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Arjan de Jong

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Invest in functionality, not technology

“Companies are not interested in technology, cloud computing and storage. That’s correct! They should focus on their core business. A bank should lend money, a media company should publish content, a logistics company should send parcels to their destinations and a health insurance company should insure healthcare. None of them should be occupied with IT. That’s something you buy.”

Is that my opinion? It could be, but it’s not. It was the opinion of one of the CIO Summit’s attendees whom I have spoken to over the last couple of months. Last year, I attended several international IT-conferences and summits in Bremen, Vienna and Miami. During these summits, I presented our vision on the changing IT-landscape. I noticed some interesting differences between Europe and the US from talking to the attendees and listening to the panel discussions.

Rumor around ‘cloud computing’

Ask ten people about the definition of cloud computing and you will get ten different answers. Is this a problem? I guess not. The only thing that lacks is a clear disquisition and definition. Once you have ‘cleared the sky’, it immediately becomes clear which type of cloud computing is being discussed. The most important characteristic is that it is offered ‘as-a-service’ and not as semi-manufactured goods. It offers a final product or service for which the customer does not need to invest in hardware, maintenance, depreciation, licenses, etc. This is where the first uncertainty arises, since a lot of IT is offered ‘as-a-service’ nowadays; Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (IaaS) being the most famous ones. But more types start to arise, which adds to the confusion. Platform-as-a-Service (PaaS), Database-as-a-Service (DbaaS) are new varieties. The most brilliant one I have come across must be LaaS (Labour-as-a-Service). Smart move, because when you offer something in the cloud, it will sell automatically.

Since Jitscale offers IaaS with additional support services, we shared our definition with many attendees during the summits last year; an on demand, virtualized IT-infrastructure, provided as-a-service.

Interest in cloud computing

Every CIO – and certainly every CFO – is convinced that cloud computing should be part of their current IT-strategy nowadays. Because of the economies of scale and on demand character, these infrastructures offer both flexibility and cost savings.

It’s interesting to see the difference in cloud adoption between the US and Europe. European multinationals understand they have to start using cloud computing, but still need to work out when and how. They are hesitant about outsourcing their infrastructure, although this already happens via well-known integrators like EDS, HCL, KPN or IBM.

It’s a whole different situation at the other side of the pond, where companies are looking at which integrator will integrate and migrate their infrastructure to the cloud. They understand that most parts of their infrastructure have become a commodity and, therefore, can and must be outsourced. The choice of which as-a-service to use has already been made and it’s just a matter of finding the right integrator.

No technical interest, but problem outsourcing

It’s also interesting to see that companies are becoming less interested in the technology. The development is going so fast that companies can hardly keep up with it and, therefore, are looking more and more at functionalities. Since the business pays for it these days, ownership automatically moves to them. This requires a functional and non-technical approach from cloud providers.

The future is outsourcing

I have found out that there is no difference between Europe and the US regarding the vision on outsourcing. Both markets are moving towards a fully problem outsourcing situation, which is quite logical. As discussed before, companies lack in-depth knowledge about the current technology, which is also very versatile and agile. By outsourcing their infrastructure, organizations can make use of the cloud provider’s knowledge. This extensive knowledge can also be used for technological changes and challenges. Furthermore, absenteeism and employees being on vacation are no longer an issue, since capacity planning is done by the partner. The last advantage is the easier achievement of your objectives due to contract management instead of managing all processes internally.

Where do I start with cloud computing?

A delaying factor is often not knowing where to start. A typical approach could be to divide it into three ‘tiers’; a quick fix (e.g. Linux environment, stand-alone application with relatively few external connections), a more complex fix (e.g. Microsoft environments, systems with multiple external connections to mainframes) and lastly the most complex fix (e.g. AS400, Oracle clusters and legacy systems).

In summary, IT is a means to an end. According to Gartner, by 2013 over 70% of all organizations will no longer own IT-assets. Will you wait and fall behind, or will you stay involved in the developments? Unless your core business is IT, you should not own IT and only purchase functionalities.

Q. Knepper

CCO

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Arjan de Jong is Sales & Marketing Manager of Basefarm and has been working in the Internet industry since 1997.