November 09, 2015
2016 & The Year Ahead for IT: Realities, Shifts & Opportunities
This post is part of a series based on the forthcoming book, Building a Modern Data Center, written by Scott D. Lowe, David M. Davis and James Green of ActualTech Media in partnership with Atlantis Computing.
A significant number of IT organizations around the world are spending the next 45 days looking at the opportunities and the realities they’re going to face in 2016. Demands on IT are up; complexity is spiraling to the outer edge of control, and of course, budgets and in-house IT skillsets aren’t automatically keeping pace. IT’s internal customers’ expectations have grown as well as they hear and read about the agility other companies seem to have in deploying IT resources for their important projects.
Fortunately, 2016 is also ushering in fresh approaches to planning, procuring, operating and managing IT. Clearly, not every organization is going to suddenly become Google or Facebook in the data center, but a sizeable portion of the agility these large web companies are known for is becoming securely and organizationally achievable through careful planning and new ways of approaching IT. These possibilities are opening up partly due to technological advances and new cost models, but also through IT staff adaptability.
Consider a couple of examples…
Flattening of the IT Organization
A decade ago, IT administrators prided themselves on their silos. Gray ponytailed storage administrators were the pride and joy of a thriving IT department. But that organizational mentality has come and gone, and the IT department of the future is becoming much more tightly integrated and highly generalized. With the ongoing need to do more with less, the IT team member that can adapt quickly and establish himself as someone who can pivot to the needs of the business will be in the highest demand, and most valuable to the flattening organization.
One of the primary disruptions to the industry driving this dissolution of silos was the mainstream adoption of x86 virtualization. As organizations across the globe have consolidated rooms full of physical servers down into a few racks, the supporting technologies have necessarily come closer together as well.
Virtualization administrators are also network, storage, and software administrators by association. Because this has historically been quite a full plate, the focus is now on making life easier for this “jack of all trades.” To keep costs down and agility up, the IT professional of the future will be expected to have a broad skill set and be capable of transitioning quickly between different areas of focus. Datacenter vendors will need to focus on making sure their incredibly complex, innovative solutions require as little babysitting as possible.
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Moving IT to an Operational Expense Model
Especially in the enterprise environment, getting budgetary approval for operational expenses can prove to be easier than getting approval for large capital expenditures. As such, the operating model of many IT departments is shifting away from capital expenses when possible and toward a primarily operational expense-funded (OpEx-funded) model for completing projects. A large component of recent success in these areas is due to a shift of on-premises, corporately managed resources to public cloud infrastructure and Software-as-a-Service (SaaS) platforms.
Because cloud resources can be billed just like a phone bill that comes in the mail once a month, shifting IT resources to the cloud also shifts the way the budget for those resources is allocated. While buying a pile of servers and network equipment to complete projects over the next year is budgeted as a capital expenditure, the organization’s “cloud bill” will be slotted as an operational expenditure. With a capital purchase, once the equipment is purchased, it is owned and depreciating in value from the moment it hits the loading dock. This removes an element of control from IT executives as compared to an operational expense.
If a SaaS application is billed per user on a monthly basis, there’s no need to pay for licenses now to accommodate growth in headcount 6 months down the road. It can also be in use this month and cancelled next month. This is in contrast to the IT director who can’t just “cancel” the stack of servers purchased six months ago because the project got cancelled. Due to these advantages from a budgeting and control standpoint, products and services offering a model that will require little or no capital expense and allow budgeting as an operational expense will be preferred.
To leverage this shift, IT organizations are going to expect more from their datacenter vendors. For instance, they’re going to expect:
offering of a OpEx-based model like renting or leasing,
billing based on monthly usage (or the reporting helpful in breaking this down)
expandability in small, predictable chunks based on need will position them for adoption by the IT department of the future
And finally, offering insight and helping the customer to increase efficiency and accuracy over the course of the billing cycle will create lasting loyalty.
This shifting focus from CapEx to OpEx is also giving rise to new kinds of data center architectures that allow organizations to keep data centers on premises and private, but that enable some economic aspects similar to cloud. Rather than having to overbuy storage, for example, companies can begin to adopt software defined storage (SDS) or hyperconverged infrastructure solutions that enable pay-as-you-grow adoption methodologies.
In blog posts over the next month or more we’ll dive deeper into how datacenter vendors like Atlantis are enabling these new models and helping IT organizations face 2016 with confidence that they’ll be able to meet and exceed the expectations placed on their shoulders. Don't forget to visit the Building a Modern Data Center eBook site now and sign up for your free copy.
Stay tuned for more…
SCOTT D. LOWE – Contributor
Scott is Co-Founder of ActualTech Media and serves as Senior Content Editor and Strategist. Scott is an enterprise IT veteran with close to twenty years experience in senior and CIO roles across multiple large organizations. A 2015 VMware vExpert Award winner, Scott is also a micro-analyst for Wikibon and an InformationWeek Analytics contributor.
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