Informationweek November 5 2012 2124203

THE BUSINESS VALUE OF TECHNOLOGY

IT hiring surprises 12 | SAP’s Hana cloud 14 | Amazon for the long haul 15 IaaS buyer’s guide 29 | When only big bang IT will do 36

NOV. 5, 2012

Can emerging big data technologies work in old-schoolcompanies? 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 re-prints, e-prints and permissions please contact: Wright’s Reprints, 1-877-652-5295 / [email protected]

14

COVER STORYBig Data, Big QuestionsCan emerging big datatechnologies work in old-schoolcompanies? Sears is trying.

14 SAP’s Hana CloudIts in-memory cloud platformtakes on Oracle and Salesforce

15 Amazon Takes The Long ViewCloud computing isn’t just forpeak use, Amazon says

16 Is VMware An OpenStack Threat?OpenStack’s new board is on theright track, welcoming all vendors

Watson Goes To Med SchoolHospital uses IBM supercomputerto suggest cancer treatments

[QUICKTAKES]

CONTENTSTHE BUSINESS VALUE OF TECHNOLOGY Nov. 5, 2012 Issue 1,349

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24Lies, Damn Lies, & Big DataToo many IT organizations aren’tusing big data effectively

29 Infrastructure On Demand Our latest Buyer’s Guide looks at infrastructure-as-a-serviceofferings in a range of categories

Contacts6 Editorial Contacts6 Advertiser Index

32 Business Contacts

8 Research And ConnectInformationWeek’s reports, events,and more

10 CIO ProfilesAn aging population is shaking uphealthcare IT, says this tech chief

12 Global CIOSix surprises from our research on IT staffing plans

34 Practical AnalysisThere’s a gulf between what mobileusers want and carriers provide

36 Down To BusinessHow India’s Cipla is transformingits approach to IT

[CONTENTS]

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State Of IT OutsourcingThe notion that IT outsourcing is merely a way for companies to slash payroll is no longer valid.

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Root Out Sophisticated MalwareAs malware gets more sophisticated, so,too, must the strategies we use to detectand eradicate it, or even stop it before itever makes it onto network systems.

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Government And The CloudOur latest survey of federal government tech pros findsthat a sizable majority of them have work under way orplans to advance their agencies’ cloud strategies.

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How To Pick Endpoint ProtectionWhen choosing an endpoint protection product, IT tendsto focus too much on malware detection capabilities andnot enough on end users.

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Career TrackHow long at Cigna: About a yearand a half at this health insuranceand health services company.

Decision I wish I could do over:The decisions that I replay in myhead involve not moving fastenough. It took a few mistakes earlyin my career to understand that animperfect decision today is worth alot more than a more perfect deci-sion made much later.

On The JobTop initiatives:>> Customer centricity, beingfocused on individual needs andpersonalized relationships, is a bigpriority. We’re engaging customersthrough diverse channels, requiringdelivery through flexible, scalableplatforms and infrastructures.

>> We’re also highly focused onleveraging data. Being able toaggregate, organize, and apply datareveals meaningful insights. Wewant to use this information todeliver products that support col-laboration with doctors and otherhealthcare professionals.

Most disruptive force in my industry: We’re facing an agingpopulation, an increase in chronicdisease, and growing rates of obesityand diabetes, not just in the U.S.,but around the world. Disease statestypically found in developed coun-tries are also being seen in less-de-veloped countries, so the challengesof managing lifestyle-based illnessesare playing out on a global basis.

MARK BOXERExecutive VP and Global CIO,Cigna

Favorite sports team manager: BillyBeane, the general manager of theOakland Athletics, because he appliedthe science of analytics to decision-making in building a team

Person I’d most like to have lunchwith: Winston Churchill; I’d love accessto his wisdom as the true essence of aninspirational leader (and I hear he trulyenjoyed a good lunch)

First job: Pumping gas, which taughtme to serve customers with a smileand focus on the details

If I weren’t a CIO, I’d be ... a collegeprofessor, as there are many similaritiesbetween being a teacher and being abusiness leader

VisionHow I give my team room to innovate: We’re creating innovationlabs, allowing our teams the free-dom to explore new ideas. We alsohave a company-wide innovationchallenge called “Inventrepreneurs,”with incentives for the best newcustomer-centric innovation ideas.

What I need from tech vendors:We need vendors to be more thanjust order takers. We want them toproactively engage in frank and opencommunication if there’s a better orfaster way to do things, or if there areopportunities for innovation. We alsowant transparency and visibility intotheir service delivery models, theirproblem management processes, andtheir contingency plans.

The most common cause whenIT projects go wrong: Commonfactors that lead to project failuresinclude lack of clarity in businessrequirements and success criteria,unrealistic schedules, and a lack ofengaged sponsorship.

The most overrated IT movement:While the public cloud has manypotential benefits, the hype factor islarge. The public cloud adoptionrate remains low compared withprivate and hybrid cloud models,due in part to many architectural,security, and privacy challenges.This is of particular importancewithin the healthcare industry, as wemust manage the confidentiality ofhealth records and patient informa-tion with an absolute zero tolerancefor lapses in privacy and security.

CIOprofiles Read other CIO Profiles at informationweek.com/topexecs

Ranked No. 7 in the 2012


The hiring picture is lookingOK. Comparing their IT or -ganizations to a year ago, 47%of the 1,391 business technol-

ogy pros who responded to Infor ma -tionWeek’s 2012 State of IT StaffingSur vey said staffing increased, 35%saw no change, and 18% saw a de -crease. But IT isn’t a monolith; demandvaries widely by specific skills. Hereare six staffing areas where interestingtrends popped up in our survey.1. Mobile’s a hot skill but might not

get you hired. It’s not that there’s a sur-plus of mobile talent—51% of survey re-spondents think it will be hard to findthe talent their companies need. But in-stead of hiring, most companies will re-train employees: Just 17% of respon-dents say their companies will relymostly on hiring, one of the lowest per-centages among 15 skills coveredin our survey, while 57% relymostly on retraining. (Therest are a mix of the two.)Retraining can make

sense because industry andcompany knowledge are sovaluable in creating mobileapps. That’s the approach WasteManagement took last year, for two mainreasons: Mobile developers who under-stand enterprise IT were almost impos-sible to find; and the company foundthat quality Java programmers couldquickly learn Android development andwere energized by the opportunity.2. For social and collaboration proj-

ects, new people aren’t needed. Manysocial networking and collaborationprojects are happening, but there’s not alot of hiring to get them done. Just 6%say social/collaboration is among theircompanies’ top two hiring priorities, tiedfor last among 15 areas. Among compa-nies looking for social/collaboration

skills, just 16% will rely mostly on hiringto meet the need, which is tied for thelowest mark. And they don’t expect stiffcompetition for talent: Just 16% of com-panies looking for social/collaborationpros think their salary demands will betoo high, the lowest percentage of anyjob category. 3. For big data analytics, companies

look outside. Companies aren’t addinglots of big data analytics staff—12% ofcompanies put it among their top twostaffing priorities, middle of the pack.But among those companies looking foranalytics talent, 53% think it will be hardto find—the highest hard-to-find per-centage among the staffing areas in oursurvey. And 27% think those pros’salaries will be beyond their means.With talent hard to find and unafford-

able, the 28% planning to rely on hiringare probably kidding themselves.

Another 39% will rely mostlyon retraining, and 33% a mix.

Big data analytics is a newrole at many companies, sosome might not know whatthey need. A Ph.D. in statis-

tics? An expert in Hadoop?What they really need are intangi-

bles, like a knack for spotting patterns indata and framing relevant questions. “It’sabsolutely important to groom your tal-ent internally when you get started,” saysNeeraj Kumar, a VP at Cardinal Healthwho’s working on its big data efforts.“You will not find resources outside.”4. Security hiring is strong—and

still a manual task? Security is amongthe top two staffing priorities for 17% ofcompanies, tied for second in our sur-vey. No doubt information security re-mains an indispensable priority, butshouldn’t staff size be leveling off? Thethreats aren’t getting less severe, but weshould be making progress in automat-

ing more manual IT security tasks—themonitoring, processing, and alerts. Only39% say security people will be hard tofind, well below other specialties. 5. Help desk is a priority, but for

the wrong reasons. End user sup-port/help desk ranks high among staffgrowth areas—16% put it in their toptwo, making it fourth. (It’s also No. 1on the list of likely cuts among compa-nies cutting.) Half of companies willrely mostly on hiring to fill thoseneeds, only 28% on retraining, and thereasons aren’t good when it comes tocareer and salary prospects. First, com-panies consider help desk skills plenti-ful—46% say they’re easy to find, thehighest of any category. Second, peopleinside a company are unlikely to wantto retrain and shift to support, becauseof its relatively low pay.A few companies are trying to make

IT support more appealing. Accountingfirm BDO USA made its help desk re-sponsible for creating wiki content ontech topics, and it coaches high perform-ers in leadership. Both Intuit and Star-bucks created a help desk modeled afterthe Apple Genius Bar, where employeescan walk up with a support problem.6. App dev rules. Application devel-

opment is the biggest staff growth area,with 25% putting it among their toptwo areas. That’s promising. Companiesneed to shift IT firepower to new proj-ect development and away from run-the-business IT operations, and app devtends to be about new project work. It’salso a promising sign for economicgrowth—companies don’t add develop-ers unless they’re building new prod-ucts or supporting new initiatives.

