Having been in the cloud infrastructure business since it came into existence, I’ve seen a number of different market forces shape and disrupt the industry.  The business side of my brain tends to focus on everything that’s changing.  But the engineering side of my brain tends to look for sustained constants in all the volatility. Sounds like a big data problem! Our data science team has crunched the numbers, and here are the key equations that help shape the managed cloud.

Ownership != Control

IT leaders often mistake having a tight grip on asset ownership with a tight grip on the steering wheel. With good but slightly misguided intentions, they want to own everything they use. This can lead to over-expenditure on common, undifferentiated hardware as well as under-utilized, over-engineered software products.  The own-it-all approach also builds a strong correlation between new IT projects and business growth initiatives, a situation that leaves IT permanently behind in delivering value to the business.

The critical challenge for any IT department is to provide an agility platform that addresses the digital needs of the business under competitive pressure.  The goal is to have true command and control over all IT resources, even if you don’t actually own them. In fact, true command and control comes from the de-coupling of IT infrastructure from its management systems which give operational awareness.

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Each infrastructure component should serve its purpose with high automation and focus.  Whether you financially or managerially own each asset is far less important.  We proved this to ourselves when we launched Cloud Managed Services. In just a few months, we were able to integrate the management systems which supported our managed hosting services with our new CenturyLink Cloud.  We achieved this without materially modifying anything with the underpinning platform.

Offloading != Outsourcing

It’s easy to offload your IT services.  Being strategic and gaining operational advantage from outsourcing them is another matter.  I’ve seen over and over that “offloading” infrastructure to unmanaged services and expecting a rich “outsourcing” experience is an exercise in frustration – and a violation of our second key equation.

What services are you are buying, and what do you expect from them?  Do they reliably meet your expectations? Think about why some infrastructure services catch on while others falter. It’s really a matter of whether the service reliably and intuitively does what it promises to do. A raw, unmanaged IaaS service only promises to deliver what its SLA describes: a device instance of a certain size on a reachable network that you pay for on an elastic basis.  Helping you manage those instances is a totally separate value proposition.

Compounding the issue is a shaky assumption that the person designated to managed your services at your cloud provider knows what he or she is doing.  As Paul Venezia, Editor of InfoWorld’s Test Center and one of the most trusted voices in the enterprise cloud, noted, “If it’s as simple as a service needing to be restarted, that’s one thing, but for more complex situations, the managed services admin may find himself without a clue to fixing the problem simply because he lacks the depth of knowledge about the app and its construction that’s necessary to fix it.”

We launched Service Management to solve these potential difficulties with outsourcing infrastructure. Service Management offers an innovative suite of managed services around our cloud.  These products allow us to build depth into our managed hosting solution and truly bond certain activities by our adaptive service desk with your hosted environment. This provides a true outsourced solution that actually saves you money.

Price != TCO

Cloud computing distills complex IT problems into simple numbers. All kinds of technology assets get orchestrated into a simple utility rate comparable to what you’d pay for a raw commodity. Hidden costs loom.  Just as a barrel of Bayou Choctaw Sour crude oil won’t make your car go, a cloud service with a highly visible commodity price is not guaranteed to work right. In my experience, you almost always need some important additional refinements to make it a usable service.

Placing value on all the user experience features automated into the utility rate you are considering is a critical step in understanding this third equation.  At CenturyLink, we strive to take value-added features and design them into our products as part of the utility price.  We feel this creates a better user experience – as we say within our CenturyLink Cloud Development Center, “Build In, Don’t Bolt On.” 

For example, when we integrated our Managed Services offerings with CenturyLink Cloud, we aimed for a simple model that combined all our managed hosting install steps into a simple push-button interface that customers could select at the time of server creation.  This approach consolidated all the value-add of Managed Services into a simple utility rate. 

It continues to be an exciting time in the cloud industry, as global CIOs work to understand what innovations like bare-metal automation, private clouds, Linux containers and Platform-as-a-Service mean for their enterprise architecture.  Ultimately, the most important proof point of our third equation lies in the investment it takes to stay ahead of, and fully automate these emergent innovations.  Sometimes it’s easy to lose sight of how much R&D gets baked into a simple utility price, but it is perhaps the greatest reduction of total-cost-of-ownership you get when moving workloads to the cloud.