Why the cloud may require you to learn multiple words for snow

Cloud is at the center of a convergence trend that is impacting people across all of ICT. This convergence is breaking down the walls that separated the traditional silo’s of IT, networking, storage and security. But with this breaking down of the walls we also need to better understand the subtleties of each others domains in more details.

A famous urban legend is that eskimo’s have many words for snow, as it makes sense to – if you spend your whole day in snow – to distinguish the subtle and not so subtle differences.

Similar in IT, where others simply refer to IT as IT , the people living in IT tend to distiguish between operations, development, support (helpdesk), testing, portfolio management, information and master data management, etc. etc.

And the same is true for networking, where others see the network (or even the internet) as a homogenous blob, the people running and managing the network distinguish many parts and layers, seperate it out into core and non core and many other subtleties.

The cloud (together with its enbaling peer: software defined functionality) is rapidly changing that. Anyone who tried to set up a simple IT fuction like cloud compute at one of the many cloud IaaS providers will have noticed how many of the configuration questions are network related (and not trivial to answer).

The challenge for network folk is slightly different as more of their traditional network functions are no longer implemented in or on dedicated network kit (their kit) but run on general purpose compute infrastructure as software. SDN (software defined networking) and NFV (network function virtalisation) are two of the main drivers in this area.

But even a bigger driver to learn and understand each other languages is the fact that the clouds inherent “as a service” model is driving a move from beeing organized along horizontal or functional layers (network, storage, compute, applications, support) to beeing organized around services (CRM, Collaboration, Supply Chain, etc.). These services (typically implemented as SaaS services) namely include their own implementation of all the underlying layers inside their service.

In theory (and often in practice) these services hide the underlying complexities from their end users, but often not from the teams supporting or offering (for example in the case of “private SaaS”) these services. These teams will need a more holistic and less silood view of the whole stack than they had in the past.

And that will mean we will all need to speak and understand the languages and words that are used in the layers that used to be foreign to our own areas of expertise.

At some point we may even develop a simplified high level language that goes across the domains. A bit like Esperanto or like Fangalo, the language that miners used in South Africa, a mix of words from Dutch, English and the about 500 local languages, with a simplified grammar, no distinction between past, present and other tenses and a vocabulary of only about 2000 words. It could be learned quit rapidly and allowed people to work in cross functional and cross national teams within a very short time.

In the cloud we could have such a “digital” language (or skill set) for people working on the cloud (whose tasks will be more technical than traditional business tasks) , but still a lot less technical (and less specialised) than the task of the people working behind the cloud (engineering the very complex cloud engines and networks that power the cloud).

Cloud for Business

Earlier this month the Times ran its regular "Cloud for Business" insert, in which I was asked to write a column on "Cloud for Digital Business" (see full text here). For reference I included below the piece on "The future of Cloud Computing" that it ran in an earlier edition. An item called:

Cloud Spotting is the Shape of Things to Come.When asked to write a column with an ambitious title like “The future of the cloud”, it is a good idea to look first at where cloud is at the moment and to realise that it is still very early days. Today, of the $2.7 trillion that global business spends annually on IT, just 4.8 per cent is spent on cloud computing.

The cloud’s penetration of the world of business is considerably less than its penetration of our daily lives. As consumers we get most of our news, information and increasingly entertainment through cloud services. In fact, the consumer industry has become the major driver of IT innovation. Many years ago, IT innovation was largely driven by defence spending, later by space exploration and then, for many years, the best place to see new innovative products in action, such as colour laptops, projectors and colour printers, was inside the offices of large enterprises.

How different things are now. The largest screens with the highest resolutions, the fastest network connections, “premium” tablets and the best connected mobiles are probably the ones you use at home. Even in large data centres, innovation is now largely driven by consumer-oriented organisations, such as Facebook, with its open computer server design initiative or Google with its MapReduce approach to making sense of very large sets of information. Many enterprises are still getting used to the idea that they are no longer in the driving seat. Where in the past they typically expected vendors to come running to deliver exactly what they asked for, they now need to figure out how standard offerings based on consumer-facing innovations can be used inside their business.

The cloud is not the only consumer-driven innovation businesses need to make sense of. It is joined by a nexus of new digital forces, including the social, mobile and information, or big data, forces. These offer truly new capabilities when combined. For example, businesses can now connect more directly with their customers using social and mobile technology. This provides huge amounts of customer information that can be analysed to enable businesses to communicate in a more relevant and useful way – a change facilitated by the use of software and IT infrastructure in the cloud.

