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This ESG Solution Showcase was commissioned by HPE and is distributed under license from ESG. © 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved. The Need for Hybrid Cloud As companies work to adopt digital transformation, the need for hybrid cloud has risen to the top of their requirements. We now live in a world where everything computes and digital technology is transforming nearly everything we touch. Technology is being embedded throughout our lives, from the mobile devices we use, to the devices connected in our homes, to the sensors being integrated into everything from roads to buildings to lights. Everyone and everything is being connected, with important information passing back and forth to help optimize our lives. The impact on IT is to figure out how to both cope with and leverage this new digital transformation. Digital transformation is one of the key factors in changing the role of IT within a business from a cost center into a function that can not only support business outcomes but actually fuel and drive the business itself. Technologies that support this transformation include the adoption of agile application development and delivery, big data and analytics management, and the use of cloud technologies, both off-premises and on-premises, as well as across environments, often referred to as hybrid cloud. To address digital transformation, IT is turning to hybrid cloud, enabling them to deliver rich services with the speed and agility of a public cloud, while also leveraging on-premises private cloud resources to meet the data privacy, sovereignty, and performance requirements of particular applications. Hybrid cloud also allows IT to not only cope with digital transformation but also leverage it to implement new processes and capabilities in order to drive business outcomes. This can include agile application development, the ability to develop applications quickly and with one process, and deploy those applications across environments. An application-focused hybrid cloud that can enable digital transformation in IT can unlock that capability. HPE ProLiant for Microsoft Azure Stack Enables the Application-centric Hybrid Cloud Date: August 2017 Author: Edwin Yuen, Analyst Abstract: HPE ProLiant for Microsoft Azure Stack enables an application-centric hybrid cloud that meets the needs of customers that leverage on-premises and off-premises resources. Digital transformation is driving the need for hybrid cloud. ESG research shows the need for an application-centric hybrid cloud, a solution that goes beyond just the infrastructure. HPE and Microsoft have created a hybrid cloud solution that closely aligns to current and future hybrid cloud requirements, with power and flexibility that differentiate it from other solutions. HPE ProLiant for Microsoft Azure Stack delivers Azure-consistent services, focused on managing and delivering applications across Microsoft Azure and Microsoft Azure Stack on-premises. Solution Showcase Enterprise Strategy Group | Getting to the bigger truth.

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This ESG Solution Showcase was commissioned by HPE and is distributed under license from ESG.

© 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved.

The Need for Hybrid Cloud

As companies work to adopt digital transformation, the need for hybrid cloud has risen to the top of their requirements.

We now live in a world where everything computes and digital technology is transforming nearly everything we touch.

Technology is being embedded throughout our lives, from the mobile devices we use, to the devices connected in our

homes, to the sensors being integrated into everything from roads to buildings to lights. Everyone and everything is being

connected, with important information passing back and forth to help optimize our lives.

The impact on IT is to figure out how to both cope with and leverage this new digital transformation. Digital transformation

is one of the key factors in changing the role of IT within a business from a cost center into a function that can not only

support business outcomes but actually fuel and drive the business itself. Technologies that support this transformation

include the adoption of agile application development and delivery, big data and analytics management, and the use of

cloud technologies, both off-premises and on-premises, as well as across environments, often referred to as hybrid cloud.

To address digital transformation, IT is turning to hybrid cloud, enabling them to deliver rich services with the speed and

agility of a public cloud, while also leveraging on-premises private cloud resources to meet the data privacy, sovereignty,

and performance requirements of particular applications. Hybrid cloud also allows IT to not only cope with digital

transformation but also leverage it to implement new processes and capabilities in order to drive business outcomes. This

can include agile application development, the ability to develop applications quickly and with one process, and deploy

those applications across environments. An application-focused hybrid cloud that can enable digital transformation in IT

can unlock that capability.

HPE ProLiant for Microsoft Azure Stack Enables the Application-centric Hybrid Cloud Date: August 2017 Author: Edwin Yuen, Analyst

Abstract: HPE ProLiant for Microsoft Azure Stack enables an application-centric hybrid cloud that meets the needs of customers that leverage on-premises and off-premises resources.

• Digital transformation is driving the need for hybrid cloud.

• ESG research shows the need for an application-centric hybrid cloud, a solution that goes beyond just the infrastructure.

• HPE and Microsoft have created a hybrid cloud solution that closely aligns to current and future hybrid cloud requirements, with power and flexibility that differentiate it from other solutions.

