Spring 2008: A Note from Jeff Mack
The Next Big Utility?
You no doubt have a good idea of what IT services are and the critical role they play in your business. And I am sure that as a result of enjoying the convenience of electricity, running water, and telephone every day, you are familiar with various utility services. You are now probably wondering: what do IT services and utility services have to do with one another? Well consider this - have you ever stopped to think what it would be like if you could acquire your IT services just as easily as you do other utility services?
Perhaps I should clarify what I mean by Utility IT Services and what classes of service are included. Even though this is an emerging field, generally SaaS, MSP, and HaaS (in varying combinations) are deemed to comprise the fundamental service offerings. Let’s unravel the alphabet soup a bit.
SaaS – Software as a Service
SaaS represents a significant change in the deployment and licensing of software from the traditional model where software is installed at your facility on your servers and workstations. Instead, with SaaS, the software is installed at a remote datacenter on someone else’s equipment. You simply access the software via your web browser. You might even recall the term ASP (Application Service Provider) from the late nineties. In some ways, SaaS represents a rebirth and maturation of the ASP concept.
Examples of SaaS might include Salesforce, Gmail, and NetSuite . Some of the advantages of this approach are that it is faster to deploy than traditional site-licensed software, it requires no capital investments on your part, and you don’t need to host or manage the software installation. The down side includes concerns about security when your data is in the hands of third parties and essentially being hosted in the cloud. In addition, your ability to configure the software for your optimum needs will generally be restricted in the SaaS model.
MSP – Managed Services Provisioning
We all know that maintaining a network infrastructure requires a certain amount of system administration to keep the network operating at optimum levels. If the system administration work is not performed on a regular basis, unscheduled downtime usually results. Furthermore, if the system administration is performed during regular business hours, then scheduled downtime usually results. In either case, you are incurring disruptions to productivity and higher costs. The advantage of MSP is that the system administration is primarily performed remotely and during non-production hours by an outsourced firm. The advantage to you is that the work does not impact production, and the fact that it is scheduled during off hours ensures that the work is performed on a consistent and verifiable basis. Consequently, unscheduled downtime is greatly reduced. Your staff maintains a higher level of productivity and your total cost of operation (TCO) is driven down. In addition, MSP frequently includes coordination and oversight of your other services such as telephone and Internet so that you don’t need to spend your valuable time on those chores, either. Look for much more on the MSP topic in a future article.
HaaS – Hardware as a Service
HaaS represents the newest component of the utility IT services three-legged stool. Essentially it involves extending MSP to include the provisioning of hardware and all that goes with it. Let’s illustrate by example. Assume that you have just hired a new employee and you need to equip their desk with a new workstation.
- Traditional scenario:
You might search the Internet for good deals on a workstation and spend lots of time pouring over the myriad of available configurations. Or possibly you might call your friendly ICS rep and say that you need a new workstation. A few conversations would ensue about requirements, configurations, options, price, and terms. Eventually it would all get resolved and we would collect payment and order a new workstation for you and then make arrangements to install it.
- HaaS scenario:
You have your existing network infrastructure enrolled in a MSP program with a services firm specializing in MSP. The services firm is already familiar with all of your equipment and your traditional requirements. When a new workstation is needed, you simply request that an additional workstation be added to your MSP agreement. Your work station arrives and you see an additional fee added to your periodic service invoice for the additional unit. The HaaS thus represents a bundled offering including the procurement, installation and maintenance of the hardware. Procuring a new workstation becomes analogous to adding another cell phone to your corporate wireless account. With the cell phone there is no guaranteed replacement plan down the line. Rather, you will likely replace the phone when it no longer functions, is lost, or just isn’t cool any longer. In the case of the HaaS workstation, however, it may be on a predefined replacement plan (e.g. 36 months) so that you always maintain a high level of network performance and human productivity.
The HaaS offering has a number of advantages such as saving your staff’s valuable time spent provisioning your infrastructure, avoiding large capital investment peaks when equipment fails, and ensuring that the equipment is immediately configured, plugged in and managed in concert with the remainder of your operation.
Even though these utility IT service offerings are in their infancy, you owe it to yourself to start thinking about how they might add value to your organization.
