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Managingnext-generationITinfrastructureThedaysofbuildingtoorderareover.Thetimeisripeforanindustrialrevolution.JamesM.Kaplan,MarkusLöffler,andRogerP.RobertsTheMcKinseyQuarterly,Webexclusive,February2005Inrecentyears,companieshaveworkedhardtoreducethecostoftheITinfrastructure—thedatacenters,networks,databases,andsoftwaretoolsthatsupportbusinesses.Theseeffortstoconsolidate,standardize,andstreamlineassets,technologies,andprocesseshavedeliveredmajorsavings.Yeteventhemosteffectivecost-cuttingprogrameventuallyhitsawall:thecomplexityoftheinfrastructureitself.Therootcauseofthiscomplexityisthebuild-to-ordermind-settraditionalinmostITorganizations.Thetypicalinfrastructuremayseemtobehightechbutactuallyresemblesanold-fashionedautomobile:handmadebyanexpertcraftspersonandcustomizedtothespecificationsofanindividualcustomer.Todayanapplicationdevelopertypicallyspecifiestheexactserverconfigurationforeachapplicationandtheinfrastructuregroupfulfillsthatrequest.Theresult:thousandsofapplicationsilos,eachwithitsowncustom-configuredhardware,andajumbleofoftenincompatibleassetsthatgreatlylimitacompany'sflexibilityandtimetomarket.Sinceeachservermaybeconfiguredtomeetanapplication'speakdemand,whichisrarelyattained,vastamountsofexpensivecapacitysitunusedacrosstheinfrastructureatanygiventime.Moreover,applicationsaretightlylinkedtoindividualserversandstoragedevices,sotheexcesscapacitycan'tbeshared.Now,however,technologicaladvances—combinedwithnewskillsandmanagementpractices—allowcompaniestoshedthisbuild-to-orderapproach.Adecadeintothechallengingtransitiontodistributedcomputing,infrastructuregroupsaremanagingclient-serverandWeb-centeredarchitectureswithgrowingauthority.Companiesareadoptingstandardizedapplicationplatformsanddevelopmentlanguages.Andtoday'shigh-performanceprocessors,storageunits,andnetworksensurethatinfrastructureelementsrarelyneedhand-tuningtomeettherequirementsofapplications.Inresponsetothesechanges,someleadingcompaniesarebeginningtoadoptanentirelynewmodelofinfrastructuremanagement—moreoff-the-shelfthanbuild-to-order.Insteadofspecifyingthehardwareandtheconfigurationneededforabusinessapplication("Ineedthisparticularmaker,model,andconfigurationformynetwork-attachedstoragebox..."),developersspecifyaservicerequirement("Ineedstoragewithhigh-speedscalability...");ratherthanbuildingsystemstoorder,infrastructuregroupscreateportfoliosof"productized,"reusableservices.Streamlined,automatedprocessesandtechnologiescreatea"factory"thatdeliverstheseproductsinoptimalfashion(Exhibit1).Asproductordersrollin,afactorymanagermonitorstheinfrastructureforcapacity-planningandsourcingpurposes.Withthismodel,fillinganITrequirementisratherlikeshoppingbycatalog.Adeveloperwhoneedsastorageproduct,forinstance,choosesfromaportfolioofoptions,eachdescribedbyservicelevel(suchasspeed,capacity,oravailability)andpricedaccordingtotheinfrastructureassetsconsumed(say,$7amonthforagigabyteofmanagedstorage).Thesystem'stransparencyhelpsbusinessusersunderstandhowdemanddrivestheconsumptionandcostofresources.Companiesthatmakethetransitiongainbigbusinessbenefits.Byreducingcomplexity,eliminatingredundantactivity,andboostingtheutilizationofassets,theycanmaketheirinfrastructure20to30percentmoreproductive—ontopofthebenefitfrompreviousefficiencyefforts—therebyprovidingfargreateroutputandflexibility.Evenlargersavingscanbeachievedbyusinglow-cost,commodityassetswhenpossible.Developersnolongermustspecifyanapplication'stechnicalunderpinningsandcanthereforefocusonworkthatdeliversgreaterbusinessvalue;thenewmodelimprovestimestomarketfornewapplications.Nevertheless,makingthistransitioncallsformajororganizationalchanges.Applicationdevelopersmustbecomeadeptatforecastingandmanagingdemandsothat,inturn,infrastructuregroupscanmanagecapacitymoretightly.Infrastructuregroupsmustdevelopnewcapabilitiesinproductmanagementandpricingaswellasintroducenewtechnologiessuchasgridcomputingandvirtualization.1AsforCIOs,theymustputinplaceanewmodelofgovernancetomanagethenewinfrastructureorganization.TheroadforwardDeutscheTelekomknowsfirsthandthechallengesinvolved:over18months,hopingtobalanceITsupplyanddemand,itimplementedthisnewinfrastructure-managementmodelattwodivisions(seesidebar,"Next-generationinfrastructureatDeutscheTelekom").Intheolddays,thecompany'sITinfrastructure,likemost,wasalandscapeofapplicationsilos.Todayaccurateforecastsofuserdemandarecritical,sonewlymintedproductmanagersmusttakeahorizontalview,acrossapplications,toassessthetotalneedsofthebusinessandcreatetherightproducts.Theymustthenworkcloselywithinfrastructureteamstoalignsupply—infrastructureassetssuchashardware,software,andstorage—withdemand.纹Inth景epas某t,em寄ploye带esof跑the清infra欺struc撕ture附funct粉ionw亿ereo棕rder川taker龟s.No封w,th压eyca溪nbe活more央entre输prene背urial拒,cho悲osing歪the计mixo轮fhar处dware低,sof来tware茎,and亲tech货nolog状ytha扛topt刷imize曲sthe东infr绪astru题cture廊.To码keep屋costs阴low,隆they壁can恢phase保ing听rids筐oflo弹w-end叫serv炒ers,匙cheap斑erst驶orage坑disk较s,an童doth坏erco窑mmodi胃tyre刑sourc竿es.F盾actor炉yman蹦agers势now食focus亲ona吧utoma躲ting瞧and"熔indus厦trial桨izing滔"pro绍d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pacit焦ypla家nning捡.For泊ecast引sare奏more纽accu揉rate吗when剧compa酿nies往follo瑞wDeu设tsche锻Tele蜜kom's晨exam首plea跳ndag叔grega坛tede匆mand兔acros腹spro刮ducts敞inst卖eado朵fapp蜂licat膝ions.2.Fundingandbudgeting.Productdemanddrivesbudgets.Sincethenewmodelusesrealdemandforecasts,budgetingiseasier.Moreover,withpricingtransparencycomesknowledge.BusinessunitswillnowknowwhattheirITchoicesaregoingtocost;theinfrastructuregroupwillunderstandthebudgetimplicationsofuserrequestsandbeabletocreateamoreaccuratecapitalplan.3.Product-portfoliomanagement.Companiescanexpecttospendsixmonthsdevelopingnew-productportfolios.Theinfrastructureteamshouldreexaminethemtwoorthreetimesduringthefirstyeartoensurethattheyareappropriategivenprojectedworkloadsandemergingend-userneeds.Thereafter,ayearlyreviewusuallysuffices.Teamsshouldmonitorallphasesoftheproductlifecycle,fromplanningandsourcingnewproductstoretiringoldservicesandredeployingresources.4.Releasemanagement.Toensurethatnewtechnologiesorupgradesareintegratedeffectivelyandthatchangecauseslessupheavalandlostproductivity,leadingcompaniescarefullymanagethereleaseofbothinfrastructureproductsandapplicationsinparallel.Moreover,toplanahead,applicationdevelopersneedtoknowaboutanyimpendingchangeintheinfrastructurecatalog.5.Supplyandvendormanagement.ITleadersmustensurethatcomputingresourcesareavailabletomeetthecontractedservicelevelsofproductportfolios.Infrastructuremanagersshouldrevisittheirsourcingstrategyannually,seekingopportunitiestolowercostsandimproveproductivity.Evenwiththerestructuringandthenewrolesandprocessesinplace,changingthebuild-to-ordermind-setandculturemayremainthebiggestchallengeofall.DeutscheTelekomadjusteditsincentives,hirednewpeople,developedtrainingworkshops,andappointed"changeagents"tospreadthewordandbuildenthusiasm.Theseorganizationalandculturalchangesarecentraltorealizingthepotentialofthenext-generationinfrastructuremodel.Investingthetimeandattentionneededtogettherightresultsisjustascriticalasrefreshingthetechnicalarchitecture.Reference:Next-generationinfrastructureatDeutscheTelekomOttoZeppenfeld'scheerfuldemeanormaybesurprisinggivenhisjob.AsheadofIToperationsforT-Com,DeutscheTelekom'sfixed-networkdivision,he'sresponsibleforensuringthatallapplicationsrunsmoothly,evenduringtimesofpeakdemand.T-Com,whichoutsourcesalmostallofitsIToperationstoitssistercompanyT-Systems,providesvoiceanddataservicestoabout40millionconsumersandverysmallbusinesses.ItgenerateshigherrevenuesthananyotherdivisionofDeutscheTelekom.Thecompany'sITinfrastructureismassive:1.3petabytesofstoragecapacity,25,000MIPSofcomputingpower,approximately3,000serversand100,000workstations,andhundredsofapplications.ManyofT-Com'sITinfrastructureassets,likethoseofmostcompanies,oncesatidlewaitingforpeakloads.Toaddresstheproblem,T-ComandT-Systemsbeganimplementingthekeyelementsofanext-generationinfrastructuremodel:productlikeservices,transparentpricing,strictdemandforecasting,andcapacitymanagement.ManagingsupplyanddemandacrossapplicationsForeachinfrastructureproductcategory—storage,hosting,andsoforth—T-ComappointedaproductmanagertoassessdemandacrossallapplicationsinthatcategoryandtoworkwithT-Systemsondefiningtherightproductsandservicelevelsandnegotiatingprices.T-Com'sprocessforforecastingdemandaggregatesitacrossallcategoriesandthenforwardsthatinformationtoT-Systemsforuseincapacityplanningandmanagement.T-SystemssuppliesT-Com'sproductsandmanagestheunderlyinghardware,software,andnetworks.LikeT-Com,ittakesabird's-eyeview,lookingacrossapplicationsattotalstorageandcomputingneeds.Thetwounitsnowworkintandemtobalancesupplyanddemand—aradicaldeparturefromthetraditionalapplication-silomentality.Thesuccessofthismodeldependsontwokeyfactors:T-Commustlearntopredicthowmuchcomputingpoweritwillneedandwhen;T-Systemsmustlearnhowtouseexcesscapacityinotherareas."T-Systemsmusttakeonalotmoreresponsibility,"notesMichaelAuerbach,theT-SystemsmanagerforallT-ComIToperations."Attheendoftheday,it'sourjobtoleveragetheidlecapacityelsewhere."PayingonlyforusageSincethenewmodelrequiresT-Systems—ratherthanT-Com—topickupthetabforunusedcapacity,T-Systemsisunderpressuretothinkandoperateinnewways.Formerly,whenZeppenfeldneededanewbusinessapplicationforT-Com,T-Systems'Auerbachsuppliedtheappropriatehardware,software,andservicesandthentalliedupthecost.Itwasusuallythesubjectofintensedebatebecausethevalueofcomplexcomputersystemsishardtodetermine,andsoisthecostoftheassociatedinstallation,operations,andmaintenance.Now,Zeppenfeldpaysonlyforthecomputingresourcesheuseseverymonth;thehardware,software,andstorageneededtopowerT-Com'sapplicationsareAuerbach'sproblem.Thismodel,however,givesTSystemsthefreedomtomakedecisionsthatoptimizetheinfrastructureasawholeratherthanspecificapplications.Whereverpossible,T-Systemsusescheapercommodityresourcessuchasgridsoflow-endservers,storagedisks,andIntelprocessorsinsteadofUnixsystems.Inessence,itnowactsmoreasanentrepreneurthanasanordertaker.Transparencyofcostsisamajorbenefitofthismodel:T-CommerelyreadsoffthebytesitconsumedandpaysapredeterminedpricethatfactorsinT-Systems'engineeringsupport.T-Com'sinvoiceincludesahandfulofservicecategories(suchasstorage,backup,computing,theoperationofapplications,andthehelpdesk)andquantifiesusageindetail.Eachserviceunithasafixedprice,soT-Comknowsexactlywhatitwillpayforagigabyteofstorage,anhouroftelephonesupport,orabackupcopyofadatabase.Moreover,theseservicescanbebenchmarkedindividually,soTComhastheabilitytocheckthatpricesarereasonable.ZeppenfeldandAuerbachagreethattransparencyhelpscreateanatmosphereoftrust.GaininggreaterflexibilityT-Comalsogainsflexibility:itscontractletsitincreaseordecreaseitscomputingcapacityifitgivesthreemonths'notice.Drastic,across-the-boardchangesinusageareunlikelyformostcompanies,butthisaddedflexibilityinindividualareasisstillawelcomebenefit.Marketing,forinstance,hasfluctuatingneeds.Takeane-mailcampaigngeneratingseveralmillionresponses.Previously,asix-monthleadtimewasneededtopurchasenewhardwareandsoftware.Thenewmodelforcesmarketingtoproducemoreaccuratef

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