage of Hadoop, Shelley says, is its ability to let companies keep and analyze all of their data. Whereas Sears used to analyze 10% of data on customers to figure out which promotions might work, now it can analyze all data on them. Because its cheaper and faster to keep and analyze data, he says, its collecting more of itsuch as data coming into Sears call center about which appliances are breaking and how often. But Shelley doesnt offer a clear example of how Sears is putting that kind of data to profitable use. One argument in favor of Sears doing a startup like Meta-
20 Nov. 5, 2012
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BIG DATA
[COVER STORY]
structure thats aimed at existing business problems. Shelley sees Hadoop as part of a larger IT ecosystem, too, and says systems such as Teradata will continue to have an important, focused role at Sears. But hes on the far end of the spectrum in terms of how much of the legacy environment Hadoop might replace. Countering Shelleys sometimes sweeping predictions of legacy system replacement, Olson says: Its unlikely that a brand-new entrant to the market [like Hadoop] is going to displace tools for established workloads. Scaling Out Sears main Hadoop cluster has nearly 300 nodes, and its populated with 2 PB of datamostly structured data such as customer transaction,
point of sale, and supply chain. (Hadoop systems create two copies of the data, so the total environment is 6 PB). To give a sense of how early Sears was to Hadoop development, WalMart divulged early this year that it was scaling out an experimental 10node Hadoop cluster for e-commerce analysis. Sears passed that size in 2010. Sears now keeps all of its data down to individual transactions (rather than aggregates) and years of history (rather than imposing quarterly windows on certain data, as it did previously). Thats raw data, which Shelley says Sears can refactor and combine as needed quickly and efficiently within Hadoop. Hadoop isnt a science project at Searscritical reports run on the platform, including financial analyses; SEC
reporting; logistics planning; and analyses of supply chains, products, and customer data. For ad hoc query and analysis, Sears uses Datameer, a spreadsheet-style tool that supports data exploration and visualization directly on Hadoop, without copying or moving data. Using Datameer, Sears can develop in three days interactive reports that used to take IT six to 12 weeks, Shelley says. The old approach required intensive IT support for ETL, data cubing, and associated testing. Now line-of-business power users are developing most of the new reports. The MetaScale Mission Shelley is still CTO of Sears, but if his portrayal of all the things Hadoop can do sounds a bit rosy, keep in mind
Scale is that Amazon.com, the most feared company in retail today, is doing its own tech startups. The e-commerce giants Amazon Web Services arm pioneered the sale of commodity infrastructure-as-a-service, letting companies buy computing capacity by the hour with only a credit card. Sears is attacking a niche in the cloud computing market: high-end, specialized Hadoop workloads. A more powerful argument in favor of MetaScale is that it forces Sears to stay on the leading edge of big data management and analytics, and lets it learn from big companies that are innovating in other industries while also driving some revenue. Shelley wont say how many clients MetaScale has, but he refers to a major healthcare company and another in financial services.
Retail Must Change

You cant walk into a Sears store today and really feel how Shelleys big data efforts have changed the shopping experience. But Sears isnt aloneup against this challenge is every single big retailer: Best Buy, J.C. Penney, Wal-Mart, Target, Home Depot, Lowes. Every one of them needs to figure out how to make in-store shopping so appealing that customers come to their stores to make purchases rather than to just look around and then buy from discount competitors online. Its no exaggeration to say that Sears survival hinges on its ability to figure out how to serve customers across store, Web, and mobile channels. Lampert, in his chairmans letter, listed the five pillars of Sears
business (see p. 22). One is reinventing the company continuously through technology and innovation. Lampert said he spends more of his time on that pillar than any other. He realizes that people will soon, instinctively, reach for their smartphones as they shop in stores. How people shop today is changing, and it isnt just the younger generation that is benefiting from iPads, Facebook, and online retail, Lampert wrote. Retailers have yet to take truly daring steps to create this cross-channel experience. But imagine stores geofenced by Wi-Fi, so that loyalty card customers smartphones automatically notify the store when they walk in. Sounds creepy at first, but thats exactly what many people have set up on Amazon. Give people a compelling reason to set that kind of functionality up in a physical storesay, to receive customized offers on their phonesand they will. How about changing prices multiple times a day? Sears is building the data analytics necessary to make those kind of dynamic price and inventory decisions; like other retailers, its also experimenting with digital price signs in stores that would make such changes feasible. Again, dynamic pricing would be a dramatic change, but perhaps one needed to compete with online retailing. Retailers survival depends on these kinds of changes in the mobile e-commerce era. If Sears MetaScale work helps it figure out the omni-channel shopper, its startup will succeed. If it doesnt, or it distracts Sears from this mission, it will have failed because there wont be a Sears or Kmart left.
Chris Murphy (cjmurphy@techweb.com)

