Can internal corporate IT departments successfully transition into service provider profit centers? The answer is yes, according to Computer Associates (CA) officials, who say the software giant intends to use its service management startup iCan as the vehicle to drive that effort.
At its CA World user conference in Orlando, Fla., this week, CA provided iCan with the exhibit floor space and stage time to convince attendees that its service management suite of products can be a boon to improving service provider delivery and can facilitate the enhancement of the business potential of internal IT operations.
Although an enticing concept, the latter may prove too difficult an overhaul to swallow for many businesses and their enterprises, said Rob Hailstone, director, EMEA system infrastructure and software research for Framingham, Mass.-based IDC.
"Our reaction to that is, 'When you do that, you change the expenditure of IT.' They [in turn] respond to different stimuli, and it's liable to involve costs to the user," Hailstone said. "So we might beg to differ on that [model]."
Although impressed with the package and presentation of iCan's suite at CA World, Hailstone said he wondered if the timing was right to be offering the service management technology to a service provider market struggling with bleeding costs and sparse interest.
Unfazed by the hard times befallen her targeted audience, iCan CEO Nancy Li said she believes the software-as-a-service market has tremendous upside that only requires proper management. That subscription-based service management shot in the arm can also be parlayed into minimizing the need for outside application assistance and costs, Li said.
Internal IT departments have been doing a poor job of maximizing their value, said Li, formerly CTO of Islandia, N.Y.-based CA. "[iCan] will allow [internal IT] to compete with outsourcers and external IT."
The iCan Provider Suite consists of five modules that allow service providers to collect performance and usage data over multiple accounts through a Web interface. The modules can be used independently or separately and includes iCan View, iCan Meter, iCan Assure, iCan Bill, and iCan Provision.
Laurie McCabe, an analyst at Boston-based Summit Strategies, said most IT departments have to first figure out how better to serve their own employee users before having any hope of becoming a service provider to outside parties. However, she said she does see areas where the practice could prove beneficial.
"If you're a big company and you have already created a value chain of suppliers and partners that you interact with anyway and use [specific] applications to interact [with], you have a lot of power in that relationship," McCabe said. "You could become a service provider to work with these constituents in an automated way, which makes a lot of sense,"Outtask, an ASP (application service provider) that owns and hosts a range of applications it offers to customers, has used iCanP's metering and billing solutions for the past five months, according Tom DePasquale, CEO of the Alexandria, Va.-based company.
Pointing toward the success of Sabre, the former internal IT function of American Airlines that has expanded to serve the airline industry as a whole, DePasquale said he thinks iCan's targeted focus is an excellent idea for large conglomerate corporations.
"If I was a guy running a central function across a company, having an iCan solution to make it clear to help bill back for common services, I don't think that's much of a jump at all," he said. "I don't think it's that hard to believe that [market] can become very viable space for [CA]."