The rise of IT-industrialization

A few days ago I attended the analyst summit of one of Europe’s large service providers and the theme of industrialization rang through very clearly in many of the presentation and interview sessions. Those of you who followed my earlier writings know that applying the lessons of modern manufacturing to today’s IT, is a topic near to my heart.  Back in 2004, long before joining Gartner, I wrote an article on IT-dustrialization in CFO magazine , followed by many blogs, later bundled in “Lean and the art of cloud computing management”. At Gartner IT services industrialization is covered in my area under the topic of IUS (Infrastructure Utility Services) and I am currently working with two of my European colleagues - who have been covering IUS for several years - on a market map and compass for this IT industry area.

But, as mentioned earlier publishing in many cases precedes (best) practices, so it was refreshing to see how the ideas of industrialization were very much present during the mentioned analyst day. It would go too far (also given our blog policy) to list the whole story here, but let’s look at some of the more interesting bits and sound bites.

In a very open welcome talk, the CEO acknowledged that maintaining quality is one of the hardest things when moving to a more industrialized production method. To me this sounded a lot like the problems that the Japanese car industry faced when first importing into Europe. The cost of their cars was significantly lower, but they came with a quality level to match. Now we all know that in those years Dr. W. Edwards Deming made his first visits to Japan, introducing statistical analysis and simple tools to apply quality control at all stages, and the rest is history, with Japanese quality for many years matching or even exceeding global quality (Later the Deming circle formed an important foundation of other best practice movements in both manufacturing and IT).

The several ten thousand strong production department of this provider went through a similar transition. All staff was immersed in (on-line, multi-media and in person) training programs and  processes were defined and orchestrated to an extent comparable with the ballet-like orchestration you see in modern factories. Comparing itself with internal and external benchmarks was made a way of life and statistical measurement tools were applied widely. Inspiration for much of this came from conversations the head of production of this provider had with his customers: large manufacturing organizations employing several hundred thousands of factory workers with a high focus on product and process quality. (Note: Don’t mistake the term factory worker we use here for the traditional blue collar versus white collar division of labor. Today’s factory workers are often higher educated, better trained and in many cases even better paid than most clerical white collar jobs, while the production activities they are responsible for are more automated and supported by more robot technology than most regular office - or IT - work).

But in IT, even more than in manufacturing, changes are a major enemy of quality. And with the type industrialized scale we are talking about here that means that thousands or even tens of  thousands of change requests are to be applied each night or weekend. In manufacturing it is nowadays best practice that any factory worker can stop the production line when he/she feels quality is somehow at risk. But - as availability is one of our primary definitions of quality - stopping the line, a.k.a an outage,  is exactly what we don’t want to do in IT . So in this case a best practice from the airline industry was applied. Any change has to be checked by 4 eyes before being implemented into production. In other words, it has to be reviewed by at least two people, call it the pilot and the co-pilot. An intermediate step that at first may seem expensive - just like most people in the eighties felt it was crazy to have any worker be able to stop a multi-million dollar assembly line - but that in the end reduces overall cost. Also because doing things right the first time is - over time - always cheaper than incurring rework, penalties and other cost of non-quality.

But industrialization goes further, also for the customer who is at the receiving end of these industrialized services.  In this case the CIO of one of the global customers of this provider gave his insigtfull perspectives on the changes the industry is going through. Again a couple of soundbites.

This CIO is driving his organization toward obtaining “anything as a service”, which eventually – as he put it - enables CIO’s to separate the I from the T (allows focus on the Information, not the Technology). For providers this means moving from delivering traditional system integration projects, to standardized products that are delivered as a service. This change does not only impact how it is delivered, but also how it is procured. Again a car analogy. When this CIO was to order a new car, he did not go shopping around; he did not even test drive his final choice. As he had a history of good experiences with this manufacturer, a rough idea of the type of model he wanted (eg. 4 door sedan, no MPV, no SUV), and a number of minimum requirements (think of automatic, diesel, navigation), he basically picked the car unseen, as he knew it would be “good enough” for his requirements. I would classify this as a mature buyer in a mature market. Where the immature buyer will shop around, go on test drives in many makes and models (including in two door models he is not even allowed to order as a company car) and from manufacturers he may have never heard of, the mature buyer knows what he wants and rather spends his valuable time on stuff that really matters (in business terms: on activities that differentiate the company).

At this stage the market has not many mature buyers yet (even for cars, I know because I just selected mine and that took me more than a couple of calls). But mature buying also requires a mature market. In the car industry, buyers know that most of the major brands now deliver high quality and reliability. While the brands that did not reach that trusted status yet, offer warranty periods that even Charles Deming could only have dreamed off. It is this kind of trusted quality level the industry will need to reach.
As for cost, also there the ambitions and expectations are high. As Adam Smith showed in his wealth of nations, a traditional craftsman might manufacture one pin a day. A pin factory, however, created 48,000 pins a day using ten men. In the light of what Taylorism and scientific management did in manufacturing, the voiced ambition of reducing IT cost by 90% seems a lot more feasible. Especially when realizing that in some of today’s on-line "factories" (i.e. consumer web shops) the cost of an IT item already might be 1/10 of the TCO based cost that IT departments charge in their internal catalogs of IT services (and when procuring things as a service there is no "ownership", so also no Total Cost of "Ownership", although there may be other governance related cost).

I’ll finish off with a last (car) anecdote from this CIO: When Karl Benz and Gottlieb Daimler originally estimated the size of the overall addressable car market, they came to about 1 million cars (which is about as accurate as the max of 5 computers that Thomas Watson once arrived at). But more interesting than the overall number is the way they arrived at it. As there were no available statistics on cars, they estimated the number of households that would be wealthy enough to afford a chauffeur.  We now know that overwhelming majority of cars are bought by users who drive these cars themselves. When extending this to IT, the idea would be that future CIO’s would be like today’s chauffeurs, the people that drive IT in a very small set of special cases, while most of IT would be “bought and driven“ by users.  An interesting idea, let’s hope IT-industrialization can drive the required maturing of the supply side fast enough to be ready for this scenario.

Any comments/questions send me a mail at gregor.petri at gartner.com.

The art of listening

One of the first tips I got when entering the workforce was "You have two ears and only one mouth for a reason!", meaning that in conversations with customers you should spend twice as much time listening as you do talking. Point was to avoid becoming like a radio with only one button: "Send".

Over the years I learned that above also applies to "new media" such as email, blogging, tweeting and podcasting. You need to use the receive button at least twice as much as the send button. Although less obvious, I am trying to maintain this ratio also as an analyst. Maybe not in every single conversation - our type of analyst inquiries are not like psycho-analysts calls where the analyst just keeps asking the patient repeatedly "and how do you feel about this?" - but overall it still makes sense to allocate substantially more time to input (also from colleagues, peers and even competitors) than to output.

With modern management techniques increasingly focused on managing a workforce that is increasingly spread out and that maintains work hours outside the traditional nine to five, it may – across many industries - feel increasingly difficult for individuals to maintain this balance of input versus output (as only the latter seems to gets measured and formally acknowledged nowadays).

