I see dead outsourcers

They are walking around like regular IT companies. They don’t really see each other. They only see what they want to see. They don’t know they’re dead. I see them all the time. They’re everywhere.

Some of the smaller ones might live a bit longer, relying on their loyal customers. Until these customers realize they could have the same or better kind of service from a cloud provider at a lower charge. The medium sized ones will be the first to go. Their customers were driven by budget constrains in the first place and see oportunity to save even more money early on. The large ones will more likely transform into walking zombies for legacy services and applications, if they cannot adopt to a changing business model.

Every year the transformation towards a utility like cloud based IT is spinning faster and faster, driving the traditional outsourcing industry into the grounds with the only options to shatter or re-invent themselves.

The original promise of oursourcing was the story of cost savings, that never came. What happened in reality was, you paid them to take your operational risk for a price. The applications almost never changed and so did the administration of these applications. During the last decade the competition between outsourcing companies got a lot harder, so they started optimizing their operation, introduced “off shoring” (a.k.a. people that cost less), some eventually started to adopt automation for processes and administration.

But still, the applications never changed and the effort to keep them running was only modified through evolutional stages.

We are now facing the final steps of the demise of traditional outsourcing. Enterprises finally realized the benefits of cloud computing and are starting to move to cloud based or at least enabled enterprise applications. Users are forcing Enterprise IT to provide more flexible applications and services. They in turn either force oursourcing providers to change or switch to cloud application providers. Both puts a load of pressure to the providers, which start investing heavily in overdue transformations and new solutions.

Will these efforts be in time?

For some probably not. A few already started years ago and might have a chance to survive, but will all this work be enough?

Outsourcers focus on enterprise customers. These customers have a distinct number of applications and systems. The volumes of all enterprise customers, one large outsourcer handles still cannot compete with the likes of public cloud providers like Amazon, Google and Microsoft. This will result in a steep pricing difference, where public cloud providers will still have a larger marging in price ranges the “smaller” outsources will already struggle making any money at all.

In the long run, there will be no profit in providing traditional outsourcing services, if you are not running a million (physical) servers.

The future is cloud services! I can’t really recall how often I was told there is a lot of money to be made in transforming the traditional outsourcer into a service provider for “anything”.

The reality is, there are lot’s of enterprise grade services already out there. And even more startups trying to get their product developed to enterprise grade. There is not much value in building a service plattform for existing legacy applications, package it into digestible portions and selling it as a “cloud service”. In its core it will remain a legacy enterprise application, that just wasn’t made for this. Additionally getting it to work in this kind of environment will cost a fortune.

A more likely scenario would be the one of a service integrator. Find out which services perform well together, build integration templates and sell a combined premium service. But this would not require to be a big player in the outsourcing business. Any startup could do it with a minor investment in the concept.

For thos who haven’t realized it yet: This is The Big Switch right here.

The Merits Of Being A Commodity Service Provider

We are one of the biggest service providers in Europe.

We also like to think of ourselfs as the most innovative technology company of all telecom or service providers. But the hard to learn truth is: we are in fact a mere commodity service provider. Which by itself is not a bad trade to be in.

Technology companies develop new technologies everyone else adapts and uses. This is a field we never participated in. We always used existing technologies to utilize them in new ways and develop new products for our portfolio. That is a great accomplishment, but is also something every commodity service provider does to some degree.

A great virtue of successful commodity service providers is to know, when to stop developing things on their own and optimize profits by relying on the work of others. This often enough burns down to a simple “make or buy” descision. In most cases we had developed platforms and services in the past, because there was nothing out there, we could buy, that met our requirements. So the logical descision at the time was to invest in engineering and the creation of new services.

Over time these services and platforms developed and we kept investing in engineering. At the same time the market evolved and now offers services and systems that are more or less identical to our developments, but without the engineering investment. The logical and business sensible descision today would be to buy the existing product and focus on optimizing our profits.

Instead we still try to reinvent the wheel by pouring tons of money into development projects for the devopment of new platforms and services, we could just buy with the same functionality at a fraction of the cost!

A short example from my past 2 years.

We were in the need to replace our virtual infrastructure, due to the approaching End Of Life for the existing system. A simple modernization wouldn’t have fitted into the corporate “Standards”. Building and maintaining the international standard datacenter platform failed 2 years earlier due to lack of workload in Switzerland and expensive maintenance effort and cost. So, in the end, we opted for a smaller design proposed as a customer dedicated tech-base platform, but suitable for our needs. At the time still in development. To speed things up, we decided to participate in the service development and in the end had the first productive service farm up and running in production.

