WHITE P APER

Optimizing BSM in a Challenging Global Economy:

Delivering Service Quality While Improving IT Efficiency
Sponsored by: HP

Tim Grieser
May 2009

INTRODUCTION
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Survival in today's highly challenging economic environment requires constant

vigilance by IT managers and line-of-business executives alike to deliver cost-
effective services to customers and end users. Recent economic events have driven
home the importance of improving IT efficiency by controlling IT costs and at the
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same time delivering competitive business services with high service quality. In short,
IT organizations have to sustain service quality and health while improving
operational efficiency and reducing service costs.
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IDC OPINION
The worldwide economic crisis and today's sharp focus on cost containment are
driving IT organizations to adopt a number of key strategies to optimize the delivery of
their business services. IT executives must place strategic emphasis on adopting
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such strategies, together with enabling management software, to extend the initial
benefits of virtualization technology and to incorporate the virtual infrastructure into
established physical environment. These strategies include:

Widespread use of virtualization to reduce infrastructure costs and improve agility

Automation to improve scalability and increase operational efficiency

As the deployment of virtualization technology for infrastructure and datacenter

consolidation accelerates, and the use of virtual machines (VMs) for production
workloads increases, IDC believes that IT organizations must better prepare for,
invest in, and deploy management solutions that support service views, such as
business service management (BSM). It is critical that IT organizations also address
the growing complexity of physical and virtual infrastructures to realize the cost
benefits that can be gained with virtualization technology.

IN THIS WHITE P APER

This IDC White Paper examines the roles of virtualization and automation in
improving operational efficiencies. Delivering end-to-end service visibility across both
physical and virtual infrastructures is a key requirement for preventing service
outages or failures. In addition, the need to manage change, configuration,
performance, and capacity in an automated fashion continues to grow.
Virtual computing teams, operations executives, datacenter managers, and server
and storage teams face increasing pressures to gain the expected ROI from their
virtualization investments. Automation of virtualization capabilities across silos is a
key strategy to lower virtualization TCO, increase infrastructure compliance, and
deliver agility to meet changing business requirements.

This White Paper focuses on key monitoring and automation aspects of datacenter
management. Asset management and related HP Asset Management solutions are
explored in depth in a related IDC White Paper, Managing the IT Service Lifecycle:
The HP Approach (IDC #214392, October 2008).

SITUATION OVERVIEW
The economic impact of the worldwide financial crisis brings cost control to the
forefront of IT concerns. Indeed, in a recent IDC survey, IT professionals in United
States–headquartered companies ranked "reduce costs" as the top business goal for
2009, followed by "increase revenue" (see Figure 1). Interestingly, the next two
business goals relate to service quality, namely "improve quality/accuracy" and
"increase customer satisfaction."

These two seemingly conflicting goals — containing IT costs and improving service
quality — require approaches to IT optimization that address improvement of
operational efficiencies without sacrificing service availability or performance.

FIGURE 1

Top Business Goals in 2009

Q. Prioritize the following business goals as they relate to your organization in 2009 by
allocating 100 points among them.

Reduce costs
Increase revenue
Improve quality/accuracy
Increase customer satisfaction

Increase market share

Speed time to market
Other

0 5 10 15 20 25
(% of respondents)

n = 380
Source: IDC's Datacenter Consolidation Multiclient Study, 2008

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Key Optimization Approach: Virtualization

IT departments supporting business services are adopting virtualization in many

different functional areas. Server, storage, desktop, network, and application teams
are increasingly adopting virtualization for a variety of functions, including
development and test environments; utility file, print, and Internet services; production
applications; and, increasingly, mission-critical applications and databases. High-
availability and business continuity solutions based on virtualization are growing use
cases.

Another IDC survey identified the current and planned adoption of server virtualization
among IT organizations. Figure 2 shows the extent of server virtualization in use
in the surveyed IT organizations. The largest group (40%) responded "20–40% of
servers are virtualized," 29% indicated "less than 20%," and 16% responded "over
40%."

FIGURE 2

Server Virtualization Adoption

Q. What is the extent of virtualization in use in your organization?

Over 40% of servers are currently

virtualized

20–40% of servers are virtualized

Less than 20% of servers are

virtualized
No current virtualized servers, but plan
to deploy within 12 months

No plans to deploy virtualized servers

0 5 10 15 20 25 30 35 40
(% of respondents)

n = 164
Source: IDC, August 2008

Many core reasons for adoption of virtualization align with business needs, notably
reducing and containing capital costs for infrastructure acquisition as well as providing
operational benefits such as reducing power, cooling, and space costs; reducing time
needed to execute certain tasks such as provisioning from weeks to days; and
creating a more agile infrastructure that can respond to changing business
requirements.