Nov. 5, 2012 21
BIG DATA
[COVER STORY]
that hes also now CEO of MetaScale, a division that Sears is hoping will make money from the companys specialized big data expertise. The rarest commodity that Meta Scale offers is Sears experience in bringing mainframe data into the Hadoop world. Old-school Cobol programmers at Sears were initially Hadoop skeptics, Shelley says, but many turned out to be eager and
Pillars From Sears Chairman Lampert
1. Lasting customer relationships

Sears launched a loyalty program in 2011, expanding personalized promotions
2. Productivity and efficiency

Theyre key to better profits, but Lampert says Sears has fared very poorly
center, a setup that two early customers, one in healthcare and the other in financial services, both want for regulatory reasons. Monthly fees are based on the volume of terabytes supported, and customers can buy out deployments if they want to take them over and run them themselves. MetaScale also offers data architecture, modeling, and management ser vices and consulting. The big idea behind Hadoop is to bring in as much data as possible while keeping data structures simple. People want to overcomplicate things by representing data and dividing things up into separate files, says Scott LaCosse, director of data management at Sears and MetaScale. The object is not to save space, its to eliminate joins, denormalize the data, and put it all in one big file where you can analyze it. Counterintuitive Tactic Its an approach thats counterintuitive for a SQL veteran, so a big part of MetaScales work is to help customers change their thinking: You apply schema as you pull data out to use it, rather than take the relational database approach of imposing a schema on data before its loaded onto the platform. Hadoop holds data in its raw form, giving users the flexibility to combine and examine the data in many ways over time. If in three years you come up with a new query or analysis, it doesnt matter because theres no schema, Shelley says. You just go get the raw data and transform it into any format you need. For all of Shelleys boldness about replacing legacy systems, hes careful to describe Hadoop as part of an ecosystem. Sears still uses Teradata and InfoBright, for example, when applications call for fast analysis. But Hadoop is the center of Sears data management strategy, handling the large-scale heavy lifting, while relational tools take tactical roles. So where should Hadoop adopters begin? You have to go fast and be bold
3. Building brands Kenmore and

Craftsman are strong, but Lampert wants them to be the Nike and Apple of appliances, tools, and lawn and garden
4. Reinvent Sears with tech and innovation Everyone, young and old,
will use stores, online, and mobile, so Sears needs to make it easier
5. Values More information sharing, more digital tools to store employees highly skilled adopters of the Pig language for running MapReduce jobs on Hadoop. Tasks that required 3,000 to 5,000 lines of Cobol can be reproduced with a few hundred lines of Pig, he says. The company learned how to load data from IMS (mainframe) databases into Hadoop and bring result sets back into mainframe apps. Thats not trivial work because it involves a variety of compressed data format transformations, and packing and unpacking of data. MetaScales business model is to run Hadoop clusters for other companies as a subscription cloud service in Sears data center. Or Sears will remotely manage clusters in a customers data
22 Nov. 5, 2012
without taking stupid risks, Shelley says. Start with a business need that causes enough pain that people will notice and theyll see tangible benefits. Sears itself still has a lot to prove with its own use of Hadoop to solve huge business problems, such as offering customers personalized promotions. Shelley cites plenty of conceptual uses of Hadoop, and he sprinkles in details on speed-and-feed gains, but he doesnt offer clear cases of tangible benefits the retailer has realized. The company is well along in adopting Hadoop and in developing specialized expertise that might benefit MetaScale customersparticularly those using mainframesbut will Hadoop really help turn Sears around? Sears latest results for the quarter ended July 28 show that earnings before interest, taxes, depreciation, and amortization were up 163%, to $153 million, from $58 million in the yearearlier quarter. But same-store sales were down 2.9% at Sears and 4.7% at Kmart. Sears spin is that its selling fewer items more profitably, which could be in part because of smarter targeting and promotion. But Sears cant shrink its way back to greatness. As Wal-Mart and Target gain share, their buying power and ability to press Sears on margins only grows. Would-be MetaScale customers in other industries will face different challenges as they consider embracing Hadoop. Could quick analytical access to an entire decade of medical record data change how doctors diagnose and treat patients? Could faster processing spot financial services fraud more effectively? Companies are focused on choosing and building out the nextgeneration platforms that will handle those big data jobs. Will Hadoop be that platform, and will Hadoop help turn MetaScale into a successful pioneer? Thats a story that has yet to unfold.
Write to Doug Henschen at dhenschen @techweb.com, or on Twitter: @dhenschen. Read more stories by him at information
informationweek.com
Lies, Damn Lies,

