 We're here at the Forecast 2012. I'm John Furrier with siliconangle.com for siliconangle.tv. Cube Conversations, and we're here with Petri Ulias from Capgemini, the CEO of Finland, and also you're in charge of the global data center operation for Capgemini's roadmap. Welcome to Cube Conversations. Thank you. We have a publication called Services Angle, and we were really the first ones to document this migration of cloud, big data, and the impact to services. We had a lot of thought leaders on earlier this morning here at the Intel Forecast event, talking about, not the argument about cloud technologies, because the data centers are these big, you're big customers, and the big buyers have been doing data server consolidation, service standardization, virtualization, NAS, storage servers, now network virtualization for years. So their timelines, they're cloud ready almost, but they aren't being disrupted by clouds per se. From a technology perspective, but it's really the business model that's changing. So could you share with our audience the impact to what cloud does to the services business? When I say services, I mean, there's a lot of consulting opportunity out there, but also people are selling services over the network. So their products are services. So can you talk about the landscape? Well, I think the first thing maybe is really, it is the big check. Well, first of all, the business, the whole market is changing because there's a lot of new kids on the block. So there are companies that we haven't faced. Typically our competition or our colleagues, they are HPS, IBM, SAC sensors of the world. Now you have all the telcos, all the small companies, all kind of a man and a carousel, man and a dock, or however you say it, the English kind of a companies. So it's important for us that we can pick our play better so that we go for what kind of a services we want to go for. So we, for example, we are a service provider basically. So the big change is, as you said, it is in the business model because to me the technology, it's kind of an evolutionary. So there has been changing in the technology, but they would have been changing in the hypervisor, in the storage, in the compute level, regardless of the cloud, so-called. So then the cloud is basically the provisioning layer kind of upwards, you could say, where you can be agile, where you can scale up and down easily. And then that is also then the challenge or the thing that we are facing now as a service provider, but also our clients is that, traditionally what you try to do, of course, is you try to sell as much as possible. I mean, for most businesses, it's kind of a good thing to do, sell as much as possible. And then typically the service providers, we've been looking for long contracts, be it three years, five years, whatever. And now when we go to cloud, then how do we adapt? Because the contract can be for one day, two weeks, maybe three weeks. So we don't have the same kind of a client lock-in as we used to have. People talk about technology lock-in, we talk about really the kind of a client lock-in as well. Well, you guys enjoyed, or CapCham and I, and your peers, our competition, have enjoyed a good run of lock-in over the years with SAP deployments. I agree, I agree. But those deployments from start to finish were pretty long. So with cloud and some of these new acceleration technologies, the deployment cycles are smaller because the speed is faster. Could you comment on the changes going on in that area? Well, I think there we are still in the, we talk about fast deployment. And I would like to say that, yes, now everything you can do with the cloud, you can jump into the cloud fast and so on. But we all know that we are not there quite yet. I mean, we don't have the same terminology. It's not standardized totally. We are not using the same, well, abbreviation, you know, IT world is a world of different kind of abbreviation, acronyms and all that kind of stuff. So we don't have a common language yet. And that's actually what is slowing down, for example, still the transition and the changes as well. So, but it's also what I said earlier. I think that also from, it's not only for service provider point of view, it's also for the clients who are looking for a cloud service, what they also used to do is that they were good in building a business case that do I outsource? Do I keep it inside? Do I insource? Do I buy whatever? But also for them, making a business case for cloud is much more difficult than making a business case for traditional IT spend. Yeah, they're comfortable with on-premise. But, you know, cloud offers some advantages. You mentioned spin-up, spin-down, on-demand, by the drink, however you're renting, whatever you want to call it. But the complexity with things like big data, for example, you just can't spin-down data. So like, you know, people think of Amazon, for example, develop, oh, I was putting my credit card down, I'll spin-up some web servers and spin-up some resources, and when I'm done, I'll just tear it down, I'll just move my app and port it inside. Well, that's assuming you're throwing away your data. So, what's become pretty clear from us, or very clear from us, is that the role of data into the business model is critical. And that wasn't on the cloud agenda three years ago. So, as a provider, how are you dealing with that? And, you know, you can spin-up stuff in the cloud, maybe seasonality if you're in retail, or if it's something else, whatever the vertical application is, you can use the cloud for that bursting, if you will. But now you've got the data, where do you put the