"Hosted IP Services: Fleeting Fad or Evolving Environment?"
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The document summarizes a presentation on hosted IP services and how they relate to Nicholas Carr's theory that IT no longer provides strategic advantage. It discusses how hosted IP services represent a fundamental shift in the ITC industry by allowing companies to outsource non-core IT functions. Examples are provided of how hosted services can enable business functions like mobility, disaster recovery, and multi-site unification. Early adopters are said to value the cost savings and focus on their core business that hosted services provide.
![What are Hosted Services?
Computing What Are Hosted Services?
A 'hosted service' is one in which the application is
run on a central server and accessed by users
Infrastructure Information over a broadband pipe
Remotely delivered application services using
shared resources
Communications The primary advantage [today] is that no capital
investment or technical expertise is required from
Hosted Services the business
The HSP provides all operational aspects
including security, software upgrades, server
admin, backups, and fallback procedures
A Hosted Service Provider is a business that delivers a combination of
traditional IT functions over the Internet or other wide area networks
Enables customers to consolidate and outsource much of their IT needs for a predictable
recurring fee or subscription
provide economies of scale, delivering the same software and services to many
customers at once
5](https://image.slidesharecdn.com/casefinal-12586011704445-phpapp01/85/quot-Hosted-IP-Services-Fleeting-Fad-or-Evolving-Environment-quot-5-320.jpg)
"Hosted IP Services: Fleeting Fad or Evolving Environment?"
- 1. Case Center and Syracuse Technology Garden present: The Syracuse Technology Roundtable
- 2. For years now, the rally cry to the creative has been… Think Outside The Box” “ My message …STOP THINKING ABOUT THE “Box”! My prediction …In 10 Years “Hosted Everything” will be the way businesses acquire technology-based services My belief …We are witnessing the birth of a new industry …the HSP (Hosted Services Provider) 2
- 3. Presentation Summary Chances are you have heard the term Hosted IP Services touted as the latest voice and data technology…what are they? How do Hosted IP Services relate to the controversial ideas put forth by Nicholas Carr in his article “IT Doesn’t Matter”? Is this just another Fad fostered by vendors to generate new business or is there something more going on here? We’ll discuss what services are available today, where the industry may be headed and some things to think about back at the office 3
- 4. Presentation Summary Chances are you have heard the term Hosted IP Services touted as the latest voice and data technology…what are they? How do Hosted IP Services relate to the controversial ideas put forth by Nicholas Carr in his article “IT Doesn’t Matter” Is this just another Fad fostered by vendors to generate new business or is there something more going here? We’ll discuss what services are available today, where the industry may be headed and some things to think about back at the office Expanding The Definition of IT ..to include Communications Information Technologies often refers to hardware and software that support a computing infrastructure. To fully understand what is happening in the Converged Network, we must expand that definition to include Communications as well…or what I call ITC 4
- 5. What are Hosted Services? Computing What Are Hosted Services? A 'hosted service' is one in which the application is run on a central server and accessed by users Infrastructure Information over a broadband pipe Remotely delivered application services using shared resources Communications The primary advantage [today] is that no capital investment or technical expertise is required from Hosted Services the business The HSP provides all operational aspects including security, software upgrades, server admin, backups, and fallback procedures A Hosted Service Provider is a business that delivers a combination of traditional IT functions over the Internet or other wide area networks Enables customers to consolidate and outsource much of their IT needs for a predictable recurring fee or subscription provide economies of scale, delivering the same software and services to many customers at once 5