Luckily there is modern technology - like podcasts and RSS feed readers - to help streamline at least parts of the input process. Funny thing is that some of this technology is not that new at all. My first encounter with Gartner's "podcast avant la lettre" was with the "Talking Technology" series that back then came on “compact cassettes”  (for young readers that may never have seen a cassette - not even in your "my first Sony" -  there is now an iPhone app that emulates the experience). This "Talking Technologies" series still exists (feed here, subscription required), in fact our High Tech and Technology Providers team just participated in the November edition with a segment on  the "4G, the Next frontier for Cellular Networks" special report that describes why 4G matters and what impact it will have on both providers and consumer (Personally I just hope we will use 4G at least as much to receive as to broadcast).

Just like the classic "Talking Technologies" cassette tapes and the subsequent CDs, these podcasts require a subscription. Fairly recently we added to this a series of almost daily Gartner webinars, which are open to all interested parties after a short registration process. You can register for these webinars  here, but to make it even more convenient you can also subscribe to a feed with the upcoming webinars or to a feed with all replays. This Tuesday (November 15th) I will be doing my first contribution to this series. In this webinar, called "The Crowded Cloud", I will talk about  how many different industry players, including Communication Service Providers, are trying to become the Cloud Service Provider (CSP) of choice for their enterprise customers. Would love to welcome you there.

As you gathered by now the above is part of the 1/3th of  my activities focused on output/sending, but I look forward to balancing that out soon with more personal and more two way communications. Meanwhile please feel free to comment below.

Cloud in one hundred days (and nights)

This week the Gartner Symposium visited an unexpectedly sunny Barcelona. This year’s theme for the Gartner Symposium is  "Re-imagine IT" and how the forces of Cloud, Social, Information (incl. big data) and Mobile are forming a nexus (Websters: a connected group or series) of change, see the bottom of this post for a link to the on-line replays. While here I ran into a former colleague who reminded me that this is also around day 100 in my new role as analyst. And although I am all too aware that being an analysts is not even remotely like running a country, this seems as good a point in time as any to have short look back and forward.
Apart from the usual getting acquainted with some new and some familiar (not to say classic) systems, here are some of the things that kept me busy:

• A core activity is off course writing research, in October an Emerging Technology Analysis on  How Self-Service Portals for Cloud Infrastructure Services Impact the Customer Experience published, followed by a European focused Competitive Landscape on  Two CSP Approaches to Cloud Computing  in November.
  Still in the process of peer reviews, fact reviews, editing etc. are a co-authored piece on Cloud Service Brokerage and a Marketing Essentials document describing four strategic options for Cloud Service Providers. Upcoming are also the annual Gartner Predicts for 2012, for which I got to submit a new SPA (Strategic Planning Assumption) and had a look back at an earlier one.
• But analysts also get out on occasion, for example to host a forum during the press day of a cloud datacenter opening at Amsterdam’s Schiphol Airport (some coverage here). Or to participate in a cloud brainstorm with the lead architects and national CTO’s of a large European communication services provider. And on the end user side: to facilitate  a global cloud strategy workshop for a leading European life sciences organization and to moderate a European vendor day for an international freedom and security alliance.
• In addition there are the inquiries.  I stopped counting at some point, but spoke with numerous banks, governments, manufacturers and many service providers in all shapes and forms (from gaming agencies to health care providers) and from all parts of the world, including Africa, Asia, Europe and the America’s about their cloud computing strategies. Also met in person with several members of our EXP program and had briefings with and/or visited several cloud and communication service providers (CSPs).
• These cloud service providers included traditional (and not so traditional) hardware providers, software companies, hosters, co-locators and a surprisingly large number of cloud providers form other continents that are in the process of setting up European facilities in Amsterdam. Also managed to squeeze in a visit to the European edition of VMworld and spoke with their executives about the (European) market.
• Given the fast growing number of cloud providers in Europe we also set up a continuous survey (see last month’s blog), so if you are providing (or planning to provide) cloud services in Europe it makes sense to have a look, also if you’re interested in the process of setting up a vendor briefing around your offering.
• On the internal research front started to participate in the communities covering IaaS, PaaS, IUS (Infrastructure Utility Service) and ITOM (IT Operations Management incl. private cloud).  Other internal activities included onboarding training, getting a phone, ordering a car and last week I was asked to become the second or backup agenda manager in our team (Our agenda management is not about scheduling or calendars, but about setting and managing the agenda storyline of key trends and key issues that we write to).
• Looking forward: I am hosting a customer roundtable at symposium about  “How private or public should your ideal infrastructure cloud be?” and next Tuesday (15 Nov) I am presenting a Gartner Tech Tuesday webinar called “The Crowded Cloud – Opportunities for CSPs”  (open for viewing after registering here). Going forward I plan to find more time for blogging again and for writing more in depth research on the topics covered in this blog.

Meanwhile you may want watch highlights from this year’s Symposium, like in other years these are open for general viewing (after a short free registration process) at www.gartnereventsondemand.com. In addition to the Gartner keynotes, the special guest keynote interviews and other highlights, you can also watch sessions from the symposium sponsors there, some even adapted their session –like Google – to the keynote from earlier on the day.
Apart from the earlier mentioned nexus, my personal favorite sound bites from the opening keynote were: Spending on cloud currently is already far in the tens of Billions but still only a small percentage (around 3%) of total enterprise IT spend and growing much more rapidly than traditional spend. And: Cloud will do for IT what supply chain models did for manufacturing. Both topics I hope to touch upon further in upcoming research, talks, presentations and blogs.

Using a cloud service to … collect information on European cloud infrastructure services

The public cloud infrastructure as a service market is developing quickly, also in Europe. Over the past months we saw the number of international IaaS providers setting up shop in Europe increase, while also several European based providers launched new or upgraded offerings.

To keep a finger on the pulse of developments we started, as part of the European Cloud IaaS coverage at Gartner, surveying pan-European providers of Public Cloud Infrastructure as a Service . We are now extending the invite to participate in that survey more widely (like we recently did for the CIO survey).

Especially in Europe we see cloud IaaS services being offered as an extension to existing services, this survey focuses therefore on how IaaS services fit with the overall service portfolios of providers, so it also includes short questions on adjacent offerings in areas such as PaaS, SaaS, Managed Desktops & VDI, DC Outsourcing, Infrastructure Utility Services, Managed Hosting, Co-location and  IT Professional & Brokerage Services.

If you are providing IaaS services in at least two European regions, then please take some time to fill out this survey. The data received will be used to gauge the overall state of the pan-European Public Cloud IaaS landscape, not to describe individual providers (for these we use other information such as the regular vendor briefing process, see here how to apply for such briefings).

You can take the survey from the Gartner Blog Network (GBN) page here

If you have any questions please send a short email to gregor.petri at gartner.com

Of these 10 most hated jobs, how many did you have?

Earlier this week Yahoo Finance ran an article on the 10 most hated jobs (based on a survey asking hundreds of thousands of employees at a major career site).

What amazed me most - apart from the large number of IT jobs, including the top one,  making the list – was that I personally was employed in no less than five of these . Now you may think: “What a miserable career that must have been!”, but to be honest, it never felt like that.  Sure I can relate to some of dissatisfiers that people listed, such as a lack of direction from upper management (actually described for one of these jobs - guess which one - as “employers are unable to communicate coherently, and lack an understanding of the technology”). But overall I had good fun doing most of my five.

In fact, some of my other jobs – although fun at the time - would have been more logical to make the list. As a student I was a part-time restaurant worker (even though my parents insisted the only job I was doing part-time was studying) and when that restaurant burned down I spend 3 months rebuilding it as a construction worker (hard hat and all).  Both of which did not make the list.

