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Is outsourcing coming of age? December 19, 2011

Posted by Mark Hillary in Current Affairs, IT Services, Outsourcing.
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As we head into 2012, it’s worth taking a moment to consider just how much the entire outsourcing market has changed. This is the year that the cloud really shifted from being an entirely separate concept to being intrinsically linked to the process of outsourcing.

A senior manager who made budget decisions always led the traditional market in services. It might be the CIO or the business line head – like the HR head for example – but it would always be a senior figure with a well-planned objective for the future state of the company.

This led to the traditional outsource, where an entire business process would be analysed, passed to the third party, and delivered by a service company – whether on site or remotely.

But ever since the growth of tools such as salesforce.com the model has been changing. Salesforce turned everything around by being a system that could be used over the web, with no need for any additional software, and paid for by user by the month… simple, clear, and without the need for big plans, vendor comparisons, or training programmes.

Salesforce is used by sales teams who buy it themselves on their own budget. They don’t ask a CIO to buy the system and then have maintenance teams install it.

So are cloud products like this really outsourcing? I believe so. If sales teams are trusting a third party with their information and using those tools as a part of what they do then it is just the same as if the CIO had outsourced CRM to a partner.

But it is a much more disparate world in which individual business line staff are making decisions about the tools they use to get the job done, making the job of those trying to control all of this much harder than before.

Outsourcing is not dead, it has just embraced the cloud and it now changing into something new.

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Cloud: What about regulated environments? April 29, 2011

Posted by Mark Hillary in IT Services, Outsourcing, Software.
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The cloud changes everything. That’s the consensus view. Whether it’s remote infrastructure management, software as a service, or utility computing or all of these strategies combined in some way, the cloud is changing the IT services market.

But forget the hype you read in a lot of the business and tech press. Most of us are already using cloud-based services with photo-sharing, video-sharing, document-sharing services, or even tools like Google Apps and Gmail. Facebook and LinkedIn are both tools that exist in the cloud and most executives probably use them each and every day.

The question is really how do we move from acceptance of consumer tools to a place where these applications can be used in a bulletproof and robust corporate environment?

It’s a tall order. IT leaders have a different focus to personal end users, particularly when it comes to availability and security. These are particularly important factors when the IT service is purchased from a supplier and will translate into key performance indicators applied to a service level agreement. The small print of the publicly available services does include information about service levels, but it will usually just excuse the provider from any responsibility to give you a reliable service.

If Google Mail was never available when you wanted to use it then it would be abandoned and never used, but it’s reliable enough for most of us most of the time – even with some occasional well-documented failures. Google does offer a paid version of their mail product, with SLAs, so it works better for corporate users who want that guarantee.

But can real companies make this work? It’s more than two years now since Guardian News and Media Group in the UK switched 2,500 users over to Google Apps and with it being such an easy financial decision, more will follow – so it can be done and stepping away from email on individual PCs is no longer seen as such an unusual move.

The cloud is coming and it will change more traditional bread and butter IT services such as ERP and CRM for the supplier market. But how does all of this work in a regulated market such as the public sector, banking, or for a utility. What are your thoughts ahead of the Thomas Eggar Technology and Enterprise Forum on Thursday May 12?

The Government App Store April 15, 2011

Posted by Mark Hillary in Government, Outsourcing, Software.
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Detractors have argued that the concept of a government cloud (g-cloud) is so complex and fraught with privacy issues that it will never get off the ground, but supporters argue that in a time of austerity, reuse of software and systems is essential.

The general cloud concept has been outlined on this blog before. One of the great attractions for cloud-based applications is central management, eliminating the need to manage local versions, upgrades, and maintenance. Virtual infrastructure, such as data centres also work well within the cloud-based model, allowing several departments or organisations to share storage and computing power.

For all these reasons, the British government has been interested in two key concepts in recent years:

  • A cloud of government applications and tools that can be shared by many departments
  • A government app-store, allowing standard tools to be used anywhere within government.

These are common concept for consumers. The cloud itself is merely centrally managed software, such as Microsoft’s Gmail, and the app-store is what every Android or iPhone user is now used to – plug and play systems. It is not so long ago that your telephone could only do what it did when you bought it. It was not possible to upgrade or load new software, and when it was possible, it was with great difficulty. Now consumers are used to modifying, customising, and using their equipment in new ways.

The advantages for government are obvious. Think of how many software systems are used within the police, the NHS, the devolved local governments and councils… the list is mind-boggling and yet in all these places there will be a set of common tools that can theoretically be shared with other government organisations. The advantages of getting the G-cloud working are obvious. Will the detractors derail it as too ambitious?

As with most things in politics, only time will tell.

Switching to the cloud March 15, 2011

Posted by Mark Hillary in Hardware, IT Services, Outsourcing.
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The cloud causes a great deal of confusion.

There is little consensus over what the term really describes. Data centre vendors will tell you how you can buy storage from the cloud, with servers switched on and off effortlessly and remotely. Software vendors will tell you that it is all about access to centralised software via the web, allowing you to use complex software without installing or maintaining a single package. Security vendors will tell you that it is an accident waiting to happen.

In many ways, the cloud is really a bit like the computer system represented in Hollywood blockbuster ‘the matrix’ – though without the Neo sunglasses.

The concept is that services should be accessible remotely without the customer needing to understand or care about the exact resource required to deliver it. It should also be possible to pay for only the services you use – for example, just paying for the storage you actually use rather than paying for a server and paying someone to maintain it.

The point is that you don’t need to understand the cloud as a new business concept to use it because consumers inherently understand how it works. When I switch on a power socket at home, I expect electricity to flow. I have no idea how many people worked in the power company to ensure that happened, but it happens and I pay only for the power I use.

When I turn on a tap, I get water and I similarly have little understanding of how much effort goes into ensuring that this tap produces fresh water, but it does. I also pay only for what I use. Apply these concepts from the home into the world of business and suddenly it looks a bit silly to buy banks of servers that are redundant 99% of the time, tying up capital in the equipment and needing to spend on facilities to house it all and people to maintain them. Or buying software that needs to be installed, maintained, upgraded, and paid for whether users are actually using it or not.

When the business users or technology services start thinking about the cloud in the same way they think about their utilities at home, then they will understand not only what it is, but also the immense potential.

Is the cloud just hype or are some missing the boat? February 15, 2011

Posted by Mark Hillary in IT Services, Outsourcing.
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I was out in Mumbai recently for the annual Nasscom conference. Nasscom is the hi-tech trade association in India and their annual leadership summit each February defines not only the direction of the industry in India, but for many regions around the world.

In fact, there were 35 other countries represented at the Nasscom event, some just as delegates, but most with an official party speaking and representing the advantages offered in their region so this has become quite an international event.
The industry in India has grown by some 23 per cent in the past year so there is strong optimism that IT firms and the BPO service players are back on a growth track again after a few years of recession. This is backed up by new orders being placed, but I wonder if there is some troubled times ahead for some of the big players in India?

One of the key topics being discussed in India was the cloud. It’s a topic that divides commentators, but what is clear is that some service companies have embraced it. Just look at firms like Salesforce.com, who are now moving beyond their CRM roots into all aspects of cloud-based services.

But many have not.

I asked several of the more traditional systems integrator firms what they think of the cloud and the opportunities it may offer them, and despite the threat to their own industry, many just rejected it as hype.

The firms making a killing today on software upgrades are going to have to evolve or die in an environment where IT systems can be paid for only as they are used – but some still seem to have their head in the sand.