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The key benefit driving the adoption of virtualization is the ability to drive up server
utilization by combining multiple workloads onto a single server. In typical
environments, individual nonvirtualized server utilizations can frequently be in the
5–15% range for x86 platforms. With multiple workloads combined on a single server
using virtualization, overall server utilizations can be increased to the 50–60% range,
or better. This provides the basis for server consolidation and a reduction in the
overall number of servers deployed in a datacenter.

Key Optimization Approach: Automation

Use of automation tools to leverage staff resources and reduce operational

complexity is a widespread approach to achieving IT efficiency. As shown in Figure 3,
survey respondents ranked "cost reduction" as the most likely business case for
automation solutions.

FIGURE 3

Most Likely Business Cases for Automation Solutions

Q. What is the most likely business case you will make for automation solutions?

Cost reduction
Process standardization acceleration

Business process impact

Compliance assurance

Improved change management

Improved security
Other (please specify)

0 5 10 15 20 25 30
(% of respondents)

n = 164
Source: IDC, August 2008

Automated management is a critical consideration for optimizing physical and virtual

infrastructures; in fact, automating processes requires the ability to become indifferent
to the underlying infrastructure. Policies are only as effective as the processes they
impact and the actions they trigger that deliver business impact. As cross-silo
adoption of virtualization increases, IT organizations have the opportunity to drive
efficiencies across the spectrum, using an automation platform to accelerate the
virtualization opportunity for cost reductions, increased availability, lower human error
rates, and more agile infrastructure.

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IT has an opportunity to utilize automation technologies that drive tighter task
automation across domains; for example, the ability to automatically discover and
identify server resources that can be virtualized. Automating a capacity planning
process can assist IT organizations in increasing server utilization rates, reducing
power consumption, and creating policy-based control over infrastructure. Automation
offers a faster rate of return on virtualization by eliminating redundant tasks and
creating an infrastructure that is driven by agreed-upon policies that trigger actions
within virtual infrastructure.

ACHIEVING IT OPERATIONAL EFFICIENCIES

The strategies of virtualization, consolidation, and automation can be used to achieve
IT operational efficiencies and deliver cost savings while preserving service quality. A
number of these initiatives require the deployment of management software tools to
be effective. In today's economic climate, investments in management software to
boost IT services need to be able to deliver positive returns on investment in the short
term, preferably within 6 to 12 months of the investment. The following sections
highlight representative areas in which management tools can have significant
positive effects.

Service Monitoring

The rapid adoption of virtualization as a production-level datacenter architecture is

pressuring IT organizations to adopt management solutions that manage service
delivery across both physical and virtual infrastructures. Service monitoring is
essential to verify "service health" objectives and to detect events that may negatively
impact service quality. Detected events may be handled locally or passed off to an
incident management system for further analysis. The following are key service
monitoring requirements:

Monitoring the end-to-end service experience from the user perspective to

ensure that overall required service quality performance and availability metrics
are being achieved

Monitoring and managing the virtual infrastructure, including the entire virtualized
software stack — hypervisor, guest operating system, and applications — and
the physical infrastructure it relies on to detect slowdowns and possible service-
impacting events

Integration of virtual infrastructure management tools into overall enterprise

management software — such as monitoring, event management, service desk,
and enterprise consoles — with common treatment of virtual and physical
infrastructures from the IT operations perspective (managing them "the same")

Net benefits of monitoring physical and virtual infrastructures include improved

service availability and service quality; lower cost of ownership and operations;
increased control over change and configuration management; and improved ability
to manage across "IT silos" that span server, storage, desktop, and application
environments.

©2009 IDC #218379 5

Service Automation

Service automation achieves operational benefits by reducing the staff time needed to
perform routine, repeatable operations, thus reducing costs. Another key benefit of
service automation is improved service quality by preventing operational errors that
can negatively impact service availability and performance. Also, the ability to operate
at higher volumes of activity without requiring additional staff is a key benefit derived
through automation.

Automation can be adopted in varying degrees at various operational control points

within IT service delivery. Many IT organizations have adopted some form of basic
automation — such as the use of standardized scripts — to perform routine
operational tasks that must be repeated frequently, such as applying software
patches and updates.

