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Monthly Archives: November 2013

Shifting from ‘Free Services for All’ to ‘Gold/Silver/Bronze Service Bands’

The art and science of leveraging VMware’s IT Business Management solution to manage demand

By: Pierre Moncassin

Here is a real-life customer challenge that I encountered at a workshop with a global pharmaceutical company. The challenge boils down to the question: How do you use tiered service offerings to manage demand in a culture where users are used to receiving only ‘gold plated’ services?

The team I met with is a central IT function delivering centralized, cloud-type services to multiple lines of business distributed globally. Each line of business tends to provision its virtual infrastructure independently, based on project-specific requirements. Many projects are business critical (or at least linked to substantial revenues), so teams tend to ask for the highest service levels offered without really thinking about lower service level alternatives. In absence of a mechanism to charge business units for their consumption, teams opt for the ‘gain’ of highest service offerings.

In the past, the IT organization tried to temper demand by standardizing its offering on a few median-specification offerings while requesting more justifications for the high-specification services. This approach encountered some success, and I believe it was going in the right direction because it shared the “pain” of higher IT costs.

However, in the absence of a use-based-on-consumption cost allocation method, their users still prefer high-end, or non-standard, configurations with a higher internal cost. And they will keep doing this as long as they experience all gain and no pain.

The solution is “simple” in principle: The IT organization needs to “share the pain” and cross-charge users according to chosen usage and service levels. But ‘simple,’ of course, does not mean ‘easy.’

Given the complexity of the effort and the potential pitfalls it can encounter, let’s break down the process for getting cross charging into place into three discrete steps:

Step 1 – Start with the Essential Tools: Deploy VMware’s Chargeback Manager

Okay. I said it. You need a new tool.  Spreadsheets just don’t work over the long term. VMware Chargeback Manager enables accurate metering of the cloud-based resources being used. Beyond that, it offers pre-defined cost models that make it easier for consumers to be billed according to their usage (with a range of allocation methods).

In addition, Chargeback Manager establishes a stepping stone to VMware’s IT Business Management – the comprehensive solution for managing IT budgets for the cloud. But, for now, let’s assume that you have introduced Chargeback Manager just so that each resource has a cost and an associated ‘bill of IT’ to the consumer (whether internal or external). Is that enough in itself to manage demand?

In my view, there is an implicit, but critical, additional assumption when presenting consumers with the ‘bill of IT:’ that the bill will show items that the consumers will a) clearly understand, and b) appreciate for their quality.

To compare, for example, with a restaurant service, clients would not normally expect an itemized bill showing a breakdown of heating, water rates, and raw ingredients (meat, vegetables) measured by weight. They expect to be charged by dish. But beyond accepting the costing model, they also have an implicit quality assumption. They expect that:

  1. Dishes must meet a minimum quality standard, or they will simply leave
  2. There is some link between the price offered and the quality of the dish

If these tacit assumptions about price/quality are not met, chances are that the customers will never come back (or in the case of a private cloud, move on to a public cloud provider).

Step 2 – Offer Tiered Service Categories

Similarly, charging for internal cloud-based services also needs both a well-defined ‘menu’ (i.e. a catalog of services) and a clear relationship between services and price.

In earlier blogs, we commented about the importance of standardizing cloud services and the trade-offs that this implies.

Standardization is a pre-requisite for charging, as this defines the ‘menu’ of services offered. It also underpins economies of scale and automation – which make the costs of cloud services attractive in the first place.

However, the introduction of a ‘price tag’ for services means far more than an accounting figure. It means a cultural change – introducing a buyer/seller relationship between the IT organization and the business units. The natural response for the ‘buyer’ side is to focus on price. This is why the IT organization needs to respond – like any experienced retailer would – with a focus on both price and quality of service.

A popular way to communicate service quality is to offer tiered service categories (e.g. ‘bronze/silver/gold’ with associated price bands).  These price/quality levels can be then published in the service catalog.

Step 3 – Facilitate Cultural Change Through Communication

Introducing tiered service categories will have ripple effects throughout the IT organization and beyond, as it will foster – and perhaps enforce – a service-oriented attitude. Externally, it will shift the image of the IT organization from a cost center to that of a commercially-focused service broker.

It’s a cultural change that can’t be left to chance, however – so I highly recommended that this should be supported by a communication management plan.

In an earlier blog, I shared some ideas for making your communication plan as effective as possible. But I want to emphasize a couple here that can help speed your move to a tiered service approach – and mindset.

