Posts Tagged ‘cloud’

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.

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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.

Cloud Distribution Forecast: Unsettled

December 20, 2011

The issue of network latency and loss – and how we meet the challenge of developing cloud-ready applications on best-effort networks –  is a topic that has gained a bit more exposure recently with the Alcatel and Cisco announcements, coinciding with a paper from Joe Weinman.

In addition to the demands of realtime cloud applications, another reason that the network is returning to the foreground of discussion is IPv4 exhaustion. I’ve spent a fair amount of time looking at this particular issue in 2011, including the likely impact,  in terms of costs and performance, of the various duct-tape IPv6 transition methods that are going to be implemented globally.  Here is a copy of the slides from my presentation’ at Cloudcamp London (5th October 2011).

Synopsis:

The internet has become our defacto distribution network for utility computing (otherwise known as cloud computing). The global response to IPv4 exhaustion has, unsurprisingly, not been timely adoption of IPv6; as such we now face an immediate future internet where the incumbent players dictate the terms and conditions for entry. This is likely to have a negative impact on innovation in systems that are built on cloud.

From product to service: a tale of two value networks

December 16, 2011

A Tale of Two Value Networks

If you care to step outside of your startup, look beyond your #clouderati twitfeed, or take a break from your achingly futuristic unconference, to have a stroll in the workaday realm of Enterprise IT (for now, still the ruler of global business technology) you may be shocked and appalled to encounter the steadfast opinion that cloud is “nothing new”.

“We’ve been doing this for years”, enterprise people say. “It’s just another form of outsourcing”

Normal people, eh? Don’t they ever go to Cloudcamp?

On occasions, if I’m able to summon the strength to open this can of worms, I pause for a moment and then ask,

“Do you know why you can’t understand cloud computing?”

Enterprise person: <Shrug>

“It’s because nobody wants you to”.

What on earth do I mean by this?

Well in fairness I should clarify here; when I say “nobody” what I actually mean is, “nobody in your value network”.

If you haven’t heard of value networks then you should check them out, because they provide some wonderful business analysis perspective; I’m referring to them here in the way that Clayton Christensen explains them in The Innovator’s Dilemma.

Have a closer look at my picture above.

I drew this to help me make sense of  things, and help me explain my view to others (you could call it a cluebat). It might be an over-simplification for some folk, but it works for me.

So this is how it works: you’re in a value network right now. It might even be one of the ones I’ve drawn. For most normal people just trying to get their work done, their value network largely tends to define their world view.

We have the Enterprise IT incumbents on the left of the picture and the new kids on the block sit on the right. Broadly speaking we also see a product-centric on the left and a service-centric view on the right.

The two value networks have fundamentally different costs structures and value perceptions, which is why none of the companies on the left have been able to compete with Amazon. Not even the largest IT companies on earth have managed to compete because they are prisoners of their value network.

Going back to my initial point, this picture also explains why if you work in Enterprise IT, and never stick your head above the parapet, your experience and understanding is dominated by the FUD and cloud-washing efforts of traditional vendors selling yesterday’s products packaged as a high cost “enterprise grade” services.

According to Christensen, the only really successful way for a business to enter the new value network is a spinout strategy where you start a new business entity that is independent of the normal resource allocation process . This is what VMware have apparently done with their CloudFoundry PaaS. This is what Quantum hard disks did in the 90s, and what HP Deskjet printers did. It is how IBM survived the move from Mainframe/minicomputer to desktop PCs.

Now I should point out that what I’m using to position these companies are their traditional core values as I perceive them. I’m aware that some companies on the left have made strategic acquisitions or have divisions in the right of the picture, but fundamentally their core business is based on the sales of high margin products. This is how they have created shareholder value and it’s what shareholders expect to be reflected in the financial results.

When thinking about various companies strategic moves I am reminded of JP Rangaswami’s comments at this years Business Cloud Summit: We are seeing a radical changes in the IT industry. Are acquisitions at the edge, without radical changes at the core, enough to cope with this?

I have tried to reflect movement in the diagram. You will notice that I’ve shown Dell moving mostly to the right because of their historic focus on relentless commoditisation of hardware. Microsoft also seem to be trying quite hard to find a place in the new world order, but we shall see if they manage to break across.

Finally, right at the top of picture, you have the person who actually matters – the business user. This is the sharp end of the Consumerisation of IT or, as I think more aptly describes it, the Democratisation of IT.

In a future post I want to examine a specific topic that relates to these two value networks – the concept of Carrier Cloud – and how I see the conflict between the two networks shaping the developments that are coming from the likes of Cisco and Alcatel Lucent.

All technological change is generational change

May 19, 2011

In my last post I explained why arguments over private clouds are a by-product of our industrial era, top-down thinking and how this will change over time. A few days later I found myself reading the closing paragraph in Nick Carr’s The Big Switch:

All technological change is generational change. The full power and consequence of a new technology are unleashed only when those who have grown up with it become  adults and begin to push their  outdated parents to the margins. As the older generations die they take with them their knowledge of what was lost when the new technology arrived, and only the sense of what was gained remains. It’s in this way that progress covers its tracks, perpetually refreshing the illusion that where we are is where we were meant to be.

We should always keep this point in mind when arguing over the “validity” of different types of clouds.

Those of us in control of today’s enterprise IT are destined to spend our time puzzling and arguing our way through transition. We are not equipped with the mindset, the technical or institutional context necessary to imagine a world of ubiquitous public utility computing; our fears and expectations are shaped too heavily by our past and what we already know.

Only when today’s IT decision makers have been replaced by the next generation will the true significance of cloud computing become apparent. It will be this generational turnover, together with the much discussed effects of commoditisation, that will combine to create our cloudy future.