Will IT eventually transition into a Utility company like Gas, Electric, Water?

N2IT

It seems that a lot of these large monolith type companies feel they have been exploited by IT in the 80's and 90's and want the model to shift through service providers. Like you would with Electricity etc.

What's your thoughts on IT transitioning into mostly MSP's in the future? I honestly believe companies are looking at ways of removing IT altogether from there processes and operations and transitioning them onto other providers/companies who specialize in this particular area.

I've recently read the ITIL service strategy book and some of what the book discusses is just this. Companies don't want to assume the cost of failed project/delivery over and over again and now want to transfer that risk. If the "business" can consolidate everything onto 1 or 2 lines items and have a vendor management team set up to make sure SLA's aren't breached that "could" save them a lot of money. If the availbility or quality drops below SLA, then they recoup some of their financials. The model makes a lot sense from my vantage point.

Note this is not an IT is going away post - just shifting into a utility model. With the "cloud" surfacing and gaining market penetration it seems this could be happening.

I'll be honest I haven't been keeping up on IT strategies lately but this one has caught my eye. My apologizes if this is common knowledge or already been discussed.

ptilsen

The comparison is apt in that just as it generally isn't cost-effective to provide your own utility base (e.g. power plant, water treatment facility, etc.) because utility companies take advantage of economies of scale in a unique way, it is becoming less and less cost-effective to have an internal IT when you can transfer the risk and the fixed costs. This can be both for infrastructure itself (move to Azure, EC2, et al) and for IT (outsource all/most infrastructure to MSPs, consulting firms)

However, I don't think it's that commoditized to make it quite like a utility. It's much more like an ad agency or law firm. Even if you have an internal marketing department or attorney, you're generally going to go to a firm to get the big stuff done. Enterprise IT is heading this direction. SMB IT is already there, but to the point that the MSP should be your IT department, with limited internal resources used for managing the MSP. Now on the support side, I would say it is approaching the point of being a utility-like service. And so is it on the actually computing side with cloud. But, there are many more areas in which I think we're not going to see IT truly become like a utility. Some similarities for sure, though.

And I really agree that the SLA model is better. The trouble is pricing. It's still somewhat complicated getting true fault-tolerant tech and predictable recovery procedures in place on the infrastructure side (another year or three of cloud service maturity will fix that), but even on the OLA and SLA side, it's tough for the MSP to figure out how to price without taking a huge risk. It's a nice incentive to improve services and profit from it, but most of this stuff just isn't science; it's hard to figure out your risks and how to ensure you can prevent or solve any issue within SLA.

N2IT

You wouldn't believe the risk MSP's take. I'll go as far as to say they use the metrics provided from the customer without running their own assessment. I've seen it.

darkerz

I am so glad you made this topic.

My company is re-structuring how it does "IT", we now have a Leadership/Management/Architecture group of 5 people, we have a Services group comprising of my self (Networking, Data/Wireless/Security/etc), 2 Telecommunications people, 1 Service lead (Contracts, finance, accounting w/ Vendors), 1 Service Manager (Escalation, ordering and budgeting) and 2 systems people (working with Microsoft, IBM, etc. to provide services). Finally, we have the IT "In-Housers", meaning Helpdesk, System Admins, Computer Operators, etc.

So more or less, since we've exported these Telecom, Network and Server functions to other companies, what ours is doing is using us as technical experts and vendor "accountability buddies" to steer the Vendor we're working with to work with our internal needs. Our internal it "In-housers" take care of what needs to be taken care of that's still not sourced out.

Still a lot of IT, technical, nit-grit work to do... Except when it comes to MPLS, IPVPN and other services, we have a LEC provide that and they use me to grill them every step of the way to reduce downtime, provide solution paths and maintain services.

5 years ago, the "Services" team used to be 4X in size since it was all in house.

I can't complain, a mixture of management, provisioning, vendor working, technical planning and Tier 2/3 support + analysis of my network is far better than just fixing the same issues with the same products over and over The pay is nice too.

ptilsen

N2IT wrote: »

You wouldn't believe the risk MSP's take. I'll go as far as to say they use the metrics provided from the customer without running their own assessment. I've seen it.

Oh, I would. I more or less ran the service department at the MSP I left last July. I spent over a year cleaning up mostly processes and policies that all boiled down to us taking a huge risks even though we were already on razor-thin margins just for the man-hours being provided.

wes allen

You should read this book, and critiques of it, for sure: The Big Switch: Rewiring the World, from Edison to Google

tpatt100

darkerz -

So more or less, since we've exported these Telecom, Network and Server functions to other companies, what ours is doing is using us as technical experts and vendor "accountability buddies" to steer the Vendor we're working with to work with our internal needs.