Internally to the IT Organization, we want to empower the Tenant Operations teams not just to deliver the best possible service (as a matter of course), but also to manage end-user expectations. In practice, a workshop such a Cloud Operations’ Service Definition Process Optimization can go a long way in helping these internal IT teams crystalize their thinking around what to promise their users by way of IT services: setting the foundations for clearly-understood, two-way agreements between themselves and their ‘consumers.’

When it comes to communication with the end-users (consumers), I’d recommend thinking in terms of a sales campaign (whether pitched within the same company or not) that emphasizes both short term and long term ‘wins’:

  • Short-term ‘wins,’ such as increased control over their provisioning spend, and clearly-defined service quality underpinned by written service levels
  • Long-term ‘wins,’ such as being more closely involved in the service definition process – i.e. having more say in how services will be adapted to their evolving needs.

The Way Forward: Service Differentiation Beyond ‘Gold/Silver/Bronze’

The global pharmaceutical company I was working with is already embracing many of these concepts, and has introduced a tiered service model at the infrastructure component level (e.g. server, storage). That, in turn, has paved the way for further service development: once the tiered service approach has full adoption, the next step will be to expand the model towards the application level – offering numerous opportunities to add further value for consumers. The tiering model can be extended even further, to more complex application-related services, such as continuity management, database services, etc.

This ‘win-win’ perspective is at the core of the Cloud Operation’s approach to managing demand: it is not about taking capacity away from end users – instead, it’s about offering a more informed range of choices with a clear trade-off between cost and quality. Given the right choices, even the most vocal consumers will rethink picking the ‘gold-plated’ option every time.

Summary – Key Steps to Manage Demand for Cloud-Based Services:

  • Introduce Chargeback Manager to establish a robust foundation for service costing
  • Link service quality to service prices – think like a retailer
  • Offer a simple, tiered range of choice to consumers
  • Differentiate the end-to-end services, not the service components
  • Facilitate cultural change with a communication plan (internal and external)

Follow @VMwareCloudOps and @Moncassin on Twitter for future updates, and join the conversation by using the #CloudOps and #SDDC hashtags on Twitter.

Task Automation Vs. Process Automation – Highlights from #CloudOpsChat

After a successful automation-themed #CloudOpsChat in September, we decided to take a deeper dive into automation for this month’s edition, discussing “Task Automation Vs. Process Automation.” Thanks to everyone who participated, and thank you especially to Rich Pleasants (@CloudOpsVoice), Business Solutions Architect and Operations Lead for Accelerate Advisory Services at VMware, for co-hosting!

To begin the chat, we asked: “What IT tasks or processes has your company successfully automated?”

@Andrea_Mauro jumped right in, asking how automation compares to tasks? @kurtmilne offered VMware’s take, saying “VMware IT has fully automated provisioning of complex workloads on private cloud,” and clarified that the most complex workloads were “Oracle ERP with web portals, and over 80 blueprints.” @venkatgvm also elaborated on VMware’s automation story: “VMware instance provisioning had over 20 major steps, each of them were executed by siloed teams.”

Co-host @CloudOpsVoice took the question further, asking, “Are people automating day to day maintenance activities or actual steps in the process?”

@vHamburger gave his advice on where to begin with automation, saying “[day-to-day automation] is a good starting point. Nominate your top 10 time-consuming tasks for automation.” @Andrea_Mauro replied, suggesting that “task automation is more for repeatable operations and day by day [tasks].” He followed up by offering a definition of process automation: “Process automation could be more related to organization level and blueprint usage.” @kurtmilne also chimed in with business-related definitions of task and process automation: “Task automation math includes cost/time of single task vs. developing automation capability…Process automation math includes business benefit of overall improved agility, service quality – as well as cost.” @CloudOpsVoice broke his definition of automation into three parts: “day-to-day, build and run.”

@CloudOpsVoice next asked, “What technique do you use primarily for automation? Policy, orchestration or scripting? How do App blueprints impact it?”

@kurtmilne noted the value of blueprints and scripting: “Blueprints and scripting allow app provisioning automation – not just VM provisioning.” @thinkingvirtual also offered sound advice on how to select what to automate at your company: “Always make sure your automation efforts provide real value. Don’t automate for automation’s sake.” Elaborating on this, @kurtmilne discussed the value of automation, stating that automation’s “real value” is “ideally measured in business outcomes, and not IT efficiency.” @vHamburger also warned against bottlenecks preventing automation: “every enhancement after your bottleneck is not efficient – know your bottlenecks!”

