TRIPLE ALLIANCE 2: PHYSICAL-VIRTUAL-CLOUD. PAYING FOR SHARED SERVICES
In a recent blog, I mentioned how the triple alliance of Physical, Virtual and Cloud can help you to deliver what every business strives for – maximum Service Availability at minimum cost. If you use that triple alliance to this end, you might well decrease CapEx , because you will be investing in less physical hardware.
One key factor I touched on in the previous blog was the ‘25% sticking point’. Namely that, once the low-hanging fruit has been duly harvested, you must then make a choice – and it’s a critical one: “Do I continue down the path to nearly 100% virtualisation?” Or “Do I go beyond virtualisation alone and incorporate cloud-scale operations as the next step in my virtualisation and IT strategy?”
But there’s another major consideration that needs to be addressed at this ‘sticking point’.
Exactly how is the business going to pay for shared services?
The upshot of not understanding how to pay for shared or cloud services means that any investment in shared infrastructure becomes nothing more than a wasteland. Indeed, the notion that persuades many organisations to think: “If I build it, they will come” is a highly flawed one, for the simple reason that the concept derived from the ‘Field of Dreams’ does not apply to building shared IT services.
So, what is the right approach? The first thing to remember is that, if you are building shared services, the business must be able to consume. The traditional approach for IT investment is to orientate that investment around a business project. The aim of shared services/ cloud is to provide low start-up cost, rapid scale-up, if things are good, or scale-back, if not so good approach. Combine this with a lower level of initial investment (risk), the business now has the ability to look at projects they would not have been considered in the past.
That’s all well and good, if your business is well versed in this new way of working. But, if it is not, they may be tempted to continue down the project-based procurement route, ending up with a pot of capital to invest in IT – which is not easy to spend on an Opex-based shared infrastructure. They want to spend money on assets!!
Bringing the three elements of the triple alliance – Physical, Virtual and Cloud – into a single financial model will be vital in creating a harmonious whole. However, in order to get that triple alliance to work in the first place, the business must buy into the shift from project-based procurement to flexible consumption-based procurement.
The good news is that, once that business understands the additional value to be gained (start-up cost, flexibility, agility etc), it really is a ‘no brainer’. However, unless someone actually explains how that ‘new model’ works and the huge benefits it can deliver, the business will almost certainly continue to operate in the way that it always has. Making sure your business isn’t one of those that fail to embrace such opportunities for change.
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