Now this survey is not about IT and does not even mention cloud computing, so why discuss it here?
The reason is that with cloud computing lots of job roles will be changing and there is an opportunity for all of us to think about which aspects of our current roles we like best (and which we hate most). So we have these clear in our mind while venturing into this new world.

On changes at the macro and organizational level –beyond cloud -  Mark McDonald  just published a series around  "Thinking Small" (It is time for IT to ‘THINK small’,  Thinking Small — Creating value rather than controlling costs , Thinking Small — Thinking value) and a piece called Re-Imagine IT, Lead from the Front  (a preview on the CIO experience at Orlando Symposium).

But also at the micro level we can do our share in re-imagining our job roles. Cloud computing - with its “as a service” delivery mechanism – may add some degrees of freedom to what can be imagined. Not that it will eliminate some of the less loved aspects of our jobs by having for example: EaaS for doing our Expenses as a Service, RaaS for doing our weekly Reporting as a Service and MaaS  for attending mandatory Meetings as a Service (although the idea sounds pretty cool). But cloud may enable us - also as individuals -to focus on what we are best at and on where we add the most value (which often seems to equate to having the most fun – or at least to getting the most recognition).

Scale (and particularly large scale) is certainly an important aspect of cloud computing, but let’s hope for (and work hard on) keeping our jobs at a human scale. Just like the way we apply our laptops and tablets is not impacted by having  1 million or 1 trillion transistors inside, the scale of the cloud should not impact how closely we work with people. In fact, the efficiencies of scale that cloud computing brings, may allow us to be even more granular and differentiated (a.k.a.  customer focused) at the local level.

Personally I recently did my evaluation and took the opportunity to make a switch (and yes, am having fun!). Meanwhile I am observing my kids’ early (part-time) exploits into working live. First conclusion they reached is that restaurant work definitely beats a paper route (better hours) and restocking super-market shelves (more degrees of freedom). I am still working on getting them enthusiastic for any jobs involving IT (or clouds, for that matter). Not sure this top 10 will help.

Travelling at the speed of cloud in Europe

First post from my new base blogs.gartner.com. When looking at public cloud infrastructure as a service it is fair to say that, with some notable exceptions, most off the larger scale activities, initiatives and even the majority of excitement and buzz around this phenomena so far originated outside of Europe. Understandable, as both the largest and most visible users of public IaaS – think of organizations such as Facebook, Twitter and Netflix – and the most well known providers of Iaas started their cloud activities on the other site of the Atlantic. Even when looking at government activities it is the US government that seems to be most enthusiastic, both in intend and action, about cloud computing.

Over the last year there are however some encouraging signs that public cloud IaaS is also gaining interest in Europe, both among users, providers, government and the press. Users are asking more questions and starting pilots and projects; Local providers are bringing their first or even second generation offerings to market; Governments are investigating opportunities and the EU even stated it wants Europe to be not only “Cloud-Friendly” but “Cloud-Active”. And in typical European tradition we see market players joining forces in new European associations or adding new chapters to their (many) existing vehicles of national and international collaboration.

A telling sign of cloud IaaS becoming more mainstream in Europe was the press picking up on the recent power outage in Dublin, headlining with how it impacted the European services of cloud IaaS providers. Now this power outage – for which the jury is still out on whether it was caused by lightning or something else – did off course not only impact cloud providers. Also several more traditional datacenters and datacenters services struggled, but the fact the press picked the cloud angle as headlining topic was telling.

So it’s clear there is a lot going on around public cloud IaaS in Europe: places to see, things to do and stuff to write about. And that is exactly what I plan to do from here. After the summer vacation I have started as a Research Director at Gartner covering this area. My colleague Lydia Leong just published a short piece detailing the Gartner teams, people and roles covering public cloud IaaS on her blog. At Gartner all IT-related analysts’ blog posts are first published on the Gartner Blog Network (GBN) at blogs.gartner.com before posting to existing or personal blog pages. If you’re interested in what we write and not write about on these blogs have a look at the Gartner Blog Network Q&A. Although tempted I will not use this post to do a further introduction of myself – with all of today’s social media my history should be an open book anyhow – plus I now have a new profile page here on gartner.com. In a next post I will cover some of the topics we are currently looking at in Europe and ways to brief us on your activities in those areas if you are a provider.

I do want to end with a disclaimer. Although “European cloud” has a nice ring to it, reality is that the idea of a European Cloud is just as “virtual” a concept as European citizen, European market and European tax. If you speak to someone from Europe and you ask where they are from, they will say Germany or Italy or France or the UK. Very few will say “I am from Europe” (unless they expect you to have absolutely no idea where their home country is located). Same for the European market. Although we have free traffic of (most) goods and services, companies have to fight for each individual market and European market share is a construct of adding up shares in individual country markets. Even a European Tax we have (so far) managed to avoid. And despite many consumers using global solutions like Twitter and Facebook all the time, I don’t expect the European cloud IaaS market to be extremely uniform for the foreseeable future. Not just because some regulations still prevent this, but also because local cultures, habits and even things like labor relations, are vastly different across different parts of Europe. This makes Europe such an interesting place to be, also when looking at this area of cloud computing.

Did the global summer of cloud start in NYC?

Having just returned a scorching hot New York (host of CloudExpo East 2011) to a definitely cooler Europe, it makes sense to see whether these differences in temperature also apply to the cloud market.

This 8^th Expo was the third cloud expo I was invited to speak at and it definitely was the biggest so far. If CloudExpo West in November signaled the entry of the large mainstream vendors like Oracle, Dell and Microsoft - not to mention several CA divisions - as major sponsors, then this edition was signified by the larger turn out of end user organizations and even some coverage on mainstream news channel such as CNN. A quick audience poll on the first day revealed that about 90% of the audience is in the orientation phase, getting ready to do some serious spending (you could almost hear the vendors sigh of relieve as it is starting to look their investments will indeed pay off).

Although many of the sessions were vendors explaining their approaches and offerings, there were some notable exceptions featuring real implementations, like the case study session where hamburgers (in fact plastic burger replica’s holding gift certificates) were passed out to the audience.  The “how to get from here to there session by Andi Mann, where he showed two alternative paths to the cloud (an evolutionary and a revolutionary one) was also well received. In fact his subsequent book signing session generated a queue even longer than the one at the lunch buffet.

Looking at the event from a European angle it was refreshing to see several European solutions featured in the expo. I saw a next generation NAS solution from Belgium – addressing MSP’s interested in offering an S3 equivalent without requiring the traditional high NAS upfront investments; a solution from France to automatically build the innard’s  of VM’s based on specific OS and middleware requirements.  And a PaaS solution - originally from Holland - built in the KISS (Keep it Stupidly Simple) tradition of the great 4GLs, but with the scalability and usability that the cloud can bring to application development.

A special mention goes to the Holland Pavilion–located directly opposite the CA stand -  featuring no less than 8 additional Dutch companies and start-up’s on their way to make it big. Now this is not the first time the Dutch picked New York as a good spot to start the move into America (remember New Amsterdam?), but it is refreshing to see a government investing to stimulate economic activities around cloud computing (They did not yet spend the US$ 20B the U.S. government is vowing to put into cloud computing this year, but it’s a start).  The other interesting angle of the mission was to position Amsterdam (in this case old Amsterdam) as digital gateway to Europe. With broadband in almost every home and international bandwidth that matches the proverbial throughput and transit capacity of the Rotterdam harbor this seems a logical proposition.

