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Discussion Series Part 3: The Goal of Future-Ready

This is a continuation of the discussion with ESG senior analyst, Mark Peters about what’s going on in IT.  The first two posts in the discussion series can be found here and here.

Dave Hitz:    When you talk about consolidation and standardization, it seems to me the way IT is playing out is that whatever resources you have, or whatever technologies that you have, you want to be able to share them across multiple users.

That need to share drives the need for other things, as well.  If you’re going to be sharing, you need to be able to share securely.  You need to be able to share reliably. 

But in a sharing context, because you’ve got different users with external clouds, you may have different companies sharing the same resources.  It really brings a lot of other kinds of management requirements to the fore.

Mark Peters:  Sharing is another way of saying being efficient.  It’s another way of saying consolidating.

That aligns with everything I mentioned about using the minimum resources you can use to get a given piece of work, or set of works done, to the level that you need it done – still with the quality and all those other things you just mentioned, security, etc.  Sharing is absolutely the way ahead.

There are two things that are making this really crucial as you look forward.  One is growth.  The demands on IT have grown beyond anyone’s expectations.  At the same time we’ve had this massive economic malaise around the world.  The combination of those two things has made everyone go, whoa, hang on a second.  We are not running IT in a sensible fashion.  We’ve been doing it focused almost 100 percent on being effective without thinking about being efficient.

We can’t go back to that because the economic issues, and perhaps the emergence of certain technologies, has enabled us to turn, to focus on efficiency, whether that’s via long-term flexibility, sharing or some of the other things we’ve talked about. 

Dave Hitz:    What is the percentage of the overall economy that will be the IT industry?

For many years, that percentage has been going up and up and up.  People just keep spending more and more and more on IT. But you get to a certain size, and you say, we’re just not going to double our IT spend in our company from two percent to four percent, and then four percent to eight, and then eight to 16.  Then what?  We’re going to double it to 32 percent of our whole business is paying for IT?

We’ve got to stop.  It’s a little bit like health care in the US.  You look and ask what percentage of the total economy can be health care?

Are people, as part of their re-evaluation, saying, look, IT is not going to grow anymore.  In fact, maybe it should shrink a bit.

Mark Peters:    We’ve got to do more with less. What’s interesting about that is we can absolutely do that, even today.  I’m sure it’s only going to get better.  If you look in the big trends over the last few decades, we haven’t really worried about IT expense, because it’s produced so much more value for businesses than it was costing, it was easy to justify spending money there.

Whether it’s the economy or the unsustainable growth percentage of the companies that you discussed, whatever is causing this, we’ve realized it’s not that there are lower returns from IT, but like any other part of the business, it’s got to justify those, and it has to be producing results for the business.

IT has to do more – and whether it’s for less or the same, or whatever – but it has to do it in a more efficient manner.  The whole business, the whole nature, the whole architecture of IT – if you take a really big view of it over decades – has grown up in a very inefficient manner that got the job done really well.  And now we just need to tighten it on both sides of that equation.

Dave Hitz:    We’ve been talking a lot about the importance of flexibility and the importance of being ready for what comes with the future.  What is the business benefit of this in the end?

Is it really all about saving money?  Or are there other things that come out of this approach?

Mark Peters:    You’re right to raise that question.  It’s a great deal about saving money, but you remember early on when I said future flexibility, or being ready for the future is not about IT, it’s about the business.

The flip side to this is, if it’s done well, if you know where you started and you know the impact and potential impact of things you either do or might do, then what that drives to is producing money for the business.

Most people will cite that as faster deployment of applications.  Yes, that’s great.  But you need to go one stage beyond that, because that’s IT centric.

What did the faster deployment of that application buy the business in terms of bottom line - like competitive advantage or customer satisfaction, things that can be measured in terms of revenue?  That’s the flip side to this equation.


Dave Hitz:    So, what I hear you say is to do not just a good job, but a really good job at IT, you need to understand what an application means from a business perspective.  What does it do for customers?  What does it do for revenue?  What does it do for profitability?  If you as an IT person can’t make that linkage, you’re not operating at your full potential.

Thank you for your time Mark.

Mark Peters:    Thank you.  It was a great conversation.

Discussion Series Part 2: Key Issues in the Quest to be Future-Ready

This is a continuation of the discussion with ESG senior analyst, Mark Peters about what’s going on in IT.  The first post in the discussion series can be found here.

Dave Hitz:    In the quest to become Future Ready, what are the key issues that an IT organization ought to pay attention to?

Mark Peters:    The thinking and planning that I mentioned before are 1A and 1B on the list.

You have to know where you came from and where you want to go, to the best of your ability, but keep flexible so you can react.  For instance, we know there are going to be more virtual servers.  We know there’s going to be more storage.  But what are those things going to be asked to do?

The second issue is, how do you quantify what you’re getting from these various technologies or approaches? It’s easy to throw out things like speed and efficiency.  But you need to stop and think about those for just a second.

There is a discussion in the marketplace about driving cost out of the business.  It has been crucial for the last few years, and continues to be so.  Now you’re going to have this debate between using multiple vendors, the best of breed approach, if you like, and more of the collapsed stack or converged approach.

The question users need to ask themselves there is, does one make me lose as much or more as it makes me gain. Effectiveness, in my view, is getting the job done as well as you possibly can.  That’s great, and we should all do that in IT, whatever the future is, whatever the flexibility is. But efficiency is using the minimum number of resources you can to get that given work done – still to the same standards, still as effective, but doing it with fewer resources.  You can only do that if you know where you’ve come from, what you were doing, what the business benefits of all those things were, and therefore be able to quantify the improvement, because otherwise you’re just doing more of the same.

The only thing installed in every data center is inertia; unless you have a clear path that shows not only where you’re going but also where you started from.

Dave Hitz:    When you start to think about technologies, what technologies do you think are going to be involved?  Let’s imagine somebody who is just beginning the planning cycle and they’re saying, our current data center is full.  We know we’re going to have a new data center.  And we have an opportunity to think afresh about exactly what we’re going to do as we plan where we’re headed.

Mark Peters:    We talked about being future-ready, and you talked about knowing certain things that were going to happen, but we don’t know exactly how they’re going to play out.

If you’re talking about right now and the attributes that are important, you’ve got to look for things that have an ability to consolidate, an ability to use virtualization to the fullest extent possible and an ability to use standards wherever possible.

Standards are about ease.  Virtualization is about efficiency, which is what I just said is so important.  Consolidation is just about pure economics.  And overall, you’ve got to be able to manage this.

Because you’re making some decisions in the next few months, you’re going to want more of a unified platform.  That is not just a wave in the industry, but it’s a very logical approach.

You’re going to want to talk with people who are utilizing solid state and know how to do it, because, at the end of the day, solid state is all about serving (IO); in other words, getting back to that efficiency of minimum resources for given work.

The only reason you store things is because, ultimately, you may need them.  And therefore, the choice is, how frequently, how often and when am I likely to need it?  And that will determine where it goes.

If it’s about getting immediate work done, it should go on solid state.  And even though that’s a very bold statement, that’s true as you look for the medium future.  Right now we have data on different spinning disks as well because that’s the technology we have available.

The cloud is about how you consume IT and how you consume resources.  And whether that’s done behind your firewall or from a public source, it again comes back to this flexible use of resources; it comes back to consolidation, standardization, and so on.  It may not be suitable for all.  But it’s another way that, whether it’s internal or external, you can drive efficiency and leave yourself flexible.  Those are two things that are very important.

 

Stay tuned for Part 3 in the discussion series, which will cover the goals of future-ready.