Most IT commentators agree that we will increasingly move to a computing model where IT resources become commoditized and are sourced in a similar manner to electricity, as a utility.
Today’s cloud computing discussions are typically focused on the speed at which this transformation will take place and on which IT resources will remain on-premise for the foreseeable future.
However, the elephant in the room is government interference. The impact of government interference in the provision of cloud computing services has been clearly demonstrated by the political reaction to Wikileaks.
Although WikiLeaks has done nothing that has been proved to be illegal, some politicians, in the US in particular, have taken it upon themselves to state that WikiLeaks is committing acts of terrorism and to apply pressure on its suppliers. This has caused many organizations to sever their relationships with WikiLeaks. Most notable, from a cloud computing perspective, is Amazon. This sets a disturbing precedent and raises numerous questions about cloud computing and political interference.
Will cloud computing providers also pull the plug on services provided to companies that publish content provided by WikiLeaks, such as The New York Times, The Guardian, Le Monde, El Pais and Der Spiegel?
Will cloud computing providers cease to service organizations that have chosen to fund WikiLeaks?
Given that some leading US politicians have branded WikiLeaks activities as terrorism, could its associates and sponsors be aiding and abetting terrorist activity? Will this impact the ability of these organizations to obtain cloud computing services?
Does this mean that if politicians ask cloud computing providers to sever commercial relationships with organizations which use their services, they will comply?
Will US politicians apply pressure to organizations that host data outside of its own territory?
The Chinese government must be flabbergasted by the apparent hypocrisy coming from some US politicians. It may even be grateful for the precedent that has been set. If the Chinese government does not like the activities of an organization whose data resides in a cloud within its territory, will the cloud provider comply with Chinese government requests including requests to sever commercial relationships?
If a cloud computing provider has responded to pressure from US politicians, will it do the same when under pressure from Chinese politicians? Hong Kong is host to several clouds that service customers outside of Chinese territory.
Singapore is another state that plays host to datacenters which offer cloud computing services. Will it also apply political pressure on organizations which host data that may challenge the legitimacy of its activities?
These are just a few of the questions that the WikiLeaks saga raises in the context of cloud computing.
In recent weeks, other interventions have occurred in markets where public cloud services are being adopted at rapid rates.
Both Australia and New Zealand are markets that have shown a very high propensity to adopt cloud services. In both countries, moves have been made that challenge this adoption. In New Zealand, it has recently been announced that tax records must be kept onshore in order to comply with Inland Revenue Department requirements.
Is it the mandate of governments to determine where corporations, many of which are multinationals, store their data? Why is the geographical location of corporate data of such interest to governments? This intervention stymies the transformation to cloud computing and may affect the competitiveness of those organizations that are impacted.
In Australia, APRA, the financial services regulator, has issued a warning about the use of cloud computing in the financial services sector. Although many of the major financial services companies in Australia already use public cloud services such as Salesforce.com, the warning is making these organizations very secretive about their use of cloud computing. Additionally, it will act as an inhibitor to the adoption of cloud computing as financial institutions will be ultra cautious about getting on the wrong side of the regulator.
So, although the benefits of cloud computing are indisputable and the rate of adoption of cloud services is accelerating, politicians and regulators are now interfering in ways that may inhibit the growth of this market. Indeed recent events raise many more questions about the future of cloud computing.
Tuesday, December 14, 2010
Saturday, November 27, 2010
Three Key Tech Trends in 2010 and 2011. Extract from Speech, November 30, 2010.
Good evening ladies and gentlemen. Before we start, I’d like to talk about, what are to us, the three major areas of focus in 2010. We expect these areas to continue their prominence in 2011.
The first area of focus has been cloud computing. Everybody seems to be talking about it. But, few people share the same definition. There is a huge amount of confusion in the market about how cloud computing can be deployed and how it can benefit customers. We believe that unstoppable momentum has now been built up around the adoption of IT as a service, sometimes known as the public cloud. The benefits in terms of eliminating capital expenditure, lowering overall costs, increasing business agility and creating a competitive advantage, to name a few, are now indisputable. Managers will soon find that the business case for on-premise investments will become very difficult to justify. For now, a lot of companies are deploying so called private clouds, which are a kind of half hearted attempt at reaping the true benefits of cloud computing. These pretend clouds only offer a few of the attributes of cloud computing and surely they are only a temporary solution for some current concerns around data sovereignty, privacy and security. Expect these concerns to be overcome and for IT to become a utility over the next few years.
The second area of focus has been around social media. Many people believe that social media is a fad that offers no business benefit and is used only by young people. Well, the average age of Twitter users is 37, the average age of LinkedIn users is over 40 and the average age of Facebook users is steadily increasing.
Already companies are using social media tools such as Facebook and Twitter to engage with customers. These tools are being used to support a range of business processes including, recruitment, customer service, marketing and sales. Companies are also seeking ways of analysing social media content and using the tools in ways that can increase competitiveness.
The third area of focus is tablet computing. Who would have thought, one year ago, that the iPad and similar devices would have had such a massive impact on our industry? It has been clear for some time that the PCs and laptops that we use are outdated. They are designed for client/server infrastructures of the 1980s and 1990s. We use only a tiny fraction of their functionality. Today, we can get many of the benefits associated with PCs on lighter, simpler and much easier to use tablets. Already, some organisations are replacing PCs with iPads for certain activities. The next generation of tablets will offer even more functionality and be able to displace a higher proportion of PCs. Tablets signal the end of PCs and are also a potent accelerator for the adoption of cloud computing. Less and less content will reside on local devices. Tablets will increasingly become gateways to content that is located elsewhere. In other words, computing resources will increasingly be located in the cloud and accessed by tablets.
The first area of focus has been cloud computing. Everybody seems to be talking about it. But, few people share the same definition. There is a huge amount of confusion in the market about how cloud computing can be deployed and how it can benefit customers. We believe that unstoppable momentum has now been built up around the adoption of IT as a service, sometimes known as the public cloud. The benefits in terms of eliminating capital expenditure, lowering overall costs, increasing business agility and creating a competitive advantage, to name a few, are now indisputable. Managers will soon find that the business case for on-premise investments will become very difficult to justify. For now, a lot of companies are deploying so called private clouds, which are a kind of half hearted attempt at reaping the true benefits of cloud computing. These pretend clouds only offer a few of the attributes of cloud computing and surely they are only a temporary solution for some current concerns around data sovereignty, privacy and security. Expect these concerns to be overcome and for IT to become a utility over the next few years.
The second area of focus has been around social media. Many people believe that social media is a fad that offers no business benefit and is used only by young people. Well, the average age of Twitter users is 37, the average age of LinkedIn users is over 40 and the average age of Facebook users is steadily increasing.
Already companies are using social media tools such as Facebook and Twitter to engage with customers. These tools are being used to support a range of business processes including, recruitment, customer service, marketing and sales. Companies are also seeking ways of analysing social media content and using the tools in ways that can increase competitiveness.
The third area of focus is tablet computing. Who would have thought, one year ago, that the iPad and similar devices would have had such a massive impact on our industry? It has been clear for some time that the PCs and laptops that we use are outdated. They are designed for client/server infrastructures of the 1980s and 1990s. We use only a tiny fraction of their functionality. Today, we can get many of the benefits associated with PCs on lighter, simpler and much easier to use tablets. Already, some organisations are replacing PCs with iPads for certain activities. The next generation of tablets will offer even more functionality and be able to displace a higher proportion of PCs. Tablets signal the end of PCs and are also a potent accelerator for the adoption of cloud computing. Less and less content will reside on local devices. Tablets will increasingly become gateways to content that is located elsewhere. In other words, computing resources will increasingly be located in the cloud and accessed by tablets.
Sunday, October 17, 2010
Lost in Translation - Outsourcing in China
The term outsourcing can have many different meanings to a native English speaker. Some people use the term to refer to the offshore delivery of services, others use it to mean the delivery of services by a third party and others use it to mean something as specific as the management of call centers by third parties, in offshore locations. To make matters, even more complex, the term business process outsourcing (BPO) is, by many, only associated with the outsourcing of contact centers.