• HPE ProLiant for Microsoft Azure Stack delivers Azure-consistent services, focused on managing and delivering applications across Microsoft Azure and Microsoft Azure Stack on-premises.

Solution Showcase

Enterprise Strategy Group | Getting to the bigger truth.™

Solution Showcase: HPE ProLiant for Microsoft Azure Stack Enables the Application-centric Hybrid Cloud 2

© 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved.

ESG Research Shows That Applications Help to Define Hybrid Cloud

One of the challenges facing companies interested in hybrid cloud is that the current landscape of hybrid cloud solutions is

often focused on the management and delivery of infrastructure resources to both on- and off-premises data centers.

Customers are looking for hybrid cloud solutions that focus on application management and delivery, in addition to the

infrastructure resources that support them.

But what exactly is hybrid cloud and what do customers want from their hybrid cloud solutions? ESG has conducted

research on the hybrid cloud, systems management, and the impacts on IT today. ESG surveyed 318 IT decision makers,

with knowledge of and/or responsibility for systems management or cloud infrastructure strategy at midmarket (i.e., 100

to 999 employees) and enterprise (i.e., 1,000 or more employees) organizations in North America. ESG research

respondents were asked to choose the description that most closely aligned to their definition of hybrid cloud (see Figure

1).1

Figure 1. Hybrid Cloud Definition

Source: Enterprise Strategy Group, 2017

The ESG data shows that the largest percentage of respondents said that hybrid cloud involves the management of

applications with resources that span across on-premises and off-premises environments. This definition was selected by

more than twice the respondents as any other definition. Twelve percent of respondents selected the definition of hybrid

cloud regarding deploying applications with resources both on-premises and off-premises. Both application-centric

responses, when combined together, represent over half of the survey respondents. These results show that hybrid cloud

is focused more on applications and the resources supporting them than on simply managing resources.

These results do not mean that resource management is not important for hybrid cloud. Rather, it shifts the management

lens towards supporting and delivering applications and managing the resources underneath them, as opposed to

managing the resources and supporting the impacts to the applications. We are starting to see a shift from infrastructure-

1 Source: ESG Brief, Applications Help to Define Hybrid Cloud, June 2017. All other ESG research charts and references in this solution showcase have been taken from this brief.

Managing applications with resources that

span across on-premises and off-

premises environments, 43%

Managing resources from disparate vendors regardless of location,

20%

Managing resources that are both on-premises and off-

premises, 19%

Deploying applications with resources both on-premises and off-

premises, 12%

Other, 1%Don’t know, 4%

Which of the following most closely aligns with your definition of hybrid cloud? (Percent of respondents, N=318)

Solution Showcase: HPE ProLiant for Microsoft Azure Stack Enables the Application-centric Hybrid Cloud 3

© 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved.

focused management to application-centric management, which is necessary to support digital transformation and the

delivery of more public-cloud-like services. This type of service consistency is important as IT shifts from supporting servers

and VMs to supporting applications, containers, and microservices.

Another question is whether hybrid cloud is a way station on the road to all public cloud or a long-term strategy for digital

businesses. ESG respondents were asked how their companies see hybrid cloud within the context of their long-term IT

strategy and how far along they are in their implementations (see Figure 2).

Figure 2. Organizations’ Perspective on Hybrid Cloud

Source: Enterprise Strategy Group, 2017

The results show that nearly 81% of the respondents said their organizations are committed to hybrid cloud as a long-term

strategy. Only 15% of the respondents said their organization has no plans for hybrid cloud. These results clearly show the

impact and interest of hybrid cloud for companies today. But the use of hybrid cloud to support digital transformation is

not complete by any means. Only 15% of those surveyed responded that their organizations had begun hybrid cloud

implementations. Over half of those surveyed (66%) are committed to hybrid cloud but are either only in the planning

stage or have no formal initiatives underway at this time.

Thus, organizations express significant interest in hybrid cloud and the benefits that it brings, with many beginning to

define their strategies. This presents an opportunity for a new generation of hybrid cloud solutions, which meet the needs

of digital transformation, with application-centric management views, to deliver new capabilities and drive business-based

outcomes, not just IT optimization.

But when it comes to hybrid cloud, while we focus on the applications, fundamental technologies and features still need to

be available to enable application delivery. How an application-centric hybrid cloud solution delivers these features will

drive the success of the deployment. ESG asked survey respondents what key characteristics they believe are required for

a hybrid cloud (see Figure 3).

