IT Service Management Moves to the Cloud

Equinix faced a global conundrum: How to meet its in-house IT needs amid a rapid expansion into 31 markets worldwide.

The Redwood City, Calif.-based data center and interconnection company has experienced double-digit growth in recent years, with acquisitions and international expansion helping to fuel the build out. Since 2007, Equinix's purchases have included IXEurope, Virtu and Ancotel in Europe; Switch and Data in the U.S.; ALOG Data Centers in Brazil; and Asia Tone in Hong Kong.

As Equinix grew its data center holdings, the company also accumulated a number of IT service management (ITSM) tools. The company at one point employed a half dozen systems to automate IT delivery. Equinix decided to migrate to a single toolkit to get everyone on the same ITSM page. It opted for a Software-as-a-Service platform to get there: ServiceNow, a San Diego-based company that provides cloud-based services for automating IT operations.

"We went to a cloud-based ITSM product," notes Brian Lille, CIO at Equinix. "We wanted a standard way to provision services. In the tool set, we have created a common language around the world IT team...where we didn't have one before."

SaaS Lowers IT Service Management Costs

The shift to enterprise-wide SaaS deployment in IT service management seems to gaining momentum. ITSM, as a practice, promotes the creation of unified processes to boost the quality of an IT organizations services. From a tooling standpoint, ITSM software encompasses an array of components, from help desk automation to incident reporting and management.

Analysis: Why IT Service Management Is a Good Starting Point for SaaS

Until recently, most solutions have been on-premises. But SaaS has begun to take hold as companies look to cut costs and introduce solutions with the flexibility to accommodate an increasingly complex IT environment.

Jack Probst, president-elect of the Information Technology Service Management Forum ( itSMF) USA, an organization for ITSM professionals, says the SaaS shift was a bit slow to get underway. The pace of acceptance is quickening, however.

"Within the last 18 months, there have been a lot of organizations...moving away from the on-site model to the remote model. Just about everyone now is jumping on the SaaS model," he says.

Probst, who is principal consultant at ITSM consulting firm Pink Elephant in addition to his itSFM USA role, attributed some of the movement to price. "One of the challenges for the ITSM tools has always been the cost."

Probst says IT automation tools originated in the 1990s with the arrival of help desk, call center and, later, service desk software. Over time, additional processes were added to the mix, particularly with the growing prevalence of the IT Infrastructure Library ( ITIL) and its set of IT service management practices. Software modules began to surface for service catalog, change management, configuration management, incident management and problem management, among other functions.

Individual point tools eventually evolved into suites. As the functionality grew, so did the cost, Probst says. SaaS, however, broke the existing price point model, with ServiceNow at the vanguard, he notes, adding that SaaS ITSM can be deployed at half to three-quarters of the cost of an on-site product, depending on the customer.

Other economic drivers also come into play. Jenny Geisler, treasurer at itSFM USA and principal consultant at Aeritae Consulting Group, says most IT shops are getting hit with depreciation on their capital outlays. "As their expense budgets are chewed up by depreciation expenses, they need to find a different model."

The ongoing cost of maintaining on-premises IT service management may also influence SaaS migration. Shari Brunette, president of itSFM USA and senior consultant at Aeritae, says upgrading to a new release of on-premises ITSM can take a large enterprise 12 to 18 months and cost up to $2 million. SaaS solutions, Brunette adds, let organizations keep more of their IT personnel focused on the business and less on software management.

Adds Doron Gordon: "Not owning and operating your own environment...is important."

Gordon, executive officer of SAManage, a SaaS-based service desk and asset management vendor, says outsourcing not only saves money, it also puts customers in a position to receive more frequent-and useful-software updates.

Recalling his experience at an on-premises tool provider, Gordon says development cycles use to take two to three years. "The outcome of that is you're shipping what you started building years ago, and it's no longer relevant to what the customer needs."

Cloud Offers ITSM Functionality Without Restriction

Cost isn't the only SaaS driver, however. The flexibility of the cloud model also attracts IT buyers.

At Fugro, a desire to pursue ITIL and the inflexibility of its service desk software sparked the SaaS transition. Ismael Carlo, IT manager at Fugro, the U.S. operation of a Netherlands-based multinational company that provides geotechnical and geoscience services, said the company's IT team lacked a formal IT process when he joined the company in September 2011. Fugro, he says, sought to mature its management of IT, but the firm bumped into limitations with its service desk system, Symantec's Altiris.