By Michael Healey
Big Data
Be honest: You dont work smart when analyzing the information you already have. Now were piling on more? o paraphrase an old saying, if you tor- that some companies are making progress. For example, ture data long enough, itll tell you what you most have built the required infrastructure and support want to hear. And putting big data through various roles, in terms of primary data users; about onethat torture only lets us tell bigger lies. Mar- third say they encourage wide access to information for keting can justify crazy ad campaigns: Sen- business users. However, when it comes to data acquitiment analytics shows our latest campaign sition and use models, the wheels start to 0 010010111010 1010 101110101 01 1 10 is actually a huge hit with the under-25fall off. There are major gaps in data 0101010101 urban-vegan demo! The supply analysis, even for the most com10101 0 1 10 chain team can use it to get more mon types of information: trans10 0 11 0 11 101 10 funding: Our geolocation analysis action data, system logs, email, 01 shows if we invest in robotic CRM, Web analytics. 1 00010 0 0 0 1 1 1 10 warehouse automation, well reWorse, fewer than 10% of 1 0 010 101 1 duce costs by 15%. Sales can the respondents to our sur1 010 01 explain why it missed its numvey say that ideas for prom101 bers: We dont have an iOS ising new data points are pri10 1 1 0 101 010 app, and smartphone data marily driven by a collabo001 101 0 01 10 shows thats what 87.4% of cusrative or cross-functional 01 1 0 tomers use. Its not our fault. team within their compa1 0 0 Dont get us wrong. The abilnies. The stats we gleaned 0101 0101 ity to collect and analyze data is a from our survey suggest this core IT value proposition. Compapercentage should be much 0 nies such as Wal-Mart, FedEx, and 1 0 101 0 1 0 1 0 1 higher: Nearly half of respon0101 01 Southwest Airlines gained strategic addents have 500 terabytes of data or 1 0101011 0 1 0 vantage by digging into their core busi- 1 0 1 01010111 more under management; 13% have 01 ness data long before it was labeled big. more than 10 petabytes. 01 1 1010101010001 0 1 0 And theres no question that more data is availSurely there are untapped riches. able than ever before, especially information from the IT organizations clearly know theres a problem, as Web and smart mobile devices. Our beef, though, is that only 9% of respondents rate their companies as exmost businesses arent good at using the data they have tremely effective users of the data they have. However, now. What are the odds theyll get better at analysis by just 4% admit they stink at putting their data to its best adding volumes without changing their strategies? use. Fact is, many organizations are deluding themselves Our InformationWeek 2013 Big Data Survey shows into thinking theyre empowering their businesses. So
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Get an online version of this story at informationweek.com/1349/bigdata

24 Nov. 5, 2012
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before you buy more storage, upgrade your warehouse platform, or spin up a massive Hadoop instance, lets take a reality check. Here are six big data lies organizations tell themselves. How many have you heard lately? Lie 1: We understand how much data we have today We asked in our survey which of seven key data sources are actively managed, hoping to see respondents widen their view beyond servers, storage arrays, and archives. Unfortunately, only 30% of respondents factor in their organizations cloud data, and just 11% include supply chain information. All that information zipping around on mobile devices? Considered by just 35% of survey respondents. If you dont include dynamic data sets, youre setting your analysis up for failure. How can you do vendor performance reviews without details on how well suppliers do getting the right goods to you at the right time for a competitive price? Likewise, if youre studying customer behavior, how can you get a true picture without Web or cloud-based CRM data? Lie 2: The data we have is good Well bet money that most respondents data sets are inaccurate, incomplete, and/or misaligned with one another. Do you really have a single
source of truth? Do different groups slice data in different ways? Are you making decisions based on inaccurate or incomplete data? Case in point: 19% of companies in our survey use geolocation as part of their analysis strategy, pulling information from smart devices and Web visitors to understand behavior. However, Web location tracking is notoriously inaccurate when it comes to enterprise and institutional traffic. Thats because most companies and government agencies work in private clouds with a limited number of egress points. If youre using Web location data to track the success of your sales and marketing programs by region, youre likely basing decisions on bad information. That big block of traffic from Boston may actually come from an enterprise with offices in the Midwest. Whos checking data quality? Just one in four respondents identified a dedicated business analyst group as one of the top two users of data within their company. Its simply amazing how many reports and graphs we see without sampling or accuracy notes. For example, almost every company does customer surveys, yet very few indicate confidence levels or bias results. Got 25,000 customers? Your customer service survey should have 1,843 respondents if you want a 99% confidence level with a plus or minus 3%
Get This And All Our Reports

