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Cloud Computing: Article

How To Run IT Like a Business

HP's Andy Isherwood on running IT like a business, with an eye to transforming IT's role

In many companies, IT departments remain in an isolated functional silo, often not reporting to the CEO, and often unfortunately disconnected from the main business imperatives.

Now, the combination the down economy, tight IT budgets, and the advent of more cloud sourcing and data center architecture options offer two paths to IT leaders: Remain on the alienated edge, or move to center-stage in how businesses adapt to their changing markets.

HP at its Software Universe conference last week offered a path that helps unify people, process and product into a roadmap for how to transform IT, and therefore to better help transform the business -- while keeping costs down.

To more deeply understand the transformative challenges facing IT and business leaders alike, I interviewed Andy Isherwood, vice president and general manager of HP Software and Solutions.

Here are some excerpts:

All the conversations I've had with CIOs are that the capital expenditure is typically being reduced by anything between 0 and 40 percent, and operating expenditures being decreased by up to 10 percent. It's less, but still pretty significant.

So you’ve ended up with a significantly smaller budget to do stuff, which can cause big problems for organizations. They have a certain amount of infrastructure in day-to-day activities to maintain. This means that they have to spend all their budget on existing projects and keeping the lights on, rather than any innovation. If you can’t innovate, then you can’t deliver value back to the business and you become just an IT function delivering the core value.

So, how do we innovate and how do we use the budget more effectively than we do today to allow us not just to keep the lights on, but to do this huge amount of innovation?

If we don’t do it now, we won’t be able to do it in the future, because, as demand picks up, it’s just going to be "all hands to the pump" to be able to deliver just the demand that picks up, as we come out of the recession.

The financial situation at the moment is driving a more intense look at those sourcing options and what it does from a financial point of view for that particular organization. ... SaaS is a great offering. We’ve been in that business for nine years and we have 700 customers. So, we know that business well. We know that in times, in which capital expenditure is being restrained, they can move to a more operating expense-oriented budget, but still be able to innovate, which is a pretty compelling proposition. As we move through, and capital expenditure is freed up, that might change, but at least people have the option.

Whether it’s insourced, outsourced, a partner activity, whether it's on premise or off premise, all of these options give people choices. From an HP standpoint, we have the ability to give people the choice. Our recent acquisition of EDS clearly adds the last pillar of choice, given that we have now an outsourcing business, which is significant.

People have a lot of choice, but they quite often find it difficult to make a decision on the best choice. Other people feel that the choice gives them a lot more scope to do things differently, to manage budgets in a different way, and do things more effectively.

The management of all of these sourcing options is a key consideration. Take the example of an organization putting things onto a public cloud.

What I'm hearing from customers is that they want advice on what should they insource, what should they outsource, what should they put in the cloud, and what should they have as a SaaS offering.

They’re still going to have the same requirements from a governance and management standpoint, but it might be a lot harder than having it in-house.

Management requirements on governance around what data is out there, what performance is like, and what scalability is like, are all considerations and discussions that we help with. It can make the whole world a lot more complex for CIOs. Therefore, the management capability that we have around all of those options becomes even more important.

We’re finding that people want advice around the choices. ... What I'm hearing from customers is that they want advice on what should they insource, what should they outsource, what should they put in the cloud, and what should they have as a SaaS offering.

That’s a really important job and an important role for someone like an HP, which actually doesn’t have a bias, because we've got all the options. If we were only a cloud computing or any outsourcing company, we’d be giving customers one option. Our role as a consultant to not only evaluate what is best for those organizations, but what is good for them financially, is a very important part of the role HP can play and should play.

[The solution] becomes more of a management of the service, than management of the infrastructure that develops or delivers the service. So, our role is about, governance, management, and control of the services that are delivered to an organization, rather than the product, power, or the storage that’s delivered to a company.