【正文】 Systems is under pressure to think and operate in new ways. Formerly, when Zeppenfeld needed a new business application for TCom, TSystems39。 Auerbach supplied the appropriate hardware, software, and services and then tallied up the cost. It was usually the subject of intense debate because the value of plex puter systems is hard to determine, and so is the cost of the associated installation, operations, and maintenance.Now, Zeppenfeld pays only for the puting resources he uses every month。 the hardware, software, and storage needed to power TCom39。s applications are Auerbach39。s problem. This model, however, gives TSystems the freedom to make decisions that optimize the infrastructure as a whole rather than specific applications. Wherever possible, TSystems uses cheaper modity resources such as grids of lowend servers, storage disks, and Intel processors instead of Unix systems. In essence, it now acts more as an entrepreneur than as an order taker.Transparency of costs is a major benefit of this model: TCom merely reads off the bytes it consumed and pays a predetermined price that factors in TSystems39。 engineering support. TCom39。s invoice includes a handful of service categories (such as storage, backup, puting, the operation of applications, and the help desk) and quantifies usage in detail. Each service unit has a fixed price, so TCom knows exactly what it will pay for a gigabyte of storage, an hour of telephone support, or a backup copy of a database. Moreover, these services can be benchmarked individually, so TCom has the ability to check that prices are reasonable. Zeppenfeld and Auerbach agree that transparency helps create an atmosphere of trust.Gaining greater flexibilityTCom also gains flexibility: its contract lets it increase or decrease its puting capacity if it gives three months39。 notice. Drastic, acrosstheboard changes in usage are unlikely for most panies, but this added flexibility in individual areas is still a wele benefit. Marketing, for instance, has fluctuating needs. Take an campaign generating several million responses. Previously, a sixmonth lead time was needed to purchase new hardware and software. The new model forces marketing to produce more accurate forecasts but cuts the lead time in half. Now, TCom lets TSystems know about the marketing group39。s plans and requirements three months before such a campaign。 the earlier it alerts TSystems, the lower the added capacity costs. The department managers who, with their teams, plan in advance and make the most accurate forecasts can increase their savings. These incentives are designed to improve the forecasting of TCom and the capacity planning of TSystems.Making it happenA nextgeneration infrastructure model poses practical challenges. The concept of IT bills based on actual consumption, for instance, is still very much in the development phase. Moreover, some panies get stuck migrating legacy applications to the new systems. Depreciation schedules may mean that purchase and leasing agreements for old ones still have a long time to run. At most large panies, IT has hundreds of individual contracts expiring at different times, so it is hard to make a clean break.TCom and TSystems found that an allornothing approach was unnecessary. Making better use of existing resources and phasing in new technology allowed them to use savings generated by the new model to offset the cost of migrating applications. The two units also started small, focusing solely on storage services for a few key applications. Only later did they expand the model to puting services for mainframe applications. Today 80 percent of the relevant IT infrastructure has been converted.TCom and TSystems are very satisfied with the early results of the new infrastructure model, which has delivered major cost savings, improved the use of assets, provided for greater flexibility, and made the system far less plex to manage.About the AuthorsJames Kaplan is an associate principal in McKinsey39。s global IT practice and specializes in IT infrastructure. He is based in New York. Markus L246。ffler is an associate principal in McKinsey39。s global IT practice and specializes in IT infrastructure and architecture. He is based in Stuttgart. Roger Roberts leads McKinsey39。s IT architecture practice in North America and specializes in the hightech and industrial sectors. He is based in Silicon Valley.The authors wish to thank Andrew Appel for his contributions to this article.This article was first published in the Winter 2004 issue of McKinsey on IT.Notes1 Grid puting breaks down an application39。s processing requirements into pieces for distribution among a number of servers. Server virtualization is a technology that allows a single centralprocessing unit to run a number of different operating systems—Windows NT, Windows XP, and Linux, for instance—at the same time.