Built to Out of Order

The costly build-to-order approach of typical IT infrastructures may soon be a thing of the past. It's time to get ready for the new industrial revolution.

As recently as the 1990s even large IT or infrastructure organizations ran just a few platforms and servers. Today, while most IT shops have made huge gains in removing software silos, those infrastructure silos have kept growing unconstrained. Application development needs and the demand for innovation have driven a massive expansion in volumes and rapid introduction of new technologies. The result, according to James Kaplan, a partner with McKinsey & Company, is that one of the biggest remaining bottlenecks in IT is the complexity of the infrastructure itself.

Fortunately, he says, the days of building to order are over. The time is ripe for the next industrial revolution, driven this time by the "productization" of next-generation IT infrastructure.

"I think there are a number of factors that have made next-generation infrastructure productization possible now. The biggest of those is a degree of technical sophistication, which was not possible before," Kaplan says. "There's also a technical maturity that means that a larger and larger percentage of infrastructure requirements that must be met by a particular organization can be met with standard products and technologies as opposed to systems and solutions that have to be custom-built for their needs."

The good news is that companies that drop the build-to-order thinking in favour of commoditization stand to gain big-time. But Kaplan warns organizations keen to make the transition will need to make major organizational changes, while CIOs will need to develop a new model of governance to manage the infrastructure organization.

Starting Anew

Infrastructure has become a major headache for many organizations as its complexity leaves them struggling to respond to more pressing demands. Some feel so constrained by mountains of legacy equipment they are ditching their infrastructure and starting afresh.

Research by Gartner late last year led it to predict a steady, incremental evolution towards real-time infrastructure. Its analysis notes growing competitive pressures have forced many enterprises to take drastic action (such as "business greenfielding": deliberately setting up new subsidiaries or manufacturing locations that do not have the constraints of existing business models). While difficult for entrenched companies, the greenfield approach offers many advantages, Gartner says. And it predicts many more leading enterprises will eventually exploit "IT greenfielding" to develop a new infrastructure, rather than continuing to suffer ageing and inefficient legacy environments.

"Such a trend will be exacerbated by competing start-ups that are not constrained by pre-existing technology or infrastructure and are thus able to be more effective," Gartner predicts. "Our research shows that most enterprises' IT infrastructure is ageing and petrifying, but that few companies are allocating sufficient budget to retire legacy environments. Advances in hardware performance and virtualization technologies are accelerating, and while considerable software issues remain (especially in licensing), some alternatives, such as thin-client and a more service-based approach, are becoming increasingly attractive for some organizations."

Gartner's bottom line: "'Greenfield' infrastructure rebuilds are problematic, but to remain competitive, enterprises should budget at least a 'fast-track' approach to evolving their infrastructure, eliminating increasingly expensive legacy solutions and increasing infrastructure investment to exploit new technologies."

This is where Kaplan and his team offer a new approach. In the report Managing Next-generation IT Infrastructure, prepared with Markus Loffler and Roger P Roberts late last year, Kaplan predicts the changes a new industrial revolution will force on CIOs as they look to strengthen IT infrastructure.

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