Supply, demand and service-centric IT

By Jon Collins and Dale Vile

A number of trends are having an impact on the supply, deployment and operation of corporate IT
facilities. Currently, the impact is being felt most directly within the IT supplier community, but over
the coming years the fruits of their labours will more strongly influence the way companies source
and integrate IT services. In this report we look at what’s driving the trends and ask how should
end-user organisations prepare to make the most of how IT services are delivered?

MAIN POINTS

These are interesting times for how IT services are procured, delivered and managed

This is a period of great change for information technology, through the coming together of a
number of parallel trends including platform commoditisation, service-centric IT delivery and
developments in the hosted service space. The most direct impact is currently on IT suppliers, as
they re-organise to take advantage of the new business models that result.

However, it can be difficult for end-user organisations to separate the signal from the noise

For end-user organisations competitive advantage is indeed to be had from the resulting models of
IT delivery. However, and as so often happens at times of change, many organisations are jumping
on the bandwagon and adapting the story to meet their own agendas. For example, we can see the
way the term ‘cloud computing’ has been used to mean many different things. Rather than being
distracted by the hype, for companies to maximise the benefits they need a clear picture of what is
behind it all and the impact it might have on their own organisations.

Competitive advantage comes from balancing platform efficiency with service effectiveness

Many elements of IT are subject to commoditisation, driven by standardisation in the platform and
the more widespread adoption of technologies such as virtualisation. Competitive advantage comes
from the services built on top of this platform layer, and how they are delivered. Organisations
looking to maximise the value of IT need to differentiate between the commodity elements which
favour more utilitarian economics, and service elements which are more about maximising returns.

Now is the time for end-user organisations to review how to benefit from emerging IT supply
models

The IT supplier ecosystem is undergoing massive change, and several new models of IT supply
and delivery are emerging. The exact shape of the landscape is still to play out however, and a
number of gaps remain including data protection, contractual frameworks and skill sets. Rather than
rushing headlong into the cloud, organisations need to develop a clear, unbiased view of what is
available, and what combination of internal and externally hosted services, appropriately
architected, integrated and managed, will be most appropriate for their existing and future needs.

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