Transcript of a discussion on why changes in cloud deployment models are forcing a rethinking of IT economics, and maybe even the very nature of acquiring and cost optimizing digital services.

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Why Enterprises Should Approach
Procurement of Hybrid IT
In Entirely New Ways
Transcript of a discussion on why changes in cloud deployment models are forcing a rethinking of
IT economics, and maybe even the very nature of acquiring and cost optimizing digital services.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett
Packard Enterprise.
Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of
the Analyst podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions,
your host and moderator for this ongoing discussion on the latest insights into successful
digital transformation.
This hybrid IT management strategies interview explores new ways that businesses
should procure and consume IT-as-a-service. We’ll now hear from an IT industry analyst
on why changes in cloud deployment models are forcing a rethinking of IT economics,
and maybe even the very nature of acquiring and cost-optimizing digital business
services.
Here to help us explore the everything-as-a-service
business model is Rhett Dillingham, Vice President
and Senior Analyst at Moor Insights and Strategy.
Welcome back, Rhett.
Rhett Dillingham: Hi, Dana. It’s good to be here.
Gardner: What is driving change in the procurement
of hybrid- and multi-cloud services?
Dillingham: What began as organic adoption -- from
the developers and business units seeking agility and
speed -- is now coming back around to the IT-focused
topics of governance, orchestration across platforms,
and modernization of private infrastructure.
There is also interest in hybrid cloud, as well as multi-cloud management and
governance. Those amount to complexities that the public clouds are not set up for and
are not able to address because they are focused on their own platforms.
Dillingham

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Gardner: So the way you acquire IT these days isn’t apples or oranges, public or
private, it’s more like … fruit salad. There are so many different ways to acquire IT
services that it’s hard to measure and to optimize.
How to
Better Manage
Multi-cloud Sprawl
Dillingham: And there are trade-offs. Some organizations are focused on and adopt a
single public cloud vendor. But others see that as a long-term risk in management,
resourcing, and maintaining flexibility as a business. So they’re adopting multiple cloud
vendors, which is becoming the more popular strategic orientation.
Gardner: For those organizations that don’t want mismanaged “fruit salad” -- that are
trying to homogenize their acquisition of IT services even as they use hybrid cloud
approaches -- does this require a reevaluation of how IT in total is financed?
Champion the cloud
Dillingham: Absolutely, and that’s something you can address, regardless of whether
you’re adopting a single cloud or multiple clouds. The more you use multiple resources,
the more you are going to consider tools that address multiple infrastructures -- and not
base your capabilities on a single vendor’s toolset. You are going to go with a cloud
management vendor that produces tools that comprehensively address security,
compliance, cost management, and monitoring, et cetera.
Gardner: Does the function of IT acquisitions now move outside of IT? Should
companies be thinking about a chief procurement officer (CPO) or chief financial officer
(CFO) becoming a part of the IT purchasing equation?
Dillingham: By virtue of the way cloud has been adopted -- more by the business units
– they got ahead of IT in many cases. This has been pushed back toward gaining the
fuller financial view. That move doesn’t make the IT decision-maker into a CFO as much
as turn them into a champion of IT. And IT goes back to being the governance arm,
where traditionally they been managing cost, security, and compliance.
It’s natural for the business units and
developers to now look to IT for the right tools
and capabilities, not necessarily to shed
accountability but because that is the
traditional role of IT, to enable those
capabilities. IT is therefore set up for
procurement.
It’s natural for the business units
and developers to now look to IT
for the right tools and capabilities.

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IT is best set up to look at the big picture across vendors and across infrastructures
rather than the individual team-by-team or business unit-by-business unit decisions that
have been made so far. They need to aggregate the cloud strategy at the highest
organizational level.
Gardner: A central tenet of good procurement is to look for volume discounts and to buy
in bulk. Perhaps having that holistic and strategic approach to acquiring cloud services
lends itself to a better bargaining position?
How to
Make Hybrid IT
Simple
Dillingham: That’s absolutely the pitch of a cloud-by-cloud vendor approach, and there
are trade-offs. You can certainly aggregate more spend on a single cloud vendor and
potentially achieve more discounts in use by that aggregation.
The rebuttal is that on a long-term basis, your negotiating leverage in that relationship is
constrained versus if you have adopted multiple cloud infrastructures and can dialogue
across vendors on pricing and discounting.
Now, that may turn into more of an 80/20-,
90/10-split than a 50/50-split, but at least by
having some cross-infrastructure capability -
- by setting yourself up with orchestration,
monitoring, and governance tools that run
across multiple clouds -- you are at least in
a strategic position from a competitive
sourcing perspective.
The trade-off is the cost-aggregation and training necessary to understand how to use
those different infrastructures -- because they do have different interfaces, APIs, and the
automation is different.
Gardner: I think that’s why we’ve seen vendors like Hewlett Packard Enterprise (HPE)
put an increased emphasis on multi-cloud economics, and not just the capability to
compose cloud services. The issues we’re bringing up force IT to rethink the financial
implications, too. Are the vendors on to something here when it comes to providing
insight and experience in managing a multi-cloud market?
Follow the multi-cloud tour guide
Dillingham: Absolutely, and certainly from the perspective that when we talk multi-
cloud, we are not just talking multiple public clouds. There is a reality of large existing
investments in private infrastructure that continue for various purposes. That on-
By setting yourself up with
orchestration, monitoring, and
governance tools that run across
multiple clouds – you are at least in
a strategic position from a
competitive sourcing perspective.

