Welcome!

Cloud Expo Authors: Yeshim Deniz, Liz McMillan, Pat Romanski, Hovhannes Avoyan, Elizabeth White

Related Topics: Cloud Expo, Java, SOA & WOA, Virtualization, Web 2.0, Security

Cloud Expo: Article

Multi-Year IT Contracts for Hybrid Cloud Delivery

CIO Priorities for 2013

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.

Summary
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.

More Stories By Srinivasan Sundara Rajan

I am passionate about ownership and driving things on my own, with my breadth and depth on Enterprise Technology I could run any aspect of IT Industry and make it a success. I am a Seasoned Enterprise IT Expert, mainly in the areas of Solution,Integration and Architecture, across Structured, Unstructured data sources, especially in manufacturing domain. My recent work is on Natural Language Processing, Semantic Enrichment of Unstructured Data, Data Mining and Predictive Analytics. However I have a strong footing across all tiers of Enterprise IT spectrum. I am geared to handle the massive flow of data by Internet Of Things with appropriate platform, tools and processes.

Cloud Expo Latest Stories
With the explosion of the cloud, more businesses are transitioning to a recurring revenue model to generate reliable sales, grow profits, and open new markets. This opportunity requires businesses to get to market quickly with the pricing and packaging options customers want. In addition, you will want to take advantage of the ensuing tidal wave of data to more effectively upsell, cross-sell and manage your customers. All of this is possible, but only with the right approach. At 15th Cloud Expo, Brendan O'Brien, Co-founder at Aria Systems and the inventor of cloud billing panelists, will lead a panel discussion on what it takes to launch and manage a successful recurring revenue business. The panelists will offer their insights about what each department will need to consider, from financial management to line of business and IT. The panelists will also offer examples from their success in recurring revenue with companies such as Audi, Constant Contact, Experian, Pitney-Bowes, Teleko...
Planning scalable environments isn't terribly difficult, but it does require a change of perspective. In his session at 15th Cloud Expo, Phil Jackson, Development Community Advocate for SoftLayer, will broaden your views to think on an Internet scale by dissecting a video publishing application built with The SoftLayer Platform, Message Queuing, Object Storage, and Drupal. By examining a scalable modular application build that can handle unpredictable traffic, attendees will able to grow your development arsenal and pick up a few strategies to apply to your own projects.
Come learn about what you need to consider when moving your data to the cloud. In her session at 15th Cloud Expo, Skyla Loomis, a Program Director of Cloudant Development at Cloudant, will discuss the security, performance, and operational implications of keeping your data on premise, moving it to the cloud, or taking a hybrid approach. She will use real customer examples to illustrate the tradeoffs, key decision points, and how to be successful with a cloud or hybrid cloud solution.
The cloud provides an easy onramp to building and deploying Big Data solutions. Transitioning from initial deployment to large-scale, highly performant operations may not be as easy. In his session at 15th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, will discuss the benefits, weaknesses, and performance characteristics of public and bare metal cloud deployments that can help you make the right decisions.
Over the last few years the healthcare ecosystem has revolved around innovations in Electronic Health Record (HER) based systems. This evolution has helped us achieve much desired interoperability. Now the focus is shifting to other equally important aspects – scalability and performance. While applying cloud computing environments to the EHR systems, a special consideration needs to be given to the cloud enablement of Veterans Health Information Systems and Technology Architecture (VistA), i.e., the largest single medical system in the United States.
Cloud and Big Data present unique dilemmas: embracing the benefits of these new technologies while maintaining the security of your organization’s assets. When an outside party owns, controls and manages your infrastructure and computational resources, how can you be assured that sensitive data remains private and secure? How do you best protect data in mixed use cloud and big data infrastructure sets? Can you still satisfy the full range of reporting, compliance and regulatory requirements? In his session at 15th Cloud Expo, Derek Tumulak, Vice President of Product Management at Vormetric, will discuss how to address data security in cloud and Big Data environments so that your organization isn’t next week’s data breach headline.
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Is your organization struggling to deal with skyrocketing volumes of digital assets? The amount of data is growing exponentially and organizations are having a hard time managing this growth. In his session at 15th Cloud Expo, Amar Kapadia, Senior Director of Open Cloud Strategy at Seagate, will walk through the essential considerations when developing a cloud storage strategy. In this discussion, you will understand the challenges IT is facing, why companies need to move to cloud, and how the right cloud model can help your business economically overcome the data struggle.
If cloud computing benefits are so clear, why have so few enterprises migrated their mission-critical apps? The answer is often inertia and FUD. No one ever got fired for not moving to the cloud – not yet. In his session at 15th Cloud Expo, Michael Hoch, SVP, Cloud Advisory Service at Virtustream, will discuss the six key steps to justify and execute your MCA cloud migration.
The 16th International Cloud Expo announces that its Call for Papers is now open. 16th International Cloud Expo, to be held June 9–11, 2015, at the Javits Center in New York City brings together Cloud Computing, APM, APIs, Security, Big Data, Internet of Things, DevOps 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 opportunity. Submit your speaking proposal today!
Most of today’s hardware manufacturers are building servers with at least one SATA Port, but not every systems engineer utilizes them. This is considered a loss in the game of maximizing potential storage space in a fixed unit. The SATADOM Series was created by Innodisk as a high-performance, small form factor boot drive with low power consumption to be plugged into the unused SATA port on your server board as an alternative to hard drive or USB boot-up. Built for 1U systems, this powerful device is smaller than a one dollar coin, and frees up otherwise dead space on your motherboard. To meet the requirements of tomorrow’s cloud hardware, Innodisk invested internal R&D resources to develop our SATA III series of products. The SATA III SATADOM boasts 500/180MBs R/W Speeds respectively, or double R/W Speed of SATA II products.
In today's application economy, enterprise organizations realize that it's their applications that are the heart and soul of their business. If their application users have a bad experience, their revenue and reputation are at stake. In his session at 15th Cloud Expo, Anand Akela, Senior Director of Product Marketing for Application Performance Management at CA Technologies, will discuss how a user-centric Application Performance Management solution can help inspire your users with every application transaction.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridstore delivers vmOptimized™ Storage that self-optimizes to each application or VM across both virtual and physical environments. Leveraging a grid architecture, Gridstore delivers the first end-to-end storage QoS to ensure the most important App or VM performance is never compromised. The storage grid, that uses Gridstore’s performance optimized nodes or capacity optimized nodes, starts with as few a...
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, has been named “Bronze Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Cloudian is a Foster City, Calif.-based software company specializing in cloud storage. Cloudian HyperStore® is an S3-compatible cloud object storage platform that enables service providers and enterprises to build reliable, affordable and scalable hybrid cloud storage solutions. Cloudian actively partners with leading cloud computing environments including Amazon Web Services, Citrix Cloud Platform, Apache CloudStack, OpenStack and the vast ecosystem of S3 compatible tools and applications. Cloudian's customers include Vodafone, Nextel, NTT, Nifty, and LunaCloud. The company has additional offices in China and Japan.
SYS-CON Events announced today that TechXtend (formerly Programmer’s Paradise), a leading value-added provider of server and storage virtualization, and r-evolution will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. TechXtend (formerly Programmer’s Paradise) is a leading value-added provider of software, systems and solutions for corporations, government organizations, and academic institutions across the United States and Canada. TechXtend is the Exclusive Reseller in the United States for r-evolution