So, for me, a recent trip to an outsourcing conference in China was a very valuable experience that forced me to seek clarity from my hosts when the term outsourcing was used. Needless, to say, it was very difficult to ascertain whether or not there was a common understanding of outsourcing among the hosts and the delegates. My experiences led me to believe that there was no common understanding. In fact, identifying the real outsourcing-related opportunities in China and cutting through myths are very difficult tasks. In China, one of the main issues that is discussed around outsourcing is what China can ‘learn’ from India. I assume that what is meant here is how China can replicate India’s success as an offshore destination for the delivery of services, in particular contact center services? This is definitely what people seem to mean. But, it doesn’t really make sense. China and India are so dramatically different. It is a bit like asking the question ‘How can China emulate Australia’s success in crocodile farming?. Surely, the Chinese authorities should focus on developing greater capabilities in the areas where China has some clear differentiation. Creating English-language contact centers in China that are designed to service the US and UK markets seems pointless. Wouldn’t it make more sense for the Chinese authorities to focus on industries in which China excels such as the development of infrastructure, in particular urban transport systems, engineering skills and software development?
Indeed, offering English language contact center services also faces a major cultural challenge. The concept of customer services is not mature in China. There remains a strong belief that the government knows best and that customer s (or individuals) should take what they are given and make the most. The notion of contacting the government, or any other organisation, to complain about a product or service is not one with which most Chinese citizens are familiar.
But the Chinese authorities are investing mind bogglingly large amounts of capital in 21 ‘service outsourcing model cities’. It is not totally clear what kind of outsourcing services are intended to be delivered from these cities but there are strong signals that they seek to emulate India’s success in contact center related offshore outsourcing. My experience and understanding of China suggests that attempting to replicate India’s areas of success would be a complete waste of resources. Instead, Chinese authorities and multinationals that want Chinese business, must focus on the following:
• The potentially enormous domestic market. As the Chinese economy matures, there will be increased demand for specialised services from third party suppliers. Additionally, the cost of local skills will increase and outsourcing will make clear business sense. Today, the Chinese domestic outsourcing market is very small, but will be one of the world’s largest outsourcing markets within the next 10 years. There will be very sizeable opportunities for overseas outsourcing firms such as IBM, HP and Accenture to offer services to Chinese clients. Already, these multinationals are working closely with the Chinese authorities to provide systems integration services locally. It is clear that today, the majority of the IT services opportunity is centered around project skills. China has its own ERP vendors such as Kingdee and Ufida, around which there is a sizeable services (including outsourcing) opportunity. Overseas services vendors will increasingly find it necessary to develop skills in Chinese software products such as these.
• Areas of expertise in which China has a competitive advantage and which also offer long term opportunties. China now leads the world in many types of infrastructure projects. The country has succeeded in creating a sophisticated infrastructure for its population in a remarkably short period of time. In the process of doing this, it has developed world beating skills in areas such as urban rail systems. Companies that wish to outsource engineering processes or other types of knowledge processes will increasingly find that many ‘best of breed’ services can be found in China. In my view, this is one key area where the Chinese authorities should be focusing to a greater extent.
• Software development. China has vast, low cost resources that can be deployed on software development. Many of these projects are comparatively short term so may not fall under typical outsourcing definitions. Nevertheless, there is a huge opportunity in this area. The majority of Chinese outsourcing activity is currently in software development.
• Offering services to Asian economies. China is in a comparatively strong position to focus on offering services to Asian economies. Already, most of its offshore contact center activity is for Japanese and Korean customers. There are strong Japanese and Korean language skills in parts of China. Many in China’s enormous population also have a very strong cultural understanding of other Asian countries. In other words, China may be better placed to offer many types of BPO, in particular contact center services, to other Asian countries rather than to English speaking countries. It has a competitive advantage over both India and the Philippines here and is likely to benefit from better long term growth opportunities.
In summary, if your definition of BPO or outsourcing, is the offshore delivery of English language contact center services, then the opportunities in China are likely to be limited for the forseeable future. Surely, companies operating within China and the Chinese government must focus on areas where China has a competitive advantage and where the future opportunities are greatest rather than developing infrastructure to offer commoditised English language voice services in what is already a crowded and competitive market.
So, for me, a recent trip to an outsourcing conference in China was a very valuable experience that forced me to seek clarity from my hosts when the term outsourcing was used. Needless, to say, it was very difficult to ascertain whether or not there was a common understanding of outsourcing among the hosts and the delegates. My experiences led me to believe that there was no common understanding. In fact, identifying the real outsourcing-related opportunities in China and cutting through myths are very difficult tasks. In China, one of the main issues that is discussed around outsourcing is what China can ‘learn’ from India. I assume that what is meant here is how China can replicate India’s success as an offshore destination for the delivery of services, in particular contact center services? This is definitely what people seem to mean. But, it doesn’t really make sense. China and India are so dramatically different. It is a bit like asking the question ‘How can China emulate Australia’s success in crocodile farming?. Surely, the Chinese authorities should focus on developing greater capabilities in the areas where China has some clear differentiation. Creating English-language contact centers in China that are designed to service the US and UK markets seems pointless. Wouldn’t it make more sense for the Chinese authorities to focus on industries in which China excels such as the development of infrastructure, in particular urban transport systems, engineering skills and software development?
Indeed, offering English language contact center services also faces a major cultural challenge. The concept of customer services is not mature in China. There remains a strong belief that the government knows best and that customer s (or individuals) should take what they are given and make the most. The notion of contacting the government, or any other organisation, to complain about a product or service is not one with which most Chinese citizens are familiar.
But the Chinese authorities are investing mind bogglingly large amounts of capital in 21 ‘service outsourcing model cities’. It is not totally clear what kind of outsourcing services are intended to be delivered from these cities but there are strong signals that they seek to emulate India’s success in contact center related offshore outsourcing. My experience and understanding of China suggests that attempting to replicate India’s areas of success would be a complete waste of resources. Instead, Chinese authorities and multinationals that want Chinese business, must focus on the following:
• The potentially enormous domestic market. As the Chinese economy matures, there will be increased demand for specialised services from third party suppliers. Additionally, the cost of local skills will increase and outsourcing will make clear business sense. Today, the Chinese domestic outsourcing market is very small, but will be one of the world’s largest outsourcing markets within the next 10 years. There will be very sizeable opportunities for overseas outsourcing firms such as IBM, HP and Accenture to offer services to Chinese clients. Already, these multinationals are working closely with the Chinese authorities to provide systems integration services locally. It is clear that today, the majority of the IT services opportunity is centered around project skills. China has its own ERP vendors such as Kingdee and Ufida, around which there is a sizeable services (including outsourcing) opportunity. Overseas services vendors will increasingly find it necessary to develop skills in Chinese software products such as these.
• Areas of expertise in which China has a competitive advantage and which also offer long term opportunties. China now leads the world in many types of infrastructure projects. The country has succeeded in creating a sophisticated infrastructure for its population in a remarkably short period of time. In the process of doing this, it has developed world beating skills in areas such as urban rail systems. Companies that wish to outsource engineering processes or other types of knowledge processes will increasingly find that many ‘best of breed’ services can be found in China. In my view, this is one key area where the Chinese authorities should be focusing to a greater extent.
• Software development. China has vast, low cost resources that can be deployed on software development. Many of these projects are comparatively short term so may not fall under typical outsourcing definitions. Nevertheless, there is a huge opportunity in this area. The majority of Chinese outsourcing activity is currently in software development.
• Offering services to Asian economies. China is in a comparatively strong position to focus on offering services to Asian economies. Already, most of its offshore contact center activity is for Japanese and Korean customers. There are strong Japanese and Korean language skills in parts of China. Many in China’s enormous population also have a very strong cultural understanding of other Asian countries. In other words, China may be better placed to offer many types of BPO, in particular contact center services, to other Asian countries rather than to English speaking countries. It has a competitive advantage over both India and the Philippines here and is likely to benefit from better long term growth opportunities.
In summary, if your definition of BPO or outsourcing, is the offshore delivery of English language contact center services, then the opportunities in China are likely to be limited for the forseeable future. Surely, companies operating within China and the Chinese government must focus on areas where China has a competitive advantage and where the future opportunities are greatest rather than developing infrastructure to offer commoditised English language voice services in what is already a crowded and competitive market.
Thursday, September 2, 2010
Private and Public Clouds - Why Semantics Matter
In an earlier post entitled ‘Private Cloud – An Oxymoron’, I wrote about how the term, private cloud offers little value and is arguably a term that is used by legacy IT suppliers to exploit concerns about their customers migrating computing resources to the (public) cloud. Is the private cloud simply a datacenter with lipstick? In other words, is it a virtualized datacenter that has many of the characteristics of a (public) cloud?
Many people in the industry believe that arguing about public and private cloud definitions offers little value and fails to focus on the huge changes that are taking place in the way people implement, operate and use technology.
