 And now, SiliconANGLE TV and Wikibon.org, present a focus spotlight. Live from Las Vegas at VMworld 2011, host John Furrier and Dave Vellante, a human being. Cloud realities with support from NetApp. Innovated clouds are built on NetApp. Hi, this is Dave Vellante. We're back live at VMworld 2011. SiliconANGLE's continuous coverage. We're here with the cloud realities spotlight, and we're here with George Reid, who's the CIO of Seven Corners. Welcome, George. Nice to be here, Dave. So Seven Corners is a really interesting company. I know a little bit about you guys. I met with one of your colleagues back in June, but why don't you start by telling us a little bit about Seven Corners and we'll dig into what you guys are doing with your cloud infrastructure. Seven Corners is a specialty insurance company that provides travel, medical, emergency evacuation assistance, and a variety of lines of insurance for various federal and state government agencies around the world. Yeah, and it's very specialized products. You guys are fast. You compete on speed from what I can tell. And we were talking off camera. Your background is really not, you know, in deep insurance, which usually when you talk to CIOs in the insurance industry, that's what you get. But you're really focused on a lot of great project management. You've got a military background, and you've brought that to bear at Seven Corners. So I want to talk a little bit about your infrastructure. Let's start with, everybody talks about cloud. What does cloud mean to your organization? Cloud means to us what we need, when we need, and in the correct configuration and method of delivery. It means not using more than I have to have until I need it. So pretty straightforward. I mean, it's sort of demystified in cloud, if you will. How are you guys deploying infrastructure in a cloud context? Talk a little bit about, paint a picture. What's your infrastructure like? What are your apps that are really driving your business, and how are you supporting that? Well, the infrastructure itself made an interesting transition in the last year. We went from entirely a server room full of servers that were built by an up-and-coming company and Dell desktops buffed up to get her done, so to speak. We've changed. All those are out of the room, and what's in the room now is three Cisco UCS racks running VMware vSphere. We're rolling v5 out here pretty quick. We're using a FlexPod from NetApp, and basically they are allowing us to take our applications, which, again, for 15 years have caused double-digit growth in a company, but we're going to go to the next level by writing an application that literally consumes the cloud to provision itself so that the user actually literally has what they need the very second they need it. So I actually want to come back and talk about that, but I'm interested in this concept of FlexPod. It brings together compute, networking, and storage as opposed to having them in silos. Why is that important? Why is that useful in a cloud context? Well, when you're trying to come to a unified computing environment, having a bunch of different silos means that every time you have a change in one place, you have to have accommodated that change elsewhere. As well, we're living in a regulated industry, not just because it's insurance, but also because we have business with the government and have to be FISMA compliant. It's a lot easier to manage one array extremely well than to try and struggle with managing five, six different technology stacks at the same time. Were there organizational issues that you had? Was it sort of a prerequisite of the project, if you will, when you brought in a FlexPod and a UCS? Did you have to make organizational changes? There were a load of organizational changes. I was brought in to basically solve the problem that they could no longer afford to do business as usual. And one of my comments was change management is a contact sport. You get out there and get the business involved. You got to have them at the table in your scrum sessions. We're an agile development house and they leave as part of what is going to be better and they then believe it's going to be delivered and we radically change the way technology and information management is delivered to a company that has 150 employees and 900 agents scattered around the world. So you basically bring in this infrastructure to support applications across the portfolio, right? You're not doing purpose-built and I've seen Dave Hitz. Do you know Dave Hitz? So I've seen he's got this great slide where he shows the old silos and I'm sure you've seen it really simple but powerful. So you've got this notion of infrastructure that's compute storage and networking supporting applications across the portfolio. So it's a fungible asset and it handles mixed workloads and the like. Is that what you've found? Talk a little bit about what your experience has been. What we found we were able to do once we established just good business management and good project management and good system development life cycle processes in the house we went out quantified the problem. Why do we hurt? Why am I doing anything? Then what solutions will resolve those problems in as quick a fashion as possible then we went out and find the right teaming partners. We went out and found NetTec, a great integrating partner. We found Cisco, NetApp, VMware and we came up with a solution that allowed us to take everything we do as a company. Not just most of it, not just some of it, not someone's R&D project but every single thing we do is now in this environment only eight months after we started the project. So this is about eight months ago you started? Correct. In three months we took our major insurance servicing application and had it up in the virtual environment which happened to be one minute before the old server died. So you guys were an early customer though, this whole FlexPod concept. Kind of a guinea pig in a way. You took some risk. Well risk management doesn't mean it should be risk avoidance. What we did is my technical services manager Mike Ellis is a really sharp guy. I have confidence he's going to have a technical solution that's solid and he'll be delivered on or ahead of schedule. My point of view as an executive is I can quantify a problem, I can come up with a cost and the pain to that problem, take his solution, take the cost, round the cost up, take the return on investment, round it down and then paint a compelling picture for the guy with a checkbook that's going to say go get it done. And