1034RA Is IT Asset Management Becoming Irrelevant?

What is Happening? The universe of IT assets is becoming increasingly abstracted by virtualization and service-based provisioning. Is it time to fold up the IT asset management (ITAM) tent or split the leftovers between the business units, facilities, the vendor management office, and procurement? Or is there still value in understating the “four Cs” of IT assets – Characteristics, Configuration, Contracts and Costs? Is there whole new model for ITAM and emerging new classes of IT assets to manage?

As we noted for clients of Saugatuck’s Cloud Leadership Strategies (CLS) research earlier this month, these questions need quick resolution because the assets of Cloud services, Mobility and Big Data are on the loading dock. Who is going to sign for them? (1028CLS, IT Abstract Management: Surviving the World of New Asset Realities, 22Feb2012).

Why is it Happening? The core driver of what we are calling “IT Abstract Management” is the combination of virtualization and hybridization of IT assets and business operations. Saugatuck predicts that by 2016, over 70 percent of IT server and desktops, and over 60 percent of storage in use, will be virtualized on-premise, in the Cloud, and/or in hybridized environments blending the two in no ordained manner. Further, Saugatuck’s latest SaaS business software survey (see Note 1) indicates that by YE 2014, in every category of business software, more than 60 percent of IT buyers and managers expect that the majority of all new business application functionality will be delivered as a service rather than by license. The physicality of IT assets, in other words, is fading quickly.

Virtualization of IT assets has been in full swing for over five years now, and over 90 percent of large enterprises have identified virtualization as a strategic goal (439STR, x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 1, 29Feb2008). Hard on the heels of that trend is the off-books sourcing of IT infrastructure, platforms and applications. Because of the pace of technological and business change (driven in equal parts by Cloud and by rapid economic shifts), different types of IT, whether physical or as-a-service, are acquired and deployed without formal IT and/or Finance oversight.

Inevitably and predictably, management practices that optimize, rationalize and internalize the technological advances are lagging. What should be most alarming to those responsible for managing IT assets is that the pace of technology change is accelerating, while the patience of the business users and senior management is thinning.

Meanwhile, increasingly random acquisition and lifecycle management practices have created stovepipe and redundant functionality and subsequent degradation of the value of IT resources. The discontinuity and pace of this unmanaged provisioning have left in-situ IT assets under-utilized and practically unmanaged in too many cases.

Market Impact

It’s going to get worse before it gets better. The practice of ITAM has become much more complex, abstract and distributed, as shown in Figure 1. Virtually every IT process is, or will be, challenged to change by the increased abstraction of IT assets. ITAM is a core process because of the financial and IT functional objectives it embodies essentially to maximize the value of information and technology throughout and often beyond its useful life.

Can these functions be distributed to the vendor management, procurement, facilities or even to the various business units? This is a possibility if the ITAM function fails to adapt to the market realities of new pricing, procurement and value recognition. However, if this happens, critical interactions between service delivery, service level management and customer service are likely to be compromised.

Figure 1: The Complexities of ITAM in a Cloudy World

Source: Saugatuck Technology Inc.

ITAM programs will need to be redesigned to remain relevant as IT itself becomes more abstract. ITAM will need to embrace service delivered capabilities as assets and will need to be more service oriented itself to continue to add value to the enterprise. This means that ITAM will broaden its reach beyond how much IT an enterprise has and how long it should keep it to embrace the complexities of managing supply, demand and relationships.

There is tremendous value in becoming the enterprise consumer advocate that can reduce cost through contract consolidation, reduce risk through better management of SLAs a consolidated data base of all IT related provisioning and increase awareness and availability through a comprehensive service catalog. This may be the new role of ITAM.

To exemplify this, we add another C to the four others (Characteristics, Configuration, Contracts, Costs) that are core competencies of ITAM practitioners – Consumption. Consumption management will seek to balance the supply and demand for existing and new capabilities. IT vendors that offer services, programs and solutions to accelerate the transformation of IT processes (i.e., BMC/Remedy, HP, ServiceNow) need to aggressively engage to prevent possible barriers to adoption as enterprises become overwhelmed with the complexity of managing abstract assets and delivering service based capabilities.

Subscribers to Saugatuck’s ongoing CLS research program will see more investigation, analysis, and guidance on this topic throughout 2012. Key issues that we will be examining include the following:

How will traditional ITAM tools evolve to manage virtual and abstract IT assets?
How will virtualization of ITAM impact other IT (ITIL) processes?
Will other functions like vendor management become incorporated into ITAM?

Note 1: Saugatuck’s 6th Annual SaaS Survey is Complete

Since 2006, Saugatuck has surveyed more than 7,500 SaaS user executives; interviewed more than 1,600 IT, Finance and C-level business executives regarding their SaaS buying and use; and been briefed more than 700 times by SaaS providers.

In February 2012, Saugatuck completed its sixth annual SaaS/Cloud Business Solutions global survey program. This year’s program includes data from more than 200 executive-level participants with all sizes of firms across all industry types. The survey program is being complemented with in-depth user executive interviews, and briefings with SaaS providers, from traditional IT Master Brands to leading-edge Cloud Business Solution and platform providers.

The data report for this year’s survey is in process, and is planned for March 2012 publication to Saugatuck CRS clients. Additional reports and Strategic Perspectives using the research and analysis from this program are in development and will be published over the coming weeks and months.

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Bill Kirwin
Advisory Board Member
Westport, CT
Bill is an Advisory Board Member at Saugatuck Technology and Vice President of Research and Business Development at getcontrol.net, a leading knowledge worker productivity company specializing in email, information management and meeting productivity training. He is also an IT industry advisor, mentor and author of international recognition.
Bill is an IT industry veteran with over 30 years experience in IT management, industry analysis, sales, marketing and support. In his 20 years as VP Research at Gartner, he provided thought leadership in end user computing, IT financial, operations and management key issues. He created the concept of Total Cost of Ownership and the Enterprise Personality Profile and applied it to IT user and supplier markets. He founded Gartner Software, Gartner Press and the Managing Distributed Computing practice area and was instrumental in developing Gartner Measurement consulting services.
During his IT industry tenure, Bill has written hundreds of reports and articles, presented and numerous industry events and been widely quoted in both trade and business press. He has held positions in sales, customer service and information services management.
Bill currently serves on the boards of several corporate and non-profit organizations. He has his Bachelor of Science degree in Psychology from Southern Connecticut State University.

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