WHITE P APER

Datacenter Transformation and Its Impact on Branch IT

Sponsored by: Riverbed Technology
Rohit Mehra

Eric Sheppard

September 2012

Global Headquarters: 5 Speen Street Framingham, MA 01701 USA

P.508.872.8200

F.508.935.4015

www.idc.com

EXECUTIVE SUMMARY
Despite tighter budgets driven by the fragile economy, IT departments remain under
intense pressure to deliver additional and higher-performance computing, network
and application services worldwide. To achieve their do more with less goals, they
need to transform their datacenters using a combination of consolidation,
virtualization, and automation. Once these initiatives are properly established, IT can
extend the virtual edge of the datacenter to branch offices where high-performance
services are delivered locally from centrally managed infrastructure. This whitepaper
will discuss the changing role of branch IT in the age of datacenter transformation.

Innovation Needed in Distributed Sites

One area especially targeted for an infusion of efficiency-centric innovation is the
branch office, which remains a key component of enterprise IT architectures as
businesses enter new geographies. Because of domestic and global expansion due
to businesses desire to reach new markets and to merger/acquisition activity
branch offices continue to materialize. IDC expects IT spending in the branch to reach
$32 billion in 2013.
Today, branch and remote offices require local compute, storage and networking
services. This remains the case despite a strong trend toward equipment
consolidation and centralization of tasks in the datacenter. IT, then, is faced with
attempting to reduce and contain branch or remote office costs while helping drive
overall business growth in these locations. To reconcile their divergent goals, they
rely on technology and tools to help streamline and automate IT branch operations
and support.
GeoEngineers Inc., an environmental consulting firm with 15 locations, provides just
one example of an organization utilizing advanced technologies to alleviate capital
and operational costs within their remote offices. Mitchel Weinberger, IT manager at
the company, told IDC: "Were eliminating hardware servers and all things having to
do with managing them from our branch offices. To do so, GeoEngineers uses
multifunction WAN optimization and edge virtual server infrastructure appliances, in
conjunction with cloud backup solutions, as a way to deliver the requisite compute
and network services to branch users from its centralized datacenter with a minimum
of branch-office equipment.
All IT is centralized in headquarters; the less we have in our branches, the better,
says Weinberger. Were using virtualization and backup through the cloud to get
everything back to the datacenter and set us up for disaster recovery.

Industry Advances
In the spirit of GeoEngineers efforts to streamline yet empower its branches, moves
are afoot industry-wide to help organizations transform the datacenter to support IT
requirements at the edge. In this new architectural approach centralized resources
are projected a branch site to deliver IT services on par with those of headquarters,
but without the full expenses of local expertise and capital equipment historically
associated with each business location. These efforts involve consolidating multiple
systems located within a branch office into a multifunction appliance, sometimes
called a branch office box, as GeoEngineers has done, to minimize capex and
equipment maintenance.
Centralizing as many functions as possible provisioning, management, backup,
user authentication and so forth into the datacenter aligns with increased use of
server virtualization and datacenter consolidation projects, which both often top IT
project lists within organizations looking to automate and streamline operations while
responding to increasingly dynamic internal user and outside customer needs. As
such, local branch-office servers have also begun to move into datacenters, where
branch users access them remotely.
WAN optimization plays a role in all this. WAN optimization technologies such as
compression, deduplication and local caching minimize WAN utilization and boost
application response times in the branch such that they feel local. The target of these
technologies has traditionally been containing investments in additional WAN capacity
and managing bandwidth and user experiences as users access application servers
in the datacenter across WAN links.
Despite the benefits of consolidation enabled by WAN optimization, there are times
when storage can be difficult to migrate to the datacenter without materially impacting
performance at the branch office. Thus, storage is often left orphaned at the
branches. This is because traditional WAN optimization technologies do not solve
distance limitations for storage workloads that tend to be write-intensive or are
supporting custom applications with read/write characteristics that differ from common
packaged applications. New products from companies like Riverbed, however,
provide the capabilities to overcome such problems, which should help drive the next
wave of opportunity for consolidation and virtualization at the branch office.