- 6. The “Shock Jock” of Technology Change Nicholas G. Carr is a consultant, business writer and speaker whose work centers on strategy, innovation, and technology In 2003, then Editor-At-Large for Harvard Business Review, he wrote an article entitled “IT Doesn’t Matter” His views roiled the Information Technology industry, spurring outcries from executives of Microsoft, Intel, H-P and other leading technology companies “Don’t listen to this guy…keep the faith in IT…” - Steve Balmer Microsoft's Paul Flessner says: "It's just silly to think that there's no competitive advantage in IT. It's insanity in my mind." 6
- 7. “IT Doesn’t Matter” The Central Theme: “There is nothing all that special about information technology” He argues that IT has been commoditized…that its become practically invisible; that IT no longer matters “Does IT Matter?" He argued that the strategic importance of information technology in business has diminished as IT has become more commonplace, standardized and cheaper. "The End of Corporate Computing" That in the future, companies will purchase information technology as a utility service from outside suppliers. 7
- 8. “IT Doesn’t Matter” The Central Theme: “There is nothing all that special about information technology” He argues that IT has been commoditized…that its become practically invisible; that IT no longer matters “Does IT Matter?" He argued that the strategic importance of information technology in business has diminished as IT has become more commonplace, standardized and cheaper. "The End of Corporate Computing" That in the future, companies will purchase information technology as a utility service from outside suppliers. “When a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantages it provides.” - Nicholas Carr 8
- 9. So What? ..That Was Four Years Ago Four years later, the controversial subject still generates heated debate regarding its accuracy and relevance… “Nicholas Carr” returned 2.1m Google hits “IT Doesn’t Matter” returned 126m Google hits The provocative issues and incendiary rhetoric in this piece ignited a worldwide debate on the strategic value of information technology in business With his follow-up books, blogs and articles Carr has renewed and deepened that debate and become one of the business world’s most significant voices “Carr’s article just won’t stay debunked.” - Robert Metcalfe 9
- 10. What I Believe He Was Saying The title is misleading…Carr is not arguing that Information Technology doesn’t matter…of course it does As IT Technologies mature, spread and become more standardized, the strategic advantage any individual company can gain from that technology diminishes You only gain a strategic edge over rivals by having or doing something can’t have or do Today, most IT-Based competitive advantages simple vanish too quickly to be meaningful Many IT Technologies are no longer a potentially strategic resource…they are being transformed into a commodity factor of production Essential to competitiveness but inconsequential to strategic advantage: that's why certain technologies are best viewed (and managed) as a commodity To help explain this, he introduces the concept of two categories of technology Proprietary and Infrastructural 10
- 11. Carr’s “Two Technology Types” Proprietary Infrastructural Can be owned by a More mature & widely single company available Technology Proprietary Exclusive rights, patent Guided by standards Te ch Innovative way to Viewed more as no log yC ur employ a technology “plumbing” ve Competitors find hard Part of the general Infrastructural Technology to replicate business infrastructure Can be a foundation More value when shared for long term strategic than when used in advantages isolation THINK: Google Search THINK: Ethernet / IP In addition to enabling new, more efficient operating methods, infrastructural technologies often lead to broader market changes. Here, too, a company that sees what’s coming can gain a step on myopic rivals. 11
- 12. Carr’s Underlying Concepts…not new stuff What Carr was talking about or predicting is actually the confluence of a number of existing theories: The Law of Disruption and The Disruptive Innovation Model First introduced in the book “Unleashing the Killer App” • Moore’s Law + Metcalfe’s Law + Coasean Economics Further developed in “The Innovator’s Dilemma” and “The Innovator’s Solution” • The dichotomy of Sustaining vs. Disruptive innovations These theories are playing themselves out today in the ITC Industry…fueling the rapidly growing concept of Hosted IP Services 12