Chris Murphy is editor of Infor ma tion -Week. Write to him at [email protected] or on Twitter: @murph_cj.

6 Surprises About IT Hiring Plans G

L O B A L C I OG

L O B A L C I O

By Chris MurphyglobalCIO

QUICKTAKES

informationweek.com14 Nov. 5, 2012

SAP jumped into the cloud plat-form-as-a-service market,launch ing the first in a series ofcloud-based application and

database services at the annual TechEdconference in Las Vegas. The new serv-ices make SAP a more comprehensivecloud player and open up new pointsof competition with the likes of Oracleand Salesforce.com.

Both services run on the Hana in-memory database, creating what SAPCTO Vishal Sikka describes as a “RAM-optimized platform” that will set theSAP cloud apart. In-memory-basedcloud services would enable companiesto reimagine and transform cloud-basedapps, not just speed them up, Sikkasays, making reference to Oracle’s recentOpenWorld claims about performancegains with its latest engineered systems.

SAP’s new Java-based cloud devel-opment platform called SAP Net -Weaver Cloud will go up against Sales-force’s Heroku unit. The platform’sin-memory performance ensures thatit won’t require the “resource gover-nors”—processing power caps that canslow performance—that Sikka saysSalesforce routinely imposes on cus-tomers so it can keep up with cloudcomputing demands.

SAP’s new platform—the SAP HanaCloud—includes both AppServices andDBServices. On the database side, thevendor introduced SAP Hana One, anAmazon Web Services deployment op-tion aimed at companies that want toexperiment with Hana, stage proof-of-concept projects, or put small-scale in-memory applications in the cloud.

Hana One can handle up to 32 GB ofend user data. It’s priced at 99 cents perhour for SAP’s software and another

$2.50 per hour for AWS EC2 computecapacity, for a total cost of $3.49 perhour. SAP had previously offered freeHana developer licenses on AWS, butdata loads were limited to megabytesrather than gigabytes.

“At that price point, it’s pretty hardnot to be interested,” says Hana cus-tomer Adam Recktenwald, enterprisearchitect at the University of Kentucky.“It would have made it easier to justifyan on-premises deployment.”

The University of Kentucky completeda three-month on-premises Hana deploy-ment in March and then spent twomonths performing its first proof-of-con-cept project. Had Hana One been avail-able then, the school could have savedweeks if not months on the effort.

Database-As-A-Service OptionsBeyond Hana One, SAP is planning

more database-as-a-service options.Leveraging Hana’s in-memory technol-ogy processing power, SAP’s databaseservices will also include certain appli-cation-level services, Sikka says, suchas user management, session manage-ment, user authentication, HTTP Webservices, and language runtimes.

“The separation of the applicationserver and the database server into dif-ferent tiers is a construct of inefficient[legacy] infrastructure,” Sikka says.That argument echoes what SAP hasdescribed as the artificial separation oftoday’s analytical and transactional en-vironments, and it’s another example ofthe simplification SAP is promising byconsolidating layers of obsolete infra-structure with Hana pro cess ing power.

On the application services side, SAPannounced the general availability of SAPNetWeaver Cloud, which is a Java-based

development platform-as-a-ser vice forbuilding, deploying, and managing ap-plications in the cloud. It supportsEclipse and industry-standard tools thatwill enable the use of Ruby, PHP, andother programming models, SAP says.

Given SAP developers’ familiarity withNetWeaver, applications built on Net -Weaver Cloud are most likely to be in-tegrated with SAP’s on-premises orcloud-based applications, or used as ex-tensions to them. But the platform is alsosuitable for building standalone applica-tions from scratch, according to SAP.

NetWeaver cloud includes integra-tion, portal, and mobile services, aswell as federated ID management andsingle sign-on capabilities. To make theplatform more attractive to cloud de-velopers, SAP has introduced free, un-limited developer licenses that elimi-nate 90-day usage restrictions.

Customer adoption will go a longway toward validating SAP’s cloud plat-form. But adoption by software vendors,integrators, and resellers also will helpby making SAP Hana Cloud a moreopen universe than Oracle’s go-it-alone,all-red-stack Oracle Cloud. It also mightbegin to challenge Salesforce’s AppEx-change and vast cloud community.

Write to Doug Henschen at [email protected].

SAP’s In-Memory Cloud Platform Set To Take On Oracle And Salesforce By Doug Henschen

Reimaginecloud apps,Sikka says[

Nov. 5, 2012 15

Many companies use cloudcomputing to supporttheir websites and public-facing applications during

peak traffic periods. Amazon appearsto be increasingly successful at gettingthem to use the cloud for long-term,steady-state purposes, too.

Amazon Web Services’ Reserved In-stances—an alternative to the com-pany’s on-demand virtual servers—areavailable through one- and three-yearagreements. Reserved Instances don’thave to run continuously, although oneof the options for purchasing them,heavy utilization, assumes they willrun most of the time.

Customers who use Reserved In-stances routinely save a third of thehourly cost of a similarly sized, on-de-mand instance. Skillful use of Re-served Instances can even save “up to71% over on-demand rates,” accord-ing to an Amazon spokeswoman. Thecompany doesn’t disclose how muchof its cloud business comes from Re-served Instances.

Amazon introduced Reserved In-stances in 2009, and last December ittailored Reserved Instances to bettermatch the types of applications its cus-tomers run, giving them the option oflight-, medium-, or heavy-use in-stances. The difference among them isthe amount of time the server is usedeach day.

The additional choices appear to bedriving demand for Reserved In-stances. Cloud monitoring and analyt-ics specialist Cloudyn has seen use ofthe service among its customers climbfrom 28% in January to 48% at the endof September, says CEO Sharon Wag-ner. On Oct. 22, Cloudyn launched acalculator that imports data on a cus-tomer’s Amazon Elastic Compute

Cloud (EC2) usage and recommendsthe most efficient Reserved Instancesconfigurations.

Cloudyn’s customers typically spendaround $250,000 a year on cloud serv-ices. Use of Reserved Instances savesabout 30%, in exchange for an up-front payment of about 30% of the to-tal bill, Wagner says. With Amazon’slight-, medium-, and heavy-utilizationoptions, the savings can be evenhigher. But selecting the right types ofReserved Instances to maximize sav-

ings can be complicated. Cloudyn’scalculator uses a rules engine and ana-lytics to help with that. “Customers arenot always selecting the right pricingmodel,” Wagner says.

In an analysis of 200 of its customerswho use Reserved Instances, Cloudynfound that two-thirds had one-yearcontracts, a third had three-year agree-ments, and many had both. The great-est potential savings are to be found inthree-year contracts, Wagner says.

Without doing the math, it mightseem as though signing up for Re-served Instances and using it only 37%of the time would be wasteful. How-ever, even at that usage level, the Re-served Instances light-utilization op-tion is 24% cheaper than on-demandservers, according to Cloudyn. The cal-culation is based on using a large Linuxserver for a year in Amazon’s “East 1”zone in the United States.

Based on its analysis, Cloudyn rec-

ommends that 50% to 60% of an Ama-zon users’ servers be Reserved In-stances. The higher the percentage, thegreater the savings, assuming theservers are being utilized.

Learning CurveMany EC2 users choose the seem-

ingly safe, middle-of-the-road me dium-utilization Reserved Instances whenthey would operate more efficientlywith the light- or heavy-utilization op-tions. But Cloudyn’s customers are get-ting smarter about that. Since May, useof medium instances has dropped from35% to 19%, while light instance usehas climbed from 2% to 10%, andheavy instance from 26% to 36%.

Another cloud-usage analysis firm,Newvem, has also noticed an uptick inuse of Reserved Instances. CEO ZevLaderman says that’s a reflection of thecloud learning curve. As customersgain experience, they look for ways todrive down costs.

There’s another twist to this pricingmodel. In September, Amazon launcheda Reserved Instances marketplace wherecustomers can buy and sell un usedtime on their contracts.

That removes some of the risk ofsigning up for Reserved Instances byallowing “no-regret purchases,” Lader-man says. Companies can save on thecost of on-demand EC2 servers, evenif the Reserved Instances aren’t neededfor the full length of the contract. Theymay not be able to resell their Re-served Instances at full value, but theycan recoup some of their investment.Says Laderman, “It’s another wayAmazon ensures the customer stayswith them for the long haul.”

