Business Service Management Hub

I have been asked many, many times “what is the return of a business service management project / practice”.  The answer is honestly, “it depends” on your environment, how much efficiency can be driven into it, how much consolidation, cost of outages, the list goes on.  However, I know that is absolutely the answer everyone despises and I can say by NOT tackling a shift from technology to services, it costs you 2% of revenue (at a minimum) every year.

Thus, I put my old analyst hat back on and thought as an analyst what would I do?  Create a model by which to calculate and start building out a business case.  I have put this basic information into a short presentation and have added it to our resource page.  The first link is a streaming slide presentation and the second is a self contained PDF file with sound.  The PDF file takes a few minutes to download, but you can share the file as you like.

The objective with this slide show was to bring together the statistics from many analyst papers, provide a simple model and understanding of what it costs you to not manage services.  We are at a tipping point this year with agile technology, new deployment options and competitive cost models.

This post goes hand in hand with the previous Featured Post on Finding Your Services.  Know how to identify and classify your services for service value.  The next in that series will be examples of services and the start of a service catalog.

Let me know your thoughts on this!  How are you getting to service value and what does it cost you?

Michele

Click Here – This is the streaming slide show and is just over 6 minutes.

Click Here – This is the self contained PDF download – 8M download, it does take a few minutes to download and start, but you may share accordingly.

The Hub Commentary_

This is the week of consumerization of IT and personal devices in the workplace.  I have a couple of posts on the topic from the news yesterday and a blog article yesterday as well.  Good business service management practices would suggest against supporting device of the day from the employees.

The article covers the first major concern, security.  However, the most expensive component is rarely covered as we just expect the support desk has endless time and people to support anything and everything.  The cost of support will be high in a time IT is commoditizing and the support desk represents 10% of any operational budget.

Additional personal device support brings additional security practices, tools, etc. as does the support of the device.  The question comes down to is the additional cost burden, risk and risk mitigation practices worth the value they bring to driving business growth?

Commodity IT or business driver – which are you?

Michele

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Lack of control and security worries holding back support

IT departments at businesses across the UK are still cautious about supporting personal devices at work, due to worries about control and security, new research has revealed.  (Read Full Article…)

I’ve seen a bit in the news about support, the consumerization of devices in the workplace and virtual desktop infrastructures that has brought this post together.  We seem to ebb and flow with new toys in the workplace and standardization of support.  The plain truth is that the standard environment is the most cost efficient.  If the role did not dictate that a given device be provided by the company to the individual, why would we assume we must support it?  I understand it did not come with a capital expenditure and made the employee accessible, if they choose to be, however, it does carry a significant cost burden that is often overlooked.

Service and support is commodity.  It is something that can and should be easily outsourced and the service provider will either standardize the support or will tax the customer for the varying types of devices that are supported.  I know that sounds harsh, but in these days where we should be seeking to spend less on operating and more on innovating this is one of the easiest and biggest cost saving area.  In most IT Operations budgets, the service and support function represents about 10% of the budget.  Tools no longer need to be in-house and custom if the business would rather not outsource, there are good SaaS offerings on the market to at least alleviate the burden of supporting the tools, paying the big boys maintenance taxes and paying for customized support of a commodity function.

I’ll make another bold statement, we care too much about the “end user” for the wrong reason.  No one outside of a data center even really knows what an “end user” is, but we all know who is our customer.  IT has to make this transformation to drive business growth and this is one of those starting places in knowing who is really the customer.  Whether or not our “end user” in the business is really happy or not with IT services is a debateable point.  The most important factor is whether or not we are able to transact business and support our buying customers that grow the business.  This is the mindset shift that needs to occur.

So supporting the latest version of iPhone from whichever provider and carrier and how happy our “end users” are when we re-image their machine because it is far cheaper to re-image to standard than figure out what they downloaded that broke something.  It’s about keeping the business productive, growing and making the customer of our goods and services happy and buying.  We should be automating the operations and shifting this attention, focus and resources on the growth side of the see saw.