data? You spin-down the data, do you port the data? So, data's become an interesting linchpin now. Can you talk about the changes that you've seen with data? Well, I think the main thing is, of course, the growth of, I mean, the amount of data keeps on growing all the time. And then, if we were not so good in using the data for our business purposes, three years ago, five years ago, we are not better today. But the amount of data we have is multiplied, 10 to 100 or whatever. You can capture the data, you can store the data. Yeah, exactly. But what do you do with the data? So, I think it really then, maybe that connects to the cloud as well. But I think the cloud has kind of come afterwards. But thinking about the BI, the analytics, or that part, we need more and more, I mean, more improved analytics and BI kind of a software, for example, or application, where we can easily, easily, what you call it, crunch and blah, blah, blah, slice and dice and all that, the data, and really get the information you need. Because data is data, but making it information is the most difficult part. So, let's talk about some successful components in Germany, SAP, headquarter in Palo Alto, in my town. You've heard of those guys. They do very successful with their messaging and their product lines these days. They have the HANA, they have the in-memory, they have the application suite, they talk about business analytics, it's a really great product. The side baseball for the mobile. So, that really talk about the application market. Can you talk about applications? Because developers are really part of the big conversation right now. You guys are racing out with solutions out there, with customers, you're providing a service. The role of the developer agile programming, these are like consumer-like concepts, but now the enterprise needs to up their application portfolios. We've seen that trend of app stores. The app conversation hasn't always been the leading conversation in with IT in the data center. How has that changed, or is it still early? The role of the application developer. Well, I think if you start developing application today, most likely then you want to make it cloudable in a way, what does this really mean? It is, I'm not sure if it's, I think again the cloud, if you think about the cloud really as a kind of flexible layer and provisioning layer, it is about the technology, the portability for example. So I suppose all those things are the bigger, in the past it was easy. You focused, you have a certain hardware, certain kind of a middleware, certain kind of operating system so on. So you build your software. Dotnet or Java, whatever, that's your choice, and then you just do it. And now I think, but I'm not sure if it's really so big thing for the software development because you should be able to somehow, as far as I understand, I'm not a technician, but somehow what you call it, encapsulate or whatever, so that it really is portable from one place to the other. And I would imagine that the development tools that you are using today, they would kind of do the encapsulation for you in a way that when you work on those parameters that they give you, then it is movable. But I think- We're seeing that platform as a service, for example, becoming a key enabler for developers because they can extract the right- That's also interesting. Where is the limit between the platform as a service or software as a service? If you are providing for- That's a good question. Where is it? Well, I don't know. I mean, basically, platform, if you only think that it's kind of a middleware and maybe some kind of a management layer on top of it, that's clear. But then when you go to database, you go, for example, the messaging services or you go, you could call, I think you can call it a software service or application as a service as well as platform as a service. So I don't know what is a platform or is an application, it's a good question. And you know, there's also infrastructure as a service. So, you know, we've been saying on SiliconANGLE- Which is the most difficult part, by the way, in many ways. Yeah, I mean, as you go down to the infrastructure, there are things with virtualization. Now, network virtualization is very, very difficult. Configuration, management, automation, this is not trivial. So up the stack, they look down, it has to be turnkey. And that's a problem today in some of the tech that I'm seeing. But again, what is the line between commodity, infrastructure as a service, platform as a service? And the fundamental question that everyone was asking in the market today is, what's the differentiation strategy for a vendor, a provider, if platform as a service and software as a service is erased as zero, which some say, it gets commoditized. Where's the differentiation? We think it's in software and services. It is, I agree. Share your thoughts on that. Well, I think just a little bit background. We started our infrastructure as a service offering about two and a half years ago. And I think we made a mistake because we basically thought that it is a building block you need, and then you put your platform on top of it, then you put your application on top of it. But then we also thought that we can sell it as it is because people would need testing or development. It hasn't been at all as easy as we thought because then you have all the security, the network connections, all the things that we've been discussing also about here. And we didn't really, probably, and many people haven't really thought about those. You just, it's so easy to build your infrastructure stack and then, okay, just