then we went and got it done in less than the time frame they asked for. Our project became a revenue stream in mid-July. So that's interesting. You talk about your project as a revenue stream and you talked about quantifying it. So take us through the metrics. How did you justify it? What was the expectation? What have you seen so far in terms of payback and have you quantified it? Well we calculated a real-life revenue loss due to system outages and instability in the physical server-based environment of around $100,000 a month. And that's where an e-commerce, half of our business comes in over online purchase engines. Not a real good thing for our infrastructure to not be up. $365,000, $24,000 by $7,000 every day, every way. Was most of that lost revenue? Shear lost revenue and lost time from claims handlers just sitting there staring at the screen waiting for a report to run. Yeah, when a claims handler system, when his or her system goes down, they're not that productive. They'll tell you about it as it turns out. Now, some of the real-world metrics that came out of it is the amount of time to process a claim went down by 68%. That is the biggest cost drain for an insurance company is human resources, employees, hands-on what you're doing. And we were able to, without expanding the number of claims people, the business has kept expanding and there are some happy people down there getting their work done because the system runs fast. So you quantified 100,000, you were actually realizing $100,000 and lost productivity and lost revenue a month. Correct. Okay, and then have you quantified the impact of this new infrastructure? Well, the infrastructure cost us about $400,000 to implement this infrastructure in the space. And so it paid for itself and then you add our labor and all of that kind of thing. The project cost and the present value. It paid itself off by mid-July and now that savings is being rolled into future IT projects. Okay, so I've had this conversation with a lot of CIOs. A lot of times, if you save money, it goes right to the bottom line. You never see it back. Is your executive management sharing the gains with you? Oh, absolutely. The first thing that occurred when they realized the virtualization A had worked and B was over-delivering what they thought it would do is they tripled the IT budget, which allowed us to triple the staff, which allowed us to, instead of attacking one strategic project, we put five on the table and we're going to get them knocked out. So can you quantify? I mean, where are you at in terms of... Really, the benefit is cost savings, correct? Well, it really is. Well, it's actually, no, it's cost savings and it's the avoidance of lost revenue. Can you put a number on that? Is it half a million dollars, a million dollars? As of mid-July, we're at about $845,000. $845,000, so just under a million. So actually, we're now almost September, so you're probably up over a million or close to it. And the projects that success... The credibility we got by accomplishing this allowed us to get other projects on the books that is creating a software system that will be self-provisioned from our cloud and instead of 18 pairs of hands having to handle a sale when we sell insurance to some university sending their students abroad, it's two pairs of hands, which means that's 16 people that did not have to interact with that line of business in order to get it up and running which speeds up the amount of time that you're trying to get work out to the field. George, do you think that as an industry we've got to focus on total cost of ownership? You've got to have the lowest total cost of ownership possible, but what you're describing, I mean, yeah, okay, you've got great TCO, but you're talking about printing money because of the avoidance of downtime. I mean, that's amazing to me. I mean, it's telephone numbers compared to the TCO. Do you think that's common in the industry or do you think that's an outlier? Well, if it's not common, it should be because the technology's there. The smart guys that know how to do it is there. You have to get someone that knows how to quantify the problem and the solution and convince the checkbook guy and then you need the people that are going to put together your plan. And like this event today is full of people that just need the guy with the checkbook to know that it's a good idea. Yeah, so a lot of that's internal selling. Absolutely. Okay, I want to come back to this notion of compute and storage and networking. So you've got three vendors, if I understand it. It's Cisco, it's VMware, and it's NetApp. Correct. And they're basically taking this consolidated infrastructure and you're putting it in and supporting your applications. Who do you call if something goes wrong? What I do is I call my NetTech Integrating Partner. We had a perfect example a week and a half ago when Mike Ellis comes in and says, hey boss, with this new travel community we've put out there, we started a travel community, basically the Facebook of travel. We're growing in storage fast. We're not in trouble, but we're growing fast. You know, you're right. Get another rack of storage in here. That was at 11 in the morning. By one, he had a quote from NetTech and NetApp. By 1.15, I signed the purchase order. By 2 o'clock he had picked up the drives, and by 4.15 they were in provisioned and storing data. I'm a big fan of you. You pick people who are experts in what they do and you put them to work. Now that's a local integrator for you guys? Yeah. Okay, so they're close by. You trust them, have a good relationship with them. I wonder if I could actually make an observation about the industry. I mean, you see there's a lot of big whales, a lot of consolidation that's gone on in the business, yet you still have a lot of independence, some really large, you know, like a Cisco. I think of them as an independent networking company, and then smaller, even though NetApp's a five billion dollar company, they're pure play in storage. These companies like NetApp will start to create these virtual partnerships and try to sort of recreate the benefits of some of the whales, but at the same time focus on delivering their best of breed in their own little layer. Do you see that as the sort of model of the future? Let me just ask that. I very much see that as the model. It is that care after the sale, after the commission check and the big bonus at Christmas, they're still there every time you pick up the phone and give them a call. Right, right. So where do you, you talked a little bit about