BALANCING BUSINESS REQUIREMENTS

WITH IT REALITIES IN THE BRANCH
IT will always have a set of goals relating to improving business process efficiency
and creating competitive advantages through the use of technology. As times change
and trends evolve, though, so too do ITs top-of-mind priorities and projects.
Currently attempting to help their employers keep their heads above water, enterprise
IT is in major cost-cutting mode, which is driving a need to deliver more IT services
with fewer monetary and human resources. Facilitating the ability to do more with
less, typically, are the new technologies that emerge to enhance the automation
aspect of deploying and operating IT.

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The days of deploying technology for the sake of technology are long gone, yet every
IT department needs to accomplish at least a portion of the following goals to remain
relevant:
Achieve strong technology and business alignment
Mitigate risk, both to keep data secure and to ensure network availability and
performance
Consolidate, streamline and virtualize where appropriate to accelerate time to
market and save on physical server capital costs, real estate costs and
aggregate power consumption
Create and maintain an interoperable, highly accessible and centralized storage
architecture
Set and fulfill an organization-appropriate technology strategic vision
Achieve a high level of fluidity, defined as running 24x7 operations with no single
point of organizational or IT failure
All this creates a tall order to fill on a flat or decreased budget. As a result, the
industry is bringing to market solutions that IT can use to help meet its goals
efficiently.

Server Consolidation, Virtualization and

Cloud Trends
Some cost reduction, efficiency and dynamic resource provisioning goals, for
instance, are being met by a surge in server and datacenter consolidation projects.
Datacenter consolidation tends to be followed rapidly by server virtualization for
boosting the utilization of each physical server asset. Shortly thereafter, enterprises
often begin the migration to private or public cloud services with new usage and
chargeback models.
Cloud services generally are defined as those whereby users pay for their usage
based on consumption, much as consumers assume an always-on, available pool of
electricity from their local utility company and pay each month for what they have
actually used. In the cloud, services can take the form of applications (software as a
service, or SaaS); compute services (infrastructure as a service, or IaaS), and app
development tool usage and storage (platform as a service, or PaaS).
The first step is server consolidation within the enterprise, first across datacenters
and then within branches. Server consolidation optimizes the utilization and efficiency
of physical servers, so that companies need fewer of them; instead of buying,
installing and maintaining 100 servers operating at 15% or 20% utilization, for
example, they might run 10 operating at 70% or 80% utilization.
A reduction in the number of physical servers lowers hardware purchasing and
maintenance costs. It also makes it possible to reduce the number of datacenters
required, in that fewer physical boxes fit into less space, which lowers real estate and
aggregate power and cooling requirements and costs. Datacenter consolidation
projects are actively underway in the largest of companies for the greatest savings.
For example, in late April 2011, the U.S. Federal CIO's office named the first 137 out
of 800 government datacenters it plans to shutter as part of an extensive cost-cutting

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effort. The 39 datacenters closed so far roughly equal the square footage of 5.5
football fields.
Such consolidation projects are among the reasons that the number of virtual
machines (VM) multiple virtual instances of application servers sharing common
physical server compute and memory resources is steadily growing. For now,
datacenter VM installations are outpacing those in branch offices. Of about 250
enterprises polled by IDC, 18% had 500 or more virtual servers across all their
datacenters in 2010, compared with 13% in 2009, a five-point increase. By contrast,
6% of enterprises were running more than 500 VMs across their branch offices in
2009, and 8% of enterprises were running more than 500 VMs across all their
distributed branch offices in 2010, a two-point increase (see Table 1).

TABLE 1
Virtual Machine (Server) Comparisons: Datacenter and Branch Offices
Datacenters, 2009

Branch Offices, 2009

Datacenters, 2010

Branch Offices, 2010

500+ VMs Across All

500+ VMs Across All

500+ VMs Across All

500+ VMs Across All

6%

18%

8%

13%

Source: IDC's Economic Impact on Remote Branch IT Spending Survey, Anything more recent for these tables?

It follows that the number of physical servers installed is decreasing as VM

installations increase (see Table 2), a desired result for associated capex,
maintenance, real estate and power savings.

