Flexible IT Models Drive Efficiency and Innovation – Musato Technologies
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What does Flexible IT really Mean?

Flexible IT models help organizations adapt to changes in the technology landscape. Uncertainty and change mean the IT organization, and its service delivery capabilities must be more flexible. Multi-year IT planning cycles have become outdated almost overnight. Organizations need the agility to deploy, scale, and de-provision resources on the fly based on rapidly changing user and business requirements.

Cloud computing operations models deliver this flexibility, allowing infrastructure users to define requirements while the provisioning and management of the infrastructure are handled “behind the scenes” in a highly automated fashion.
Teams that expand cloud operations beyond the public cloud and extend it to on-premises and hybrid environments optimize their ability to adapt with agility.

Segmenting the Market in Terms of Flexible IT Enablement

A Modern Approach to Infrastructure Management Demanded by Modern Organizations

In order to analyze organizations by their ability to deliver IT services to end-users flexibly, ESG grouped respondents’ organizations into three cohorts based on their responses to five survey questions specific to application and infrastructure management:

Flexible IT

Their progress toward delivering on-premises Infrastructure-as-a-Service (i.e., infrastructure that can be provisioned by
users rapidly in a self-service manner, is operated in a highly automated fashion, and is paid for or cost over time based on usage versus with a large upfront capital cost)
• Who leads workload placement decisions
• How workload placement decisions are made
• The number of workload locations typically evaluated
• Whether they are consolidating the number of infrastructure management tools in use across workload locations

Each of these questions is representative of a maturity characteristic: a behavior or technology in use that identifies the
organization as a leader. ESG’s hypothesis was that organizations making flexible IT a reality would be most well-positioned to deliver an adaptable and agile technology experience to end-users.

Three Stages of Making IT Flexibility a Reality

Today the plurality (45%) of organizations fall into Stage 1, showing that legacy IT management approaches are still the norm for many organizations today. At the same time, just 18% of organizations meet the threshold of making flexible IT consumption a reality. There is a clear imperative for most organizations to radically evolve IT operations to deliver increased agility and flexibility.

Key Takeaways: What Did We Learn About Flexible IT Accelerators?

Accelerators enjoy big rewards:

Cost optimization: These organizations have reduced their infrastructure costs by 16% in the last year as a result of their use of on-premises infrastructure-as-aService consumption models (a 60% greater reduction than reported by Flexible IT Reactors).

More effective public cloud management:
These organizations are making smarter public cloud use and workload placement decisions for their businesses, reducing their risk. As a result, they have experienced 44% fewer problematic public cloud incidents (like app
outages, data loss, and security breaches) in the past 12 months than Flexible IT Reactors.

More agile development and migration processes: These organizations credit their as-a-Service capabilities with
reducing application development cycles by ~3 business weeks on average (a 40% larger reduction compared with Flexible IT Reactors). Moreover, these organizations are able to re-platform workloads from one location (public cloud,
edge location, or private cloud) to another 53% faster than Flexible IT Reactors on average.

As-a-Service Consumption Is Trending Up

A cornerstone of flexible IT is the proliferation of as-a-Service consumption models throughout the environment. Traditionally as-a-Service consumption models have been delivered by public cloud providers, but on-premises infrastructure vendors and IT teams are increasingly employing these models.

The research quantifies the degree to which organizations’ environments are delivered as-aService and organizations report a clear uptrend in the aggregate: twelve months ago, respondents reported that an average of 33% of their environment was delivered as-a-Service; today that percentage has increased to 44%. Furthermore, in an ideal state,
respondents report 50% of their environment would be delivered as-a-Service, showing there is further room for growth.

As-a-Service Consumption Models Drive Benefits for Organizations

The survey asked respondents to report the benefits their organizations have enjoyed as a result of the employment and expansion of as-a-Service consumption models. The data makes it clear that all organizations stand to gain from as-a-Service enablement. ESG asked respondents if their organizations had achieved 8 benefits as a result of as-a-Service consumption. Even the least frequently reported benefit was cited as achieved by the majority (56%) of all respondents.

The Return on As-a-Service Enablement Varies with IT Maturity

Given that as-a-Service enablement is one of the pillars of how ESG evaluates overall flexible IT maturity, it is not surprising to note that more mature organizations see the greatest return to date from as-a-Service consumption usage: 80% or more of Flexible IT Accelerators credit as-a-service usage with faster responsiveness to requests from line-of-business stakeholders (89%), faster cloud onboarding and migrations (89%), more efficient IT operations (88%), accelerated application development and deployment (84%), reduced infrastructure costs (83%), and increased organizational resilience (82%).

