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APPLICATION RATIONALIZATION AND MODERNIZATIONMitigate Risk and Accelerate Time to Value

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TABLE OF CONTENTSExecutive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Understanding the Modernization Imperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Application Transformation Path Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Data: The Biggest Constraint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Delphix Modernization Engine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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EXECUTIVE SUMMARYBusiness expansion, acquisitions, and digitization of processes have led to explosive growth in enterprise application portfolios . Application diversity and redundancy have increased dramatically, creating a huge technology debt with cascading, negative consequences for IT and business alike .

Aging, poorly utilized applications and infrastructure have dragged along a growing cost burden, including unsupported hardware, software, and specialized labor. The resulting increase in operational or “run rate” costs has put pressure on flat or marginally growing IT budgets . As a result, new projects and innovation suffer, frustrating business owners .

In order to compete, businesses have to move faster, introduce new services, reach new markets, and stay in compliance with regulatory requirements . With IT increasingly viewed as a bottleneck, business units have spun-up shadow IT teams or adopted SaaS offerings to work around IT limitations .

Application rationalization and modernization programs not only reduce run rate expenses but also unlock the ability to innovate faster—all within IT controls and security . Full discovery and prioritization of application estates enables businesses to rationalize which applications need to remain, which need to be consolidated, and which can be retired, leading to lower run rate expenses. By modernizing and migrating applications onto private or public clouds and software-defined infrastructure, IT organizations gain greater elasticity, efficiency, and utilization—enabling faster innovation.

These expensive, multi-year projects, however, carry significant risk of delay and failure. According to Gartner, the top three problems that hinder consolidation projects are internal politics, workload coexistence, and actual savings expectations .

The Delphix Modernization Engine transforms the economics and risk profile of application rationalization and modernization initiatives . Delphix eliminates business unit resistance by minimizing disruptions to production operations and by enabling early wins with lower risk non-production application environments. By offloading project workloads, Delphix eliminates workload coexistence issues, and with automatic data delivery and virtualization, Delphix reduces project costs while increasing ongoing run-rate savings .

In addition, the Delphix Live Archive feature addresses one of the largest objections and risks inherent in application projects: meeting current and future legal and regulatory compliance requirements (e .g . delivering against Sarbanes-Oxley audit demands) .

#1 leaders across over 50 industries have accelerated application transformation projects by up to 50% with Delphix . Key benefits of the Delphix Modernization Engine for application transformation projects are summarized next.

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UNDERSTANDING THE MODERNIZATION IMPERATIVEBusiness expansion, acquisitions, and digitization of processes have compounded application portfolios across both public and private sectors over the last two decades . A Gartner survey of over 500 executives across 17 countries estimates application data growth at 650% between 2010 and 2015 alone . The associated application and data footprint is largely hosted in a growing number of data centers built on obsolete technologies . The reported number of US federal agency data centers alone grew from 432 in 1998 to more than 2000 in 2010 .

Meanwhile new and upgraded application software stacks were built to demand and consume the benefits of Moore’s law. Aging, hardware defined data centers built on poorly integrated, proprietary infrastructure stacks fundamentally lack the utilization, efficiency or elasticity to deliver on that demand in a cost effective and timely manner .

The consequences for IT teams are significant from a cost, risk, and agility standpoint. Aging and unsupported application stacks limit the ability to upgrade software packages . An Accenture report suggests that 70% of global transactions still run on legacy applications . The need for specialized labor to support legacy applications drive up operational costs . Premium maintenance costs kick in for unsupported versions . Power and cooling costs grow linearly with physical infrastructure . Invariably, operational budgets pay the legacy tax by taking away from innovation . Meanwhile unpatched security holes introduce non-compliance risks . Slow change management processes cripple SLAs and in turn infrastructure has to be overprovisioned with poor utilization outcomes . The stakes are still higher for lines of business where technology drives revenue generation, competitiveness, & customer satisfaction .

By modernizing and migrating applications onto private or public clouds and software-defined infrastructure, IT organizations gain greater elasticity, efficiency, and utilization—enabling faster innovation . In the process of IT modernization, organizations also have an opportunity to retire obsolete and redundant applications, optimize staffing models (insourced/outsourced), and move to lower real estate cost zones . Application rationalization and modernization programs not only reduce run rate expenses but also unlock the ability to innovate faster .

Full discovery and prioritization of application estates enables businesses to rationalize which applications need to remain, which need to be consolidated, and which can be retired, leading to lower run rate expenses. These benefits have coupled with the high cost and risk of legacy applications and datacenters to fuel a massive application rationalization and modernization push across industries .

