The combination of technology changes and the adoption of service management has transformed data centers into IT service providers. Regardless of whether the business model includes external customers, data centers have more in common: offering IT services as products to be consumed by users. The internal customer moves from the older view of the facility as a cost center to viewing it as a profit center because of the product-maker mindset that is part of service management. The expectations of users are viewed as expected outcomes rather than as uses of technology. If a data center provides external services, the provider differentiates itself from the competition on the basis of service capabilities rather than technology. This transition from a technology-driven model to a service-driven model empowers the data center to use virtualization, pooling and other cloud computing technologies to satisfy user requirements.
The difficulty with these major technology advancements has been delivering them in a cost-effective way and then being able to pass on the savings to customers. The transition has placed IT asset management (ITAM) at the center of data center management. Services owned by the IT department and delivered by a virtualized pool of assets require extensive detail about and management of those assets. An IT service consists of the following:
- Resources such as capital, infrastructure(hardware), applications (software), information and people
- Capabilities such as manageability, organization, process and knowledge
ITAM assets are the hardware and software in the services, and much of the information included in the services is created through the ITAM processes. Data centers are managing an intricate complex that consists of layers of software and hardware. That complex must be divided into services and must include user requirements such as redundancy to avoid single points of failure and varied levels of service from other users. Translating the “mesh” of hardware and software into services is at the heart of ITAM and IT service management (ITSM) cooperation.
Setting the Price for IT Services
ITAM accepts responsibility for specific assets, managing the entire life cycle and collecting information about the assets during their use. The development of IT services relies on that information to determine the cost of services and to identify the roster of service offerings.
To set the price for a service, the first step is to calculate the costs for delivering that service. Examples of the information that ITAM gathers include the following:
- Acquisition cost
- Maintenance coverage and cost
- Warranty specifics
- Contractual restrictions for specific hardware
- Software licensing limitations
- Hardware configurations
- Anticipated disposal costs
- Chargeback costs
ITAM also builds the processes that manage the lifecycle of the individual assets and can assign costs to that service. With this information, the costs of the service are collected and a price per user can be set.
IT services are defined according to user expectations, which include accepting ownership for risk. The service approach allows data centers to accept the risk associated with each of the services. Risk elimination at specified performance and availability levels requires additional hardware and/or software, with the costs coming from the ITAM processes and data. In some cases, the ability to offer a service and/or avoiding the risk for a service requires knowing the limitations of the assets. That means that the breadth of services in the catalog is at least partially defined by ITAM’s information about the hardware and software limitations. For instance, two services may be identical except that one service offers higher availability. Providing higher availability requires the technological capabilities of workload balancing and performance monitoring. And providing that service depends on the presence of certain hardware and the licensed right to use software in that setting. ITAM provides that information.
Regardless of whether the data center delivers staff to internal customers or multiple external customers, the approach to ITAM is the same. Each must deliver services against the service level agreements (SLAs) that have been signed by the data center and its customers. If the data center uses a private cloud and a public cloud, the responsibilities become more complicated, requiring the integration of two different levels of asset management. In addition to relying on ITAM for management of individual assets, a public cloud adds the SLA commitments contracted with customers, and the data center’s availability must compensate for the internal use to meet those SLA commitments. For instance, if the public cloud service commitment is 95% availability, then the data center’s service has to be more than 95% to met the 90% user commitment (95% x 95% = 90.25%). Less than 95% results in failure to deliver availability as defined by the SLA.
The data provided by ITAM is critical to changing the starting point of asset utilization from the pre-service management model of 20–30%. The old method anticipated growth but had no impetus to measure it, if that growth in fact occurred. Data centers uncovered many instances where such growth did not occur, resulting in utilization remaining as low as the original 20–30%. IT service management has dramatically changed the perspective on use of assets and encourages maintaining 80–90% utilization and eliminating waste. The combination of ITSM and virtualization technology has increased the options as well as complexity of tying assets to services logically, physically, financially and contractually to enable appropriate chargeback and to maintain compliance.
ITSM Components Depend on ITAM
IT service management relies on the configuration management database (CMDB) as the basis for all of the deliverables in the picture to the left. The CMDB must contain a significant amount of information related to the IT services. Coordination with ITAM, through integration or using the same ITSM software suite, provides the details such as servers, storage, operating systems, middleware and open-source software.
IT financial management as defined in ITSM relies specifically on ITAM. First, ITAM provides details related to costs and, second, links the specific asset to those costs. Without the linkage to specific assets, it is difficult or impossible to accurately identify assets in a creditable manner. Without this information, user expectations for savings and ROI cannot be delivered.
Change management is the process that satisfies new requirements from users. The constant change means that the costs of services and chargeback are also changing. Without the data in the CMDB provided by ITAM, change management fails to adequately capture and recover the costs associated with the changes.
Competing in the Storage Market
Data centers competing for a piece of the storage market differentiate themselves and satisfy customers by increasing their return on investment (ROI). Proof of the increased ROI is the difficulty that ITAM helps to solve. With ITAM, storage assets are managed throughout their life cycles, and data is collected about them just like any other asset. Appropriate chargeback relies on this information, along with calculations of the rapidly changing storage needs of each customer.
Meeting End-User Expectations for Data Center Services
Whether providing services to internal customers or adding the complexity of a public cloud, IT service management has enabled data centers to address the specific needs of the end users. Users require agility so that it no longer takes months to change or add a new service. Changes created by market demand also require great agility. Data centers must be flexible to support rapid growth or the rapid exit of a user.
User expectations also include cost elements. With options between internal services and external services and the competition between service providers, users clearly want lower and fairer pricing. The low CPU utilization rates from the past translate into costs and are no longer tolerated by today’s service customer. Users also do not want to bear the costs or concerns associated with mitigating risks. The service model changes the user’s perspective from owning services to using them, and it transfers the risk responsibility to the service provider.
IT asset management is vital to addressing all of these user expectations. ITAM management processes, as well as the broad representation of the financial, contractual and inventory aspects of assets and the data collected about each of these asset aspects, are foundational to the success of IT service management in the data center.
About the Author
Takeshi Takeuchi is Japan Branch Manager at the International Association of IT Asset Managers. Takeuchi is a seasoned IT asset management specialist who manages IAITAM’s Japanese presence and related markets. With more than six years’ experience in ITAM, Takeuchi has worked with software vendors HP, Artisoft and PC-Doctor in Japan. He has over 20 years’ overall experience in the IT industry and has written published books and articles on LAN, ITSM and ITAM.