Will history repeat itself with a “busting” explosion of rolling thunder from dotcom days?
CIO Magazine reports from a recent Economic Impact Study (April 2010) that 39% of the 410 respondents say that the economic recession has accelerated their organization’s use of alternative IT models (e.g., cloud, on-demand services, SaaS). As an ex-analyst from the sourcing era of ASP’s, ISP‘s, MSP’s, etc. in the dotcom rush to get to the web via hosting providers, this is a reminiscent trend and one that repeats with each new technology trrend.
What does this metric say about the objective to get to the Cloud and/or leverage as-a-Service options? It illustrates 2 things:
Short-cut to Agility
The rush to the cloud is in search of a quick, short-cut to new services. This is a myth and a high risk proposition to go to the cloud. Support, management and risk of outage are not factored into the equation for speed of service and change. Frustration with IT organizations and the need to create change in the delivery model is always the reason new sourcing models become very appealing to businesses.
Advice: Solve for the real challenge, the over serviced in-house technology delivery. Align service expectations, freeing resources to evaluate technology advances to be applied to new business services for growth rather than pure cost reduction. Change the objectives to reward technology innovations and business growth.
Moving to the cloud because it offers a service that can drive growth into the organization meeting time to market requirements with the service is a better strategy. Leverage cloud technology to grow your business.
Quick Cost Reduction
This is a myth and a and another high risk proposition to go to the cloud. Support and management costs are not being factored into this equiation, nor is it really a cost reduction. Did you remove hardware, software or people when you moved services from in-house to the cloud or to a service provider? If all of this were factored in with the margin for the provider and the overhead to manage the provider, it would be higher than in-house delivery (except for those grossly out of alignment in current computing cost structures).
Advice: Solve for the real challenge, the over serviced in-house technology delivery. Align service expectations, delivery and management to real business criticality. Not all services are created and nor do they all require the highest level of disaster recovery, support and management. Right Size!
Cost reduction can be an objective if it also removes infrastructure, support and management requirements in-house. Bluntly put, removal of hardware, software and people and/or cost avoidance for the extreme swing in capacity and demand requirements and acts as the overflow for limited periods of great demand requirements.
Success of any service delivery supported by technology whether in-house or outsourced begins in the business. The management of the service and support of the technology is still the responsibility of the organization using the technology to transact business. Seeking low-cost options out of frustration with in-house IT organizations to get to the web is absolutely part of the overall collapse of the predecessors to the cloud during the dotcom era. Hosting providers did not have the operational management maturity and were very risky propositions to the businesses that subscribed to their services and did not include service level agreements by which to management the service provider resulting in ultimately failing.
“Moving” things to the Cloud and to a service provider does imply they are “supporting” it end-to-end. In many cases, they are “running” a service or application, but the subscribing business retains support of the application. When blending an environment with Cloud services also recognize you want to manage the “service” via service levels and should not be concerned with their infrastructure or operational processes, drive the behavior with the service level agreement and manage the service.
I am great fan of new technology as it brings new possibilities to re-think how you do business, bringing opportunity to innovate and change the game with your competition before they do. It takes imagination to “apply” technology to business growth. IT organizations that do not make this shift in how they think about the use and implementation of technology will and are commodity. The role of IT IS changing from an “operator” to a “service manager”.
Steps to Success:
- 1. Strategy – Develop a strategy to “apply” technology to services that both drive business and the top line as well as reduce costs (right size IT) at the bottom line.
- 2. Build – Design and develop for the Cloud, don’t just “move” things to the Cloud that were not architected for the Cloud.
- 3. Management – Determine a management plan and architecture to manage performance and availability of the extended infrastructure.
- 4. Support – Define service expectations and implement service levels with the service providers of the extended infrastructure and do not set excessive requirements, right size or risk cost prohibitive service delivery.
Management responsibility and the application of technology to drive business growth does not have to be overburdening and those businesses that make the shift in how IT functions and aligns within the business and how technology is applied to services for business growth and innovation are those that lead their markets. No one got anywhere fast with high risk short-cuts!
Management Control Never Ends!
From Physical to Virtual to Cloud – The Control Never Ends – Are you ready to take control of your infrastructure?