I disagree. If people are expected to invest millions of dollars in new products and services, it is important that we, in the industry, share common definitions. How can businesses plan when there is no clear understanding of the ways in which they are using technology? As an analyst, it is impossible to size a market if the definition of that market is not clear. So, to all those that say, stop arguing about semantics, I say, rubbish. We need to constantly challenge the marketing spin that comes out of our industry if we are to make sense of it. And step one requires clear definitions. I talked about definitions in previous posts and I made it clear that, in my view, there is only one type of cloud and that is what is commonly known as the public cloud.
Most people in the IT industry understand what is meant by the public cloud and could instantly give you examples of suppliers of public cloud services. Few share a common understanding of the so called private cloud.
This confusion inhibits our ability to focus on the real issues that organisations face today and how they can best ensure that on-premise technology meets their current and future needs, while increasingly using (public) cloud computing services.
Large companies typically have huge amounts of on-premise technologies in which they have invested large amounts over the years. It often doesn’t make sense to throw all of this technology out. Indeed, there are activities that are not suited to the (public) cloud. The reality is that many organisations wish to keep significant chunks of their technology on-premise for a whole host of reasons, some real and some imaginary. For those IT resources that remain on-site, it makes perfect sense to invest in making that technology more efficient and effective. This may involve investing in fabric computing, some new development platforms such as Microsoft’s Azure, virtualization, and datacenter optimization. Rather than describing these investments as private clouds, why not just describe them as they are? There is a huge opportunity here for the large systems integrators and hardware suppliers as well as leading suppliers of infrastructure software.
Inevitably, these same companies will purchase (public) cloud services at an increasing rate over the next decade and can be expected to use these services where it is at all possible, given the huge benefits offered. These companies will be looking to partner with technology companies that can optimize their internal IT architectures and integrate these technologies with the (public) cloud services that are being used. I’ve heard people use the term hybrid cloud to describe these environments. This creates even more confusion. As far as I can gather, a hybrid cloud means everything. It means all of your on-site technology plus all of the resources that you source from (public) cloud providers. It is a term that offers little value. In fact, just about all IT infrastructures could be called hybrid.
So, companies are seeking ways in which their internal IT resources can share some of the characteristics of (public) clouds, given that this is becoming increasingly feasible and cost effective.
Organizations are also looking at migrating an increasing proportion of their resources into the (public) cloud. The integration of (public) cloud resources with internal resources is a key challenge and opportunity for organizations. Cloud-related discussions should indeed focus on these issues.
But, in order to do this, it helps us enormously if we communicate more clearly and call a cloud, a cloud and we call internal resources what they are. There is plenty of terminology that can help us to do this. The term private cloud continues to create a lot of confusion and a lot of debate. I am sure that this nonsensical term will eventually be dumped. I hope that this happens soon.
Many people in the industry believe that arguing about public and private cloud definitions offers little value and fails to focus on the huge changes that are taking place in the way people implement, operate and use technology.
I disagree. If people are expected to invest millions of dollars in new products and services, it is important that we, in the industry, share common definitions. How can businesses plan when there is no clear understanding of the ways in which they are using technology? As an analyst, it is impossible to size a market if the definition of that market is not clear. So, to all those that say, stop arguing about semantics, I say, rubbish. We need to constantly challenge the marketing spin that comes out of our industry if we are to make sense of it. And step one requires clear definitions. I talked about definitions in previous posts and I made it clear that, in my view, there is only one type of cloud and that is what is commonly known as the public cloud.
Most people in the IT industry understand what is meant by the public cloud and could instantly give you examples of suppliers of public cloud services. Few share a common understanding of the so called private cloud.
This confusion inhibits our ability to focus on the real issues that organisations face today and how they can best ensure that on-premise technology meets their current and future needs, while increasingly using (public) cloud computing services.
Large companies typically have huge amounts of on-premise technologies in which they have invested large amounts over the years. It often doesn’t make sense to throw all of this technology out. Indeed, there are activities that are not suited to the (public) cloud. The reality is that many organisations wish to keep significant chunks of their technology on-premise for a whole host of reasons, some real and some imaginary. For those IT resources that remain on-site, it makes perfect sense to invest in making that technology more efficient and effective. This may involve investing in fabric computing, some new development platforms such as Microsoft’s Azure, virtualization, and datacenter optimization. Rather than describing these investments as private clouds, why not just describe them as they are? There is a huge opportunity here for the large systems integrators and hardware suppliers as well as leading suppliers of infrastructure software.
Inevitably, these same companies will purchase (public) cloud services at an increasing rate over the next decade and can be expected to use these services where it is at all possible, given the huge benefits offered. These companies will be looking to partner with technology companies that can optimize their internal IT architectures and integrate these technologies with the (public) cloud services that are being used. I’ve heard people use the term hybrid cloud to describe these environments. This creates even more confusion. As far as I can gather, a hybrid cloud means everything. It means all of your on-site technology plus all of the resources that you source from (public) cloud providers. It is a term that offers little value. In fact, just about all IT infrastructures could be called hybrid.
So, companies are seeking ways in which their internal IT resources can share some of the characteristics of (public) clouds, given that this is becoming increasingly feasible and cost effective.
Organizations are also looking at migrating an increasing proportion of their resources into the (public) cloud. The integration of (public) cloud resources with internal resources is a key challenge and opportunity for organizations. Cloud-related discussions should indeed focus on these issues.
But, in order to do this, it helps us enormously if we communicate more clearly and call a cloud, a cloud and we call internal resources what they are. There is plenty of terminology that can help us to do this. The term private cloud continues to create a lot of confusion and a lot of debate. I am sure that this nonsensical term will eventually be dumped. I hope that this happens soon.
Sunday, July 25, 2010
Restricting Access to Social Media can Seriously Damage your Business
In the past year or so, it has been amazing to witness organisations finding ways of using social media to engender innovation and creativity. By offering employees full access to these tools, innovative use of applications like Twitter and Facebook can come from all parts of the organisation. Restricting access to social media risks placing an organisation at a competitive disadvantage.
These tools can be used in an enormous variety of ways. They can support and enable common business processes such as sales, marketing, customer services and recruitment. In addition, they can even support industry specialists that seek to improve the ways in which they do things. Specialists in industries from aeronautical engineering to zoology are finding ways of using social media to support, enhance and transform their business activities.
I recently met up with an ex colleague who now works for Carnival Australia
Given that there is clear evidence of social media tools, including Facebook, being used for innovation and to increase productivity, why do some companies continue to use web filtering tools to restrict employee access to social media? The short and polite answer is that the people who make these decisions often have very little understanding of the relationship between business and technology. In the 1980s, when spreadsheets were first widely used, some myopic employers were concerned that their employees would spend too much time using spreadsheets for personal use such as creating shopping lists. A similar argument was used if we go further back to the widespread introduction of the telephone in the work place.
Today’s managers should not spend time worrying about employee use of social media. Instead, they should view these new tools as opportunities to gain a competitive advantage. They should be encouraging employees to find ways of using social media to improve their performance as well as the performance of their organisations.
Rather than using cumbersome software to restrict Web access and introducing new management processes to determine which sites can be accessed and which sites cannot, organizations need simply introduce policies and guidelines that require employees to use social media in a responsible manner and to use their tools primarily for business purposes when using business assets and business time. Sure, they will sometimes use these tools for personal use. But this is no big deal considering that most employers are happy to allow employees to use business telephones for personal use, within reason. Besides, if an employee is performing, the time that they spend using social media should not be a cause for concern.
A much greater concern should be the extent to which the organisation is leveraging social media. Failure to offer employees full access to social media seriously threatens an organisation’s competitiveness.
Wednesday, July 21, 2010
The Role of the CxO in Cloud Computing
Choosing cloud computing solutions and deciding how these solutions might be used, are now key strategic issues for organisations. The benefits offered by cloud computing can lead to competitive advantages. For this reason, cloud computing is not only on the agenda of CIOs but also other executives within organisations (or CxOs).
The major benefit that is typically associated with cloud computing is cost. Studies show that cloud computing can offer massive cost benefits when compared to on-premise alternatives. A Frost & Sullivan study shows that for many organisations, IT costs can be halved when cloud computing alternatives are selected.
But cloud computing offers very significant additional benefits, not least in terms of its ability to make business more agile. In a cloud computing environment, organisations can increase and decrease the number of users of computing resources instantly. They can provision new resources instantly and stop using them instantly. This provisioning is typically automated, further increasing business agility.
