PwC 30000 feet Ground Zero to The trends in Enterprise Infrastructure and IT Sivarama Krishnan, Executive Director

30000 feet

Ground Zero

to

The trends in Enterprise Infrastructure and IT

Sivarama Krishnan, Executive Director

Slide 2PricewaterhouseCoopers

Agile Management

Architecture

Applications

www.pwc.com/technologyforecast

Data

PwC Quarterly Tech Forecast

Trend 1

Cloud computing will change your infrastructure landscape


Cloud Computing—Definition

• Cloud Computing is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet.

Zeus, 2009

• The Cloud is how the Internet is depicted in network diagrams, also used in telephony for Virtual Private Networks (VPNs) where traffic is switched to balance utilization.


Cloud Computing—Benefits

Complexity of built-to-order IT infrastructure burdens business agility and contributes to lack of responsiveness of IT.

The Cloud Computing paradigm shift may be similar to the displacement of electricity generators by electricity grids early in the 20th century.

Cloud Computing promises compelling benefits, including:

• Rapid IT expansion and scalability with few upfront costs• Clearly defined services managed to appropriate service levels (billed

on a utility or subscription basis – avoid capex)• On-demand availability and scalability up and down• Location independence (internal, external, Web, etc.)• Complexity hidden from view

Cloud Computing is a model of how IT should operate as a business!


Service providers own and operate live Cloud Computing systems to serve third parties:

Example: Amazon.com modernized their data centers after the dot-com bubble; New Cloud Computing architecture resulted in significant internal efficiencies; Offer ‘Amazon Web Services’ on a utility computing basis

Cloud Computing—Third Party Platform and Infrastructure Services


Three models have emerged:• Software as a Service (SaaS)--Applications via browser (ex:

Google Apps, SAP and Salesforce)• Platform as a Service (PaaS)--Hosted environment to build

and/or deploy cloud applications (ex: Amazon E2C)• Infrastructure as a Service (IaaS)--Virtualization of the data

center using a utility computing model with resources available on demand (internal). Also available for rent (external) (ex: HP Adaptive Infrastructure as a Service, Microsoft Online Service)

Cloud Computing—Categories

SaaS and IaaS are the key Cloud capabilities for 80% of customers.


Cloud Computing—Hybrids

A hybrid Cloud environment will likely be typical for most enterprises

This environment consists of multiple internal and/or external providers, creating additional risks and complexities to be considered by organizations and their auditors.

Source: VMware, 2009

Internal Cloud External Cloud

Federation


Cloud Computing—Outlook

• Cloud computing will meet prime time in the 2010 timeframe

• Expected to have >30 yrs of momentum

• The biggest opportunity to our clients is to improve IT by making the data center “virtualizable”—that is, make the data center programmable, or fully software-defined (evergreen IT)

• Requires a new way of thinking, new risks, new processes, new skills, and new tools


Cloud Computing—Strategy

Companies evaluating a Cloud-computing strategy should consider the practical, operational and legal issues, including:

• Costs to transition from company-hosted servers to the cloud

• Selecting service providers and evaluating ‘lock-in’ implications while service providers have not agreed on industry standards

• Architecture of IT environment (internal vs. external components)

• Security and data access


Cloud Computing—Vendor Assessment

Gartner lists seven security issues to consider when evaluating vendors:

1. Controls over access to and administration of data in the cloud

2. Process for vendors to undergo external audits/security certifications

3. Data location – can the customer control location of the data?

4. Data segregation – encryption at all stages and properly designed/tested?

5. Recovery – disaster recovery plan and time to reconstruct

6. Investigative support – ability of vendor to investigate illegal activity

7. Long-term viability – how will data be returned if vendor goes out of business?


Governance, Security and Privacy

Other Governance, Security and Privacy concerns:

• The “cloud”, by nature, is obscure and common governance frameworks do not exist

• There is a certain level of distrust from customers about how well cloud companies are abiding by the terms of service and securing their sensitive data

• Uncertainty as to how individual company data will be separated and kept private from other customers

• Cloud vendors are perceived as being prime targets for cyber terrorism• Secure architectural models are in their infancy and there are no clear

leaders in best practice• Complexity is present in getting a good handle on control over access and

who will govern standards• Expect difficulty implementing robust auditing and monitoring

Trend 2

Enterprises will leverage unstructured information through Semantic Web


Semantic Web—Definition

Hypertext Markup Language (HTML) Web pages are designed to be read by people, not machines.

