Differentiating Your Cloud Services - Part Two
September 06, 2012

Antonio Piraino
ScienceLogic

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Infrastructure reliability and availability is no longer enough in the modern era. The expectation is that the applications and services matter.

Start with Part One of Differentiating Your Cloud Services

Having said that, enterprises desire visibility into the underlying infrastructure – it matters to them. Just ask any of the large Service Providers and they will tell you about the level of granular control and visibility demanded at that end of the spectrum. That's why ITSM and APM have hit a critical must-have in RFPs being issued by enterprises today.

And they will pay for it too. In fact, the most surprising answer to our recent survey question regarding who/what hosting providers see as the biggest threat to the industry was the fear of pending price wars. We are highly suspicious of the rationale behind the answer. Nowhere in the enterprise space is outsourced service pricing on the decline, with the exception of the shared and dedicated hosting space – areas of extreme commoditization, where few are innovating and introducing new services.

On the flip side, marginal revenue is on the increase for those providers introducing new app layer services, advanced monitoring among them.

Application Level Monitoring - A Key Differentiator

However, if these hosters are to be believed, then it is even more critical for them to look for a way in which to distinguish themselves from the herd. Knowing that the massive server deployments within the likes of AWS can be subsidized over the long term from overlay SaaS offerings, the AWS ecosystem, advertising and even book sales, hosting providers should be looking way beyond just a good discount from the vendors in order to survive.

They will have to understand precisely how these technologies will allow them to deliver profitable new service offerings to new market segments that plan to outsource their IT infrastructure and apps, but require specialized functionality.

At ScienceLogic, we completely agree with the notion that management and support of both customers and their IT infrastructure is critical. Returning to our survey once again, the corollary to that axiom is presented in the 32% of respondents recognizing the need for tools as their differentiators.

Over the last year in particular, we have seen an increasing trend among our hosting customers to provide truly multitenant solutions that give differentiated and contextual visibility and control to distinctive constituents. Availability and performance statistics are important, but our customers look for more analytics, that show the health and risk factors of infrastructure and services alike.

As mentioned previously, pricing as a differentiator is a slippery slope that only a very few can win at. Cost and operational efficiency are increasing differentiators in a commoditized business arena, and the ability to parlay those efficiencies into prices, and juggle the different balls of retaining margins, meeting SLA agreements, and still remaining proactive in the management of increasingly complex, virtual environments will separate the winners and losers in this space.

The Rackspace example is point in case around the elevated need to offer application level monitoring that incorporates granular data from the underlying infrastructure as well, in order to offer both a predictive management service for critical productivity services, as well as the opportunity for hosting providers to offer new Cloud services above the fray of vendors offering lightweight analytics of pure play application layer performance.

Successful Cloud service management relies on the ability to bond smarter business practices with smarter IT practices at the application and infrastructure layers. That's the promise of what ITSM really encompasses.

Antonio Piraino is CTO of ScienceLogic.

Related Links:

www.sciencelogic.com

Differentiating Your Cloud Services - Part One

Antonio Piraino's three-part series posted on the APMdigest Vendor Forum:

How to Choose the Right Service Provider for Your Needs - Part One

How to Choose the Right Service Provider for Your Needs - Part Two

How to Choose the Right Service Provider for Your Needs - Part Three

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