Another element shaping the future of the cloud is the increasing importance of sharing content and knowledge across organisations. The value of using cloud services, such as Google Maps and LinkedIn, comes from sharing more information (on roads, traffic, people, skills) than individual companies could ever hope to collect or keep up to date in their own internal systems. For many years businesses sought efficiencies and gained competitive advantage by integrating and co-ordinating their internal processes better. Now we see increasingly that, driven by big data, future efficiencies lie in optimising processes across multiple organisations. This leads to “social collaboration networks” between businesses, similar to what a cloud application like Facebook did for individuals.

However, by saying that the cloud is especially valuable for doing things that were not possible before, or at least not practicable or affordable, we make predicting the future of the cloud a lot harder. Ironically, uncertainty about the future is also one of the main reasons for using the cloud. When a business is uncertain whether one thousand or one million customers will watch its latest webcast or play its latest game, the elasticity of the cloud makes it an ideal platform because a business can rapidly scale up its IT capacity to meet its needs at the time and then scale it back when it is no longer required.

Similarly, when organisations are uncertain whether a new software implementation will be a tremendous success (leading to all divisions in all countries using the whole platform on a daily basis) or a modest failure (leading to a few divisions using some parts of the software in a couple of countries), it is better not to invest up-front but to “pay as you go”. An example of a company using this is game provider Zynga, which uses cloud computing extensively when launching new games, but then brings established games back in-house when many of the uncertainties about usage and capacity requirements have been resolved. It is this agility, the ability to “turn on a sixpence”, not cost-savings, that is the main driver for the cloud's use by businesses today and it is likely to remain an important driver in future.

Using the cloud should not be a goal in itself: it should be a means of achieving specific benefits. As a result, business cloud strategies, today and in the future, must be driven by higher-level objectives, such as reducing lead times or improving customer experience by delivering core services through the cloud. Cloud adoption should not be driven by artificial IT metrics, such as aiming to have a certain percentage of applications running in the cloud by 2015. Selecting projects potentially suitable for the cloud is a question of weighing the benefits against the risks. If the risks of using the cloud are very high and the benefits relatively low – for instance, when migrating stable and predictable yet crucial workloads that already run efficiently internally – it may be something to avoid.

Conversely, if benefits are high and risks low, as for example in big data modelling and analytics where tens of thousands of processors run for short periods to simulate or predict customer behaviour, using the cloud may be a “no-brainer”, allowing a business to pay only for what it needs, and to avoid overheads and maintenance during times when this capability is not required.

Risk, however, is not a constant. Just as Japanese manufacturers pursuing just-in-time and Lean manufacturing concepts refused to accept that the changeover time between products on a production line was a constant and so actively worked to reduce them, consumers and cloud providers should work on reducing the risks, both real and perceived, associated with cloud computing. There are many ways to do this.

Concerns about the security of information held in the cloud can be allayed by applying technologies, such as encryption or by agreeing to more transparency about the physical location in which data is stored. It is also important to realise that confidence in the cloud will grow naturally as users and providers gain more experience. Passengers of the first airlines needed to be quite brave as there was no track record that warranted trust in pilots and their equipment.

Trust increased as the industry learned from initial disasters and actively improved service – you can also expect to see both disasters and subsequent improvements with the cloud. Not all the cloud will be as regulated as the airline business, but some cloud services could well be more regulated than they are today, for example in privacy-sensitive areas like healthcare.

The cloud changes attitudes to IT more than it changes IT itself. The concept of delivery “as a service”, so central to cloud computing, will lead to IT organisation acting as an intermediary within business where managing the consumption of external cloud services will be as important as managing the delivery of internal services – leading to a future that is facilitated by, but not determined by, the cloud.

Author: G. Petri Source: Racontuer - Times instert

Did the US just give a bigger stimulus towards local European Cloud activities than the EU ever could?

Unless you have been under a rock for the last week it was impossible not to notice the uproar regarding the Guardian’s story on alleged information collection , allegedly called PRISM that -again allegedly- involved several major cloud service providers. The most detailed and nuanced piece so far – but it is only Sunday when I am writing this – is this one from the Washington Post.