In my session on Day two I covered several aspects of vendor Lock-In and more importantly, possible approaches to prevent it. We discussed standards, of which most are still too early to tell or too close to call, although the open datacenter alliance - as if on cue - published their first use case proposals on the same day. I also explored the benefits of a software based fabric approach for portability across (hybrid) clouds and revisited the earlier discussed 3D cloud strategy model.

Overall the event showed that cloud is becoming red hot, almost as hot as the pavement outside the Javits convention center (a condition many an attendee sought refuge from at one of the rooftop reception's thrown by the various sponsors). With all this momentum we are likely to see a next edition with even more cloud use cases and success stories, also from Europe. This could be done by every provider session including a real-live implementation story or a separate track dedicated to sharing the experiences of cloud (end-) users. Maybe a bit like our recent cloud leaders initiative, which features online stories from cloud luminaries such as PGI and  DonorsChoose  and cloud accelerators like LayeredTech, ScaleMatrix and DNS Europe (now also available as free Cloud Leaders iPad app). 

Don’t let the cloud creep up on you! (also not at Cloud Expo NYC next week)

In IT we like to use fancy words like architecture, governance and strategy, but is our approach to IT innovations indeed as structured and planned as these terms imply or is IT in many cases just like real life: IT is what happens to you while you're busy making other plans? And if yes, does that also apply to cloud computing?

When I recently published my “to cloud or to compute” column, fellow columnist and IT service management expert Alee Roos submitted the following “confession”(at ITSM portal):

• “… I'll make an embarrassing confession. I had not been much interested in the cloud-thing but finally went to listen to a presentation on cloud and cloud security. It was only then I realized that I had already put most of my business in the cloud without thinking much about it. The point was that I had bought services like web-site, Outlook Exchange, remote backups and a eSurveys, not cloud. I bought them because they solved some immediate business need at a very reasonable price.”

But Alee is not alone; I believe many organizations are in the same predicament and not only for SaaS solutions. When speaking to the European CTO of one of the largest IaaS providers (now part of a large Telco) he explained how many of their customers tend to move to the cloud. At some point a customer may have a need for temporary test or development capacity. Because it is a one-off need and not as strategic as production workloads, they “give it a try”. Often that first try is successful and they are surprised it was that easy. So a few weeks later – when a new need arises - they take the same route again. Often without a lot of due diligence, because by now this is an already used solution from an already accepted vendor. And before they know it they have several critical and/or production systems running in a cloud.

Now this is not the first time this is happening in IT. Many of us were taken by surprise by departmental servers (mini's), then we didn't notice PCs become important and costly (remember one of the first TCO surveys, the one that rocked our world and the one that caused us to run around trying to “implement” ITIL so we could make them as reliable, controlled and efficient as our mainframes had always been?). Next we managed to underestimate that at some point everyone - not just a few exceptions in higher management - needed mobile phones. And just recently some companies discovered that they had spreadsheets running core business logic that had become so large and so complex that to continue running them, they had to buy dedicated servers (yes these Excel-only servers now exist). I can’t imagine that any IT professional would plan for these things to work out like this. And finally how about the “structured and strategic way” we are introducing tablets into the organization? Yes, as mentioned, IT is what happens while you're busy making other plans. And now we risk letting the cloud creep up on us.

With SaaS most people have started to realize this, in fact our former CIO, David Hansen , now general manager of CA Technologies Enterprise Solutions and Cloud Management Business, explained to fellow CIOs at Evanta’s annual CIO Executive Summit how he – to get a feeling for what was being used sorted through the many authentication requests from inside the company to outside services. It was amazing to hear what employees were using, even back then, when cloud was not yet a household name and in a time when everything that was not approved by default was verboten (remember the days you had to leave the office to access Facebook, YouTube, Twitter etc.?).

And now as an industry, are we at risk for similar experiences with IaaS, too? Guess it's a case of l’histoire se répète (but a Dutch proverb involving a Donkey also comes to mind).

Of course you could ask: how bad is it if this happens? If users are happy, prices are reasonable and service is good. Why should we care? Well –beside the obvious one: risk management – avoiding vendor lock-in seems to be a pretty good reason. Just be sure it doesn’t creep up on you while you’re busy making other big plans.

By the way, I will be speaking more about this topic in my session at Cloud Expo on Tuesday afternoon at the Javits Center in New York: "Cloud Users of the World, Unite!, How to Remedy Cloud Lock-in.”

To cloud or to compute, that’s the question

The ultimate dream of any marketer is to have its brand become a verb. “Let me quickly Xerox that”, “I Fedexed it to you yesterday”, “I just Googled it”. In cloud computing I do not see that happening any time soon. At least I haven’t heard anyone say they Amazoned their intranet or forced their custom apps yet. But it is also unlikely we will be calling it cloud computing forever.

Cloud computing is not the first new kind of computing. Previously we saw “interactive computing” - indicating that it was no longer processed in an overnight batch – and “client/server computing” –indicating it ran with a graphical user interface and not on a boring green screen terminal. But pretty soon the new way became the norm and we resorted back to simply calling it “computing”.

For cloud computing there are basically two options, we will either call it computing again – meaning it is perceived as a slightly improved version of the same old, slow and expensive service they used to get from the EDP or IT department. Or users may start to use a new name: “Since we cloud our email, the cost has gone down considerably”, “Our new CIO agreed with the CEO to cloud as much as possible, and the results have been amazing”.

Don’t get me wrong, I am not advocating to try and repeat the oldest trick in the IT book of putting a new name or label on old ideas. Like when we started calling everything e-something and we renamed our companies to Something.DOT.com. Some of that is already going on around as cloud washing (companies renaming their existing offerings to be perceived as cloud solutions, even if they have little to do with cloud).

Now it may take some time to get used to clouding as a verb - as I am sure it took some time to get used to texting as a verb. And what does not help is that - till now - the only things people clouded were issues.

For people that grew up in IT this idea of calling it cloud may sound silly. Why on earth would we use a new name for something that basically is computingas we invented it (or at least as we intended it). But it won’t be the IT people deciding what to call it; it will be the next generation of users. The same generation that – at least in Holland – massively adopted the verb computering. “What did you do last night?” “Oh not much, got pizza, watched a movie and computered a bit”. It’s the generation that came up with verbs like texting, computering and gaming. All not very results oriented activities, but that’s not the point.

The point is that if it feels like traditional computing – where you depended on an IT department to get service and decided what you were allowed to do - they will likely simply call it computing again. If it feels completely different, with more freedom, more possibilities and more speed and agility, it deserves to become a verb.

PS Anticipating the popularity of “to cloud” a Dutch vocabulary site is already showing the full conjugation here.

In cloud standards, it's all about survival of the fittest

The Kuppinger Cole European Identity Conference 2011 (EIC), which was held in Munich earlier this month, truly represented a ‘Who's Who' of cloud initiatives and standards.  Representatives from many influential, established and aspiring standards and industry bodies were on hand to showcase progress of the security initiatives currently in the works.

The number of initiatives is overwhelming. For years the joke was that any time two Dutch meet, they are likely to start an association or co-operative initiative, but apparently that is also true for security and cloud experts. I won't bore you with all the clever acronyms (it's a true alphabet soup), but I do want to highlight the more interesting overall findings.


