To many, the demise of Kodak was entirely predictable. But, the reasons for its demise are not yet widely understood. There remains a mainstream view that Kodak’s fall was due to its failure to embrace digital technology. This is not true. In fact, Kodak engineer, Steve Sasson, invented the digital camera in 1975. Kodak marketed digital cameras from 1995, which was years before most of its competitors entered the market. In other words, Kodak did not succeed in a market that it developed.
Digital technology cannibalized Kodak’s analog business. The analog business was much more profitable than the new digital business. The company sought to maximize the profits that it could generate from its traditional business while controlling cannibalization. Given that Kodak dominated its market, executives felt that they could manage the impact of digital technology on their hugely profitable analog business.
The two businesses were very different and needed to be managed in different ways. Kodak may have been better off if it had spun off its digital division and allowed it to compete, unconstrained, with the traditional business. Managing a less profitable business (digital) that cannibalizes a more profitable business (analog) is almost impossible given the comparatively short term requirements of shareholders. It is difficult to justify a large investment in the less profitable disruptive business at the expense of further investment in a more profitable traditional business that continues to require additional resources.
Today, multiple disruptive technologies are changing the IT industry and similar challenges are being faced. For now, I’ll focus on what, in my view, is the most disruptive technology that is impacting both IT firms and their customers. This technology is cloud computing. As I have mentioned before, it is the shift to the public cloud model of computing that will have the biggest impact on business. IT will truly be bought as a service and paid for on the basis of usage. IT resources will increasingly reside in remote datacenters and be accessed from multiple devices using browsers or apps.
In this new computing paradigm, it is likely that, for the first time in many people’s ‘technology memories’, Microsoft will not have a dominant role. Public cloud computing is disrupting the software product business. Microsoft’s results for the quarter ending December 31 2011, showed a fall in revenue for the Windows and Windows Live Division of 6.2% from the same period in 2010. This is being driven by a downturn in PC sales which, in turn, is being driven by the growth in shipments of tablets and smartphones. It is an ominous sign or Microsoft.
Tablets and smartphones are designed to access IT resources from the public cloud and are leading a wholesale shift away from the traditional PC centric model of computing.
Like Kodak ten years ago, Microsoft is by no means ignoring the trends that are taking place around it. Indeed, it remains a highly innovative company and has developed very competitive products that embrace cloud computing such as Office 365. Its Azure product is also a leading Platform as a Service offering and has proved to be very popular with developers.
Given that the bulk of Microsoft’s revenues (and profits) are generated from its traditional PC centric products, will it place sufficient emphasis on cloud computing in order to become a leading IT vendor in the future? It is reasonable to predict that Microsoft will not dominate IT over the next 10 years to the extent that it has done previously. We are definitely witnessing Microsoft’s relative decline compared to competitors such as Google and Apple. In light of this relative decline, will Microsoft be able to establish itself as a leading vendor in the markets that we can now see emerging or will it end up like Kodak? In other words, will it fail to transfer its leadership in the PC centric world to the cloud computing world?
In the IT industry, few firms have succeeded in marketing products that cannibalize one another. Apple is the best example of such a firm. It is attempting to lock its customers into its ecosystem of products and services and with much success. Many Apple customers own an Apple PC, an iPod, an iPad, an iPhone and use iTunes and Apple’s new iCloud. Apple’s iPod and PC markets are being cannibalized by its iPad and iPhone products. This does not matter to Apple as long as customers continue to buy its products and operate within its ecosystem.
Consider Microsoft’s position today. PCs are being cannibalized by products that run Android and iOS. Microsoft has not developed an ecosystem and keeping customers loyal will be a major challenge for the firm in the coming years.
IBM has also succeeded in marketing products that cannibalize one another. It successfully moved away from its mainframe business into client/server computing. It also transformed itself into the world’s leading IT services vendor. However, like Microsoft, public cloud computing challenges its current business model. Unlike Microsoft its IT services focus will give it wider opportunities to address disruption.
We are currently witnessing a highly disruptive shift to cloud computing. This shift is being accelerated by the rapid uptake of tablets and smartphones. How can IT firms that dominated the PC centric world manage the transition to cloud computing? How can they ensure that they continue to benefit from the markets that they dominate while also ensuring rapid uptake of their cloud-based offerings? How can these companies transfer their leadership in the PC centric world to the cloud computing world and avoid sharing the experience of Kodak?
Tuesday, January 24, 2012
Sunday, December 18, 2011
2012 IT Outlook - The End Of Business As We Know It
In 2012, we will witness the end of business as we know it. The relationship between technology and business will be inverted. Until recently, technology has typically been designed and implemented in order to support and enable business processes. For example, CRM and ERP software applications were created to improve the performance of existing business processes. In other words, business developments forced change in technology development.
In 2012, technology developments will frequently force change in business processes. This has already occurred in some industries, most notably, the media industry. Personal clouds in which people can stream their own content are forcing enormous change in the media industry. In fact, technology has completely transformed the media industry. The inversion of the relationship between business and technology is driving several key developments that will be apparent in 2012.