For example, FDCCI, a massive data center consolidation and modernization initiative spanning all US federal agencies, alone, has mandated the closure of 1200 data centers by 2015 . This represents over 35% of all federal data centers at the time the mandate was issued . Similarly, a recent NASCIO report on state government CIO priorities for 2014 highlights data center consolidation as the second most important initiative . The private sector is no different . In a report on CIO priorities for 2013, the closely related trifecta of cloud computing, legacy modernization, and virtualization—all made the list of top 10 priorities .

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The trend towards application transformation isn’t surprising when you consider the benefits. Some examples follow:

• 80% of IT spend is “dead money” that keeps the lights on but doesn’t contribute to business growth or competitive advantage .

• An application rationalization survey suggests 88% of enterprises agree that that significant savings could be realized across support, licensing and maintenance .

• The OMB estimates the FDCCI initiative (closure of 1200 data centers) will yield $3B in annual savings . These savings are the result of significant improvements in core data center economics. For example, FDCCI expects server utilization to increase from 15% to over 60% .

• A Gartner report suggests modernized data centers can:

° Support 300% capacity growth in 60% less space .

° Reduce operating expenses up to 40% .

At scale, the capital and operational cost benefit of modernization is staggering for any IT organization. However, the bigger benefits are the ones that flow upward to the business itself. For revenue and growth driven sectors, application transformation projects significantly increase IT agility. Business agility depends on application agility; and rationalized application portfolios hosted in modernized data centers offer far greater application lifecycle velocity, data access, and data availability. These benefits can accelerate revenue-generating projects and drive competitive advantage.

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APPLICATION TRANSFORMATION PATH CHALLENGESThe inhibitor to application rationalization and modernization isn’t the lack of technologies that support and enable the next generation datacenter. Virtualization, converged infrastructure etc. have proven out the benefits of modernization in both private and public clouds . The biggest obstacles lie in the transformation path itself:

Risk: For most IT teams, upgrading even a single application is a high-risk project . The risk of failure and delays is logically far higher with modernization projects that necessitate widespread upgrades and platform changes just as a pre-requisite . The actual migration and cutover to new data centers only compounds risk due to business interruptions . Application owners often pushback on project teams because they can’t easily test and validate migration . The sheer scale and scope of modernization initiatives also puts a long list of other projects and their benefits on hold. Additionally, application retirement is often an explicit goal of application portfolio rationalization . Yet, the reality is that while applications can be retired, legacy data has to remain available for compliance . The lack of a cost effective way to retain legacy application data while maintaining accessibility only increases resistance from security and audit teams . Consequently, critical applications that would benefit the most from modernization are pushed to the back of the list making the order (and benefits) of modernization sub-optimal .

Cost: Acquiring or building new data centers alone requires a massive capital outlay . Applications running on unsupported software need to be upgraded before they can even run on newer hardware platforms . Similarly, legacy operating systems must be migrated to newer linux based, virtualization friendly platforms for compatibility with emerging pod architectures . The combination of upgrades, platform changes, and the actual migration introduce huge test-bed infrastructure costs . The operational cost burden is equally significant. IT teams rarely have the bandwidth to directly execute major modernization projects so expensive third party services costs also have to be incurred .

Risk

• Concurrent upgrades & platform migrations

• Migration validation

• Downtime

• Competing projects

• App retirement & legacy data retention

Cost

• New DC build-out costs

• Application upgrades

• Hardware upgrades

• Migration testing capex

• Internal plus 3rd party opex

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Quality: Extensive upgrades and platform changes invariably stretch modernization project schedules. Huge fixed costs required for migration test infrastructure lead to compromises that impose serialization and limit the quality of migration testing and validation . Process overhead and wait times embedded in migration test bed setup and refresh tasks eat into actual test times, extend timelines, and erode quality further .

The high cost and risk of application transformation projects eats into the ROI of modernization by extending legacy data center operational costs and delaying the benefits of modernization. For example, the FDCCI goal of closing 1200 data centers by 2015 is now already far behind schedule. In a 2013 report, 56% of respondents graded their agency’s consolidation efforts at ‘C’ or below. Additionally, only half the respondents believed the overall consolidation targets would by achieved in time . The key challenges reported in the survey were lack of budget, overcoming mission-owner objections and shutting down or consolidating applications .

