I attended a managed services end-user event yesterday held in Cincinnati (birthplace of Kevin Youkilis, Red Sox first baseman extraordinaire). The event was sponsored by Logicalis. What really struck me about the event was how the Logicalis executives focused strongly on the their desire to sustain their customer’s business focus by supporting the tactical day-to-day operation of their underlying systems. Michael Cox, Chairman of Logicalis’ US operations, led off the event by explaining how his company ‘inverts the pyramid’ for his customers (what presentation would be complete without a pyramid?). The pyramid that Michael refers to is a representation of the operational requirements to support business IT where strategy, representing a small portion of investment and cost, sits atop the pyramid and operational expenses for day-to-day control lie beneath – and these responsibilities are best migrated to trusted partners. Michael’s point, which is usually referenced obliquely in most managed services provider’s presentation as ‘maintaining strategic control’ was the center point of most of Logicalis’ presentation bolstered by good examples and references.
Andy Wood, the CIO of Wilton Re a life reinsurer based in Wilton CT, provided an interesting customer presentation validating Logicalis’ message from a user perspective. Andy made some excellent points and validated my belief that managed services represent an intermediate step towards accepting ‘The Cloud’. It is a point not well represented in the media, or in analyst presentations, that the drive towards Cloud services will require some intermediary step for user organizations to become familar, and comfortable, with IT resources that are shared and not owned, located or managed by the user.
Andy made other interesting points supporting my belief that IT markets will not ‘sublimate’ to cloud computing and indicated that his relationship with his managed services provider, Logicalis, will change as his company embraces maturing cloud offerings.
Another reinforcing observation I took away from the Logicalis event is that the promise of ‘Managed Services’ is very interesting to small, medium and large companies without significant experience in traditional outsourcing relationships. A noteworthy gating factor in their decision making is their lack of knowledge in structuring deals and underlying agreements such as statements of work, SLAs (including escalation policies and thresholds) and other Ts and Cs.