As at this stage many things are unclear and some reports may be incorrect, I – for one – have not decided whether I will move my personal information from the many US based providers that I use in my personal live to local alternatives. But in this blog I do want to share my (strictly personal) views and thinking on the topic and explore potential alternatives. As usual I will stay far away from any politics in my blogs (something that must be doable given that the public reactions from different political sides are so varied and diverse).

Till today , individuals – like myself – often took a relaxed view towards protection of their privacy, using phrases like: “Well, nothing I do here is secret or illegal, so if they wanna peak, no problem”. But illegal in an international context is a relative term. Think of copyright law, where what is legal in one country (for example downloading copyrighted materials for personal use), leads to several year of incarceration in other countries, or think of controversies around travel of people carrying a certain disease or -maybe in the future – a certain gen, or of people of a certain origin. Currently the – already controversial – access to this data is only permitted for anti-terrorism and not for fraud-related or other criminal investigations. But we need to take into account that regimes may change and that as a result also this applicability can change (for example the detailed and accurate paper-based administration systems of local government entities in my country lead to significant, unforeseen and unintended harm following the regime change during WWII).

The increase of control that comes with massive centralized data-processing always carries some drawbacks (as Nicholas Carr – again with remarkable timing – republished just prior to all this hitting the press) and use of alternatives may to some extend be similar to the now famous statement about Democracy: Democracy is far from ideal, but it sure is better than any of the alternatives tried so far. For those individuals who want to try an alternative, here are some thoughts on cloud services to replace the ones currently under scrutiny or discussion.

• Email: Most of the providers listed as part of the program deliver (free) email services. Many European individuals started using these because they delivered convenient webmail that did not tie email addresses to a particular ISP (and thus allowed changing internet provider without being locked in to their proprietary email domain name). Maybe it is time to reconsider ISP-provided email, but at the same time investigate the use of your own domain name (which makes your email a lot more portable). Make however sure that the mail provider your choose is not just owned by a European company , but that it runs under European jurisdiction (for example a European owned mail alternative I looked at turned out to be “a corporation organized and existing under the laws of the State of Delaware”).
• VoIP Calls: Although leading consumer VoIP provider Skype started from Luxembourg, it is now part of a US headquartered corporation. Also most alternative voice and video calling solutions come from US based companies (with some even limiting their services to US based consumers only). Although European Telco’s have been talking about offering VoiP based alternatives to their regular mobile and fixed voice services, only very few have gone to market yet (check you local providers for possibilities) and even fewer offer it as a cost effective alternative for international calling.
• Social Networks: Up to a few years ago most leading social networks in Europe were national providers, but today Facebook is very much the name of the game. If it was not for editorial independence a media corporation like the Telegraaf group might consider leveraging the current media driven FUD to drive local consumers back to the recently acquired (and formerly leading) social network Hyves. However, moving to a new social network all by yourself is not a very social thing to do (and kind of defeats the purpose of a social network) so some group orchestration may be required.
• Short Message Services: So far the reporting did not mention any short message services , such as WhatsApp, Instamessage, Viber etc. Nor did it include other new web destinations becoming popular with the under 20ties (as their parents took over on Facebook) . Many of those however, such as Instagram and Tumbler have been recently acquired by the named providers. Twitter is a chapter by itself as most activities on Twitter are public by nature (and unlike some other providers they have put up a brave fight to keep their private services private).
• Professional Networks: Also professional networks, like LinkedIn have not been explicitly mentioned so far (likely because the job market for the type of activities under investigation does not rely on these types of services ), but here some local alternatives do still exist. Unfortunately the alternatives are often very local (limited to one language area) and do not help much in an increasingly pan-European or inter-continental job market.
• Dropbox: I could have used the more neutral term file replication here, but DropBox has – in a remarkably short time – pulled a Xerox on the market and made its brand name the generic name for these types of service. Alternatives do exist – from independent European companies as well as from Telco’s and ISPs and even from providers of networked hard disks. Maybe this is a good time for companies – who so far largely turned a blind eye towards the (shadow) use of such services, to offer internal – but just as convenient – alternatives to their employees.
• Cloud IaaS/PaaS Providers: Also these have not yet explicitly been mentioned. Maybe because the typical consumer does not use these providers to build their own personal photo of file storage and sharing facility (mainly because higher level alternatives like Flicker and DropBox are so much more convenient to achieve the same result). Also these lower level services offer a lot more options for the user to protect his own data (like using encryption). Regardless of these consideration, this area is a domain where several local alternatives do exist, both at a national and a pan-European level. Some of these providers are even global offering services from facilities they run in “neutral” – but latency-wise quit closeby – locations like Canada or Switzerland.