Our full report on our 2013 Big Data Survey is free with registration at informationweek.com/reports/ 2013bigdata This report includes 32 pages of action-oriented analysis, packed with 23 charts. What youll find: > Outlook on use of cloud services for big data management > Top 14 big data tools in use, from Excel to Exadata to EDW margin of error. Furthermore, results should be biased by revenue level. Reality is, we just dont see that done with any type of data. Lie 3: Everything will be OK if we can just get more tools A quarter of respondents plan to use more big data tools over the next 12 months. Now, we like Hadoop, NoSQL, Splunk, and the plethora of other big data options out there, but we recommend looking at what data sets are sitting idle before cutting a check. Given the low levels of use of the 20 internal and external data sets we asked about, its clear the problem is related more to staffing than systems. Unfortunately, fewer respondents plan to invest in big data staff versus spending money on technology. Only 33% plan to grow their training and development programs; 9% are cutting back. Net new hiring ranked at the bottom of our list, with 17% growing staffing
Nov. 5, 2012 25
Who Are The Primary Users Of Your Companys Data?

Department-level analysts 39% Senior business management 32% A wide array of business users; we encourage wide access 31% Information technology 30% Dedicated business analyst group 25% Business users dedicated to analysis, though not full time 22%
Data: InformationWeek 2013 Big Data Survey of 257 business technology professionals at companies with 50 or more employees, September 2012
Eye On Critical Data

How effective is your company at identifying critical data and using it to make decisions?
Not at all effective 4% 16% 9%
Extremely effective
Slightly effective
Very effective 33%
38% Moderately effective
levels compared with 14% cutting. Nowhere is this tools over people focus more evident than in healthcare. The federal governments electronic records incentives have driven the industry to a new level of data collection and reporting. But now that healthcare providers have all this data, theyre trying to figure out how to use it. There is big money to be made in healthcare big data, so everyone and their brother was throwing up solutions, says Bill Gillis, CIO of Beth Israel Deaconess Physician Organization. But its important to work with people who understand healthcare organizations and the complexity of their data, Gillis says. The business need should drive the process, he says. The tool alone will not change much. Finding a skilled hand that can effectively wield that tool will. Lie 4: Theres an expertise shortage Speaking of staff, an oft-quoted McKinsey & Co. study estimates a shortfall of 140,000 to 190,000 people in big data staffing by 2018. Our own InformationWeek Staffing Survey shows that 18% of respondents focused on big data want to increase staff in this area by more than 30% in the next two years, but 53% say it will be difficult to find people with the right skills.
26 Nov. 5, 2012
Roll the clock back a few years and substitute the words virtualization engineer or Cobol programmer or even webmaster for big data specialist and youll similarly find people predicting doom. Dont get sucked in again. You already have much of this talent within your organization; you just need to set it free. Consider that 39% of respondent organizations have department-level analysts as the main users of their information. Break those people out of their department silos and move them toward a more holistic view of data. For example, a U.S. retailer we worked with always had separate data
teams aligned with various departments. The strongest team was within the catalog group, banging out circ plans, catalog yields, conversion rates, even profit per page. Great stuff, but that team was limited to using catalog and financial data. Siloed from the Web team, they were missing the transformation happening within the customer base. Separate departments, separate views of the truth. Dont blame the analysts. The company built the structure, and IT wasnt involved enough to identify the information gaps between departments. Our point is, IT not only has to understand the data itself, but it must also become an integral part of identifying and growing the centralized talent pool. That means putting more emphasis on training and talent development. Competitors will steal some of your more talented big data pros if you dont give them a reason to stick around. We scanned the online listings of the major hiring sites and found that the salary levels for data analysts still range from about $55,000 to low six figures. However, if you add big data to the standard titles, the average salary doubles. Expect everyones LinkedIn titles to change in the next 12 months. Lie 5: We know what data we need In our survey, we asked about 10 internal and nine external data types.
Are You Considering Specialty Big Data Analytics Tools?

