Utility computing finds a home

A few weeks ago, I wrote an article about what I believe will soon be a prominent model of computing: the utility data center.  I featured the managed hosting company VeriCenter and its philosophy on this computing model.  Company CEO Gray Hall talks about “the economies of skill” and how the “utility” company should provide the infrastructure while the business owner should care for the business applications.

Having been on both sides of the outsourcing model, I wondered if utility computing really worked. Can a business literally treat IT infrastructure like an electric wall socket, with its critical business applications being like the appliance that provides the value?  Can the CIO sleep at night without worrying about servers, security, upgrades, patches, communication lines, and so on?

If Heather Humphrey is the litmus test, then the answer is yes.

Humphrey is CIO of the privately owned national homebuilder, David Weekley Homes.  As a production builder, David Weekley builds about 3,500 homes a year in seven states and 14 major markets.  With 1,000 employees mostly focused on production and sales, the company brings in about $1 billion annually. 

Up until about a year ago, David Weekley’s IT department had its own data center and did the care and feeding of all the company’s business applications as well as the infrastructure.  Among the applications is a J.D. Edwards system to support accounting, purchasing and other resource planning activities.  The company also has a point-of-sale system that generates contracts; an extranet to support communications with homebuyers; and an intranet to promote internal communications.  All in all, the IT department supports applications for its builders, sales representatives, customers and potential customers.

As a midsized company, David Weekley Homes couldn’t afford the increasing need for round-the-clock coverage of its applications. “The business of building and selling homes extends to evenings, weekends, and whatever hours potential and current customers want to interact with you,” Humphrey says.  “Our network team was working five days a week and on call for extreme emergencies, but we felt we had to go to a full 24-7 service to make sure all the applications were available when needed.” 

Humphrey needed to provide a growth path for the applications, including 24-hour continuity.  “We would have had to significantly increase our IT team to do it ourselves,” she says.  That, more than anything, led Humphrey to look for a managed hosting partner to become her 24-hour-a-day data center. 

She started by looking at the high end of outsourcing companies – the kind that do it all for you.  “We looked at EDS and Perrot Systems, but we didn’t need complete outsourcing like they offer,” says Humphrey.  “We understand our business requirements and there is no third party that can support our applications as well as we can.  What we really needed was a company to manage the infrastructure so we could focus on the applications.”

Humphrey found VeriCenter by word of mouth.  “The more we looked at VeriCenter’s services, the better a fit they seemed to be for us,” Humphrey says.  “They offered us managed utility computing and depth of technical expertise, but wanted little to do with our applications.”

David Weekley turned over its complete infrastructure to VeriCenter, including an AS/400 computer and 53 servers.  VeriCenter proactively monitors and maintains all the equipment, including operating system patches and upgrades, backups, disaster recovery planning and performance tuning.  David Weekley stills maintains the applications, and provides its own training, help desk, Web site and desktop operations.

“They don’t know our specific applications,” says Humphrey, “but that isn’t important.  All we want to do is leverage VeriCenter’s technical expertise for the infrastructure management, and our internal team will take care of our business needs.”  She adds that VeriCenter is a strategic partner for David Weekley’s IT department.  “They’re a key part of our shop.  They are involved in our annual review of how we will support our business in the future.  But we let VeriCenter stay focused on the technology changes and advancements, while our in-house team focuses on extracting value from our applications.”

Humphrey is bullish on utility computing.  “When you need a particular expertise, such as security, you can’t afford to wait, but you don’t need it 100% of the time.  We can leverage VeriCenter’s people with that expertise when we need it.  We know their people are very focused and have the necessary skills.”

Reflecting on her experiences over the past year, Humphrey concludes, “We didn’t do this for the money, but VeriCenter does it more cost effectively than we could have done in house.”  She adds, “This was THE hardest decision I’ve had to make as a CIO.  This was a strategic move that affected a lot of people, but a year later, I feel good about it.  I have the full support of the company owners, and it’s been a good direction for us.”

Linda Musthaler is vice president of Currid & Company.  You can write to her at mailto:Linda.Musthaler@currid.com