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Fresh Thinking on IT Operations for 100,000 Industry Executives

The problem with computing is everyone wants to make it uniform – fit it into a neat box, categorise it as ‘all the same’, make it autonomic, self-managing and move on. In fact, IT is anything but uniform, so these simplistic approaches fall at the first hurdle.

Smart CIOs understand applications need to be treated differently depending on their value to the business. There are four key types – invest, operate, contain and kill.

‘Invest’ applications generally make up around 10-15% of the full estate. These are the applications the CEO knows about – the ones that when they get better, faster or more functional have a direct impact on business value. Examples are key CRM systems or MRP platforms, applications that underpin vital business processes and touch customers. These applications are not terribly cost sensitive, so when CTOs look to virtualise to take out cost, CIOs resist. Virtualisation is useful for invest applications but only if it improves agility, speed of deployment, adds functionality or reduces risk.

‘Operate’ applications represent 40-80% of the estate. No matter how much better we make them, they don’t improve business performance. Examples might be email or document management, internal HR systems or archiving systems. They need to be reliable and cheap. Virtualisation works here as a method of taking out costs. So does outsourcing and software as a service (SaaS) delivery.

‘Contain’ applications are those we wish we didn’t have – old stuff that’s expensive to run and difficult to change or manage. We get the amount of these we deserve: under-invest and the category grows. They have one other characteristic: they are difficult to re-platform and change to ‘operate’ status. Although they’re important to the organisation, they don’t typically make the business run any better if we improve them. We just want them to run silently for as long and as cheaply as possible. ‘Operate’ applications that have not had proper investment, love and attention will eventually move into this category.

‘Kill’ applications are always a nightmare. These are the ones that are impossibly expensive to run and maintain. By definition, they only represent a tiny handful of the estate (perhaps 1-5%). They are impossibly difficult to change. Often the guys who wrote and maintained the code are retired (or dead). No one else you know still has the hardware, except the Natural History Museum, and the vendor no longer supports the operating system. These might have been ‘contain’ applications that just wouldn’t stay contained, or ‘invest’ applications where you didn’t invest (silly you). There is only one thing to do with a ‘kill’ application – bin it. You know it’ll cause pain and disruption, as well as costing a lot of money, but it has to be done.

Smart CIOs know this already and take a pragmatic approach to their applications, understanding instinctively where to spend money and where to bleed a previous investment. And really smart CIOs never reach the point where they need a kill category.

There Are 7 Responses So Far. »

  1. […] This post was mentioned on Twitter by Steve O'Donnell, ESG. ESG said: RT @stephenodonnell: [Blog] : Why Virtualisation isn't… http://bit.ly/bVcZfG #datacentre #it #esg […]

  2. […] } This morning I’ve been reading from an article about virtualization not being a universal panacea. I do have to disagree some with Steve though. In this post, I’ll be talking about this from […]

  3. Hi Steve
    I like the approach, but I’ve found that due to the fragmentation of larger IT Operate business units into technology towers, it’s next to impossible to tie together the technology components in the runtime that go together to support the different application classes. When we last spoke, I thought that the gap was around 10%, but after looking at a few outsourced environments, I’ve seen much larger gaps of up to 50%.

    I don’t think that it’s possible to find and track the gap in sufficient detail to make the savings. This is ironic as the idea behind the tech towers was to get scale economies, but it invariably leads to uncontrolled costs.

    My initial thought was that there’s a need to rebalance the build/run ratio of the IT budget and put the responsibility back into the build part of IT to track the application structures and use Continuous Integration to enable a controlled migration to SaaS (where I can tolerate the interoperability challenges) or IaaS. Of course that’s not an instant win, but there’s minimal investment and at least it’s not a big bang exercise.

    Tim

  4. I think that even the invest applications are going to be delivered as virtual instances eventually – its a question of when. The advantages of portability, maintenance and DR(it really helps with the “kill” apps in the future) means that it becomes a no brainer – it goes beyond the cost arguement

  5. RT @jnickotto: There are four key types of applications: Invest, Operate, Contain and Kill: http://bit.ly/a2yFJL

  6. Yup >> RT stevie_chambers RT @jnickotto: There are four key types of applications: Invest, Operate, Contain and Kill: http://bit.ly/a2yFJL

  7. Yup >> RT @stevie_chambers RT @jnickotto: There are four key types of applications: Invest, Operate, Contain and Kill: http://bit.ly/a2yFJL

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