TABLE 2
Physical Server Comparisons: Datacenter and Branch Offices
Datacenters, 2009
<100 Physical Servers
33%

Branch Offices, 2009

Datacenters, 2010

Branch Offices, 2010

<100 Physical Servers

<100 Physical Servers

<100 Physical Servers

58%

45%

68.50%

Source: IDC's Economic Impact on Remote Branch IT Spending Survey, 2009

Though consolidation and virtualization are considered key to IT and energy

efficiencies, they arent without their challenges. Complexity in managing VMs, which
are fast and easy to deploy, grows as the number of VMs increases, creating what
some call virtual server sprawl. Processes are required for organizations to retain
control over the number of VMs and who has administrative rights to create them;
otherwise, management becomes nearly impossible.

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The Role of the Branch and Its Challenges

The branch is a key component of organizational goals such as the creation,
maintenance and enhancement of customer support excellence. Branch offices
continue to emerge as businesses enter new markets and seek to establish customer
relationships with personnel speaking the local language and understanding the local
culture. They need to expand their customer bases both domestically and globally. As
part of this expansion effort, organizations are rapidly expanding customer touch
points.
IDC research, for example, shows that nearly a third of businesses (31%) with 1,000
to 9,999 employees increased their number of branch offices between 2008 and
2009. And well over a third (39%) of businesses with more than 10,000 employees
increased their number of branch-office sites during the same time period.
Such expansion has ensured that organizations have been able to hire the best
possible talent no matter where they reside. This means that they must deploy highly
reliable corporate services to these employees and that the communication flow
between employees must be seamless.
Achieving these goals is not without its challenges. Some of the challenges in these
branch environments are the following:
Enabling high-speed application access to virtual servers across the WAN;
Funding for local infrastructure, including local physical servers and associated
maintenance, to enable the user experience to match that of headquarters LAN
users;
If moving to a virtual environment, complexity of VM management when most IT
experts steeped in the ins and outs of virtualization technology tend to operate at
larger, centralized sites;
Storing, managing and protecting data within the branch office;
Laborious data backup procedures that require users to back up onto tape and
ship the media to another, central location;
Lack of IT agility/flexibility;
Length of time it takes for IT to open a new branch under traditional
circumstances, where equipment must be ordered, installed, configured and
tested before going live ; and
Disaster recovery: as consolidation grows, fewer sites are becoming more
important to everyday options (i.e., there are more IT eggs in fewer baskets)
outages or downtime in these fewer locations are more serious and mean that
disaster recovery plans have to account for this fact.

DATACENTER TRANSFORMATION BRINGS

AGILITY TO IT ORG ANIZATIONS
An agile, scalable datacenter which affords branch employees the same access to IT
resources as those at the company headquarters can help meet these challenges. By
extending the boundaries of the datacenter as noted, the physical branch office is

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present but without the extensive IT equipment build-out and associated real estate
and IT power bills. This setup can be a differentiator for the enterprise.
Multinational law firm Paul Hastings, for example, is preparing to move the storage
component out of the branch using Riverbed Technologys Granite storage
consolidation product, says Searl Tate, director of network engineering.
Granite is a recently added module available for Riverbeds Steelhead branch office
box appliances, which help enterprises minimize their technology footprint in
branches by consolidating as many functions as possible back at the datacenter. The
devices provide compression, caching and other network optimization techniques to
boost performance of datacenter resource access, such that it feels LAN-like to the
remote user population.
Consolidation rips out the administration and capex investment that makes branch
offices so costly, Tate explains. He estimates that the technology might enable him
to reduce his branch infrastructure costs by about a third.
Tate adds that his company currently runs 20 worldwide locations with a datacenter in
each one. In the future, we hope to run datacenters only in our four hub sites, he
says, essentially removing most of the server and storage infrastructure and
associated management and expense from the other 16 locations.
Giving branch users the ability to tap central resources as peers not only reduces
costs, but perhaps more importantly, helps drive top-line revenue. The reason is that
without these capabilities, opening new branches in todays economy would likely be
cost-prohibitive, thwarting businesses opportunities in new markets and access to
new customers. For those operating long-established branch offices, centralization of
the remaining IT environment can help reduce capital and operational costs.

