Technology

Interview with André Feld, Deutsche Post DHL

Heavy Clouds
or Clear Skies?
Cloud Computing in the IT Strategy of Deutsche Post

Old wine in new barrels or a groundbreaking

concept? Many companies are currently
wondering about the significance of cloud com-
puting for their IT landscape. As complexity
and abstraction increase, IT officers find it
increasingly difficult to assess technological
trends. André Feld is the head of technology
management at Deutsche Post and describes
in the following DMR interview just how the
logistics corporation is turning innovation into
value and what relevance cloud computing
models will have in the future.

64 Detecon Management Report s 1 / 2010


DMR: On the one hand, the recession is exerting enormous
pressure on company budgets, including information technology
investments. On the other hand, everyone is feverishly seeking a
good starting position for the upswing we hope is coming. For these
efforts, a deliberate use of technology can be key success factor. What
value does information technology have for the logistics industry, for
Deutsche Post AG?
A. Feld: Many of the IT projects now being carried out are
aimed at increasing cost efficiency, a consequence of the general
economic situation. Yet one should not forget that future-orien-
ted logistics consisted of much more than the simple movement
of transport fleets even before the recession hit. The develop-
ment of new business opportunity heavily depends on infor-
mation technology. In creating the announced “Online Brief ”*,
Deutsche Post is transferring the service promises of the classic
letter – confidentiality, reliability, and binding force – to the
Internet. The carrier for these services is without a doubt an IT
platform; to this extent, information technology is becoming
of even greater importance for the business development of the
company.
DMR: The speed of innovation in IT continues to accelerate, the
abstraction levels and interdependencies are becoming more and
more complex. How does Deutsche Post deal with this challenge?
A. Feld: We put a substantial effort in evaluating emerging
technologies and their potential benefits. In order to create a
competitive advantage and to make unbiased decisions, we drive
the innovation process from within the company. We analyze
innovation fields thoroughly and in the context of our business
activities. With this approach we assess the value that technology
contributes to the specific service portfolio of Deutsche Post.
* The term “Online Brief ” (engl. „Online Letter“) is a working title.
Interview: Heavy Clouds or Clear Skies?
DMR: What methodology do you apply in identifying, evaluating,
and implementing new technologies?
A. Feld: We have created a standard procedure for technology
management that balances the demand and supply side regarding
their influence on the technology portfolio. Close cooperation
is necessary between the business departments and the IT unit
whenever a “market pull“ must be taken into account. We strive
to collaborate in the planning and representation of innovation
driven by the market and technology.
The identification of value-creating technologies is followed
by an evaluation phase which takes into account functional,
commercial, and operational aspects. Once the results of these
evaluation steps have come in, a standardization process, e.g.,
for specific products and supply processes, is conducted.
DMR: The implementation of innovative technology concepts
frequently happens at places other than the green field. How do you
prepare a technology change?
A. Feld: Technological innovations can offer great benefits of
either a functional or commercial nature even for existing IT
systems. By preparing a detailed view of the current inventory of
IT components, we are able to align the standardization of new
technologies with benefits for the current application landscape
as well. The introduction and implementation is initially sup-
ported by an in-depth consideration of economic efficiency and
feasibility and then carried out within a dedicated migration
program. In the event of a complex, fundamental technological
changeover, the IT organization may create incentive systems
for the business units to encourage them to shorten migration
cycles.
65 Detecon Management Report s 1 / 2010
Technology

DMR: Apropos “fundamental technology changeover” – informa-

tion technology is always rich in trend topics and visions of the
future. What disruptive technological innovations are the subject of
your current investigations?

