The death of the data center - and the transformation of I&O through cloud

Public clouds will replace today's data centers to a large extent. This requires changes in I&O departments.

Author: Daniel Albisser

Growing technological possibilities from the cloud and new social standards are rapidly driving digital change. Technologically or organizationally - change does not stop at any level.

The way software is developed and operated has also changed dramatically in recent years. Development is agile, in interdisciplinary product teams, on the most modern native cloud services, completely in the DevOps manner.

And the software solutions are operated in a public cloud of the large hyperscalers - is this the death of the data center, and consequently of I&O (Infrastructure & Operation)?

Gartner writes that 80% of companies will no longer operate traditional data centers in 2025. [The Data Center Is (Almost) Dead, Gartner, 2019].

This statement is too progressive for the CH market. But it is obvious that the public cloud will largely replace today's data centers. And this trend can be observed in our customer projects.

«But that doesn't mean that there is no need for I&O anymore! Rather, it shows the urgency for change - from a 'classic operator' to a business enabler for product teams within the company.»
Daniel Albisser Partner ipt

But that does not mean that there is no need for I&O anymore! Rather, it shows the urgency for change - from a «classic operator» to a business enabler for product teams within the company. It is clear that I&O is needed. But simply in a different form. The technological changes towards the cloud require procedural and organizational changes, especially in the I&O departments.

Modern I&O departments act as enablers in digitisation

Modern I&O departments enable agility. They are open to change through adaptable cloud architectures. They are fully automated and allow a high degree of autonomy for the various product teams through self-service. 

For today's I&O departments, this means a major change. Their role and activities as classic operators must evolve roughly as follows:

  • Expand the current platform service offering with public cloud services including integration between on-premises, public cloud and end-to-end security
  • Provision of attractive platform services from the public or private cloud, including continuous development
  • Platform automation and engineering - new skills in software development are needed
  • Consulting and cooperation with product teams with engineering services - primarily automation
  • Forward strategy towards the public cloud by gradually decommissioning today's on-premise infrastructures

The organizational embedding of I&O is intended to act as a cross-sectional function in the BizDevOps process (interdisciplinary cooperation between Business and Development and Operation aka Ops according to DevOps principles) and to work closely with the product teams) of the business units with consulting and platform engineering services.

The following diagram shows the basic ideas of a modern I&O operating model

I&O – Produkt Teams in Business Units.png
I&O acts in a cross-sectional function (yellow bars) as business enabler across all product teams.

On the one hand, I&O is responsible as a service broker and operator for the various platforms - from today's data centers, private and public clouds to outsourcing and SaaS. 

On the other hand, they provide consulting services in close cooperation with the product teams, who support them in platform engineering work and in the automation of CI/CD processes in software development. 

But what does this mean for I&O departments? Here are a few questions that each I&O department must answer for itself (not an exhaustive list):

  • What should remain with I&O and where do we want to hand over responsibility?
  • On which platform is the future priority?
  • What roles and skills do we need tomorrow?
  • How do we bring the cultural shift to bear? Do we have the necessary governance and processes?
  • How should we manage the cooperation with the product teams?
  • How can overall cost reduction be achieved?

Cloud as technical driver for the modernization of I&O

Cloud is both a curse and a blessing for I&O. On the one hand, cloud is competing with today's data center services, on the other hand, cloud brings I&O a great opportunity to develop and break away from the image of the «classic operator».    

«Cloud is the data center of the future and the basis for state-of-the-art cloud-native software development. There is no way around it: either I&O plays along or the product teams will directly use Cloud services - without I&O.»
Daniel Albisser Partner ipt

Cloud is the data center of the future and the basis for state-of-the-art cloud-native software development. There is no way around it: either I&O plays along or the product teams will directly use Cloud services - without I&O. Why should product teams purchase platform services via I&O when "The Latest Greatest" can be obtained directly from the Public Cloud?

Modern Cloud services are an essential part of the service offering of a modern I&O department! It would also be best if cloud responsibility were to be attached to I&O in the form of a CCoE (Cloud Center of Excellence).

Through modernization, I&O becomes a service hub for the company and is gaining in importance. I&O becomes a mediator between the various platforms and product teams.

However, agility/speed, efficiency and the autonomy of the product teams must not take a back seat. These characteristics are important success factors for the successful transformation of I&O.

For successful cooperation with the product teams, I&O must increasingly act as a service broker and make the various platform services available on-demand by means of self-service and automation. With a pragmatic degree of automation and the appropriate management tools, an efficient foundation can be created for decentralized software development in the product teams. Governance and compliance checks are managed centrally and automatically by the I&O Platform.

As an enabler for product teams, I&O must increasingly act as a service broker.

I&O-ServiceBroker.png
For successful cooperation with the product teams, I&O must increasingly act as a service broker and make the various platform services available on-demand through self-service and automation.

Will the current I&O departments disappear in the cloud era?     

We agree - the workloads of today's data centers will continue to shift to the public cloud over the next decade. But will today's I&O departments also disappear as a result? We think not. But the pressure on I&O departments to change will increase. 

I&O must rethink. It needs a cultural change. They need to transform themselves from «traditional operators» to service brokers and business enablers and adapt to the new circumstances.

Below are the most important take-aways for successful transformation of I&O in times without data centers:

  • I&O must modernise
    I&O departments must change due to digitalization, cloud, DevOps etc. The public cloud of the hyperscaler is an essential part of the service offering of a modern I&O department. It would be best to also add the CCoE (Cloud Center of Excellence) at I&O.
  • I&O should act as a cross-cutting function in the BizDevOps process
    The organizational embedding of I&O is to be anchored as a cross-sectional function in the BizDevOps process. I&O must advise the product teams on platform automation with CI/CD and support them with engineering.
  • I&O must increasingly act as a service broker for the product teams
    The autonomy of the product teams is an important success factor: platform services should be available via self-service and a high degree of automation. Governance and compliance checks must be embedded in the automation wherever possible.
  • The transformation of I&O is primarily an organizational
    The transformation of I&O is primarily about organizational change and not just technology. The transformation of I&O departments is a long-lasting process that takes time and leads to success through step-by-step «doing» with those affected.
  • The cultural change becomes the biggest hurdle
    We see the greatest challenges in cultural change, in empowering employees and on the bumpy road away from the «classic company».