So far most of the discussion has been about individuals and their data. The interesting thing is that the European Data Protection Directive has implemented the roles of Data Subject, Data Controller and Data Processor. For individuals (Data Subjects) the cloud service providers mentioned in the current media hype are in many cases both the Data Controller and Data Processor. For companies using these same cloud service provider firms, they themselves remain the Data Controller, while their customers and employees are the Data Subjects and the Cloud Service Providers are the Data Processors (which – according to my limited legal knowledge – can significantly change the applicable law and the entity held eventually responsible).

The list of concrete named European Cloud Service alternatives is not as long as I would like it to be (any suggestions more than welcome, please submit via the comments). That however was to be expected given the slower uptake of cloud in Europe described in existing Gartner research (see In a Diverse Europe, Cloud Adoption Will Be Slower and European Businesses Are Only Slowly Overcoming Their Reluctance to Transfer Personal Data to theCloud). There are however several interesting European initiatives underway, as we described in Cool Vendors in the European Cloud Computing Market, 2013 (subscription required). Please note that blogs – like this one – do not constitute such research.

10 Years on, and it still matters?

If an article, 10 years after its initial publication date, is featured in several look backs, reviews, Q&As and still gathers reactions and emotional analysis, it can be concluded it must have struck a chord - or in this case - more an open nerve.

In May 2003*, the Harvard Business Review published "IT Doesn't Matter" , an article by then still largely unknown editor "at large" Nicholas Carr.

The premise of the article was that infrastructure has a diminishing impact on competitiveness and that IT was infrastructure (although Carr in the recent Q&A seems to indicate he meant IT Infrastructure is Infrastructure, a lot less controversial idea). Given all the recent analysis around, I only want to zoom in on one aspect.

What still amazes me after all these years is how the last decade of IT was impacted/hindered/predicted/paralleled (pick one based on your personal emotional state with regard to the article) by the three short recommendations that were included - almost as an afterthought - in a small breakout box on page 8 of the article.

The article gave the following three "New rules for IT management"

• Spend Less : Which arguably coincided with a decade of corporate IT anorexia?
• Follow, don't lead : Today we know that consumer-play IT - and not corporate IT - leads most of IT innovation (think Facebook, Twitter, Google, Netflix), and Web-scale IT is arguably about corporates following consumer-plays?
• Focus on vulnerabilities (as for any utility the dependence on external providers increases) - Which ironically is today's main argument for corporate's preference for private (over public) clouds?

Is the relationship between the last 10 years of IT and the article a question of coincidence, a perfect crystal ball, extreme influence or simply good penmanship? Let me know what you think (in the comments or via @gregorpetri)

The spring of 2013 is off to a cool start

Even though today’s crowning ceremony in Amsterdam enjoyed some modest sunshine, the temperatures across Europe are at an all time low. A more reliable indication that spring has started, are the annual Cool Vendor reports being published.

For the first time this series includes a note dedicated to cloud activity in Europe. The “Cool Vendors in the European Cloud Computing Market, 2013” note describes four European vendor making a difference in the local and global cloud market. The report also points to several other European cool vendors featured in other notes. Such as in the “Cool Vendors in Cloud Services Brokerage Enablers, 2013“,  “Cool Vendors in Cloud Services Brokerages, 2013” and  “Cool Vendors in Cloud Management, 2013“.

One of the featured cool vendors is directly involved in the Amsterdam crowning ceremony by hosting the social crowd control app that gives the many visitors real-time insight into movements and current volumes of people at the different venues. A nice example of a nexus application that gathers social information from mobile devices, performs real-time analysis of that big data type information in the cloud and makes it available again to the crowd via a mobile app.

Three Makes a Cloud

The 'third' in this cloud menage a trois is the network, which is joining Storage and Compute as a Software Defined Resources that can be allocated on demand through a self-service API or portal. As a term “Software Defined” is in race to catch up with established but equally vague terms such as “on demand” and “as a Service” and surfacing in all kinds of combinations.

The current frontrunner - Software Defined Networking (SDN) – might very well already be the most hyped term of 2013. All network technology providers are busy either building or acquiring SDN capabilities but the largest acquisition to date (for more than one billion dollars) was done by a virtualization platform provider. Meanwhile most network providers are looking to leverage SDN to increase the agility and reduce the cost of the services they provide.

