IaaS makesdigitalizationeasier andaffordable

Introduction

Corporate competitiveness is inexorably becoming more about digitalization.
A wide majority of chief financial officers around the world have committed toongoing digitalization, but with so many avenues of digital innovation open to pursue,
CFOs have a formidable challenge managing the process. The emerging infrastructureas-a-service (IaaS) model provides CFOs a rich palette of options to manage theprocess efficiently.
IaaS can also be coupled with innovative new payment options. An IaaS partner with
sufficiently advanced infrastructure can offer its services on a pay-as-you-go basis. NewPAYG options give CFOs an added dimension of flexibility in managing digitalization not
only efficiently but also cost-effectively.
Lenovo, a leader in IaaS, offers the PAYG option, giving CFOs a safe, risk-free way to meettheir strategic objectives and easily adapt to their needs as those needs evolve. Lenovo’s
TruScale IaaS service allows customers to leverage Lenovo infrastructure, storage andhardware on an as-needed basis.
TruScale’s scalable PAYG model and real-time access to usage and cost data gives CFOs
the visibility they need to monitor enterprise investment and ensure they stay withinbudget as they guide their companies’ digital transformations. This approach meansthat CFOs will always be able to formulate a solution that is always right-sized for theirrespective enterprises.

Digitalization is the use of digital technologies
to change a business model and provide newrevenue and value-producing opportunities; itis the process of moving to a digital business.
Gartner (from the Gartner Glossary)102

IaaS makes digitalization easier and affordable

Digitization

What is digitalization?
Digitalization starts with digitization. Digitization is a very fundamental concept. It is
the process of translating data into a digital format or of adopting the use of digital data.
Digitalization, on the other hand, is a strategic, corporate-level program of using digitaltechnologies to improve operations and to create new business opportunities.
Digitalization may be the milieu of high tech, but there is no line of business that cannot
benefit by digitalizing - finance, agriculture, medical, or any other endeavor. To remaincompetitive, there is no enterprise that can afford to not digitalize.
At a conceptual level, digitalization might involve any combination of the following:•••••

Imagining new ways to use data
Adopting new methods and tools to collect data
Developing or exploiting new tools to perform that processing,
and/or devising new analysis techniques
Processing and interpreting the data
Exploiting the processed data in a new or innovative way
for a specific business purpose

At a conceptual level, digitalization is relatively simple. From an implementation
standpoint, digitalization is quite complex. Preparations include a multitude of tasks thatCFOs have direct responsibility for, but also many they have only indirect control over. A
partial list that hints at the scope of what digitalization entails includes devising policy forthe use of data, promoting both digital and financial skills among employees, instituting
enterprise-wide digital security, and improving environmental, social and governance(ESG) performance.
All of it is in one way or another dependent on computing and communications resources in other words, on infrastructure. In the process of digitalization, the infrastructure itself
constitutes a competitive advantage.

03

IaaS makes digitalization easier and affordable

Examples

The Prime example
What does that mean in practice for infrastructure itself to be an advantage? Amazon is a primeexample of a company that transformed itself by digitalizing: exploiting infrastructure to effectbusiness transformation.
Amazon as originally conceived was a simple online bookseller. The company was relentless in its
efforts to increase the efficiency of online sales, however, first of books and then of more and moredifferent types of goods. To accomplish that, Amazon built a multifaceted network anchored byincredibly flexible data centers that could support nearly every aspect of nearly any type of transaction.
Amazon’s infrastructure made it such a superior competitor it now dominates not just individual markets
but entire market segments, including retail and advertising.
But efficiency that’s just the first part of this digital transformation story. The other part of digitalizationis business transformation.
Amazon’s great perception was that it might be able to make a good business of selling access to
its infrastructure, specifically to idle computing resources in its data centers. It was a new business
opportunity, and it was predicated entirely on having the appropriate infrastructure: the data centers.
Amazon Web Services (AWS) now accounts for roughly 15 percent of Amazon’s revenues, and thecompany controls roughly 40 percent of the entire cloud market.
Since AWS was formally established in 2006, digitalization has become a gradual but inexorable trend.
Leveraging infrastructure to realize new efficiencies and to identify new business opportunities is now
well understood to be a winning business practice. More and more companies are pursuing the formula.
The difference between 2006 and now is that fewer and fewer are in a position to rely entirely on theirown infrastructure. The reason is simple: few can afford to replicate the networking and computational
resources that Amazon and its rivals in the cloud business began to amass more than 20 years ago.
Infrastructure is expensive to procure, it is expensive to install, it is expensive to run, it is expensive tomaintain, and it is expensive to perpetually upgrade. There is a limited number of companies with thewherewithal to compete in the cloud market. They include Google Cloud, Microsoft Azure, and SAPCloud Platform (SAP is a Lenovo partner).

