I recently attended the GlassHouse Technologies analyst day at the luxurious Sheraton Tara in Framingham. These guys continue to be the not so little engine that could, and keep coming up with some of the best ideas in infrastructure services like vLab. More on that in another blog.
One of the discussions was on the IT supply chain, IT as a business, and invariably the fact that that’s what Cloud is really all about. But in a room full of mostly techies, we talked about web delivery vs. VDI and other stuff that sometimes glazes my eyes. What we weren’t talking about, though, was spending or budgets.
When you leverage Cloud to put the actual purchase of IT directly in the hands of the consumer–it changes EVERYTHING!
Today, the IT budget consists of either one big pile of money, or several departmental stashes that the CIO manages. For all the talk about charge-back in the past 15 years, most people are not there, and IT cost allocation is a black art. Users are not connected to their IT consumption in any financially meaningful way. Which is why we have social media applications on infrastructure with the same service levels as trading applications. God forbid we couldn’t Tweet for a couple hours.
In the new world, a user logs on to a portal, picks the server and storage they need based on service level, and they’re off and running. At the point of purchase, an invoice spits out, or a workflow application sends a bill for approval to the IT Finance head. This needs to happen whether the Cloud is public or private. It will happen in the public Cloud since these are for-profit ventures. If this does not happen in private Cloud, then we’ve just missed the whole point.
The user knows exactly what they pay, the enterprise knows the cost, and the user will either self regulate or run out of money. This behavior will drive innovation. No one will be on the fence anymore about deduplication, virtualization, or using commodity hardware vs. high-end proprietary stuff. Users will demand lower costs when every request forces them to make an actual spending decision. This will completely change the paradigm of how IT purchasing decisions are made, and even what type of technology can be brought to market.
You can read Jeff’s other blog entries at Speed & Change: The Business of IT Services.
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