Write to Charles Babcock at [email protected].

29%

Data: InformationWeek survey of 453 business technology pros, March 2012

On our 2012 IT project list

Among our top two 2012 IT initiatives13%

Public Cloud PlansCompanies adopting or increasing use

Amazon Sells Customers On Long-Term Use By Charles Babcock

OpenStack is the main opensource initiative contestingVMware’s growing domi-nance in running private

cloud data center infrastructure. Open-Stack has momentum as an expandingopen source project, and a recent step tocreate a governing board adds to the mo-mentum. But can OpenStack attract abroad support base, and should VMwarebe a part of this new organization?

OpenStack is software to control thebuilding blocks of cloud computing:server, network, and storage manage-ment, with virtual machine provision-ing built in. It has monitoring and re-porting through its Horizon dashboard,plus image management in Glance. Inaddition to VMware, it competes withAmazon-compatible open source code

from Eucalyptus Systems, and a morepolished, OpenStack-like package inApache’s CloudStack, contributed byCitrix.

OpenStack is off to a great start butneeds the commitment of many talenteddevelopers, with independent opensource developers as well as those paidby large vendors. Independence is whyit needed a governing board: Rackspace,which founded OpenStack along withNASA, had become a de facto primarysponsor and leader. The new OpenStackFoundation has “platinum” backers

AT&T, Hewlett-Packard, IBM, Nebula,Red Hat, Rackspace, SUSE, and Ubuntu.

There now are two key elements towatch in OpenStack’s development.

One, OpenStack must attract inde-pendent developers, and doing someans keeping the project above the in-terests of any one company or smallgroup of vendors. Code contributions tothe latest OpenStack release showsprogress—Rackspace is still the largestcontributor, but there are at least fiveother significant contributors. Cisco justreleased its own version of OpenStack,and Red Hat plans to do so.

Xen, an open source hypervisor proj-ect, offers a warning of what not to do.XenSource, the company formed toback Xen, was acquired by Citrix Sys-tems, and Xen’s direction appeared tobe dominated by the interests of Citrix,IBM, Oracle, and other large vendorsthat wanted a vehicle with which tocompete against VMware. Xen hasstruggled as a project.

That leads to the second big question:Did the fox buy its way into the hen-house when VMware became a goldsponsor? Board member Boris Renski,co-founder of OpenStack consultingfirm Mirantis, said admitting VMwarewas a mistake. Board chairman AlanClark called it “a very positive move.”

For the OpenStack Foundation tohave turned down VMware wouldhave been cutting off its nose to spiteits face. Open source projects are sup-posed to be open to contributors, andNicira was a primary contributor to theOpenStack Quantum working groupbefore VMware acquired it. Yes, thatputs the fox in the henhouse, but withso many watchdogs circling, VMware’slikely to remain on its best behavior.

—Charles Babcock ([email protected])

16 Nov. 5, 2012

QUICKTAKES

OPENSTACK’S BOARD>> Eight companies, each paying

$500,000, each get a seat on the board

>> Thirteen companies, sponsoringOpenStack developers, choose representatives for eight seats

>> The 5,600 project contributors elect eight at-large seats

Is VMware A Fox In The OpenStack Henhouse?

informationweek.com

It’s been more than a year sinceIBM’s Watson computer defeatedseveral Jeopardy game show cham-pions. Now it’s time for a much moreserious challenge: cancer.

New York’s Memorial Sloan-Ket-tering Cancer Center and IBM areapplying Watson’s capabilities toSloan-Kettering’s database on out-comes for 1.2 million patients overmore than 20 years. They hope touse Watson’s natural-language pro-cessing to make sense of the text-centric information in that data-base, along with outside medicalliterature. Watson would then applyalgorithms to analyze that dataalong with a patient’s specific con-ditions, and then suggest diagnos-tic and treatment options with aconfidence rating for each one.They’re trying to build “an intelli-gence engine to provide specific diagnostic test and treatment rec-ommendations,” says Pat Skarulis,CIO at Sloan-Kettering. Sloan-Ket-tering doctors have about 2,000 or-der sets they can use for a cancertreatment.

Watson’s first test will be on non-small-cell lung cancer cases. Lungcancer specialist Dr. Mark Kris willhelp develop training cases for Wat-son to work on, focusing on 14 to 20data elements, such as the size andlocation of a patient’s tumor, thepresence of any genetic mutations,and whether the tumor has spreadto other tissues. Skarulis hopes tolaunch by the end of this year a pilotprogram that will allow the super-computer to work on real cases.

—Paul Cerrato([email protected])

Watson Goes To Med School

informationweek.com

Sears is embracingHadoop to get a

grip on its big data.Can emerging tech

fit in a legacy infrastructure

and help Searscompete?

By Doug Henschen

ike many retailers, Sears Holdings, the parent of Sears andKmart, is trying to get closer to its customers. At Sears’ scale, that re-quires big-time data analysis capabilities, but three years ago, Sears’ ITwasn’t really up to the task. “We wanted to personalize marketing campaigns, coupons, and offers

down to the individual customer, but our legacy systems were inca-pable of supporting that,” says Phil Shelley, Sears’ executive VP andCTO, in a meeting with InformationWeek editors and his team at com-

pany headquarters in suburban Chicago.Improving customer loyalty, and with it sales and profitability, is desperately impor-

tant to Sears as it faces fierce competition from Wal-Mart and Target, as well as onlineretailers such as Amazon.com. While revenue at Sears has declined, from $50 billionin 2008 to $42 billion in 2011, big-box rivals Wal-Mart and Target have grown steadily,and they’re far more profitable. Meantime, Amazon has gone from $19 billion in rev-enue 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 cutting-edge implementation of Apache Hadoop, the high-scale, open source data processingplatform driving the big data trend. Despite Sears’ less-than-cutting-edge reputation as

18 Nov. 5, 2012

Get an online version of this story at informationweek.com/1349/sears

L

Nov. 5, 2012 19

a retailer, the company has been an in-novator in using big data. In fact, Shelleyis leading a Sears subsidiary, MetaScale,that’s pitching services to help compa-nies outside retail use Hadoop. But will companies be interested in

buying big data cloud and consultingservices from Sears? And can Sears’own big data efforts help the companyregain its footing in the retail industry?

Fast And AgileSears’ process for analyzing marketing

campaigns for loyalty club membersused to take six weeks on mainframe,Teradata, and SAS servers. The newprocess running on Hadoop can becompleted weekly, Shelley says. For cer-tain online and mobile commerce sce-narios, Sears can now perform dailyanalyses. What’s more, targeting is moregranular, in some cases down to the in-dividual customer. Whereas the oldmodels made use of 10% of availabledata, the new models run on 100%.“The Holy Grail in data warehousing

has always been to have all your datain one place so you can do big modelson large data sets, but that hasn’t beenfeasible either economically or in termsof technical capabilities,” Shelley says,noting that Sears previously kept dataanywhere from 90 days to two years.“With Hadoop we can keep everything,which is crucial because we don’t wantto archive or delete meaningful data.”Sears is still the largest appliance re-

tailer and appliance service provider inthe U.S., for example, so it’s in a strongposition to understand customer needs,service trends, warranty problems, andmore. But Sears has only been scratchingthe surface of using available data. Enter Hadoop, an open source data

processing platform gaining adoptionon the strength of two promises: ultra-high scalability and low cost comparedwith conventional relational databases.Hadoop systems at 200 terabytes costabout one-third of 200-TB relationalplatforms, and the differential grows asscale increases into the petabytes, ac-

cording to Sears. With Hadoop’s mas-sively parallel processing power, Searssees little more than one minute’s dif-ference between processing 100 mil-lion records and 2 billion records.The downside of Hadoop is that it’s

an immature platform, perplexing tomany IT shops, and Hadoop talent isscarce. Sears learned Hadoop the hardway, by trial and error. It had few outsideexperts available to guide its work whenit embraced the platform in early 2010. The company is now in the enviable

position of having big data experienceamong its employees in the U.S. andIndia. MetaScale will leverage Sears’data center capacity in Chicago andDetroit, just as Amazon Web Servicestakes advantage of Amazon’s massivee-commerce compute capacity.

Open Source Moves InSears’ embrace of an open source stack

began at the operating system level, withLinux. Sears routinely replaces legacy

Unix systems with Linux rather than up-grade them, Shelley says, and it has re-tired most of its Sun and HP-UX servers.Microsoft server and development tech-nologies are also on the way out. Moving up the stack, Sears is consol-

idating its databases to MySQL, Info-Bright, and Teradata—EMC Green-plum, Microsoft SQL Server, andOracle (including four Exadata boxes)are on their way out, Shelley says.Hadoop’s power comes from dividing

workloads across many commodity Intelx86 servers, each with multiple CPUsand each CPU with multiple processorcores. Since early 2010, Sears has beenmoving batch data processing off itsmainframes and into Hadoop. Cost isthe big motivator, as mainframe MIPScost anywhere from $3,000 to $7,000per year, Shelley says, while Hadoopcosts 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 100times better performance on batchtimes,” Shelley says. Eliminating all of themainframes in use would enable it tosave “tens of millions” of dollars, he says.

