How to Create a Business Case to Buy vs. Build Software

How to Create a Business Case to Buy vs. Build Software

When approaching new problems, such as cost optimization or task automation, development and IT teams are faced with the decision to buy vs. build a solution. There are a number of financial and strategic factors to consider when determining the best choice in each case, which can be difficult to parse through. Here are our tips for building a buy vs. build business case, whether for your own use or to present to management.

Reasons to Build Your Own Solution 

1. An off-the-shelf product doesn’t exist to solve your problem. If you can’t buy a product, or hack together several different existing solutions, you are probably going to have to build your own software. There is not too much “blue ocean” left out there, but if you have a need and no product can solve it, then it can make sense. Be wary and make sure you’ve completed your research before determining this is the case: perhaps the solution is called something other than what you’re searching, or exists as part of a larger suite of offerings. 

2. It will provide you with a significant competitive advantage over your rivals. This typically requires unique IP (some special sauce) that you can build into the product which other existing products can not offer and which will help your company succeed.

3. You can see a business opportunity whereby not only can you use the product yourself in-house, but you will also be able to offer it to your customers, thus leveraging your company’s investment.

4. You have a team of engineers sitting on the bench with nothing better to do (i.e. minimal opportunity cost). This does actually happen from time-to-time and such a project can make them productive.

5. The specialist knowledge already exists within the company and a natural product owner exists. This is not reason enough to decide to build, but without it, things are likely more difficult.

Reasons to Buy Pre-Built Solutions 

1. Building software is complex and expensive. If this is a software product that you are going to roll out across the enterprise, it will require support and likely a commitment for the life of the product to feature updates and improvements. 

2. Supporting products that your team might build is a significant commitment and typically is where the ‘big bucks are spent’. An MVP style product is unlikely to keep the masses happy for long, and you will need to budget for ongoing updates, improvements, patching and support. This typically multiplies the cost of building v1.0.

3. Commercializing a product built primarily for in-house usage is a great theory but in reality rarely works. Such examples do exist but are few and far between. Building a new product company requires a lot more than just technology and execution risk is high unless it is to become the #1 priority for your company. 

4. A long time to value of a new product venture means that you are often missing out on significant value which would be realized if an existing ‘off the shelf’ (today that often means a SaaS solution) were selected.

5. Enterprise-grade software comes with the bells and whistles that enterprises need. This typically means lots of points of integration, single sign-on requirements, and security as a given. Home-baked products typically do not include these items which are considered ‘added extras’ and not core to solving the problem at hand.

Create Your Business Case

If you work in an organization with access to technical resources (which today includes a lot of companies), there is often a desire to build because “they can” and a sense that they can meet the needs in a more custom manner solving the precise needs of their organization. Even if the opportunity cost of diverting resources away from other projects is low, there can be a tendency to overlook to include the longer term maintenance, upgrade, and support requirements of enterprise-grade software. Additionally, we often encounter companies who have started on the journey toward building an in-house solution, only to discover additional complexity or seeing internal priorities change. In such cases, even when there are significant sunk costs, reappraising alternative paths and third-party solutions can still make sense. 

Ultimately, every case is unique and weighing the relative pros/cons and building the business case to buy vs. build will require considering both financial and non-financial aspects to help the right decision is made. 

Do Cloud Providers Care About Green Computing?

Do Cloud Providers Care About Green Computing?

Is green computing something cloud providers like Amazon, Microsoft, and Google care about? And whether they do or not – how much does it matter? As the data center market continues to grow, it’s making an impact not only on the economy but on the environment as well. 

Public cloud offers enterprises more scalability and flexibility compared to their on-premise infrastructures. One benefit occasionally touted by the major cloud providers is that organizations will be more socially responsible when moving to the cloud by reducing their carbon footprint. But is this true?

Here is one example: Northern Virginia is the east coast’s capital of data centers, where “Data Center Alley” is located (and, as it happens, the ParkMyCloud offices), home to more than 100 data centers and more than 10 million square feet of data center space. Northern Virginia welcomed the data center market because of its positive economic impact. But as the demand for cloud services continues to grow, the expansion of data centers also increases dramatically. Earlier this year, the cloud boom in Northern Virginia alone was reaching over 4.5 gigawatts in commissioned energy, about the same power output needed from nine large (500-megawatt) coal power plants. 