In one of the first forum sessions - called "In Cloud We Trust" - Dr. Laurent Liscia of OASIS gave an interesting perspective on these competing standards. He compared the process of establishing an accepted standard to a Petri dish (no relation).  Multiple cultures in a nutritious environment all trying to do a land grab. A process that is not orchestrated, it's ‘eat or be eaten' and it is hard to predict the outcome because the process takes time.  No amount of pressure  or additional heat can accelerate it and watching a Petri Dish real-time is about as useful and as interesting as watching grass grow. Meaning, it's better to wait for history to run its course.

Having said that, there one initiative from this forum - which had participants from ENISA, The World Economic Forum, TRUSTe and CA Technologies - that I do want to highlight, even though the implementation is still in an incubation phase.

Earlier this year the World Economic Forum IT partnership - in collaboration with Accenture and with input from a steering group including representation from CA Technologies - published "Advancing cloud computing: what to do now?" with eight recommended action areas. 

The reason I mention this particular initiative is because of the enormous influence this organization has on governments. As associations all over the world realize that legislation and government stimulus may determine the success of their regional cloud industry - an industry that is likely to be the next economic engine of prosperity - they are rapidly publishing recommendations on what they feel their local governments should do to facilitate the success of cloud computing. So as not to be drowned out in the aforementioned alphabet soup of initiatives, it makes sense to anchor such local recommendations against the global guidance of the World Economic Forum. 

The recommendations are not earth shattering, but if governments and the cloud ecosystem participants could streamline their efforts around these eight, it would further these efforts in a useful and pragmatic way. For more info read the (very readable) full report, but in a nutshell the recommendations are:

1. Explore and facilitate the realization of the benefits of cloud
2. Advance understanding and management of cloud related risks
3. Promote service transparency
4. Clarify and enhance accountability across all relevant parties
5. Ensure data portability
6. Facilitate interoperability
7. Accelerate adaptation and harmonization of regulatory frameworks
8. Provide sufficient network connectivity to cloud services

P.S. During the event I participated as a forum member in "Cloud Standardization: From Open Systems to Closed Clouds?," and "Identity and Access in the Cloud." I will be speaking more about the topic of lock-in at the upcoming International Cloud Expo in New York (June 6-9), and I will cover cloud computing and risk during the Middle East Financial Technology Conference (MEFTEC) in Abu Dhabi (May 30-31).

April 21, the day the cloud was out!

Some blogs percolate for a while, waiting for a good day to be put to paper. For this one - about the cost of reliable cloud - that day was last Thursday, the day a network mishap caused an outage at Amazon Web Services taking down more than 100 customers, many of which cloud providers themselves, in its aftermath, while at the same time a similar mishap at Sony PlayStation´s network stopped about 70 million gamers from connecting.

A lot has been written about the outage, so I won't repeat that here (if you want to catch up suggest you read: TechCrunch for the PlayStation story, GigaOM for an overview of the Amazon issue, eWeek for some interesting analysis and the DotCloud blog for a very readable explanation of day to day use of a public cloud service like Amazon).
Instead, let's focus on the big picture of the cost of reliable cloud, comparing it - again - with the move from mainframe to distributed computing.  History tends to repeat itself, especially in IT where generations of technology tend to be heavily siloed, and staffed with different generations of people who often do not even sit at the same table in the canteen.

Somewhere during the 1980s, IT pros started to realize they could get the same processing power for significantly less money, when selecting distributed servers - till that time used mainly for scientific work - instead of traditional mainframes.  Soon after, companies began porting existing applications to the new platforms, focusing initially on applications that were more compute than I/O or data intensive (sounds familiar?). And indeed, initially the new departmental platform, not requiring all the resource intensive water cooling, air-conditioning or a heightened floor did seem a lot more cost effective. But, it didn't take long after initial proofs-of-concept to find that for some applications we needed more processors or to set up clusters, or uninterruptable power supplies and other redundant features. On the storage front, we started to use the same - not so cheap - storage solutions as we did on the mainframe. And shortly thereafter, the distributed boxes started to look and cost about the same as the systems they were replacing. Let's not forget that at the same time, smart mainframe developers - pushed by the competition from distributed systems - found ways to abandon water cooling, leverage off the shelf standard components like NICs and RISC processors and even re-examined their licensing cost for specific (Linux) workloads.

What does this all have to do with cloud computing? Likewise, we see that running a certain "compute intensive" workload can be done much faster and cheaper in the new environment. But when replacing these one-off batch jobs with services that have higher availability and reliability needs, the picture changes. We need to have redundant copies and failover machines in the data center, and in many cases a backup data center in another part of the country, preferably located on an alternate power grid and connected to multiple network backbone providers. All of a sudden it sounds a lot like the typical set-up a bank would have - and likely with a similar cost profile. So far cloud seems to offer cost benefits, but will this cost advantage still exist if we need to replicate our whole cloud setup at a second vendor - worst case scenario, doubling the cost.  Now cloud has many other advantages beyond cost (elasticity, scalability, ubiquitous access, pay per use, etc.), so many specific use cases are still ideally suited  for the cloud, but if a certain application has no need for these, then it may be worth (re-)considering the business case for a move to the cloud.

Regarding redundancy, the cloud business case actually has two opposing vectors. On one hand, there is the fact that as a user you have less control (you can't fly there and ‘kick' the server) leads to requiring a secondary backup installation. On the other hand, the cloud - with its pay-as- you-go model - offers much more efficient ways to arrange for a backup configuration for running your applications, than finding your own second location and filling it with shiny new kit.

At the same time you have to take into account the likelihood of the cloud having capacity available at the moment you need it. If your own data center fails, I am sure you could find another cloud provider with some capacity. But in this case, where one of the largest (cloud) data centers in North America had issues, all customers, in principle, could be looking to move their workloads elsewhere, it is not certain that enough excess capacity would be available at alternate providers.

In this specific case there seemed to have been technical issues inside Amazon and Sony's data centers that caused a series of events impacting the services running within, but what if there had been a major physical problem, such as a large fire or accident? With more mission critical applications moving to the cloud, companies need to make contingency planning a top priority.

As a result of last week's incidents, enterprises should take stock to assess what services are truly vital to their customers and/or to their own continuity. Organizations (and the world) seem to be more resilient than you might expect. In the Netherlands we saw Telcos ceasing mobile service in a large part of the country  for periods of up to half a day, with ISPs unable to offer Internet services for as long as a week in certain regions. And yet, these companies did not go under. Each industry, government and organization will have to assess its own priorities and success metrics/criteria and standards. As I mentioned in a past blog post, aiming to continue your on-demand video services after a mayor flood, hurricane or nuclear disaster may be over-shooting what is necessary under those circumstances - survival will be the only concern in a case like that.

Looking at the reactions in the market so far, the responses of the vendors impacted by the Amazon mishap seem to be a lot more benign that the reactions of impacted PlayStation gamers. Maybe because these vendors feel they have a good thing going and the last thing they won't to do is kill it by too much honesty. What is refreshing is that not too many vendors crawled out of the woodwork saying "private cloud, private cloud, private cloud" -- not even my colleagues who recently published a book on the topic. Good!  Nobody loves "I told you so" types and there's no point in kicking your opponent when he is down. But the case for private cloud did get a bit better, or is it just me thinking that?

5 Simple Rules for Creating a Cloud Strategy

Over the last 18 months, the media, technologists, analysts, CIOs and CEOs have all been talking about the cloud. Now, most organizations are embarking on some form of cloud computing, but as always, technology is the relatively easy part. For those of you wanting to keep your feet firmly on the ground, and looking to set your direction and strategy, here are some simple guidelines to help you along the way.