I know this post is a bit controversial.  This is something that happens with each new toy that comes to market and budgets loosen, we forget the good efficiency practices we put in place in lean times.  I’ve answered hundreds of inquiry calls on this subject just before this function gets outsourced, the services are cheaper because the service provider will impose a standard and tax for the luxory.  We should be doing the same with good business service management practices shifting our focus and resources to the growth of business.

Are you taxing for the non-standard or spending more reacting and maintaining?

Michele

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Network World — Cost-saving technologies remain a priority for IT in 2011 and virtual desktop infrastructure (VDI), with its ability to streamline operations, is one of the technologies at the top of the list.  (Read Full Article…)

The Hub Commentary_

I challenge folks to put on their strategic business service management practice hats when they approach extremely strategic projects like VDI.  This is an area that has the large cost savings potential or biggest failure and money sucking projects.

Yesterday, I came across a couple of articles regarding the support of any device an employee has to avoid capital expenditure.  My mid career roots are deeply planted in the service and support arena and the human cost of supporting non-standard infrastructures is the biggest misuse of resources in a service and support organization.  VDI projects are about standardization and cost reduction, but that will only occur successfully with the proper management baked in from the beginning.

I agree with the article considering the network impact and security, etc. are all areas to explore and plan for, but the management of the infrastructure and a view for the service and support staff is a must have planning and design consideration upfront – not an after thought for implementation.

We had the opportunity to work with an extremely large retail organization this past year for the purpose of putting the face on top of the VDI infrastructure for the service and support organization.  Huge cost savings are realized with standard images, lighter desktops and a face to the infrastructure that indicates where the failure is when the business cannot access an application.

How do you visualize and manage your end-to-end VDI?

Michele

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Network World — Cost-saving technologies remain a priority for IT in 2011 and virtual desktop infrastructure (VDI), with its ability to streamline operations, is one of the technologies at the top of the list.  (Read Full Article…)

The Hub Commentary_

Did you take advantage of the investment opportunity to grow your and reform your data center?  Loosening of budgets and increased spending should be leveraged not just for your new toys, but should keep in mind that the new toys need to be managed and the management factors that service enable your data center should be baked in from the start and not an after thought.

We are in a time of growth to drive the business and part of that growth enablement is automating the commodity of operations in order to re-focus and move your resources from operating to growth of the business.

Are you still using high dollar resources to operate or are you driving to growth?

Michele

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Global IT market grew by 8% year over year to cross $1.5 trillion at constant currency, including telecom services, the information and communications technology (ICT) market grew by 6% to $3 trillion in 2010, according to a new report by IDC.  (Read Full Article…)

The Hub Commentary_

This is the second offering like this I’ve seen in a week.  The first was the British Airways announcement with the software and service provider vendor.  This is a classic example of  a shift in the market and commoditization of some back office functions.  Great examples of business service management functions and knowing which services are commodity for cost versus those that are value and differentiate your services in the market place.

These are offerings and movements that enterprise IT shops should watch and take notice of in determining what is really value add and unique and most of all needs to be unique in your organization.  Leverage service offerings for the commodity services and accept standard processes so as to drive down costs and evolve your organization and roles to drive business growth with technology.

Are you merely powering the business or are you driving the business with technology?

Michele

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Supports energy and network providers in their daily back office business with its portfolio of modular IT offerings

Deutsche Telekom has introduced complete Software as a Service (SaaS) package via the Internet for the energy industry.  (Read Full Article…)

Business service management practices are about understanding your costs and the value of services to the business so that IT manages as services appropriately.  I can hardly read an article these days that isn’t cloud or as-a-Service related.  I enjoy these and the transformation it is driving as it is long over due for most IT organizations.  When I wore an analyst hat and I would field inquiry calls regarding outsourcing, I would always start by saying you don’t outsource for cost savings.  I find these days with the flexible payment and contract options that we are being short sided and seeing these offerings as the low cost option.

