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Monthly Archives: June 2013

Business Units to IT: Change speed and course, FAST!

Author: Alex Salicrup

I loved my military career and still tend to use this nautical analogy with many of my IT customers. At sea, small frigates are designed to be agile, maneuverable, and nimble. They can effectively change course, increase speed, or stop very quickly. The aircraft carrier, however, carries great momentum and displaces such a massive amount of water tonnage that it requires five miles to stop. Because of that substantial weight, changes in speed and course take time and a lot of effort from both crew and machinery to execute. So, when frigates and carriers navigate as part of a group, the carrier actually holds the frigates back.

Today, IT organizations can be compared to the carrier, and the new breed of business units and users that IT serves are the nimble frigates. Business units are relying more and more on their IT organization to get things done and have a perception that if IT is not fast enough, they’ll seek a public service provider to get what they need, when they need it. In their view, they have options and no longer have to wait on IT.

In the last year alone, the Accelerate team has received many an SOS from executives of Fortune 100 corporations who need help transitioning their IT organization to act like a competitive service provider.  When I do meet with the CIOs and executives of these organizations, I find that they do not have technology impediments to act as a service provider, rather that they lack the culture, processes, and structure to do so.

IT has tried to fend off the influx of external services from vendors such as Dropbox for storage, and infrastructure and application offerings from AWS or Google, but also acknowledges those services are widely available, easy to access, and require little to no customization. Facing sluggish sales to IT groups during The Great Recession, IT service providers got smart and shifted their attention to cater to the emotions of the new breed of users who want and need connectivity right now.  These users now lead marketing, engineering, and sales departments across the nation and have expense accounts. They are using IT services from third-party providers of IaaS, SaaS, and other services that appear to be more cost-effective, readily available, and perceptively easy to provision compared to what IT can provide.

We can’t deny it—internal business customers are getting impatient with the way services are provisioned to them. Today’s business user is significantly more technology savvy than ever before. They know enough or even more about services available to them than their internal IT gurus—or at least they think they do. And, they’re getting better at justifying these services every day, armed with a credit card and the URL for your least-liked IaaS or SaaS provider.

This rattles the CIOs I meet regularly with for so many reasons. In the most extreme cases, IT can’t control what workloads their users are sending out to the public cloud or how they access it—which could violate every governance security policy and best practice IT has spent years developing.

So who are we really dealing with? This new talent is forging the future of corporations worldwide—a new breed of decision-making business users who grew up with ubiquitous access to a computer. Most had access to the Internet for much their life, if not all their adult life. They had a high-tech environment at school and could access content and applications anytime, anyplace.

In my first year in the Navy, the most radical technological advancement in modern nautical warfare was the NAVSTAR Global Positioning Systems satellite network. Today—20 years later—a typical business user has about 10 times more power in their smartphone than we had during the Gulf War, and it has a more accurate GPS chip, too! Technology moves fast but IT often doesn’t. Sometimes IT simply can’t keep up with the value offered by the technology they keep.

The business world is driven by technology. We use applications for most tasks, and we access most of our personal services via several devices and with consistent experiences on each device. Most users are expecting the same from their business services, and business units want to give it to them. The response from IT organizations in many cases is similar to a 12-step program—refusal, fear, denial, fear, aggression, fear—and so on.

IT organizations are recognizing that they must act like a service provider in order to satisfy today’s business needs. Although their efforts seem to be focused and well motivated, many find it very challenging to transform their business model. The cultural mindset of a service provider drives methods to address risk mitigation that are very different from those IT organizations subscribe to. Simply put, service providers want their customers to allow them, as the provider, to assume much of the risk—for a fee, that is! It’s a value proposition that they can and do charge for.

IT organizations spend a lot of time and effort fending off risks in a variety of ways, and many incur significant internal costs to implement or manage risk mitigation practices. Third-party service providers may not be able to justify the same level of risk mitigation that enterprise IT organizations deploy—it would add cost to the solutions they offer and interfere with price points. Nevertheless, the service provider is able to provide a lucrative solution and still publish a lucrative price point to its customers.

Stay tuned for part two in this series—I’ll share my tips on how to move from a vintage IT organization to one that’s service-driven.

