McKinsey: Managing next-generation IT architecture

In recent years, companies have worked hard to reduce the cost of the IT infrastructure—the data centers, networks, databases, and software tools that support businesses. These efforts to consolidate, standardize, and streamline assets, technologies, and processes have delivered major savings. Yet even the most effective cost-cutting program eventually hits a wall: the complexity of the infrastructure itself.

The root cause of this complexity is the build-to-order mind-set traditional in most IT organizations. The typical infrastructure may seem to be high tech but actually resembles an old-fashioned automobile: handmade by an expert craftsperson and customized to the specifications of an individual customer. Today an application developer typically specifies the exact server configuration for each application and the infrastructure group fulfills that request. The result: thousands of application silos, each with its own custom-configured hardware, and a jumble of often incompatible assets that greatly limit a company's flexibility and time to market. Since each server may be configured to meet an application's peak demand, which is rarely attained, vast amounts of expensive capacity sit unused across the infrastructure at any given time. Moreover, applications are tightly linked to individual servers and storage devices, so the excess capacity can't be shared...