‘ETL Must Die’Sears’ move to Hadoop began as an

experiment using a single node runningon a netbook computer—the netbookthat still sits on Shelley’s office desk.Sears deployed its first production clus-ter of 20 to 30 nodes in early 2010. Amajor big data processing bottleneckthen was extract, transform, and loadprocessing, and Shelley has become azealot about eliminating ETL. “ETL is an antiquated technique,

and for large companies it’s inefficientand wasteful because you create mul-tiple copies of data,” he says. “Every-body used ETL because they couldn’tput everything in one place, but thathas changed with Hadoop, and nowwe copy data, as a matter of principle,only when we absolutely have to copy.”Sears can’t eliminate ETL overnight,

[COVER STORY]

SEARS AT A GLANCEBricks And ClicksSears Holdings includes Sears andKmart stores (more than 2,600 stores)and Lands’ End. This year, it spun offSears Hometown and Outlet stores.

Digital TiesIts Shop Your Way loyalty program offers points and promotions.

IT OperationsIT staff in the U.S. and India, with datacenters in Chicago and Detroit areas.

Hadoop StartupMetaScale will run Hadoop clusters—in Sears’ data center or remotely—onsubscription basis, plus do consulting.

BIG DATA

so it has been moving the slowest andmost processing-intensive steps withinETL jobs into Hadoop. Shelley cites anETL process that took 20 hours to runusing IBM DataStage software on acluster of distributed servers. One stepthat took 10 hours to run in DataStagenow can run in 17 minutes on Ha -doop, he says.One downside: It takes 90 minutes to

FTP the job to Hadoop and then bringresults back to the ETL servers. ThatFTP time is a trade-off in Sears’ ap-proach of picking off one ETL step at atime. Shelley intends to keep movingsteps in that process until the entire datatransformation workload is on Hadoop.“The reason we do it this way is you

get a very big hit quickly,” he says, not-ing it takes less than two weeks to get

each step into production. Shelleyvows to get rid of ETL eventually, “butyou do it in a very nondisruptive, non-scary way for the business.”Shelley’s “ETL must die” view has its

doubters. Coming to the defense of

ETL, Mike Olson, CEO of Cloudera,the leading Hadoop software distribu-tor, recently told InformationWeek, “Al-most without exception, when we seeHadoop in real customer deployments,it is stood up next to existing infra-


CTO Shelley: big data zealot[

Given all of the headwinds Sears faces, should itsCTO be spending much of his time building astartup? Sears Holdings had operating losses fourof the last five quarters. Sears chairman Eddie

Lampert, whose hedge fund owns more than 60% of the com-pany, started his chairman’s letter back in February with thisassessment: “Our poor financial results in 2011, culminatingin a very poor fourth quarter, underscore the need to acceler-ate the transformation of Sears Holdings.”In that environment, launching a technology startup is risky,

given the potential for distraction from meeting the IT needsof a $42 billion-a-year retail business that includes Sears andKmart.With the MetaScale venture, CTO Phil Shelley is lookingto take advantage of Sears’ broad experience with using theHadoop big data platform. MetaScale sells subscription ser -vices to manage large data sets using Ha doop, and it offersbig data consulting. Shelley doesn’t see such a startup as risky. Lampert, he says,

sets the expectation that executives need to make suchmoves. “It’s a very innovative environment,” Shelley says. “Theconcept 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 practicalwork—work that other big companies might buy as a ser -

vice—is moving big batch processing data loads off of main-frames, cutting hours of processing time. Applied to Sears’own business, eliminating mainframes could save tens of mil-lions of dollars. But when it comes to applying big data tactics to change

Sears, it feels like Sears could be doing more and movingfaster. One of the most promising areas is for customizedmarketing promotions, using Sears’ growing loyalty card pro-gram to know what customers bought in the past and whatthey’re now buying, and to give them an intensely relevantoffer to get them to buy more. Sears is just beginning to dothat kind of personalization at scale. “You’re starting to see that much more personal, targeted,

digital engagement,” Shelley says. “It’s a big company tochange, 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. WhereasSears used to analyze 10% of data on customers to figure outwhich promotions might work, now it can analyze all data onthem. Because it’s cheaper and faster to keep and analyzedata, he says, it’s collecting more of it—such as data cominginto Sears’ call center about which appliances are breakingand how often. But Shelley doesn’t offer a clear example ofhow Sears is putting that kind of data to profitable use.One argument in favor of Sears doing a startup like Meta -

Is Sears’ Big Data Startup A Distraction?COMMENTARY

BIG DATA [COVER STORY]

structure that’s aimed at existing busi-ness problems.”Shelley sees Hadoop as part of a larger

IT ecosystem, too, and says systems suchas Teradata will continue to have an im-portant, focused role at Sears. But he’s onthe far end of the spectrum in terms ofhow much of the legacy environmentHadoop might replace. Countering Shel-ley’s sometimes sweeping predictions oflegacy system replacement, Olson says:“It’s unlikely that a brand-new entrant tothe market [like Hadoop] is going to dis-place tools for established workloads.”

Scaling OutSears’ main Hadoop cluster has

nearly 300 nodes, and it’s populatedwith 2 PB of data—mostly structureddata such as customer transaction,

point of sale, and supply chain.(Hadoop systems create two copies ofthe data, so the total environment is 6PB). To give a sense of how early Searswas to Hadoop development, Wal-Mart divulged early this year that itwas scaling out an experimental 10-node Hadoop cluster for e-commerceanalysis. Sears passed that size in 2010. Sears now keeps all of its data down

to individual transactions (rather thanaggregates) and years of history (ratherthan imposing quarterly windows oncertain data, as it did previously). That’sraw data, which Shelley says Sears canrefactor and combine as needed quicklyand efficiently within Hadoop.Hadoop isn’t a science project at

Sears—critical reports run on the plat-form, including financial analyses; SEC

reporting; logistics planning; andanalyses of supply chains, products,and customer data. For ad hoc queryand analysis, Sears uses Datameer, aspreadsheet-style tool that supportsdata exploration and visualization di-rectly on Hadoop, without copying ormoving data. Using Datameer, Searscan develop in three days interactivereports that used to take IT six to 12weeks, Shelley says. The old approachrequired intensive IT support for ETL,data cubing, and associated testing.Now line-of-business power users aredeveloping most of the new reports.

The MetaScale MissionShelley is still CTO of Sears, but if

his portrayal of all the things Hadoopcan do sounds a bit rosy, keep in mind

Nov. 5, 2012 21

Scale is that Amazon.com, the most feared company in retailtoday, is doing its own tech startups. The e-commerce giant’sAmazon Web Services arm pioneered the sale of commodityinfrastructure-as-a-service, letting companies buy comput-ing capacity by the hour with only a credit card. Sears isattacking 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 man-agement and analytics, and lets it learn from big companiesthat are innovating in other industries while also drivingsome revenue. Shelley won’t say how many clients Meta -Scale has, but he refers to a major healthcare company andanother in financial services.

Retail Must ChangeYou can’t walk into a Sears store today and really feel how

Shelley’s big data efforts have changed the shopping experi-ence. But Sears isn’t alone—up against this challenge is everysingle big retailer: Best Buy, J.C. Penney, Wal-Mart, Target,Home Depot, Lowe’s. Every one of them needs to figure outhow to make in-store shopping so appealing that customerscome to their stores to make purchases rather than to justlook around and then buy from discount competitors online.It’s 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 chairman’s letter, listed the five pillars of Sears’

business (see p. 22). One is “reinventing the company continu-ously through technology and innovation.” Lampert said hespends more of his time on that pillar than any other. He real-izes that people will soon, instinctively, reach for their smart-phones as they shop in stores. “How people shop today ischanging, and it isn’t just the younger generation that is bene-fiting 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 byWi-Fi, so that loyalty card customers’ smartphones automati-cally notify the store when they walk in. Sounds creepy at first,but that’s exactly what many people have set up on Ama zon.Give people a compelling reason to set that kind of function-ality up in a physical store—say, to receive customized offerson their phones—and they will. How about changing prices multiple times a day? Sears is

building the data analytics necessary to make those kind ofdynamic price and inventory decisions; like other retailers, it’salso experimenting with digital price signs in stores thatwould make such changes feasible. Again, dynamic pricingwould be a dramatic change, but perhaps one needed tocompete with online retailing. Retailers’ survival depends on these kinds of changes in the

mobile e-commerce era. If Sears’ MetaScale work helps it fig-ure out the omni-channel shopper, its startup will succeed. Ifit doesn’t, or it distracts Sears from this mission, it will havefailed because there won’t be a Sears or Kmart left.

