Tom Peruzzi's thoughts on digital, innovation, IT and operations

cloud reloaded

Posted in financial, startup failures, technical by opstakes on October 7, 2010

I had the chance to present some general thoughts on cloud computing on an aicooma and Microsoft event yesterday.
While being in general a pro cloud geek especially for operations I got some more hints to cover:

  • scrum & cloud really cooperate well on a very high level (aicooma will present some whitepaper regarding that topic soon)
  • the deeper you look at all potential hidden costs the less interesting a cloud offer looks like in the first, but keep in mind that you always have to take care on a service lifecycle perspective
  • Moving from Managed Services to a real cloud offering is quite hard, on the one hand side for the moving organization to get an understanding and feeling for the cloud, on the other hand side for the partner, right now nearly all major outsourcing parties claim to offer cloud but the contract looks quite different afterwards …
  • Even cloud vendors now tell the truth: a cloud will never ever fit into each setup

Dealing with that topics it shows that there is still some FUD in regarding how cloud computing could help me, my department my organization and whether it fits or not. A quite good way would be like I do in general:

  1. Get your service catalogue and your service portfolio up
  2. Include lifecycle infos into portfolio (time of reinvest …)
  3. take the 5 out where reinvest should occur within next 18 months
  4. have a very deep look (organizational, technical, financial) on those 5
  5. find a potential cloud substitute
  6. compare in depth

After doing this once or twice it’s getting quite easy to deal with, it is not that much work as it looks like in the beginning but it offers you a very transparent view on your portfolio and on the potential of cloud offerings being out and stable right now, more or less it demystifies cloud offerings and makes them compareable to your internal or external managed services like comparing apples with apples, and that’s the goal, nothing about emotions, coolness or hype, realistic and transparent decision taking is king.

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Threaten Business

Posted in financial, general failures by opstakes on March 24, 2010

I still wonder why so many IT people do argue that they talk to business, involve the business and respond to the business but if you ask them how and how often, you get no concrete answer.

Currently I got a query of a colleague asking me why IT isn’t interested in getting direct involvement via a project steering board from the business. The IT directors are part of an internal change project leading to better response times, lean IT and massive cost reduction. Those are all business related values and if business is neither involved nor partnering the project nobody will ever know what happened to the project!

The way to a good understanding of both sides is a long and stony way. Both sides have to learn to talk to each other, get understanding for their situation and their attitudes and behaviour. The goal is to convert the business culture and IT culture to a corporate culture. Sounds easy? Isn’t it: potentially tons of arguments will stress, disrupt or even destroy that idea, plenty of (personal) interests will have to be aligned with the business idea itself. IT has to understand that business should be a partner and sponsor, business has to understand that it needs a strong IT.

So stop living beneath within the building!

Our own datacenter is the best

Posted in financial, general failures, technical by opstakes on December 8, 2009

Potentially no, but there is still a sub reality out there showing IT Operators or Facility Managers that owning their own datacenter is much cheaper, cooler, greaner, leaner, and whatever even if they just want to run 50 servers.

To be honest it could make sense, depending on your location, some geographic stuff and depending on the growth. But even google did not start by building their own datacenters. They rented before and now step by step they migrate to their owns – because they have reached a size of interest for having their own ones!

And if you think about your datacenter think about:

  • who’s operating the facility
  • who keeps care on USV, Diesel …
  • who keeps care on getting all licence stuff done?
  • who cleans the filters
  • who is responsible for CCU & friends
  • who is the cabling expert?
  • who is the power expert?
  • who is responsible for rack planing and provisioning …

and all of that in a twenty-four-seven environment …. ? Do you really want to be the Facility guy PLUS the Ops Leader? Can you combine those two or run them in a professional manner? Will you get headcounts for an electric expert as an IT Ops Leader? Tons of questions and nearly all – especially if you think about associated risks – should lead to the decision to NOT rund your own DC before you reached critical size.

The next interesting topic which always happens: If we still do not have the critical size, why don’t we do some shared hosting too? Because you do not have the skillset to do this? Because you are an internal service unit and you are not set up to offer on market prize on the external market? Because your SLAs are not that strong? Not really, potentially no, the main answer is: Because it is not your business!

So when do you reach the critical size? It does not depend on the number of systems, it depends on strategic and economic questions

  • is running own datacenters a potential USP and can I run it cheaper/equal market?
  • Sum of mass discount smaller than savings by own DC (economic value)
  • extra flexibility needed (keep care! flex against price, and flex. against coolness)

The how and when will vary and potentially we will have to work on a new definition of critical size with regards to cloud computing, the price modell and the new datacenters (generation IV) which should reduce costs too.

Our vendors always deliver best price

Posted in financial, startup failures by opstakes on November 19, 2009

It sounds so silly, but it always happens …. the longer you know each other and the longer a partnership exists, the better it gets? No not really in 90 % of all partnerships, especially vendors do all their best to get better prices, get out of project price agreements, anounce new hardware which is out of contract and lot more.

And they know you, your setup, your hardware and software, they know your employees and their habbits and behaviour and they do all their best to support your organization to get you and better prices (for them).

This is not wrong, it is their business intention and this is not as bad as above market prices because of buddies within upper management  (even this should happen, I’ve heard about it 🙂 )

So how to deal with: Trust your partners in terms of what they offer to you in terms of the concept behind, handle them carefully as they know you and the underlying organization. Handle them with care, as they did their job good for a long term and business partnerships can create business value. But keep on challenging their models and prices ALL the time by getting in either challengers or direct competitors. The 3 offer approach of large companies is not that silly, yes it is work, but the intention is to know the market price and get a price below.

But then you challenge them, never press price below their line, you should be interested in a vital and profitable partner, but you do not want to overpay. Keep the balance right!

Next, let them know that you challenge their model and price, so they will keep on deliver you (their) best results possible, but give them trust, that they are a preferred or strategic partner. So inviting others should show them, that you are interested in best price and best model. It should not show them that you are interested in changing your vendors. If you intend to do so, tell them why, what happened and how you are willing to cooperate with them in the future. But never blame your long term vendors!

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