An operating model defines how an organization and its business teams use a cloud computing platform to support business objectives. It is shaped by business needs, enterprise architecture, organizational culture, and existing technical capabilities. While each organization has a unique operating model, this topic introduces several common models.
The purpose of building an operating model is to achieve more efficient and agile management and operation of cloud environments. Specifically, an operating model aims to:
Enable rapid deployment and scaling: Build a standardized release pipeline on a cloud computing platform to achieve rapid deployment and scaling, improving service responsiveness and flexibility.
Improve decision effectiveness: Build an observable system to collect and integrate data from digital business operations. This data feeds into a decision loop to improve organizational decision-making.
Optimize resource allocation and efficiency: Use real-time monitoring of cloud resources, such as compute, storage, and network, combined with optimization measures to improve resource utilization and reduce cloud service costs.
Enhance business stability and reliability: Use the cloud platform's monitoring and technical capabilities to help your organization accelerate incident response, shorten fault diagnosis time, and increase business stability and reliability.
Operating model definitions
Decentralized operating model
An application is an independently deliverable unit that provides an external service, serving as the smallest logical unit for development, deployment, release, and Operations and Maintenance (O&M). In the development phase, an application typically corresponds to one or more functional modules and is associated with one or more code repositories. In the runtime phase, it usually corresponds to one or more services.
Here, development refers to developing and testing applications and infrastructure. O&M refers to deploying, updating, and providing ongoing support for applications and infrastructure.
In a decentralized operating model, different roles are driven by different goals:
Development is driven by functional requirements, which are often directly tied to business needs.
Testing is driven by the need to find functional defects.
O&M is driven by non-functional requirements for stability, such as availability, reliability, and performance.
In a decentralized operating model, separate teams perform the activities in each area. A clear division of labor enables a faster response to customer needs. When teams are given more autonomy and accountability, they can innovate and make decisions more effectively within their scope. However, the complexity of cross-team communication and coordination can reduce overall organizational efficiency. Narrow team specializations, physical separation, or logical isolation can hinder communication and collaboration.
Decentralized + Managed Service operating model
In a decentralized organization, if a more specialized team is needed to support cloud computing platform operations, or if the organization wants to outsource parts of its day-to-day infrastructure operations, consider Alibaba Cloud's Managed Service. This service provides expert support for the cloud environment, helps meet security and compliance requirements, and supports security and regulatory objectives.
Decentralized + ISV operating model
In a decentralized organization, if software development is needed for a specific domain or industry, the organization can work with an Independent Software Vendor (ISV). An ISV can often complement the company's own products to provide better solutions that more effectively meet customer needs. Alibaba Cloud's Ecosystem Partner network can provide application development, testing, deployment, and management services to help organizations develop and deploy their applications more easily.
Centralized operating model
An infrastructure engineering team provides a standardized platform to application teams, with services such as infrastructure automation, configuration management, and application release. These services help application teams develop and operate their applications more efficiently and deliver high-quality services to meet customer needs.
Using the standardized platform, application engineering teams automate the development, testing, and O&M of their applications. This enables faster, more frequent, and more reliable software releases, which shortens the development cycle and enables high-quality continuous delivery.
In a centralized operating model, the centralized team's expertise and standardization can provide greater stability, better operational performance, and lower costs. The infrastructure team centrally manages the production environment, reducing the need for other teams to request privilege escalation. Limiting the number of privileged users helps reduce compliance risks. However, as part of a digital transformation, the cloud platform may become the primary operating platform. A platform and team built for a traditional data center may not suit cloud operations. Teams outside the infrastructure group have limited access to the environment, which can discourage experimentation and innovation.
Centralized + Managed Service operating model
In a centralized organization, if the organization lacks the skills or teams to support cloud platform operations, or wants to build unique capabilities while outsourcing daily infrastructure operations, consider Alibaba Cloud's Managed Service. This service provides expert support for the cloud environment, helps meet security and compliance requirements, and supports security and regulatory objectives.
Centralized + ISV operating model
In a centralized organization, if software development is needed for a specific domain or industry, the organization can either build its own application engineering team or work with an ISV. An ISV can often complement the company's own products to provide better solutions that more effectively meet customer needs. Alibaba Cloud's Ecosystem Partner network can provide application development, testing, deployment, and management services to help the organization develop and deploy its applications more easily.
Cloud Center of Excellence (CCoE) operating model
A Cloud Center of Excellence (CCoE) is a best practice for driving cloud transformation. An enterprise typically establishes at least one cloud management team or forms a CCoE of key stakeholders. This group plans the overall cloud adoption strategy, which includes confirming the plan at an organizational level and gathering specific requirements from across the organization.
A CCoE operating model organization typically includes:
Executive leadership: The executive team must clearly define the strategic importance of the cloud and how teams should use it.
Cloud Center of Excellence: This team, which can be a virtual organization, designs the cloud service delivery model and management system and provides the necessary technical enablement. Its members include:
Architects and technical professionals responsible for cloud architecture design and workload migration.
Experts in security, compliance, and other domains responsible for designing the enterprise IT governance plan, assessing risks, and setting governance rules.
Financial experts responsible for establishing financial management processes and cost allocation rules.
Cloud management team: Once on the cloud, this team continuously optimizes the cloud architecture and provides cloud environments for new business initiatives. It establishes the enterprise's cloud O&M system, builds an operations platform, and uses automated O&M to continuously govern and manage the cloud environment. The team provisions and configures cloud resources and permissions based on new business needs, delivering ready-to-use environments. Application teams can then use the cloud without focusing on the underlying infrastructure.
CCoE + Managed Service operating model
While building a CCoE, an organization can leverage its strengths by outsourcing parts of its cloud platform operations to a professional service provider. Alibaba Cloud's Managed Service provides expert support for the cloud environment, helps meet security and compliance requirements, and supports security and regulatory objectives.
CCoE + ISV operating model
While building a CCoE, if an organization needs to develop software for a specific domain or industry, it can choose to work with an ISV. An ISV can often complement the company's own products to provide better solutions, helping the company meet customer needs more effectively. Alibaba Cloud's Ecosystem Partner network can provide application development, testing, deployment, and management services to help the organization develop and deploy its applications more easily.
Choose the right operating model
As an organization migrates from an on-premises environment to the cloud, it needs to select an operating model based on its strategy and culture. The decentralized, centralized, and CCoE models each have ideal use cases:
Decentralized: This model best suits IT environments with highly complex applications that require continuous innovation. In this environment, the distinct operational needs of different applications often require special attention. In some organizations, development teams also operate their related IT environments.
Centralized: This model best suits a tightly controlled IT environment composed of stable, steady-state applications. In this environment, the focus is on managing the overall IT environment rather than the individual operational needs of each application.
CCoE: Consider a CCoE model if the organization is planning a large-scale cloud migration or wants to use the cloud to drive innovation that creates a market advantage. In this model, by establishing a cloud O&M system and platform with Automated O&M, workload teams can make their own decisions while following a set of guardrails and repeatable controls, maintaining their agility and flexibility.
Regardless of which operating model an organization currently uses, it was adopted to meet its present business needs and strategic goals. If an organization decides to redefine its operating model based on future strategy, two models may coexist for a long period. Change does not happen overnight. The organization must continuously plan, experiment, and iterate to optimize its model and achieve its goals.