An important reason for the interest in SDN is the size of the market it is promising to disrupt. The total revenue for Network and Communication services makes up a large part total worldwide IT spending. Of the total 3.7 trillion IT spending in 2013 46 percent will be spent on Telecom Services (next to 8 percent on software, 22 percent on hardware and 25 percent on IT Services). Any development that such a large proportion of the total cost influences can count on great interest, also from the telecom industry itself. At the SDN World Congress in Darmstadt no less than 13 of the largest telecommunications companies announced a joint initiative to promote 'Network Function Virtualization. This initiative encourages network technology providers to enable their network functions to run on (clouds of) industry standard servers instead of on proprietary hardware appliances.

The main advantage of a software defined network - just like any other kind of software defined infrastructure construct - is that it no longer consists of dedicated and proprietary boxes with names like: firewall, load balancer, router, etc. If an organization tomorrow suddenly two times more firewalls than load balancers needs (or vice versa), they can just provision other software on their existing hardware. In addition everything that is controlled by software can be much easier automated than something that is based on hardware. And this offers benefits not just to providers but also to end users as it can reduce the time needed to reconfigure en network to changing needs from several days or weeks to a few hours, or even shorter. And as a result the network can become as dynamic a cloud resource as compute and storage already were.

But let’s not forget that for many organizations the transition to 'as a Service' and “on demand” began in the network area. Back in the 80-ties companies started to give up their own in-house controlled and managed wide area networks in exchange for the use of shared packet-switched networks, often based of X.25 and commonly called the “public data network”. Maybe something to remember for those currently afraid of “public clouds”?


PS Gartner press release : Software Defined Networking Creates a New Approach to Delivering Business Agility

Will CPR significantly increase cloud survival rates?

IT is an acronym crazed world. So crazy that sometimes - when running out of three letter ones - we simply  recycle them or add sequence numbers. Remember MRP, which used to mean Material Requirements Planning, but then became Manufacturing Resource Planning (called MRP II to avoid confusion), to only a couple of years - and a few trillion of investments - later, resurface as ERP.

In that era the term BPR also became popular. BPR stood for Business Process Re-engineering (see for example Hammer, M. and Champy, J. A.: (1993) Reengineering the Corporation: A Manifesto for Business Revolution), a movement that in my perspective*really gained steam from the realization that throwing new technology (ERP) at existing processes, only offered limited improvement potential. As Business Process Re-engineering often resulted in massive redundancies and layoffs, BPR got kind of a bad rap, especially among employees and unions (remember those?).

Today the term Business Process Redesign is a more socially acceptable reincarnation, and even though that could fly under the same acronym (eg. BPR II), people seem to prefer to call it by its full name.Nowadays all the buzz is around cloud. And also here people are finding that just throwing this new idea at existing processes is not bringing the benefits expected, not to mention that the cost of absorbing it into our existing ways of working is very high (remember how much we spend on trying to force fit ERP packages into our existing processes by modifying them beyond recognition, only to reimplement these packages a few years and a few releases later in a more off the shelf manner?).

And increasingly the topic of adapting processes to the cloud is becoming popular. Last month my note "Cloud Solution Providers Ignore Customer Processes at Their own Peril" published, and this month KPMG published a study called "the cloud takes shape". In that study KPMG uses the term Business Process Redesign and states "One of the most important lessons uncovered by this year’s research is that business process redesign must occur in tandem with cloud adoption if organizations hope to achieve the full potential of their cloud investments." In my note I describe the need to challenge the status quo on processes using the term Cloud Process Re-engineering  (the cloud generation is likely to have a less emotional response to re-engineering, while some of its disruptiveness still rings through).

Some IT departments I speak to seem to think of cloud computing largely as a way to move their applications to the cloud. But if an enterprise organization with thousands of applications running in their datacenter, moves these apps to the cloud, they will still have thousands of apps. And more importantly those apps will do the same they did before, just running somewhere else (so you might ask "why bother?" as the savings on hardware, housing and electricity are small compared to the overall cost and today's management is much more interested in new (revenue) possibilities and agility than in efficiencies that in the end form a mere rounding error in the companies overall bottom line). If organizations however look at each process and decide how the cloud can optimally support or even completely eliminate that process (for example through Business Process as a Service (BPaaS) or by participating in multienterprise applications) the potential impact can become much more significant. 

