|By Srinivasan Sundara Rajan||
|December 6, 2012 10:45 AM EST||
Outsourcing the IT operations, support and associated infrastructure maintenance has been the norm for large enterprises over the last decade. Typically the multi-year IT outsourcing contracts cover the following aspects:
- Application Development Services: These will be the set of resources and other costs, like environment, required to perform the custom development of various applications and sometimes customization and configuration of COTS products.
- Application Testing Services: Even though testing is covered as part of development, to make this step more independent most enterprises outsource testing activities as a separate entity.
- Application Sustain Services: This normally constitutes a biggest portion of outsourcing contracts, such that the applications are running without disruption to businesses and any incidents are handled within the defined SLA Levels. Also Sustain Services are governed by the well-established process of ITIL (Information Technology Infrastructure Library).
- Infrastructure Management Services: These will cover the hosting, operations and support of servers and storage, network infrastructure systems. Sometimes they may be hosted in the data centers of the enterprise or hosted with external service providers.
Multi-Year IT Contracts in the Cloud Era
Over the last two years, most enterprises reinvented themselves with the Hybrid Delivery model, whereby the business processes have been realized with a combination of the traditional data center, private clouds and public clouds. Also SaaS (Software as a Service) has become a major force in supporting enterprise business capability needs.
CIOs need to re-assess the cost and delivery models of most multi-year IT contracts due to the following reasons.
- Unlike standard sizing techniques like Function Point Analysis that are meant for large-scale development projects, there is no universally accepted estimation and sizing techniques available for these large outsourcing deals. Most of the time vendor organizations adopt a combination of multiple legacy techniques to come together with a final pricing model. Most of the time factors like the number of FTEs incumbent vendors already deployed, ticket volume and similar factors play a major role.
- The estimation techniques adopted a couple of years of ago, before SaaS and Cloud become mainstream, have become largely irrelevant in now. As most of the business processes that have been served in-house have now been brokered by the enterprises and hence the supporting needs will vary drastically.
- Enterprises have to shift their custom development budgets towards SaaS evaulation or cloud-based integration (CBI) techniques.
- Budget allocations have to accommodate for proof of concept and innovation enabled by areas like Big Data and real-time analytics
From the above points it is a priority for CIOs to evaluate the multi-year IT contracts and shift the priorities from certain areas and move them to other areas so that the capability of IT to serve the business is adapted to the new realities.
Areas Affected by the Hybrid Cloud Delivery Model
The following are the typical line items in a multi-year IT contract that needs to be revisited so that their allocations are fully justified.
- Problem Management: In the past much of the time has been spent on fixing the production ABENDs of various custom development code. However, with SaaS and cloud usage these are expected to be reduced a lot. Also in a SaaS delivery model IT service personnel from the enterprises will not be responsible to fix the issues, rather direct them to the SaaS vendors.
- Production Job Management: Maintaining production jobs, scheduling them, monitoring them and restarting them have been the core activities of many production support staff in custom application management. However with automation being the key of most cloud IaaS providers or private cloud platforms, much of these tasks have been simplified and can be revisited.
- Preventive & Adaptive Maintenance: Earlier application support staff needs to work with multiple third-party vendors to ensure that proper versions of the operating systems and patches are maintained, so that the applications don't break in the future. However, with the adoption of PaaS (Platform as a Service) and SaaS (Software as a Service) much of the effort spent on this can be shifted to the cloud providers.
- Service Continuity Management: Setting up the recovery tests and testing for disaster recovery have been a daunting task in the past. In fact due to the complexities of this operation we have seen some enterprises don't even have proper disaster recovery sites. However cloud has simplified the creation of disaster recovery sites in different geographies and provisioning them has become much easier.
- License Management: The enterprise licensing model in the COTS and Custom applications era is much different that the pricing models adopted by SaaS applications and hence there requires a revised planning on this front.
- Application Development Services: In the past enterprises used to give Service Requests for custom development of various applications and a fixed pool of resources are typically allocated for the development, however the adoption of SaaS, PaaS and Cloud Based Integration will certainly alter the allocation of resources towards this. Also much of the budget allocations for new large scale custom development efforts can be revisited if the enterprises decided to utilize SaaS as a service delivery model.
An exhaustive list of services that are part of the multi-year IT contracts may vary from enterprise to enterprise; however, one of the important priorities for CIOs is to revisit them and allocate their resources appropriately towards business capabilities and innovation which is one of the major enablers of the hybrid delivery model.