Unless you are hideously inefficient, it really isn’t cheaper.  You outsource for change or to right source the services in your organization and drive standards.  Let me explain a bit more.  When you move portions of your IT to the cloud, a service provider, as-a-Service option, to a managed service provider or a full service outsourcing organization, they are still in the business to make a profit and you need to factor some time and resources (costs) to manage the provider.  The estimate to manage the provider is 3-7% of the cost of the contract, generally.  So this is one piece to factor into the overall cost, but change that is too difficult to create in your environment is another factor.  Short story of it, implementing standards.

So in some cases it may drive down costs with lower cost resources and standards, but that isn’t an apples to apples comparison to your current service offering.  However, it is the right reason to move the commodity to a service provider because we come full circle – not all services are created equal.  In-house data centers find themselves staffing the services with expensive resources and managing the services very similarly across the board.

So this is the driving down cost of the equation in right sourcing and creating change and standards, on the other side of the coin I read a lot about supporting the devices of our employees.  By not taking on the capex of buying smart phones, tablets, etc., but taking on the expensive support cost to support the devices of our employees.  I can guarantee you the service providers will tax you for this non-standard practice.  I can see the debate on both sides, you deemed they didn’t require the device or accessibility for their role, but they allowed themselves to be accessible if you support the device.  I would caution against this practice without fully evaluating the security and support costs of doing so.

We are in the midst of great change and there will be an ebb and flow as budgets loosen.  I find it exciting times and also find that there will be real success stories and others that may not enjoy the same success.

Are you right sizing your services and sourcing options?

The Hub Commentary_

The title caught my attention as I can relay a very similar story and entered the job market the same year as well.  Yikes!  However, I didn’t aspire or become CIO as Diane has done.  The one aspect of the article that I would debate is supporting any device in the organization.  The article describes a business service management approach at Intel in understanding the business and knowing how technology supports and drives the business growth, however, then takes a left turn with the roll your own approach.

Let me explain.  The consumer market without a doubt drives IT and how we as technologists should evaluate technology for business application.  Where I scratch my head and even argue with myself is in supporting every one’s personal device.  If for business purposes Intel did not require specific roles to need a smart device or tablet, then why take on the cost and burden to support it.  Intel didn’t take on the capital expenditure, but the human support cost in the end can exceed the cost of the device and defining a standard device may in the end have been cheaper.

I know that this also goes to the work environment/culture and I do not have visibility to their support costs and it also made employees more accessible to work by their own decision, so that is where I debate with myself and it may come out to be a wash in this case.  I’m using it as an example of the things that should be weighed before signing up to support anything just because the employee makes the capital expenditure.  Like Intel evaluated security, there are very real other concerns to weigh.

Outsourcing and the service providers are more appealing with their subscription models because they define a standard for the commodity and do not deviate.  So while the Intel story sounds appealing, I would not suggest it is for everyone.  This is the exception – not the rule.

Michele

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Diane Bryant never intended to go to college, let alone become a top executive at Intel, the world’s largest chipmaker. She joined the Santa Clara, Calif.-based company back in 1985 and has held several positions over the years, including silicon design engineer and general manager of the server platforms group. About three years ago, she became Intel’s (INTC) chief information officer.  (Read Full Article…)

The Hub Commentary

SaaS as the article describes is followed with a ton of hype in these days of the cloud and transformation to business service management versus the commodity at the lower level.  The short term cost appeal with the subscription model and ease at which you can subscribe generates a lot of the hype.  I believe in the model and again always suggest first going back to basics and identify your services and classify them giving you a sense of what you need to service and support.

Once you understand the value of a service to your business, you can start evaluating whether it is a commodity process or specialized, market differentiators for your business.  Specialized services do not lend themselves well to these types of models.  Well defined and common services/process es are well suited for these models and should be used for that purpose.  In fact, they should be employed to drive standards into your organization and right size your service and support, which is hard to do from the inside once high levels of service have been delivered.