—Chris Murphy ([email protected])


that he’s also now CEO of MetaScale,a division that Sears is hoping willmake money from the company’s spe-cialized big data expertise.The rarest commodity that Meta -

Scale offers is Sears’ experience inbringing mainframe data into theHadoop world. Old-school Cobol pro-grammers at Sears were initiallyHadoop skeptics, Shelley says, butmany turned out to be eager and

highly skilled adopters of the Pig lan-guage for running MapReduce jobs onHadoop. Tasks that required 3,000 to5,000 lines of Cobol can be repro-duced with a few hundred lines of Pig,he says. The company learned how toload data from IMS (mainframe) data-bases into Hadoop and bring resultsets back into mainframe apps. That’snot trivial work because it involves avariety of compressed data formattransformations, and packing and un-packing of data.MetaScale’s business model is to run

Hadoop clusters for other companiesas a subscription cloud service in Sears’data center. Or Sears will remotelymanage clusters in a customer’s data

center, a setup that two early cus-tomers, one in healthcare and the otherin financial services, both want for reg-ulatory reasons. Monthly fees are basedon the volume of terabytes supported,and customers can buy out deploy-ments if they want to take them overand run them themselves.MetaScale also offers data architec-

ture, modeling, and management ser -vices and consulting. The big idea be-hind Hadoop is to bring in as muchdata as possible while keeping datastructures simple. “People want toovercomplicate things by representingdata and dividing things up into sepa-rate files,” says Scott LaCosse, directorof data management at Sears andMetaScale. “The object is not to savespace, it’s to eliminate joins, denormal-ize the data, and put it all in one bigfile where you can analyze it.”

Counterintuitive TacticIt’s an approach that’s counterintuitive

for a SQL veteran, so a big part of Meta -Scale’s work is to help customers changetheir thinking: You apply schema as youpull data out to use it, rather than takethe relational database approach of im-posing a schema on data before it’sloaded onto the platform. Hadoop holdsdata in its raw form, giving users theflexibility to combine and examine thedata in many ways over time.“If in three years you come up with

a new query or analysis, it doesn’t mat-ter because there’s no schema,” Shelleysays. “You just go get the raw data andtransform it into any format you need.”For all of Shelley’s boldness about re-

placing legacy systems, he’s careful to de-scribe Hadoop as part of an ecosystem.Sears still uses Teradata and InfoBright,for example, when applications call forfast analysis. But Hadoop is the center ofSears’ data management strategy, han-dling the large-scale heavy lifting, whilerelational tools take tactical roles.So where should Hadoop adopters

begin?“You have to go fast and be bold

without taking stupid risks,” Shelleysays. Start with a business need “thatcauses enough pain that people willnotice and they’ll see tangible benefits.”Sears itself still has a lot to prove with

its own use of Hadoop to solve hugebusiness problems, such as offering cus-tomers personalized promotions. Shelleycites plenty of conceptual uses ofHadoop, and he sprinkles in details onspeed-and-feed gains, but he doesn’t of-fer clear cases of tangible benefits the re-tailer has realized. The company is wellalong in adopting Hadoop and in devel-oping specialized expertise that mightbenefit MetaScale customers—particu-larly those using mainframes—but willHadoop really help turn Sears around? Sears’ latest results for the quarter

ended July 28 show that earnings be-fore interest, taxes, depreciation, andamortization were up 163%, to $153million, from $58 million in the year-earlier quarter. But same-store saleswere down 2.9% at Sears and 4.7% atKmart. Sears’ spin is that it’s sellingfewer items more profitably, whichcould be in part because of smarter tar-geting and promotion. But Sears can’tshrink its way back to greatness. AsWal-Mart and Target gain share, theirbuying power and ability to press Searson margins only grows.Would-be MetaScale customers in

other industries will face different chal-lenges as they consider embracingHadoop. Could quick analytical accessto an entire decade of medical recorddata change how doctors diagnose andtreat patients? Could faster processingspot financial services fraud more effec-tively? Companies are focused onchoosing and building out the next-generation platforms that will handlethose big data jobs. Will Hadoop be thatplatform, and will Hadoop help turnMetaScale into a successful pioneer?That’s a story that has yet to unfold.

Write to Doug Henschen at [email protected], or on Twitter: @dhenschen.Read more stories by him at information

[COVER STORY]BIG DATA

1. Lasting customer relationshipsSears launched a loyalty program in 2011,expanding personalized promotions

2. Productivity and efficiencyThey’re key to better profits, but Lampertsays Sears has “fared very poorly”

3. Building brands Kenmore andCraftsman are strong, but Lampert wantsthem to be the “Nike and Apple of appli-ances, tools, and lawn and garden”

4. Reinvent Sears with tech andinnovation Everyone, young and old,will use stores, online, and mobile, soSears needs to make it easier

5. ValuesMore information sharing,more digital tools to store employees

5 ‘Pillars’ From SearsChairman Lampert

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To paraphrase an old saying, if you tor-ture data long enough, it’ll tell you what youwant to hear. And putting big data throughthat torture only lets us tell bigger lies. Mar-keting can justify crazy ad campaigns: “Sen-

timent analytics shows our latest campaignis actually a huge hit with the under-25-urban-vegan demo!” The supplychain team can use it to get morefunding: “Our geolocation analysisshows if we invest in roboticwarehouse automation, we’ll re-duce costs by 15%.” Sales canexplain why it missed its num-bers: “We don’t have an iOSapp, and smartphone datashows that’s what 87.4% of cus-tomers use. It’s not our fault.”Don’t get us wrong. The abil-

ity to collect and analyze data is acore IT value proposition. Compa-nies such as Wal-Mart, FedEx, andSouthwest Airlines gained strategic ad-vantage by digging into their core busi-ness data long before it was labeled “big.”And there’s no question that more data is avail-able than ever before, especially information from theWeb and smart mobile devices. Our beef, though, is thatmost businesses aren’t good at using the data they havenow. What are the odds they’ll get better at analysis byadding volumes without changing their strategies? Our InformationWeek 2013 Big Data Survey shows

that some companies are making progress. For example,most have built the required infrastructure and supportvarious roles, in terms of primary data users; about one-third say they encourage wide access to information forbusiness users. However, when it comes to data acqui-

sition and use models, the wheels start tofall off. There are major gaps in dataanalysis, even for the most com-mon types of information: trans-action data, system logs, email,

CRM, Web analytics. Worse, fewer than 10% of

the respondents to our sur-vey say that ideas for prom-ising new data points are pri-marily driven by a collabo-rative or cross-functionalteam within their compa-nies. The stats we gleaned

from our survey suggest thispercentage should be muchhigher: Nearly half of respon-

dents have 500 terabytes of data ormore under management; 13% have

more than 10 petabytes.Surely there are untapped riches.

IT organizations clearly know there’s a problem, asonly 9% of respondents rate their companies as ex-tremely effective users of the data they have. However,just 4% admit they stink at putting their data to its bestuse. Fact is, many organizations are deluding themselvesinto thinking they’re empowering their businesses. So

Be honest: You don’t work smart when analyzing the information you already have. Now we’re piling on more?

By Michael Healey

Lies, Damn Lies,

Get an online version of this story at informationweek.com/1349/bigdata

Big Data

before you buy more storage, upgradeyour warehouse platform, or spin up amassive Hadoop instance, let’s take areality check. Here are six big data liesorganizations tell themselves. Howmany have you heard lately?

Lie 1: We understand how muchdata we have todayWe asked in our survey which of

seven key data sources are activelymanaged, hoping to see respondentswiden their view beyond servers, stor-age arrays, and archives. Unfortunately,only 30% of respondents factor in theirorganization’s cloud data, and just11% include supply chain information.All that information zipping around onmobile devices? Considered by just35% of survey respondents.If you don’t include dynamic data

sets, you’re setting your analysis up forfailure. How can you do vendor per-formance reviews without details onhow well suppliers do getting the rightgoods to you at the right time for acompetitive price? Likewise, if you’restudying customer behavior, how canyou get a true picture without Web orcloud-based CRM data?