1. Start your cloud strategy (and any cloud project) with an exit strategy

Now this may seem like contradictory advice, but there is a great risk of vendor lock-in with cloud computing than there is with traditional on premise software, and I'm sure that you will be aware of the downside of vendor monopolies such as high cost, low responsiveness and inflexible vendor business practices, which result in vendor lock-in and prohibitive switching costs.
A second important reason to avoid vendor lock-in to any cloud computing services is that unlike today, where software is purchased and then used to deliver services to customers, in the cloud era organizations are directly dependent on external providers to deliver those services. The impact of a breakdown or contract termination of as a service delivery is much more immediate to the business, it is therefore imperative to have a plan B.
Ideally you will architect your cloud services and contracts in such a way, that you can move to an alternative (Plan B) within a reasonable timeframe. A definition of reasonable depends on the type of business and may vary be between six months and six seconds. Standards, although currently just emerging, will play a crucial role and I recommend that you consider any implementations that are not based on such standards as temporary. Meanwhile the automation capabilities of vendor neutral management tools can help enable such exit strategies in a cost effective manner.


2. Design IT as a supply chain
Although deceivably simple, this analogy will help to change both the way the IT organization thinks and acts and, how other departments perceive IT. Supply chain thinking allows you to both buy and build; it allows you to make all your decisions in the context of what your company needs in order to deliver services to its customers. It allows you to look at what your IT department owns in-house but also all the services you sourced externally too. A good rule of thumb in setting your IT supply chain strategy is the lean mantra: Only do what adds value to your customers and remove any steps/activities/processes that don't add value or aren't legally required.
A supply chain approach means dynamically balancing resources (both internal and external) against rapidly changing goals and constraints towards an optimal end result. This is a very different game from traditional IT where IT operations avoided changing anything that was not broken to "keep the lights on" in the most reliable and stable manner possible. Just as in a car factory the product mix changes constantly, new products are introduced while others are phased out, the supply chain will enable IT to switch services on and off as and when required.

3. Use a portfolio approach for deciding WHAT to move to the cloud

A good cloud strategy is as much about WHAT to do as about HOW to do it. A portfolio approach helps you identify which services could be moved to the cloud and deliver cost savings and agility to the business, versus the more business critical services which - at this time - are less desirable to move to the cloud.
A portfolio approach needs to begin with the strategic goals of your organization in mind. These goals may vary from becoming customer focused to launching products in emerging markets or; reducing cost within the business.
Once the strategic goals are identified, these need to be matched to business or market constraints for example legislation, resources, geography or finance. The final step would be to map the goals and constraints to existing IT services and your cloud based opportunities.
From this exercise you will produce a roadmap of what you need to do; how you allocate human, financial and technical resources to deliver the most critical services and, monitor progress against your plan.
IT portfolio planning is not a one-off exercise and not something that can implemented overnight. It will constantly evolve as the business evolves and as IT gains maturity and experience in consuming and deploying cloud services.  It is a good starting point to determine  your "low hanging cloud fruit" which could add considerable value in terms of benefits or cost savings quickly and, those services which are too business critical to be put into the cloud.


4) Make service costing a core competency
If cloud computing it going to achieve one of the goals it is heralded for, then it needs to remove unnecessary cost - not just move CAPex to OPex.
Regardless of whether a service is completely rendered in house, composed from various sourced components or procured completely as a service, it is essential to understand the exact cost characteristics and the impact on the overall cost of doing business.
IT needs to be able to determine the cost of each service delivered rather than just the cost of individual IT functions. For example, services may include payment processing, issuing tickets, sending invoices, creating an order, facilitating video conference calls and delivering online training courses.
In electronics manufacturing the heads of production are not interested in how much the company spends in total on plastic versus aluminum or copper, but they want to know whether they can offer their new product at a competitive price compared to their competitors.  In the same way, IT needs to prepare itself for such discussions, can they deliver services at an optimal cost, and if not, can they suggest a viable alternative?
Cost reduction is not the only reason or benefit when adopting cloud computing, increased accountability and agility and reliability are a few other areas which cloud computing can really impact positively. So whilst increasing transparency in the cost of IT services will give you insight into areas to optimize from a cost perspective, you may need to balance this view with potentially needing to increase investment in the short term for greater business agility.


5. Treat security as a service
Security or to be precise "fear of a lack of security" is consistently cited as the biggest barrier to cloud computing. However, a recent study conducted by Management Insight and sponsored by CA Technologies showed that 80 percent of mid-sized and large enterprise organizations have implemented at least one cloud service, with nearly half saying they have implemented more than six cloud services. This adoption is happening even though 68 percent of respondents cite security as a barrier to cloud adoption. These survey results indicate that for now cost and speed of deployment are leading reasons for cloud adoption and are strong enough to offset the perceived risks associated with deploying cloud services. This may be a sufficient for now, but as increasingly sensitive data and applications are selected to migrate to the cloud, organizations will quickly reach an impasse.
The security challenge with the "supply chain" model is an organization's ability to dynamically control access of a variety of users across a changing portfolio of applications running internally and externally from multiple suppliers.
The cloud computing model demands a rethink about how security is approached- making it an enabler instead of an inhibitor. The challenge is, not denying access to everyone, but letting the right people access the data they need to have access to (and no more than that) and to actively control the usage to prevent any out-of-the-ordinary activities.

Now having shared some advice and suggested first steps to start planning, I'd like to add one last thought.
The appropriate speed for deploying cloud computing depends on the culture and current state of your organization and realistically you aren't going to be in the cloud tomorrow. The US Federal government issued a directive called "Cloud First." This is basically a type of "Comply or Explain policy" which states that cloud options should be evaluated first (comply) unless there are significant reasons not to do so (in which case departments should explain). Pushing the accelerator that hard might not be everyone's cup of tea, but whatever you do: don't rush in, but also make sure you do not get left behind!

More on fabric computing in the cloud

In my last post I covered the concept of fabric computing and why it matters in the world of cloud computing.  With a "fabric" approach towards creating a cloud application, we include the virtual compute, storage and network components inside a fully software-based model of the service. This is distinctly different from a more traditional approach, where the various resources are added and configured one by one.

In response to a comment, I also suggested that this new approach could be compared to a modern espresso machine.  Such a machine delivers a complete service (coffee!) - in an integrated fashion.  No need to worry about the temperature of the water, grinding the beans, any other steps or equipment required to make it happen.

In a cloud computing context, the fabric is integrated "out of the box," like the espresso machine. It doesn't require provisioning, managing, integrating and monitoring lots of VMs and appliances individually. Most cloud solutions approach building a cloud by automating these individual steps - typically through scripting -- but this approach has distinct drawbacks. I included a short demo of the fabric approach below, but to understand these drawbacks we will use another analogy:

The parable of the spreadsheet and the calculator

                                                    

Imagine you are an accountant and you can choose between using a spreadsheet (a fabric) or an automated (scripted) calculator.  Both a calculator and a spreadsheet have similar base functions (add, subtract, multiply, square root). On a calculator, you start with a value and you perform functions against that. If you perform the same functions every month you could put these in a script, so you can play them back automatically next time. You could even edit that script to do it slightly different. This may makes things easier, but it is not a spreadsheet. With a spreadsheet you can have several versions next to each other (you can do a "Save as"), a change in one area immediately updates the other areas (it is integrated, there is no need to rerun a script), you can send a spreadsheet to other users or to your accountant.