Another factor to consider is not all software was developed to be effectively used in a shared model and may not offer the economies of scale that a true shared service can offer.  As the folks at Forrester indicate, the commodity management, monitoring and lower in the stack items are well suited for this model as they should be standardized and common so your valuable resources can focus on driving business growth with technology over monitoring “box on / box off” lights.

Michele

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Given all the hype SaaS (software as a service) has garnered, you might be inclined to think every category of software will be delivered predominantly from the cloud at some point. Not so, says a new Forrester Research report.  (Read Full Article…)

The Hub Commentary_

Consolidation can have short term gains and costs with longer term gains when approached as Arthur describes in his post.  Its all about balancing operating and growing the business and business service management practices.

Many approach consolidation much like new technology, virtualization, for the short term cost saving to remove hardware and software licenses from the equation.  However, when done right it with investments and spending upfront, there are greater gains in the longer term.  Arthur mentions SIRVA and how they spent to consolidate and gain and ends with a reduction in staff by a third.

Who really removes people?  It is possible and generally is why IT does not turn inward to automate and drive efficiencies in their own organization as they do when applying technology for automating other parts of the organization.  As was noted in today’s earlier news commentary, the roles in IT start to shift as service managers and analysts applying technology to the business – not “bulb monitors” watching the commodity operate.

These are interesting times and it will be interesting to keep this years Fortune 500 edition and compare it to 2012 and 2013 and see who takes over each industry and is leading with the use of technology.

Michele

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It isn’t often that the phrase “do more with less” is literally true, but that is exactly what’s happening with the latest round of data center consolidation.   (Read Full Article…)

The Hub Commentary_

I would agree that IT is commoditizing and the role of IT leaders is evolving much like my good friend Siki indicates where commodity services can be done elsewhere and which then frees the evolved IT resources to sit at the table as Diane describes to apply technology to business choices.  This is the practices of business service management in action.

In the featured post, Finding your Services, I describe first classifying your services based upon their contribution and cost to the business.  How you deliver (source) that service then becomes the next choice.  Just because you have technical capability in-house to deliver the service does not mean you keep it in house.  Many services are becoming commodity and should be shipped out of the data center.  On the other extreme, where you are seeking to deliver new and innovative services to the market to drive growth, but you may not have the expertise in-house to deliver it timely enough, you may also choose to seek outside assistance.

Again, it becomes a balancing act between operating and growth and weighing the cost and value of in-house versus external options.  Then the new role of IT becomes that which is described by both Siki and Diane, one of the facilitator of services that both operate and drive the business.  We are in unique times of role evolution and this will become uncomfortable for the traditional IT staff.

Are you driving business with technology or just operating?

Michele

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This week I saw two articles that captured the two visions of IT that will dominate the future. Both were interviews with senior IT leaders, one a CIO of a major technology company, the other a senior executive with a leading system integrator. One article depicted a vision of IT as a future of standardized, commodity offerings, while the other portrayed IT as a critical part of every company’s business offerings.  (Read Full Article…)

The Hub Commentary_

I read this post by a friend of mine and I couldn’t agree more wholeheartedly.  Cloud computing by the nature of it screams heterogeneous environment versus a single vendor framework homogeneous environment.  I also screams requirements for an integration platform and business service management practice to manage the services consuming the technology.

I suppose my first question to someone would be “why consider the agility of cloud computing if you are seeking a single vendor framework?”  The speed at which the market is exploding with varying as-a-Service offerings, whether it be infrastructure, applications, storage, etc. indicates that you must consider and determine how best you will monitor and manage these threads of technology as a service fabric holistically.  The requirement for an end-to-end view of the service is possible in real-time with the right approach to integrating the metrics from the various sources of monitoring whether they be in your data center or provided by the service provider.

Finally as this pains me to mention again and will have to be the last time this year, there is taking advantage of the technology for business growth and opportunity, as was done this past Sunday for 5 hours in Texas Stadium.  During opportunities of promotional selling, the ability to dial up/down services, reposition capacity to insure the greatest opportunity to reap the benefit of the customer interaction will be the key to agile computing and business growth in the future.