Lie 2: The data we have is goodWe’ll bet money that most respon-

dents’ data sets are inaccurate, incom-plete, and/or misaligned with one an-other. Do you really have a single

source of truth? Do different groupsslice data in different ways? Are youmaking decisions based on inaccurateor incomplete data? Case in point: 19% of companies in

our survey use geolocation as part oftheir analysis strategy, pulling informa-tion from smart devices and Web visi-tors to understand behavior. However,Web location tracking is notoriouslyinaccurate when it comes to enterpriseand institutional traffic. That’s becausemost companies and governmentagencies work in private clouds with alimited number of egress points. Ifyou’re using Web location data to trackthe success of your sales and marketingprograms by region, you’re likely bas-ing decisions on bad information. Thatbig block of traffic from Boston mayactually come from an enterprise withoffices in the Midwest.Who’s checking data quality? Just

one in four respondents identified adedicated business analyst group asone of the top two users of data withintheir company. It’s simply amazinghow many reports and graphs we seewithout sampling or accuracy notes.For example, almost every companydoes customer surveys, yet very few in-dicate confidence levels or bias results.Got 25,000 customers? Your customerservice survey should have 1,843 re-spondents if you want a 99% confi-dence level with a plus or minus 3%

margin of error. Furthermore, resultsshould be biased by revenue level. Re-ality is, we just don’t see that donewith any type of data.

Lie 3: Everything will be OK if wecan just get more toolsA quarter of respondents plan to use

more big data tools over the next 12months. Now, we like Hadoop,NoSQL, Splunk, and the plethora ofother big data options out there, butwe recommend looking at what datasets are sitting idle before cutting acheck. Given the low levels of use ofthe 20 internal and external data setswe asked about, it’s clear the problemis related more to staffing than systems. Unfortunately, fewer respondents plan

to invest in big data staff versus spend-ing money on technology. Only 33%plan to grow their training and devel-opment programs; 9% are cutting back.Net new hiring ranked at the bottom ofour list, with 17% growing staffing

Nov. 5, 2012 25

Get This AndAll Our Reports

Our full report on our 2013 BigData Survey is free with registra-tion at informationweek.com/reports/2013bigdata

This report includes 32 pages ofaction-oriented analysis, packedwith 23 charts.

What you’ll find:

> Outlook on use of cloud servicesfor big data management

> Top 14 big data tools in use,from Excel to Exadata to EDW

Who Are The Primary Users Of Your Company’s Data?Department-level analysts

Senior business management

A wide array of business users; we encourage wide access

Information technology

Dedicated business analyst group

Business users dedicated to analysis, though not full time

Data: InformationWeek 2013 Big Data Survey of 257 business technology professionalsat companies with 50 or more employees, September 2012

39%

32%

31%

30%

25%

22%


levels compared with 14% cutting.Nowhere is this “tools over people” fo-

cus more evident than in healthcare. Thefederal government’s electronic recordsincentives have driven the industry to anew level of data collection and report-ing. But now that healthcare providershave all this data, they’re trying to figureout how to use it. “There is big money tobe made in healthcare big data, so every-one and their brother was throwing upsolutions,” says Bill Gillis, CIO of BethIsrael Deaconess Physician Organization.But it’s important to work with peoplewho understand healthcare organizationsand the complexity of their data, Gillissays. “The business need should drivethe process,” he says. “The tool alone willnot change much. Finding a skilled handthat can effectively wield that tool will.”

Lie 4: There’s an expertise shortageSpeaking of staff, an oft-quoted

McKinsey & Co. study estimates ashortfall of 140,000 to 190,000 peoplein “big data staffing” by 2018. Our ownInformationWeek Staffing Survey showsthat 18% of respondents focused onbig data want to increase staff in thisarea by more than 30% in the next twoyears, but 53% say it will be difficultto find people with the right skills.

Roll the clock back a few years andsubstitute the words “virtualization en-gineer” or “Cobol programmer” or even“webmaster” for “big data specialist” andyou’ll similarly find people predictingdoom. Don’t get sucked in again. Youalready have much of this talent withinyour organization; you just need to setit free. Consider that 39% of respondentorganizations have department-level an-alysts as the main users of their infor-mation. Break those people out of theirdepartment silos and move them to-ward a more holistic view of data. For example, a U.S. retailer we

worked with always had separate data

teams aligned with various depart-ments. The strongest team was withinthe catalog group, banging out circplans, catalog yields, conversion rates,even profit per page. Great stuff, butthat team was limited to using catalogand financial data. Siloed from theWeb team, they were missing thetransformation happening within thecustomer base. Separate departments,separate views of the truth.Don’t blame the analysts. The com-

pany built the structure, and IT wasn’tinvolved enough to identify the infor-mation gaps between departments.Our point is, IT not only has to under-stand the data itself, but it must alsobecome an integral part of identifyingand growing the centralized talentpool. That means putting more empha-sis on training and talent development.Competitors will steal some of yourmore talented big data pros if you don’tgive them a reason to stick around.We scanned the online listings of the

major hiring sites and found that thesalary levels for data analysts still rangefrom about $55,000 to low six figures.However, if you add “big data” to thestandard titles, the average salary dou-bles. Expect everyone’s LinkedIn titlesto change in the next 12 months.

Lie 5: We know what data we needIn our survey, we asked about 10

internal and nine external data types.

How effective is your company at identifying critical data and using it to make decisions?

33%

9%

38%

16%

4%

Eye On Critical Data


Very effective

Extremely effective

Moderately effective

Slightly effective

Not at all effective

44%

15%

41%

Are You Considering Specialty Big Data Analytics Tools?


Yes

No

Don’t know

Nov. 5, 2012 27

Internal sources include financial ac-counting applications, detailed salesand product data, CRM data, un-structured network data such as Of-fice files and images, and unstruc-tured data stored on end userde vices. External sources includegovernment statistics and other pub-lic records, geolocation data, data col-lected from sensors on companyproducts and services, social networkdata (Facebook, Twitter), and un-structured data stored in the cloud(Office365, Google Docs).Clearly, there’s a lot of information

out there. But when we asked who’sdriving data analysis ideas, we weresurprised to find that only 5% of re-spondents have a centralized team todrive big data strategy; an additional3% use a looser collaborative effort.We’re not the biggest fans of com-

mittees, but given the fact that theusers of your data are likely spread farand wide, it makes sense to create across-functional group to identify newsources or elevate the importance ofan existing stream. It’s staggering tosee some of the great data that’s all butuntouched. Take CRM, phone, email, and Web

analytics. These four data pointscover most of the communicationsrelationship with your clients. Tyingthem together isn’t rocket science, es-pecially if you have decent baselinecustomer data to start with. Not onlycan you determine the number ofconversations your company typicallyhas with customers, but you can alsounderstand how email relates tophone calls and Web traffic. If youhave an outside sales force loopingin, your CRM data gives you a profil-ing capability to model everythingfrom product rollouts to customerservice problems.All that intelligence exists today, yet

few companies have this level of analy-sis integrated into their big data strate-gies. While 35% of survey respon-dents say their IT organizations

include CRM in their integrated plans,only 29% include email, 22% Web an-alytics, and 14% phone logs.

Lie 6: We do something with ouranalysisThere’s nothing more frustrating for

an analyst than to work for days orweeks on a project, present the find-ings, have a great meeting with execs,then watch those recommendations dieon the vine. Everyone focuses on thepositive aspects of data analysis—help-ing find new customers or discovermore productive logistics routes. Butthe reality is that big data analysis willfind some negative things—about yoursales team’s effectiveness, your online

presence, your true costs of operations.The slow economy of the last four yearshas weakened multiple parts of mostcompanies. Adding data sources and amore holistic analysis will help find andprioritize the problems you need to fix.

IT Truth TellersWant to raise IT’s profile as a busi-

ness enabler? Step in and assume re-sponsibility for data quality across thecompany. Here’s a quick check of itemsIT should review today:1. Is there a centralized data qual-

ity team? If not, set one up ASAP.2. Does the team do regular or, at

minimum, spot audits of variousanalyses? Does it regularly look to addnew data sources?3. Are critical external events anno-

tated within your data warehouse or aspart of your reporting process? For ex-ample, think about major system up-grades that would change the underly-ing 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 vali-dated against your base customers ortotal market size to ensure accuracy? 6. Do you run regular “stress tests”

for current data sets with cross-func-tional teams, challenging assumptionsand sacred cows?7. Do you look outward? Most re-

spondents, 75%, report some publiccloud use. Yet many companies aren’tcapturing associated data—think WebEx conferencing for customer be-havior analysis or Google analyticsfor sales tracking.

Michael Healey is the president ofYeoman Technology Group. Write tous at [email protected].

6%22%

33%

39%

What’s Your Company’s Approach To Data Analysis?


