Two stories sat atop baseball's marquee in the final days of July.
The first was the non-waiver trade deadline, baseball’s annual
pros-for-prospects surge staffing. The second was the pending punishment
of Alex Rodriguez, the former sweet-swinging shortstop turned sullen
slugger turned cautionary tale and financial wild pitch of the New York
Yankees.
Tucked in that double play of headlines was an impromptu lesson about the value of cloud services brokers (CSBs).
Really.
In a general sense, baseball's trade deadline is a valuable part of its own asset lifecycle.
For non-contending teams, the deadline historically is the time to
exchange expensive, often past-its-prime talent (say, baseball’s legacy
hardware) for cheaper, younger players. For teams in the penant race,
the deadline offers an opportunity to add talent on a short-term basis
to meet important objectives, say adding additional on-demand SaaS
options like Salesforce to meet immediate campaign goals.
If executed properly, either approach can benefit your organization.
Ask an Astros fan about acquiring future franchise cornerstone Jeff
Bagwell from the Red Sox for reliever Larry Andersen in 1990 as an
August waiver wire trade and watch them beam ear to ear, at least until
they get knocked silly by a Boston fan with a fungo. On the flip side,
ask any Yankees fan about the value of David Cone,
a 1995 acquisition, to the team’s four World Series wins in five years
from 1996 – 2000, at the cost of prospects who never became so much as
household names in their own households.
While Yankees GM Brian Cashman may not be the first person to visit
with your cloud strategy functional requirement documents, when it comes
to the trade deadline, effective baseball general managers share a
playbook and set of guidelines with effective cloud services brokers.
Understand the Needs of Your Team
Effective CSBs and effective GMs intimately understand the needs of
the team and the specific circumstances of the marketplace. In a
blue-sky environment, every team in baseball would benefit from the
addition of a star pitcher like Jake Peavy. Likewise, were money and
technology no obstacle, nearly every company would find some benefit in
using public cloud services.
Whether or not either option is the best course for your team or
company requires an understanding in end goal and, more importantly,
current position against that goal. Reduced overheard/increased
effieciency is the top-level goal of every IT department, just as every
baseball’s team goal is to win the World Series. An effective GM or CSB
will understand the position of your company and react accordingly. Just
because companies have the same goal doesn’t mean they have a
one-size-fits-all approach to the cloud, as every baseball team
shouldn't make trades with the goal of winning the World Series at
season's end.
For example, in 2002, the then Montreal Expos (kids, consult your
history books) overestimated its success potential and traded future All
Stars Brandon Phillips, Cliff Lee and Grady Sizemore for Bartolo Colon,
only to both badly miss the playoffs by 12.5 games and lose Colon as a
free agent at the end of the year. The trade (in fairness, completed
under the cloud of possible contraction) set the Expos on the course to
relocation to Washington, DC and effectively took baseball out of the
French vocabulary.
Large cloud strategies without a proper understanding of time, place
and expertise can be just as crippling, burdening a company with lengthy
contracts and underperforming software.
The value of a CSB is the same as an effective general manager. Both
the GM and CSB find the best available value and plot the best strategy
with the specific goals of your company in mind, be it downsizing,
upsizing or changing course altogether. There are no one-size-fits-all
strategies, nor, likely, any one vendor to best meet all needs.
Kevin L. Jackson
Understand the Marketplace
In baseball, there are no sticker prices. Player acquisition is a
negotiation between one buyer and one seller, so price discovery is an
inexact science. From year to year, the value of a type of player
changes as a simple function of supply and demand. Some deadlines are
overloaded with starting pitchers, some don’t have a single hurler that
could make a dent against the Bad News Bears or, worse, the Houston
Astros.
Cloud strategy isn't much different.
Due to dynamic pricing relative to any number of factors between
vendor and end user, maximizing the value of your IT investment in cloud
is a difficult course to plot without extensive familiarity with the
marketplace.
Further, with an increasing number of cloud solutions, ranging from
the ordinary, like storage or email, to the more exotic, like disaster
response, an effective CSB, like an effective general manager, needs to
make certain the return on investment is sufficiently high in an era of
dwindling IT dollars. Even if your primary need is upgrading desktop
applications or, say, acquiring a second baseman, if the cost exceeds
your budget, an effective GM or CSB will offer the best course of when
to commit and when to wait or explore other options.
