Standard Services

The concept of "standard services" is gaining attention as a means for organizations to realize the benefits of "cloud" and "utility" computing. Any topic that starts with this many terms in quotation marks must be approached with caution.

But first, what is "cloud computing"? Microsoft defines it in this way, "I can own way less and do way more." Gartner's Tom Bittman talks about elasticity and scalability enabled by internet technologies, sharing technologies, services architectures, and automation resulting in increased speed and agility with lower costs to the organization.  InfoWorld suggests "Cloud computing comes into focus only when you think about what IT always needs: a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT's existing capabilities."

Is the basis for cloud computing, then, elasticity, scalability, and consumption-based pricing? Underlying that basis is the concept of "standard services." In other words, consumers of the IT services cannot impose constraints on the service provider or IT services as they may do in more traditional IT service delivery. Similar to Common Off-The-Shelf (COTS) software such as Microsoft Word, the consumer of the service must learn to adapt their business requirements to the capabilities of the service rather than vice-versa. The more the service has to adapt to the business, the more constraints that are placed on the service provider and the fewer benefits to be gained.

Certain functions (email, contact management, etc.) have garnered a great deal of attention in terms of cloud computing success. In addition, "xAAS" offerings (Software, Platform, Infrastructure, etc.) are similarly prevalent in the news. Realizing benefit from a distinct function or a distinct environment is much different than wholesale benefit from the delivery of "standard services" in a traditional IT environment.

What is that wholesale benefit? 20%? 30%? 40%? More? Who knows. Conceptually, we know the benefit exists. We just don't know how much. The fact is, realizing the benefit of "standard services" requires the consumer to remove the vast majority of delivery constraints, the ability to value the constraints applied, and the ability of the service provider to fully leverage the depth and breadth of their scale and skills. Surprisingly, or possibly not, it is the latter that presents the greatest challenge to the full realization of benefits of "standard services" for both the consumer and provider of IT services.

To better understand the preceding, it will be helpful to examine some of the more traditional areas of constraint typically placed on service providers through typical outsourcing agreements. We can then begin to help the service provider overcome the challenges of scale and skill that should be present in their offerings.

Cloud Computing

I recently pulled a white paper off of the CSC website that highlighted a discussion with Michael Capellas. The topic was Cloud Computing and the event was a Masterclass, “Masterminding The Future of Cloud Computing” held in October, 2010.

I found it interesting that the three events cited by Capellas that have enabled Cloud Computing were “leased lines to IP”, “Intel’s X-86 processing architecture”, and the “explosion in wireless access.”  He does a nice job of explaining their contribution. These really relate to a set of standard services and are technology enablers that allow for more dynamic capacity and access.

While necessary, these technology enablers are not sufficient to provide the benefits of the cloud as presented by Capellas. The barriers to adoption are more than just legacy applications and the amount of “local” information stored on the desktop.

Private and public “clouds” have both similar and different hurdles to overcome prior to widespread adoption. Three examples are provided below.

Private clouds, conceptually, will never be as cost effective as public clouds due to the level of scaling, sharing of costs among multiple customers, etc. Realizing the full benefit of a private cloud requires standardization as in a public cloud but also an enterprise view of demand cycles and capacity requirements. Understanding enterprise demand will minimize the additional capacity reserved for peak loads.

Whether you are talking about private or public clouds, other hurdles include the need for consumption-based pricing of computing resources. This is not a trivial matter and no standards currently exist. Depending on the service provider, computing resources are defined and priced in different “units”. Comparability of these units is difficult at best since they are comprised of different components and range in structure from simple (CPU Minute, for example) to complex (consisting of combinations of factors such as memory, processor, and storage).

A third hurdle involves the skills (technical as well as management) required to realize the benefits of cloud-based computing. How many IT organizations are really capable of implementing the technology and processes required to support a scalable, demand-driven computing environment? Translating business requirements into a set of standard services, identifying the cost of business policies that inhibit the establishment of standard services, and understanding enterprise demand are all challenges that, if not addressed effectively, will severely limit the benefits of cloud computing.

The fact is, “Tier 1” IT service providers are struggling with these challenges and more. While pockets of services have been demonstrated (most notably, SAP services, for example), the ability to provide widespread benefit to the enterprise in the form of delivering general IT services has yet to be realized.

In summary, standard services, utility computing, cloud computing, etc. make sense, conceptually. Focusing on the technical challenges is interesting and relatively straightforward. Embarking on this journey, be prepared to spend most of your energies on the management and skills required to realize the benefits.