Michele

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Larry Ellison let it be known at the recent Oracle OpenWorld (an ironic name if I ever heard one) that he saw nothing wrong with companies using just Oracle solutions across the entire enterprise. Of course, he would think that given that he runs Oracle. But these days, more often than not, you are going to find multiple solutions from a variety of vendors, and you need a cloud solution that is going to support them all.  (Read Full Article…)

There were some funny commercials and some not so funny commercials during the Super Bowl.   The one with Ozzie and Beiber was kind of funny, but I question if the commercial had impact, as in, did it sell something?   If you saw the commercial, which company was the commercial for, what is it that they were selling?

Business Service Management has some of the same challenges.  There are many metrics that IT is watching, but in the end, what is it that they are trying to get out of the metrics, what is it that we are watching in IT?   Does looking at a dashboard with response times mean BSM, does looking at a group of correlated alarms equate to doing BSM, does showing the availability of a database imply BSM… no, but all of it together with even more gets you into the ball park of Business Service Management.

The point is, focusing on the underlying technologies or only specific areas of the enterprise does not allow for IT to have a good understanding of the Services being offered and/or if the Services are up, running and happy.  One of the main objectives of Business Service Management is to have a clear picture of the Services that are being offered to the end customer (internal or external), being able to see the services end to end and understand the overall health and availability.   Don’t allow IT to get distracted by the technology silos, get them focused on the Services being provided to the end users.

Tobin

The Hub Commentary_

For the folks that know me best, they are snickering at how this pains me to write and not only post once, but twice about Texas Stadium.  My featured post on Friday was also about Texas Stadium and the Super Bowl and the Business Service Management opportunity facing those companies buying 30 second ads at $3M each.  I believe the might Pug stole the show!

I also included a link to this video about the data center powering Texas Stadium.   Check out this video In hindsight, Texas Stadium was geared for successful Business Service Management practices.  They were not just monitoring all the technology that powered the TV’s and point-of-sale (POS) devices around the stadium.  They were monitoring the inventory levels in the Pro Shops shifting inventory in real-time around the stadium.  They were monitoring the snack bars and offering real-time discounts around the stadium.

This was Business Service Management in action.  100,000 buyers captive for roughly 5 hours using technology to drive the highest revenue possible.  As much as it pains me, my hats off to the IT staff of Texas Stadium AND the gaunlet has been dropped on my beloved Colts and Lucas Oil Stadium for 2012!                        

Michele

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As 100,000 fans pour into Cowboys Stadium Sunday for Super Bowl XLV, the fans will have little awareness that there’s a data center serving as the technological nerve center of the stadium. But the staff at CDW and HP and the Cowboys’ IT team know how vital the stadium’s IT infrastructure is in creating the “ultimate fan experience.”  (Read Full Article…)

The Hub Commentary_

This headline caught my eye as I will be the first to debate that IT is not a profit center.  However, this is a prime example of IT realizing and classifying services based upon Service Value and applying Business Service Management practices.  In an effort to first cut support costs from old systems, right sourcing decisions and partnerships were established for industry must haves and I applaud these decisions.

I’ve seen this consortium model a couple of times in my career and it can be successful when set-up like this with the outsourcer as the intermediary managing the infrastructure and service with the ability to market, sell and replicate the solution across the industry.  The service is an industry standard and not specific to the business and thus no competitive advantage across the industry.  However, what usually keeps it from being successful is the size of the market that it can be sold to and how easily the others in the industry can just plug into the service.

The tipping point to concentrate on growth investments for IT and decrease the IT spend for cost saving measures may be enough to push to consortium like success for these types of services in the coming 12-24 months.

Michele

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Give a man a fish, the proverb goes, you feed him for a day; teach a man to fish, you feed him for a lifetime. Turns out there’s a quasi-corollary for corporate IT: Give your company a more efficient system, and you cut costs; give your industry a better way to operate, and you increase revenue.  (Read Full Article…)

The Hub Commentary_

Hooray!  Great post by Mary on the management and service level management requirements for the cloud.