Yes 15% Dont know 41%
44% No
informationweek.com
[BIG DATA]
Internal sources include financial accounting applications, detailed sales and product data, CRM data, unstructured network data such as Office files and images, and unstructured data stored on end user de vices. External sources include government statistics and other public records, geolocation data, data collected from sensors on company products and services, social network data (Facebook, Twitter), and unstructured data stored in the cloud (Office365, Google Docs). Clearly, theres a lot of information out there. But when we asked whos driving data analysis ideas, we were surprised to find that only 5% of respondents have a centralized team to drive big data strategy; an additional 3% use a looser collaborative effort. Were not the biggest fans of committees, but given the fact that the users of your data are likely spread far and wide, it makes sense to create a cross-functional group to identify new sources or elevate the importance of an existing stream. Its staggering to see some of the great data thats all but untouched. Take CRM, phone, email, and Web analytics. These four data points cover most of the communications relationship with your clients. Tying them together isnt rocket science, especially if you have decent baseline customer data to start with. Not only can you determine the number of conversations your company typically has with customers, but you can also understand how email relates to phone calls and Web traffic. If you have an outside sales force looping in, your CRM data gives you a profiling capability to model everything from product rollouts to customer service problems. All that intelligence exists today, yet few companies have this level of analysis integrated into their big data strategies. While 35% of survey respondents say their IT organizations
include CRM in their integrated plans, only 29% include email, 22% Web analytics, and 14% phone logs. Lie 6: We do something with our analysis Theres nothing more frustrating for an analyst than to work for days or weeks on a project, present the findings, have a great meeting with execs, then watch those recommendations die on the vine. Everyone focuses on the positive aspects of data analysishelping find new customers or discover more productive logistics routes. But the reality is that big data analysis will find some negative thingsabout your sales teams effectiveness, your online
ity team? If not, set one up ASAP. 2. Does the team do regular or, at minimum, spot audits of various analyses? Does it regularly look to add new data sources? 3. Are critical external events annotated within your data warehouse or as part of your reporting process? For example, think about major system upgrades that would change the underlying data related to order flow. 4. Do you require statistical notes, including sampling statements? 5. When it comes to customer or vendor surveys, are sample sizes validated against your base customers or total market size to ensure accuracy? 6. Do you run regular stress tests
Whats Your Companys Approach To Data Analysis?

Abacus-like: If its not tied to accounting, no one cares Leading: Its core to how we do business, and we have a dedicated staff thats constantly modeling, mining, and scraping to help gain insight 6% Limited: Some groups dig into nonfinancial sources, but cross-departmental analysis is limited to financial data
22%
33%
39% Guiding: Its core to almost every part of the company, but were not quite there with predictive use
presence, your true costs of operations. The slow economy of the last four years has weakened multiple parts of most companies. Adding data sources and a more holistic analysis will help find and prioritize the problems you need to fix. IT Truth Tellers Want to raise ITs profile as a business enabler? Step in and assume responsibility for data quality across the company. Heres a quick check of items IT should review today: 1. Is there a centralized data qual-
for current data sets with cross-functional teams, challenging assumptions and sacred cows? 7. Do you look outward? Most respondents, 75%, report some public cloud use. Yet many companies arent capturing associated datathink WebEx conferencing for customer behavior analysis or Google analytics for sales tracking. Michael Healey is the president of Yeoman Technology Group. Write to us at iwletters@techweb.com.
Nov. 5, 2012 27
On-Demand Options
Our latest Buyers Guide looks at 8 top infrastructure-as-a-service offerings in a range of categories By Joe Masters Emison
nfrastructure-as-a-service lets companies focus on their core competencies without having to worry about buying, deploying, and maintaining data center hardware or facilities. IaaS is why Instagram sold at a $1 billion valuation with only 13 employees and why Pinterest served nearly 12 million monthly unique visitors with only 16 employees. For our new Buyers Guide, we defined an IaaS provider as offering selfservice provisioning of an extremely large number of virtual machines and storage using an API or a Web control panel, without customers having to interact with an engineer or salesperson. For many companies, IaaS offers significant benefits, but with an evergrowing number of providers, its difficult to know which will be the best choice. To help in the hunt for the perfect IaaS provider, we queried a dozen vendors about their offerings. Eight responded: GoGrid, Google, IBM, Internap, Joyent, NaviSite, SoftLayer, and Terremark. Amazon Web Services didnt respond, but given that its a major IaaS player, we found answers to our questions on its website. We compared providers in several categories; get the full results at informationweek.com/ reports/iaasguide.
amount of RAM, and amount of local storage that comes with each VM. There are lots of options, from half a core (GoGrid) to 24 cores (also GoGrid), and 256 MB of RAM (Terremark) to 68.4 GB of RAM (Amazon). However, because virtualization does not
lend itself to exact CPU definitions, some IaaS vendors have created their own nomenclature for how much processing power comes with each core on a particular VM. Amazon defines an Elastic Compute Unit, or ECU, as the equivalent CPU capacity of a 1.0-1.2
Count The Cores

Minimum and maximum number of CPU cores offered per virtual machine, by IaaS provider
Minimum cores (dedicated) AWS 1
Maximum cores (dedicated)
16
GoGrid 0.5 24 Google Compute Engine 1 8 IBM 1 16 Internap 1 11 Joyent 0 15 NaviSite 1 SoftLayer 1 16 Terremark 1
CPU And Memory Most vendors offer a variety of VMs based on the number of CPU cores,
Data: InformationWeek Reports
Get an online version of this story at informationweek.com/1349/iaas