The Semantic Web is a vision of computer-readable information. With the first generation of this capability, siloed information can be integrated at a scale not previously possible.

To enable the Semantic Web, humans have to make the context of the information they develop explicit and universal.

Some enterprises like Chevron and M.D. Anderson Cancer Center are already doing some very compelling things with Semantic Web techniques to address the problem of information silos. The silo problem is at the root of poor business intelligence (BI) and poor knowledge management (KM).


Semantic Web—Addresses the Information Gap

Source: PwC 12th Annual Global CEO Survey, 2009

Despite huge investments in BI, data warehousing and KM, information gaps persist.


Semantic Web—Benefits

PricewaterhouseCoopers, 2009

The traditional information analysis tools and methods we have focus on internal, structured data.

Enterprises generally don’t make the best use of most of the data they have access to, tending instead to focus on the internal, structured data generated by core transaction systems. The Semantic Web makes it possible to tap into and integrate external and less structured information with the rest.


Semantic Web—Methods

“We’ve found that when you provide a basis for people to say that this entity, this sort of information relates to this other sort of information, then the people who are involved fill in the gaps. You don’t have to have this huge engineering effort to try to force a shared model between them…. Semantic Web technology…is designed to go from very slim threads and very slim connections, and then have those strengthened over time through human intervention.”

--Uche Ogbuji, Zepheira

Knitting together an information fabric with semantic techniques starts with a few good threads, which you then add to incrementally.


Semantic Web—Case Studies

Interviewee: Uche Ogbuji

Case: Sun Microsystems

Interviewee: Tom Scott

Case: BBC

Interviewee: Lynn Vogel

Case: M. D. Anderson

Interviewee: Frank Chum

Case: Chevron

Case studies from PwC interviewees underscored both the immaturity and the potential of these techniques


Semantic Web—Implications• The rise of a new class of tool vendors within three to five years, now that Semantic

Web standards are in place and application builders are emerging.• A move from centralized to decentralized data models, which implies slow growth for the

guardians of the centralized model (well entrenched data warehousing and BI vendors). • A shift of database and suite vendors’ competitive dynamics: Oracle is well positioned

to benefit from the Semantic Web. Microsoft’s in an okay position. SAP is still in the lab.• A change in application design philosophy: Ordinary applications won’t go away, but the

growth potential favors vendors who understand trends at the data layer and the need for lightweight, distributed applications best.

• Reduced emphasis on traditional data management because the established methods don’t scale well. Semantic Web data methods do scale. IT departments can shift resources to the scalable method.

• Reduction of corporate silos, at the root of what the Semantic Web enables.• A need for entirely rethinking corporate compartmentalization policies, practices and

processes, given the silo reduction capability.• Years for enterprises to navigate the learning curve, which means there’s plenty of

continuing opportunity to advise clients on moving to a Web-scale, data-centric architecture.• A need to treat XBRL and other financial reporting separately, because Semantic Web

methods are still in an early phase, while XBRL is refined and more complete for the purpose it serves.

• A need to harness the power of business units to describe data in a standard way: Sem Web techniques make possible what was previously too time consuming to attempt, but requires business unit involvement.

Trend 3

Internal and external communications will revolutionize with Web 2.0 & social networking


Social Networking—What is It?

Knowledge and insight

• documents

• broadcasts

• Web 1.0

• Webcasts

• blogs & wikis

• mashups

• totally new things

• meetings

• conversations

• brainstorms

Powerpoint, Excel, Word, portals, radio, TV

Ajax, Ruby on Rails, widgets, wikis, blogsites, filters, ranking systems, hack days

face-to-face, phone calls, messaging, paper napkins

Media

Tools &techniques

Timeliness of content

Historical Real time

One tomany

One toone

Many tomany


Social Networking—Phase I

Source: The Guardian, 2008

1997-2006: Some Hits, Mostly Misses 2001-2007: The Rise and Fall of Online Anonymity and Dial-Up

Source: Wikimedia, 2008


Social Networking—Phase II

• Anchor tenants in the online mall

• Twitter on the upswing• Decidedly more mature than

phase I

What This Phase Has

• Aggregative potential—Ease of collecting in one place what’s been posted

• Collaborative potential—Ease for users to edit or change what others have posted in place

• Extensibility potential—Ease of adding other functions from other sources

• Flexible privacy potential—Ease of adding or deleting recipients of messages in mid-thread

What This Phase Lacks

Source: HItwise, 2009


Social Networking Phase III—Google Wave

“Imagine if we designed e-mail today, rather than 40 years ago. What would it look like?”