The idea of optimizing processes to new realities - for example through Business Process Management (BPM) - is not new and covered broadly in Gartner's  existing body of research. Cloud practioners - both consumers and providers of cloud services - should take an interest in this softer, more human, side of the cloud.*

PS. Whether CPR will turn out to become the acronym that replaces BPR is debatable, also as it seems to be already firmly taken by the medical profession (for both the life saving CardioPulmonary Resuscitation and for Computer-based Patient Records).

Dear Apps, why can we not just all get along?

Ecosystem could be "the word" of 2013, if only vendors, providers, ISVs and other technology conglomerates stop acting in a “This Town ain’t big enough for the both of us“ way.

As an App user* I am increasingly amazed, affected and annoyed by what in my view can only be described as turf wars between various technology providers. Increasingly cooperation - that originated by a desire to have a quick time to market - is being replaced by outright competition driven by a desire to own the full stack. Some recent examples:

• Phone manufacturers replacing perfectly good map applications with in-house brews*
• Search engines wanting to become social networks*
• Social networks* and web retailers* wanting to become advertising specialists
• Photo filtering apps opting out of 140 char event timelines* and v.v. event timeline apps adding photo filtering*
• Email providers abandoning the use of third party sync to enterprise messaging apps*
• Providers replacing third party music and movie services with in-house variants limited to their stack*
• Just about everyone adding their own inline chat and messaging functionality*
• Not to mention the various patent wars companies are waging, trying to block each other out of their home markets*

Now I am not against healthy competition (on the contrary) but as a consumer I fail to see how these developments are benefiting me. It seems many companies are answering the markets desire for integration by forcing consumers into their own, closed, single stack shops.

With cloud computing rapidly breaking down the walls between traditional industry segments, times are confusing for providers. Where we used to buy hardware and software form different vendors and solicited help - to get these two to work together - from yet a third category of providers, these demarcation lines are now rapidly blurring. Hardware and software are merging into services, while at the same time we see phones behaving like camera’s, tablets behaving like PCs and TVs behaving like tablets. Naturally companies are worried about where in that blurring supply chain the largest profits will fall and as a result everyone seems determined to own the whole chain, wall to wall and soup to nuts.

But increasingly the limiting factor in market success is no longer the ability of providers to supply functionality, it is the capability of consumers to absorb functionality. Aan - at least at my age - once I mastered the science how to color my pictures, how to create a playlist, how to interact socially, how to access my email, etc., etc., I just want to be able to continue to do so, but in a seamlessly integrated fashion. I don’t want to replace it with a new app, that does virtually the same, but in a different way.

Just a couple of years ago there was a lot of talk and enthusiasm about “Open Innovation”, where companies could make the market pie bigger by working together (instead of fighting over who got what piece of the existing pie). To some extend it is the old “single vendor” versus “best of breed” dilemma, do I concentrate on having a good enough homogeneous product that does it all, or do I focus on building the best product for my functional area and work/integrate closely with others (at the risk their area turns out to be more profitable (in market speak: has a better business model)). In other words do I go integrated/closed/proprietary or more interoperable/open/standard.

My believe (or at least my hope) is that companies that act more from the perspective of consumers/customers, than from their own financial/shareholder perspective, will eventually come out better. Note however that in this context it is very important to understand exactly who the customer is: is it the user buying access to the service or the advertiser buying access to the user (in which case the user is merely the product being sold). If the app economy is to continue to grow, it will need to increasingly address the primary customer (the users). And if (granted, a big if) the market is a bit like me , it will prefer ecosystems of leading open apps over fully integrated closed stacks.

Traditionally, before the current trend towards exclusion instead of collaboration took hold, the silicon valley pressure cooker was the center of such collaboration. Maybe Europe - being a collaborative environment by nature - can step into its place and use this as much needed differentiator against the increasingly mega-large, mega-integrated and mega-closed conglomerates from Asia and North America.

Lean and Low in Las Vegas

Those of you who followed my blog for a while know that the idea of applying manufacturing best practices to cloud computing is a favorite topic of mine*. This week the topic popped up in a fireside chat (the popular term for keynotes delivered from a set of armchairs, often with no fire in sight) between Amazon’s CTO Werner Vogel and CEO Jeff Bezos at re:Invent, the first Amazon Web Services customer conference.