Have a look at the demo below to see how that applies also to a fabric cloud application (including "save as", creating multiple versions, send it to someone else to run).  But first ask yourself: when did you last see an accountant with a calculator? In fact automated calculators never really took off. Spreadsheets (fabrics) are simply the better way.

Seeing is believing: the epiphany of a demo
When I personally saw my first demo of this concept in action, it reminded me of two earlier occasions where a demo later reshaped IT as I knew it. The first was after I installed Windows 1.0 (all 12 floppies). Sure back then it was still monochrome, there were no applications and the performance was not great, but it did make me think: "Boy, if they ever get this to work, it will really change how we use desktop computers."

The second "epiphany" was my first experience with X86 virtualization. After having confiscated the biggest machine in the office with the most memory, and after quite some tinkering I saw an actual X86 machine boot inside a window (of course this was not an actual machine - it was a virtual one). After it booted, it could not do much, and running two of them brought the whole machine to a grinding halt. Yet, it did make me think: "Wow, if this ever scales, it can completely change how we handle our machines." And (admittedly somewhat to my surprise), about a decade later around 2009, X86 virtualization did actually start to scale and it developed into the billion dollar industry that is changing the way we manage our servers.

Just like Windows profoundly changed the way we use desktops and virtualization is changing the way we manage servers, this new software-based, virtual fabric approach, in my view will change the way we manage data centers. Now I was certainly not the first person to realize this. Nicholas Carr already acknowledged the power of this approach in his book "The Big Switch." In an interview with eCommerce Times, he subsequently said:

"In 3Tera's AppLogic, you can see the broad potential of virtualization to reshape how corporate IT systems are built and managed..."

How is that so? Well, my marketing colleagues here created quite an entertaining video , but the original - now vintage - 5-minute demo that shows how to define an application as an integrated fabric is also still out there (and shows the potential much better than my above ramblings).
CA 3Tera AppLogic software essentially enables you to do three things: 

1) First, you set it up on commodity x86 servers, creating a single fabric for the storage, network and compute capabilities on those servers.
2) Then, using an integrated modeling tool, you take your application or service - including all its components, such as data, networking, load balancing, security etc.-- and create a 100% software based model (using a Visio-like drawing tool - check out this InformationWeek demo from Cloud Connect to see this in action).
3) Next, you can deploy a model of the fabric, with the software allocating resources based on the model, and providing automated scaling, metering and fail over capabilities.
You can also move the service or application to another data center very simply, even to one in another country or at another provider. Or, you can copy it and provide the same service to another department or customer (nearly instantly).

For a long time, CA 3Tera AppLogic software was kind of an industry insider secret. Several analysts and writers - like Nicholas Carr - were aware of it, discussed it and listed it in their publications. But today there are many case studies and real life success stories of both small and large implementations out there. This may be a good time for you to have a closer look; if only as an interesting implementation of these new fabric computing trends and principles in action.

Is fabric computing the future of cloud?

The term fabric computing is gaining rapid popularity, but currently mostly within the hardware community. In fact, according to a recent report, over 50% of attendees at the recent Datacenter Summit had implemented, or are in the process of implementing, fabric computing. Time to take a look at what fabric computing means for software and for (cloud) computing as a whole.

Depending on which dictionary you choose, you can find anywhere between two and seven meanings for "fabric." Etymology-wise, it comes from the French fabrique and the Latin fabricare, and the Dutch Fabriek actually means factory. But in an IT context, fabric has little to do with our often used manufacturing or supply chain analogies; instead it actually relates much closer to fabric in its meaning of cloth, a material produced (fabricated) by weaving fibers.

If we check our handy Wikipedia for fabric computing, we get:

Fabric computing or unified computing involves the creation of a computing fabric consisting of interconnected nodes that look like a 'weave' or a 'fabric' when viewed collectively from a distance.[1]

Usually this refers to a consolidated high-performance computing system consisting of loosely coupled storage, networking and parallel processingfunctions linked by high bandwidth interconnects ...

In the context of data centers it means a move from having distinct boxes for handling storage, network and processing towards a fabric where these functions are much more intertwined or even integrated. Most people started to note the move to fabric or unified computing when Cisco started to include servers inside their switches, which they did partly in response to HP including more and more switches in their server deals. Cisco's UCS (Unified Computing System), and its bigger sibling, VCE, are the first hardware examples of this trend (although inside the box you can still distinguish the original components).

One reason to move to such a fabric design is that by moving data, network and compute closer together (integrating them) you can improve performance. Juniper's recent QFabric architecture announcement is another similar example. But, the idea of closer integration of data, processing, and communication is actually much older. In some respects, we may even conclude IT is coming full circle with this trend.

Let me explain.

Many years ago I spoke to Professor Scheer, founder of IDS Scheer and a pioneer in the field of Business Process Management (BPM). (Disclosure: years later IDS Scheer became part of my former employer: Software AG.) He spoke about how - in the old days of IT - data and logic were seen as one. Literally! If - while walking with your stack of punch cards to the computer room (back then it was a computer the size of a room, not a room with a computer in it) - you dropped your stack of punch cards, both data and logic would be in one pile on the floor. You would spend the rest of your afternoon sorting them again. There was just one stack: first the processing/algorithm logic, and then the data. Scheer's point was that just like we figured out after a while that data did not belong there and we moved it to its own place (typically a relational database), we should now separate the process flow instructions from the algorithms and move these to a workflow process engine (preferably of course his BPM engine). All valid and true - at that time.

But not long after, Object Oriented programming became the norm, and we started to move data back with the logic that understood how to handle that data, and treat them as objects. This of course created a new issue of having these objects perform in an even more remotely acceptable way, as we used relational databases to store or persist the data inside these objects. You could compare this to disassembling your car every night into its original pieces in order to put it in your garage. Over the years the industry figured out how to do this better,in part by creating new databases which design-wise looked remarkably similar to the (hierarchical) databases we used back in the day of punch cards.

And now , under the new shiny name of fabric computing we are moving all these processes back in the same physical box.

But this is not the whole story -- there is another revolution happening. As an industry we are moving from using dedicated hardware for specialized tasks to generic hardware with specialized software instead. For example, you might use a software virtualization layer to simply emulate a certain piece of specific hardware.

Or, look at a firewall: traditionally it was a piece of dedicated hardware built to do one thing (keeping non-allowed traffic out). Today, most firewalls are software-based. We use a generic processor to take care of that task. And we're seeing this trend unfold with more equipment in the data center. Even switches, load balancers and network-attached storage are becoming software-based (virtual appliance seems to be the preferred marketing buzzword for this trend).

Using software is more efficient than having loads of dedicated hardware, and we can't ignore the fact that software, because of its completely different economic and management characteristics, has numerous inherent advantages over hardware. For example, you can copy, change, delete and distribute software, all remotely, without having to leave your seat, and even do automatically. You'd need some pretty advanced robots to do that with hardware (if it could be done today).

So how do these two trends relate to cloud computing?
By combining the idea of moving stuff that needs to work together closer together (the idea of fabric) and the idea of doing that by using software instead of hardware (which gives us the economics and manageability of software) we can create higher performance, lower cost and easier to manage clouds.

Virtualization has been on a similar path. First we virtualized servers, then storage and networking, but all remained in their separate silos. Now we are virtualizing all of it in the same "fabric." This means that managing the entire stack gets simpler, with one tool to define it, make it work and monitor it. And that's something that should make any IT pro smile.