--Lars Rasmussen, Google Wave’s Lead Developer

Source: Google, 2009

• Blend of wiki-style, or even community scrapbook-style e-mail/IM/blog/collab. editing

• Playback of message edits/changes: Later users added can play back the message evolution piece by piece

• Portability between media types, including photos, video

• Access control specific to group messages in mid-stream

• Simultaneous editing and real-time translation• Interactive games between group members• Wave links instead of URIs (so it's non-Web)

Features

Significance• Breaks apart the old e-mail paradigm, enriching and renewing it• Reduces silos between social media• Taps into open source development at a new level• Establishes a different, secured “Web” owned and operated by Google• Provides an on-ramp for seizing market share from Facebook and MySpace


Social Networking—Implications

• Continuing evolution of networking capabilities, with new social networking sites appearing and older ones growing stale or being forced to reinvent themselves

• Removal of some boundaries between media types and sites, as the open platform model of Google Wave and other new sites emerges

• Increased cross-platform collaboration and a further blurring of the boundaries between companies, between public and private, and between work and personal pursuits

• Enhanced media sharing capabilities, with even more risk of information loss, security policy violation and copyright infringement

• More urgent need for online identity standards and capabilities, given the new boundarylessness and cross-platform capability. One question that will be asked more frequently: Are people who they say they are?

• Emergence of private “Webs,” like closed community sites, but with more of the richness of a public Web environment

Trend 3

3G may have been delayed, but 4G will quickly follow unleashing new platform for enterprise computing


4G—What Is It?

• LTE, or Long-Term Evolution—The upgrade path of choice for most major cellular carriers, including CDMA carriers

• Multicarrier EV-DO and DO Advanced—A path for some CDMA EV-DO carriers

• Mobile WiMax—The chosen alternative for Sprint, Clearwire, and parts of developing world

4th Gen Mobile Broadband

Features• 7Mbps expected average throughput, about

10 times the speed of 3G• Lower latency than 3G• Better roaming possibilities (with LTE)

What will be possible with 4G?• Good mobile video—finally• Better music services over cellular• Some basic video conferencing• Alternative to wireline, Wi-Fi and satellite

broadband service

Sensa Fili Consulting, 2007

Pyramid Research and PwC, 2009

LTE Subscriber Forecast

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2010 2011 2012 2013 2014

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4G—More Device Types Get Connected

Cisco, 2009

Cisco, 2009

Mobile Data Demand by Type

Data Growth Potential per Subscriber per Month

More available cellular bandwidth

More demand for mobile data

More device connection possibilities

Mobile Data Demand by Region

Cisco, 2009


4G—Chinese Mobile Infrastructure Providers Gain Share

1Q09 Mobile Network Equipment Market Share

Ericsson33%

Huawei15%Alcatel-Lucent

14%

Nokia-Siemens12%

ZTE5%

Nortel4%

Other17%

• Huawei and ZTE have capitalized on subscriber and network growth in China over the years

• Nortel’s share dropped by half

• Alcatel-Lucent’s share dropped by 2 percentage points over the previous quarter

• The Nokia-Siemens JV, suffering losses, is looking to buy part of Nortel’s assets

Dell’Oro Group, Forbes, PwC Estimates, 2009

$35.4 billion


4G—Speculations about the Next iPhone

A new Apple patent application this month alludes to a pico projector and media sharing. But no figures in the patent show the projector. Here are some of the interface drawings in the filing:

Apple patent application as reported by Slashgear, 2009


4G—Implications

• Growing strength of Asian hardware OEMs, bolstered by continued strong subscriber growth, favored vendor status locally and government subsidies

• Instability among North American and European equipment providers and some more consolidation

• Slow upgrade to 4G in the US by contrast with China, Korea and Northern Europe• A rich new platform environment, implying a proliferation of new kinds of handhelds

and lots of opportunity for developers• Increased competition in the residential and SOHO broadband market, with some

opting for cellular wireless over wireline• Further reduced emphasis on metro Wi-Fi, as cellular improves enough to be

classified as true broadband• More pressure on IT departments to allow the iPhone and other smart handhelds• Increased proliferation of user-generated video and greater privacy implications as

handhelds become life recording devices• Reinforcement of the strongest incumbent wireless carriers, by contrast with

those who do not have the capital to upgrade losing ground

© 2009 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

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PwC 30000 feet Ground Zero to The trends in Enterprise Infrastructure and IT Sivarama Krishnan, Executive Director