In this type of environment, focus is shifted away from IT and towards business services. IT becomes less of a cumbersome weight around the neck of parts of the business and more of a business enabler. Organisations can, for example, decide that they want a service for leave management or sales management and simply provision it instantly rather than having to deal with implementation and the complexities around it.
So why haven’t more organisations chosen to adopt cloud computing alternatives? Well, the first concern expressed by CxOs typically relates to security and privacy. This should not be their major concern. Cloud computing is, in many ways, a much more secure environment than on-premise alternatives. In cloud environments, computing resources reside in datacenters that typically adopt security best practices. In on-premise environments, data is distributed across heterogeneous environments exposing the organisation to many more security risks. Indeed, employees often travel to work and to meetings with laptops. These laptops usually contain valuable data. They can easily be lost, stolen or compromised when not under corporate control. In a cloud environment, much less data is exposed to this risk.
The real issues around which CxOs should focus relate more to performance. For example, if data resides on a different continent, CxOs must consider issues like latency and asymmetry in upload and download speeds. Cloud options need to be evaluated and CxOs need to ensure that they meet performance requirements for specific business processes. If the data is hosted nearby, then, many of these challenges can be addressed.
So, in summary, cloud computing can enable CxOs to arm their employees with tools to undertake their jobs in a much more straightforward manner than before. The resources used can be increased and decreased instantly in line with business requirements. In a cloud centered environment, IT will become commoditised and the role of the CIO with diminish.
In theory, cloud computing is expected to deliver us computing resources in the same way as today’s utilities deliver us power and water. For this reason, organisations will not need to employ the same number of IT professionals. Instead, most IT professionals will work for organisations that deliver computing resources from the cloud.
The major benefit that is typically associated with cloud computing is cost. Studies show that cloud computing can offer massive cost benefits when compared to on-premise alternatives. A Frost & Sullivan study shows that for many organisations, IT costs can be halved when cloud computing alternatives are selected.
But cloud computing offers very significant additional benefits, not least in terms of its ability to make business more agile. In a cloud computing environment, organisations can increase and decrease the number of users of computing resources instantly. They can provision new resources instantly and stop using them instantly. This provisioning is typically automated, further increasing business agility.
In this type of environment, focus is shifted away from IT and towards business services. IT becomes less of a cumbersome weight around the neck of parts of the business and more of a business enabler. Organisations can, for example, decide that they want a service for leave management or sales management and simply provision it instantly rather than having to deal with implementation and the complexities around it.
So why haven’t more organisations chosen to adopt cloud computing alternatives? Well, the first concern expressed by CxOs typically relates to security and privacy. This should not be their major concern. Cloud computing is, in many ways, a much more secure environment than on-premise alternatives. In cloud environments, computing resources reside in datacenters that typically adopt security best practices. In on-premise environments, data is distributed across heterogeneous environments exposing the organisation to many more security risks. Indeed, employees often travel to work and to meetings with laptops. These laptops usually contain valuable data. They can easily be lost, stolen or compromised when not under corporate control. In a cloud environment, much less data is exposed to this risk.
The real issues around which CxOs should focus relate more to performance. For example, if data resides on a different continent, CxOs must consider issues like latency and asymmetry in upload and download speeds. Cloud options need to be evaluated and CxOs need to ensure that they meet performance requirements for specific business processes. If the data is hosted nearby, then, many of these challenges can be addressed.
So, in summary, cloud computing can enable CxOs to arm their employees with tools to undertake their jobs in a much more straightforward manner than before. The resources used can be increased and decreased instantly in line with business requirements. In a cloud centered environment, IT will become commoditised and the role of the CIO with diminish.
In theory, cloud computing is expected to deliver us computing resources in the same way as today’s utilities deliver us power and water. For this reason, organisations will not need to employ the same number of IT professionals. Instead, most IT professionals will work for organisations that deliver computing resources from the cloud.
Sunday, July 18, 2010
A Cloudy Future for Microsoft
At the turn of the 21st century, Microsoft’s position as the world’s largest, most dominant, and most influential IT vendor seemed unassailable. Today, the firm’s position is not so strong and its positioning in the cloud computing, tablet and smart phone markets is not yet clear.
In recent years, there have been seismic shifts in the IT industry, much of which has been driven by two companies, Google and Apple. Both are massively disrupting Microsoft’s traditional business model.
Google generates revenues from advertising so has been in a position to offer software that competes directly with Microsoft products, free of charge, while driving the cloud computing model.
Apple has been leading the development of smart phones and tablet computers which are undermining the dominance of PCs and further driving the cloud computing model.
These developments are being compounded by a shift away from Microsoft’s operating systems towards Open Source alternatives.
The shift towards the cloud model is now taking place at breakneck speed, and is threatening to choke revenue streams that are dependent on selling software licenses.
In the short term, we will be working within hybrid computing environments, consisting of both cloud computing and traditional models of computing, but the cloud model will dominate in the next few years. Soon, managers will need to present very strong business cases to justify the expense of keeping computing resources on-premise.
Microsoft’s two key competitors have cloud-based business models and lots of cash.
Google has only ever had a cloud-based business model. Apple, on the other hand, has brilliantly made the transition from an ailing desktop-oriented IT supplier to a cash generating machine, by fully capitalizing on technology shifts. Its iTunes business is a cloud business and its iPhones and iPads have driven the development of a huge number of cloud-based applications. The tablet computing market that Apple has pioneered, will speed up the demise of PCs. Where is Microsoft in this market?
Right now, the market is dominated by Apple and Google. A rapidly growing number of Android devices are appearing on the market and taking on Apple’s iPhone and iPad products. It is reminiscent of the battle between Apple and Microsoft in the early days of the PC. Apple had a ‘walled garden’ strategy. Its software ran only on its hardware. Microsoft, on the other hand, licensed its software to run on PCs produced by anyone. Microsoft’s Windows Phone 7 is expected to provide competition but, the market is growing very fast without Microsoft’s product having been released. Has Microsoft been too slow this time? Will Windows Phone 7 be well received or will it be considered to be a sluggish and unreliable product? Does the product name suggest that Microsoft has not recognised or anticipated the growth in tablet computing? Is Microsoft designing its mobile/tablet products specifically for these new environments or is it merely re-coding its existing PC oriented products?
To be fair, Microsoft now offers cloud products. Its applications can now be offered over the cloud and its price competitive, platform as a service (PaaS) product, Azure, creates a development environment that is simple to get to grips with for those that are used to working with Microsoft products. This, of course, represents most developers. Microsoft seems to be banking on developers believing that it is simpler to stick with Microsoft, with whom they are familiar, as they move into the cloud, rather than using products from cloud, pure play, suppliers of PaaS products like Amazon, Google and Salesforce.com.
Microsoft’s current approach is to ensure that it can offer cloud services to its customers if customers seek these solutions. In doing so, it is shifting substantial numbers of its customers into the cloud and it has been working closely with its partners to support these efforts. But, is it working hard enough to move its customers into the cloud? Has it anticipated the huge growth of cloud computing? Has it created sufficiently attractive sales incentives to encourage sales teams and partners to sell cloud services instead of on-premise alternatives? In order to enjoy success, Microsoft must proactively ensure that its cloud offerings become embedded within the world’s leading corporations before its competitors, as it did in the PC-oriented world. If it does not do this, it risks losing its very strong, but no longer dominant position in the IT industry.
Microsoft needs to improve its speed to market with new products. It needs to act faster than it has ever acted before and it needs to do this now.
In recent years, there have been seismic shifts in the IT industry, much of which has been driven by two companies, Google and Apple. Both are massively disrupting Microsoft’s traditional business model.
Google generates revenues from advertising so has been in a position to offer software that competes directly with Microsoft products, free of charge, while driving the cloud computing model.
Apple has been leading the development of smart phones and tablet computers which are undermining the dominance of PCs and further driving the cloud computing model.
These developments are being compounded by a shift away from Microsoft’s operating systems towards Open Source alternatives.
The shift towards the cloud model is now taking place at breakneck speed, and is threatening to choke revenue streams that are dependent on selling software licenses.
In the short term, we will be working within hybrid computing environments, consisting of both cloud computing and traditional models of computing, but the cloud model will dominate in the next few years. Soon, managers will need to present very strong business cases to justify the expense of keeping computing resources on-premise.
Microsoft’s two key competitors have cloud-based business models and lots of cash.
Google has only ever had a cloud-based business model. Apple, on the other hand, has brilliantly made the transition from an ailing desktop-oriented IT supplier to a cash generating machine, by fully capitalizing on technology shifts. Its iTunes business is a cloud business and its iPhones and iPads have driven the development of a huge number of cloud-based applications. The tablet computing market that Apple has pioneered, will speed up the demise of PCs. Where is Microsoft in this market?
