5 Important Questions You Should Ask Consumption IT Vendors

No two consumption models are the same. Before you choose a vendor to work with, find out whose offering best suits your needs.

Choosing consumption IT vendors

Many IT organizations have a problem: They’re so bogged down with mundane tasks affiliated with maintaining legacy infrastructure that they have little time to spend on strategic priorities. Indeed, about 80 percent of IT staff time is spent on “undifferentiated heavy lifting” rather than on innovation that might make their business more competitive, an IDC survey found. 

That’s why we are seeing an increasing number of vendors pitching a modern approach where IT organizations pay as they go for consumption-based IT solutions, with the promise of making their lives easier.

Only one problem: Not every IT-as-a-service vendor offering is the same. Indeed, some aren’t even real consumption-based IT solutions—at least not in the truest sense of the term.

So, how can you tell the difference? Start by asking vendors seeking your business these five questions:

1. What is your real business model?

When someone tells you they’re going to improve your IT operations, it’s important to discern what they mean by that. What does “improvement” mean in their business model?

Consumption-based IT models are supposed to help you plan and provision more effectively, leading to better efficiency and lower costs. But as IDC notes, there are numerous consumption models that often get mixed up with one another. These include pay-per-use, multiyear leasing, hardware ownership with outsourced operation, IT equipment transition options, and Capex ownership with internal management and maintenance.

Modern pay-per-use models should take a hybrid approach, combining the agility and economics of public cloud with the security and performance of on-premises infrastructure. That hybrid approach helps organizations simplify operations and allows them to pay for IT services and resources only when they are needed. As such, organizations can reduce or even eliminate heavy upfront investments in capital.

The other approaches are different animals. While some vendors may dress up their offerings to resemble an IT-as-a-service model, they’re often just putting lipstick on some other beast.

For example, with some vendors, it’s entirely possible you’ll still be asked to buy hardware or software in the traditional model. That’s a totally different approach from consumption, with its own cash flow, ROI, and commitment implications. The downside of this model is that customers don’t buy this equipment very often—maybe once every few years. So, as a result, customers are forced to guess what they’ll need. More often than not, this causes them to overbuy and ultimately waste money.

Similarly, with leasing, while there are no upfront purchase costs, you’re still spreading payments over a fixed period of time. This means committing to a level of provisioning without knowing if it will be needed. Once again, that means overprovisioning. And neither delivers on the usage-based economics promise of consumption-based services.

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Copyright © 2019 IDG Communications, Inc.