Environmental groups like Greenpeace have accused major cloud providers like Amazon Web Services (AWS) of not doing enough for the environment when operating data centers. According to them, the problem is that cloud providers rely on commissioned energy from energy companies that are only focused on dirty energy (coal and natural gas) and very little from initiatives that include renewable energy. While the claims bring the spotlight on energy companies as well, we wanted to know what (if anything) the major cloud providers are doing to rely less on these types of energy and provide data centers with cleaner energy to make green computing a reality.

Data Center Sustainability Projects from AWS

According to AWS’s sustainability team, they’re investing in green energy initiatives and are striving to commit to an ambitious goal of 100% use of renewable energy by 2040. They are doing this with the proposition and support of smart environmental policies, and leveraging expertise in technology that drives sustainable innovation by working with state and local environmental groups and through power purchase agreements (PPAs) from power companies.

AWS’s Environmental Layer, which is dedicated to site selection, construction, operations and the mitigation of environmental risks for data centers, also includes sustainability considerations when making such decisions. According to them, “When companies move to the AWS Cloud from on-premises infrastructure, they typically reduce carbon emissions by 88%.” This is because their data suggests companies generally use 77% fewer servers, 84% less power, and gain access to a 28% cleaner mix of energy – solar and wind power – compared to using on-premise infrastructure. 

Amazon Solar Farm

So, how much of this commitment has AWS been able to achieve and is it enough? In 2018, AWS said they had made a lot of progress in their sustainability commitment, and exceeded 50% of renewable energy use. Currently, AWS has nine renewable energy farms in the US, including six solar farms located in Virginia and three wind farms in North Carolina. AWS plans to add three more renewable energy projects, one more here in the US, one in Ireland and one in Sweden. Once completed they expect to create approximately 2.7 gigawatts of renewable energy annually.

Microsoft’s Environmental Initiatives for Data Centers

Microsoft has stated that they are committed to change and make a positive impact on the environment, by “leveraging technology to solve some of the world’s most urgent environmental issues.”

In 2016, they announced they would power their data centers with more renewable energy, and set a target goal of 50% renewable energy by the end of 2018. But according to them, they were able to achieve that goal by 2017, earlier than they expected. Looking ahead they plan to surpass their next milestone of 70% and hope to reach 100% of renewable energy by 2023. If they were to meet these targets, they would be far ahead of AWS.

Beyond renewable energy, Microsoft plans to use IoT, AI and blockchain technology to measure, monitor and streamline the reuse, resale, and recycling of data center assets. Additionally, Microsoft will implement new water replenishment initiatives that will utilize rainfall for non-drinking water applications in their facilities.

Google’s Focus for Efficient Data Centers 

Google claims that making data centers run as efficiently as possible is a very big deal, and that reducing energy usage has been a major focus to them for over the past 10 years. 

Google’s innovation in the data center market came from the process of building facilities from the ground up instead of buying existing infrastructures. According to Google, using machine learning technology to monitor and improve power-usage-effectiveness (PUE) and find new ways to save energy in their data centers gave them the ability to implement new cooling technologies and operational strategies that would reduce energy consumption in their buildings by 30%. Additionally, they deployed custom-designed, high-performance servers that use very little energy as possible by stripping them of unnecessary components, helping them reduce their footprint and add more load capacity. 

By 2017, Google announced they were using 100% renewable energy through power purchase agreements (PPAs) from wind and solar farms and then reselling it back to the wholesale markets where data centers are located. 

The Environmental Argument

Despite the pledges cloud providers are committing to in renewable energy, cloud services continue to grow beyond those commitments, and how much energy is needed to operate data centers is still very dependant on “dirty energy.”

Breakthroughs for cloud sustainability are taking place, whether big or small, providing the cloud with better infrastructures, high-performance servers, and the reduction of carbon emissions with more access to renewable energy resources like wind and solar power. 

However, some may argue the time might be against us, but if cloud providers continue to better improve existing commitments that keep up with growth, then data centers – and ultimately the environment – will benefit from them.

Why Abstraction Layers are Key to IT Success

Why Abstraction Layers are Key to IT Success

A recent conversation I had with Turbonomic founder and president Shmuel Kliger highlighted the importance of abstraction layers. Shmuel told me, “there’s only one reason why IT exists,” which quickly led to a discussion of cloud and abstraction.

It’s easy enough to get caught up in the whirlwind of ever-evolving technologies that returning to a single, fundamental purpose of IT is actually quite an intriguing idea.

Why Does IT Exist?

So, why does IT exist? As Shmuel put it, the purpose of IT is to get applications the resources they need in order to perform. That’s it!

Others have said the purpose of IT is to “make productivity friction free” or “enable the business to drive new opportunities”, but it all comes down to enabling the performance of the business. 