The Branch Office Box

Businesses today recognize that in order to grow top-line revenue, they need to enter
new geographies and find new customers. Financially, that requires the ability to
centralize IT resources with no penalty to distributed branch offices and a modicum of
equipment to worry about at each branch site.
Thats where the idea of the branch office box comes into play; collapsing multiple
compute, print, file service, network and WAN optimization functions into a single
device that can be centrally configured, shipped to the branch and simply plugged in.
The majority of resources reside across the WAN in the datacenter, and local
equipment is minimized to supply the most basic access requirements and local
services.
The decision factors of specific capabilities to put in the branch box vary by
organization, but top candidates for the appliance include network access, key
business application acceleration and WAN optimization. Print functions and file
access, as well as certain local security capabilities and local connectivity, such as
wireless access, are also possibilities to collapse into the branch box.
Organizational trends are also part of the reason such branch capabilities are
desirable. For example, GeoEngineers reorganized recently to become business
unitcentric rather than physical officecentric, says Weinberger. As a result, theres
much more sharing of data across remote locations amid a data growth rate of about
20% per year at the company, he says.

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Despite the growth and new traffic patterns, We wanted to reduce our costs at each
remote office. We were also running out of disk space at the datacenter, Weinberger
explains. We needed to solve multiple issues.
Getting physical application servers out of the branch also opens the door for a
greater portion of the enterprise including those in the branch to leverage cloud
services. This could include taking advantage of SaaS offerings for quick access to
new applications, as well as tapping into IaaS offerings of public cloud service
providers such as Amazon, Akamai, AT&T and others. Overflowing usage and
access from an internal, private datacenter cloud service to a public cloud service
such as from one of the providers mentioned on an as-needed basis is known as a
hybrid cloud service model.
Maintaining a fluid business means having the ability to run 24x7 operations with no
single point of organizational or IT failure. Doing so requires that data currently
scattered across branch infrastructure become centralized for security, efficient
management and cost reasons. That could happen in the form of a private cloud
service or a public cloud service or in the hybrid scenario described.
Service recovery should also be a central tenet of the projected branch architecture.
If local branch resources or primary WAN access to centralized resources should fail,
a hot failover system should be in place to ensure very quick recovery. For instance,
Paul Hastings has equipped many of its sites with both primary and secondary WAN
connections and, in some cases, a tertiary diverse fiber path link is used, says Tate.

Attributes of a Simplified Branch

The branch of the future, then, is a reflection of what exists in a primary datacenter.
Consolidation in the branch, as noted, is a big theme. The consolidation of branch
office assets into the central datacenter is now being extended to include storage,
such that just a single active copy of data exists in the enterprise. Without being able
to consolidate data resources and access, the branch remains cluttered with storage
and backup infrastructure that must be purchased and maintained locally. And it
means that multiple copies of data exist throughout the organization, raising the
potential for errors. Due to the limitations of current WAN optimization technologies
and the need to keep storage local for performance reasons, enterprises have a
higher cost and management burden at the branch and an associated security risk
since islands of difficult-to-protect data exist across the organization. Given a choice,
enterprises would like to avoid the status quo and consolidate all data and services to
the datacenter.
The key attributes of the new simplified branch architecture are described below.

C en t r ali z at io n of I T
Ensuring that security best practices, as well as legal and regulatory compliance
requirements, are met remains a major concern for organizations. When sensitive
corporate data can walk out the door either on an individual's laptop or from
equipment theft, IT needs to have a process that prevents this from occurring. So
centralizing IT, where all VMs and storage resources are securely consolidated in the
datacenter is very attractive.

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C u s t om er -Ce n t r ic R es p on se Tim e
The remote branch location is at the front line of revenue-generating opportunities. As
organizations look to drive revenue growth, they are increasingly looking to
incorporate technology in a way that enhances the customer experience and creates
a favorable brand impression. In this context, speed is a top priority. IT should not be
a barrier to patient healthcare, for example, or a roadblock to a customer who wants
to sign up for new services at a branch location. As a result, the speed in which
employees can access business-critical applications is of paramount concern.
Application acceleration technology for business-critical applications is a must for
organizations.