More generalized approaches include run-book automation or solutions that provide

automation facilities for standard processes such as incident management, change
and configuration management, and common maintenance functions. Run-book
automation is based on workflows that define the sequences of tasks to be automated
using a vendor-supplied workflow engine:

Automation is especially appropriate to efficiently managing virtualized

infrastructure. For example, IT organizations must consider the impact of VM
sprawl as production usage of virtualization continues to accelerate and broaden
across IT silos. Automation offers a faster rate of return on virtualization by
eliminating redundant tasks and creating an infrastructure that can be driven by
agreed-upon policies that trigger actions within the virtual infrastructure.

Many of the same management challenges exist in both physical and virtual
environments, such as change, configuration, capacity planning, chargeback,
problem, and performance management. Automation offers a seamless and
efficient approach to linking management processes and tasks across physical
and virtual infrastructures.

Overall, automation is a highly important and effective strategy for optimizing IT

operational costs while delivering on improved service quality.

HP SOFTW ARE SOLUTIONS TO IMPROVE IT

EFFICIENCY
HP Business Service Management and HP Business Service Automation work together
to help IT organizations maximize the return on their virtualization investments.
Together these solutions provide the necessary management and automation of both
virtual and physical environments to improve operational efficiency.

HP Business Service Management helps IT to achieve the following benefits:

Drive down new operational costs brought about by virtualization

Consolidate event and performance monitoring for end-to-end virtual services

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 Provide the necessary decision support data used to analyze problems before
using automation tools for remediation

Eliminate redundant tasks and decrease administrative overhead

Retrieve metrics from all layers of the virtualization stack

Detect and isolate problems across physical and virtual environments

Improve customer satisfaction and retention through proactive detection

HP Business Service Automation provides the following benefits:

Improve ROI from virtualization through automation of manual processes

Provide a common platform for automating provisioning, configuration, and

change management and other processes and managing physical and virtual
server environments

Integrate processes across multiple virtualization platforms, including VMware,

Microsoft, and Citrix

Eliminate redundant tasks and decrease administrative overhead

Simplify use of best practice processes such as ITIL

FUTURE OUTLOOK
Many IT organizations face critical future considerations when deploying virtualization
and consolidating management capabilities. These considerations include:

Automation technology adoption. Identifying automation technology task

opportunities and integrating them with process standardization will help staff be
more efficient and drive more policy-based management.

Integration of physical and virtual data. Bringing together data from across
disparate parts of the virtual and physical infrastructures can improve the visibility
and business benefit analysis from a service life-cycle perspective.

IT service view. Clustering and grouping VMs, understanding dependencies,

CMDB inclusion, and expanding production usage of virtualization and emerging
server architectures are driving the need for IT to deliver a service orientation
that understands the supporting infrastructure.

New management benchmarks. IT organizations must better understand how

they utilize and measure service delivery successes; benchmark analysis such
as admin-to-VM ratios, availability, file recovery times, and reduced provisioning
cycles are critical to measuring the success of IT service deployments.

IT as a profit center. The ability to measure and offer tiered services to business
partners is a goal for IT; granular insights into data and the service delivery life
cycle enable accurate and credible chargeback models to drive a profit center.

©2009 IDC #218379 7

CHALLENGES/OPPORTUNITIES
HP Software challenges include:

The buildout of integrations across a large, growing product portfolio focused on

enabling physical and virtual management for datacenters

The development of "value-added" features and products that are viewed by

users as innovative capabilities that leapfrog management offerings from
hypervisor providers

HP Software opportunities include:

HP's large installed base can benefit by extending what it has to cover
virtualization and integrate automation.

The HP Operations Orchestration automation product empowers customers, as

they grow, to use process automation across the infrastructure and IT silos; it
also utilizes integrations with products from HP Software and third-party vendors.

HP's professional services unit offers a vast portfolio of virtualization expertise in

areas such as deployment, IT organizational, process, and management best
practices.

HP's partnerships with leading virtualization hypervisor providers such as

Microsoft, VMware, and Citrix offer customers choices and options. HP has the
opportunity to leverage HP hardware/hypervisor deals with HP Software products
to optimize the virtualized HP platform.

CONCLUSION
Virtualization is having a profoundly positive impact on the ability of IT organizations to
respond to business demands, especially the immediate need to control costs. Also, the
agility that virtualized infrastructure provides offers faster deployment of IT services.
However, the management of both physical and virtual infrastructures is an important
area of investment to ensure availability, problem identification and resolution, and an IT
service perspective. End users must be assured of receiving required service levels
regardless of whether the service is based on virtual or physical infrastructure.

Automation is playing an increasingly important role in the buildout of management

processes and capabilities in the datacenter. As such, automation offers IT
organizations the opportunity to deliver lower-cost operations and reduce the total
cost of ownership for physical and virtual environments.

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