Does not sound all that special, but it took 1 year from our involvement in development to the final implementation. 1 year of investment in engineering, management meetings, process modifications, ordering processes, discussions of scope, … For these efforts alone I could have bought the whole thing 3 times over again! Let alone, just buying something similar off the shelf would have saved 30% of the investment for each plattform system.

For a company that is insanely fixed on CAPEX reduction we sure do spend a lot of money on developing things we could just by from almost any vendor out there, because that is what commodity service providers do. They buy stuff at sensible prices to put into production for as little operational cost as possible.

Great Speakers Tell Stories

Watching National and Internation Portfolio Calls, hearing the presentations by our sales and management personnel pretty much boils down into a boring tirade of buzzwords and numbers.

They all start with at least 15 minutes ob blah about our company and who we are. > Trust me. If you’re presenting in Germany, they know who we are. Outside of Germany there should be a short 2-5 minutes of explanation, but not more. Next would be the obligatory praises and back patting for everyone in management, who ever had to read through the summaries in any of the documentations. Even as an employee of the company I couldn’t care less at this time.

Usually we are now 20-30 minutes into a presentation and haven£t hear a word about:

  • What it does
  • Where it will generate customer value
  • How much does it cost

I’ll skip the “Is it internationally available” because… well 90% of our offerings really aren’t, so why bother?

Do we hear some of these key fact now? Probably not. Instead we focus on the WHERE IS IT LOCATED … which might be great news, but is totally irrelevant for the solution. Well.. unless you need to rent a data connection from you customers network to an individual T-Systems data center in order to even sell this service… oh… I forgot, you’ll probably need to.

We’re now heading into a short and very rough description of the “what it does” followed by pages of UNIQUE SELLING PROPOSITIONS. In my view some people really should learn the menaing of the word: UNIQUE.

  1. First there rarely more than one a single company can claim for it self
  2. If you have a competitor, that offers the same service, you simple are not unique

So please, call it whatever you like “Competitor Comparison Chart” for example, but please spare me the pages full of logos and commodities that we have a unique selling proposition for. We simply don’t.

Now we get down and dirty with numbers of seats, ressources, customer references and the lot… and very likely on one page of Powerpoint.

aaaand.. times up.

What have we learned in 1 hour of presentation?

  • I can do a lot of emails while they are talking
  • I can make some phone calls on the side
  • These office chairs are comfy
  • something about blah

Because, let’s face it: Most of these presentations are boring as hell.

I actually hang up on a very interesting topic in the NPC yesterday because I couldn’t stand the presentation anymore. If you’re f**king Product Manager of a new cloud based solution the go on and sell it to me!

  • If you’re talking 10 minutes of “Ah”, “Ähm” and “Uh” to me, I’m not listening.
  • If you’re not prepared to present I will notice.
  • If there is no structure in what you say I won’t follow.

It’s very much Presenting 101. Build a storyline and be prepared for what you want to say. Simply building a slide set won’t help you.

Take a look at:

Great Speakers Tell Stories from Slides That Rock.

State Of Confusion (a.k.a. Incompetence)

Sometimes, mostly on a day like today, I’m rather puzzled about our superb ability to successfully sabotage the very common and simple task, of “just making it work”.

1. The Concept

“just because you talked about this feature for two (2) years and wrote it in a concept, doesn’t mean we built it into the product” … Well, apart from “it” being an essential feature for complex customer environments AND migrations! It’s great if I’m being told that we didn’t order the required modules, because they are expensive and someone didn’t think, we would need them… AFTER the platform had been built and ist going into production next week.

… Did I mention, that I need exactly THIS feature to plan a migration in a complex customer Environment this year? Who would have thought of that.

2. The Network

I love standadized products just like the next guy, but they have to fulfill an essential requirement: They need to work!

I have a customer, that I work for as an Account Architect and we literally had to use our managed LAN, VoIP, WAN and now our WiFi Services for them. Some kind of corporate strategy. This all sounded good during the proposal phase and turned into a nightmare during the implementation.

The WAN Service isn’t fully operational, 19 months after we started the project. The Managed LAN is incapable of provinding a single customer location on time that doesn’t need fixing to at least some minor routing configurations, and now they also want to integrate the WiFi network service (the only thing working fairly well so far). VoIP needed three (3!!! for godsake!) replanning attempts and also trippled in cost … just for the data center infrastructure and operation. By the way, the Fax over VoIP still isn’t working and the phones drop the lines like every 2 minutes.

