NETWORK WORLD NEWSLETTER: MARK EHR ON OUTSOURCING 09/22/04 Today's focus: Is a free meal a good thing?
Dear [EMAIL PROTECTED], In this issue: * Why it could be worthwhile sticking with providers that don't ��meet their objectives * Links related to Outsourcing * Featured reader resource _______________________________________________________________ This newsletter is sponsored by Nokia NW Special Report: Preparing an Infrastructure for Mobile Applications. Mobility, properly done, increases productivity and decreases operating costs. So get up to date information about building a mobile infrastructure, dealing with security issues, the latest networking options, connectivity alternatives and operational support enhancements. http://www.fattail.com/redir/redirect.asp?CID=81440 _______________________________________________________________ DOWNLOAD THE LATEST SPECIAL REPORTS FROM NETWORK WORLD Focused reports on compelling industry topics, Network World Special Reports are available online at Network World Fusion. Network World Special Reports on Mobility, IP Telephony Security, the State of Wireless LANs and more are currently available. Download any or all of our Special Reports at: http://www.fattail.com/redir/redirect.asp?CID=81389 _______________________________________________________________ Today's focus: Is a free meal a good thing? By Mark Ehr A few years ago, I worked for Aprisma, the company that's best known for its Spectrum network management product. At the time, Aprisma had outsourced its VPN to a service provider to provide access to the corporate network for remote offices and traveling employees. When Aprisma negotiated a service-level agreement with the VPN vendor, it insisted on service-level objectives (SLO) that specified certain levels of availability and performance, to which the provider agreed. The SLA specified financial penalties in the form of service rebates for SLA-violations not to exceed the total monthly fee. After a year of receiving service from the provider, Aprisma's CIO gleefully told me that she had never had to pay the VPN service vendor's monthly fee - ever! The reason was that the provider repeatedly failed to achieve the SLOs specified in the SLA, resulting in service rebates month after month. One would think, after a few months, that Aprisma would have canceled the contract with the vendor for non-performance and simply found another company to provide the service, but it did not. Why? The answer is that the levels of service being provided were actually acceptable - I can vouch for that, as I used the system every day and never had a problem with it that I can remember. The provider's fatal mistake was in not making absolutely sure that it could meet the SLOs in the agreement, and also in forgetting that it was doing business with a network management software vendor that could easily verify the service provider's compliance with the agreement. That brings up an interesting point - service consumers should leverage their investments in management technologies to verify their provider's compliance with the SLAs, as there may be some free service to be had simply by holding their feet to the fire. I believe that many service providers create SLAs without making sure that they are realistic, and many service consumers lack the technical sophistication to validate if the SLOs are actually being met, instead trusting the data gathered by the provider. This is a common problem with SLAs that are written at an elemental level instead of guaranteeing levels of service from the end-user perspective (see <http://www.nwfusion.com/newsletters/asp/2004/0830out1.html> for more information on end user-based SLAs). This is an incredibly flawed business model, as no service provider can stay in business long without receiving revenue from its customers. It's like getting a bad meal from a restaurant, and when you complain about it, the manager gives you a coupon for a free meal. Do you _really_ want another meal, free or otherwise, unless there is empirical evidence that they have rectified the problem? This typifies a real problem in the service provider/service consumer model today: poorly written SLAs based on unachievable SLOs can be disastrous for the vendor, resulting in significant financial losses when adequate levels of service are actually being provided. The reverse also holds true - SLOs that are vague or difficult to measure are not worth the paper they are written on. It is critical to both the service provider and the consumer to ensure that the SLA they agree upon provides a business-relevant level of service to the consumer that can be easily measured and verified by both parties. I welcome your ideas, suggestions and comments on the subject of outsourcing; my e-mail address is below. Thanks for reading. RELATED EDITORIAL LINKS JPMorgan Chase cancels deal with IBM Network World, 09/20/04 http://www.nwfusion.com/news/2004/092004jpmorgan.html EDS faces headwinds, aims to reconnect Network World, 09/20/04 http://www.nwfusion.com/news/2004/092004eds.html _______________________________________________________________ To contact: Mark Ehr Mark Ehr is a Research Director with Enterprise Management Associates in Boulder, Colo., a leading market research firm focusing exclusively on all aspects of enterprise management software and services. Mark has more than 20 years of experience working with distributed systems, applications and networks. His current focuses at EMA are applications and systems management, mobile and wireless, enterprise application integration, security, and Web services. He can be reached via e-mail at <mailto:[EMAIL PROTECTED]> _______________________________________________________________ This newsletter is sponsored by Nokia NW Special Report: Preparing an Infrastructure for Mobile Applications. Mobility, properly done, increases productivity and decreases operating costs. So get up to date information about building a mobile infrastructure, dealing with security issues, the latest networking options, connectivity alternatives and operational support enhancements. http://www.fattail.com/redir/redirect.asp?CID=81439 _______________________________________________________________ ARCHIVE LINKS Archive of the Outsourcing newsletter: http://www.nwfusion.com/newsletters/asp/index.html Breaking outsourcing news and resource links: http://www.nwfusion.com/topics/outsourcing.html _______________________________________________________________ FEATURED READER RESOURCE ACCESS NW'S IN-DEPTH REPORT ON: BLADE SERVERS Available now is Network World's Technology Insider on: Blade Servers. Find out why early adopters of blade server technology say the benefits aren't science fiction, how blade servers differ by vendor, why blade servers are perfectly suited for today's data centers, review our extensive blade server buyer's guide and more. 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