Thinking Beyond the Clouds
Supply, demand and service-centric IT

First published: July 2010

By Jon Collins and Dale Vile

A number of trends are having an impact on the supply, deployment and operation of corporate IT facilities. Currently, the impact is being felt most directly within the IT supplier community, but over the coming years the fruits of their labours will more strongly influence the way companies source and integrate IT services. In this report we look at what’s driving the trends and ask how should end-user organisations prepare to make the most of how IT services are delivered?

MAIN POINTS

These are interesting times for how IT services are procured, delivered and managed
This is a period of great change for information technology, through the coming together of a number of parallel trends including platform commoditisation, service-centric IT delivery and developments in the hosted service space. The most direct impact is currently on IT suppliers, as they re-organise to take advantage of the new business models that result.

However, it can be difficult for end-user organisations to separate the signal from the noise
For end-user organisations competitive advantage is indeed to be had from the resulting models of IT delivery. However, and as so often happens at times of change, many organisations are jumping on the bandwagon and adapting the story to meet their own agendas. For example, we can see the way the term ‘cloud computing’ has been used to mean many different things. Rather than being distracted by the hype, for companies to maximise the benefits they need a clear picture of what is behind it all and the impact it might have on their own organisations.

Competitive advantage comes from balancing platform efficiency with service effectiveness
Many elements of IT are subject to commoditisation, driven by standardisation in the platform and the more widespread adoption of technologies such as virtualisation. Competitive advantage comes from the services built on top of this platform layer, and how they are delivered. Organisations looking to maximise the value of IT need to differentiate between the commodity elements which favour more utilitarian economics, and service elements which are more about maximising returns.

Now is the time for end-user organisations to review how to benefit from emerging IT supply models
The IT supplier ecosystem is undergoing massive change, and several new models of IT supply and delivery are emerging. The exact shape of the landscape is still to play out however, and a number of gaps remain including data protection, contractual frameworks and skill sets. Rather than rushing headlong into the cloud, organisations need to develop a clear, unbiased view of what is available, and what combination of internal and externally hosted services, appropriately architected, integrated and managed, will be most appropriate for their existing and future needs.

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