Friday, July 03, 2009

Vendor Managed Infrastructure - Are clouds just a VMI solution?

Tweeting with Neil Ward-Dutton I had a thought about what he has written on public v private clouds and it made me think that the only real difference between them is in the who manages and pays. This might sound like a big thing but taking a leaf out of the retailers book it doesn't need to be that large.

Vendor Managed Inventory is simply where a supplier takes over the management of a products inventory and ensures that it meets the buyers SLAs (availability, price, etc). The advantage for this on the buyer is that they don't need to worry about ordering, they just need to track against the SLA.

What is a cloud proposition if not that? Further more if we take this to its logical conclusion then even private clouds could be delivered to the same economic model as public ones. Maybe not with quite the same leverage but why couldn't IBM, HP or whomever supply you with hardware and software infrastructures against an SLA that you define and be responsible for ensuring that the capacity and pricing of the infrastructure meets the SLA? What is security and separation but part of an SLA?

My point is that "Private Cloud" really tends to mean "Still hugging your own tin" and that the real impact of cloud is in the economic model of procurement (the switch from CapEx to OpEx) and in the scaling of infrastructure independently of the current direct demand (i.e. you don't pay for Amazon to buy more hardware, that is part of their calculation to meet the SLAs).

So in 5 years will there really be Private Clouds that have a CapEx model, or will people be demanding that the H/W vendor provision capacity in a private environment with a specific SLA. In other words will VMI be applied to infrastructure in the same way as a supermarket applies it to apples?

Personally I think it will and that this makes strong financial sense for both businesses and suppliers as it changes the relationship and enables hardware vendors to undertake hardware refresh directly (after all if their Powerpoints are to be believed you'll always save money this way) and the business will have a defined capacity model.

Don't believe me? Well an awful lot of companies are already doing just this around storage. Getting "private" pieces of a great big SAN and paying a utility price for it.

This to me means that the current sales pitches of end user purchases of "cloud" infrastructures are just a temporary marketing led blip and that the future is VMI for everything.

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1 comment:

cifuentj said...


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