August 25, 2010Doug Hadden
In an interesting meeting yesterday, a top IT official at the Government of Canada said that “legacy technology is a terrible anchor.” Meanwhile, Josh Greenbaum of the Enterprise Matters Blog posted an entry that multi-tenancy in cloud computing is a vendor issue. This recieved a lot of comment, particularly from Ray Wang of the Altimeter Group. Multi-tenancy hosting was one of the benefits described by Workday during their technology summit.
Josh made the important observation that “a customer that looks at multi-tenancy as a key criteria for acquiring a new piece of functionality is basing their decision on factors that are not directly relevant to their TCO.” This is a critical point for any organization looking at leveraging cloud computing. As I commented: “In the cloud, no one knows what architecture you have.” Yet, the architecture becomes a super critical issue when governments are hosting multiple government organizations.
Client Benefits: for those government organizations using a hosted shared service
As I described in my comment to the blog entry: ” There has been a lot written about enterprise architectures and vendors are quick to promote architectural advantages. You are right here because the further we get away from TCO & functionality – where the “rubber hits the road” for clients, the more we get into almost metaphysical discussions of “potential” TCO & functionality. Effective architecture is seen as future proofing but it is a third order benefit. (Second order benefit is feature sets you don’t need now, but possibly might need.)”
First order benefit:
Efficiency & effectiveness to meet mission + ease of compliance with government reporting requirements
Less the Total cost to achieve functional needs =
software/chargeback costs, governance costs (participation in the system governance), training & certification costs, upgrade costs + cost of the complete solution meaning the costs to develop applications to fill gaps, manual processes that are not automated, extra oversight over standardized processes that do not fully meet organizational needs + cost to migrate and business re-engineer to go from current systems
Second order benefit:
Leveraging new feature sets and functions not currently in use can improve efficiency & effectiveness to meet mission
Third order benefit:
Architectural benefits of hosted solution that reduces hosting costs that can reduce the cost to client organizations to:
- Future-proof and grow to meet functional needs and scale to user demands
- Change configurations to support on-going govrnment modernization
- Maintain a technical footprint that could be bloated requiring too much hardware and high power consumption
Benefits from Hosting Agency
The third order benefits from the client perspective are critical to hosting agencies. Shared services are intended to reduce costs and provide a better value to citizens. Yet, many contemporary software architectures are not able to achieve the cost reduction. Ironically, the costs to host multiple organizations can be higher than individual on-premesis deployments. Why?
- Technical architectures that rely on customization tend to be costly to meet multiple organization functional needs
- The customization approach often makes adapting to new government mandates and process modernization difficult
- Minimum technical footprints can be large and need to accomodate to peak period-ending activities across multiple organizations where government Service Level Agreements can result in unused over capacity
Where do Governments go from here?
Virtualization seems to be the blunt approach to optimize technical footprints. Vendors providing products to governments need to address the standardization/uniqueness problem where multiple compliant configurations are possible, as we have described before. And, the burden to adapt to government modernization should not fall on government IT professionals.