I am finding myself in this sort of position now. I wonder if I should even fight it anymore and just make the more technical side of IT my hobby and find fun projects to keep myself somewhat current and start focusing my studies more into project management.....

the_Grinch

I'd say we are making a shift that is utility like, but not necessarily drowning IT out completely. I read a book recently that I believe paints the picture extremely well and actually if implemented would make a world of difference. It hinges on Salesforce, but it still makes a lot of sense since a lot of companies are doing SaaS. The book is Unleash the Power of force.com: How to Thrive in the New Digital Economy. The idea is your IT department will honestly consist of a few hardcore programmers and that's it (beside perhaps your network people). From there, you have power users who can make simple programs (using force.com) on their own without talking to IT at all. The idea is they can manipulate the data without changing it so they can do what they like. If the "program" is a little more complicated, they talk to the programmers to help them extend it.

Honestly, I forsee the death of the IT Department. Mind you, just the department, not IT in and of itself. I think most of the good companies are finally seeing that you can't separate IT from the business any longer. IT enables the business to do what it does. At the same time, IT has to see that you can not longer be just an IT guy. Understanding the business is a requirement and finding ways to make things easier or more efficient is where the IT career field is going. The other side of it is, with the incoming generation being tech savvy there isn't as big of a need to your general helpdesk people. Where I am at now, I've literally have a number of users who I haven't spoken too since I've onboarded them. Their laptops work and they tend to troubleshoot/fix their own issues. I've thought about it and I tend to think that there is a 70/30 deal going on now. About 30% of your users will take up all of your time. That's pretty good. I got my example from our roll out of Adobe Creative Cloud. We generated the accounts and said "sign in, download, then install the tools you need" with a brief how to. Sent this to 10 people, only three came back with issues. Wrote a script to change printer ip addresses, sent directions, and we had five people (out of 80 users) come back with an issue.

As for MSPs, I think it will ultimately be a split between people using them for some things, but not going to them fully. I worked for an MSP and customers came and went. It really comes down to knowing how much you can off load. Most of our clients still had internal IT resources, they might trim their departments, but only a few relied on use completely. I tended to see that the smaller shops relied on us completely and a fair portion of the almost big companies relied on us completely. The rest was a split, really just serving as that "third" IT guy when your other two were overloaded.

All that being said, IT as we know it now, is going to change big time and you'll find we need to change with it. The specialists will work for either a Service Provider, a datacenter, or large consulting firm. Your helpdesk people are ultimately going to become business analysts with tech skills. Your business analyst will be the go to tech person when something breaks and will coordinate with your programmers for larger projects. The rest of their time will be spent doing business related tasks.

I highly suggest everyone read these two books:

The Phoenix Project: A Novel About IT, DevOps, and Helping Your Business Win <--This book was insanely good and will get you emotionally involved because we've all been there.

Unleash the Power of force.com: How to Thrive in the New Digital Economy <---Not that you have to use force.com, but this books gives you awesome examples of the power for Software as a Service.

N2IT

I wish I was a speed reader. I am very interested in all of the books mentioned.

the_Grinch

The Phoenix Project is a quick read. I read it within a week just by reading for forty minutes a day on the train. Unleash the Power of force.com is just as good of a read and by the end you can leave the rest since he dives more into the Salesforce side of things.

darkerz

tpatt100 wrote: »

darkerz -

I am finding myself in this sort of position now. I wonder if I should even fight it anymore and just make the more technical side of IT my hobby and find fun projects to keep myself somewhat current and start focusing my studies more into project management.....

The second my job becomes less than 51% technical in nature, I'm going to call up these ISP's/MSP's and jump ship. I didn't get into IT to make others do the work for me, I did it out of raw passion for technology.

They get to work with all the cool stuff (the bigger ones) and new technologies.

Also, Technical Consulting is pretty good, I know a few companies in my area that pretty much lease out CCIE's for 150-300 an hour. They all make over 6 figures and are pretty happy fella's.

GAngel

I'd say my org is a prototype of what the modern mid size company will look like in 5 years. We're cloud for most apps and file server. Only a few custom in house apps. Almost fully paperless BYOD shop. Ratio is now 1:200 In the old days it was around 1:15

With that aside I've never seen a company that functions well without an internal IT department there is just too much stuff that can't be project managed away. Tech is far more strategy based now than ever before.