Welcome!

Cloud Expo Authors: Shelly Palmer, Elizabeth White, Liz McMillan, Hovhannes Avoyan, Yeshim Deniz

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
14th International Cloud Expo, held on June 10–12, 2014 at the Javits Center in New York City, featured three content-packed days with a rich array of sessions about the business and technical value of cloud computing, Internet of Things, Big Data, and DevOps led by exceptional speakers from every sector of the IT ecosystem. The Cloud Expo series is the fastest-growing Enterprise IT event in the past 10 years, devoted to every aspect of delivering massively scalable enterprise IT as a service.
As more applications and services move "to the cloud" (public or on-premise) cloud environments are increasingly adopting and building out traditional enterprise features. This in turn is enabling and encouraging cloud adoption from enterprise users. In many ways the definition is blurring as features like continuous operation, geo-distribution or on-demand capacity become the norm. NuoDB is involved in both building enterprise software and using enterprise cloud capabilities. In his session at 15th Cloud Expo, Seth Proctor, CTO at NuoDB, Inc., will discuss the experiences from building, deploying and using enterprise services and suggest some ways to approach moving enterprise applications into a cloud model.
Until recently, many organizations required specialized departments to perform mapping and geospatial analysis, and they used Esri on-premise solutions for that work. In his session at 15th Cloud Expo, Dave Peters, author of the Esri Press book Building a GIS, System Architecture Design Strategies for Managers, will discuss how Esri has successfully included the cloud as a fully integrated SaaS expansion of the ArcGIS mapping platform. Organizations that have incorporated Esri cloud-based applications and content within their business models are reaping huge benefits by directly leveraging cloud-based mapping and analysis capabilities within their existing enterprise investments. The ArcGIS mapping platform includes cloud-based content management and information resources to more widely, efficiently, and affordably deliver real-time actionable information and analysis capabilities to your organization.
In his session at 15th Cloud Expo, Mark Hinkle, Senior Director, Open Source Solutions at Citrix Systems Inc., will provide overview of the open source software that can be used to deploy and manage a cloud computing environment. He will include information on storage, networking(e.g., OpenDaylight) and compute virtualization (Xen, KVM, LXC) and the orchestration(Apache CloudStack, OpenStack) of the three to build their own cloud services. Speaker Bio: Mark Hinkle is the Senior Director, Open Source Solutions, at Citrix Systems Inc. He joined Citrix as a result of their July 2011 acquisition of Cloud.com where he was their Vice President of Community. He is currently responsible for Citrix open source efforts around the open source cloud computing platform, Apache CloudStack and the Xen Hypervisor. Previously he was the VP of Community at Zenoss Inc., a producer of the open source application, server, and network management software, where he grew the Zenoss Core project to over 10...
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity. In his session at Internet of @ThingsExpo, Mac Devine, Distinguished Engineer at IBM, will discuss bringing these three elements together via Systems of Discover.
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.
The cloud is everywhere and growing, and with it SaaS has become an accepted means for software delivery. SaaS is more than just a technology, it is a thriving business model estimated to be worth around $53 billion dollars by 2015, according to IDC. The question is – how do you build and scale a profitable SaaS business model? In his session at 15th Cloud Expo, Jason Cumberland, Vice President, SaaS Solutions at Dimension Data, will give the audience an understanding of common mistakes businesses make when transitioning to SaaS; how to avoid them; and how to build a profitable and scalable SaaS business.
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 Solgenia, the global market leader in Cloud Collaboration and Cloud Infrastructure software solutions, 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. Solgenia is the global market leader in Cloud Collaboration and Cloud Infrastructure software solutions. Designed to “Bridge the Gap” between personal and professional social, mobile and cloud user experiences, our solutions help large and medium-sized organizations dramatically improve productivity, reduce collaboration costs, and increase the overall enterprise value by bringing collaboration and infrastructure solutions to the cloud.
Cloud computing started a technology revolution; now DevOps is driving that revolution forward. By enabling new approaches to service delivery, cloud and DevOps together are delivering even greater speed, agility, and efficiency. No wonder leading innovators are adopting DevOps and cloud together! In his session at DevOps Summit, Andi Mann, Vice President of Strategic Solutions at CA Technologies, will explore the synergies in these two approaches, with practical tips, techniques, research data, war stories, case studies, and recommendations.
Enterprises require the performance, agility and on-demand access of the public cloud, and the management, security and compatibility of the private cloud. The solution? In his session at 15th Cloud Expo, Simone Brunozzi, VP and Chief Technologist(global role) for VMware, will explore how to unlock the power of the hybrid cloud and the steps to get there. He'll discuss the challenges that conventional approaches to both public and private cloud computing, and outline the tough decisions that must be made to accelerate the journey to the hybrid cloud. As part of the transition, an Infrastructure-as-a-Service model will enable enterprise IT to build services beyond their data center while owning what gets moved, when to move it, and for how long. IT can then move forward on what matters most to the organization that it supports – availability, agility and efficiency.
Every healthy ecosystem is diverse. This is especially true in cloud ecosystems, where portability and interoperability are more important than old enterprise models of proprietary ownership. In his session at 15th Cloud Expo, Mark Baker, Server Product Manager at Canonical/Ubuntu, will discuss how single vendors used to take the lead in creating and delivering technology, but in a cloud economy, where users want tools of their preference, when and where they need them, it makes no sense.
The 15th International Cloud Expo has just expanded its conference program, to bring together Cloud Computing, APM, APIs, Security, Big Data, Internet of Things, DevOps and WebRTC at one location. Cloud Expo is the single show where delegates and technology vendors can meet to experience and discuss the entire world of the cloud. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to learn about the latest technology developments and solutions.
SYS-CON Events announced today that Bsquare Corporation, a leading enabler of smart connected systems, has been named “Bronze Sponsor” of SYS-CON's Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Bsquare is a global leader of embedded software solutions. We enable smart connected systems at the device level and beyond that millions use every day and provide actionable data solutions for the growing Internet of Things (IoT) market. We empower our world-class customers with our products, services and solutions to achieve innovation and success.
SYS-CON Events announced today that NuoDB, Inc., the leader in webscale distributed database technology, 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. NuoDB was launched in 2010 by industry-renowned database architect Jim Starkey and accomplished software CEO Barry Morris to deliver a webscale distributed database management system that is specifically designed for the cloud and the modern datacenter.