plug it in. Well, it didn't work so easily. So I think, and then why- Because of the dynamic nature of what? The apps and the network or all the above? I think the accessibility, the kind of two-fold, basically it's all about the security and the access. So on the other hand, the kind of front-end access for the end users and then the back-end access for those who are maintaining the system. And basically, traditionally, when we build our IT system, we've made all the efforts to make sure that those are totally separate. They can't in the cloud way be. So I think the thinking that what you have as your basic infrastructure and all the kind of rules for accessibility, they would work for cloud as well. It's probably not, it's not that simple. So how are you helping, how are you working with people in your customer base solve the cloud problem? What specific use cases are you seeing as the most prominent right now? I think for us- For the large enterprise. What comes to the cost for the large enterprise? I think for us, one of the big things lately has been the kind of road from system service management, integration, aggregation, and then finally to the service orchestration because people have always had difficulties in managing, especially if you are multi-tower services, you're buying services from different partners. It doesn't even have to be IT services. It can be anything. Managing and orchestrating all those services is always been the pain. In cost too. Yeah, it's on a cost as well. And actually also cost that you don't really manage well. You don't even know exactly what you are spending with those. So what we see now coming, and we already have quite a few clients where we basically are just doing the service orchestration or integration part. So we can take all the SLA's from all existing service providers. For example, we take the SLA's, we carry the risk for the SLA's, and then we use our expertise to manage all those different towers. And you assemble the SLA's in concert with what the business objectives are. Exactly. And match that to the infrastructure. Exactly. So then the client has one portal. One kind of a portal. Into the window. Yes, one, one kind of. So you guys are providing a management function as well as an interface. Yes. Both. Yes. And when you say take that risk of the SLA, you're actually taking the business risk on? Yes. Or management risk, or both? Well, I mean business risk, management risk. But basically, the SLA's are supposed to, they are supposed to be there to support your business as well. Theoretically, your SLA's are there that if you breach, you have a business problem. If you don't breach, your business is running for you. Well, you're hitting on my favorite topic, which is the business, the data center operating system. Because what you're basically doing is assembling at runtime the different service levels within the enterprise. True. And managing that for the client. That's essentially creating an operating environment for the customer. Yes. And providing that as a service. So it kind of makes sense. So with that, I wanted to ask you, what do you think about the concept of a data center operating system where HP and others are putting out some really good R&D through HP Labs, a holistic approach to the data center. They're looking at using big data, using management software, specifically one of the hottest things we're tracking right now is DCIM, data center integrated services, management type software that works across the data center. Are you seeing any of that in your environments now, or is it still too early R&D? Well, yes, I see. But at least for us, I think that's where there was a discussion, I don't know if you were, there was one panel just before the lunchtime actually, and it was a discussion about the locking actually. Kind of a technical locking. And I think that's where it's quite obvious that if you go kind of a higher level of services you take for your data centers from one given provider, the more difficult it is actually to break away from it. So I don't know if that world is ready. The nestedness of one vendor provided or one technology. Yeah, it's like, I think it's the kind of the same thing we discussed about the virtualization already for quite a few years. And then we also, I did a lot of work with the virtualization of different layers, also for example, virtualization of the stories. And then there was that there is a software provider whom I can buy a product that then I can plug in all my stories or whatever beneath it. It sounds good, but the problem is that then I have a complete lock-in with that virtualization software. I can't change that part ever. And the same if you take it kind of the abstract layer a little bit higher to the data center level then it could be the same. But I don't really know about it. Okay, so the change gears I want to ask you around. I want to talk about globalization. So I talked to a lot of my friends and some of them run huge global operations. And so it's a complicated environment. You have all kinds of issues around replication of data. You also have policy issues around country management and country rules. Cloud has been an interesting use case where cloud can be an enabler for business logic and business use cases around country deployments. People who have data centers and all over the world who are managing whether it's a follow the sun sort of backup strategy or application strategy. Follow the moon. Yeah, so yeah, depending upon that. So how does cloud enable like global business? Take advantage of some of the resources when you have in some cases