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Analysis

Every company is a services company now; but is your tech up to the job?
Bob Tarzey By: Bob Tarzey, Service Director, Quocirca
Published: 21st January 2014
Copyright Quocirca © 2014
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In the IT industry the term “service provider” is generally taken to mean a company that sits in the information technology and communications (ITC) sector providing ITC-related services; internet service providers (ISPs), telecommunications service providers, software/infrastructure-as-a-service providers and so on.

However, the way that most organisations interact with business customers, partners and consumers has changed so radically in the last 20 years that the majority are now service providers of some sort. The degree to which this is the case in northern Europe is examined in a recent Quocirca research report—In demand: the culture of online service provision—that was sponsored by Citrix.

The report looked at enterprise and mid-market organisations from a broad range of sectors. Overall 66% were providing online services; for the majority it was e-commerce (e.g. retail, financial and supply chain). However, many were also providing ITC services and this was not just in the hi-tech industry (think of online support services using chat etc.). Almost 53% were providing business to business (B2B) services, but business to consumer (B2C) was not far behind at just over 42%; just fewer than 38% were interacting with partners.

It is a long time since such online interaction was simply a 'nice to have' additional communications channel or route to market. In many cases these on-demand services are now the principal way in which organisations are interacting with external users. Many supply chain systems are 100% reliant on internet access and the availability of the supporting applications, online banking services etc are expected to be available 24x7 and pure online retailers are common place. It is therefore not surprising that reliability is the top priority for online application delivery (closely followed by security).

Quocirca’s report also looks at the use of advanced supporting technologies for on-demand applications; these include:

  • Multi-tenancy – the ability to provide flexible support for multiple applications to multiple customers and the need to manage differing resource and security requirements on the same platform. A technology for achieving the economies of scale of many online services.
  • Cloud bursting – the ability to rapidly increase the resources available to a given application by transferring workloads to a cloud computing platform, usually provided by a third party service provider.
  • Fabric and consolidated networks – the move away from rigid physical deployment to flexibly virtualised network capacity, increasingly referred to as software defined networks (SDN).
  • Application delivery controllers (ADC) – network devices that provide advanced load balancing and perform common tasks required by a given set of applications to free up application server and network resources.

The research showed that recognition of the value of such services increased the more committed a given organisation was to online service provision; for example 90% of organisations providing ITC services were using multi-tenancy. The majority of those providing ITC or e-commerce services were running fabric or consolidated networks usually with ADCs as a key component; both going hand in hand with almost ubiquitous server virtualisation. 80% of organisations providing 5 or more types of online service had deployed ADCs; interestingly 24% were using on-demand ADC services.

Reliable and secure online applications supported by advanced technologies are all well and good, but it turns out that, as organisations become more and more committed to providing online services, they face a further challenge—a skills shortage. Overall, only 32% are happy with the availability and currency of networking skills. The majority look for vendor accreditations when seeking new staff and this is more likely to be the case for those organisations that are committed to online service provision and they will pay more for them.

The obvious message for would-be network engineers wanting to work at the bleeding edge of online service provision is to get trained up with the necessary skills, where relevant backed by accreditations from the leading vendors. In networking this includes the major vendors; Cisco, Brocade, Juniper and HP—all of who are likely to strengthen their SDN capabilities in during 2014. The ADC market is led by F5, followed by Citrix (whose NetScaler product is resold by Cisco) and Radware (partnered with Juniper); others include A10 (with a high end enterprise focus), Riverbed, Kemp and Array Networks.

The need for such skills seems unlikely to diminish as the reliance on online services grows. However, some of the more technical, platform-oriented jobs are likely to migrate to traditional service providers as the providers of commercial online services turn to their platforms more and more. They will do this in order to focus their own resources on what really counts—the reliable delivery of on-demand applications.

This article first appeared in Tech Republic: http://www.techrepublic.com/blog/european-technology/were-all-services-companies-now/#.

Quocirca’s research report, In demand - the culture of online service provision, is freely available here: http://www.citrix.com/news/market-research/oct-2013/quocirca-in-demand-the-culture-of-online-service-provision.html

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