IDC’s Shuchat agrees that this is yet another area where on-demand computing shines. “When you look at an on-demand software provider’s position, the company is actually both the user as well as the implementer and as such has been through many implementations and upgrades,” she explains. “This means, for example, that Oracle can give guidance about many of the issues that interest end users: what are the pitfalls, what should you—as an on-demand user—be looking for. You, as an end user, definitely have access to the experts at all times.”
Another benefit, says Ajit Barsode, Essilor of America’s Oracle On Demand Solution Manager, is the fact that his company can build on the experiences of those customers who have gone before them. “For example, with our upgrade, we got firsthand information from other customers about best practices and the pitfalls that we should be looking for,” he says. “And it’s a two-way street. It’s all of us customers helping each other on the best way to implement Oracle and Oracle On Demand within the data center.”
The Green Aspect
Of course, both Essilor of America and Exterran saw many other benefits, some of which were unexpected. For example, although neither company migrated to an on-demand system although neither company migrated to an on-demand system specifically for environmental reasons, both companies say that the green benefits they’ve seen are significant. The fact that Oracle has been named the No. 9 company in the 2007 Black Book Green 50 information technology companies directory and that it received the Environmental Protection Agency’s Green Award helps solidify this view.
“Exterran is a socially responsible organization,” York says. “It’s not just a buzzword for us. We look for opportunities to better manage our energy costs and our time, and Oracle On Demand has allowed us to use critical business applications without additional infrastructure.”
IDC’s Shuchat says it’s not just being able to run applications and add servers and resources only when you need them that makes on demand such a smart proposition for companies. Instead, it’s the fact that a company such as Oracle is using the most energy-efficient back-end infrastructure available today.
“These data center sites make use of virtualization capabilities—utility-type models where the systems can scale up efficiently,” she says. “Oracle, like other companies with similar expertise, is looking at how it’s consuming power and the overall allocation of space so that it’s maximizing value. In order to scale up or down, people in the data center are using fairly sophisticated service management tools, too, that allow them to manage variable loads at any time of the year.”
In Essilor of America’s case, on demand helps the company avoid waste, says Barsode. “In my world, before I had to buy my hard drives, I had to buy my additional servers to support my new projects before the project was over,” he says. “Once a project was complete, I was left with the equipment to try to reuse somewhere.”
Exterran’s waste-avoidance savings are similar, but they also include a cost savings that comes from not having to hire additional database administrators or technology staff to run a data center—and the immeasurable peace of mind that comes from knowing someone else is watching the back end and making sure that everything is up and running, says York. “It’s a relief to know that someone is constantly monitoring the applications and making sure that our business technology road map can support our company going forward,” he adds. “I’m not building another data center or having to buy new servers if something breaks. Those are things that Oracle is taking off my hands and taking care of, day after day.”
This sentiment isn’t surprising, says IDC’s Shuchat, because cost savings and IT competency are the top two drivers of outsourcing today, according to IDC’s most recent survey research. “Instead of spending hours upon hours and days upon days dealing with mundane issues, you’re giving these responsibilities to people who make this their daily business,” she says. “It’s a question of these companies asking themselves, ‘What level of profit could you already have achieved with the help of outsourcing?’ Ultimately there is value in leveraging that standardization and knowledge.”