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Alex Salicrup is a business solutions architect for VMware Accelerate Advisory Services.

VMware AccelerateTM Advisory Services can help you and your key stakeholders understand the IT as a service value proposition—our consultants quantify the potential benefits, develop architectural designs, recommend organizational and process changes, create a migration plan and advise during implementation. Visit our Web site to learn more about our offerings, or reach out to us today at: accelerate@vmware.com for more information.

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Join Us For a Software-Defined Data Center Twitter Chat on June 27th 8am &11am PST

Author: Rob Jenkins, Director VMware Accelerate Advisory Services EMEA

We’ve been talking a lot lately about the software-defined data center (SDDC) as it relates to financial services, information security, and emerging IT cloud careers.  As the Accelerate team meets with customers, we find that there are still many questions around how this infrastructure will eventually transform IT from the traditional model to one focused on business agility. And their business issues range from how to drive down cost and streamline their IT organization to be more efficient and responsive, to managing expectations of internal IT business stakeholders.

So, we’re pleased to announce a Twitter Chat around this topic—to hear what others in the industry are thinking and to provide our insight.

Please share this information with your teams, and I look forward to an open dialogue at the chat.  (You can find me on Twitter here @cloud_rob)

HOSTS: VMware Events (@VMwareEvents) and IDG (@IDGtechtalk)

WHAT: Live Twitter Chat on Software-Defined Data Center (SDDC)

WHEN: June 27, 2013, 8-8:30a and 11a-12p PT (3p & 6p GMT)

WHERE: Twitter or any Twitter client, recommend using Twubs

Hashtag: #vSDDCchat

Mark it on your calendar!

Download the white paper: Catching the Tide: IT as a Service (ITaaS)

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More Details on Twitter Chats: 

What is #vSDDCchat?

#vSDDCchat is an online Twitter Chat scheduled on June 27, 2013 at 8a & 11a PT (3p & 6p GMT). The topic is the software-defined data center (SDDC), and everyone is welcome to join.

What are some sample questions that will be posed during #vSDDCchat?

  • “What are the core technologies that enable SDDC?”
  • “As an IT professional, what is your opinion of SDDC?”
  • “What is the biggest challenge or misunderstanding about SDDC?”
  • “Will SDDC change the role of IT in your organization?  If so, how and why?”

…and more!

How do I participate in #vSDDCchat?

Is this your first time participating in a Twitter Chat? You can use Twubs to help you easily follow the conversation.  Enter in our hashtag #vSDDCchat to see only this specific chat stream (after signing in, it will ask you to authorize Twubs to use your Twitter account).  Then you’re ready to go and can post your thoughts in the text bar to be added to the action.  If you’re a more advanced Twitter user, you can also use tools like HootSuite, TweetDeck, or TweetGrid to filter for all posts marked #vSDDCchat.

If you’re planning to take part through just the standard Twitter site, please remember to add the hash #vSDDCchat to all of your tweets so your comments aren’t overlooked.

Get ready! It’s a fast-paced conversation with 140 characters or less at a time. Every 10 minutes the moderator will pose a new question. It’s not necessary for you to answer/comment on every question, but it’s a terrific way to get a variety of perspectives and to keep the conversation moving. 

Technical Steps for Participation 

  1. Your first tweet should include your name, title, company you work for, and hashtag #vSDDCchat
  2. Subsequent tweets should start with the question number you are responding to and include the #vSDDCchat hashtag. For example, “@VMwareEvents A2: Agreed, SDDC is actually an architecture and not just one product #vSDDCchat
  3. Be yourself and please don’t push your product during the conversation.
  4. Use common sense and don’t say things that might come back to hurt you or your business.
  5. Be nice to your fellow tweeters.

Chat Tips

  1. Don’t worry about catching and reading every tweet—find the ones that speak to you and go from there.
  2. Remember that your tweets go to all your Twitter followers unless you DM someone (to DM someone, they have to be following you).
  3. Try to tweet complete thoughts whenever possible- this will help followers outside the chat learn from you.
  4. Consider sending out a tweet in advance letting your followers know that you’re participating in this Twitter Chat, and encourage them to take part in the convo with you.