DATA: THE BIGGEST CONSTRAINTData access is ironically both the impetus for application transformation as well as its biggest bottleneck . Consider an organization looking to rationalize and migrate its portfolio of 500 applications from a legacy data center to a new, modernized facility . Now, assume the production data footprint of these application stacks is roughly 500 TB in aggregate and that the project team needs 3 additional environments to effectively test and validate the migration . As is generally the case, existing development and test environments are needed for other ongoing projects so an incremental 1500 TB of tier-1 capacity would be needed just for the modernization initiative . Many organizations limit migration test environments to control project costs and instead serialize the migration with a smaller number of test beds . On the backend, these compromises manifest in the form of limited validation, higher project risk, and limited support from lines of business or application owners .

Test infrastructure costs aside, application transformation projects face an even bigger challenge when it comes to operational costs around test data management . Project teams need frequent and iterative access to the latest production application environments before a cutover can be made with a high level of confidence. Yet, each refresh of a test environment from its production source can take days to weeks of coordinated effort across third party integrators managing the migration project and production operations teams . Moreover, the constant movement of large data sets to test and validate migration also introduces the risk of saturating network links carrying business critical traffic. When thousands of systems have to be migrated, network capacity alone can force serialization and introduce lengthy delays . In large-scale modernization efforts spanning hundreds of applications, these constraints only push out the benefits of modernization further while eroding potential returns .

Within application stacks, the constraints are particularly pronounced at the database tier . While next generation, software defined data centers enable rapid provisioning of virtualized servers, large application data sets locked in databases continue to constrain agility and drive up costs . Because databases and underlying data sets are inextricably linked, the reality is that utilization across application landscapes remains sub-optimal even in modernized data centers . Removing this “data” bottleneck can not only accelerate application transformation projects but also deliver sustained benefits around greater agility, reduced risk, and lower costs post-transformation .

Quality

• Inadequate test beds

• Process overhead

• Approval cycles

• Cross-team dependencies

• Serialization

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DELPHIX MODERNIZATION ENGINEThe Delphix Modernization Engine accelerates application transformation projects by removing the biggest constraints and bottlenecks .

Virtualization: Much like a hypervisor abstracts compute resources to create virtual machines, the Delphix Modernization Engine abstracts data from hardware and storage to create virtual databases, application instances, and file sets. Through intelligent block mapping and sharing, Delphix eliminates the widespread redundancy across migration test beds . Delphix virtual application instances function just like full physical copies, but consume a fraction of the space and can be created in minutes . As a result, Delphix can eliminate over 90% of migration test bed storage and operational management costs . More importantly, if virtual environments are retained for their sustained benefits post-migration, Delphix can entirely eliminate the need to migrate non-production application stacks . Virtualizing non-production copies at the target data centers (after production is migrated) can eliminate the migration workload for over 50% of all systems in scope . Through cost effective migration test beds and V2P (virtual to physical) support, Delphix has a similar impact on production migration effort as well .

Efficient Synchronization: In data center migration projects, the constant movement of full backups from source to target data centers represents a huge tax on both the source system and WAN bandwidth . Often, migration tasks have to be scheduled during off hours to mitigate this impact . As a result, the overall migration schedule is stretched further . Delphix implements a “forever-incremental ” technique to maintain continuous, efficient synchronization with source application stacks (application binaries, databases, and configuration files). Delphix synchronization eliminates 95% of source and network load caused by full data extraction and movement .

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TimeFlow: As part of its synchronization process, Delphix also synthesizes and records all changes . This information is used to build a time window or TimeFlow of changes that can be used to provision or refresh virtual test beds from any point in time down to the second or transaction boundary . TimeFlow enables migration test teams to setup and tear down test beds without relying on slow recovery from full, incremental backups, and redo logs . This is particularly valuable for composite applications that require synchronized test beds to validate migration . With Delphix TimeFlow, recovery points are continuous and recovery time is a matter of minutes regardless of the application data footprint . TimeFlow also enables LiveArchive to address one of the largest objections and risks inherent in application projects: meeting current and future legal and regulatory compliance requirements (e .g . delivering against Sarbanes-Oxley audit demands) .

Integrated Data Masking: Applications that store sensitive or regulated data require data masking across lifecycle copies . However, data masking only introduces additional overhead to migration test bed provisioning and refresh tasks . In migration projects, data related risk is often the cause of pushback from security and audit teams . Delphix eliminates the overhead of data masking through seamless integration with commercial or home-grown masking solutions . With Delphix, data can be masked once and all derived copies are automatically protected . Since Delphix virtual, masked copies can be created, tracked, or deleted centrally and on-demand, associated risk and resistance from data owners are significantly lowered.

