|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.
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound...
Jun. 1, 2016 03:15 AM EDT Reads: 3,342
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
Jun. 1, 2016 01:30 AM EDT Reads: 2,054
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
Jun. 1, 2016 12:00 AM EDT Reads: 2,535
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
Jun. 1, 2016 12:00 AM EDT Reads: 1,258
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
May. 31, 2016 11:15 PM EDT Reads: 1,065
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, 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 enterprises are using some...
May. 31, 2016 11:00 PM EDT Reads: 3,363
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
May. 31, 2016 10:00 PM EDT Reads: 1,875
SYS-CON Events announced today Object Management Group® has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
May. 31, 2016 10:00 PM EDT Reads: 2,778
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
May. 31, 2016 09:00 PM EDT Reads: 2,159
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
May. 31, 2016 07:15 PM EDT Reads: 1,925
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
May. 31, 2016 04:45 PM EDT Reads: 2,677
"What we see what happens when you have a completely networked society and the potential to now drive the value creation and the collaboration and the ecosystems that are possible when you start to be able to connect people and industries together in ways that have never been possible before," explained Esmeralda Swartz, VP of Marketing Enterprise & Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
May. 31, 2016 04:45 PM EDT Reads: 1,930
SYS-CON Events announced today that ContentMX, the marketing technology and services company with a singular mission to increase engagement and drive more conversations for enterprise, channel and SMB technology marketers, has been named “Sponsor & Exhibitor Lounge Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York. “CloudExpo is a great opportunity to start a conversation with new prospects, but what happens after the...
May. 31, 2016 02:30 PM EDT Reads: 1,515
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discuss how businesses can gain an edge over competitors by empowering consumers to take control through IoT. We'll cite examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He'll also highlight how IoT can revitalize and restore outdated business models, making them profitable...
May. 31, 2016 02:00 PM EDT Reads: 3,163
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...
May. 31, 2016 01:45 PM EDT Reads: 1,820
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
May. 31, 2016 12:30 PM EDT Reads: 1,440
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
May. 31, 2016 12:00 PM EDT Reads: 1,528
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
May. 31, 2016 12:00 PM EDT Reads: 2,652
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
May. 31, 2016 11:45 AM EDT Reads: 2,163
SYS-CON Events announced today that MobiDev will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 200 develope...
May. 31, 2016 10:15 AM EDT Reads: 2,962