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premises technology also needs cost optimization, security, compliance, auditability, and
customization of infrastructure for certain workloads.
That means the ultimate toolset to be considered needs to work across both public and
private infrastructures. A vendor that’s looking beyond just public cloud, like HPE, and
delivers a multi-cloud and hybrid cloud management orientation is set up to be a
potential tour guide and strategic consultative adviser.
And that consultative input is very valuable
when you see how much pattern-matching
there is across customers – and not just
within same industry but across industries.
The best insights will come from knowing
what it looks like to triage application
portfolios, what migrations you want across
cloud infrastructures, and the proper set up
of comprehensive governance, control processes, and education structures.
Gardner: Right. I’m sure there are systems integrators, in addition to some vendors, that
are going to help make the transition from traditional IT procurement to everything-as-a
service. Their lessons learned will be very valuable.
That’s more intelligent than trying to do this on your own or go down a dark alley and
make mistakes, because as we know, the cloud providers are probably not going to
stand up and wave a flag if you’re spending too much money with them.
How to
Solve Cost and Utilization
Challenges of Hybrid Cloud
Dillingham: Yes, and the patterns of progression in cloud orientation are clear for
those consultative partners, based on dozens of implementations and executions. From
that experience they are far more thoroughly aware of the patterns and how to avoid
falling into the traps and pitfalls along the way, more so than a single organization could
expect, internally, to be savvy about.
Gardner: It’s a fast-moving target. The cloud providers are bringing out new services all
the time. There are literally thousands of different cloud service SKUs for infrastructure-
as-a-service, for storage-as-a-service, and for other APIs and third-party services. It
becomes very complex, very dynamic.
Do you have any advice for how companies should be better managing cloud adoption?
It seems to me there should be collaboration at a higher level, or a different type of
management, when it comes to optimizing for multi-cloud and hybrid-cloud economics.
Consultative input is very valuable
when you see how much pattern-
matching there is across customers
– and not just within the same
industry but across industries.

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Cloud collaboration strategy
Dillingham: That really comes back to
the requirements of the specific IT
organization. The more business units
there are in the organization, the more IT
is critical in driving collaboration at the
highest organizational level and in being
responsible for the overall cloud strategy.
The cloud strategy across the topics of platform selection, governance, process, and
people skills -- that’s the type of collaboration needed. And it flows into these
recommendations from the consultancies of how to avoid the traps and pitfalls,
mismanage expectations and goals, resulting in clear outcomes on execution of projects.
And it means making sure that security and compliance are considered and involved
from a functional perspective – and all the way down the list on making it progress as a
long-term success.
The decision of what advice to bring in is really about the topic and the selection on the
menu. Have you considered the uber strategy and approach? How well have you triaged
your application portfolio? How can you best match capabilities to apps across
infrastructures and platforms?
Do you have migration planning? How about migration execution? Those can be similar
or separate items. You also have development methodologies, and the software platform
choices to best support all of that along with security and compliance expertise. These
are all aspects certain consultancies will have expertise on more than others, and not
many are going to be strong across all of them.
How to
Remove Complexity
From Multi-cloud and Hybrid IT
Gardner: It certainly sounds like a lot of planning and perhaps reevaluating the ways of
the past. I’m afraid we’ll have to leave it there. We have been exploring new ways that
businesses can procure and consume IT-as-a-service, and we have learned why
changes in cloud deployment models are forcing a rethinking of IT economics in general.
Please join me in thanking out guest, Rhett Dillingham, Vice President and Senior
Analyst at Moor Insights and Strategy. Thank you, sir.
Dillingham: Great to be with you, Dana.
Gardner: And a big thank you as well to our audience for joining this BriefingsDirect
Voice of the Analyst hybrid IT management strategies interview. I’m Dana Gardner,
The more business units there are in
the organization, the more IT is
critical in driving collaboration at the
highest organizational level and in
being responsible for the overall
cloud strategy.

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Principal Analyst at Interarbor Solutions, your host for this ongoing series of Hewlett
Packard Enterprise-sponsored discussions.
Thanks again for listening. Please pass this along to your IT community, and do come
back next time.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett
Packard Enterprise.
Transcript of a discussion on why changes in cloud deployment models are forcing a rethinking of
IT economics, and maybe even the very nature of acquiring and cost optimizing digital services.
Copyright Interarbor Solutions, LLC, 2005-2019. All rights reserved.
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