- 13. The Type Types Of Innovation Sustaining vs. Disruptive Sustaining innovation improves the performance of existing products along the dimensions that mainstream customers value Disruptive innovation will have characteristics that traditional customer segments may not want, at least initially Early on, such innovations will appear as cheaper, simpler and even with inferior quality if compared to existing products, but some marginal or new segment will value it 13
- 14. Today’s Infrastructural Technologies Wide Area Access Networks Messaging Both voice and data Email, voicemail, fax, IM, etc Business Voice Systems Data Storage PBX’s & Key Systems Online, offline, backup, archival Core IP Infrastructure Security Layer 2 & Layer 3 devices SPAM, Firewalls, IDS/IPS, etc Voice & Data Services Business Applications Local, LD, 800, Internet, MS Office Suite, SFA, CRM, VPN, DNS, etc ERP, etc 14
- 15. The Business End of Hosted Services The great thing about Hosted Services is that it maps very well to business initiatives such as Cost Savings - reducing system acquisition & management costs Improving worker productivity Flexibility - facilitating User/IP mobility Risk Management & Disaster Planning - maintaining business continuity Integration & Control - Unifying Communications Other business services can be built around vertical industries like healthcare, education, hospitality, government, law firms, professional services, etc. 15
- 16. Example – Multi-Site Unified Network SITUATION A High-Tech Mfg is growing quickly via acquisitions and needs to integrate operations quickly and cost-effectively. Also, their culture is steeped in “Work-Force Flexibility” requiring creative use of technology SOLUTIONS Identical phone sets, features & Interoffice Dialing Single IVR, Voicemail and ACD System Geographic Abstraction of Telephone Numbers Hot-Desking and Cell-Twining Remote Office Solutions • Remote Call Centers and Agents • Regional & Small Office/Home Office 16
- 17. Example – User Mobility SITUATION A Sales-focused company with 40+ professionals on the road calling on regional clients relies heavily on communications between its clients, sales force and HQ SOLUTIONS Single Number Service – Simultaneous Ring Multi-Number Service – Personalized Agent Find Me/Follow Me – Unified Communications Cell Twining and Cell Cloning Telecommuting with Voice & Data VPN’s 17
- 18. Example – Hosted Messaging SITUATION A very large Community College provides extensive information to its students using a premise-based IVR. However, it frequently is unavailable due to high call volumes and can also block in-bound & out-bound voice calls. Very antiquated and needs to be replaced. SOLUTIONS Hosted Messaging – IVR & Voicemail Number Portability – No need to change Burstable Voice Bandwidth – Virtual expansion for high traffic Management Portal – Web interface from anywhere Service Creation Environment – Object based changes Real-Time Schedule Integration – via simple vXML 18
- 19. What the Early Adopters Are Saying… "We can focus on our core business.” Smart companies focus on growing their business and not on managing complicated office systems. "We can easily add/manage office locations." Hosted IP systems are designed to treat multiple locations as one office…for example, the ability to share a centralized receptionist and use four-digit dialing between locations. "We're guaranteed access to the latest technology." Hosted IP providers handle software upgrades at no additional charge. "Hosted IP satisfies our business continuity & disaster-recovery needs." Hosted providers house their equipment in carrier-grade collocation facilities with high levels of resiliency, back-up power and advanced safety features. An IP PBX resides in the client's office where it is susceptible to emergencies such as fires, floods or natural disasters. 19
- 20. Hosted IP Services - Stages Of Value Stage 1 Stage 2 Stage 3 Business Enablers & Growth Drivers Productivity & Convenience Cost & Control 20
- 21. Hosted Services…the key messages Hosted IP Services… is the business of housing — and managing — the Infrastructural Systems that run a business is NOT a Fad…it represents a Fundamental Shift in the ITC Industry • There are several immutable technology and economic laws at work are Evolutionary…not Revolutionary • This is NOT an “All Or Nothing” proposition are NOT “Futures”… • You can use them to create completely new services…Today! Are you ready? 21
- 22. One Final Thought… “Decide what is Core to your company -- absolutely critical, strategic… strategic Your Competitive Advantage -- and then outsource everything else” - John Turner (Aug, 2007) 22
- 23. Q&A John Turner EVP and Chief Strategy Officer USA Datanet jturner@usadatanet.com 318 S. Clinton St. Syracuse, New York 13202 Phone:315-579-7105 Fax:315-579-7201