FOCUS COMMENT
Issue 15, April/May
2011 OUTSOURCING DECISIONS
Of all the decisions taken this year the big one will be: How much will your company outsource to the Cloud? By Ambrose McNevin
to a third party. The Cloud simply allows a much greater level of control and choice. Want Software-as-a-Service? Fine. Want to retain control of every aspect of your enterprise application but don’t want to manage the infrastructure to deliver it? Fine. Want to close down all of your data centers in the next 12 months and deliver IT to your business purely as a service. It can be done.
A
Differentiated service requirements is how IBM has described this range of choices.
What are the implications of all this? Risk is the obvious one. But it will be controlled risk as the move is to hybrid insourced and outsourced models.
But this introduces complexity which will be diffi cult to manage. How can this be addressed?
This is a good time to list just some of the concerns that have been identifi ed as possible barriers to outsourcing to the cloud.
Privacy, security of data and cloud-based applications. Transition management, governance, data identifi cation, confi dentiality, operational process change management, multiple supplier integration, exit strategy, avoidance
of vendor lock-in. (These, and
many more, are detailed throughout our Cloud section which starts on page 25.)
We’ve spoken with some sober thinkers and there exists much common thinking on cloud issues. Meanwhile colocation suppliers already have fi rms that are piling in to offer many variations of cloud to end users. There will doubtless be many fantastic ideas, processes and delivery models. There will also doubtless be some mistakes, some charlatans and spectacular failures.
SOFTWARE NUMBERS
Looking from the top down, the Cloud is about software. So what do the numbers say? The
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Cloud software business is the fastest growing sector in business software in EMEA according to numbers from IDC. EMEA is a big place. But think of this. Remove Western Europe and its legacy of on-premises, per-server license procurement and the numbers will most likely show a far greater growth in cloud software sales in those markets not burdened with traditional software practices.
A contact in the software business told me: “The larger or more well established software vendors have a business model designed around licence sales as opposed to subscription models. This means that their whole sales process/structure and cost model is geared to large licence deals being closed within a quarter/year. One deal can make a huge difference. Subscription models mean that the equivalent revenue is spread over time. This is great from a predictability perspective, but can mean that a shift from one model to the other is hard.”
A BASIC SCENARIO
Looking from the bottom up, it is about infrastructure. Imagine for a moment that you remain in charge of an owner-operated data center and your company decides to ignore all the talk of cost savings, keeps everything in house and proceeds with a cautious, slow adoption of cloud services while retaining a clear demarcation between facilities and IT.
Traditionally your job is to provide power to run servers. You will soon be told to provide the power on an as-needed and where-needed basis. That means understanding where the power is required within the data center, how
See Touching the Cloud, our special report, on Page 25.
DatacenterDynamics’ global conference
series includes streams addressing every aspect of Outsourcing Decisions and IT Optimization.
www.datacenterdynamics.con/conferences
many VMs are running where, where they are likely to be tomorrow and what impact that will have on existing infrastructure.
If you are reading DatacenterDynamicsFOCUS and thinking, I am a CTO or I work for a CTO with a background in engineering, this has nothing to do with me, then think again. Already the Cloud is making people at the top think about which ‘as-a-Service...’ delivery models they will adopt and what degree of outsourcing they will undertake.
The Cloud is a perfect storm of change to M+E infrastructure, IT hardware, networks, management and automation software, virtualization, application software, services and outsourcing. This is the ultimate disruptive technology. You are lucky because you work in a data center and are already in this storm.
Think your job won’t change in the next three years? ■
ny move to the Cloud involves a degree of outsourcing as responsibility for one or more aspects of IT delivery is handed
See more analysis see
www.datacenterdynamics.com/focus
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