Carlo says Fugro decided to install a new release of Altiris in a test environment, noting that the software upgrade incorporated a formal IT process. "The problem was the product was very rigid, so we would have to completely change everything we were doing. When we started to use it, it enforced ITIL to the nth degree, and that was really challenging on the service desk team," he says.

Fugro spent about three months trying to adjust to the new software and then began scanning the market for other approaches. The company discovered SaaS as an option. "We realized these cloud vendors have done a pretty good job of capturing our needs," Carlo says.

Fugro considered a few cloud vendors and opted for SAManage's cloud-based offering. Carlo says SAManage provided the right fit of process and functionality but did not restrict the IT team to very specific processes that it wasn't yet ready to adopt. The SaaS solution has been in production for about a year, he says.

In purchasing ServiceNow, meanwhile, Equinix abandoned a Remedy implementation and shut down legacy tools including Altiris, Bugzilla, and Documentum eRoom. The ServiceNow cloud solution has been operating for about a year and a half.

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Over that span, greater consistency across operations has proven a key benefit. Another plus: a higher rate of service-level agreement (SLA) compliance. Greg Ogle, senior director of IT infrastructure operations and engineering at Equinix, says SLA compliance rates were about 70 percent within months of the early 2011 implementation. By the end of 2011, the IT team hit 90 percent SLA compliance.

Ogle says the 20 point gain came from greater efficiency; IT wasn't compelled to add headcount. In 2012, IT surpassed 90 percent compliance with the same staffing levels.

Internal customer satisfaction rates also saw a 20 percent uptick, according to Equinix CIO Lille. "People are pretty satisfied with the service they are getting-and they weren't for the longest time," he explains.

Equinix has been able to handle tasks such as account creation and access provisioning more rapidly using ServiceNow automation, Lille notes. "We calculated [that] it saved about 30 minutes of pure IT time per request," Lille says, adding that the IT organization receives several hundred requests in a given year.

Lille estimated ServiceNow's IT time savings at half a man-year. That savings grows to 2,000 hours, nearly one man-year, if Equinix's use of Ping Identity's cloud-based, single sign-on offering is taken into account, he says.

Cloud ITSM Fear Factor Fading Away

Despite the potential benefits, some enterprises may still balk at cloud ITSM. The chief reasons stem from security concerns and the desire to have a locally controlled solution, according to industry executives.

"It's fear of the unknown and loss of control. We still have some people rooted in having to see it, feel it, touch it: 'It has to be mine to be beneficial to my organization,'" Geisler says, adding that the mindset is going away, as more people become comfortable with cloud applications.

Commentary: Cloud Security Not Really Slowing IT Adoption

In that vein, Gordon notes that customers' experience with Google Apps has encouraged them to adopt service management SaaS. He said SAManage is tightly integrated into Google Apps, which makes rollout easier. The linkup also lets users access a self-service portal from their Google accounts. The portal lets them submit new service requests or check on existing requests, Gordon says.

Organizations may confront additional challenges once they make the SaaS decision. While SaaS is generally considered easier and faster to install than on-premises software, certain cloud-based ITSM components may prove simpler to roll out than others, industry executives says. Configuration management, for example, can prove somewhat more challenging to implement than modules such as incident or request management.

Lille, meanwhile, says asset management has been a little bit harder to deploy than other aspects of ServiceNow. Equinix's global IT assets are maintained in ScienceLogic, the company's IT asset monitoring solution. Now, Equinix aims to link ScienceLogic and ServiceNow.

"Finding a clean way to deal with that has been a little bit challenging, but that is really on the periphery," Lille says. "What we are working though is creating near real-time integration between ScienceLogic and the ServiceNow asset database."

Lille says integration will let Equinix perform actions on IT assets via ServiceNow, while employing the ScienceLogic's strengths. Overall, he adds, the ServiceNow rollout has been one of organization's smoothest.

Probst points to a final caveat: Failure to cultivate mature service management processes. Lack of progress on this front will hinder the effectiveness of IT service management tools, cloud-based or otherwise.

"Everyone has heard the secret sauce is in the SaaS model-it will cure all their ills," Probst says. "We have a saying, 'A fool with a tool is still a fool.' If you haven't done the process work, the opportunity for success will be limited."

John Moore has written on business and technology topics for more than 20 years. His areas of focus include mobile app development, health IT, cloud computing, government IT and distribution channels. Follow everything from CIO.com on Twitter @CIOonline, on Facebook, and on Google +.

Read more about software as a service (saas) in CIO's Software as a Service (SaaS) Drilldown.