@vHamburger went on to mention task workflow: “Clean task workflow with documented steps is always preferred over scripts,” he suggested, because it’s “easier and repeatable for new admins.” @Andrea_Mauro countered by saying that sometimes a “‘quick and dirty’ solution could be good enough,” to which @vHamburger replied, “In my experience ‘quick and dirty’ always leads to fire fighting ;).” @kurtmilne then vouched for “leaning out” a process: “‘Leaning out’ an IT process is good. But sometimes it’s better to use automation to eliminate tasks vs. automate tasks,” he wrote. @thinkingvirtual also noted how important communication is to successful automation: “Often forgotten: keep your business in the loop. Show back the value continuously to broaden the relationship.”

@AngeloLuciani kept things moving by asking, “Do you pick a tool to fit the process or a process to fit the tool?”

@JonathanFrappier enthusiastically went with the latter: “Process to fit the tool! Processes can change, tools have to live on until more budget is approved!” @kurtmilne added, “Tool/process construct doesn’t make sense with full automation. You can do things with automation you can’t do with manual tasks: For example, you don’t figure out manual horizontal scaling process in cloud – then look for tool to automate.”

#CloudOpsChat ended with one last great tip (and a nod to VMworld!) from @thinkingvirtual: “Automation skills are a huge career opportunity. Don’t avoid automation, defy convention.”

Thanks again to everybody who participated in this latest #CloudOpsChat, and stay tuned for details of our next meet up. If you have suggestions for future #CloudOpsChat topics, let us know in the comments.

For more resources on automation, check out the following CloudOps blog posts below:

In the meantime, feel free to tweet us at @VMwareCloudOps with questions or feedback, and join the conversation by using the #CloudOps and #SDDC hashtags. For more from Rich Pleasants, head over to the VMware Accelerate blog.

The Critical Element of Service Delivery in the Cloud Era: Join our Webcast 11/14

As more companies aim to build the software-defined datacenter (SDDC), the importance of service definition continues to grow. Running a successful SDDC strategy means understanding service offerings, for sure. But it’s also about standardizing those offerings to achieve agility and efficiency. So where do you start? How do you know what services your company can best provide?

Join Product Manager Jason Holmberg and Business Solutions Architect Rohan Kalra on Thursday, November 14th  at 10am PT for their BrightTalk webcast: The Critical Element of Service Delivery in the Cloud Era. The webcast will take you through the four fundamental Service Catalog building blocks:

  • Automation
  • Governance & Policies
  • Provisioning and orchestration
  • Lifecycle management

Both Jason and Rohan have years of experience building and implementing service catalogs. In addition to defining these building blocks, Jason and Rohan will dive into the requirements for each component, making it easier for you to implement a service catalog and making sure that you’re delivering the best services to your users through your catalog. Don’t miss this webcast to learn how service definition will be the key to your SDDC.

Follow @VMwareCloudOps on Twitter for future updates, and join the conversation by using the #CloudOps and #SDDC hashtags on Twitter.

Task Automation vs. Process Automation: Join Us For #CloudOpsChat 11/13!

Here at VMware, we’re always talking about automation: Venkat Gopalikrishan detailed his success after automating the provisioning of business-critical application stacks, and Paul Chapman introduced VMware’s IT transformation story by highlighting the importance of automation and change management.

We saw some fantastic insight on automation from many of you during our last #CloudOpsChat and wanted continue the conversation. For this month’s #CloudOpsChat, we’re specifically focusing on next steps in automation by asking the following questions: What has your company successfully automated? Do you focus on task automation, process automation, or both?

Join us on Wednesday, November 13th at 11am PT to discuss task vs. process automation with your CloudOps peers. Hosting the chat is CloudOps expert Rich Pleasants, Business Solutions Architect and Operations Lead for Accelerate Advisory Services at VMware.

During the chat, we’ll discuss:

  • What business tasks or processes has your company successfully automated?
  • When discussing automation, how do you determine whether you should automate a task vs. a process?
  • Do you have people in your company whose primary role is automation?
  • What technique do you use primarily for automation? Policy, orchestration or scripting?
  • How does the blueprint concept impact your automation workflow (scripting, orchestration)?

Here’s how to participate in #CloudOpsChat:

  • Follow the #CloudOpsChat hashtag (via Twubs.com, Tchat.io, TweetDeck, or another Twitter client) and watch the real-time stream.
  • On Wednesday, November 13th at 11am PST, @VMwareCloudOps will pose a few questions using the #CloudOpsChat hashtag to get the conversation rolling.
  • Tag your tweets with the #CloudOpsChat hashtag. @reply other participants and react to their questions, comments, thoughts via #CloudOpsChat. Engage with each other!
  • #CloudOpsChat should last about an hour.

In the meantime, RSVP to the event and feel free to tweet at us at @VMwareCloudOps with any questions you may have! For even more on automation, check out Rich Pleasants’ latest blog post for VMware Accelerate where he discusses “Intelligent Automation.”

We look forward to seeing you in the stream!