Right now, the market is dominated by Apple and Google. A rapidly growing number of Android devices are appearing on the market and taking on Apple’s iPhone and iPad products. It is reminiscent of the battle between Apple and Microsoft in the early days of the PC. Apple had a ‘walled garden’ strategy. Its software ran only on its hardware. Microsoft, on the other hand, licensed its software to run on PCs produced by anyone. Microsoft’s Windows Phone 7 is expected to provide competition but, the market is growing very fast without Microsoft’s product having been released. Has Microsoft been too slow this time? Will Windows Phone 7 be well received or will it be considered to be a sluggish and unreliable product? Does the product name suggest that Microsoft has not recognised or anticipated the growth in tablet computing? Is Microsoft designing its mobile/tablet products specifically for these new environments or is it merely re-coding its existing PC oriented products?
To be fair, Microsoft now offers cloud products. Its applications can now be offered over the cloud and its price competitive, platform as a service (PaaS) product, Azure, creates a development environment that is simple to get to grips with for those that are used to working with Microsoft products. This, of course, represents most developers. Microsoft seems to be banking on developers believing that it is simpler to stick with Microsoft, with whom they are familiar, as they move into the cloud, rather than using products from cloud, pure play, suppliers of PaaS products like Amazon, Google and Salesforce.com.
Microsoft’s current approach is to ensure that it can offer cloud services to its customers if customers seek these solutions. In doing so, it is shifting substantial numbers of its customers into the cloud and it has been working closely with its partners to support these efforts. But, is it working hard enough to move its customers into the cloud? Has it anticipated the huge growth of cloud computing? Has it created sufficiently attractive sales incentives to encourage sales teams and partners to sell cloud services instead of on-premise alternatives? In order to enjoy success, Microsoft must proactively ensure that its cloud offerings become embedded within the world’s leading corporations before its competitors, as it did in the PC-oriented world. If it does not do this, it risks losing its very strong, but no longer dominant position in the IT industry.
Microsoft needs to improve its speed to market with new products. It needs to act faster than it has ever acted before and it needs to do this now.
Wednesday, July 7, 2010
Notes from a Large Region
I recently attended a briefing detailing APJ results for a major US-based cloud services provider. By the way, APJ is an abbreviation for Asia Pacific, Japan which means Asia Pacific plus Japan. To many, Asia Pacific includes Japan anyway and the letter J does not need to be specified. But sometimes, the letter J is used to signify the importance of Japan which until recently accounted for more than half of the aggregate GDP of Asia.
I was presented with APJ revenue numbers and revenue growth numbers, and was informed that these growth figures are higher than for anywhere else in the world. I then attempted to interpret this information and came to the conclusion that it was meaningless. Telling me that APJ growth is x%, and that this is the highest in the world, is like telling me that there is a storm in the Pacific Ocean. I want to know about specific parts of the APJ region. In fact, like many, I am particularly interested in what is going on in China. I believe that the vendor in question, like many US services companies, does very little business in China and will struggle to penetrate the Chinese market. Talking about APJ disguises this fact and may lead some to assume that business is strong in China. Right now, the Chinese government is probably creating several Chinese versions of this company. Of course, when I asked if the vendor in question could share its revenue numbers for specific parts of APJ, I was told that this was not possible.
The notion of placing many, very diverse countries into one region has always seemed very strange to me and not very rational. It seems as though large corporations split the world up in a way that satisfies their own, internal and often myopic view of the world.
Asia Pacific is a huge area and is made up of an incredibly diverse set of countries.
From an outsourcing/IT services perspective, it is important to understand the diversity of the region.
Australia and New Zealand are mature IT markets and the propensity to outsource is high. From an outsourcing perspective, these countries share more characteristics with the UK than with any country in the Asia Pacific region. The combined ANZ economy is becoming smaller relative to other Asia Pacific economies and hence is receiving less focus. Nevertheless, many US-based services companies continue to generate the bulk of their Asia Pacific revenues from ANZ.
Japan and Korea are also mature IT markets but the propensity to outsource to third parties is relatively low. Japanese and Korean organizations are much more likely to operate captive facilities than to engage a third party to manage business or IT processes.
India is an enormous offshore destination with a rapidly emerging domestic outsourcing market. Economically and politically, India behaves more like a Western economy than other large economies in Asia Pacific, like China and Japan. Large Indian companies and government organizations have a comparatively high propensity to purchase outsourcing services from third parties.
The Philippines is the second largest offshore destination in the region but has a disproportionately small domestic market. Most ASEAN countries, including The Philippines, face challenges in maintaining economic and political stability. Furthermore, some ASEAN countries such as Cambodia are among the poorest nations on earth while Singapore is one of the richest on a GDP per capita basis.
Of course, China is the market that attracts the most interest given its phenomenal economic growth and the size of the economy. In recent years, China has emerged as a nearshore destination for Japanese and Korean captives. However, the government is investing heavily in encouraging foreign and Chinese companies to establish themselves as providers of offshore outsourcing services within China aimed at US and European companies. The establishment of this infrastructure is not driven by current demand but instead by anticipated future demand for services delivered from China. Perhaps of more interest is the domestic market in China. This could potentially be huge. But, it will take time for a sizeable domestic market to emerge for many reasons. One of the main reasons for this is cultural. China is not yet a services-oriented economy and by and large, China simply does not do services well today. There is a sense that you buy products that should work and if they don’t, then you should be able to fix them using your own resources. It is hard to find high quality services in China should you be unable to address a problem with products using your own resources. The other issue that holds back domestic outsourcing is the same as in many other parts of Asia Pacific and that is the relatively low cost of labour.
So, Asia Pacific has massive variety. It houses two of the world’s three largest economies as well as some of the world’s poorest. It has countries where the propensity to outsource is among the highest in the world and where it is among the lowest. It has the most centrally planned economies in the world as well as some of the most market-oriented economies. In other words, it doesn’t make much sense for these economies to be included in the same category.
As parts of the region become more influential globally, managers within the region are changing the geographic categories that these use. Powerful country offices within the region are beginning to refuse to report into regional headquarters and insisting that they should report into global headquarters. If you are running the Chinese operation for a large US-based corporation, you are probably operating a critical part of the business for future growth. So, you will most likely want to report directly into global headquarters rather than regional headquarters in Singapore.
In a few years time, the way some large corporations segment the globe will change, Asia Pacific will no longer be a useful geographic category. It is likely to break up into several areas. India and its neighbours will make up one area, South Asia, Greater China another, ASEAN another and Japan and Korea will be the other. As mentioned earlier, ANZ will continue to become proportionately a smaller part of Asia Pacific so will probably be thrown in uncomfortably with ASEAN.
I was presented with APJ revenue numbers and revenue growth numbers, and was informed that these growth figures are higher than for anywhere else in the world. I then attempted to interpret this information and came to the conclusion that it was meaningless. Telling me that APJ growth is x%, and that this is the highest in the world, is like telling me that there is a storm in the Pacific Ocean. I want to know about specific parts of the APJ region. In fact, like many, I am particularly interested in what is going on in China. I believe that the vendor in question, like many US services companies, does very little business in China and will struggle to penetrate the Chinese market. Talking about APJ disguises this fact and may lead some to assume that business is strong in China. Right now, the Chinese government is probably creating several Chinese versions of this company. Of course, when I asked if the vendor in question could share its revenue numbers for specific parts of APJ, I was told that this was not possible.
The notion of placing many, very diverse countries into one region has always seemed very strange to me and not very rational. It seems as though large corporations split the world up in a way that satisfies their own, internal and often myopic view of the world.
Asia Pacific is a huge area and is made up of an incredibly diverse set of countries.
From an outsourcing/IT services perspective, it is important to understand the diversity of the region.
Australia and New Zealand are mature IT markets and the propensity to outsource is high. From an outsourcing perspective, these countries share more characteristics with the UK than with any country in the Asia Pacific region. The combined ANZ economy is becoming smaller relative to other Asia Pacific economies and hence is receiving less focus. Nevertheless, many US-based services companies continue to generate the bulk of their Asia Pacific revenues from ANZ.
Japan and Korea are also mature IT markets but the propensity to outsource to third parties is relatively low. Japanese and Korean organizations are much more likely to operate captive facilities than to engage a third party to manage business or IT processes.