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
Aug. 29, 2016 02:15 AM EDT Reads: 1,804
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Aug. 29, 2016 01:45 AM EDT Reads: 2,158
This digest provides an overview of good resources that are well worth reading. We’ll be updating this page as new content becomes available, so I suggest you bookmark it. Also, expect more digests to come on different topics that make all of our IT-hearts go boom!
Aug. 29, 2016 01:30 AM EDT Reads: 4,812
This complete kit provides a proven process and customizable documents that will help you evaluate rapid application delivery platforms and select the ideal partner for building mobile and web apps for your organization.
Aug. 28, 2016 10:45 PM EDT Reads: 2,896
It's been a busy time for tech's ongoing infatuation with containers. Amazon just announced EC2 Container Registry to simply container management. The new Azure container service taps into Microsoft's partnership with Docker and Mesosphere. You know when there's a standard for containers on the table there's money on the table, too. Everyone is talking containers because they reduce a ton of development-related challenges and make it much easier to move across production and testing environm...
Aug. 28, 2016 10:30 PM EDT Reads: 5,202
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Aug. 28, 2016 10:30 PM EDT Reads: 4,044
Aug. 28, 2016 10:30 PM EDT Reads: 4,877
Deploying applications in hybrid cloud environments is hard work. Your team spends most of the time maintaining your infrastructure, configuring dev/test and production environments, and deploying applications across environments – which can be both time consuming and error prone. But what if you could automate provisioning and deployment to deliver error free environments faster? What could you do with your free time?
Aug. 28, 2016 08:15 PM EDT Reads: 1,948
Monitoring of Docker environments is challenging. Why? Because each container typically runs a single process, has its own environment, utilizes virtual networks, or has various methods of managing storage. Traditional monitoring solutions take metrics from each server and applications they run. These servers and applications running on them are typically very static, with very long uptimes. Docker deployments are different: a set of containers may run many applications, all sharing the resource...
Aug. 28, 2016 07:00 PM EDT Reads: 2,060
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Aug. 28, 2016 06:00 PM EDT Reads: 1,938
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
Aug. 28, 2016 05:30 PM EDT Reads: 780
The following fictional case study is a composite of actual horror stories I’ve heard over the years. Unfortunately, this scenario often occurs when in-house integration teams take on the complexities of DevOps and ALM integration with an enterprise service bus (ESB) or custom integration. It is written from the perspective of an enterprise architect tasked with leading an organization’s effort to adopt Agile to become more competitive. The company has turned to Scaled Agile Framework (SAFe) as ...
Aug. 28, 2016 04:00 PM EDT Reads: 889
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
Aug. 28, 2016 03:15 PM EDT Reads: 3,511
Modern organizations face great challenges as they embrace innovation and integrate new tools and services. They begin to mature and move away from the complacency of maintaining traditional technologies and systems that only solve individual, siloed problems and work “well enough.” In order to build...
Thomas Bitman of Gartner wrote a blog post last year about why OpenStack projects fail. In that article, he outlined three particular metrics which together cause 60% of OpenStack projects to fall short of expectations: Wrong people (31% of failures): a successful cloud needs commitment both from the operations team as well as from "anchor" tenants. Wrong processes (19% of failures): a successful cloud automates across silos in the software development lifecycle, not just within silos.
Aug. 28, 2016 02:45 PM EDT Reads: 2,148
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Aug. 28, 2016 01:45 PM EDT Reads: 3,674
Cloud Expo 2016 New York at the Javits Center New York was characterized by increased attendance and a new focus on operations. These were both encouraging signs for all involved in Cloud Computing and all that it touches. As Conference Chair, I work with the Cloud Expo team to structure three keynotes, numerous general sessions, and more than 150 breakout sessions along 10 tracks. Our job is to balance the state of enterprise IT today with the trends that will be commonplace tomorrow. Mobile...
Aug. 28, 2016 01:30 PM EDT Reads: 3,543
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Aug. 28, 2016 01:00 PM EDT Reads: 2,433
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Aug. 28, 2016 11:00 AM EDT Reads: 3,144
A company’s collection of online systems is like a delicate ecosystem – all components must integrate with and complement each other, and one single malfunction in any of them can bring the entire system to a screeching halt. That’s why, when monitoring and analyzing the health of your online systems, you need a broad arsenal of different tools for your different needs. In addition to a wide-angle lens that provides a snapshot of the overall health of your system, you must also have precise, ...
Aug. 28, 2016 10:45 AM EDT Reads: 1,654