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The future of IT Service Brokering


In 2003, Nicolas Carr wrote a now-famous article in Harvard Business Review entitled, “IT doesn’t matter”, in which he argued that IT can’t provide competitive advantage, was thus a commodity, and would therefore be replaced by utility (i.e. cloud) computing. Needless to say, the article caused a stir and is still talked about, eleven years on.


In the same vein, some commentators say “in the future, IT will just be a service broker”.


The Core/Context model is key to IT service brokering decisions


Let’s look that what is actually happening in 2014 and how this trend will evolve. In order to do this, we need to use the “core - context” theory created by IT guru Geoffrey Moore. Moore states that we should keep under our control those applications that provide the business with competitive advantage. Moore calls these “core” services.

geoffrey moore.png

All other applications, Moore considers to be “context”, and provided a service of sufficient quality and reasonable cost exists, we should let someone else -  a cloud provider - deliver our context services. Moore argues that context services provide no competitive advantage and just serves to de-focus IT from creating competitive advantage through “core” services. 


We are, of course, seeing this theory played out in most companies around the world. Here in HP, for example, now provides our CRM solution and workday our HR solution, to name but a few. 


Core/Context applies at the infrastructure and business process level too


Moore’s core-content model applies at other levels too. If we have a core application, we may still decide that certain functions and certain pieces of infrastructure should be provided by someone else. We may decide, for example, that a gateway into the application can live in the cloud because we rarely use it. Or, the development team may chose to house their test systems for the application in the cloud.


Core-context applies to business processes too. While we may feel that a business process is “core”, we may choose to supply certain steps in that business process from SaaS providers. 


The "dirty reality" for most organizations will be a mosaic of services - some cloud, some on prem


While there are some companies who will decide that all of their applications can be provided by SaaS (my local gym owns no applications of its own, for example), the majority of organisations of any size will find that they do have core and context applications. And, we may well find that portions of core applications and business processes have “context portions” provided by the cloud.


We will therefore end up with a mosaic of services, some provided by our IT department and some provided by the cloud. This mosaic will exist at different levels. At the application level, we will have our own applications and SaaS-provided applications. Increasingly in the future, we will have enterprise mobile apps - some from IT, some from mobile app developers. Applications use services. Some of those services will be provided by the cloud and others by IT. 


How do we deliver IT services in a hybrid world?


What do we need to put in place to ensure that, whatever configuration our mosaic takes, we still deliver the performance, security, compliance and uptime that the business needs?


This question brings us back to service brokering. The IT department of the future will be a service broker, but it will use service brokering to create these IT mosaics we talked about. 


1. Service Supplier Governance


The first function we need to put in place to manage our IT mosaics is service supplier governance..

  •  We must choose suppliers who are compliant, secure and who have a good chance of surviving 
  • We must ensure the ongoing adherence of the supplier to our security, performance and compliance requirements. Note the use of the word “ongoing”. Service supplier governance is not a “do once and ignore” function
  • We must ensure the ongoing (that “ongoing" word again) value for money of our suppliers. Are they still the best financial choice, or have they put up their prices such that another supplier is now a better choice?

2. A single pane of glass for service users


So, we have chosen our digital service suppliers - of enterprise apps like CRM and HR, of mobile applications that interact with our business processes, of PaaS, and of cloud services for server and storage. But we are also “private cloud-izing” our internal IT solutions - making it easier for users to order them and putting in place automation so that they are delivered more quickly.


In fact, we will end up with a whole array of ordering interfaces and provisioning methods. At which point our users will complain, rightly, that they can’t figure out what’s on offer and how to order when they make a choice.  


What we therefore need is a single pane of glass … 

  • One catalog for all the services IT offers. This catalog will include the content of all the supplier catalogs and of IT’s own catalogs
  • We need one user interface where people can go to order - a single pane of glass onto all services that can be ordered
  • We need this interface to be role-based. A developer will want to see different catalog entries to an end user sales rep, for example
  • We need this interface to be able to do multi-product provisioning. We may want to create a bundle for developers, say, and have the system enact multiple provisioning “out the back”
  • We need consistent billing so that we can see, across the mosaic of services we are using, how much everything costs. The billing system also needs to generate reports for our governance system
  • And we need to provide a unified help system. Each service provider, including each group within IT, will have different ways of providing help. We need a unified way for our users to understand what each service does. As users and IT build up knowledge about the various services, we need to be able to add this too

The future of service brokering


HP’s own research found that by 2020, 100% of customers surveyed believed they would have a mosaic of both IT-provided and cloud-provided services.

mosaics of services.png

Gartner’s own research found that by 2020, CIOs estimated that 50% of their infrastructure and applications would be provided by the cloud. But today, less that 20% of IT departments were acting as service brokers. We have a lot of work to do between now and 2020!  (These statistics are contained within an excellent Gartner video which can be found on this HP web site under the section entitled "IT Service Brokerage : Garnter's View")


Given that cloud services will increasingly be used, IT needs to ensure it is in the driving seat, not being told what to do by the business. The key to this is deciding now about your core-context map. What IT applications and business processes give the business differentiation? Defend these like crazy. Have a plan to move the rest, the “context”, to the cloud.


And then put in place the governance and the “single pane of glass” for ordering and provisioning that will stop your IT mosaic becoming a disorganised zoo. 


hp propel 1.png


(HP's solution to provide this single pain of glass is called "HP Propel". The HP Propel web site can be found here. )


Mike Shaw
Director Strategic Marketing

linkedin.gifMike Shaw

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About the Author


Mike has been with HPE for 30 years. Half of that time was in research and development, mainly as an architect. The other 15 years has been spent in product management, product marketing, and now, strategic marketing. .

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