Tuesday, June 23, 2009

SaaS delivery of IT lifecycle and quality management functions evolves toward an IT service-delivery solutions approach

Listen to the podcast. Download the podcast. Find it on iTunes/iPod and Podcast.com. Sponsor: Hewlett-Packard.

Read a full transcript of the discussion.

When people think of Software as a Service (SaaS) and web services delivery, they often envision business applications like salesforce automation, email, and human resources management.

But Hewlett-Packard has been delivering quality assurance and applications performance management functions via SaaS for years. It's Business Technology Optimization (BTO) services, part of its Mercury acquisition, made the leap to SaaS delivery long before web-based business applications became popular. You could say SaaS for developers and testers -- code warriors -- paved the way for SaaS for salesmen -- road warriors.

Now, as interest in cloud computing ramps up, the ability to deliver more aspects of IT lifecycle and quality management, along with broader project and portfolio oversight values, is also ramping up. Yet a missing ingredient for IT innovators has been how to begin and how to organize these sourcing changes effectively.

Such a SaaS whole greater than the sum of its web services parts will better help IT managers do more with less, and provide better applications faster, as well.

To better understand the expanding role of SaaS within IT, and how professional services can newly help in the transition to holistic SaaS use by IT departments, I interviewed two executives last week at HP's Software Universe conference in Las Vegas: Scott Kupor, vice president and general manager of Software-as-a-Service, and Anand Eswaran, vice president of professional services, both in HP's Software and Solutions group.

Here are some excerpts:
Kupor: At HP for the last nine years, we've been selling IT management applications as a service delivery option. If you think about things like testing, performance management, or project and portfolio management (PPM), for example, those are traditional IT applications that we’ve been selling with this similar delivery model.

What we’ve been hearing from customers today at the conference are two key things. Number one, the cost benefits that initially drove them to SaaS are ever present and incredibly more important in this financial environment. The benefits are really coming to fruition. The second is that we’re starting to see a migration of SaaS from what was traditionally testing services toward other more complex and more customizable IT management applications.

We’re hearing a lot of interest from customers around IT service management (ITSM), service desk applications, and service management applications. These are things that have traditionally been the domain of inside-the-firewall deployments. Customers are now getting comfortable with the SaaS model so much so that they’re looking at those applications as well for deployment in a SaaS environment.

Eswaran: We’ve made a very conscious shift from what was inherently deployment of products. The approach right now is transformed into what business outcomes can we achieve for the customer, which is something which we would have been unable to do some time back.

We have changed focus now from deploying a single product set to achieving outcomes like reduction of outages by 40 percent, increasing quality, getting service-level agreements to a certain point, and guaranteeing that level of service. That’s been hugely helpful.

All of what we do at the back end, whether it’s how we leverage SaaS, what products we use, what software we use, what consulting and professional services we use, all of that is going to be transparent to the customer. What they care about is a service, which we will deliver to the customer. SaaS enables us to get to that service, get to that time-to-market, much faster.

This all gets us to the point of what customers refer to as "killing the game," getting to a point of being able to offer outcome-based pricing and guaranteeing that outcome, as opposed to the traditional consulting model of billing rates and hours.

Kupor: Remember, all these are complex IT management applications, they have third-party integrations.

That’s really what IT’s job is -- to help deploy business applications and govern the integrity, security, the authenticity, and the performance of those applications.

They have custom code that customers are building on top. Those are all areas of domains of expertise for the services organization. Through the work that [Anand's team] and we are doing together, we can together deliver a cost-effective delivery option for customers, but without having to sacrifice the complexity, integration, and customization opportunities that they demand for these applications.

We’ve heard this a lot from our customers today, that they’re actually interested in looking at how, as an IT department, they can deploy their own applications in a third-party cloud environment. You hear a lot of people talking about infrastructure on demand or computing power on demand.

People are looking toward these third-party products as a way to basically take an application they’ve built in-house and deploy them externally in, perhaps, an Amazon environment or a Microsoft environment. Where the interesting opportunity is for us, as a management vendor, is that customers will still need the same level of performance, availability, security, and data integrity, associated with applications that live in a cloud environment as they have come to expect for applications that live inside their corporate firewall.

We’ve been talking to customers a lot about something called Cloud Assure, which is the first service offering that HP has brought to market to help customers solve those management problems for applications they choose to deploy in a cloud-based environment.

That’s really what IT’s job is -- to help deploy business applications and govern the integrity, security, the authenticity, and the performance of those applications.

Eswaran: Everything is eventually going to get transformed into a service for the customer, so that they can actually focus on the core business they are in. When you have things transformed into a service, everything we do to offer that service should be transparent to the customer.

It becomes a services-led engagement, but that’s where we clearly differentiate "services" from "service," the singular, which is the eventual outcome the customer needs to create for themselves. That’s why we really partner well between SaaS and Professional Services. We believe that we are on a path of convergence to eventually get to offering business value and a service to a customer.
Read a full transcript of the discussion.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod and Podcast.com. Sponsor: Hewlett-Packard.

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