Vendor Risk Sharing – An Option for Private Cloud Eslasticity

True wide-spread public cloud adoption by large enterprises will take some time. First the underlining service level and security concerns will need to be addressed. In the meantime, companies can work towards building expertise in cloud technologies and realize immediate benefits by building private IaaS clouds or evolving their current infrastructure to be more like a service. One of the key benefits of IaaS is the ability to scale infrastructure up and down fairly quickly improving agility and time to market, not to mention delighting internal customers. The goal here is to give internal customers the perception of almost infinite elasticity and build services that are close to on-demand. However, achieving this goal will require internal staff keep more infrastructure inventory on hand than they are used to, a proposition that goes against some of the cost benefits of IaaS. Some are meeting this challenge with off premise or external clouds and “bursting”.  In bursting you procure additional compute resources from an IaaS provider, typically for a short period of time,  while you add capacity to your existing private IaaS. Most of the conventional wisdom in this space is moving towards internal private IaaS coupled with external private IaaS bursting to meet elasticity demands. However there is another option that can help meet the inventory/capacity challenges; technology vendors can share the inventory risk by providing hardware and software upfront at close to zero cost and charging only when its put in service. HP had a similar model with their Intel server hardware a few years ago. They would provision a full rack of servers in your data center and charge you, per server, as you turned them on. There were never any delays due to HW provisioning. I refer to this as vendor inventory risk sharing and see it as a viable option to enabling elasticity and agility.

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