3. Tool Chain

Apart from having to use corporate standard solution, that don’t work as well as their PowerPoint slides, we also had to implement the corporate tool chain, which doesn’t have to be a bad thing … unless it’s our own corporate tool chain.

So we start off a the workplace management system, a neat little shopping interface for the casual customer line manager for ordering an managing users accounts. A bit too much free-text forms for my taste but it works fine so far. All data inserted here is transmitted to the infamous central customer user management system and… for some reason is also transfered back to the workplace management system. That’s the time, when the previously filled forms don’t look exactly like before and some entries are missing.

Somewhere in that big black data-hole is a connection to our ServiceCenter implementation from hell. Someone had found, it would be a great idea to use the company name from central customer user management system as the main key for all tickets in ServiceCenter, instead of the customer ID.

Now, I have customer, that has some international subsidiaries that need to be handled during the email archiving process. In detail, the messages have to be archied separately by country AND subsidiary… which is now impossible since the company name always has to be the same and departments carries a different information.

4. Portfolio

The best thing about our current portfolio that I can say is: we have some great marketing slides. But it doesn’t scale, doesn’t work, hasn’t been implemented yet, is years behind our competitors, … dare to find out for yourself.


I started at here two years ago in hope, I could be a part of a long needed change to get things like these into a right and working condition. Until now, I gave my best and still feel lost and failing. A condition like this is hard to grasp and even harder to communicate to a customer.

How can I stand in front of a customers service manager and tell him, everything is OK when right behind me everything is breaking down, falling into pieces?

How can I create value for any customer if we WASTE millions on building something on our own, that I can just buy and get delivered within two weeks for a fraction of the CAPEX and no project costs for enigeering?

Are We Asking The Right Questions?

… or more importantly: Can we provide the right answers?

From my experience over the last 22 Months with T-Systems the answer is clearly: No

But why?

When consulting my clients, I try to follow a few simple steps to reach out and identify their actual needs and the resoning behind them.

1. Listen

Most solutions and discussions with our customers show me one thing about how we talk with the people that pay us: We do not listen to their needs. Most of the time we try to sell our “one size fits all” soultions. In 90% of the cases this “one size” won’t fit. ever.

It is much easier to let our customers do the talking and just listen to their goals, their pain points, their situation and what they think they need at first.

2. Understand

We are all experts at something. At least I still hope so. We have a certain perspective based on our daily work. This perspective is unlikely the same our customer’s.

There’s a simple reason fot that: Most of the time I do not have the slightest idea of you my client’s businesses really work, on the other hand, I don’t have to. To be honest, my customers usually don’t know what I do either.

My job ist to provide the best possible solution based on requirements, business context, technology and budget. For that I need to know why my client makes decision the way he does.

For that I just ask “why”. I question the process, the reasoning, the history of a product, … pretty much everything. Not to intimidate my client, but to understand how he got to this point and the requirements he formulated for a future solution.

3. Advise

As soon, as I know my client’s reasoning, I can give a useful advise… or ask more questions. This advise has to be useful for the client and aimed towards solving the current task (or project) and fulfilling underlying requirements. This does not necessarily include any portfolio elements, if they won’t help in the solution.

Three little steps towards better understanding and scoping a project task. And still I end up in situations, where project managers and migration specialists have been arguing with each other and the customer representatives about an issue and it’s possible solutions for months until they end up in a deadlock and finally involve a third party (that would be me) to resolve this situation.

In some cases, on of the discussed solutions turnes out to be the best fit as soon as the right questions have been asked, but the worst case at this point would be to start from scratch and redesign large parts of the projects.

So much for my thoughts on this topic. How about your’s?

Presentation Styles

Since I’ve started working at T-Systems I’ve seen a lot of powerpoint presentation that where clearly mistaken to be a document for reference. So I may use this platform to write down some ideas we might apply to our future presentations to improve the change of getting our messages across to a wider audience of decision makers.

Almost every slide had too much text, to small fonts, unreadable diagrams and grafic elements without any function to the topic in it. The photo from the official media library above very much illustrates the point.

I know, most of it is corporate “design”, but it simply won’t address the needs for an effective presentation. Most sales and marketing people claim, they had a lot of success presenting these slides. I personaly know C level managers, that would have stopped the presentations after a few minutes if they didn’t get the speakers message visually through the powerpoint pages.