Michele

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IDC is forecasting that the total cloud systems management software market will total $2.5 billion by 2015. This market will encompass virtualization management, automated provisioning, self serve provisioning portals, dynamic consumption based metering and capacity analysis, service catalogs, end-to-end real time performance monitoring and related management software tools deployed into public and private cloud environments.  (Read Full Article…)

I can already hear you asking and scratching your heads, “Michele, what do those 3 things have in common – cmon, get real”.  Yes, I’m a long term IT nerd and tremendous football fan that remembers everything.  Heck, I fessed up to crashing a data center for 7 hours in an earlier post.  My motto:  go large or stay home or as we say in the south: ” if you can’t run with the big dawgs, stay off the porch”!

Back in 1999 Victoria’s Secret ran their first ever Super Bowl ad, $2.7M for 30 seconds.  Early days of online retail, wind back the clock and clear the cobwebs, yes, these were the early days of Amazon and the revolution to online sales and web hosting.  Then the unthinkable happened, 1M website visitors in an hour, was IT ready for this traffic?  Heck no!  Did IT and Marketing prepare and communicate this impending event, likely not.  Headlines:  CNNMoney 2/1/1999 “Victoria’s ‘Net Secret is Out” .  So can I fault them in these early adopter days, nah, I applaud them as market innovators.  However, they brought the data center to its knees.  Marketing created interest that the data center could not fulfill upon in an effort to generate Valentines sales with both men and women in an audience estimated at 100M so ~3 cent spend per customer and generated millions in orders.  Not a bad return.

Now roll the clock forward.  It was almost 10 years before Vickies (as I call them) purchased another Super Bowl ad in 2008 – USA Today 2/1/2008 “Victoria’s Secret back to Fiirt with Super Bowl”. No outage headlines this time, but this is a prime example of Business Service Management practices and IT understanding and operating with the business objectives in mind.

The moral of the story is IT and the business must link up in order to support major bursts in spend, marketing,  Super Bowl ads and traffic on the infrastructure to reap the biggest return on the investment.  This year’s ads are $3M for a 30 second slot.  Who’s “going to the cloud”?  Who leveraged the cloud for the additional one time capacity – now that is a story I’d love to read about linking Business Service Management and Cloud strategies.

Who’s going to make IT headlines after this year’s Super Bowl or will it be 2012 for the Cloud Bowl headlines?  How cool would it be to make headlines because you leveraged the Cloud for additional capacity to reap the greatest reward of a marketing spend at the Super Bowl? Business Service Management in Action!

As much as it hurts me to tell you this on so many levels, Texas Stadium is IT ready, Check out this video.

What I do find fascinating about this is that Texas is experiencing an unusual cold snap and they are experiencing power outages.  However, the news says the power outages will not impact Texas Statium, no guarantees to all the Texas TV watchers, but the event is supposed to be impact free. 100M viewers will determine that on Sunday!

P.S. – In case you  are wondering – I’m a serious Colts Fan, but this year the color of the helmet in the feature picture is no accident – Green Bay all the Way!

The Hub Commentary_

The author points out great security points in making the leap to the cloud and part of those warts not mentioned is the management of those VMs in the cloud from an end-to-end business service management perspective to manage against the risk he points to.  How risky is it to have that VM in the cloud?  How secure should you make the data and management of the VM?  What business services are at risk?

It is the end-to-end service view that needs to also be considered up front when architecting your plans for cloud deployment and that should be based upon the service value and risk of the overall service.  Mapping those services, understanding cost, risk and value will aid in making these decisions, architecting the VMs and putting the proper monitoring, management and measurement of the VMs and services in total.

Check out my Feature Post on classifying services.

