Friday, May 4, 2012

Operational Model

Cloud computing focuses on technology solutions for cost savings, cost avoidance, and business agility, but in large enterprises cloud computing will be a catalyst for organizational realignment to converge traditional infrastructure silos. A new operations model is needed to bring insight into IT costs so that IT executives can become the brokers for internal and external cloud solutions.

Even though logic may point to a realignment of traditional silos, the shift is a challenge considering it will impact span-of-control for IT executives. In my experience, functional silos become barriers to innovation. Innovation thrives in environments that nurture ideas, collaboration, and diverging viewpoints. When departments run in silos they are not looking at broader aspects of organizational activities.

Businesses tend to structure their IT departments based on specific functional roles. These departments may include Wintel servers, mid-range, mainframe, storage and recovery, and networking. I am going to focus on one of the fundamental building blocks of cloud computing - virtualization.

Ownership of server-hosted virtualization often falls on the server team. The department that has supported the conventional physical server is not aligned from service standpoint to show the underlying costs of hosting the infrastructure. The list of services they currently provide the company are bundled into the operation cost of supporting the baseline infrastructure. Although these services are critical to the business, their operational support costs should not be a part of the core infrastructure charge-back.

The example below shows the activities your server team may be providing:

The server department support ranges from server provisioning, incident management, resource monitoring, web support, database support, application migration, and data center services. They work with their business partners on many information technology projects, particularly in the area of enterprise application integration.

All those services to the business get rolled up into infrastructure OPEX. The majority of those services are not available at an external hosting provider which doesn't provide an apples-to-apples comparison for IT leadership.

When IT packages their overall operational costs for supporting business applications that run inside their virtual machines they are at a disadvantage. IT salaries are not cheap, management of the infrastructure plumbing is a fraction of the cost compared to the server consulting they provide for the deployment and support of applications on virtual machiens.

IT leaders need to re-think their operational model.

The support model of infrastructure support (hosting) and integration support (DevOps) will help drive the transparency for application hosting. In an IaaS model, if your operational support costs for a virtual machine is greater than the infrastructure costs to host that virtual machine you should consider a change!

That doesn't diminish the responsibilities of integration support. The move to DevOps cultivates a productive relationship between development teams and operations teams. This improved relationship increases efficiency and reduces the production risk associated with frequent changes.

Here is how DevOps is defined in Wikipedia:

Many organizations divide Development and System Administration into different departments. While Development departments are usually driven by user needs for frequent delivery of new features, Operations departments focus more on availability, stability of IT services and IT cost efficiency. These two contradicting goals create a "gap" between Development and Operations, which slows down IT's delivery of business value.

In computing, "DevOps" is an emerging set of principles, methods and practices for communication, collaboration and integration between software development (application/software engineering) and IT Operations (systems administration/infrastructure) professionals. It has developed in response to the emerging understanding of the interdependence and importance of both the development and operations disciplines in meeting an organization's goal of rapidly producing software products and services.

Both support responsibilities should feed into your organizations service catalog. This will offer a comprehensive portfolio of service options that you can provide your IT business partners while enabling your IT executives with detailed costs for making decisions as a cloud broker.

Cloud computing technology can be an enabler for a competitive advantage, but organizational change needs to happen to foster innovation and provide transparency. IT leadership must strive to find effective and risk-appropriate solutions, anticipate the challenges ahead, and nurture collaboration.  
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