A. Feld: Right now, we are taking a very close look at use cases
for cloud computing services which we have analyzed within
the scope of an innovation study. The term “cloud computing”
does not define a field of technology in the literal sense; it refers
to a business model for which cost efficiency and flexibility is
the key motivation. The range of products currently available
on the market is correspondingly broad. Even the somewhat
coarse segmentation into infrastructure, platform, and applica-
tion services indicates how extensive and immature the cloud
André Feld is the head
of the team Identity & computing paradigm is today.
Technology Management
at Deutsche Post DHL. DMR: What applications of cloud computing appear to you to be
One of the focal points of
realistic and, above all, of commercial benefit from the standpoint
his work is the assessment
of innovative technolo- of a large corporation?
gies for the corporation
Deutsche Post DHL and A. Feld: We have gained a lot of experience in the flexibiliza-
anchoring them in the
tion of our IT infrastructure in the past. The establishment
cross-departmental IT
strategy. André Feld holds of shared IT platforms, e.g., in the area of data integration or
a degree in computer business intelligence, is also being driven forward. The current
science which he earned transition to a fully virtualized application landscape and the
at the RWTH Aachen
dynamic allocation of IT resources takes us relatively close,
University.
technologically speaking, to the scenario of an enterprise cloud.
However, the dominant model of usage-based pricing in the
area of public clouds is economically lucrative. Since IT infra-
structure sizing is subject to a high level of inaccuracy, one can
shift the risk of idle time for the infrastructure to the operator
by using a “pay as you go” model. This appears to be an attrac-
tive model for the future.

DMR: Experts could hardly be less in agreement regarding the

adoption of cloud computing services. Some believe that Europe is
already falling behind, while others warn of additional risks. How
do you judge the maturity level of today’s cloud computing services,
and what risks do you see?

66 Detecon Management Report s 1 / 2010


A. Feld: If the properties of cloud computing services are
matched with our business and IT requirements, the results are
quite mixed. Although the flexibilization of the costs and acce-
leration of the speed with which applications are made available
represent a visible improvement in comparison with conven-
tional IT deployment concepts, there are also weaknesses. Many
software providers do not provide a licensing model which takes
into account the lack of physical quantities such as processor
cores or server instances and which is suitable for cloud compu-
ting. Moreover, data security and data protection requirements
have not been adequately implemented for public clouds. Be-
sides open questions concerning security in multi-tenant
environments, the problem of compliance with general legal
provisions in the intentionally industrialized, anonymous ope-
rator model of cloud services has not been solved. For example,
the revised German Federal Data Protection Act obligates every
data proprietor to audit regularly compliance with security stan-
dards among the IT service providers operating IT systems on
a contractual basis. The “self-service” philosophy of the public
cloud providers does not allow for such audits.
DMR: Let us assume that the cloud computing concept will develop
into the IT paradigm of the coming years. What steps will you take
in order to be prepared for future cloud services? What challenges do
you see in the transformation of today’s IT landscape?
A. Feld: We are currently focusing on two fundamental prere-
quisites for the use of cloud services: the highest possible level of
standardization for a limited number of utilized technologies for
one and the decoupling of all applications from the underlying
infrastructure for the other. Moreover, we are gathering practical
experience with public clouds in particular use cases. We have
found some highly promising scenarios for development and
reference environments which are subject to highly dynamic
workloads and low operating risks.
There are a number of hurdles to be taken before the attrac-
tive vision of a dynamic selection of the IT infrastructure pro-
viders similar to the preselection concept for telephone calls
can be realized. The limitations of the IPv4 address space and
Interview: Heavy Clouds or Clear Skies?
the widespread encapsulation of address spaces on the Net are
blocking a virtualization of the network. Moving IT systems
across various clouds requires features of the IPv6 protocol
family such as stateless, automatic configuration. Following the
dynamization of the compute and storage systems, our transfor-
mation work will shift focus to the network.
DMR: Classic IT manufacturers are not the only ones who have
discovered cloud computing as a business model and who are
expanding their portfolios by providing services out of the cloud.
The internet retail company Amazon is a prominent example, but
telecommunications and media companies are doing the same. Is
the role of cloud computing services provider a promising scenario
for Deutsche Post as well?
A. Feld: Changing to a provider role on the cloud computing
market is an option which can be considered only as an exten-
sion of the current value chain. Herein, the push of the techno-
logies on which cloud computing is built such as virtualization,
automation, and broadband networks becomes obvious. It is
the IT department‘s duty to enter into dialog with the business
units and explain the potential of the technologies to them; then
a joint work to develop innovative business models may follow.
With regard to Deutsche Post, I believe the SaaS market would
be a suitable segment for enhancing our current services port-
folio by creating services that are customized for our customers
and partners. The announced “Online Brief ” service falls within
this category, and there are advanced concepts in the area of
campaign management as well.
DMR: Thank you for the interview.
The interview was conducted by Martin Jeske
and Dirk Pracht from the Strategic Technology Group, Detecon.
67 Detecon Management Report s 1 / 2010