04

IaaS makes digitalization easier and affordable

(X)-as-a-service

The (X)-as-a-service
model and modern agility
Every CFO’s challenge is to assess corporate priorities andallocate resources accordingly. What are CFOs prioritizing
today? According to a survey from Gartner, 82% of CFOs
report that they are accelerating their companies’
investments in digitalization.
Chief information officers provide corroborating evidence
that digitalization is an accelerating trend. Nearly threequarters (73%) of the respondents in Gartner’s separate
but concurrent CIO survey said they expect they will
be shifting their priorities to strategic business activities
such as driving business innovation, developing businessstrategy, and identifying opportunities for competitive
differentiation. They report that satisfying those goals
is going to include modernizing infrastructure andapplications.
As indicated earlier, digitalization is a complex, long-term
process that requires significant CFO oversight. CFOs arestill exploring the uses of technology innovations and how
they can benefit their business and function operations,
Gartner reported. The CFOs who responded to Gartner’s
survey say they are tackling some of the more difficult
objectives first, including developing digital skills andinstituting more flexible budgeting and forecasting.
Gartner’s survey does not reveal whether the increased
investments in digitalization come at the expense ofinvestments in talent, supply chain, business services,
fixed assets, or any other corporate needs, but there

05

IaaS makes digitalization easier and affordable

are no corporations with limitless resources. Implicit in theCFO job description is juggling resources to balance shortterm needs against long-term goals.
Enterprises could benefit greatly from access to all of thelatest modern infrastructure to fully exploit the potential
benefits of digitalization. CFOs are confronted with thefact that infrastructure costs dearly, however.
It seems as if something here should have to give,
but companies such as Lenovo are making a businessof offering to other companies access to theirinfrastructure, giving CFOs a range of sophisticatedyet cost-effective solutions.
The cloud business is essentially a computing-as-a-service
business. There are innumerable companies offering a vastarray of applications on a software as a service (SaaS)
basis. Some companies will set up sophisticated sensor
networks for their customers, and provide data collection
and/or analysis - it’s the beginning of the Internet ofThings as a service. Other XaaS variations exist, andit’s almost certain that others will be devised.
Successful businesses tend to share a set of common
traits; ambition, efficiency, and innovation are only a few.
Another characteristic of a successful enterprise is agility.

(X)-as-a-service

Agility starts with flexibility. The XaaS model allows fora maximum of mix-and-match flexibility, all dependingon the needs of each individual enterprise. For example,
financial trading companies still find it critical to retain
complete control of their data, so owning and operating
their own server installations is worth the expense andeffort. There’s a growing number of other enterprisesof all types, however, that find it cheaper, easier, moreconvenient, and more efficient to rely on cloud vendors
for most of their computational needs.
Lenovo’s TruScale infrastructure as a service (IaaS), forexample, starts with a secure and privately managed cloudservice (through our partnership with SAP). This service
provides all the benefits of an operating expense businessmodel, elastic computing, and white-glove managed
services delivered in one single operation.
Our cloud services are complemented by TruScale for
Hosted Desktops (with partner Nutanix), which provides
responsive remote desktop solutions that help streamline
IT administration and simplify implementation.
XaaS companies not only give their customers options forservices, they also clear the space for their customers tobe agile. An enterprise that invests in physical plant has
committed to whatever course of action is dependent onthat infrastructure. If the company’s priorities change andthe business needs to evolve in a different direction, it will
never get its return on its investment. If an enterprise has
been relying on a third party to provide the infrastructure,
the consequences of moving on are far more negligible.

06

IaaS makes digitalization easier and affordable

So far this discussion has focused on the fundamental
advantage of the XaaS model - that an enterprise
can manage its digital transformation by prioritizing
which capital investments to make. But there’s anotherdimension to XaaS. Different XaaS vendors have adopted
different ways to pay for services, and the payment
models available can constitute an added layer offlexibility for CFOs.
The typical approach to XaaS is to charge for somedefined time period of access to an XaaS service, which
can range from a year, months, and weeks to just afew hours in some cases. Flexibility on the duration of acontract can be a boon, but it is still not the most efficientapproach for the customer of XaaS services. Customers
can still end up paying for access that remains left unused,
when they may have reserved more time than theyneeded, or enterprise priorities may have evolved
and they no longer need what they reserved.
The next level of payment flexibility for CFOs looking toengage XaaS services is the pay-as-you-go (PAYG) model.
The PAYG model charges companies only for the services
they actually use, giving them the ultimate flexibility toprioritize. The PAYG model requires infrastructure capableof accurately metering usage, however. Lenovo and its
IaaS partners are among the first to offer this option with
TruScale IaaS.
With TruScale CFOs gain direct visibility into expendituresin both the short term and the long term, thereby
maintaining full control over costs. PAYG and Lenovo’s
flexible terms make it easy to adapt when requirements
and priorities change.

Conclusion

Why Lenovo?
Driving digitalization is high on the agenda for many enterprises, but to beable to support that journey, CFOs need optimal visibility over the ongoing
requirements of the IT infrastructure, the expected and actual usage, andthe relating costs.
Lenovo TrueScale IaaS enables this transparency with a true PAYG
approach, providing a simple way to ensure that the enterprise can benefit
from an IT architecture that is right-sized, all the time, while allowing CFOs
to optimize budget control in the short and long term.

Visit our website to learn more about
how Lenovo TruScale IaaS can provide
flexible infrastructure that helps you
innovate without limits.
www.truscale.com

1

https://www.gartner.com/en/information-technology/glossary/digitalization

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