Changing IT Consumption Models: Are You the Comet or the Dinosaur?

First off, I apologize for the relative scarcity of blog posts lately.  I hadn’t really noticed that I had slowed down, but I was (forcefully) reminded by two people that I respect very much that I need to stop making excuses and get back to writing more.

suitcloudSince the large product launch that VCE had in February, my job has been in a little bit of flux.  There was so much NDA material to help customers and partners prep for, I spent the better part of 2012 just having discussions about VCE Vision, and the Vblock 100 and 200 Systems.  Once everything launched, we transitioned those discussions to one of the pre-sales overlay teams, and my team re-grouped in Scottsdale, AZ to figure out what to do next.

One of the topics we focused on was the idea that we are seeing a fairly significant shift in consumption models.  It’s not about one platform or another, since technology usually emerges to serve an existing need, not the other way around.  It’s a more fundamental realignment of what IT is, and the role it plays in the overall lifecycle of a business.

The interesting part to me is how this trend is reflected in how the audience has evolved for VCE.  In 2010, our audience was very technical, in spite of our efforts to show Unicorn-Shit-rainbows-23310537-500-500business value up the ladder.  The questions we got at this point from our customers and partners were very focused on the pieces of the Vblock.  By far, the question I got most in 2010 was “Why on earth are you using Cisco UCS?” as Cisco was extremely new to the market and hadn’t become the global x86 server player they are today.  We spent a lot of time going over configurations, explaining how rack-and-stack wasn’t something IT organizations needed to have as a core competency, and helping customers understand the real relationships between their applications and the underlying hardware.  Honestly, it was exhausting.  And boring.  But it was very necessary to handle questions and objections at this point because it gave us, as a company, the credibility to move up to the executive ranks and the confidence to know we understood the value of our offering.  Being forged in a crucible of technical fire isn’t a bad thing.

In 2011, we started to put the technical questions behind us.  Part of that was the release of the Vblock 300 system utilizing the then-new VNX storage array.  The addition of FAST Cache and FAST VP put a lot more buffer in the designs around storage, and we took many of the lessons learned from the early days and put them into practice with the Vblock 300.  The level of comfort and confidence that customers had with the successplatform increased greatly, and we started focusing on the business value of converged infrastructure.

Our target audience here was the CIO/CTO/Infrastructure Director, and over the next 18 months we focused heavily on the business metrics.  Cost of Ownership.  Return on Investment.  Time to Market/Provision. Operational Efficiency.  Scalability.  Consumption Models.  Staffing Cost.  Things that matter to a balance sheet.  Things that matter to a business.  Over time, we came to focus on this level almost exclusively, since it was here that we could show the most differentiation as a company.  Make no mistake: in today’s market, reference architectures are purchased by IT and infrastructure teams, but Vblocks are purchased by CIOs and CTOs.  One is a tactical continuation of the status quo in a market with increasing technical complexity, one is a strategic play to realign IT with the needs of the business, and streamline everything in that path.

By and large, we’ve been successful at showing the business value of the Vblock.  The IDC report and the TCO tools help to quantify the value for customers, and the Gartner market share report validates that customers are responding to what we are offering.

Consumption Models Matter (frame 1)The most fascinating shift has come in the last 12 months, however, as a third audience has started to appear.  The slide above shows the “traditional” areas of focus, from IT on the left, to the actual end users on the right.  Looks familiar, right?  IT spends money, when they spend enough that it’s material to the business there comes the addition of IT executives to help focus priorities and all of that effort is designed, hopefully, to serve the end users.  Today, 80% of our discussions are with the executive teams, the rest with IT and infrastructure teams.

Consumption Models Matter

Today, we are seeing a new audience: the application developers and the DevOps personnel that are supporting them.  On one hand, this is a small, small subset of the conversations that we have, maybe 5%, but there’s a lot of interesting things happening.

First, I’m talking to a lot of IT folks that don’t have any idea what the developer teams are doing.  None at all.  They don’t understand what they need, they don’t understand where they are going to have those needs met, they don’t understand what impact that’s having on their departments.  In many cases they see that budget is being moved, particularly OpEx, but they don’t understand why.  I always laugh when I hear the phrase “Shadow IT” because it implies that IT knows something about it.  In many cases, IT is completely out of the loop and the development teams (and less frequently the users themselves) are paying for the services they need directly.  I don’t blame them at all.

The important part to note is that the developers are closer to the users.  Even in a traditional large enterprise, they are closer to the applications that are core to the business.  This is important for one simple reason: they are guaranteed to win any battle they fight with IT.  At the end of the day, they are more relevant to the business.  But why are they at such odds with IT to begin with?  Because consumption models matter, and IT doesn’t understand what is being consumed or how to provide it.

meteors and dinosaursMany of the discussions I’m having with customers today are around understanding these consumption models, how they are changing and how IT can remain relevant.  My friend Florian Otel delivered a great presentation earlier in the year where he included this quote: “Never try to sell a meteor to a dinosaur. It wastes your time and annoys the dinosaur.”  IT groups that don’t understand how and why the consumption models that they are delivering to are changing are dinosaurs.  Much like the dinosaurs, their demise will be slow and painful as budget and priorities get shifted to development teams who deliver value to the business in a much more real-time, relevant way.

But what if there’s another way?

What if we could blend the best traits of the two groups?  What if we can help both sides understand each other better?  What if we can take the hardware-based resiliency and performance-focused design of IT and make it accessible and relevant to developers who are looking to use a process to publish the best code they can, as fast as possible?  What if we can make converged, multi-vendor hardware as API-enabled and accessible as the services that the developers are used to going outside the company for?  Is it possible we can help the dinosaurs avoid an extinction level event?  Maybe.  I’m an optimist by nature, so I think that given the choice, people want to do what’s right for the business, we just have to give them that option.

So what’s the answer?  OpenStack?  Possibly.  There are definite, strong opinions on that topic both ways, even on my team.  VMware?  Maybe.  Depends on how much they are willing to cannibalize themselves to realign with these new consumption models.  Maybe something else is out there.  It’s an exciting time, that’s for sure.

While the market tries to sort itself out, we’ll continue to try and help IT teams and executives understand these new consumption models and what they mean.  We’ll also continue to leverage investments like our VCE Vision Intelligent Automation software to provide API-accessible hardware solutions to prepare those IT groups for a day when they can choose to avoid the comet.