A book review: The Everything Store by Brad Stone

January 23, 2014

Jeff Bezos, age 5, with his grandfather, Lawrence Preston Gise, on the ranch at Cotulla, Texas, in 1969.

The legal fictions we call corporations are nothing more than machines built from humans, so understanding them depends on understanding people. Fortunately, the foundation of The Everything Store by Brad Stone is over 300 interviews with people who have played a part in the Amazon story and the depth of this research has paid off.

Seasoned Amazon watchers will find themselves revisiting many familiar themes in this book, as they work their way through the historical accounts and illustrative anecdotes, but it’s the unexpected details that really stand out. Amongst these gems we find revealing quotes from former employees, a leaked memo on Bezos’ quest for Amazon to become a “loved” company and the extraordinary tale of his long lost biological father, who was a former unicycling champion in the Albuquerque circus.

This is a story of a corporation that functions as what SVP Jeff Wilke describes as “scaffolding” around the mind of a single man. The fact that Bezos has succeeded in extending his own thinking in this way, through what has grown over two decades to become a 90,000 person organisation, is quite remarkable. As Tim O’Reilly has also noted in his review, one of the achievements underplayed in the book is how Amazon’s organizational structure mimics the service oriented architecture found in their software.

One of Amazons’ most impressive feats is maintaining rigorous PR discipline as the company grows, adopting the expressionless manner of a chess grand master, giving away nothing to the opponent. The corporate poker face comes at a cost, of course. Curbing deviation of individuals at scale is a major undertaking. There is a long list of top executives who have fallen by the wayside. Those who are granted a public facing role – known as “Jeff Bots” – are trusted staff who have perfected the act of communicating in a carefully measured style, repeating and amplifying the Bezos world view.

The scale and impact of Bezos’ creation cannot be denied. Appropriately, it turns out that the concept of longevity is one of Bezos’ top preoccupations – he has funded the 10,000 year ‘Clock of the Long Now’ to the tune of $42m. He can certainly be confident that Amazon will be studied by historians and management theorists as one of the most significant companies of the 21st century. It will be known for systematically dismantling the value chains of entire industries, for taking a realpolitik approach to markets and a dispassionate approach to human resources. It will be known for brutal, predatory behaviour towards challengers or when it chooses to eat its own ecosystem.

But of course the most interesting question is not what Amazon is, or how it was built, but why it exists. Has Stone managed to uncover the underlying human motivations of this global corporation? The answer, as explained by high school girlfriend Ursula Werner, is a notion romantic enough for a future Hollywood biopic. It can be found deep in Texas, hidden in the aircraft hangers and launch site of the secretive startup Blue Origin. It seems that every book you download, every product you order, or web services API call you make is simply a tiny contribution to fulfilling the dreams of a 5 year old boy:

“The reason he’s earning so much money,” Werner told journalists who contacted her in the 1990s, “is to get to outer space”


Why there should be a little bit of Pivotal in everyone

May 2, 2013
88 Miles Per Hour - Azaghal Gabilzaramul

When Paul Maritz and the team finally unveiled Pivotal last week, like Doc Emmett Brown uncovering the DeLorean, not only did they reveal EMC’s new escape vehicle from the inertia of past success, but also a brilliantly droll marketing tag line to go with it.

The idea of EMC and VMware’s “consumer grade” spinout to serve enterprises – delivered with a knowing wink – comes with a delightful and complex irony, but behind the humour is a much more serious lesson for anyone still with their head in the sand.

Pivotal represents a refreshingly positive and constructive response to being at the sharp end of disruption. It shows a company taking a careful and dispassionate look at its assets, how its value chain and those of its customers are changing, and then understanding where it should be next in order to remain relevant.

The notion on which Pivotal is founded is more than a clever joke; it turns the entire semantics of enterprise tech marketing on its head. It paints a picture showing where new business value is now being created, how these applications are being built and where they are being deployed. All this should prompt some interesting questions amidst the hubris of old school IT.

For example, perhaps it’s time to take a fresh look at the competitive landscape. Are those hyperscale brethren Google, Amazon and Facebook sworn enemies to be renounced at all costs or actually pioneers to be understood and emulated? Before jumping to conclusions on how to play these games, do we actually understand the basis of competition in this new world of cloud ecosystems? Is it best to respond with a knee jerk flurry of FUD, or by adopting the same philosophies, co-opting the winning ecosystems, and building on these to create new value?

