Services -> Outsourcing
By: Rob Bamforth, Principal Analyst, Quocirca
Published: 14th November 2011
Copyright Quocirca © 2011
Two recent events with rather different audiences reveal that not everyone is convinced that the benefits of technology adoption will be evenly shared. In particular, what was highlighted were some disconnects between organisational gain and personal risk.
At a gathering of senior IT executives at a CBR dining club dinner sponsored by Riverbed and Dimension Data, a number of CIOs voiced their thoughts regarding the IT industry’s current apparently all-enveloping rising star—‘cloud’. While there was widespread appreciation of the possibilities and potential for the deployment of IT resources into the cloud, there were some significant reservations about the reality.
Vendors and service providers have been keen to promote the benefits of cloud, but they need to appreciate how implementation will affect their customers, in particular one part of the decision making process; the CIO, IT director or individual IT manager most directly responsible. This is the person that gets it in the neck when something goes wrong—irrespective of who in the external cloud ecosystem is really to blame.
The selling job elsewhere in the organisation is slightly less daunting. Those involved directly on the financial side recognise the cost savings of pushing (human and/or IT asset) resource demands into a virtual infrastructure provider, especially if they can cut precious capital expenditure at a time when borrowing is difficult. Many users recognise the flexibility of ‘on demand’ access to IT, storage and services, especially while on the move. Mobile and remote access, fuelled by consumer behaviours and social media, have become a regular expectation and a perceived necessity.
However, IT managers, whose jobs depend on the reliability, fidelity and robustness of the services being delivered, see risk. And who can blame them when recent downtime and outages from what seemed unshakeable cloud service providers—Google, RIM, Amazon, Microsoft—demonstrate that even large and well planned IT systems can fail?
Quocirca regularly advocates the use of a total value proposition to understand the wider benefits and drawbacks of technology adoption. This goes beyond a simple ROI or TCO financial proposition, to encompass the less tangible positive and negative impact on the organisation, its competitive positioning and, crucially, on the individual or individuals making a technology implementation decision. In this context the total value proposition also considers an element often missed out by those looking at technology change in an organisation—a “total liability proposition”, perhaps—to understand the potential negative consequences, as these weigh most heavily on those making the decision, as it is their neck on the line.
The second event indicated where a respectful approach to risk might emanate where other critical players in the value chain discussed where they might contribute and benefit from cloud adoption. This was a gathering of diverse telecoms companies and service providers at the NetEvents, Italy conference. Here the interest in cloud as potential new sources of revenue and enterprise influence was strong, but it was dosed with a heavy realisation that significant credibility would be at stake if something went wrong.
Telecoms providers, unlike some of the IT industry, have a healthy respect for Murphy’s Law (if something can go wrong, it will), in addition to the more famous ones that are attributed to the value and growth of Moore’s Law of transistor numbers doubling every eighteen months and Metcalfe’s Law of the increasing value of connectedness. They know that their survival is dependent on fundamental attributes that some vendors in the IT industry like to portray as differentiated marketing benefits, like security, availability, interoperability and predictability.
The telecoms industry’s measured approach and involvement in the blossoming cloud market is to be welcomed, and should, over time, start to allay the understandable fears of those within enterprise who are responsible for delivering IT services. As well as trusting them to provide resilient networks, CIOs and IT directors might look to their telecoms providers to supply computer power. Then maybe Sun Microsystems (and Oracle, through its acquisition) was right after all, the network really is the computer?
Posted: 14th November 2011 | By Tim Coote :
The key adoption is not cloud 'technology' it's moving to application architectures based on unreliable components. This adoption requires significant internal IT organisational rewiring (or for the business to source directly, eg from a SaaS supplier), and some new approaches/skills.
I don't know whether IT directors will be able to make this leap. But if they don't, they'll find that they're left running down the old IT estate, while either the business or the business' competition get a better service at lower cost.
These are dangerous times - how do you reliably source the new capabilities?
Posted: 14th November 2011 | By Rob :
Agreed - cat herding & dealing with complex IT architectures are skills CIOs need to gain & quickly
Posted: 14th November 2011 | By Tim Coote :
Less 'cat herding' more 'kitten drowning': the biggest threat to the IT function is the vested interests in it.
Posted: 14th November 2011 | By clicker :
Ha, like I would trust any of my business data to a TelCo ! Last I checked TelCo = Government puppets, and about as customer service oriented as the pet Rock on the Sinking Titanic. No I will keep my data where it belongs, on-premise, with a single person responsible for its safe keeping until our CFO decides to run our business into the ground by insisting we cut spending on IT. I can see it now, Verizon or AWS walking into the CFO's office, convincing them they could save 40% a year on their IT spend, if only they would run "their services" in the their cloud. CFO convinces CEO of this, and the "Boom goes the dynamite" - CEO/CFO tag team CIO/CTO/COO to have our "services" moved to cloud.
The joke of it is, you get what you pay for. First, as an enterprise, we don't have simple products like a SugarCRM, nor would we. So the best we could ever hope for, when adopting a cloud architecture, would be little more than remote hosting. No SQS, SNS, No need to run Elastic Map Reduce or any of these services - heck we spend hours just keeping SAP up most of the time. Why add another layer of complexity and risk??? Oh yeah, 40% savings. Good Luck with the Enterprise Market on that one.
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