Our organization is committed to hybrid cloud as a long-term strategy and we have

begun initial implementations, 15%

Our organization is committed to hybrid cloud as a long-term

strategy and we are in the technology evaluation and

planning phase, 43%

Our organization is conceptually interested

in hybrid cloud as a long-term strategy but

we have no formal initiatives underway at

this time, 23%

We have no plans for hybrid cloud at this

time, 15%

Don’t know, 4%

Which of the following best represents your organization’s perspective on hybrid cloud? (Percent of respondents, N=318)

Solution Showcase: HPE ProLiant for Microsoft Azure Stack Enables the Application-centric Hybrid Cloud 4

© 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved.

Figure 3. Hybrid Cloud Requirements

Source: Enterprise Strategy Group, 2017

The ESG data shows that the majority of those surveyed responded that it was a requirement that management software

manage both on- and off-premises environments. In this survey, the requirement for compatibility or management across

on-premises and cloud environments was reflected in the four most popular responses. Respondents also noted the need

to manage systems or applications deployed both on- and off-premises, the need for hypervisor or VM technology to be

compatible across on- and off-premises, and the need for application development APIs to be compatible.

Customers are looking for consistency across their on-premises and off-premises environments, allowing for the same

infrastructure and DevOps processes to be used across their hybrid cloud. The ability to leverage existing infrastructure

while adopting newer DevOps processes is critical to transforming IT from cost center to business enabler. To further

understand the factors driving hybrid cloud adoption, ESG asked survey respondents about the main objectives of their

organizations’ hybrid cloud strategies (see Figure 4).

24%

36%

38%

38%

52%

Managed systems must be from disparatevendors/cloud providers

Application development APIs must be compatible

Hypervisor or VM technology must be compatibleacross both on- and off-premises

Managed systems or applications must be deployedboth on- and off-premises

Management software must manage across bothon- and off-premises environments

Which of the following characteristics do you believe are hybrid cloud requirements? (Percent of respondents, N=318, multiple responses accepted)

Solution Showcase: HPE ProLiant for Microsoft Azure Stack Enables the Application-centric Hybrid Cloud 5

© 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved.

Figure 4. Main Objective of Hybrid Cloud Strategy

Source: Enterprise Strategy Group, 2017

The data shows that 31% of the respondents cited common infrastructure compatibility as the main objective of their

organization’s hybrid cloud strategy. Eighteen percent of the respondents cited common application APIs and

development, which allows for consistent DevOps processes to be used across on-premises and off-premises

environments. Finally, 21% of those surveyed cited leveraging existing vendor relationships as the main objective of their

organization’s hybrid cloud.

The results of the survey show that organizations interested in hybrid cloud are focused on a consistent infrastructure and

application development model, all while leveraging existing vendor relationships. This allows companies to continue to

use their existing on-premises systems and begin the transformation of IT with new off-premises services. The key to

hybrid cloud is its ability to deliver digital services across both on- and off-premises environment, using a common

operating model for efficiency.

Microsoft Azure Stack

Simply put, Microsoft Azure Stack is an extension of Microsoft Azure, bringing the speed and agility of the Microsoft Azure

public cloud service to an on-premises environment. Azure Stack is designed to deliver a solution that is closely integrated

with Azure, providing an application-centric hybrid cloud. The unique capabilities enabled by Azure Stack meet many of the

requirements of hybrid cloud users, delivering a consistent infrastructure and application development model across on-

and off-premises environments, delivered by trusted vendors in Microsoft and select hardware partners.

Azure Stack provides a consistent platform across multiple areas. First, Azure Stack allows companies to run the same

applications by providing a hybrid application environment. By using the same Azure SDK, along with APIs, portals,

PowerShell, and Visual Studio, Azure Stack customers can implement common DevOps practices across their entire hybrid

cloud deployment. Applications can be built and deployed the same way across Azure and Azure Stack, and managed by

Azure Resource Manager and Azure Active Directory (Azure AD).

Azure Stack does not focus solely on hybrid cloud infrastructure, but delivers a consistent Azure Resource Manager for

management as well as Azure IaaS and Azure PaaS for VM and application-level API compatibility. This allows customers to

Common infrastructure compatibility, 31%

Leveraging existing vendor relationships,

21%Common application

APIs and development, 18%

Common management interfaces, 15%

Taking advantage of new cloud startups,

11%

Other, 2%Don’t know, 1%

What is or likely will be the main objective of your organization’s hybrid cloud strategy? (Percent of respondents, N=261)

Solution Showcase: HPE ProLiant for Microsoft Azure Stack Enables the Application-centric Hybrid Cloud 6

© 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved.

deploy portals and DevOps tools that run across cloud infrastructures spanning on- and off-premises. Azure Resource

Manager can be used to create reusable application templates to build and deploy both traditional and new cloud-native

applications. All these services can be used in conjunction with Microsoft solutions such as Visual Studio, as well as a large

choice of open source solutions, including Linux, Java, PHP, and Chef. All of this builds a One Azure Ecosystem, allowing

tools and technology from across the Azure Marketplace to run on both Azure and Azure Stack.

