Welcome!

Security Authors: Pat Romanski, Elizabeth White, Liz McMillan, Rene Paap, Vormetric Blog

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

Srinivasan is passionate about ownership and driving things on his own, with his breadth and depth on Enterprise Technology he could run any aspect of IT Industry and make it a success.

He is a seasoned Enterprise IT Expert, mainly in the areas of Solution, Integration and Architecture, across Structured, Unstructured data sources, especially in manufacturing domain.

He currently works as Technology Head For GAVS Technologies.

@ThingsExpo Stories
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, data security and privacy.
SYS-CON Media announced that Cisco, a worldwide leader in IT that helps companies seize the opportunities of tomorrow, has launched a new ad campaign in Cloud Computing Journal. The ad campaign, a webcast titled 'Is Your Data Center Ready for the Application Economy?', focuses on the latest data center networking technologies, including SDN or ACI, and how customers are using SDN and ACI in their organizations to achieve business agility. The Cisco webcast is available on-demand.
IoT is still a vague buzzword for many people. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. He also discussed how IoT is perceived by investors and how venture capitalist access this space. Other topics discussed were barriers to success, what is new, what is old, and what the future may hold. Mike Kavis is Vice President & Principal Cloud Architect at Cloud Technology Pa...
Dale Kim is the Director of Industry Solutions at MapR. His background includes a variety of technical and management roles at information technology companies. While his experience includes work with relational databases, much of his career pertains to non-relational data in the areas of search, content management, and NoSQL, and includes senior roles in technical marketing, sales engineering, and support engineering. Dale holds an MBA from Santa Clara University, and a BA in Computer Science from the University of California, Berkeley.
The Internet of Things (IoT) is rapidly in the process of breaking from its heretofore relatively obscure enterprise applications (such as plant floor control and supply chain management) and going mainstream into the consumer space. More and more creative folks are interconnecting everyday products such as household items, mobile devices, appliances and cars, and unleashing new and imaginative scenarios. We are seeing a lot of excitement around applications in home automation, personal fitness, and in-car entertainment and this excitement will bleed into other areas. On the commercial side, m...
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., showed what is needed to leverage the IoT to transform your business. He discussed opportunities and challenges ahead for the IoT from a market and technical point of vie...
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, addressed the big issues involving these technologies and, more important, the results they will achieve. Rodney Rogers, chairman and CEO of Virtustream; Brendan O'Brien, co-founder of Aria Systems, Bart Copeland, president and CEO of ActiveState Software; Jim Cowie, chief scientist at Dyn; Dave Wagstaff, VP and chief architect at BSQUARE Corporation; Seth Proctor, CTO of NuoDB, Inc.; and Andris Gailitis, C...
SYS-CON Events announced today that CodeFutures, a leading supplier of database performance tools, has been named a “Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. CodeFutures is an independent software vendor focused on providing tools that deliver database performance tools that increase productivity during database development and increase database performance and scalability during production.
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Performance is the intersection of power, agility, control, and choice. If you value performance, and more specifically consistent performance, you need to look beyond simple virtualized compute. Many factors need to be considered to create a truly performant environment. In his General Session at 15th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, discussed how to take advantage of a multitude of compute options and platform features to make cloud the cornerstone of your online presence.
SYS-CON Media announced that Splunk, a provider of the leading software platform for real-time Operational Intelligence, has launched an ad campaign on Big Data Journal. Splunk software and cloud services enable organizations to search, monitor, analyze and visualize machine-generated big data coming from websites, applications, servers, networks, sensors and mobile devices. The ads focus on delivering ROI - how improved uptime delivered $6M in annual ROI, improving customer operations by mining large volumes of unstructured data, and how data tracking delivers uptime when it matters most.
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.
“The age of the Internet of Things is upon us,” stated Thomas Svensson, senior vice-president and general manager EMEA, ThingWorx, “and working with forward-thinking companies, such as Elisa, enables us to deploy our leading technology so that customers can profit from complete, end-to-end solutions.” ThingWorx, a PTC® (Nasdaq: PTC) business and Internet of Things (IoT) platform provider, announced on Monday that Elisa, Finnish provider of mobile and fixed broadband subscriptions, will deploy ThingWorx® platform technology to enable a new Elisa IoT service in Finland and Estonia.
Advanced Persistent Threats (APTs) are increasing at an unprecedented rate. The threat landscape of today is drastically different than just a few years ago. Attacks are much more organized and sophisticated. They are harder to detect and even harder to anticipate. In the foreseeable future it's going to get a whole lot harder. Everything you know today will change. Keeping up with this changing landscape is already a daunting task. Your organization needs to use the latest tools, methods and expertise to guard against those threats. But will that be enough? In the foreseeable future attacks w...
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications Unified Communications Suite gives CSPs the capability to do just that. In addition, its integration ...
SYS-CON Events announced today that ActiveState, the leading independent Cloud Foundry and Docker-based PaaS provider, has been named “Silver Sponsor” of SYS-CON's DevOps Summit New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. ActiveState believes that enterprises gain a competitive advantage when they are able to quickly create, deploy and efficiently manage software solutions that immediately create business value, but they face many challenges that prevent them from doing so. The Company is uniquely positioned to help address these challenges thro...
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, a...
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...