I won't cover the conference here - many blogs and media sites already did - but in the chat Bezos made a number of interesting points on how principles of lean manufacturing are guiding Amazon’s overall endeavors and how cloud computing both supports and benefits from this approach. He discussed how – for developers- this approach turns the cost of infrastructure operations from an abstract overhead-like concept into a very visible direct cost they can directly influence. And how the cost of quality is always lower than the cost of non-quality, as fixing problems later - after it has shipped to the customer – is many times more expensive than doing things first time right. But also how cloud computing allows to continuously improve products and processes (similar to how factory workers at Toyota were empowered to stop the production line and jointly improve the process). He also stressed the importance of focusing on customers and their requirements (by continuously measuring and providing feedback loops) instead of focusing on competitors or winning.

A 70/30 rule
In the chat Bezos also discussed his assertion from an earlier interview that- with customers being more connected through social media and through the transparency that internet and big data is bringing to all markets – the effective way of doing business is flipping from spending 30% on creating a product and 70% on "shouting about it" (making sure - through marketing and sales activities - that people know about it and buy it) to the reverse. A new reality, where it makes more sense to spend the majority of energy, effort and cost on building the best possible product and a significantly smaller effort on communication and delivery. In other words, the more transparent markets are becoming, the more product quality (being fit for purpose) will rule success.

This in turn makes working on product quality (though principles such as Lean) more important, but - taking this beyond was what was said on stage – is also likely to drive total costs down and result in lower overall prices. For the enterprise IT industry - where a lot of the product costs stem from the lengthy sales & implementation cycles that traditional complex enterprise products require – this may turn out to be a very disruptive development. In fact, earlier in the week Amazon had a panel of their partners discuss their experiences and - although they all created some impressive new cloud successes for their customers - you could sense they all realized that going forward the world was no longer going to be what it was before.

A valid question to ask is whether the whole Enterprise IT industry will follow this trend. In other words: what percentage of large enterprise organizations will be interested (and able!) to adopt the self service, super market model of the cloud (see also A Cloud That Cares? Or About Eating Your Cloud And Having it too). Will there be a large percentage that prefers ready made meals (instead of home cooking using super market ingredients - One could think of SaaS solutions in this context) or will there be a significant number of organizations that - voluntarily or forced by a lack of in house capabilities - continues to prefer a full service restaurant model, where the provider does not just supply the ingredients, but also does most of the day to day work?

Let's end with a question you may want to ask yourself: When looking at your markets and customers, how fast are they moving from a 30/70 to a 70/30 model and how prepared is your organization for that?


* In one of my first Gartner blog posts I wrote about the Rise of IT-dustrialization , earlier publications include “LEAN and the Art of Cloud Computing Management (2010)” and my LeanITmanager blog.

What happens in Barcelona…. can now be seen here

Also this year cloud computing was a large topic at Gartner’s annual symposium in Barcelona. It shared the limelight with the other three forces of the Nexus (Social, Mobile and Information) but managed to pop into most conversations and presentations.

For those who missed it - and for attendees that did not manage to be in all parallel sessions at once - video recordings can now be accessed at gartnereventsondemand.com (highlights available after registration of email, full sessions for registered attendees).

Personally I did a couple of dozen 1on1’s, seven larger sessions (presentations, roundtable's and clinics) and met with several more people over breakfast and dinner. With breakfasts at the time most Americans are accustomed to and dinners taking place according to local tradition, you can imagine these were pretty lengthy days. Not that we noticed, because the 1on1 rooms (unlike last year) had no daylight. Luckily we managed to get some fresh air as we popped over to the special CSP (Communication Service Provider) track that was running across the street.

Of course this special track also touched upon cloud computing as an opportunity for CSPs using the recently published (and now publically available) high level overview of Gartner's Advice for CSPs Becoming Cloud Service Providers.

On day two I popped into the IT Expo to present the new MQ for Cloud Infrastructure as a Service, the first Gartner MQ I got to participate in creating (Note: this is not a public doc, but there was some press coverage and a number of providers are offering access via their websites). Presenting at the expo is different as the audience is sitting in a kind of fishbowl while wearing headsets as the noise from the surrounding stands, raffles and demoes is at times deafening.

My conclusion from four days (where I managed to speak to maybe 1% of the total attendees and a slightly larger percentage of the participating providers) is that participants are increasingly aware of the slower pace of cloud in Europe. Providers are pushing the cloud envelope harder than (most) end-users, who –as we saw in the outsourcing and cloud clinics that we ran throughout the event – are often still more looking for a restaurant with cloud views than for self-service cloud supermarkets.