We should take our target audiences more into concideration when creating these presentations, as they most likely will not be adapted to the current customer situations.


A 70 page slide deck will not be much fun to watch for 140 minutes. On the other hand I regularly delete 80% of the slides in official presentations and the customer is still very satisfied with the information he got. If we need to get much more information out to our customers please do it in document form.


The last thing I want to address is the visual impression. I really love technical illustrations to understand everything about a system or software. but not within a presentation slide. If the audience cannot clearly see or read the contents of a diagram from the back of the room, there is no need to show it. Printing handouts that only use 1/3 of the page to show the slide and fill 2/3 with more text won’t help either. Keep in mind, that handouts could be greyscale, and certain colors will just look identical.


These were my thoughts, and now I want to know what is your take on this topic?

Virtually Physical

Did I mention, how much I like solving math problems? No? Maybe because I don’t, actually.

This weeks puzzle to be solved: How big can our hosted virtual machines get without blocking too many resources and what can we do in case they still need to grow?

Historically VMs where created to consolidate all these tiny little server loads lurking in our data centers. each one on its own hardware that was essentially never utilized at all. Today these VMs get bigger and bigger every year as hypervisors can allocate more and more resources to each virtual machine. But there is a limit after all.

The Host server can only handly so much load. At a certain point of growth it simply doesn’t make sense to host a super large VM, since there will be only enough resources for 2 or three of them. We could now revert to a physical installation, but this would also rob us of some ofthe benefits we had with the virtual machines. Like: moving the server from host to host for maintenance, business continuity in case a host server fails, easy backups through storage snapshots of the image file, etc.

And after all… we would still have the same SLA with out clients, so we all would likely have to install a physical failover cluster to keep up out agreements. No, I don’t want to go there anymore!

Why don’t we just boot the hardware directly from the virtual disk? Windows 7 and Server 2008 have this feature build in, for most of the other OS’ there are tools that help you.

Only one catch: Native support in Windows seems only to support the VHD format while VMWare provides me with a VMDK. There are some tools that enable you to boot any kind of image, but I really need to figure out how to do this in an highly automated production environment.

Clouding Your Calculations

In today’s virtual service environment, customers and providers are facing a huge dilemma: lack of comparison

During the old days you had a box with one or more processors of a certain performance type and clock speed. Comparing two different boxes was pretty easy through CPU benchmarks and memory configuration. Then came the new multi core processors and comparing two CPUs, even of the same type, got difficult. So Intel and AMD provided us with Names and ID Numbers to estimate the relative performance… within their own brands.

Virtualization takes the already hard to compare performance a few steps further. We are no longer talking about processor cores, but about constructs like a “quarter of a vCPU per minute”. Try to compare this performance to anything you’ve managed in the past. You simply can’t!

Amazon introduced us to the impossible to grasp ECU (EC2 Compute Unit), IBM is selling the VCU (Virtual Compute Unit) to it’s outsourcing customers and most of the other cloud and outsourcing service providers struggle by creating their own or jumping onto already defined Measurements. Currently none of these are intended to be comparable.

But they all use some kind of Benchmark to create their “Compute Units”. And here comes the next obstacle: There are hundreds of benchmarks and none of them are actually comparable.

The wildest thing of creating a server processing benchmark was modifying the Amazon ECU to be based on PassMark

“Daniel Berninger of goCipher Software proposed broad adoption of the ECU and a mapping of 1 ECU to a 400 PassMark score.”

Sounds good, until you notice PassMark is a CPU only benchmark and their database consists mainly of Home PC processors. One problem with this is that AMD processors usually do pretty well on these lists, but are much slower in an actual data center operation setup. Another difference is, that the CPU by itself does not say anything about server performance.

I know the VCU, IBM is selling is based on RPE2, which is an aggregation of most of the relevant server system benchmarks. Some customers are directly asking for a RPE2 or tpm-C equivalent for service offering. Then you also have your crazy SAP guys, that only talk in SAPS.

And now I’m facing one simple question: “How can you make all of these comparable?”

That’s pretty much, where my headache started yesterday. How can you compare the intentionally uncomparable units?

I know how to get from RPE2 to tpm-C to SAPs and back, but where can I cut into the ECU oder UCU (Universal Compute Unit) or Whateveryousell-Unit. Three factor equasions with two unknowns are really hard to tackle, if you need a simple number in the end.

And never was that good at math.