informationweek.com
Nov. 5, 2012 29
GHz 2007 Opteron or 2007 Xeon processor. Google uses a Google Compute Engine Unit, or GQ, describing 2.75 GQs as the minimum power of one logical core (a hardware hyperthread) on our Sandy Bridge platform. Regardless of how a vendor defines its processing power, you should run benchmarks to see how its offering compares with your hardware. Storage Vendors typically offer up to three types of storage: local storage as part of the VM, also called ephemeral or instance storage, as it disappears when the VM is terminated; block storage that exists and is billed separately from the VM; and a storage service that has virtually unlimited available space and is billed by the space used. There are two benefits to true block storage thats divorced from the VM. One is that block storage makes VM offerings more flexible: Some IaaS vendors only offer CPU, RAM, and storage in lockstep multiples, such as 1 CPU, 1 GB RAM, and 100 GB storage. If your application doesnt have significant RAM or CPU requirements but requires hundreds of gigabytes or terabytes of disk space, having a block storage option will let you avoid overpaying for a beefier machine. The second benefit is that block offerings often can take snapshots and re-
Get This And All Our Reports

Our full Infrastructure-As-AService Buyers Guide is free with registration. Download it at informationweek.com/reports/iaasguide This report includes: > Information on redundancy and data center IaaS offerings > A companion spreadsheet of vendor responses to our survey store backups to new volumes very quickly. This is important if you need to restore service fast after an outage and have more than 50 GB of data that must be transferred to a new VM. Operating System And Databases The most common operating systems IaaS vendors support are Ubuntu, CentOS, and Red Hat Enterprise Linux, as well as Windows Server 2003 and 2008. In general, supporting tools and
What Types Of Cloud Providers Do You Use?

