Q&A: Optimizing costs through virtualization in the manufacturing industry

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Manufacturing companies across the globe are increasingly virtualizing their IT environments to optimize costs and gain greater flexibility. Michael Donovan, Industry Leader, Americas Manufacturing for DXC Technology, explains how virtualization solutions are helping companies improve both back office and plant operations and more easily expand into new markets and regions.

What’s the most pressing topic you are talking about with your manufacturing clients as related to virtualization?

From a back-office IT perspective, at the end of the day it’s all about cost optimization. Most enterprises are either on a path or beginning down a path of virtualizing their current environments. As they do that we can start to have a conversation around, “Do you really need to have the Capex investments sunk into IT plumbing? Or would it make sense to migrate that to a cloud environment?”

By moving from a Capex to an Opex model they can invest the capital on the operational technology (OT) side where you really want IT capacity and manufacturing investments to ensure you have the ability to keep functioning even if you have a network outage or some other issue.

What are the primary benefits manufacturing companies can get from virtualization?

You get the flexibility to make workloads mobile so you can better manage uptime, availability and cost by moving your workloads where and when they need to be to keep the business running. The ability to virtualize also means you can optimize the use of hardware in the plants and fail over to alternate hardware or the cloud if need be. The goal here is improving availability, supporting growth, lowering overall cost, and reducing or eliminating IT-driven downtime.

Share an example of how virtualization can have an impact.

One large automotive manufacturer DXC is working with is transforming from fully-independent, regionally controlled IT to a global IT operation. At the same time, they’re making a huge product shift to connected cars, autonomous driving and electric vehicles, which means they are trying to manage huge amounts of data from autonomous car testing, manufacturing sensors and automation, and even collecting more data from customers. The ability to optimize and move capacity between fixed data centers and the cloud is a powerful enabler if they can do it reliably and improve their availability, performance and cost.

What are some of the key considerations when companies pursue virtualizion?

It’s all about how they standardize, how they optimize, and how they position themselves for data-hungry solutions. It’s a whole different client experience, with interactive insight and experiences for employees, suppliers and customers. When considering where and how to deploy functionality they need to ask things like, “Does it stay on a server in the cloud, or does it move to SaaS?” Enterprises need to do the work to make the transformation align to the needs of the business, but you can begin to move now and free up capital.

Cloud has been around for a while, so why aren’t manufacturers already all in?

The perception of risk. For the back office IT folks the risk has generally been of two varieties: security and control. Is sharing resources with my competitors or potential attackers safe? In reality, the data centers hosting public cloud services are some of the most secure ever built. If they weren’t, would you see the most paranoid government systems in the world moving to these platforms? Not likely. So security is not a risk.

Second is control. Enterprise IT departments are used to defining the architecture and policies of their data centers. As these services have commoditized, there is little opportunity for a consumer to affect the design choices that are made. This can make engineers nervous, but again these are some of the most efficient and secure data centers ever built. For OT buyers, the risk is related to the need for custom integration and availability of critical manufacturing systems. Regardless of whether cloud is used, the network can and will suffer an outage. The presence of on-site capacity mitigates this risk and therefore edge computing is required.

What hurdles are there beyond risk?

In addition to risk it’s a capital story. Companies still have a lot of capital on the books in the form of servers, storage, and networks. To the extent that they are bound to repayment of hardware asset costs, it’s that lock-in that it is stifling creativity and movement. And then you’ve got the regional variances, which are often essentially control issues but can reflect subtle variances in requirements based on local culture and resource availability. When looking to migrate or not, they need to assess the risk and determine the right workload and the right place to get the right cost mix.

How does virtualization help in the dynamic between IT and OT?

OT and IT can be very competitive. They operate with different priorities. The back-office IT strategy is based on central control with limited usage of edge computing on an exception basis. The plant operations folks are very protective of the systems and the automation that drives production, so are focused on edge computing with some allowance for central standardized IT where it doesn’t drive the perception of risk and control from the plant. There’s a lot of stuff that’s very custom because of all the robotics and the specific machinery they have in the plants and they need to control that. If the IT side can begin to offer services that keep the plant running and prevents hardware or network outages, that’s a significant contribution.

What should companies watch out for when migrating data to the cloud?

Job No. 1 is to understand your workload. Don’t just randomly move things. Move things as a group because the more you separate things that are talking to each other and introduce latency into that conversation, the more likely you are to break things. Understand and accommodate the differences between IT and OT as you plan for workload migration. Incorporate edge computing and the ability to rapidly move workloads as part of the strategy. And don’t be afraid to move. Don’t be afraid to lift-and-shift as an initial step, but follow that up with an assessment of where that application really should live, where is that business function best served? A sound virtualization strategy is the first step to supporting a truly independent workload placement strategy. It’s easier than ever to move to the cloud. With virtualization, you can move workloads quickly to a flexible environment, get immediate benefits, then transform later for even better performance.


Michael-Donovan-headshotMichael Donovan is Industry Leader, Americas Manufacturing for DXC. He has more than 30 years of experience in the design and implementation of applications and large infrastructures across multiple industries. His responsibilities include working with senior business and IT executives to improve strategic outcomes through the innovative use of technology.

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