Full-service CSB, which provides transparency into pricing through
service acquisition portals, as well as expert consultative service,
helps provide a full view. At NJVC, Vice President and General Manager,
Cloud Services, Kevin Jackson,
leads the company's cloud efforts, including both strategy assessment
and the use of the innovative Gravitant CloudMatrix platform. Jackson
sees the evolution to a broker model as organic due to the level of
knowledge required to understand the marketplace.
“The range of cloud solutions in the marketplace today exceeds the
ability of many corporate IT staff to keep abreast, just in the way the
number of financial investment instruments available often exceed the
ability of a personal investor to track,” Jackson says. “Even successful
financial investors don’t work by themselves. Cloud is simply the next
industry that will greatly benefit from brokerage models.”
Whether your cloud strategy is to use an internal cloud strategy
broker composed of your own team of experts or an external team,
understanding the marketplace is just as important as understanding
needs.
Always Look Beyond the Back of the Card
Baseball is a game so finely audited you'd think it was sponsored by
the IRS. Every pitch is carefully indexed; every swing recorded. The
results of everything from defensive positioning to pitch type to
seemingly what flavor bubble gum the left fielder prefers are cataloged
and then analyzed like the human genome.
But, with apologies to ex-NFL Coach Bill Parcels’ brutally earnest
assessment that you are what your record says you are, in baseball and
cloud computing you are not necessarily what your numbers say you are.
Effective general managers, like CSBs, know how to look beyond the
publicly available statistics and determine organizational fit and
future benefit.
Any armchair GM could propose a trade for a player hitting .300 in AA,
but an effective general manager looks for the story behind the
numbers. Is the player simply getting lucky on balls in play? Is he
performing well against other top prospects or simply crushing pitchers
on the way out of baseball? Is he age appropriate for the level?
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Similarly, a CSB can look beyond the promised statistics of a cloud
solution and understand how advertised performance baselines measure up
in a real-world environment, and how the solution will benefit your
entire IT enterprise. Any effective CSB understands there's more to
cloud strategy than just vendor promises.
Work Effectively, but Behind the Scenes
General managers, like CSBs, work as architects. The on-field
management is handled by the team's manager, and most decisions are
approved by an owner or team president. Similarly, a CSB helps provide
leadership and strategy; a company’s day-to-day management is handled
by its own IT department.
“The goal of a cloud services broker is to supplement your expertise,
not take your IT sovereignty,” Jackson says. “There may be some
reluctance with cloud because its solutions often take IT off-premises,
but it’s not a solution about lack of control, it’s a solution of
efficiency.”
Cloud services brokerage holds many of the benefits of travel
brokerage services, like Travelocity or Kayak. CSBs won’t tell you where
your vacation spot should be, they’ll simply ensure you get to
destination as efficiently as possible.
Full IT sovereignty belongs to the company and the IT manager.
Avoiding A-Rod and Vendor Lock in
On the flip side of the trade deadline was Rodriguez.
The once-and-future clean home run champion, Rodriguez now faces suspension through the end of 2014 for his part in a performance-enhancing drugs scandal, is a declining talent and at 38, locked in to a 10-year, $275 million contract through 2017. The heft of Rodriguez’s contract makes even to the money-printing Yankees, baseball’s financial equivalent of a merger between Richie Rich and Daddy Warbucks, cringe.
In baseball's world of guaranteed contracts, player agreements are as
unbreakable as a .400 batting average, an aluminum bat or a Royals'
losing skid.
In the wrong circumstances, IT can be just as painful.
Paying for current performance without anticipating future needs can
be a serious problem for any company. Like aging third basemen, IT
solutions that provide best-in-class service today may not in five
years. Technologies evolve, and often the most difficult part of
corporate IT can be managing with creaky legacy software. Granted, IT
tends to be more predictable than people (except printers, of course),
but an effective CSB can help your IT strategy avoid lengthy vendor lock
in and lack of agility .
Matched with the ability to look beyond the back-of-the-card stats
and a real-time understanding of a dynamically priced market, an
effective CSB, like an effective general manager, can maximize your IT
budget and achieve your primary goal—increasing efficiency while
reducing cost.
As baseball’s trade deadline and Rodriguez’s purgatory tells us, it
isn’t simply understanding that it’s time for a change in strategy, it’s
identifying the right team to execute it.
In these first days of August, when it comes to your cloud strategy, it’s probably time to make a trade.
( Thank you. If you enjoyed this article, get free updates by email or RSS - © Copyright Kevin L. Jackson 2012)
1 comment:
The legislation would also direct the SEC to tailor its rules governing M&A brokers in light of the limited scope of their activities, the nature of privately negotiated M&A transactions, and the active involvement of in Merger and Acquisition Brokers those transactions.
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