February 5, 2014

How the Five Big IT Strategy Trends Fit Together for CSPs

Understanding how big, new concepts complement each other is an important aspect of communicating IT strategy to key stakeholders. Here is a look at how five IT strategy components that are prevalent today fit together for CSPs.

Buzzwords seem to be the stock-in-trade across all tech related industries, but they can generate as much ambiguity as they do excitement. When Communications Service Providers (CSPs) choose their IT strategy paths, they are often making multi-billion dollar long term commitments. It is not uncommon for buzzwords – and the concepts they represent – to play key roles in defining those paths. Understanding how big, new concepts complement each other is an important aspect of not only defining IT strategy, but also communicating it to key stakeholders. Here is a look at how five IT Strategy components that are prevalent today fit together for CSPs.

Managed Services
Managed Service initiatives typically begin with a CSP giving a trusted supplier the reins to major portions of their IT or network infrastructure. It is common for a significant number of personnel to be “rebadged” in the process. Operations can continue on an as-is basis for the most part while the supplier has an opportunity to make incremental improvements to systems, processes, and operational teams over time. A Managed Services strategy can immediately can reduce cost and risk for the CSP that’s reflected clearly on balance sheets and income statements, but often it’s only the first major step in a transformative IT strategy that embraces new outsourcing options.

Hosted Solutions
Hosted Solutions can build on and work in conjunction with Managed Services approaches. In terms of responsibility for system and process health and welfare, Managed Services and Hosted Solutions often are not very different. With a hosted approach, a trusted supplier provides it solutions to the CSP from a remote data center. This can be, and often is, in addition to operating elements of the CSP’s infrastructure from its own data centers (or what were its data centers). In a Managed Services arrangement, the supplier may very well operate and maintain existing solutions that were sourced from other vendors. The key to a hybrid, Hosted Solutions-Managed Services approach is that it can define a long term path for outsourcing, transformation, and consolidation. Without disrupting its business, the CSP can make a key supplier responsible for maintaining the status quo; transform and streamline its operations incrementally; and leverage advantageous technologies.

Virtualization has become a staple of data center operations because of the cost and efficiency benefits it produces. It is a key concept in the delivery of hosted solutions because these are data center-centric and aim to reduce cost of ownership. With concepts like Software Defined Networking (SDN) and Network Functions Virtualization (NFV), virtualization is gradually moving into CSPs’ network domains as well.  As CSPs move to Managed Services approaches and hybrid Hosted Solutions models, they can and should expect their key suppliers to leverage and deliver virtualization’s capabilities and benefits on their behalf.

Multi-tenancy is a key concept in the cloud-based applications world because it can allow software-as-a-service (SaaS) providers to scale their products in order to achieve great efficiencies and substantial margins. Multi-tenancy is what allows a single, implementation of an application to host many different customers by abstracting, distributing, and virtualizing core  processing, application functionality, and data management. A key idea here is that distinct customers’ data can be partitioned securely, so that while everyone is – in a sense – using the same core application, no one has horizontal visibility into each others’ confidential business data.

This public-cloud vision of mult-tenancy typically does not pass muster in large scale CSP environments because data privacy is too critical for business, legal, regulatory, and liability reasons. Multi-tenancy may gain greater traction, however, within group operators who aim to achieve massive efficiencies from group-wide IT initiatives. By leveraging managed services and hosted solutions, empowering them to be highly efficient through virtualization, and employing multi-tenancy in a private-cloud environment, large group operators can physically partition data across their operating units – as typically they must - and yet share application resources group-wide. This can drive massive IT efficiencies, facilitate transformation and consolidation, and enable group-wide architectural standardization.

Standardization is occurring on two major levels: adoption of industry-wide standards and standardization within CSPs’ group-wide IT environments. The two can be mutually exclusive, but more often that are complementary. As an operator adopts industry-wide standards, it can set the stage for more commonality and flexibility in its IT environment. This flexibility can ease the path to transformation, including transformation strategies based on adoption of managed services and hosted solutions.

When an operator defines group-wide standards, it can adopt industry-standards as a basis for its internal specifications. It can define a target-state architecture to which it will gradually migrate all of its operating units in order to achieve large scale, group wide IT efficiencies and capabilities. There are massive cost, risk, training, licensing, speed-to-market, and customer experience benefits to be derived from this approach.

To a large degree, standardization can bring all of the five IT strategy components together. It can provides the blueprint for CSPs to determine group-wide, target end-state architectures which can incorporate standardized, centralized, virtualized, multi-tenant solutions provided via a combination of on-site managed services and remote hosted models.

Photo by: Leonardo Rizzi via Flickr


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