regulation in countries. Have you, because you're operating a global operation. Can you lend some insight into the global CIO out there who's grappling with in-country strategy? Should I put a data center in Africa? What do I need to do in India? Should I look at tier two cities, follow the sun, all of the above? What's on the agenda for these global CIOs and how they use cloud to architect their data centers? It's a big question, but let me- It is a big question. I was just trying to think that what's, but I think one thing is first of all discussed it also that people may think that there is easy in a way that cloud war that you basically have big enough theaters in all the time source and then you just manage and you follow the sun or you follow the moon and so on. And then especially, well, coming from Europe you start thinking about okay, we have about tens of countries with very strict break relations or all the data have to stay inside the country borders no matter, well, you can move it maybe from Finland to Sweden or so on, but not much further than that. And that complicated. So actually, I think now we are kind of rethinking probably needs to be much more granular than we thought. We also like many people you remember some years ago many people thought that all the Googles of the world they were building huge data centers here and there but I don't think that it's really going to work that way unless you get to the pass or even source level when you kind of for them, it's actually easier because by default, if you're going to Azure, if you're going to Amazon, they won't by default they won't promise you that they will store your data in your own country or whatever. And you accept it because it's part of the concept then if you buy your services more but then about the global things is that companies that are truly global, they actually are in a way the easiest clients because they don't typically care. So they are okay, so that okay, I am truly global company I find that all my data in Europe is centralized in Germany, all my data in APEC is centralized in Singapore and all my data in here is centralized in New York or whatever, so that's okay with that. So they're already operating at that level so they want to be globals. Exactly. Have to figure out their localization strategy by data. Yes, and also the kind of, because typically, do you really have global operations or do you have all the sales depots I mean all around the world or so, so it really depends. Okay, so my final question here in this CUBE conversation here at the Intel Forecast in 2012 is what's the impact that you see in the next few years in the services area? What are the big things that's going to really change the equation, if you will, and change the distribution of wealth and the ability to monetize that will impact the business? We had a theme, adapt or die, transform or die, it's been a mantra, it's been around for all innovation cycles. As we enter in this new age of big data cloud and all this innovation, apps and applications, mobile, social, what is going to be the disruption areas in the services business? And services being, you know, how people are servicing their customers, how they're delivering services, what do you see as the, in your personal perspective, the key disruptions in that market? Wow, that was a, that was a... Next few years, what are you expecting to, what are you watching? What trends are you watching closely that you're still not sure about that could really transform the business completely or not and still open, open, open-ended for you? I don't know, I mean, it's like, like, well, it's stupid to say because it's so, but I mean, it's like always, it's kind of overestimate the next one or two years and then you underestimate what's going to happen in five or 10 years. I suppose that's why it's kind of difficult as well. I do feel, though, that people say that the cloud is kind of the next part of the saves after the internet. Fine, it can be so. But I mean, I feel that in a certain way, the cloud is still so kind of small and granular. It's all over the place. It's like, I don't know what you say to me, it's kind of a dusting phase. So everything is in the air. Yeah, flying around. And finally, you let them, you let them go down and they will settle in a way or the other. There will be a certain kind of, I'm sure that there is one thing that is quite clear. There is room for people like us, I mean, big service providers. We have to be able to provide more agile services. That's quite clear. That's what we are focusing on. Our main focus still will be with really big enterprises and that helping them to orchestrate and manage their services. Because as we discussed the role of the CIO because more like a chief service orchestrator and that's where we want to go and help them. So I think for us the clear, to me it's quite clear, we go and from that system management tradition, we go towards the orchestration play. But then there is, what it really means is that because now having an IT system, having a system in there for a small company of one or two persons, it is easy, it's cheap, it's, you can do it. So there is going to be a lot of room for kind of a much smaller. Innovators. Niche kind of players. Boutique kind of. Exactly. But where do they exactly settle in? They are not going to really compete with us because they have the different kind of clients. Yeah, they don't have the scale. Well, Hitchie, thank you so much for being inside theCUBE. This is CUBE Conversations from Intel 2012 forecast event in New York City. We'll be right back with our next guest.