That key step of “enablement” is where we get to the plethora of technologies – private cloud, public cloud, serverless cloud, containers, managed containers, container orchestration, IoT data, data warehouses, data lakes, the list goes on and on. There’s no lack of solutions to the many productivity and technology-related problems faced in businesses today. Really, the problem is that such a wide and constantly changing array of technologies exist, inadvertently (or perhaps advertently, depending on your view!) creating more complexity in the wake of the problems they solve.

Complexity is no stranger, but it’s no friend, either. Simplification leads to efficiencies across the board, and should be one of the primary goals IT departments seek to achieve.

How Abstraction Provides Simplification

First of all: what do we mean by abstraction? An abstraction layer is something that hides implementation details and replaces it with more easily understandable and usable functions. In other words, it makes complicated things simpler to use. These layers can include hardware, programmable logic, and software. 

When you start to think about the layers between hardware and an application end user, you see that the abstraction layers also include on-premises hardware; cloud providers and IaaS; PaaS; FaaS; and containers. These middlemen start to add up, but ultimately, in order for an application to execute its underlying sequence of code, it needs CPU, memory, I/O, network, and storage. 

On this point, Shmuel said: “I always say the artifact of demand can change and the artifact of supply can change, but the problem of matching demand to supply doesn’t go away.” 

By using layers of abstraction to match this demand to supply, you remove the burden of the vast majority of decisions from the developer and the end user – in other words, simplification. One of the most prominent 

The Full Benefits of Operating Through Abstraction Layers

In addition to simplification, other benefits of abstraction include: 

  • Alleviating Vendor Lock-In – this can occur across the board – for example, by using a layer of multi-cloud management tools, you reduce your reliance on any single cloud provider, which is important for enterprise risk mitigation strategies.
  • Reducing Complexity of Analysis – by bringing data into one place and one format, abstraction makes data analytics simpler and broader reaching.
  • Reducing Required Expertise – by rolling up multiple hardware and software problems into a single management layer, you eliminate much of the heterogeneity that requires diverse skills in your organization’s workforce and generally reduces the limits imposed by the human end user.
  • Optimize everything – by eliminating silos and allowing for a single point of analysis, abstraction management opens doors to resource and cost optimization. 

IT organizations should attack the problems of complexity in two ways: one, by identifying the most messy and complex areas of your technology stack and creating a plan of attack to simplify their management. 

Two, by identifying “quick wins” where you can abstract away the problem with automation, achieving a better environment, automatically. We’ve got one for you: try ParkMyCloud to automatically optimize your cloud costs, saving you time, money, and effort.

8 Non-Obvious Benefits of SSO

8 Non-Obvious Benefits of SSO

As an enterprise or organization grows in size, the benefits of SSO grow along with it. Some of these benefits are easy to see, but there are other things that come up as side-effects that might just become your favorite features. If you’re on the fence about going all-in on Single Sign-On, then see if anything here might push you over the edge.

1. Multi-factor Authentication

One of the best ways to secure a user’s account is to make the account not strictly based on a password. Passwords can be hacked, guessed, reused, or written down on a sticky note on the user’s monitor. A huge benefit of SSO is the ease of adding MFA security to the SSO login. By adding a second factor, which is typically a constantly-rotating number or token, you vastly increase the security of the account by eliminating the immediate access of a hacked password. Some organizations even choose to add a third factor, which is typically something you are (like a fingerprint or eye scan) for physical access to a location. Speaking of passwords…

2. Increased Password Complexity

Forcing users to go through an SSO login instead of remembering passwords for each individual application or website means they are much more open to forming complex passwords that rotate frequently. A big complaint about passwords is having to remember a bunch of them without reusing them, so a limitation on the number of passwords means that one password can be much stronger.

3. Easier User Account Deployment

This one might seem obvious to some, but by using an SSO portal for all applications, user provisioning can be greatly accelerated and secured. The IT playbook can be codified within the SSO portal, so a new user in the accounting department can get immediate access to the same applications that the rest of the accounting department has access to. Now, when you get that inevitable surprise hire that no one told you about, you can make it happen and be the hero.

4. Easier User Account Deletion

On the flip side of #3, sometimes the playbook for removing users after they leave the company can be quite convoluted, and there’s always that nagging feeling that you’re forgetting to change a password or remove a login from somewhere. With SSO, you just have one account to disable, which means access is removed quickly and consistently. If your admins were using SSO for administrative access, it also means fewer password changes you have to make on your critical systems.

