The Software Solution June XX, 2013 Underwritten by:

Introduction Many believe Federal IT is at a tipping point – innovate or die. But, innovation is hard when nearly three fourths of your budget is devoted to life support for legacy systems. Current IT models are falling short as agencies grapple with fewer dollars, more requirements, and faster change. Some are transitioning to more flexible “software-defined” environments. For “The Software Solution” study, MeriTalk and VMware surveyed 150 Federal IT decision makers to explore legacy costs and challenges, and the “software-defined” opportunity. What steps are agencies taking, what are the benefits, and what have they learned? 2

Executive Summary IT, We Have a Problem: Legacy IT is holding Feds back Agencies spend $62B annually supporting legacy IT 77% say their agency needs a more flexible IT framework More than half (58%) don’t believe their agency is able to acquire new IT resources in a timely manner Software Solution: Feds see software-defined potential 66% of Feds believe transitioning to a software-defined enterprise will foster IT innovation in their agency 53% say shifting to a software-defined data center will reduce costs and improve performance The Road Ahead: Agencies are taking steps to transition More than half have started to shift to software-defined IT services Additionally, 57% have centralized IT management; 48% have consolidated data centers; 41% have deployed virtualization Most Feds believe a full transition to a software-defined environment will take at least three years *Of those who say innovation is vital to their agency’s future (n=132) 3

Defining Software-Defined Software-defined Datacenter A software-defined datacenter is one where all x86/industry standard server infrastructure is virtualized, and the management and control of the datacenter resources is entirely automated by software. Software-defined Network Software-defined Storage A software-defined network is identical in concept to a software-defined data center – it functions by virtualizing network infrastructure, and therefore removing the dependency between networks and networking hardware. Storage resources are virtualized to enable pooling, replication, and on-demand distribution. The result is a storage layer with agility similar to that of virtualized servers: aggregated, flexible, efficient, and capable of elastic scale-out. http://blogs.federaltimes.com/federal-careers/2010/04/05/how-to-guard-against-age-bias/

Take Away: No Innovation Opportunity IT, we have a problem Federal agencies spend 79% of their budget, or $62B* on the status quo What percentage of your overall IT budget does your agency spend updating and maintaining the following? Legacy data center hardware and software Legacy enterprise networks Traditional storage environments Remaining budget 79% of IT budgets are spent updating/maintaining legacy environments Take Away: No Innovation Opportunity *Based on Federal IT budget for Fiscal year 2013; Calculation (79% x 78,878); Source: https://cio.gov/wp-content/uploads/2012/09/FY2013-IT1.pdf, Slide 6

Take Away: IT Can’t Keep Up Uphill Upgrades More than half (58%) of Feds say their agency is not able to acquire IT resources in a timely manner When your agency decides to upgrade a portion of your IT infrastructure, on average, how long does your agency spend on each of the following steps? 30 Months Evaluation Installation 6 Months 20 Months 6 Months 6 Months 8 Months 6 Months 5 Months 12 Months 26 Months Definition Procurement Training Take Away: IT Can’t Keep Up

Take Away: Time is Money The Daily Grind In-demand IT staff is consumed with routine tasks that could be automated What percentage of your time do you estimate is spent waiting for and/or performing routine IT maintenance events with each of the following? Data Center 33% of time waiting for routine events 42% of time performing routine events Storage Environment 31% of time waiting for routine events 37% of time performing routine events Network 34% of time waiting for routine events 40% of time performing routine events http://blogs.federaltimes.com/federal-careers/2010/04/05/how-to-guard-against-age-bias/ Take Away: Time is Money

Take Away: Time for a Change The Bottom Line Most agencies are facing major hurdles with IT flexibility, budgets, and staff resources IT Framework Budget Resources 77% 57% 63% http://blogs.federaltimes.com/federal-careers/2010/04/05/how-to-guard-against-age-bias/ IMAGE NUMBER: 77509882 Believe their agency needs a more flexible IT framework Believe their agency does not have adequate IT budget to accomplish its goals Believe their agency lacks the resources to execute standard maintenance on IT systems Take Away: Time for a Change

Take Away: Take the First Step Progress The good news – agencies are taking steps to centralize, consolidate IT Which of the following steps has your organization taken? 57% 48% 41% 32% 22% 18% 15% Implemented a chargeback system Increased the use of cloud Provided IT financial transparency Automated standard IT maintenance Deployed virtualization Consolidated data centers Centralized IT management Take Away: Take the First Step

Take Away: Find a Better Way What Stops Progress? But, there are challenges; Budget, security, and agency politics are roadblocks Why has the Federal government not made more progress updating legacy systems? #1 Budgets #2 Security #3 Agency politics #4 Complex procurement process #5 Locked into vendor contracts http://blogs.federaltimes.com/federal-careers/2010/04/05/how-to-guard-against-age-bias/ Take Away: Find a Better Way

Take Away: Bountiful Benefits Exploring Options Feds see software-defined potential 81% say innovation is vital to their agency's future and 66% believe transitioning to a software-defined enterprise will foster IT innovation in their agency 81% 66% Improve speed/performance in: Data center – 53% Network – 35% Storage – 21% Additional Software-Defined Benefits Cost reductions in: Data center – 53% Network – 45% Storage – 43% Take Away: Bountiful Benefits * n=132

Take Away: Fund Progress Wish List Feds suggest agencies re-direct savings to new applications, cloud, and improved program management If your agency could save the money currently spent maintaining legacy technology and re-purpose those dollars, what would you do with the budget? Deliver new or enhanced line of business applications Invest in agency cloud capabilities Improve program management Improve digital services Retrain IT resources http://blogs.federaltimes.com/federal-careers/2010/04/05/how-to-guard-against-age-bias/ Take Away: Fund Progress

Take Away: Strong Support The Right Direction Many agencies have started the shift to software-defined IT services Percentage Using Today Percentage Recommending Use 65% 46% Servers Storage Network Security Backup 59% 54% 55% 38% 50% 35% http://blogs.federaltimes.com/federal-careers/2010/04/05/how-to-guard-against-age-bias/ 50% 51% Percentage who are utilizing each as a software service today Percentage who recommend transitioning to a software-defined environment Take Away: Strong Support 4

The Road Ahead Most Feds believe the transition to a software-defined environment will take at least three years Of those who have not transitioned* one in three (33%) have established a timeline for transition to either a software-defined data center, network, or storage system How long do you think it will take for your agency to transition to a software-defined environment*? http://blogs.federaltimes.com/federal-careers/2010/04/05/how-to-guard-against-age-bias/ Take Away: Start Now 4 * Average response across data center, network and storage

Recommendations Quantify legacy costs Consider a software-defined project that will: Centralize IT management Automate IT maintenance Reduce costs Identify specific innovation opportunities http://blogs.federaltimes.com/federal-careers/2010/04/05/how-to-guard-against-age-bias/

Methodology and Demographics MeriTalk, on behalf of VMware, an online survey of 150 Federal IT decision makers in June 2013. This report has a margin of error of +/- 7.92 at a 95% confidence level Title Distribution 42.8% IT Manager 19.1% Other IT management 14.5% IT Director/Supervisor 7.9% Network Administrator 7.2% Deputy CIO/CTO 4.6% CIO/CTO 3.9% Data Center Manager Agency type: 60% Federal Civilian 40% Department of Defense or Intel 100% of respondents are familiar with their agency’s IT infrastructure operations, including servers, storage, and networking 16

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