Azure Stack enables an Azure-consistent hybrid cloud for a variety of use cases. Azure Stack’s consistent application

environment enables companies to develop and deploy modern applications across both Azure and Azure Stack. Azure

Stack works well for enterprises that need public cloud capabilities but have specific requirements for local operations,

such as data sovereignty, security, or compliance regulations. Azure Stack is also suitable for applications in edge and

disconnected operations, such as cruise ships or factories, or have performance requirements linked to local operation.

Microsoft Azure Stack is available as an integrated system, including hardware and software, from select hardware

partners. This approach allows for customers to receive an integrated system lifecycle and support experience, with

coordinated support across Microsoft and the hardware partner.

Why HPE ProLiant for Microsoft Azure Stack

Building on its 30-year partnership, Microsoft and HPE have introduced HPE ProLiant for Microsoft Azure Stack. This

pretested, factory integrated, hybrid cloud solution allows organizations to run Azure-consistent services in their data

center, providing a simplified development, management, and security experience that is consistent with Azure public

cloud services.

Figure 5. HPE ProLiant for Microsoft Azure Stack

Source: HPE, 2017

HPE has made significant effort in differentiating its solution from others in the market. Starting with configuration

flexibility, customers are able to choose the number of nodes from four to twelve nodes, with individual increments in

between, as well as the desired processor type, memory and storage configurations, network switching options, power

Solution Showcase: HPE ProLiant for Microsoft Azure Stack Enables the Application-centric Hybrid Cloud 7

© 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved.

supplies, and various rack options to meet the needs of their business. In addition, based on larger memory configurations,

the HPE solution delivers up to 50% more Azure VM computing capacity. This flexibility will enable customers to more

easily deploy HPE ProLiant for Microsoft Azure Stack within their existing infrastructure.

In addition, HPE offers a number of options to assist with purchasing and operations. HPE has several different operational

options, including HPE Flexible Capacity for a pay-as-you-use consumption model, HPE Data Center Care, Operation

Support Services where HPE performs the infrastructure management and monitoring for the customer’s organization, and

additional HPE professional services to assist across the broad range of scenarios.

Microsoft and HPE are two of the most established, trusted vendors in IT, both delivering class-leading on-premises and

off-premises solutions. In addition to joint R&D, HPE has also trained over 4,000 HPE employees who can support this

offering. Finally, HPE and Microsoft have jointly invested in developing HPE-Microsoft Innovation Centers where customers

can go to learn about and experience Azure Stack first-hand. Customers can receive help with business planning,

implement a proof of concept, or perform testing at one of these centers, currently in Redmond, Washington, and Geneva,

Switzerland.

The Bigger Truth

For hybrid cloud, application focus and on-premises integration are the key attributes that customers are looking for to

support digital transformation. Enterprises need a hybrid cloud solution that meets those needs and more, driving a

consistent, application-centric experience, with power and flexibility that differentiates it from more infrastructure-focused

solutions. Hybrid cloud users are looking for a solution that enables the power of public cloud while maintaining

compatibility with their on-premises applications and infrastructure. Only an application-focused hybrid cloud solution can

enable the features, capabilities, and processes IT needs to support digital transformation for today and for tomorrow.

All trademark names are property of their respective companies. Information contained in this publication has been obtained by sources The Enterprise Strategy Group

(ESG) considers to be reliable but is not warranted by ESG. This publication may contain opinions of ESG, which are subject to change. This publication is copyrighted by

The Enterprise Strategy Group, Inc. Any reproduction or redistribution of this publication, in whole or in part, whether in hard-copy format, electronically, or otherwise to

persons not authorized to receive it, without the express consent of The Enterprise Strategy Group, Inc., is in violation of U.S. copyright law and will be subject to an

action for civil damages and, if applicable, criminal prosecution. Should you have any questions, please contact ESG Client Relations at 508.482.0188.

www.esg-global.com [email protected] P. 508.482.0188

Enterprise Strategy Group is an IT analyst, research, validation, and strategy firm that provides market intelligence and actionable insight to the global IT community.

© 2017 by The Enterprise Strategy Group, Inc. All Rights Reserved.