5. Consistent Audit Logging

Another one of the benefits of SSO is consistent audit logging. Funneling all of a user’s access through the same SSO login means that tracking that user’s activity is easier than ever. In financial and regulated industries, this is a crucial piece of the puzzle, as you can make guarantees about what you are tracking. In the case of a user who is no longer employed by the enterprise, it can make it easier to have your monitoring tools look for such attempts at access (but you know they can’t get in, from point #4!).

6. Quickly Roll Out New Applications

Tell your IT staff that you need to roll out a new application to all users without SSO and you’ll hear groans starting in record time. However, with SSO, rolling out an application is a matter of a few clicks. This means you have plenty of options ranging from a slow rollout to select groups to start all the way to a full deployment within a matter of minutes. This flexibility can really help maximize your user’s productivity, and will make your IT staff happy to put services into play.

7. Simplify the User Experience

If you use a lot of SaaS applications or web apps that require remembering a URL, you’re just asking for your users to need reminders of how to get into them. With an SSO portal, you can make all services and websites show up as clickable items, so users don’t need to remember the quirky spelling of that tool you bought yesterday. Users will love having everything in one place, and you’ll love not having to type anything anymore.

8. Empower Your Users

Speaking of SaaS applications, one of the main blockers for deploying an application to a wider audience is the up-front setup time and effort, which leads to IT and Operations shouldering the load of the work (since they have the access). SSO can accelerate that deployment, which means the users have more power and can directly access the tools they need. Take an example of ParkMyCloud, where instead of users asking IT to turn on their virtual machines and databases, the users can log directly into the ParkMyCloud portal (with limited access) and control the costs of their cloud environments. Users feel empowered, and IT feels relieved.

Don’t Wait To Use SSO

Whether you’ve already got something in place that you’re not fully utilizing, or you’re exploring different providers, the benefits of SSO are numerous. Small companies can quickly make use of single sign-on, while large enterprises might consider it a must-have. Either way, know that your staff and user base will love having it as their main access portal!

Can Azure Dev/Test Pricing Save You Money?

Can Azure Dev/Test Pricing Save You Money?

Azure Dev/Test pricing is an option that Azure offers to give developers access to the tools that are necessary to support ongoing development and testing in Microsoft Azure services. This, hopefully, should give the user more control of their applications and environments reducing waste. 

Azure Dev/Test Pricing Options

With Azure Dev/Test pricing, three different options are available to users – Individual, Teams (Enterprise Agreement Customers), and another Teams option for those customers that don’t fall under the enterprise agreement. These pricing options are offered solely to active Visual Studio subscribers. We’ll dig in a little deeper to the pricing options and the benefits associated with each one. 

Option 1: Individuals

The individual option is meant to let users explore and get familiar with Azure’s services. As you can imagine, pricing for individuals is a little different than team pricing. Individuals are given the pricing option of monthly Azure credits for those who are subscribed to Visual Studio. If this pricing option is chosen, the individual is given a separate Azure subscription with a monthly credit balance ranging from $50-150.

You get to decide how you use your monthly credit. There are several Azure services that you can put the credit towards. The software included in your Visual Studio subscription can be used on Azure VMs for no additional charges, you pay a reduced rate for the VMs that you run. 

These monthly credits are ideal for personal workloads, but other options are more optimal for team workloads.

Option 2: Teams – Enterprise Agreement Customers

Teams that have an Enterprise Agreement in place have access to low Dev/Test rates for multiple subscriptions. The funds that are on the customer’s Enterprise Agreement will be used – there is no separate payment. A discount is given to customers at this level – all Windows and Windows Server, Virtual Machines, Cloud Services, and more are discounted off normal Enterprise Agreement rates. 

Unlike the option for Individuals, the team’s option for enterprise agreement customers allow end-users to access the application to provide feedback and to run tests – only Visual Studio subscribers can actually use the Azure resources running in this subscription. 

Option 3: Teams – All Other Customers

If a user isn’t an enterprise agreement customer but wants to use Azure for their teams, they would fall under this category. This rate offers a pay-as-you-go Dev/Test pricing option. This pricing option is very appealing because it allows users to quickly get their teams up and running with dev/test environments. Users are only allowed to use these environments for development and testing.  

This is a more flexible and inclusive option, it allows for multiple team members to interact with the resources, it’s not limited to just the account owners. 

Can Azure Dev/Test Save You Money?

All three options allow users to use the software that is included in their Visual Studio subscription for dev/testing. For VMs being run in environments in all three of these options, users are given a discounted price that is based on a Linux VM rate. 

