old it sourcing dilemma is exacerbated on cloud

Alfredo SaadIT Sourcing Consultant

Old IT Sourcing Dilemma is Exacerbated on Cloud

https://br.linkedin.com/in/alfredosaad


•Old IT Outsourcing Dilemma: Sole Provider x Multiple Providers

•Dilemma’s SWOT Analysis• Strengths• Weaknesses• Opportunities• Threats

•Dilemma: exacerbated on cloud scenario

•Critical factors on cloud concerning a multi-provider environment


Old IT Outsourcing Dilemma: Sole Provider x Multiple Providers

An old IT outsourcing dilemma, relative to the “single provider” versus “multiple providers” models of implementation, has its decision factors strongly exacerbated on cloud scenario


As will be discussed, on a cloud scenario we can sometimes find tens of providers coexisting, not always peacefully, resulting in a turbulent and unstable IT environment

Old IT Outsourcing Dilemma: Sole Provider x Multiple Providers


Dilemma’s SWOT Analysis

S (strengths)

W (weaknesses)

O (opportunities)

T (threats)


Dilemma’s SWOT Analysis: Strengths


Dilemma’s SWOT Analysis: Weaknesses


Dilemma’s SWOT Analysis: Opportunities


Dilemma’s SWOT Analysis: Threats


Dilemma: exacerbated on cloud scenario

In a full IT outsourcing scenario, the adoption of the cloud alternative makes impracticable the single provider option


This is due to the fact that for each of the service lines available on cloud (IaaS, PaaS, SaaS, BPaaS, etc), there is a huge list of providers, each one with unique features offered



This fact induces the multiple providers option, as it allows that, in each segment, the best-of-breed provider be selected, maximizing the intended benefits of cloud



In practice, this option becomes mandatory, as it is virtually impossible that one only provider has all the better skills required for all service lines, all geographies and all features required by the buyer organization



As a result, the concept of “multiple providers” on cloud scenario shows up as radically different from the concept on a traditional IT outsourcing



On a traditional IT outsourcing scenario , the number of providers rarely surpasses a limit of, let us say, 5

Frequently this number is 2 or 3 and it is kept stable after the initial selection process



On cloud scenario, frequently this limit surpasses 10 and is not rare that it involves tens of them, depending on the complexity of the buyer organization and scope coverage of the cloud environment



Yet more, this number tends to a continued increase, as a natural consequence of the new services and facilities made available almost daily in the young and not fully matured cloud services market



As we can easily imagine, the customer governance over tens of providers in a growing cloud environment is a task much more complex than the administration of a small number of providers in a stable traditional outsourcing environment



As a consequence, we can infer that, in general terms, the “weaknesses” and “threats” earlier identified in the SWOT analysis become exponentially exacerbated on the new scenario



Critical factors on cloud concerning a multi-provider environment

Some aspects become more and more relevant as the number of providers increases

Their adequate consideration is critical to effectively achieve the intended benefits of the cloud


Some of them are: Services catalogue and self-service portal

Access control

Provisioning and automation

Billing, chargeback and resources utilization measurements

Diagnosis on availability and performance of services

Critical factors on cloud concerning a multi-provider environment


The diversity of the available services on cloud market through hundreds of providers, or tens of providers if we think about a specific buyer environment , makes it mandatory to have a services catalogue, continuously updated, aiming at giving visibility to its user community about the offered services

It is desirable that the requisition of such services be made through a web portal which consolidates, with a standardized format, all services made available to the customers by the cloud providers of the organization and the conditions to request them, their prices, etc

Critical factors on cloud:Services catalogue and self-service portal


Aiming at assuring that the services request is made only by those authorized users, an identification and access control process must be in place for each request

Policies, rights and obligations which the user community must adhere to must be maintained, according to the circumstances and conditions agreed and authorized, including those concerning the rules of compliance, security and external regulations

Critical factors on cloud: Access control


In the “pay-as-you-go” model, which typifies the cloud scenario, cost control is a vital issue and, as such, the provisioning and de-provisioning of resources must be made with agility and as automatically as possible

It is also important to assure that only the exact amount of resources needed is requested and configured as a way to avoid waste

Critical factors on cloud: Provisioning and automation


The detailed demonstration by the providers about the correct amount of resources requested by the buyer organization is an important initial step to the cost control process in cloud scenarios

The right allocation of the incurred costs in cloud services, according to the internal account structure, that is, detailed by business area, by geographical sites, by subsidiary company, etc is a mandatory element towards an effective cost control, based on the real business priorities

Critical factors on cloud: Billing, chargeback and resources utilization measurements (1 of 2)


A third kind of information that must be collected concerns to the identification of the biggest consumers, the most used apps, the peaks and valleys occurrence and its periodicity, etc; such data will subsidize many decisions which aim at promoting an efficient utilization of resources

Critical factors on cloud: Billing, chargeback and resources utilization measurements (2 of 2)


Such diagnostics may become a very complex task due to the dispersion of responsibilities among the providers, which tend to focus their analysis merely on technical aspects and not the consolidated impact over the customer business

The buyer organization itself, through its cloud contracts management team, will have to manage and integrate the priorities of the actions taken by each of the providers, aiming at supporting the most critical requirements of its business

Critical factors on cloud: Diagnosis on availability and performance of services (1 of 2)


Such activity will also have to take care of the integrated adjustment actions to minimize the reoccurrence probability and to promote a continuous proactive attitude

Also the service level agreements negotiated with each of the providers must coherently interrelate to give a holistic visibility about the resulting impact over the customer business when they are not achieved

Critical factors on cloud: Diagnosis on availability and performance of services (2 of 2)

old it sourcing dilemma is exacerbated on cloud

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