C o n sis t en t an d P r edic t a ble File R et r ie v al

As organizations look to secure all data in a centralized datacenter, they need to
make sure the branch is still operational. The benefits of centralization are clear: in
the datacenter, data is protected centrally and is more efficiently stored and
replicated. The downside is a potential impact on response time for end users who
are geographically very far away from the data or who may be subject to WAN
disruption. All remote branch office IT plans must ensure that files can be retrieved
from the branch in a consistent and predictable timeframe and that application usage
in the branch can continue during periods of network outage.

P r e par i n g f or A p plica t i on A gili t y i n t h e N e x t -G e n er a t i o n B r a n ch

In today's economy, businesses know that the early bird gets the worm. In fact, timeto-market advantages of even six months can have downstream revenue-generating
benefits that last for years to come. As an example, Lowe's, the do-it-yourself home
improvement retailer, recently introduced My Lowe's. It is a great example of where
retailers are headed toward engaging their customers with shopping management
apps and, better still, lifestyle apps to create genuine brand engagement. This "Online
Inside" offering establishes new retail table stakes: the online world is inside each and
every store. Consumer technology is driving this new norm. An organization that can
bring new applications and services to the remote branch changes the basis of
competition; in the case of Lowe's, by creating genuine brand engagement.
Creating a default infrastructure platform that supports application agility also
provides the benefit of easily replicating the branch. This saves time in new branch
growth as well as in the face of unforeseen disasters. Organizations can recover far
more quickly if they have a standard IT environment for each remote branch.

I T C o n so lid at io n at t h e B r a n c h
As discussed, IT consolidation further supports simplified instant branch
provisioning. Many services at the branch get consolidated onto as few branch IT
devices as possible; ideally, in one branch device. These services include file and
print services, as well as IP services needed for WAN connectivity such as Domain
Name Service (DNS) and Dynamic Host Control Protocol (DHCP).

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BRANCH CONSOLIDATION SOLUTION:

RIVERBED STEELHE AD EX + GRANITE
The Riverbed Steelhead WAN optimization product line has been designed to
address many of the business and IT requirements at the remote branch that have
been discussed in this paper. Built initially to address application performance
optimization over the WAN, a newer Steelhead version now runs a Virtual Services
Platform (VSP) featuring VMware vSphere ESXi server virtualization software. Called
Steelhead EX, the appliance enables the virtualization of file, print and application
servers alongside the WAN acceleration capabilities.
The Steelhead product has also evolved to allow enterprise storage resources to be
projected from the datacenter to the edge while allowing retrieval and data write times
to feel local. Riverbed Granite enables storage to be decoupled from compute over
great distances allowing all branch virtual servers, applications and data to be
centralized to the datacenter, eliminating the need for storage infrastructure in the
branch. This new edge virtual server infrastructure approach provides the ability to
manage, patch and protect branch resources in the datacenter. The Granite
appliance also caches a working set of data at the branch location to enable
disconnected operations the ability to continue working with applications and data,
even if the WAN link fails.
Granite is available standalone or as a bundled module on the Steelhead EX series
(Steelhead EX + Granite). The Steelhead EX + Granite appliance is deployed in the
branch office and works with corresponding Steelhead and Granite Core products in
the datacenter, delivering accelerated application and storage performance over the
WAN.
GeoEngineers, for example, is using a Steelhead EX + Granite appliance to eliminate
two mid-range tower servers, each storing about 2 terabytes of data. It costs less to
put in 10 terabytes of storage on low-cost disks in the datacenter than to put in 10
[distributed] file servers and license them, says Weinberger. Ive been testing [the
Steelhead EX + Granite appliance with CAD and other documents, and I almost feel
like response time is faster using datacenter storage with local caching than local
storage response times, says GeoEngineers Weinberger. He explains that his
company is modernizing the branch and previously ran older, slower servers albeit
local ones with SATA drives. Now, were pulling cached data off the branch-box
appliances, and it seems a bit quicker, he reports.
Riverbeds Steelhead EX appliance is an enterprise-class WAN accelerator and
consolidated services platform featuring a VMware hypervisor capable of running
multiple virtual machines. This enables the virtualization of services that should
remain local (such as print, file, DNS and DHCP) as well as any branch-resident
business applications in order to realize the greatest consolidation efficiencies and
cost savings possible. The new product line provides increased compute power and
memory over previous Steelhead offerings.
Using Granite to centralize data from the branch office and putting it in the datacenter,
while maintaining local performance, means no longer having to manage storage and
backup at distributed branches or necessarily having to pay for a backup WAN to
ensure redundant access.