Cross-Platform Provisioning – Modernization initiatives often require porting legacy unix operating systems to cloud friendly, x86 linux platforms as a prerequisite to actual data center migration. However platform changes involve a lengthy, manual, error-prone process just to validate and ensure platform migration readiness . For some steps, source production systems have to be placed in read-only mode, which introduces service interruptions . To avoid this downtime, organizations create intermediate physical copies that consume additional storage and are still hard to keep synchronized with the source . These challenges around platform migration can add months to the broader modernization schedule for each application . By automating unix to linux migration steps (including endian conversion), Delphix eliminates 50-75% of the associated overhead . For composite applications, synchronized Delphix virtual copies enable fluid migration rehearsals without service interruptions or storage overhead.

Virtual secure database branches can be deployed in minutes

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Self-Service: Delphix provides an intuitive GUI that enables migration project teams to provision, refresh, rewind, or branch migration test beds independently, without relying on production operations teams . With physical test beds, each task can introduce days to weeks of dead time to process approvals . By eliminating the capex and opex costs that trigger the need for approval cycles in the first place, Delphix self-service can return months of dead time to migration validation and testing . Self-service alone represents and enables a significant project acceleration opportunity.

Enterprise and Cloud Ready: The Delphix Modernization Engine is delivered as a virtual appliance to maximize deployment flexibility, scale, availability and cloud readiness . This form factor supports deployment to any private, public or hybrid cloud environment in under two days . Delphix also supports any hardware and storage . This ensures organizations can leverage existing infrastructure and avoid delays tied to procurement cycles . Delphix also reduces vendor lock-in at all tiers . For example, Delphix can virtualize and migrate a unix/netapp legacy application stack to a linux/flash- based converged stack in the modernized data center . For large migration initiatives, Delphix can be scaled vertically or horizontally . Delphix also supports hypervisor templates (like VMware vSphere) for quick, standardized rollouts . Bandwidth efficient replication to secondary Delphix engines provides high availability and disaster recovery for critical project environments and for Delphix environment itself . The Delphix software appliance is delivered in “lock-down” mode to ensure compliance with stringent configuration standards such as the DISA STIGs. For example, known vulnerabilities are patched and extraneous communication ports and services are disabled .

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CASE STUDYA US based CPG firm was challenged by legacy application software licensing costs and aging infrastructure . Additionally, historical data growth was 30% and their single data center was quickly approaching full capacity . Real estate costs excluded expansion as an option .

The company decided it would build out new primary and DR data centers in a lower real estate cost zone . To minimize risk to production, a decision was made to first migrate all non-production environments to the new location. They identified 100 key applications, which had three non-production application environments on average . Unfortunately, competing projects consumed the existing non-production stacks and budget limitations only allowed for one additional environment per application for this project .

Repeated movement of data from production instances to the new DC’s was identified as a high source of risk to business critical traffic. Additionally, numerous applications required upgrades and platform changes prior to migration . Resistance from business units was significant and the project was expected to take 12 months.

By using Delphix, the customer transformed both the migration project and sustained application lifecycles . Delphix was deployed in the target data center from where it remotely and efficiently synchronized with the 10 production sources and then rapidly provisioned 60 virtual databases in the new, modernized facility . In other words the entire migration was parallelized rather than requiring 10 cycles . Additionally, all 60 Delphix virtual copies collectively consumed less than 1X the footprint of production (vs. that 6X that would be required by physical copies). Migration rehearsals were far more fluid because Delphix virtual databases could be provisioned, refreshed, or rolled back to any point in time in minutes, directly by the migration project team .

Since Delphix only requests changed blocks from the source environments, the impact of data refreshes, rollbacks etc . on the saturated WAN link was also minimized . As a result of the parallelization and operational savings, the project was completed in less than 6 months with Delphix . The customer chose to retain Delphix virtual copies rather than reverting to rigid, physical copies . Consequently, they realized over 90% in storage savings and over 95% in operational savings in steady state post migration .

For more information on how Delphix can help you move faster, introduce new services, and reach new markets, visit www .delphix .com .

Profile

• F1000 US based CPG with global operations

• 30% annual data growth

• High legacy application and DC costs

Transformation Plan (Before Delphix)

• Rationalize and migrate to new DC

• Budget limitations force serialization

• 12 months targeted for completion

Delphix Impact

• Completion in 5 months

• Success drove cross-LOB interest, buy-in

• 90% lower capex & opex (sustained)

Application Rationalization and Modernization March 2014

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