In my next post, I'll share my thoughts on why I think this approach has the power to change IT as we know it, based on some of my own epiphanies.

An IT Supply-Chain model, once more with feeling

The idea of cloud computing making IT management more similar to supply chain management has been mentioned before; it’s time to take a closer look.


This post originally appeared as at ITSMportal.com

Let’s start by looking at the supply chain in its simplest imaginable form, even simpler than the supply chain at a manufacturing company. Think of a transport company – like a Federal Express, DHL or TNT – that transports packages from location A to location B. There are processes, people and resources needed to get the package from A to B within the supply chain.

The reality today is that many of these distribution companies do not actually come to your door themselves – at least not in every region or town; they use subcontractors and local partners at various points. It would be far too expensive for the delivery firm to have their own trucks and employ their own drivers in every remote country, city and village around the world. (Bear with me, we will get to cloud computing in a minute). This way, they can still offer you end to-end-service and keep you up to day of minute by minute parcel movements around the globe. They provide customers with tracking numbers - or “meta“-information (01001011). They know exactly which trucks are where, and with which packages; as a result they can “outsource” almost every logistical process (the outside arrows in our animated diagram).

figure 1: animated IT supply chain

But IT does not transport packages from A to B (at least I hope that is not what you do all day!). IT meets the demands of the business by providing a steady supply of services. IT does not have trucks or warehouses, but departments such as development, operations and support that work within their supply chain. What an IT supply chain essentially does, is take IT resources - like applications, infrastructure and people - and use these to create and deliver services.

Some IT shops have decided not to react to demand, but to actively help the users - work with the business – figure out what they should want or need (shown by the arrow marked “innovation” in the diagram). A more recent trend is the introduction of DevOps, a way to closely connect and integrate the demand side with the supply side. This is often done in conjunction with the introduction of agile development processes.

Users typically care about speed, cost and reliability, not about whether IT used its own trucks or someone else’s. Speed - like in many supply chains - is one of the main criteria. Responding faster to customer or user demands reduces cycle time and time-to-market and makes organizations more agile and more competitive. The use of cloud computing in all its incarnations, such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS), can play an important role in further increasing this speed.

With IaaS, the IT department can significantly speed up the procurement, installation and provisioning of required hardware. Because of its OPEX model, no capital expenditure requests need to be raised, no boxes with hardware need to be unpacked, no servers need to be installed. Just as in the above distribution example, the organization can rapidly respond to heavily fluctuating demand, extreme growth or demand for new services by using external capacity if and when needed.

With SaaS the route from determining demand to getting a service up and running is even shorter, because the whole thing is already a service the minute we start looking at it. There is no buying, installing, or configuring of the software. It all runs already at the provider’s website. If you are implementing a solution for ten thousand users across hundreds of departments, the time you save by not having to install a CD is not that significant. Large SaaS implementations go live much quicker than traditional on premises implementations, in many cases for psychological or even emotional reasons.Once the solution is already running, users are much more willing to start using it on the spot. Many SaaS providers reinforce this further by specifically designing their software to enable simple “quick starts.”

In those cases where there is no readymade solution available, PaaS (Platform as a Service) can deliver significant time savings. As soon as the developer has defined the solution, it can be used in production. The PaaS provider – through its PaaS platform – takes care of all the next steps such as provisioning the servers, loading the databases, granting the users access etc. Comparing PaaS with IaaS, the big difference s that with PaaS, the provider continues to manage the infrastructure, including tuning, scaling, securing, and so forth.IT operations does not have to worry about allocating capacity, about moving it from test to production or about all the other things operations normally takes care off. And because the PaaS provider has already done this many, many times, it can be done immediately and automatically.

Sound too good to be true?
Well,actually it might be, because - although the above can be faster – it also can mean IT loses control and can no longer assure the other two aspects that users care about: reliability and cost. So, how can these concerns be addressed? In the same way as in the distribution example: by making sure that at all times, IT has all the information (010011001) about “where everything is,” or better, “where everything is running.”

This management system –call it a “cloud connected management suite” if you like – needs to not only give insight about where things are running and how well they are running, but also allow you to orchestrate the process, move workloads from one provider to another, and help you decide whether to take SaaS or PaaS applications back in house (or move them to a more trusted provider). Ideally it will allow you to dynamically optimize your environment based on the criteria –such as speed, cost reliability – and constraints – such as compliance, capacity, contracts - that are applicable at that moment in time to your specific business.

Clearly this dynamic approach is a long way from the more traditional “If it ain’t broke, don’t change it,” but IT will have to get used to this. Or - even better - embrace this new way of doing things, just like planners at industrial companies did. Today’s global manufacturing would not be as efficient and such a driver for the world’s prosperity if they had not started to optimize their global processes a long time ago.
There are, however, a number of prerequisites to be able to implement such a supply chain approach in IT. First, we need to achieve fluidity or movability of IT. IT needs to be able to take fairly sizable IT chunks and move them somewhere else with relative ease. On the infrastructure side, virtualization is a major enabler of this. Virtualization containerizes and decouples from the underlying hardware, thus acting as a dire needed “lubricant”. But to enable true movability, more is needed.

figure 1: animated IT supply-chain  (repeat)

Many of today’s applications are as intertwined as the proverbial plate of spaghetti. This makes the average datacenter a house of cards, where removing one thing may cause everything else to come crashing down. On the functional side, the use of Service Oriented Architectures can help, but we will also need to apply this thinking on the operational side.A virtual machine model is in many cases too low level for managing the movement of complete services; management needs to take place at a higher level of abstraction, ideally based on a model of the service.
The second hurdle is security. I don’t mean that the security at the external providers may be insufficient for the needs of our organization. In fact, the security measures implemented at external providers are often much more advanced and reliable than those inside most enterprises (fear for lack of security is consistently listed as top concern by organizations before they use cloud computing, but it rapidly moves down the list of concerns once organizations have hands-on experience with cloud computing). The real security inhibitor for the dynamic IT supply chain is that most organizations are not yet able to dynamically grant or block access to a constantly-changing set of users, across a fast moving and changing portfolio of applications running at a varying array of providers. This requires us to rethink how security is approached, where it is seen more as along the lines of “Security as a Service”, an enabler instead of an inhibitor.

The third consideration is that any optimization will have to work across the whole supply chain, meaning across all of the different departments and silos that the average large IT organization consists of. For example, it has to look at the total cost of a service, including running, supporting, fixing, upgrading, assuring, and securing it. Likewise, it also has to optimize the speed and the reliability - or at least give visibility into these - across the whole chain.

To prevent sub-optimization (the arch enemy of real optimization) one needs to understand and connect to many of the existing information and systems in these departments. Systems in diverse areas such as helpdesk, project management, security, performance, costing, demand management, data management, etc. IT supply-chain optimization is in its infancy and many start-ups are gearing up to offer some form of cloud management, but it will be clear that offering optimization requires quite a broad and integrated view of IT.

The end result of adopting a Supply Chain approach is that IT becomes more an orchestrator of a supply chain - a broker of services - than a traditional supplier of services. Demand and Supply are two sides of the same coin which occur (almost recursively) throughout the chain. Once we close the loop, the supply chain becomes a cycle that constantly improves and becomes more efficient and agile in delivering on the promises the organization makes to its customers, just like an industrial supply chain but also very much in the spirit of Deming and the original ideas around Service Management.