Leading: It’s core to how we do business,and we have a dedicated staff that’sconstantly modeling, mining, and scraping to help gain insight

Abacus-like: If it’s not tiedto accounting, no one cares

Limited: Some groups dig intononfinancial sources, but

cross-departmental analysisis limited to financial data

Guiding: It’s core to almost everypart of the company, but we’renot quite there with predictive use

[BIG DATA]

Nov. 5, 2012 29informationweek.com

Infrastructure-as-a-service letscompanies focus on their corecompetencies without having toworry about buying, deploying,

and maintaining data center hardwareor facilities. IaaS is why Instagram soldat a $1 billion valuation with only 13employees and why Pinterest servednearly 12 million monthly unique vis-itors with only 16 employees. For our new Buyer’s Guide, we de-

fined an IaaS provider as offering self-service provisioning of an extremelylarge number of virtual machines andstorage using an API or a Web controlpanel, without customers having to in-teract with an engineer or salesperson.For many companies, IaaS offers sig-nificant benefits, but with an ever-growing number of providers, it’s dif-ficult to know which will be the bestchoice. To help in the hunt for the per-fect IaaS pro vider, we queried a dozenvendors about their offerings. Eight re-sponded: GoGrid, Google, IBM, Inter-nap, Joyent, NaviSite, SoftLayer, andTerremark. Amazon Web Services did-n’t respond, but given that it’s a majorIaaS player, we found answers to ourquestions on its website. We comparedproviders in several categories; get thefull results at informationweek.com/ reports/iaasguide.

CPU And MemoryMost vendors offer a variety of VMs

based on the number of CPU cores,

amount of RAM, and amount of localstorage that comes with each VM.There are lots of options, from half acore (GoGrid) to 24 cores (alsoGoGrid), and 256 MB of RAM (Terre-mark) to 68.4 GB of RAM (Amazon).However, because virtualization does not

lend itself to exact CPU definitions,some IaaS vendors have created theirown nomenclature for how much pro-cessing power comes with each core ona particular VM. Amazon defines an“Elastic Compute Unit,” or ECU, as “theequivalent CPU capacity of a 1.0-1.2

Get an online version of this story at informationweek.com/1349/iaas

On-Demand OptionsOur latest Buyer’s Guide looks at 8 top infrastructure-as-a-service offeringsin a range of categories By Joe Masters Emison

Minimum cores (dedicated) Maximum cores (dedicated)

Minimum and maximum number of CPU cores offered per virtual machine, by IaaS providerCount The Cores

AWS

GoGrid

Google Compute Engine

IBM

Internap

Joyent

NaviSite

SoftLayer

Terremark

Data: InformationWeek Reports

R

116

0.524

18

116

111

015

18

116

18

30 Nov. 5, 2012

GHz 2007 Opteron or 2007 Xeonprocessor.” Google uses a “Google Com-pute Engine Unit,” or GQ, describing2.75 GQs as “the minimum power ofone logical core (a hardware hyper-thread) on our Sandy Bridge platform.” Regardless of how a vendor defines its

processing power, you should runbench marks to see how its offering com-pares with your hardware.

StorageVendors typically offer up to three

types of storage: local storage as part ofthe VM, also called “ephemeral” or “in-stance” storage, as it disappears whenthe VM is terminated; block storagethat exists and is billed separately fromthe VM; and a storage service that hasvirtually unlimited available space andis billed by the space used. There are two benefits to true block

storage that’s divorced from the VM.One is that block storage makes VM of-ferings more flexible: Some IaaS ven-dors only offer CPU, RAM, and storagein lockstep multiples, such as 1 CPU,1 GB RAM, and 100 GB storage. Ifyour application doesn’t have signifi-cant RAM or CPU requirements but re-quires hundreds of gigabytes or ter-abytes of disk space, having a blockstorage option will let you avoid over-paying for a beefier machine.The second benefit is that block of-

ferings often can take snapshots and re-

store backups to new volumes veryquickly. This is important if you needto restore service fast after an outageand have more than 50 GB of data thatmust be transferred to a new VM.

Operating System And DatabasesThe most common operating systems

IaaS vendors support are Ubuntu, CentOS, and Red Hat Enterprise Linux,as well as Windows Server 2003 and2008. In general, supporting tools and

libraries for automation and orchestra-tion tend to be implemented for Linuxbefore Windows, but it’s far more com-mon to see extensive Windows deploy-ments on IaaS now than a few years ago.Some IaaS vendors offer specialized

VMs that come with both operatingsystem and database server installedand include simple API-driven meth-ods for backing up and restoring datato and from the database server. Thesecan be very useful for quickly imple-menting an application in the cloudwithout having to spend a lot of timeon software installation, configuration,and orchestration. The downside to these services is

that you pay for convenience—they’remore expensive than running the exactsame software on the exact same hard-ware on the IaaS pro vider’s systems.They also limit your ability to fine-tunesome or all configuration options. You may find a cloud management

or configuration management softwareor service that has database templatesbuilt for your IaaS vendor to be a betterand less costly option. For example,RightScale offers a Database ManagerServer Template that provides a similarfeature set to Amazon RDS but lets cus-tomers run database deploymentsacross multiple clouds and doesn’thave Amazon RDS’s hourly price pre-mium. Cloud management platformenStratus is working on a library ofChef and Puppet scripts that will en-able similar functionality.

CostThe utility pricing that most IaaS

vendors offer can seem very low, butlike a cellphone bill, lots of little chargescan add up. Plan For Cloud .com is auseful resource for cost planning, let-ting you design a complete cloud archi-tecture and compare costs among IaaSproviders. The most important part of estimat-

ing costs is making sure you’re compar-ing apples to apples. Most pro vidershave a one-core, 1- to 2-GB RAM virtual

2012 2011

What Types Of Cloud Providers Do You Use?

SaaS providers

Virtualization technology providers

Platform providers

Infrastructure providers

Data: InformationWeek State of Cloud Computing Survey of 166 business technology professionals in December 2011 and 125 in October 2010 using cloud computing services

57%56%

56%61%

42%35%

27%21%

Get This AndAll Our Reports

Our full Infrastructure-As-A- Service Buyer’s Guide is freewith registration. Download it at informationweek.com/reports/iaasguide

This report includes:

> Information on redundancyand data center IaaS offerings

> A companion spreadsheet ofvendor responses to our survey

informationweek.com

Nov. 5, 2012 31

machine available for between 8 centsand 10 cents per hour with on-demandpricing. If you can take advantage of aprovider’s discount plan (commit topurchase a certain amount of comput-ing resources or pay a lump sum upfront to obtain lower hourly pricing forone or more years), you’ll see significantsavings—up to and beyond 40% withAmazon and Terremark.

Security And ComplianceLet’s face it, the default security

stances of most IaaS vendors are signif-icantly more stringent than standardon-premises security practices. IaaS vendors are also quite used to

questions about compliance with com-mon regulations, such as PCI DSS,HIPAA, and Gramm-Leach-Bliley, andsome have guides on how to bestachieve compliance within their infra-

structures. Finally, the Cloud SecurityAlliance’s Security, Trust, and Assur-ance Registry has responses from manyIaaS vendors to a rich set of uniformquestions about security practices.

Support And SLAEvery IaaS vendor we surveyed offers

24/7 online support, and most havetelephone support as well, sometimesat an additional charge. However, notall telephone support is equal; Soft-Layer is the only vendor that says itputs you in touch with a person whoworks directly on the hardware under-lying your VM. Make sure to calculatethe cost of premium support for ven-dors that price support as a percentageof usage, as that can quickly add up.Every IaaS vendor with a service-level

agreement provides credits for futureservice in the case of an outage, al-

though offerings can be difficult to com-pare. Amazon and SoftLayer offer 10%of your monthly bill as credit in case ofan outage, while Joyent offers 5% ofyour monthly bill as credit for every 30minutes of outage, and GoGrid offers10,000% credit on whatever amountyou paid during the outage. Most cus-tomers find that IaaS SLAs are noncom-pensatory; that is, no SLA adequatelycompensates a company for downtime.SLAs serve more as an incentive toproviders to make sure the service is upfor the vast majority of its customers. Ifyou have a mission-critical applicationon IaaS, you must have a multiregion ormulticloud deployment, as SLAs don’tprovide adequate protection.

Additional ServicesOne of the most exciting aspects of in-

frastructure-as-a-service vendors is thatthey’re constantly innovating and creat-ing new services that make developingand deploying powerful applicationseven easier. Amazon has had such a headstart that its additional offerings dwarfthe competition, but a number of ven-dors are starting to add services, too.Some of the offerings unique to Am a -

zon are Route 53 (DNS service), Elasti-Cache (caching service), CloudSearch(full-text search service), Simple Notifi-cation Service, and Mechanical Turk(human worker service). A number ofvendors offer or will soon offer NoSQLdatabase services, aimed at customerswho need to store a large number of key-indexed records, such as user prefer-ences for a consumer website: Amazon(SimpleDB and DynamoDB), Google(BigQuery), and IBM (coming soon); aswell as queue services (Amazon, Joyentand SoftLayer); and email services (Ama-zon and SoftLayer). Some vendors alsooffer consulting services, whereas otherslet partners do the consulting.

Joe Masters Emison oversees the award-winning BuildFax cloud architectureand frequently speaks on cloud topics.Write to us at [email protected].