Michele

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Over the past few years, we have seen a gradual transition from traditional computer center with dedicated resources to virtual machines and cloud computing.  During this time, people have realized some of the value of virtualization in termsof savings and resource optimization.  Unfortunately, there are still a number of warts in the virtualization that have followed the migration to the cloud.  (Read Full Article…)

The Hub Commentary_

This article inspired me to write a full blown feature on the subject of vendor management, service level measurement/management/communication and basic business service management practices.  The net of it, IT you own it – no shifting blame to others and no government intervention to set up terms and conditions.  This is outsourcing, plain and simple – manage your provider.

Read the feature commentary in this post.  I do predict there will be a very large outage in 2011, it will be a brand name company, there will be hype based headlines and buried deep in the article disguised in hype will be the root cause – poor contractual terms and conditions, poor vendor management and complete lack of service level measurement keeping perception in check with reality!

Michele

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Back in December, after Amazon summarily pulled the plug on WikiLeaks using its servers for alleged violations of terms and conditions, the CTO of Fujitsu Technology Solutions wrote that the action constituted a serious threat to the business of cloud computing…. (Read Full Article…)

Face it, we all blame our siblings for everything that goes wrong, in my case my baby brother – who towers over me.

Today I’m writing an article instead of just sharing the news having spent a little time consulting and reviewing major sourcing contracts for customers and being trained in the Ross Perot bootcamp of outsourcing early in my career.  What I always find amazing is how much trust a subscriber puts in the provider during the contract negotiation.  On one hand there is trust (I call it naivety) and the provider was successful in creating a relationship, playing on emotion and expertise in the market.  On the other hand it is a recipe for disaster,  a lose – win situation for you the subscriber.  Know your rights.

Cloud computing is still just outsourcing, however, agile and dynamic technology enables a more dynamic purchasing option than in an early adopter phase.  What differentiates the providers at this time is their maturity to manage the services and service level agreements and the flexibility of their services.  When the market matures, we will reach a state of similar services, standard agreements and get down to price based decisions.  Price based decisions currently reflect the “buying” of a customer base and immature operating processes.  Buyer beware in these situations of early adopter buying and low cost options – shame on you the buyer.

Here’s my usual SLA and sourcing advice.  Outsource the commodity, the services that are absolutely the same regardless of industry, stop being unique, special and different and accept the standard and low cost option.  Go back to my Service Value chart.  Remember you still own the services and you can’t blame your sibling.  To that point, you own the service level – availability, performance, response, contract termination, etc.  Just remember the more stringent you are with the terms the greater the risk to the provider and the higher the cost.  Evaluate their standard terms and fill in the gaps, but fill them in appropriately based upon the value of the service.  Do not tell the provider “how” to deliver the service or how to manage the infrastructure, you are outsourcing for a reason.

My prediction for this year is that a major customer will engage with a major provider and there will be a major outage this year and there will be front page headlines creating noise how the cloud fails.  I will point back to front page Wallstreet Journal news of just about 10 years ago.  IBM, Seibel and SAP fail and Hershey misses Halloween – their largest candy selling season.  Pages and pages of an article playing to the hype of the big names and the market and failure.

I remember exactly where I was when I read the paper, waiting on my relentlessly late co-worker in the lobby of a San Francisco hotel.  Net of the story, change management and testing issue and Hershey found we are not loyal to chocolate.  We will go to another drugstore for a brand of toothpaste, but when we want chocolate we will take what is on the shelf.  Moral of the story was Hershey missed Halloween, Thanksgiving, Christmas, Valentines and most of Easter to sort out their order to distribution challenges for what they thought was “14 days, we can fix anything in 14 days”.

I predict the same hype will occur here and it will boil down to a mismanaged, lack of defined and monitored SLA’s.  Just because you subscribe to a service does not alleviate you from the responsibility of the service and contract.

Monitoring, management and measuring cannot be an afterthought – how are you monitoring your service provider(s)?

The article that riled me up for this post is the following:

Cloud Computing (still) Needs a Bill of Rights – ZDNet

Back in December, after Amazon summarily pulled the plug on WikiLeaks using its servers for alleged violations of terms and conditions, the CTO of Fujitsu Technology Solutions wrote that the action constituted a serious threat to the business of cloud computing:  (Read Full Article….)