When economic times are hard there is always pressure on budgets in every area of business
operations. Indeed justifying any spend at all has become subject to ever more intense scrutiny and
in IT this has been reflected by vendors proclaiming IT budgets are being "slashed" and that IT
must "do more with less".
In a recent online survey we asked IT professionals how budgets are changing inside their
organisations.
While the report of the results from the survey does record that IT funding is under stress in many organisations, it should be remembered that this is the case across the board in business as a whole – i.e. there is nothing unique about the IT department compared to other areas of the business.
But there are signs that IT spending is far from being slashed to the bone.
As can be seen in the graph above, significant numbers of respondents state their IT budgets are at a level that allows them to do everything they have to do. Perhaps of even greater importance, many report they also still find it possible to get investment in new IT projects. Perhaps unsurprisingly, this is reflected mostly by organisations where IT and businesses communicate well together and in which IT service delivery is visibly well aligned with the needs of the business.
Naturally, even here, new IT project proposals must lay out a clear business case in a form that business stakeholders can understand.
One potential response to the financial challenges facing IT could be the adoption of technology
aimed at streamlining the IT delivery process, boosting physical infrastructure asset utilisation,
and generally lowering overheads, and it’s based on these promises that a number of key vendors are
promoting, private cloud. But how do the claims translate to reality, and is it only just about
efficiency?
Well there must be something real and valuable here, because according to the research, many
IT professionals already recognise the adoption of private cloud solutions as a logical next step
forwards from existing and planned virtualisation projects, so let’s drill into what’s on offer a
little deeper, and where it fits into the greater scheme of things.
Private cloud systems depend upon the sharing of computing resources amongst multiple IT services
combined with the notion that such resources can be rapidly adjusted to ensure users obtain the
levels of service quality they require to do their jobs. Indeed, the combination of active
management and shared resources are major factors that transform a standard virtualised
infrastructure into a private cloud. But moving towards the large scale use of private cloud poses
a range of technical, process and financial challenges that it’s important to be aware of.
Of these the most straightforward to address concerns the requirement for new tools that enable
management and administration of the combined server, storage, networking and application resources
in a seamless manor. That said, we know from many surveys carried out by Freeform Dynamics over the
years that getting budgets to pay for new management tools can take considerable time and
effort.
As well as pulling things together across previously separate domains, private clouds, by their
very nature, are also designed to be dynamically managed to ensure each IT service receives the
resources needed to deliver specified levels of service as circumstances and usage vary. This will
in turn necessitate using tools to monitor the service levels delivered, even including user
experience. It will also become desirable, if not a necessity, to report to business users on the
service levels being delivered, if only to ensure that everyone is aware that they are not being
disadvantaged by the sharing of resources with other business units.
Beyond tooling, keeping a private cloud functioning smoothly typically also requires IT departments
to modify, perhaps drastically, many of the operational procedures and processes in place today.
For some organisations this may well mean taking steps to combine different teams, for example the
storage, server and networking groups, into new units combining all the skill sets.
All of these IT related matters are then likely to have a considerable impact on the way in which
IT budgets are funded. Today many organisations still pay for IT infrastructure out of individual
project requirements, rather than investing in the infrastructure itself. These existing budgetary
models are not suited to working effecting with dynamically shared resources. The time for the
active use of charge-back, or at least "show back", for the use of IT resources may become a
requirement if user disputes are to be avoided.
Even if IT funding and accounting do migrate towards some form of activity or usage based model,
the business may have to face an even tougher challenge. Private clouds can react very quickly to
changing demands and move resources around to keep service levels at a desired quality, but they do
not offer infinite capacity.
Until organisations find ways of adding capacity on the fly, perhaps utilising external cloud
services, there may be times when the availability of physical resources is stretched. At such
points, someone will need to decide which IT services receive the capacity available and which
services will have to accept reduced quality for a period of time. Then for persistent growth
situations, alternative budgets will need to be found, very rapidly, to pay for service
enhancements.
Clearly, IT does not want to be put in a position to have to make such choices without senior business managers being involved, so a key question for IT leaders is: Are you ready for private cloud?
Tony Lock is programme director at analyst Freeform Dynamics.