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Were currently backing up from 10 file servers across the WAN every night, says
GeoEngineers Weinberger. Were going to be eliminating all that.
Specific differentiators and architectural features built into Riverbed Steelhead EX +
Granite products include:
VMs can be deployed in the branch to run critical services right on the WAN
optimization box. The VMs can be managed centrally with VMware vCenter.
Enables data centralization by combining unique block-level prediction algorithms
with a local authoritative cache to enable accelerated block storage read/write
access across the WAN as well as resiliency to WAN outages.
Branch application services can be provisioned and maintained centrally in the
datacenter yet delivered locally by booting VMs across the WAN.
According to Riverbed, accelerates application performance across the WAN,
typically by 5-50 times and, in some cases, by up to 100 times.

FUTURE OUTLOOK
The consolidation and virtualization approaches that have been driving datacenter
trends toward physical server reductions and associated cost savings are making
their way to distributed branch offices. These moves are ramping up particularly in
organizations attempting to establish new local branch presences or improved IT
operation within long-established branch office sites.
Embarking on a consolidation and centralization approach that retains branch
survivability with a minimum of IT resources at each and every branch is a potentially
winning combination, provided VMs (both application server and storage) are
controlled, managed and secured properly at the central site. For new branch sites to
be created and thrive, at least in the current economic climate, a transformed
datacenter architecture that projects as many functions and services as possible out
to the branch onto the fewest number of hardware components will be necessary.
Enterprises want as small a footprint at the branch as possible but also want
survivability if a WAN link fails. So IT must creatively architect all elements of the
branch (network, servers and storage) to enable maximum agility and reliability for the
organization.

CHALLENGES/OPPORTUNITIES
The consolidation trends and associated, enabling automation and optimization
technologies described in this paper create opportunities both for enterprises and
suppliers. Enterprises able to transform their datacenter operations to more efficiently
support edge locations have the potential to affordably run local operations and enter
new markets. Meanwhile, continuing to streamline enterprise branch sites with
centralized storage access offers potential for suppliers like Riverbed to continue to
establish differentiated, value-added offerings that help enterprises overcome the cost
and expertise hurdles traditionally associated with branch deployments.
Part of the equation involves moving as many functions as possible to the datacenter,
while maximizing performance of network access through WAN optimization
equipment for business fluidity. The additional capability of collapsing remaining
necessary branch functions including routing, local switching, virtualization of local

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DNS DHCP, directory, file and print services and possibly WLAN controller
capabilities into the same optimization box can provide still more, considerable
savings.

CONCLUSION
Enterprises increasingly seek to deploy complex branch networks and services while
having minimal infrastructure and IT personnel onsite. Riverbeds Steelhead and
Granite products show that, with time, many of the enabling capabilities that have led
to datacenter efficiencies such as consolidation, application server virtualization and
cloud services will extend to branch sites, too.
WAN optimization equipment is a strong candidate for consolidating features and
functions because it sits at the intersection of applications, networking and storage.
As such, it holds the potential to play a role as a key architectural design element that
shapes the performance lifecycle of IT.
Organizations that streamline branch office IT with Riverbed Steelhead EX and
Granite products will help to ensure that these sites have equal access to central
resources, comparable application performance and access to a single source of data
stored on arrays that are managed and protected centrally. Given that 20% of
companies with more than 1000 branch offices report that 50% to 69% of their
storage resources reside out in the remote sites, the cost of creating and maintaining
the branch should drop considerably for those who take advantage of this approach.

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