2012 SaaS providers 57% 56% Virtualization technology providers 56% 61% Platform providers 42% 35% Infrastructure providers 27% 21%
Data: InformationWeek State of Cloud Computing Survey of 166 business technology professionals in December 2011 and 125 in October 2010 using cloud computing services 30 Nov. 5, 2012
libraries for automation and orchestration tend to be implemented for Linux before Windows, but its far more common to see extensive Windows deployments on IaaS now than a few years ago. Some IaaS vendors offer specialized VMs that come with both operating system and database server installed and include simple API-driven methods for backing up and restoring data to and from the database server. These can be very useful for quickly implementing an application in the cloud without having to spend a lot of time on software installation, configuration, and orchestration. The downside to these services is that you pay for conveniencetheyre more expensive than running the exact same software on the exact same hardware on the IaaS providers systems. They also limit your ability to fine-tune some or all configuration options. You may find a cloud management or configuration management software or service that has database templates built for your IaaS vendor to be a better and less costly option. For example, RightScale offers a Database Manager ServerTemplate that provides a similar feature set to Amazon RDS but lets customers run database deployments across multiple clouds and doesnt have Amazon RDSs hourly price premium. Cloud management platform enStratus is working on a library of Chef and Puppet scripts that will enable similar functionality. Cost The utility pricing that most IaaS vendors offer can seem very low, but like a cellphone bill, lots of little charges can add up. PlanForCloud .com is a useful resource for cost planning, letting you design a complete cloud architecture and compare costs among IaaS providers. The most important part of estimating costs is making sure youre comparing apples to apples. Most providers have a one-core, 1- to 2-GB RAM virtual
informationweek.com
2011
[IAAS BUYERS GUIDE]
machine available for between 8 cents and 10 cents per hour with on-demand pricing. If you can take advantage of a providers discount plan (commit to purchase a certain amount of computing resources or pay a lump sum up front to obtain lower hourly pricing for one or more years), youll see significant savingsup to and beyond 40% with Amazon and Terremark. Security And Compliance Lets face it, the default security stances of most IaaS vendors are significantly more stringent than standard on-premises security practices. IaaS vendors are also quite used to questions about compliance with common regulations, such as PCI DSS, HIPAA, and Gramm-Leach-Bliley, and some have guides on how to best achieve compliance within their infra-
structures. Finally, the Cloud Security Alliances Security, Trust, and Assurance Registry has responses from many IaaS vendors to a rich set of uniform questions about security practices. Support And SLA Every IaaS vendor we surveyed offers 24/7 online support, and most have telephone support as well, sometimes at an additional charge. However, not all telephone support is equal; SoftLayer is the only vendor that says it puts you in touch with a person who works directly on the hardware underlying your VM. Make sure to calculate the cost of premium support for vendors that price support as a percentage of usage, as that can quickly add up. Every IaaS vendor with a service-level agreement provides credits for future service in the case of an outage, al-
though offerings can be difficult to compare. Amazon and SoftLayer offer 10% of your monthly bill as credit in case of an outage, while Joyent offers 5% of your monthly bill as credit for every 30 minutes of outage, and GoGrid offers 10,000% credit on whatever amount you paid during the outage. Most customers find that IaaS SLAs are noncompensatory; that is, no SLA adequately compensates a company for downtime. SLAs serve more as an incentive to providers to make sure the service is up for the vast majority of its customers. If you have a mission-critical application on IaaS, you must have a multiregion or multicloud deployment, as SLAs dont provide adequate protection. Additional Services One of the most exciting aspects of infrastructure-as-a-service vendors is that theyre constantly innovating and creating new services that make developing and deploying powerful applications even easier. Amazon has had such a head start that its additional offerings dwarf the competition, but a number of vendors are starting to add services, too. Some of the offerings unique to Amazon are Route 53 (DNS service), ElastiCache (caching service), CloudSearch (full-text search service), Simple Notification Service, and Mechanical Turk (human worker service). A number of vendors offer or will soon offer NoSQL database services, aimed at customers who need to store a large number of keyindexed records, such as user preferences for a consumer website: Amazon (SimpleDB and DynamoDB), Google (BigQuery), and IBM (coming soon); as well as queue services (Amazon, Joyent and SoftLayer); and email services (Amazon and SoftLayer). Some vendors also offer consulting services, whereas others let partners do the consulting.
Joe Masters Emison oversees the awardwinning BuildFax cloud architecture and frequently speaks on cloud topics. Write to us at iwletters@techweb.com.
Nov. 5, 2012 31
Remember This
Minimum and maximum amount of memory offered per virtual machine, by IaaS provider
Minimum RAM in megabytes (dedicated) AWS 613
Maximum RAM in megabytes (dedicated)
61,952 GoGrid 512 Google Compute Engine 3,840 30,720 IBM 2,048 Internap 2,048 Joyent 512 NaviSite 256 32,768 SoftLayer 1,024 16,384 Terremark 256
Data: InformationWeek Reports
24,576
16,384
45,056
49,152
65,536
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informationweek.com
practicalAnalysis
hen our partners at Light Reading came to us with the idea of fielding almost identical surveys to users of enterprise services and carrier providers on the future of mobility, we were at once intrigued and skeptical. We knew InformationWeeks readers would be happy to tell us what they want from mobile services, but could Light Reading really get carriers to say where theyre headed? Turns out it could and did. The results from 230 IT professionals involved in determining, procuring, or managing mobile services and from 67 mobile carriers show huge gulfs between what users want and what carriers think they wantand can provide. (The full report will be available in mid-November at reports.informationweek.com.) Surprisingly, very few carriers (9%)
By Art Wittmann
Enterprise Buyers To Carriers: Were Not Thrilled
data caps just make things worse. If consumers hit such a cap, they can decide on the spot if they want to pony up more money for another chunk of data. But if corporate users hit a cap, they generally dont have permission to whip out the credit card for another 100 GB or so. And even if they did, Murphys Law says youll hit your data cap at the worst possible time, like when youre trying to book an order in front of a customer. The result is the need for fairly complex policies and usage monitoring that will come with their own costs. For their part, carriers arent just trying to drive more revenue30% of respondents said theyre trying to do just that, but another 47% said they want to provide better service and 23% want to reduce network congestion. Clearly, giving unlimited data doesnt mean theres
Ninety percent of respondents questioning pricing and 80% questioning service limits dont indicate a happy user base.