Microsoft Azure users that are looking to save money on their cloud costs may want to use one of these options. These pricing options come with the benefit of no additional Microsoft software charges on Azure Virtual Machines and exclusive dev/test rates on other Azure services. 

Shadow IT: Not a Problem or Worse than Ever?

Shadow IT: Not a Problem or Worse than Ever?

Shadow IT: you’ve probably heard of it. Also known as Stealth IT, this refers to information technology (IT) systems built and used within organizations without explicit organizational approval or deployed by departments other than the IT department. 

A recent survey of IT decision makers ranked shadow IT as the lowest priority concern for 2019 out of seven possible options. Are these folks right not to worry?  In the age of public cloud, how much of a problem is shadow IT?

What is Shadow IT?

So-called shadow IT includes any system employees are using for work that is not explicitly approved by the IT department. These unapproved systems are common, and chances are you’re using some yourself. One survey found that 86% of cloud applications used by enterprises are not explicitly approved.

A common example of shadow IT is the use of online cloud storage. With the numerous online or cloud-based storage services like Dropbox, Box, and Google Drive, users have quick and easy methods to store files online. These solutions may or may not have been approved and vetted by your IT department as “secure” and/or a “company standard”. 

Another example is personal email accounts. Companies require their employees to conduct business using the corporate email system. However, users frequently use their personal email accounts either because they want to attach large files, connect using their personal devices, or because they think the provided email is too slow. One in three federal employees has stated they had used personal email for work. Another survey found that 4 in 10 employees overall used personal email for work. 

After consumer applications, we come to the issue of public cloud. Companies employ infrastructure standards to make support manageable throughout the organization, manage costs, and protect data security. However, employees can find these limiting. 

In our experience, the spread of technologies without approval comes down to enterprise IT not serving business needs well enough. Typically, the IT group is too slow or not responsive enough to the business users. Technology is too costly and doesn’t align well with the needs of the business. IT focuses on functional costs per unit as the value it delivers; but the business cares more about gaining quick functionality and capability to serve its needs and its customers’ needs. IT is also focused on security and risk management, and vetting of the numerous cloud-based applications takes time – assuming the application provider even makes the information available. Generally, enterprise IT simply doesn’t or cannot operate at the speed of the other business units it supports. So, business users build their own functionalities and capabilities through shadow IT purchases. 

Individuals or even whole departments may turn to public cloud providers like AWS to have testing or even production environments ready to go in less time than their own IT departments, with the flexibility to deploy what they like, on demand.

Is Shadow IT a problem?

With the advent of SaaS, IaaS and PaaS services with ‘freemium’ offerings that anyone can start using (like Slack, GitHub, Google Drive, and even AWS), Shadow IT has become an adoption strategy for new technologies. Many of these services count on individuals to use and share their applications so they can grow organically within an organization. When one person or department decides one of these tools or solutions makes their job easier, shares that service with their co-workers, and that service grows from there, spreads from department to department, growing past the free tier, until IT’s hand is forced to explicit or implicit approve through support. In cases like these, shadow IT could be considered a route to innovation and official IT approval.

On the other hand, shadow IT solutions are not often in line with organizational requirements for control, documentation, security, and reliability. This can open up both security and legal risks for a company. Gartner predicted in 2016 that by 2020, a third of successful attacks experienced by enterprises will be on their shadow IT resources. It’s impossible for enterprises to secure what they’re not aware of.

There is also the issue of budgeting and spend. Research from Everest Group estimates that shadow IT comprises 50% or more of IT spending in large enterprises. While this could reduce the need for chargeback/showback processes by putting spend within individual departments, it makes technology spend far less trackable, and such fragmentation eliminates the possibility of bulk or enterprise discounting when services are purchased for the business as a whole. 

Is it a problem? 

As with many things, the answer is “it depends.” Any given Shadow IT project needs to be evaluated from a risk-management perspective. What is the nature of the data exposed in the project? Is it a sales engineer’s cloud sandbox where she is getting familiar with new technology? Or is it a marketing data mining and analysis project using sensitive customer information? Either way, the reaction to a Shadow IT “discovery” should not be to try to shame the users, but rather, to adapt the IT processes and provide more approved/negotiated options to the users in order to make their jobs easier. If Shadow IT is particularly prevalent in your organization, you may want to provide some risk management guidance and training of what is acceptable and what is not. In this way, Shadow IT can be turned into a strength rather than a weakness, by outsourcing the work to the end users.

But, of course, IT cannot evaluate the risk of systems it does not know about. The hardest part is still finding those in the shadows.