The On-Demand Services Effect

Author: Michael Francis

 A business model describes the rationale of how an organisation creates, delivers, and captures value.1

When I consider the way on-demand services has changed business models, I think of the traditional retail model, which was a bricks-and-mortar store with trained staff to sell the goods. The value proposition—what was really being sold—would be the variety of goods combined with the knowledge of the sales team. For example, a video store of the ’90s provided me with the value of a physical location plus a relatively large assortment of videos that I could either purchase or rent. The value was the physical repository of videos and the selection.

Now consider online retailers and what they are selling—and you might think it’s the goods. But what I think online retailers are selling is the ease of access to goods that are relevant to the consumer, delivered in a consistent and predictable timeframe, at a known cost. The important aspect to this value proposition is that the value is not in the goods themselves. The online retailer has created a marketplace for consumers ready to consume through its procurement and delivery channel.

This business model allows the online retailer to place any product or service  into its consumption process and deliver value. Which gives the online retailer the agility to seek out different suppliers to capture more consumers without changing its core value proposition or redeveloping its consumption process.

The value proposition changed between the bricks-and-mortar and the online businesses. And, on-demand services was the enabler of this business model—the ability to easily consume a product or service that is relevant to me with consistent delivery and known costs. And, it has changed the value proposition of the retailer from the goods and trained staff.

The Effect on the IT Department

Similarly the internal IT organization has a B2C relationship with the business side of the organization. The value proposition offered to the consumer (the business) by the IT organization has historically been the skillset as an integrator/developer of required technologies and the foundational compute services provided. With a largely captive market in the past, IT has operated like a traditional B2C retailer.

As we know, the captive market is no longer captive—IT’s consumer can now access a broad range of services, including many that previously have only been available through their internal IT organization. However, just as the retail consumer doesn’t necessarily want a relationship with hundreds of suppliers, the business consumer also doesn’t want to manage hundreds of suppliers to get the IT services they need. Business consumers want the ability to easily access services that are relevant to them in a timely manner and at a known cost —ideally from a single point. These requirements now provide more value to the business consumer than highly customized, perfectly-fitting IT solutions that involve extensive integration and development and have varying delivery times and costs.

The business consumer has changed what’s important to them. As a result, the internal IT department is being challenged to align with this change in their consumers’ requirements and value proposition and provide known outcomes, known delivery times, and known costs. Failure to do so will likely increase the use of “shadow IT” and potentially relegate IT to a diminished tactical role.

IT needs to operate a business model similar to an online retailer. The value is not in the compute good or service itself—the value is ease of access to many suppliers through a single store front, with known delivery time and known cost. This requires a significant change inside the IT department to a mindset of understanding the consumer to ensure that relevant goods are offered, and in doing so, leverage external suppliers and defer the risk to them when introducing those goods. This is especially important while the demand for an offering is being evaluated.

If used effectively, the pay-as-you-go finance models and automation offered by established public cloud providers can provide improved delivery times and greater agility to the business, while also deferring up-front costs to provide the goods until the actual demand is fully understood.

My point is that it’s important to understand the rationale behind consuming public services—in this case, to provide capability while evaluating actual demand. Public cloud solutions are not necessarily the most effective means of reducing costs of IT services in every situation. And, to make the most effective use of public cloud requires that an organization understand the services it provides and cost of those services.

In my next blog in this series, I’ll discuss the implementation of an on-demand services business model—an implementation that transforms the IT department from a traditional B2C retailer to the equivalent of the online B2C retailer. To deliver on this requires a transformation within the IT department from organizational structure, technology, and operational perspectives. I’ll also cover the ideal organizational structure, product offerings, associated service definitions and how to leverage public cloud to defer risk and understand your consumers’ demand.

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Michael Francis is a principal systems engineer at VMware, based in Brisbane.

Would you like to continue this conversation with your C-level executive peers? Join our exclusive CxO Corner Facebook page for access to hundreds of verified CxOs sharing ideas around IT Transformation right now by going to CxO Corner and clicking “ask to join group.”


1Alexander Osterwalder and Yves Pigneur, Business Model Generation, Wiley; 1 edition (July 13, 2010)