India is an enormous offshore destination with a rapidly emerging domestic outsourcing market. Economically and politically, India behaves more like a Western economy than other large economies in Asia Pacific, like China and Japan. Large Indian companies and government organizations have a comparatively high propensity to purchase outsourcing services from third parties.
The Philippines is the second largest offshore destination in the region but has a disproportionately small domestic market. Most ASEAN countries, including The Philippines, face challenges in maintaining economic and political stability. Furthermore, some ASEAN countries such as Cambodia are among the poorest nations on earth while Singapore is one of the richest on a GDP per capita basis.
Of course, China is the market that attracts the most interest given its phenomenal economic growth and the size of the economy. In recent years, China has emerged as a nearshore destination for Japanese and Korean captives. However, the government is investing heavily in encouraging foreign and Chinese companies to establish themselves as providers of offshore outsourcing services within China aimed at US and European companies. The establishment of this infrastructure is not driven by current demand but instead by anticipated future demand for services delivered from China. Perhaps of more interest is the domestic market in China. This could potentially be huge. But, it will take time for a sizeable domestic market to emerge for many reasons. One of the main reasons for this is cultural. China is not yet a services-oriented economy and by and large, China simply does not do services well today. There is a sense that you buy products that should work and if they don’t, then you should be able to fix them using your own resources. It is hard to find high quality services in China should you be unable to address a problem with products using your own resources. The other issue that holds back domestic outsourcing is the same as in many other parts of Asia Pacific and that is the relatively low cost of labour.
So, Asia Pacific has massive variety. It houses two of the world’s three largest economies as well as some of the world’s poorest. It has countries where the propensity to outsource is among the highest in the world and where it is among the lowest. It has the most centrally planned economies in the world as well as some of the most market-oriented economies. In other words, it doesn’t make much sense for these economies to be included in the same category.
As parts of the region become more influential globally, managers within the region are changing the geographic categories that these use. Powerful country offices within the region are beginning to refuse to report into regional headquarters and insisting that they should report into global headquarters. If you are running the Chinese operation for a large US-based corporation, you are probably operating a critical part of the business for future growth. So, you will most likely want to report directly into global headquarters rather than regional headquarters in Singapore.
In a few years time, the way some large corporations segment the globe will change, Asia Pacific will no longer be a useful geographic category. It is likely to break up into several areas. India and its neighbours will make up one area, South Asia, Greater China another, ASEAN another and Japan and Korea will be the other. As mentioned earlier, ANZ will continue to become proportionately a smaller part of Asia Pacific so will probably be thrown in uncomfortably with ASEAN.
Sunday, May 30, 2010
Cloud Security - A Pleonasm?
The IT industry successfully generates billions of dollars each year by selling us security products and services. Security always plays a major role in any corporate IT purchasing decision. But, we are still a very long way from securing our IT environments.
Most security breaches are caused internally by employees or other authorized users of corporate systems such as contractors. It is these groups that are most likely to compromise the integrity of our systems, not external hackers. In spite of this, much more focus tends to be placed on external threats. Each time I work on a client’s site, I am struck by how easy it would be for me to compromise their systems. All I would need to do is insert a thumb drive with malicious code into a USB port and, hey presto, I’ve undermined hugely expensive security investments.
It is reckless to allow employees and contractors to carry highly sensitive data around with little consideration of the consequences of losing the laptops and smart phones that house the data. Amazingly little focus is placed on addressing this particular security threat.
Indeed, enterprises do not sufficiently focus on changing the behavior of their users by making them aware of security policies and the reasons for those policies. Few ensure adequate control of basic access to their physical premises and to end points that form part of their network. As mentioned earlier, it also seems as though few enterprises track the location of sensitive data that physically moves around with employees and contractors.
Ensuring that everybody who accesses enterprise networks is trained to follow appropriate security policies is an extremely challenging task. For this reason, it is necessary to consider other ways of mitigating the risk of an employee or contractor from compromising security.
One way of doing this is to source as much of the enterprise’s computing resources from the cloud as possible. Managing the security of heterogeneous on-premise IT environments is a highly complex and almost impossible task. Minimising the amount of on-premise resources that a corporation manages mitigates risk associated with security breaches enormously. Ensuring that data is stored in a secure environment (in the cloud) rather than on portable devices such as laptops and smart phones also enables corporations to reduce risk.
Cloud computing, and I mean public cloud computing, allows us to mitigate risk and in many cases offer greater security that can be provided by spending millions of dollars in an attempt to secure on-premise resources.
Multitenancy and virtualization do indeed add a lot of complexity to providing levels of security that many enterprises require. However, public cloud services providers such as Google, Amazon, Microsoft and Salesforce.com focus heavily on ensuring that their datacenters follow best practice security policies and are using the most up to date security tools. Security can also be tied into service levels.
So, using public cloud services can offer more security than keeping data and other computing resources on-premise. These services can also reduce the amount spent on security massively. Perhaps this is the reason why many in the IT industry are keen to dissuade us from using cloud computing.
Security is always a challenge. But, there is little evidence to suggest that using the public cloud is less secure than the traditional on-premise form of computing. In fact, there is more evidence to suggest that using public cloud services can, in many cases, eliminate security risks that exist with on- premise computing alternatives.
The cloud model of computing is much better positioned to address today’s security challenges and concerns than alternative models. So, will the term cloud security soon be considered to be a pleonasm? In other words, will the cloud soon become synonymous with security?
Most security breaches are caused internally by employees or other authorized users of corporate systems such as contractors. It is these groups that are most likely to compromise the integrity of our systems, not external hackers. In spite of this, much more focus tends to be placed on external threats. Each time I work on a client’s site, I am struck by how easy it would be for me to compromise their systems. All I would need to do is insert a thumb drive with malicious code into a USB port and, hey presto, I’ve undermined hugely expensive security investments.
It is reckless to allow employees and contractors to carry highly sensitive data around with little consideration of the consequences of losing the laptops and smart phones that house the data. Amazingly little focus is placed on addressing this particular security threat.
Indeed, enterprises do not sufficiently focus on changing the behavior of their users by making them aware of security policies and the reasons for those policies. Few ensure adequate control of basic access to their physical premises and to end points that form part of their network. As mentioned earlier, it also seems as though few enterprises track the location of sensitive data that physically moves around with employees and contractors.
Ensuring that everybody who accesses enterprise networks is trained to follow appropriate security policies is an extremely challenging task. For this reason, it is necessary to consider other ways of mitigating the risk of an employee or contractor from compromising security.
One way of doing this is to source as much of the enterprise’s computing resources from the cloud as possible. Managing the security of heterogeneous on-premise IT environments is a highly complex and almost impossible task. Minimising the amount of on-premise resources that a corporation manages mitigates risk associated with security breaches enormously. Ensuring that data is stored in a secure environment (in the cloud) rather than on portable devices such as laptops and smart phones also enables corporations to reduce risk.
Cloud computing, and I mean public cloud computing, allows us to mitigate risk and in many cases offer greater security that can be provided by spending millions of dollars in an attempt to secure on-premise resources.
Multitenancy and virtualization do indeed add a lot of complexity to providing levels of security that many enterprises require. However, public cloud services providers such as Google, Amazon, Microsoft and Salesforce.com focus heavily on ensuring that their datacenters follow best practice security policies and are using the most up to date security tools. Security can also be tied into service levels.
So, using public cloud services can offer more security than keeping data and other computing resources on-premise. These services can also reduce the amount spent on security massively. Perhaps this is the reason why many in the IT industry are keen to dissuade us from using cloud computing.
Security is always a challenge. But, there is little evidence to suggest that using the public cloud is less secure than the traditional on-premise form of computing. In fact, there is more evidence to suggest that using public cloud services can, in many cases, eliminate security risks that exist with on- premise computing alternatives.
The cloud model of computing is much better positioned to address today’s security challenges and concerns than alternative models. So, will the term cloud security soon be considered to be a pleonasm? In other words, will the cloud soon become synonymous with security?
Sunday, May 2, 2010
The Myth of Enterprise Social Networking
One of the most attractive concepts I have ever come across is that of crowdsourcing. At no time in history have ordinary individuals possessed the tools that enable them to engage with such a huge variety of people and to tap such a vast amount of knowledge. Many of today’s emerging business titans such as Facebook have used ‘the crowd’ to build their businesses and to build fortunes for their founders.
For knowledge based workers, the use of these tools can increase their productivity enormously and engender innovation at a more rapid rate than would be the case for smaller, selected, teams and individuals.
In a traditional corporate environment, knowledge workers predominantly access corporate resources alone. Admittedly, in certain environments such as academic institutions, knowledge sharing and collaboration beyond a single institution has been the norm for centuries. However, today, knowledge workers within corporations as well as within academia have access to infinitely more resources than ever before by using social networking tools.
