What is IT Consumption Model?

We are in digital transformation era and one of the buzz word we have been hearing in most IT conferences or seminars is “IT Consumption Model”.

So, what really IT Consumption Model is? In other words, it is a “Pay-as-You-Need” or “Pay-as-You-Go” model. A good analogy for this is your monthly electrical usage or your mobile data usage where in both scenarios, you pay for usage when you need it, and as you go.

For a long time, traditional IT was based on CAPEX model, where businesses are required to invest upfront for hardware purchase and expenses associated with maintaining and operating them. This approach is costly as businesses may require budget for future growth/expansion, which they may not be needing it after all. The fast-changing technology and user demands are also making this model costly and risky to adopt.

IT consumption model provides businesses greater agility and flexibility to meet businesses’ demands in fast paced world of digital. It helps reduce maintenance & upgrade cost and allow organization to rapidly scale and accelerate technology adoption while managing IT spending to match expenses with revenue.

Digital transformation is driving cloud adoption and the emergence of cloud is the main driver of consumption model where IT services has become commodities that hardware, software, & services are offered As-a-Service, or better term to call it, IT as a service (ITaas). In this model, businesses are provided with enough resources they need, and as they go.

In multi-cloud world, consumption model helps organizations to better align technology investment with its operational & financial objective. The cloud-like on-prem consumption model with its capability to provide capacity on-demand, offers the agility & flexibility to response to business growth in fast manner, thus provide faster time to market to help businesses to stay competitive in the market.

Cloudify Asia’s Consumable Hybrid Cloud (CHC), enable better cost efficiency by incorporating fixed baseline resources (e.g.70%) which is enough for businesses consumption on day 1 with opportunity for growth (e.g. by placing resources buffer of 30%). Additional benefits of CHC as compared to CAPEX model as below:

In summary, IT consumption model offers:

  • Agility & Flexibility
  • Scalability & Availability
  • Security
  • Reduce cost
  • Faster time to market
  • Manage technology risks (Up-to-date hardware & software, continuous maintenance & support)

The main driver of IT consumption model is the rapid evolution of technology, fast changing business requirements & user demand. It helps reducing upfront investment and therefore free up budgets allow more investment opportunities for business to grow and compete.