said they want to see data prices increase. The largest chunk (50%) would prefer to implement data caps to create a more manageable service. Some 21% said prices are too high, and 20% said theyre at the right level. Not so surprisingly, data caps arent popular with IT pros; 40% were OK with current prices but objected to data caps, and another 50% said prices are simply too high regardless of data caps. When we asked IT pros how they feel about existing caps, 43% said they foresee problems and 37% said they already have had issues. Ninety percent of customers questioning pricing and 80% questioning limits on service dont indicate a happy user baseand
34 Nov. 5, 2012
an unlimited supply of bandwidth. At some point, something has to give. Enterprise users expect that their employees will adopt tablets and smartphones somewhat faster than carriers dothough the differences in expected rate of growth are not by any means striking. Whats more striking is the difference in opinion of the existing network. Roughly half of both carriers (47%) and enterprise customers (52%) said that 4G networks are adequate but need improvement. A quarter of IT pros said the current 4G network is very good and meets our needs, while a much larger 40% of carriers said that. Some 20% of IT pros said the existing infrastructure is barely cutting it, while
only 10% of carriers come to the same conclusion. This disparity seems like a formula for customer disappointment. IT pros see two areas in particular where existing networks dont cut it. First, for rural/remote usage, where data coverage can be spotty to nonexistent46% of survey respondents said this is their biggest issue. The second biggest concern, at 29%, is with data caps and avoiding excessive overage fees. Theres not much to be done about the first issue, but in the second case, both carriers and IT pros see Wi-Fi as an off-load medium and a way to expand network coverage. Only 12% of the carriers in our survey dont plan to use Wi-Fi this way; just 26% of IT pros said they preferred not to use Wi-Fi where they can to augment 4G services. As carriers improve their mobile networks and enterprise users rely more heavily on apps that require wireless connectivity, how confident is each group that the 4G wireless infrastructure will do the job? Not surprisingly, more carriers are very confident than are enterprise planners (38% vs. 15%). However, 70% of enterprise customers said theyre at least somewhat confident, while 56% of carriers said the same. The restjust 15% of enterprise pros and 6% of carrier prossee a very bleak picture for carrier wireless networking. Art Wittmann is director of InformationWeek Reports. More than 100 major reports will be released this year. You can sign up for a free account at informationweek.com/reports/register. Share a digital version of this story and read others by him at informationweek .com/artwittmann. You can write to him at awittmann@techweb.com.
informationweek.com
from the editor
down to Business
By Rob Preston
Indias Cipla: No Time For Incremental IT Change
o business technology buzzword gets worn out quite like transformation, but theres no other way to describe what Indian pharmaceutical company Cipla is embarking on. The 77-year-old company, publicly traded but family controlled, is one of the worlds largest generic drugmakers, with a presence in more than 170 countries (half its revenue comes from India). But until six months ago, it didnt have a CIO and was the poster child for shadow IT. Each company department negotiated with tech vendors on its own, deployed its own systems, and then looped in the IT department which consisted of only 17 core internal people, serving a company with 20,000 employees. Enter Arun Gupta, who Cipla re-
reduce more than 600 database servers to 100. Gupta also plans to reduce the companys scores of ERP, CRM, HR, document management, laboratory information management, and other pharma-specific apps to about 15 total. And hes fixing Ciplas broken implementations of Pilgrim (quality assurance and compliance) and IBM Cognos (business intelligence) software. Looking to make a difference on the front lines, Gupta is focusing on Ciplas medical reps: the employees who sell the companys products to doctors. Already, Cipla is one of the few pharma companies that doesnt pay its reps based on sales, he says, and it wants to enhance its reps engagement with doctors with a new off-the-shelf software tool that lets them share information on clinical trials and medical studies.
Until six months ago, IT buying at the 20,000-employee pharma company was scattered at best. It didnt even have a CIO.
cruited earlier this year from retailer Shoppers Stop to bring discipline and vision to the companys IT. I caught up with the soft-spoken Gupta last month at Interop Mumbai, where he put his IT transformation efforts into the context of a broader business restructuring under way at Cipla, which has brought in new chiefs of HR, supply chain, international marketing, strategy, legal, and other functions over the past half year. Guptas first major step was to consolidate Ciplas six data centers to a single colocated one and revamp its network around a mix of MPLS and Metro Ethernet links. The companys ongoing application rationalization is a bit more complex, he says. The plan is to
36 Nov. 5, 2012
The goal is to increase the average time a rep spends with a doctor from one minute to five, Gupta says. He estimates that the new tool also helps reps save as much as three hours a day on planning and reporting activities: accessing customer data, tracking sales activity, filing expense reports. Cipla plans to replace the 8,000 laptops its reps use with 10,000 Windows 8 tablets. It will pilot the tablets with about 200 reps over the next few months before rolling out the devices, from multiple OEMs, next year. Gupta is also trying to get his arms around Ciplas sprawling supply chain of distributors and resellers to improve on-time delivery, which he estimates
was in the low teens when he took the job. Ciplas starting with process improvements, adopting theory of constraints methodologies before turning to technology. Next up is a big bang SAP ERP implementationstarting with financial accounting, sales and distribution, production planning and materials management, and purchase and order managementto replace 40-plus custom systems. Every process will change, Gupta says. There will be disruption from day one. The rollout is due to start in January and finish by 2015. Meantime, Gupta is building up Ciplas in-house IT capabilitiesa goal over the next 12 months is to add 35 IT specialists beyond those 17 in the core IT group. For example, an SAP lead will join the company next month and hire his own team; same for a chief information security officer Gupta is recruiting. In the process, Cipla will gradually wean itself off its dependence on IT vendors, integrators, and consultantsmuch like CIO Randy Mott is doing at General Motors under his own recently launched IT transformation effort. Gupta, like Mott, realizes he doesnt have the luxury of making incremental changes. He figures Cipla is 10 to 15 years behind others when it comes to IT best practices, and all Cipla executives are under pressure to accelerate company growth to the 30% to 35% range. In the past, Cipla was averse to doing such a massive ERP implementation, for instance, but now theres no choice, Gupta says. If we dont do it, it will start impacting the business. Rob Preston is VP and editor in chief of InformationWeek. Read more by him at informationweek.com/robpreston. Write to Rob at rpreston@techweb.com.
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