Quantifying the Cost Impact of Increased IT Flexibility and As-a-Service Acceleration

Legacy IT planning and procurement depends on multi-year projections and infrastructure sizing forecasts, meaning organizations overbuy what they need today and “grow into” their environment over time. There are two drawbacks with this approach:
• First, upfront overprovisioning of resources is an inefficient use of capital. This amounts to a large down payment on infrastructure that saps available funds from other possible projects.
• Second, forecasts are often wrong. The organizations may find their infrastructure underutilized if the planning
assumptions are wrong, again resulting in an inefficient allocation of capital. Similarly, planning assumptions may undershoot workload needs, which will require the organization to undertake another round of capacity planning and investment.
Our research shows that advances in delivering IT flexibility directly reduce costs by driving efficiencies in on-demand
provisioning and scaling with workloads. On average, Flexible IT Accelerators credit as-a-Service consumption models with reducing IT infrastructure costs by 16% over the last 12 months. Given that past, ESG research shows the average IT budget in 2021 is $113.7M1 , and assuming that infrastructure spending represents ~40% of IT budgets, this
represents a savings of $7.3M over the past 12 months.

More than Just Saving Money: Saving Time with Increased IT Flexibility and As-a-Service Acceleration

To make IT flexibility real, teams typically find they need to leverage automation to simplify and streamline operations.
Manual workflows and complicated provisioning and management tasks are incompatible with rapid IT service delivery and on-demand responsiveness.
Our research bears this out, with Flexible IT Accelerators reporting an average of 44% more time savings than Flexible
IT Reactors. They report eliminating an average of 52 person-hours of manual infrastructure management tasks per week due to advances in as-a-Service consumption.

Similarly, 88% of Flexible IT Accelerators say as-a-Service has increased infrastructure management efficiency and simplified operations versus just 59% of Flexible IT Reactors.
Not only do these efficiency gains help IT teams deliver on the promise of flexible IT, but they free staff from mundane
tasks to allow them to focus on strategic projects that can add significantly more value to deploying and tuning infrastructure.

Accelerating True IT Flexibility Allows IT to Deliver on Stakeholders’ Expectations

For many in IT, the definition of success is to deliver a level of service high enough that users don’t complain. The threshold of that level of service is frequently defined by a formal service level agreement (SLA) between IT and constituents like developers, data analysts, and other line-of-business stakeholders.

For example, the help desk team might have an SLA stating that all tickets submitted will be responded to within four hours. Or an IT operations team may guarantee a specific level of capacity or bandwidth will be available for a workload.
Our research shows that the agility enabled by truly flexible IT operations helps teams eliminate SLA non-compliance. Relative to Flexible IT Reactors, Flexible IT Accelerators have reduced SLA non-compliance by 78% more thanks to as-a-Service adoption. While Flexible IT Reactors have reduced SLA non-compliance by 37% on average, Flexible IT Accelerators have eliminated two-thirds of SLA violations.

Accelerating True IT Flexibility Helps Mitigate Public Cloud Risk

One key element in ESG’s definition of flexible IT is the ability of the organization to evaluate numerous environments—across private cloud, public cloud, and edge—for workloads and to select the environment that best suits the needs of the workload in question. This flexibility has numerous benefits for organizations, from getting the right level of performance at the right cost, to the right-sizing public cloud consumption.
Consider an organization with a public cloud-first orientation. This organization may place an outsized proportion of
their data on various public clouds. If the organization’s cloud security program can’t keep pace, the organization
may be at risk for data loss or application outages due to misconfiguration or cyber-attacks. Organizations with the
flexibility to utilize public cloud where it makes sense for them lower their risk and this theme is apparent in the data.

We asked respondents how many public cloud data breaches, unplanned application outages, and other events resulting in data loss had occurred in the last 12 months. The differences were significant: Flexible IT Accelerators reported 44% fewer incidents in the last 12 months than Flexible IT Reactors (4.4 versus 7.8).

Accelerating True IT Flexibility Makes Application Modernization Efforts More Effective

Business differentiation is increasingly driven by application developers, data analysts, and other teams whose charters are disrupting and transforming business processes. For those teams to do their jobs well, they need access to data and infrastructure. Flexible IT delivers that access faster and with less friction and our data shows that this allows leading organizations to outperform their peers on innovation.

For example, we asked respondents how much they’ve accelerated the traditional and cloud-native application development and deployment workflows as a result of As-a-service consumption models. Flexible IT Accelerators have
compressed app innovation cycles by 40% more than Flexible IT Reactors, the equivalent of nearly a full business week.

Similarly, we asked respondents how often they push new code to any production environment. Nearly two-fifths (39%) of Flexible IT Accelerators reported they push code to production multiple times per day versus just 24% of Flexible IT Reactors.
Finally, we questioned respondents about application modernization—that is, re-platforming legacy workloads to run
in more cloud-native ways. On average, Flexible IT Accelerators reported their application re-platforming projects to take less than half as long as Flexible IT Reactors (1.9 weeks versus 4 weeks).

Contact Musato Technologies to learn more about our ICT services and solutions designed to boost your business performance and productivity.

Data provided by ESG

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