The Need for Re-Engineered Pay-as-you-go IT | HCLTech

The Need for Re-Engineered Pay-as-you-go IT

The Need for Re-Engineered Pay-as-you-go IT
July 24, 2017

Ever since its inception, ‘public cloud’ as a model has enjoyed major commercial success. Today, organizations don’t want to invest in assets but want to consume IT resources directly. With a critical understanding on how to leverage public cloud, the need for more flexible 360° IT increased for ‘contained’, in-house IT environments in the realm of ‘complex/restrictive’ regulatory and compliance requirements. Eventually, it paved the way for a new consumption model that could help IT services companies save or optimize the cost from the private cloud perspective.

As the IT spending continues to grow, there is an immense pressure on service providers to offer adaptable IT consumption models without interrupting the service value, asset value and user value chain. Consequently, there are hyper-disruptive demands from digital transformation initiatives with businesses looking to expand their geographical presence.

An analyst firm report projects the overall IT spend will increase by 1.4% y-o-y, reaching $3.5 trillion in 2017. The data center segment is also expected to grow by 0.3% y-o-y that signals a reformed consumption pattern for enterprises. Subsequently, IT services companies are preferring to move away from buying assets in a traditional manner (CapEx). Instead, they are renting or leveraging the ‘as a service’ consumption frameworks from managed service providers.

IT spending

Experts believe that enterprises have a significant workload stake on the non-public cloud front, suggesting a shift—right approach that most organizations are adopting / willing to adopt. This would essentially mean moving from custom-made solutions to standard packaged solutions, standardize on x86 architectures, and eventually push the non-cloud landscape towards the cloud. Most service providers have already ousted the classic IT consumption models (for example, CapEx, OpEx with upfront long-term commitment), while others are following suit to remain competitive.

It is now evident that pay-per-use options are growing in popularity. Additionally, their gratification levels and succeeding necessities are beginning to take shape. This has revolutionized multiple ‘IT-as-a-service’ consumption models such as hardware leasing, metered model with minimal upfront payments, and shared risk model. IT-as-a-service aims to provide customers with the required scalability without over-provisioning, resulting in cost savings for their private cloud deployments.

However, none of the available options provide accurate flexibility nor transparency, which are the fundamental characteristics of a true pay-as-you-go model.

As per a recent survey done by one of the leading research companies on ‘customers view of pay-per-use offering’:

  • Pay-as-you-go will become the standard model for data center facilities and infrastructure investments
  • Customers would want pricing details and options to scale or reduce IT capacity i.e. transparency and flexibility
  • Future pay-per-use programs would include all-inclusive offers of hardware, software, services, and support. With exponential innovation in technology, customers are looking forward to a re-engineered consumption model that will support this commercially viable option to boost innovation, drive diverse business and digital transformation objectives

Future pay-per-use programs would include all-inclusive offers of hardware, software, services, and support.

Presently, enterprises deploy modernization and transformation initiatives to enhance business agility and productivity. They also look-out for a mature framework to address their core objectives.

The ‘on-premise IT-as-a-service’ (on-premise capacity on demand) has become an essential consumption model for private cloud deployments that are strategically and tactically aligned to drive business values (which aims to provide experience-centric, outcome-based, & service-oriented environment). A flexible IT consumption model acts as a critical enabler and propeller to drive business agility, innovation, and address the diverse end-user needs.

A flexible IT consumption model acts as a critical enabler and propeller to drive business agility, innovation.

The futuristic consumption model is expected to eventually cover all facets of the data center landscape i.e. hardware, software, services, and support. The impending attributes are the value and risk associated with the respective delivery models. These challenges could be substantial.

The futuristic consumption model is expected to eventually cover all facets of the datacenter landscape.

But enterprise IT services are more than eager to embrace this futuristic model to achieve:

  • Balanced technology architecture — for limitless scalable solutions
  • Rich software-defined data center footprint
  • Fewer software licenses
  • Stable, reliable, and quicker applications
  • Energy-efficient datacenters — pay for what you use only
  • Predictable performance and capacity — scale up or down at convenience

Service providers are now able to offer cost effective, flexible enterprise IT services due to standardized offerings for multiple customers. Users also benefit from the cost savings, flexibility, and scalability of the services. However, these models still lag behind in unleashing its true potential. Till then, the journey towards efficient cloud infrastructure looks full of aspirations, lessons, transformations, and triumphs.

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