The massive benefit offered by social networking tools is obvious in some corporate functions such as human resources, marketing and customer care. But, for other activities, the benefits are also huge. For example, a specialist such as an engineer can potentially source best practices or solutions to challenges using social networking tools. These professionals can use these tools to ensure that they are fully aware of the latest developments in their profession and they can do this anywhere in the world. Clearly, these tools can offer huge benefits to professionals ranging from aerospace engineers to zoologists. In fact, those that do not use social networking tools will soon find themselves isolated from the rest of their profession and risk coming across as having a seriously outdated approach to work, a bit like refusing to use word processing software and preferring to write by hand.
Horses for Sources has used social networking to build a business and to engage with a large community of professionals that share an interest in outsourcing. There are no restrictions on who can read the blog or follow Horses on Twitter. Provided, external content does not offend Phil Fersht, it can be added to the blog. But, the main point is that it is open to anybody, anywhere, who wishes to engage.
So what is enterprise social networking? Well, it is collaboration within the enterprise and with selected external stakeholders. To me, this is not social networking given that if I use these tools, the people with whom I can interact and the content with which I can engage are restricted by the enterprise. For example, it is much easier for an IBM employee that I have never met to connect with me using Twitter than using Yammer. Enterprise social networking tools are the next generation of collaboration tools that are designed to overcome the thorny issue of insufficient collaboration within most enterprises. Intranets were, and in many cases, still are used to engender greater collaboration within the enterprise.
In order to improve performance within many functions within their organisations, management must embrace open, public social networking tools such as Twitter, Linkedin and yes, Facebook. They should not seek to use enterprise social networking tools as more secure or manageable substitutes of the open, public tools. They have very different benefits. Instead, they should use enterprise social networking to help them to address that on-going challenge that they face, namely getting people, within different teams (or within the same team), to work together more closely.
For knowledge based workers, the use of these tools can increase their productivity enormously and engender innovation at a more rapid rate than would be the case for smaller, selected, teams and individuals.
In a traditional corporate environment, knowledge workers predominantly access corporate resources alone. Admittedly, in certain environments such as academic institutions, knowledge sharing and collaboration beyond a single institution has been the norm for centuries. However, today, knowledge workers within corporations as well as within academia have access to infinitely more resources than ever before by using social networking tools.
The massive benefit offered by social networking tools is obvious in some corporate functions such as human resources, marketing and customer care. But, for other activities, the benefits are also huge. For example, a specialist such as an engineer can potentially source best practices or solutions to challenges using social networking tools. These professionals can use these tools to ensure that they are fully aware of the latest developments in their profession and they can do this anywhere in the world. Clearly, these tools can offer huge benefits to professionals ranging from aerospace engineers to zoologists. In fact, those that do not use social networking tools will soon find themselves isolated from the rest of their profession and risk coming across as having a seriously outdated approach to work, a bit like refusing to use word processing software and preferring to write by hand.
Horses for Sources has used social networking to build a business and to engage with a large community of professionals that share an interest in outsourcing. There are no restrictions on who can read the blog or follow Horses on Twitter. Provided, external content does not offend Phil Fersht, it can be added to the blog. But, the main point is that it is open to anybody, anywhere, who wishes to engage.
So what is enterprise social networking? Well, it is collaboration within the enterprise and with selected external stakeholders. To me, this is not social networking given that if I use these tools, the people with whom I can interact and the content with which I can engage are restricted by the enterprise. For example, it is much easier for an IBM employee that I have never met to connect with me using Twitter than using Yammer. Enterprise social networking tools are the next generation of collaboration tools that are designed to overcome the thorny issue of insufficient collaboration within most enterprises. Intranets were, and in many cases, still are used to engender greater collaboration within the enterprise.
In order to improve performance within many functions within their organisations, management must embrace open, public social networking tools such as Twitter, Linkedin and yes, Facebook. They should not seek to use enterprise social networking tools as more secure or manageable substitutes of the open, public tools. They have very different benefits. Instead, they should use enterprise social networking to help them to address that on-going challenge that they face, namely getting people, within different teams (or within the same team), to work together more closely.
Monday, April 12, 2010
UnGreen IT
In Australia, most industries have been addressing sustainability issues, at least to some extent, for several years. For example, energy companies and miners have had to, at the very least, address sustainability issues for many years, as have financial services companies, government, retailers and manufacturers.
IT, however, has traditionally perceived itself to be a clean industry and has been late to focus on sustainability. Over the last couple of years, IT’s carbon footprint and ways of reducing it have become more of a focus.
Sustainable IT is made up of two components. Firstly, it consists of ways of reducing IT’s carbon emissions through activities such as datacentre consolidation or even small operational changes like power management for PCs. Secondly, and perhaps more importantly, it comprises ways in which IT and IT suppliers can enable whole organisations to reduce carbon emissions in non-IT specific activities such as by developing smart grids for utilities firms or by enabling video conferencing.
In a recent survey undertaken by Frost & Sullivan, it was revealed that, despite the global financial crisis, IT professionals, in Australia, are placing more emphasis on sustainability initiatives than was the case a year ago.
Over time, Frost & Sullivan expects sustainability to be embedded within every IT process and purchase. It will become a much more significant choice determinant for products and services over the coming years along with other determinants like price, performance and references. It will be assumed that sustainable IT offers cost benefits. This will lead organizations to seek accurate ways of determining payback periods, net present values and returns on investment. Passing on the cost of carbon usage and of recycling to the consumer will result in the benefits of sustainable IT investments being realized sooner and offering greater financial benefits. It should be noted that this is not a hypothetical comment. Incorporating carbon costs and the cost of recycling into products and services is not just a possibility. Frost & Sullivan believes that organisations will incorporate these costs and pass them onto their customers within the next three to five years, if not before.
Of course, no investment is made that does not offer clear financial benefits within a reasonable timeframe. As a technology or business activity matures, buyers start to look beyond financial benefits and more to the strategic benefits that can be offered. Foresighted IT buyers are now making sustainable IT purchases not only for financial benefits but also to differentiate themselves from their competitors. This has parallels with the evolution of outsourcing. In the early days of outsourcing, cost reduction was the dominant and often the only driver for outsourcing decisions. However, today, outsourcing buyers assume that there will be measurable cost benefits associated with an outsourcing purchase. Cost reduction is no longer the sole driver. Instead, outsourcing buyers are increasingly interested in ways that outsourcing can differentiate them from their competitors. For example, an outsourced contact centre may not only offer cost benefits but also enable an organization to fully integrate its channels to market. Multichannel integration allows many organizations to offer vastly improved customer care and hence differentiation from their competitors.
Seeking business benefits beyond cost reductions can also be expected to occur when buyers examine sustainable IT options. For example, a utilities firm might invest in developing a smart grid, not only to manage costs over a period of time but also to differentiate its customer offerings from competitors. A utilities service that can provide information about energy use per device can differentiate that service and offer additional value to customers.
Key advances in technology use in Australia will complement the move to sustainable IT. The National Broadband Network will allow an increasing number of services to be provided over the Internet, further enabling service dematerialization such as the elimination of CDs.
The move to cloud computing together with server virtualization will also create greater efficiencies and economies of scale in the datacentre.
Another major sustainable IT issue is e-waste. Australia has yet to implement e-waste legislation which exists in many other mature economies. IT products contain comparatively large amounts of embodied energy yet, they have relatively short life spans. Questions are being raised about the life spans of IT products. For example, why do we dispose of all the components of a laptop computer each time we purchase a new one? Can’t we, for example, re-use our keyboards or monitors? As yet, there are no clear answers to these questions? This suggests that the bulk of the IT industry still has some way to go before sustainable practices are embedded into all parts of the IT supply chain.
Nevertheless, IT stakeholders are becoming increasingly aware of the benefits and challenges associated with sustainability issues and sustainability is becoming a key component of, at least some, critical IT-related decisions.
IT, however, has traditionally perceived itself to be a clean industry and has been late to focus on sustainability. Over the last couple of years, IT’s carbon footprint and ways of reducing it have become more of a focus.
Sustainable IT is made up of two components. Firstly, it consists of ways of reducing IT’s carbon emissions through activities such as datacentre consolidation or even small operational changes like power management for PCs. Secondly, and perhaps more importantly, it comprises ways in which IT and IT suppliers can enable whole organisations to reduce carbon emissions in non-IT specific activities such as by developing smart grids for utilities firms or by enabling video conferencing.