[IAAS BUYER’S GUIDE]

Remember This

AWS

GoGrid

Google Compute Engine

IBM

Internap

Joyent

NaviSite

SoftLayer

Terremark

Data: InformationWeek Reports

Minimum and maximum amount of memory offered per virtual machine, by IaaS provider

61361,952

512

512

24,576

3,84030,720

2,04816,384

2,04845,056

49,152

25632,768

1,02416,384

25665,536

R

Minimum RAM in megabytes (dedicated) Maximum RAM in megabytes (dedicated)

informationweek.com

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When our partners at LightReading came to us withthe idea of fielding al-most identical surveys to

users of enterprise services and carrierproviders on the future of mobility, wewere at once intrigued and skeptical. Weknew InformationWeek’s readers wouldbe happy to tell us what they want frommobile services, but could Light Readingreally get carriers to say where they’reheaded? Turns out it could and did.

The results from 230 IT professionalsinvolved in determining, procuring, ormanaging mobile services and from 67mobile carriers show huge gulfs betweenwhat users want and what carriers thinkthey want—and can provide. (The fullreport will be available in mid-Novem-ber at reports.informationweek.com.)

Surprisingly, very few carriers (9%)

said they want to see data prices in-crease. The largest chunk (50%) wouldprefer to implement data caps to createa more manageable service. Some 21%said prices are too high, and 20% saidthey’re at the right level. Not so sur-prisingly, data caps aren’t popular withIT pros; 40% were OK with currentprices but objected to data caps, andanother 50% said prices are simply toohigh regardless of data caps.

When we asked IT pros how theyfeel about existing caps, 43% said theyforesee problems and 37% said they al-ready have had issues. Ninety percentof customers questioning pricing and80% questioning limits on servicedon’t indicate a happy user base—and

data caps just make things worse. If consumers hit such a cap, they can

decide on the spot if they want to ponyup more money for another chunk ofdata. But if corporate users hit a cap,they generally don’t have permission towhip out the credit card for another 100GB or so. And even if they did, Murphy’sLaw says you’ll hit your data cap at theworst possible time, like when you’retrying to book an order in front of a cus-tomer. The result is the need for fairlycomplex policies and usage monitoringthat will come with their own costs.

For their part, carriers aren’t just try-ing to drive more revenue—30% of re-spondents said they’re trying to do justthat, but another 47% said they want toprovide better service and 23% want toreduce network congestion. Clearly, giv-ing unlimited data doesn’t mean there’s

an unlimited supply of bandwidth. Atsome point, something has to give.

Enterprise users expect that their em-ployees will adopt tablets and smart-phones somewhat faster than carriersdo—though the differences in expectedrate of growth are not by any meansstriking. What’s more striking is the dif-ference in opinion of the existing net-work. Roughly half of both carriers(47%) and enterprise customers (52%)said that 4G networks are adequate butneed improvement. A quarter of IT prossaid the current 4G network is “verygood and meets our needs,” while amuch larger 40% of carriers said that.Some 20% of IT pros said the existinginfrastructure is barely cutting it, while

only 10% of carriers come to the sameconclusion. This disparity seems like aformula for customer disappointment.

IT pros see two areas in particularwhere existing networks don’t cut it.First, for rural/remote usage, wheredata coverage can be spotty to non -existent—46% of survey respondentssaid this is their biggest issue. The sec-ond biggest concern, at 29%, is withdata caps and avoiding excessive over-age fees.

There’s not much to be done aboutthe first issue, but in the second case,both carriers and IT pros see Wi-Fi asan off-load medium and a way to ex-pand network coverage. Only 12% ofthe carriers in our survey don’t plan touse Wi-Fi this way; just 26% of IT prossaid they preferred not to use Wi-Fiwhere they can to augment 4G services.

As carriers improve their mobile net-works and enterprise users rely moreheavily on apps that require wirelessconnectivity, how confident is eachgroup that the 4G wireless infrastruc-ture will do the job?

Not surprisingly, more carriers are“very confident” than are enterpriseplanners (38% vs. 15%). However, 70%of enterprise customers said they’re atleast somewhat confident, while 56% ofcarriers said the same. The rest—just15% of enterprise pros and 6% of car-rier pros—see a very bleak picture forcarrier wireless networking.

Art Wittmann is director of In for -mationWeek Reports. More than 100major reports will be released this year.You can sign up for a free account atinformationweek.com/reports/register.Share a digital version of this story andread others by him at informationweek.com/artwittmann. You can write tohim at [email protected].

Enterprise Buyers To Carriers: We’re Not Thrilled

practicalAnalysisBy Art Wittmann

Ninety percent of respondents questioningpricing and 80% questioning service limitsdon’t indicate a happy user base.


Businessdown tofrom the editor

No business technologybuzzword gets worn outquite like “transformation,”but there’s no other way to

describe what Indian pharmaceuticalcompany Cipla is embarking on. The 77-year-old company, publicly

traded but family controlled, is one ofthe world’s largest generic drugmakers,with a presence in more than 170 coun-tries (half its revenue comes from In-dia). But until six months ago, it didn’thave a CIO and was the poster child forshadow IT. Each company departmentnegotiated with tech vendors on itsown, deployed its own systems, andthen looped in the IT department—which consisted of only 17 core inter-nal people, serving a company with20,000 employees. Enter Arun Gupta, who Cipla re-

cruited earlier this year from retailerShoppers Stop to bring discipline andvision to the company’s IT. I caught upwith the soft-spoken Gupta last monthat Interop Mumbai, where he put his ITtransformation efforts into the contextof a broader business restructuring un-der way at Cipla, which has brought innew chiefs of HR, supply chain, inter-national marketing, strategy, legal, andother functions over the past half year. Gupta’s first major step was to con-

solidate Cipla’s six data centers to a sin-gle colocated one and revamp its net-work around a mix of MPLS and MetroEthernet links. The company’s ongoingapplication rationalization is a “bitmore complex,” he says. The plan is to

reduce more than 600 database serversto 100. Gupta also plans to reduce thecompany’s scores of ERP, CRM, HR,document management, laboratory in-formation management, and otherpharma-specific apps to about 15 total.And he’s fixing Cipla’s “broken” imple-mentations of Pilgrim (quality assur-ance and compliance) and IBM Cognos(business intelligence) software. Looking to make a difference on the

front lines, Gupta is focusing on Cipla’smedical reps: the employees who sellthe company’s products to doctors. Al-ready, Cipla is one of the few pharmacompanies that doesn’t pay its repsbased on sales, he says, and it wants toenhance its reps’ engagement with doc-tors with a new off-the-shelf softwaretool that lets them share informationon clinical trials and medical studies.

The goal is to increase the average timea rep spends with a doctor from oneminute to five, Gupta says. He esti-mates that the new tool also helps repssave as much as three hours a day onplanning and reporting activities: ac-cessing customer data, tracking salesactivity, filing expense reports. Cipla plans to replace the 8,000 lap-

tops its reps use with 10,000 Windows8 tablets. It will pilot the tablets withabout 200 reps over the next fewmonths before rolling out the devices,from multiple OEMs, next year.Gupta is also trying to get his arms

around Cipla’s sprawling supply chainof distributors and resellers to improveon-time delivery, which he estimates

was in the low teens when he took thejob. Cipla’s starting with process im-provements, adopting “theory of con-straints” methodologies before turningto technology.Next up is a big bang SAP ERP im-

plementation—starting with financialaccounting, sales and distribution, pro-duction planning and materials man-agement, and purchase and order man-agement—to replace 40-plus customsystems. “Every process will change,”Gupta says. “There will be disruptionfrom day one.” The rollout is due tostart in January and finish by 2015.Meantime, Gupta is building up

Cipla’s in-house IT capabilities—a goalover the next 12 months is to add 35 ITspecialists beyond those 17 in the coreIT group. For example, an SAP lead willjoin the company next month and hirehis own team; same for a chief informa-tion security officer Gupta is recruiting.In the process, Cipla will gradually weanitself off its dependence on IT vendors,integrators, and consultants—much likeCIO Randy Mott is doing at GeneralMotors under his own recentlylaunched IT “transformation” effort.Gupta, like Mott, realizes he doesn’t

have the luxury of making incrementalchanges. He figures Cipla is 10 to 15years behind others when it comes to ITbest practices, and all Cipla executivesare under pressure to accelerate com-pany growth to the 30% to 35% range. In the past, Cipla was averse to do-

ing such a massive ERP implementa-tion, for instance, “but now there’s nochoice,” Gupta says. “If we don’t do it,it will start impacting the business.”

Rob Preston is VP and editor in chief of InformationWeek. Read more by himat informationweek.com/robpreston.Write to Rob at [email protected].

India’s Cipla: No Time For Incremental IT Change

By Rob Preston

Until six months ago, IT buying at the20,000-employee pharma company wasscattered at best. It didn’t even have a CIO.

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