Companies in Asia Pacific and Japan (APJ) are facing an innovation gridlock, which stops them from taking full advantage of business opportunities, according to HP Malaysia.
HP Malaysia enterprise business general manager, enterprise servers, storage and networking, Anita Lim, said: "[This] innovation gridlock--or blocked business innovation--prevents seven out of 10 companies from investing in new technology, and the same number face reduced flexibility in operations, while six out of 10 companies are hampered from keeping up with the competition."
"According to a worldwide study by analyst firm Coleman Parkes Research in February and March 2010, 50 per cent of companies suffer from innovation gridlock, compared to 62 percent of organisations in the Asia Pacific and Japan," Lim said.
She said the study included IT leaders' relationship with four factors: innovation spending [the portion of IT budget spending on delivering new functionality to the business], elasticity [the ability to scale up and down to meet business needs], innovation gridlock [where funds needed for new projects need to be diverted to maintenance of legacy systems], and self-funded IT projects [with funds derived from cost savings on other projects].
"Seventy per cent of IT budgets are swallowed in operations and maintenance of rigid and aging IT infrastructure," she said. "In the Asia Pacific, IT operations spend 29 percent on mission critical systems [compared to a global figure of 40 percent] and 45 percent on legacy systems [30 percent globally]," she said. "The cost of lost business opportunity in the Asia Pacific could translate to as much as 92 percent."
"IT sprawl is taking business performance to the breaking point," she said, adding that many organisations in Malaysia need to review their approach to IT investment.
The intrinsic position of IT
Lim cited Robin Bow, editorial director and economist of the Economist Intelligence in March 2010, who said: "Change is the most constant thing--the change imperative will continue to shake business in the next three years. The forces that shaped the world and its economy in the last two years will put a premium on companies' ability to reinvent themselves today and into the future."
"Uncertainty is the key hallmark of today's environment," said Lim. "Analyst firm McKinsey said 54 percent of companies would increase productivity in the next 12 months. In addition, 48 percent would introduce new products and services to gain market share and 47 percent would implement steps to reduce operating costs."
"Ninety-nine per cent of companies link business success with success in IT," she said. "Seven out of 10 companies say IT is a fundamental enabler of business. IT has become an intrinsic part of daily life. In both work and leisure, IT is the constant driver."
HP Malaysia Enterprise Business country manager, storageworks division, enterprise servers, storage and networking, Chung Chee Cheong, said: "For example, as data is growing at a huge rate, the demand for proper management and storage of data is critical. Data constitutes the most valuable asset both for businesses and individuals."
"Companies need better ROI [returns on investment] on storage solutions," said Chung. "For example, CCTV (closed circuit TV), and BI [business intelligence] is producing an exponential amount of data that needs to be stored, while in the world of insurance, data may need to be kept for far longer than seven years, perhaps for the lifespan of the person insured. Key drivers driving data explosion also include the emergence of cloud computing and virtualisation."
"HP's innovative technologies include application integration, platform convergence and comprehensive virtualisation," he said. "These innovations bring benefits such as 2x ROI on storage. HP has just announced its HP StoreOnce deduplication software."
Is Malaysia ready to be a global player?
"The new generation of users take for granted the flow of information to their mobile and other connected devices," said Lim. "The HP team provides the servers as part of a solution to improve the life of everyone in Malaysia."
"With converged infrastructure approach, companies can break the IT innovation gridlock," she said. "The HP virtualisation storage and enterprise solutions can deliver a deeper level of simplicity to businesses."
"In addition, supporting industry companies need more awareness of the importance of correct IT strategies in order to innovate," said Lim. "Cost of IT is a secondary issue against understanding the true hidden costs of maintaining legacy systems."
"While it is true that more Malaysian companies are asking us about new IT solution, there needs to be more," she said. "In effect, a change of mindset is needed to break through the innovation gridlock in order for Malaysian companies to play globally."
"All sizes of Malaysian organisations, in all sectors from enterprises to SMBs [small and medium businesses], are facing a growing demand to change their IT investment thinking," said Lim. "The CIO needs to understand the company business to correctly link IT to drive business."
HP Malaysia enterprise business country manager, business critical systems, Kelvin Khaw, said: "Businesses that use critical system solutions in Malaysia include telecommunication companies, broadcast billing systems, and banking systems such as ATMs [auto teller machines]."
"Banking organisations, both in Malaysia and around the world, tend to be conservative and so have a great deal of legacy infrastructure," Khaw said. "However, local banks such as Maybank, CIMB, Public Bank need to grow and the sector is going through consolidation as a result of mergers and acquisitions."
"Banks need to reconcile systems and compliance requirements during this time of transition," he said. "HP's role is to help modernise systems and help the banks to grow and meet compliance requirements set by Bank Negara."
Converged infrastructure approach
"The converged infrastructure is a critical approach with four keys that are helping to build the data centre of the future," said HP Malaysia enterprise business country manager, enterprise servers, storage and networking, industry standard servers and channel organisation, Vincent Lee, adding that his team handled HP's ProLiant solutions.
"HP ships a server every 12 seconds; two million servers have been shipped so far," said Lee. "Power and cooling innovations are driven by tools, which include HP's Seas of Sensors and HP Thermal Logic, resulting in a 90 percent reduction in power and cooling costs."
"HP POD [performance optimised data centre] solutions allow customers to determine their own data centre strategies and not the other way around," he said. "Other attributes of our blade portfolio, for instance, include 96 percent more performance and 30 percent lower cost, with 50 percent less floor space and a 4x reduction in licensing costs."
"There are growth opportunities for other sectors such as the communication & connectivity industries, as well as the public sector," he said.
HP Malaysia enterprise business solution manager, enterprise servers, storage and networking, Chok Fook Hing, said: "There has been a convergence of server, network, and storage into a blade enclosure. This technology has matured sufficiently to make cloud computing models possible."
"Businesses demand a dynamic pervasive infrastructure such as that can be delivered by cloud computing, whether private, public or in a hybrid form," said Chok. "Everything as a service is another definition of cloud computing: compute resources that are online, flexible with smart provisioning of infrastructure."