In a recent survey undertaken by Frost & Sullivan, it was revealed that, despite the global financial crisis, IT professionals, in Australia, are placing more emphasis on sustainability initiatives than was the case a year ago.
Over time, Frost & Sullivan expects sustainability to be embedded within every IT process and purchase. It will become a much more significant choice determinant for products and services over the coming years along with other determinants like price, performance and references. It will be assumed that sustainable IT offers cost benefits. This will lead organizations to seek accurate ways of determining payback periods, net present values and returns on investment. Passing on the cost of carbon usage and of recycling to the consumer will result in the benefits of sustainable IT investments being realized sooner and offering greater financial benefits. It should be noted that this is not a hypothetical comment. Incorporating carbon costs and the cost of recycling into products and services is not just a possibility. Frost & Sullivan believes that organisations will incorporate these costs and pass them onto their customers within the next three to five years, if not before.
Of course, no investment is made that does not offer clear financial benefits within a reasonable timeframe. As a technology or business activity matures, buyers start to look beyond financial benefits and more to the strategic benefits that can be offered. Foresighted IT buyers are now making sustainable IT purchases not only for financial benefits but also to differentiate themselves from their competitors. This has parallels with the evolution of outsourcing. In the early days of outsourcing, cost reduction was the dominant and often the only driver for outsourcing decisions. However, today, outsourcing buyers assume that there will be measurable cost benefits associated with an outsourcing purchase. Cost reduction is no longer the sole driver. Instead, outsourcing buyers are increasingly interested in ways that outsourcing can differentiate them from their competitors. For example, an outsourced contact centre may not only offer cost benefits but also enable an organization to fully integrate its channels to market. Multichannel integration allows many organizations to offer vastly improved customer care and hence differentiation from their competitors.
Seeking business benefits beyond cost reductions can also be expected to occur when buyers examine sustainable IT options. For example, a utilities firm might invest in developing a smart grid, not only to manage costs over a period of time but also to differentiate its customer offerings from competitors. A utilities service that can provide information about energy use per device can differentiate that service and offer additional value to customers.
Key advances in technology use in Australia will complement the move to sustainable IT. The National Broadband Network will allow an increasing number of services to be provided over the Internet, further enabling service dematerialization such as the elimination of CDs.
The move to cloud computing together with server virtualization will also create greater efficiencies and economies of scale in the datacentre.
Another major sustainable IT issue is e-waste. Australia has yet to implement e-waste legislation which exists in many other mature economies. IT products contain comparatively large amounts of embodied energy yet, they have relatively short life spans. Questions are being raised about the life spans of IT products. For example, why do we dispose of all the components of a laptop computer each time we purchase a new one? Can’t we, for example, re-use our keyboards or monitors? As yet, there are no clear answers to these questions? This suggests that the bulk of the IT industry still has some way to go before sustainable practices are embedded into all parts of the IT supply chain.
Nevertheless, IT stakeholders are becoming increasingly aware of the benefits and challenges associated with sustainability issues and sustainability is becoming a key component of, at least some, critical IT-related decisions.
Tuesday, March 16, 2010
Private Cloud - An Oxymoron
Recently, IT vendors as well as IT buyers have been focusing on the impact of cloud computing on their businesses. The rapid growth in the use of cloud services in recent years massively disrupts traditional IT delivery models. But, there remains much confusion regarding the nature of cloud computing.
Attributes of cloud computing typically include, scalability, elasticity, multi-tenancy, payment models that are linked to usage, resources delivered from virtualized environments and the provision of all support and management tasks by a cloud services provider.
However, the emergence of the term, ‘private cloud’ is creating confusion around cloud computing. It is a term that is commonly used by those with vested interests in existing computing paradigms. In fact, is the term an oxymoron?
Surely the use of private clouds is not cloud computing since key attributes of cloud computing include, the use of computing resources that reside outside of the enterprise and that are delivered to multiple customers (multi-tenancy) by a third party (cloud services provider). Private clouds deliver IT resources from within the corporate firewall and to one customer. To me, the term private cloud is a misleading way of describing hosted services. Is it a term that is used by providers of hosted services in order to hold onto lucrative contracts and prevent the loss of customers to companies that provide public cloud services?
Companies that offer services from the public cloud such as Salesforce.com are undermining traditional on-premise business models. The business case for sourcing resources from public clouds will soon be indisputable. In the next few years, business unit and IT managers will need to provide business cases for not using public clouds and for keeping resources on-premise.
Services that share the attributes of public cloud computing, have, of course been with us for many years. For example, the Application Service Provider (ASP) model of computing was expected to deliver services from the Internet to multiple clients. The ASP model did not mature for a variety of reasons. However, the planets are now aligned for an explosion of public cloud activity. Today’s virtualization technology, application acceleration technology, the widespread use of OpenSource and faster average broadband speeds are enabling the rapid adoption of public cloud based services.
In many ways, the use of public cloud services is creeping up on us by stealth. Although, the use of platforms, infrastructure or/and applications delivered from public clouds may seem to be comparatively immature, most people are using public cloud services. Each time we use Google’s search engine or a social networking tool such as Facebook or LinkedIn, we are using public cloud services. From an enterprise perspective, payroll processing services offered by companies such as ADP, are also a form of cloud computing. Now, if companies can send the personal details of their employees, their salary details, their tax details and their identification details to a datacenter that is operated by a third party such as ADP, are privacy and security concerns legitimate reasons for not wishing to use public cloud services?
I believe that a mix of groupthink and conservatism is at play in many cases when objections to the use of cloud services are raised. These objections tend to be centered around security and privacy. It is argued that private clouds address these concerns. In my view, so called private clouds re-inforce the conservatism of many in business today by giving them an excuse not to use the public cloud. In a few years time, those that simply revamp their existing datacenters to provide private cloud services and those that refuse to use cloud services for security and privacy reasons, will give the impression that they simply cannot grasp their very straightforward and obvious business benefits of using public cloud services.
Attributes of cloud computing typically include, scalability, elasticity, multi-tenancy, payment models that are linked to usage, resources delivered from virtualized environments and the provision of all support and management tasks by a cloud services provider.
However, the emergence of the term, ‘private cloud’ is creating confusion around cloud computing. It is a term that is commonly used by those with vested interests in existing computing paradigms. In fact, is the term an oxymoron?
Surely the use of private clouds is not cloud computing since key attributes of cloud computing include, the use of computing resources that reside outside of the enterprise and that are delivered to multiple customers (multi-tenancy) by a third party (cloud services provider). Private clouds deliver IT resources from within the corporate firewall and to one customer. To me, the term private cloud is a misleading way of describing hosted services. Is it a term that is used by providers of hosted services in order to hold onto lucrative contracts and prevent the loss of customers to companies that provide public cloud services?
Companies that offer services from the public cloud such as Salesforce.com are undermining traditional on-premise business models. The business case for sourcing resources from public clouds will soon be indisputable. In the next few years, business unit and IT managers will need to provide business cases for not using public clouds and for keeping resources on-premise.
Services that share the attributes of public cloud computing, have, of course been with us for many years. For example, the Application Service Provider (ASP) model of computing was expected to deliver services from the Internet to multiple clients. The ASP model did not mature for a variety of reasons. However, the planets are now aligned for an explosion of public cloud activity. Today’s virtualization technology, application acceleration technology, the widespread use of OpenSource and faster average broadband speeds are enabling the rapid adoption of public cloud based services.
In many ways, the use of public cloud services is creeping up on us by stealth. Although, the use of platforms, infrastructure or/and applications delivered from public clouds may seem to be comparatively immature, most people are using public cloud services. Each time we use Google’s search engine or a social networking tool such as Facebook or LinkedIn, we are using public cloud services. From an enterprise perspective, payroll processing services offered by companies such as ADP, are also a form of cloud computing. Now, if companies can send the personal details of their employees, their salary details, their tax details and their identification details to a datacenter that is operated by a third party such as ADP, are privacy and security concerns legitimate reasons for not wishing to use public cloud services?
I believe that a mix of groupthink and conservatism is at play in many cases when objections to the use of cloud services are raised. These objections tend to be centered around security and privacy. It is argued that private clouds address these concerns. In my view, so called private clouds re-inforce the conservatism of many in business today by giving them an excuse not to use the public cloud. In a few years time, those that simply revamp their existing datacenters to provide private cloud services and those that refuse to use cloud services for security and privacy reasons, will give the impression that they simply cannot grasp their very straightforward and obvious business benefits of using public cloud services.
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