The world of has a habit of changing around us and often the changes only make sense once it’s too late. Commoditsation and democratisation of technology roll on, familiar value chains evolve, trusted business models get unpicked and the once essential quickly becomes irrelevant. Pivotal should be a wake up call to everyone trying to push water uphill in the infrastructure product business: the future is here now and it demands an appropriate response.


Jobs in the key of E

October 19, 2012

Taxi please

What we know as the ‘telecoms’ business is an intriguing game — saddled with 100 years of doctrine and fraught with modern identity crises, but also rich with opportunities for those capable of seizing them. As the dividing lines between Telco, IT and Media become fuzzy, new players emerge and incumbents are forced to adapt, continually reshaping our idea of what it means to be in the industry. This is why I find Service Providers such a fascinating area in which to work right now. It’s also why I’m delighted to be joining the EMEA Service Providers team at EMC as Senior Technology Consultant.

For those who know me mainly from my background in IP networks, or have a less than broad understanding of EMC, this may sound like a curious move, so I thought I’d explain a few of the reasons behind my decision and how it aligns my job with what I believe about service providers and their future.

We live in the wake of relentless commoditisation: a new era of large scale utility computing, a subsequent phase of war in the industry, and software continuing to eat everything else for lunch. Spending time with colleagues, customers and vendors, I often find myself thinking about these issues and the fundamental changes that are happening in the way we consume IT to get things done in our lives – it seems clear that the future power, relevance and profitability of many organisations will depend on how they respond to this stuff.

Cloud is replacing products with services, throughout the entire IT stack. As value chains evolve, previously solid business models are starting to look a little wobbly. Looking around the workplace we see business productivity gains being delivered from everywhere except the IT department. Incumbent service providers and vendors need to pay close attention to these changes and their impacts.

When it comes to steering through waves of change in the industry, EMC seems to be one of the few big vendors that is consistently smart at the top level. The company plays a strong strategic game and is always thinking several steps ahead. They’ve got an impressive track record of shrewd moves and timely acquisitions, with a diverse collection of technology under their umbrella.

The EMC and VMware magic trick is knowing how to make the most of today in mature infrastructure markets, making smart purchases to stay at the front, but also having the forethought and discipline to sow seeds for tomorrow, such as the Cloudfoundry ecosystem, that with sufficient nurturing will help the business reach escape velocity from past success.

EMC’s appetite for the long-term view was recently underlined by Paul Maritz, a big-time advocate of developer-centric thinking, moving from VMware to become EMC’s Chief Strategist. Interestingly this is the same man who “was prepared to stand in front of VMware’s core customers (IT ops people) and tell them they were not where business value lies” (redmonk.com).

The EMEA SP unit is quite a fresh venture and I’m excited to be on-board, with the chance to build relationships and understand the businesses of some major EMC partners and customers. I’m sure we’ll be having plenty of fun juggling the assortment of opportunities and threats in the service provider space, the legacy and the next generation technologies, the old business models and new ones.

So with sadness I bid farewell to Exponential-e, on my last day here, having worked with some great people and experienced so much change along the way. I will continue to watch the company’s progress with interest.

See you all in EMEA…

 


Thoughts on trust

July 3, 2012

I was remembering a moment of customer insight during a meeting earlier this year. It was one of those perfect spring days in Britain when everything aligns and you’re lucky enough to find yourself in a pub garden.

I was out on a lunch meeting with a customer, discussing current projects with their Head of Infrastructure and we got round to talking about storage. He was an AWS S3 user and was clearly compelled to use the service for all reasons that you might expect. However, it seemed like something was missing from the picture.

“So of course I like Amazon’s services”, he said with a smile, “But, I can’t go for lunch with Amazon”.

I know for a fact this isn’t true – of course AWS folks do directly engage with some customers – but I understood the sentiment behind the comment.  To a certain extent this is probably normal for any business delivering homogeneous, auto-magic services at global scale.

What’s interesting is that Amazon are incredibly customer focused, but this focus is on building services that are so convenient that you cannot help but use them. This is a different thing to building long-term customer relationships based on trust and shared values.

