Colorado is ready for world class infrastructure outsourcing!

Colorado is ready for a a world class managed services company.

By now, you're probably familiar with an IT outsourced model.  It takes many different forms and,  historically speaking,  involved software development and support overseas.  However, over the last 5 years, the US and specifically the Colorado market has seen  the growth of hosting and colocation companies (or Infrastructure as a Service- IaaS) 'hockey stick', as they say, to levels where even the bankers want in on the action.

So why is Colorado ready for a world class managed services company?  Simply put because it needs to.  The down economy is fostering more and more creative business needs and models that are perfectly suited to off-load on a service provider like Latisys and others.

Some perspective, first.

Virtually everything has a core function that never changes no matter how drastic its variables change.  As an example; capitalism.  The dictionary will explain it as an economic system in which the means of production ...so on and so forth.  Well, from capitalists perspective; the true nature of capitalism functions, on 3 things:  Improvement, speed to market and a cheaper means of production, or "better, faster & cheaper" as my colleagues and customers have heard me drone on about the last year.

So, why the economic perspective?  Well, because we're involved in a time where companies who figure out how to create a better product, get it to market faster and find a way to create it cheaper than the other guy will win the race; or at least until they get out done (i.e. mobile phones) in the next generation.

Which leads me to why I think Colorado, needs to assess how are they building their information technology strategy in the "new normal" economy.  Colorado companies are facing tough economic times because of national and local economics.  This is why companies need to explore transformative approaches, products and most importantly services from companies that focus on information technology outsourcing.

Here are my 3 keys:

Key 1: Use someone else's Capital :  isolate elements in your IT portfolio that are up for refresh or need upgrades.  However, due diligence on the financial health of the company is paramount.

Key 2: Dump the data center:  Here's the thing, most companies produce or create services that have nothing to do with managing generators, or managing power usage effectiveness (PUE).  Leave that to the experts because they build best practices, better change management and their dollars are invested, 100%, in building data centers better than your CFO is willing to spend.

Key 3:  Roadmaps are not just for vacations:  There's alot to be said about a roadmap.  Its provides direction for the future trip- you know where you're going.  Service providers are there to invest in future technologies that you may not need today, but will most certainly need to be using in the future.

So, Colorado companies, its up to you to embrace new approaches to your IT portfolio questions.  If your business/product has NOTHING to do with managing servers, cooling units, network switches or power generators; SERIOUSLY, but strategically look at Infrastructure as a Service companies in Colorado.  There's no reason you should manage those when you're trying to build the next 'widget' better, faster or cheaper than the other guy.

Cloud and Utility computing platforms: Right Sourcing and a New Taxonomy:

Recently, I was told that companies in Colorado are traditionally considered late adopters of different IT strategies and disruptive technologies.   History tells me to accept that Coloradans take a 'wait-and-see' approach with innovative business models and technology.  But present situations call for rapid adoption of transformative strategies that preserve and position Colorado companies for a much different marketplace.  One thats driven less on fulfilling demand, but creating it with strong cost and value propositions.

If you're still reading this, you've undoubtedly heard the terms cloud computing, utility based computing platforms and grid computing.  They all have the same connotation of smarter ways to utilize capital investments in IT infrastructure.  The Forrester Research Group outlined 11 cloud-oriented strategies that IT departments and organizations need to start incorporating into their budgets in 2010.

Where to position cloud for your organization?

Its commonly thought that cloud technology is fairly immature.  While its application on a wide scale is new, virtualization is not an immature technology.  Look at VMWare.  The notion of immature is somewhat lost when you consider VMWare- who's business is centered around creating utility computing or cloud environments- has a market cap of 19B.

There are several places that companies need to consider using cloud technology and providers to augment or fulfill strained budgets:

1.  Tech Refresh cycle:  In our business, we think of this as 'low-hanging fruit'.  It's an opportune time to consider- along with the purchase of hardware- how a provider of cloud-technologies can smooth out a budget, or essentially replace any hardware and software purchases.  It makes sense in one paradigm;  why buy when you can rent and by renting I mean computing resources.  The approach is simple;  cloud providers and their technology platforms are optimal places to put tier 1 and tier 2 applications that have variable use, or have low compute demand.  Web and application front-end's are ideal for consideration in the cloud.  At the end of the day, the concept is to take some of that Tech Refresh capital budget, move it to an operational expense and preserve capital for the mission critical applications in an environment.


2.  New software deployments:  As the link to this Forrester report synopsis states, new software deployments don't necessarily need to be in house.  In this case, leveraging the capabilities of an infrastructure as a service company to 'right source' these deployments is a great idea.  They deployment of a company wide software package takes time and the resources needed gradually increase as the app is more entrenched in the company.  Why not 'dial-up' computing resources as needed?

3.  Purchase for need, not capacity:  my hardware vendor pals won't like this approach, but it's concept has some validity.   In my experience, most quotes for new hardware are based on today and tomorrow's need.  In turn, the proposal is forced to incorporate some 'overhead' for growth.  Thus increasing the initial cost of the purchase, PLUS the implementation of said hardware solution.

In this day and age, there's an even greater demand to right-size the environment, but its virtually impossible when having to purchase a hardware platform.  However, right sourcing this need is best suited by leveraging a hosted, cloud based environment.  In general, they provide for a reliable SLA based computing platform that will grow based on the demand for resources

All in all, its safe to say that IT strategies must change now that the economy is transforming into something we've never seen.  Companies still need to conduct business and IT is critical to their growth. However, outsourcing or 'right sourcing' as Forrester refers to, will not only help companies navigate today's rough economic situation, but it also helps position them for a vastly different and more competitive marketplace in the future.

Forrester outlines 11 cloud computing technologies - V3.co.uk - formerly vnunet.com

I welcome any and all comments and rebuttals.