The legacy IT conundrum: Money pit or value-add?

Bernard Golden, senior director of Cloud Computing Enterprise Solutions, Dell

Last week, Saugatuck Research released an analysis of IBM's new BlueMix offering. In introducing BlueMix, IBM announced its intention to invest $1 billion in application-oriented initiatives, including a commitment to CloudFoundry and making technologies such as the venerable application server WebSphere available as an online offering. The always insightful Lydia Leong from Gartner weighed in; she's obviously impressed by BlueMix.

Saugatuck identified three main BlueMix elements, noting that IBM is doing the following:

  • Spending $1.2 billion to open 15 new cloud sites in 2014, adding to 12 existing IBM Cloud centers and 13 sites acquired with SoftLayer;
  • Delivering new SaaS-based offerings for mobile device management as well as analytics, human resources and marketing, and
  • Facilitating management of application workloads running on Cloud infrastructures and on hybrid infrastructures — that is, workloads with components running on traditional infrastructures and components running on cloud-based infrastructure.

The Saugatuck analysis continued:

As most industry analysts agree, the majority (typically 80 percent or more) of customer IT budgets are consumed by operating, maintaining and managing existing systems and workloads. This makes the implementation of any new workload a costly endeavor. Further, as customers are learning, implementing a new workload on a cloud-based infrastructure may reduce costs for required infrastructure, but can easily increase the challenges of managing the workload.

While all three of the above areas of investment are truly significant, Saugatuck projects that the third area will likely yield the greatest impact on overall customer adoption of cloud.

These last two paragraphs are critical to understanding the threat cloud computing presents to IT organisations.

I applaud IBM's initiative to make creating, deploying and operating cloud applications more efficient — after all, I work for a company that provides cloud management software — as it offers the potential for making these new applications less expensive than traditional applications. However, it leaves undisturbed that 80% of IT budgets devoted to "legacy." Therein poses the danger to IT organisations.

Like It or Not, Cloud Is Coming
As noted in my last column, a revolution in application development is happening, fomented by the seductive agility and rapid infrastructure availability offered by cloud computing environments.

I also noted that until now the friction of traditional IT infrastructure made accelerated application lifecycles unimportant. In practice, infrastructure friction outweighed application waterfall methodology friction and made slow development and deployment methodologies immaterial.

In addition, the need for heavy capital investment to roll out an application meant that, in effect, application demand was rationed. Each year, only so many applications could be put into production, since each launch required so much capital to be deployed.

Today, however, cloud environments are not only fast, they require no upfront investment -- meaning, no capital. This removes yes another barrier to application demand. The implication is clear: The demand by business units to launch new applications is going to skyrocket, fueled by agile infrastructure and low initial investment requirements. This isn't even to mention the fact that most companies are becoming more IT-infused, as described by Mark Andreessen in his renowned Wall Street Journal editorial, Why software is eating the world.

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