In one of my favourite posts from last year Venkatesh Rao makes a good observation about Amazon’s realpolitik approach to their market, to which all AWS outages are a testament:
Where other companies might respond with overwrought displays of contrition and dramatic conciliatory gestures, Amazon will likely do the minimum necessary, wait out the storm, and move on.

So where does this leave Service Providers?

Well it would seem, given that cloud is confusing the hell out of enterprises, one of the most obvious things carriers and SPs can do is fill this human gap by becoming more consultative. There really needs to be less selling and more teaching going on. Customers respond well to a bit of honesty and clarity when it comes to making informed buying decisions.

With Cloud, as with all journeys, a path needs to be created and stepping stones are needed along the way to help transformation of people, process and technology.
Service Providers, as a trusted partner for IT, often hold a privileged position from which to approach this. The brilliant thing about trust is that it can’t be copied, or stolen or bought. It can only be earned.

Service Providers are comfortable dealing with the IT dept, but we also know the customer is changing. Providers can use existing customer relationships with IT as a beachhead from which to launch new conversations with a new type of IT buyer, who have been said to hold the purse strings for two thirds of the time.

The gulf between IT and Development is definitely a challenge, but from what I’ve seen many enterprise developers are still isolated from the public cloud revolution, especially in Europe, leaving plenty of mind share up for grabs if SPs can get their act together.


The three stages of acceptance for carriers in the cloud

April 17, 2012

casa de la cultura

Carriers have some major issues when it comes to mental inertia.

They always put themselves at the centre of the universe and, especially in enterprise markets, they tend to be fixated on infrastructure rather than the applications i.e. the things that actually matter. This is a trait they share with their target customers, product-minded IT departments.

Some providers have tried buying clouds, some building, some just investing, and amongst the analysts there’s been plenty of talk about the broker model. However, the jury is still out on whether carriers can indeed find a suitable and profitable role in the new cloud world order.

I believe that if carriers can find enduring success it will depend on the acceptance of three basic, related truths.

1) Accept the commoditisation of IT

Throughout history all infrastructural technologies, from railways, to electricity, to telephony, have undergone the same process of transition from initial innovation, to product, through to commodity and utility provision.

Cloud computing is the latest phase in the relentless commoditisation of IT infrastructure. This is not news, but unfortunately the message is still not getting through to a telco industry steeped in dogma.

It’s important to keep in mind that as infrastructure becomes an inexpensive commodity utility service, all value shifts from hardware to software.

“Enterprise grade” is no longer synonymous with “the best”. From now on, whenever you read this in the context of hardware, simply replace it with “Suitable for Legacy/Unreliable Software“. That will help you to keep things in perspective.

If you’re actually trying to build cloud infrastructure, remember this: Using expensive purpose-built enterprise hardware ignores the trend of commoditisation and creates only a competitive disadvantage. When infrastructure becomes a commodity utility, you need to shift your focus onto software.

2) Accept that every conversation has to start with software.

It amazes me how almost every IT sales conversations starts with infrastructure, considering it has no inherent value. The applications that serve the business might get considered as an afterthought, if they’re lucky.

Developers who are clued-up are writing cloud applications today that surpasses the resilience and scalability that was previously achieved in hardware. Your enterprise grade infrastructure has no meaning here. Carriers will need to work out where the customer is on the application journey and make sure they understand it.

Ultimately success in cloud will depend on acquiring something that has so far eluded carriers; an ability to operate with a software-oriented mindset.

3) Accept that the customer is changing

Business Internet access is now fit for purpose in most mainstream applications. Meanwhile public commodity cloud has demolished barriers to entry for greenfield software development.

This has created an entirely new service-centric value network that is beginning to dismantle the product-centric world of Enterprise IT departments and the IT incumbents that serve them.

It’s common knowledge that developers everywhere are bypassing IT to get the resources they need from public cloud. Meanwhile the business users can now access better and faster applications and services outside the organisation, than from their internal IT dept.

Most productivity gains are coming from outside the business and this is not sustainable for Enterprise IT.  A strategy which targets only the traditional value chain or “stack” of Enterprise IT is akin to moving into a house that is scheduled for demolition.

Service providers still regard the IT dept as their sole customer. When the IT dept’s own customers (i.e the business) starts to look elsewhere, changing procurement patterns, carriers need to think about what the implications are for them.


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