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The changing world of IT providers: A recipe for cloud services

June 12, 2014 by Darren Harvey

cloud-services-1Building on proven models

Truly good ideas never go away; they just get reinvented so they can be relevant in a new context. This is true of the fundamental concepts employed in the product development, marketing and supply chain business functions that have matured through many years of experience in free market economies.

Question: So why can’t IT service providers borrow these ideas and reinvent them into a new integrated service consumption model for cloud-based services?

Answer: There is nothing to stop them from doing precisely that.

Question: What would be the primary benefit to both IT service providers and, more important, the clients they service of adopting an “IT as a supply chain” consumption model?

Answer: This model provides a consumer-centric focus rather than a technology-centric focus.

Services based on outcomes, not technologies

While most corporations have retained IT functions that provide strategic direction for technology and services, the business folks who actually consume IT services are mostly interested in the business outcomes that technology can provide.

This is where IT service providers can step up to new market expectations by becoming proficient in the design and development of “service products” that take advantage of the enabling technologies included with most cloud platforms, such as the IBM Private Modular Cloud (PMC). For more information on PMC, refer to the recent blog post by Ash Simpson: “An easy and scalable private cloud with PaaS capability.”

Now let me show you a “recipe” that takes existing IT ingredients and existing non-IT ingredients and then mixes them with new cloud-based technology platforms to “bake” a new IT service consumption model for IT service providers.

A recipe for a new model from existing IT and non-IT ingredients

Summary

Serves all clients who consume outsourced, cloud-based IT services from IT service providers.

Note: May contain nuts. Not for consumption of IT services that cannot be provisioned automatically.

Ingredients

  • 1 existing IT architecture and governance function
  • 1 existing non-IT product development function (the “free market” variety)
  • 1 existing non-IT demand planning function (the supply chain variety)
  • 3 parts of existing IT Infrastructure Library (ITIL) framework (just the service catalog, demand and capacity management parts for now)
  • 1 new IT order management facility
  • 1 new cloud provisioning automation facility (OpenStack based variety)
  • 1 new cloud demand and capacity management system (OpenStack compatible)
  • 1 new cloud cost management facility (OpenStack compatible)

Method

  • Preparation: Service product development
    • Take the existing IT functions of IT strategy and technology planning from architecture and service delivery.
    • Add to that the established non-IT product development functions of product design, development and marketing.
  • Filling: Ordering and fulfillment
    • Take an order management system that can be tailored to enable the ordering of cloud-based services. Note: this probably isn’t the existing service management tool you use for workplace services that are provided to the general client user.
    • Establish order fulfillment capability from the new automated provisioning and orchestration technologies available on private cloud platforms.
  • Base: Demand and capacity planning
    • Add to that the non-IT supply chain functions of demand planning.
    • Then wrap all that in an integrated ITIL framework that brings together service catalog management, demand management and capacity management into an integrated framework.

Serving

Serve to your client from a menu of pre-packaged service products tailored to suit them.

So what does this “recipe” give us?

From this recipe we get an enhanced business model to drive consumption across a myriad of hybrid cloud platforms through cleverly designed service products (refer to the following figure).

Most important, this model contains a managing framework that is continually maturing over time as an integrated set of functions circled around your new private or hybrid cloud offering.

cloud-services-2

Figure 1: Integrated service consumption model

Start small to allow the model to become established before expanding the scope.

Products that encapsulate the IT service provider’s experience and best practices in a standardized form provide the building blocks for repackaging to suit the needs and policies specific to each client.

The inclusion of non-IT functions allows us to balance the initial investment in “getting the product to market” with market analysis and proto-cycling, which can provide evidence of the demand for new products prior to significant product development investment.

I would be interested in your point of view on this. What is your experience?

Leave a comment below or tweet me @darrenxharvey, and look out for my next blog posts on a simple approach to service mapping.