Executives in all industries will need to closely monitor the activities of technology firms, particularly Apple, Amazon, Google and Facebook. In addition to forcing change in the retail, travel and hospitality and media industries, 2012 will see technology firms forcing change in other industries. For example, mobile payment products such as Google Wallet enable technology firms to compete with financial services firms and will change the way people spend money.
In 2012, this inversion of the relationship between technology and business, will be primarily driven by three key technology trends. These three 2012 developments are:
• Cloud computing will become mainstream
• Cloud computing will drive mobile computing
• Social media will be widely integrated into business activities
#1 Cloud Computing will Become Mainstream
In 2012, cloud computing is set to become mainstream in Asia Pacific. Indeed, approximately 30% of APAC organizations have already adopted some form of cloud computing.
In 2012, the impact of the shift to cloud computing will become apparent. One of the first obvious effects of this type of technology is the cloud-driven transformation of whole industries such as the media industry and the IT industry itself.
Platform-as-a-service (PaaS) is set to be the new battleground in the cloud computing industry as PaaS vendors seek to attract developers to their platforms. Today, Force.com has an advantage over other platforms as a result of its early entry into the market. However, over the last 18 months or so, new platforms have come online, supported by major vendors such as Microsoft, Amazon, IBM, Red Hat, Google and VMWare. Two or three platforms can be expected to dominate as a critical mass of applications is developed on each.
Cloud brokers will emerge en masse, as organizations seek partners that can customize cloud applications for them. These cloud brokers will typically affiliate themselves with a particular platform such as Force.com. In other words, many more applications will be available from the public cloud and these applications will be much more highly customized than most of today’s cloud applications. In turn, industry fragmentation will occur as many more Software- as-a-Service (SaaS) vendors emerge, many with industry-specific applications. Today’s SaaS offerings are predominantly horizontal.
Private clouds will mainly appear in the form of internal clouds that replicate the offerings of Infrastructure-as-a-Service vendors. Many large organizations will engage in datacenter transformation projects or build new datacenters in order to offer business units access to IT resources. Chargeback mechanisms will be built in, resources will be accessed via browsers and apps and the benefits associated with scalability and rapid provisioning will be integrated. These internal clouds will have most of the characteristics of public clouds.
Cloud computing will have a profound impact on the way businesses operate. The cloud model will engender innovation as well as giving businesses an opportunity to enhance existing business processes, this making themselves more competitive.
#2 Cloud Computing will Drive Mobile Computing
In 2012, more smartphones and tablets will be shipped than PCs and laptops. These devices will continue to offer much richer functionality to the extent that they will displace PCs in many business areas. Already, tablets are being used by front line staff, who previously used laptops, for example, sales staff in car dealerships.
It is the provision of cloud services that is leading to the huge growth in mobile-specific applications and other applications that run on smartphones and tablets.
Executives will drive the move to ‘Bring Your Own Technology (BYOT) as they seek to use their mobile devices in their workplaces. This transition to mobile devices in business environments will be reinforced as other workers follow suit in 2012.
The combination of mobile technology and cloud computing will drive change in business. For example, these technologies will make the provision of point of care solutions in the healthcare sector commonplace. In the airline industry these technologies will lead to much more self service. The full service airlines will emulate self service check-in activities that are typical for many low cost carriers. In fact, self service will become widespread across many industries. Where possible, business will seek to use cloud computing and mobile technology to enable self service.
#3 Social Media will be Widely Integrated into Business Activities
In several Asia Pacific countries, more than half of the working population uses social media. In spite of this development, Asian businesses have taken a very conservative stance towards the use of social media. Most Asian businesses have been more focused on blocking employee access to social media rather than viewing it as a new and powerful way of engaging with customers and other stakeholders. Asian companies have also been cautious in their use of social media because best practice in the use of social media has not been established.
Nevertheless, Asian organizations have started to recognize the importance of Online Reputation Management (ORM). For example, ICICI Bank in India has used social media as a means of understanding customer sentiment towards their brand, product and services. In turn, it has used social media to determine how to improve the company’s reputation and to determine which products and services require most focus in terms of improvement.
Commonly used social media tools such as Facebook, Twitter, LinkedIn, YouTube, and Renren and Weibo in China, have been used for some time for marketing and PR activities. They are now being used to support and enable a much wider range of business processes. For example, more wealth management advice is now delivered using Facebook than by any other means. Both Twitter and LinkedIn are now becoming standard tools for recruitment. 2012 will see this trend continue and develop.
In fact, in 2012, organizations will increasingly focus on integrating social media with its other customer and stakeholder touch points. Social media will be the fourth channel, augmenting face to face contact, voice interaction though contact centers, and interaction through web sites.
Social buying, also known as group buying, has become common in Asia and businesses have rushed to work with both local and international group buying companies to increase sales, acquire new customers and manage inventory. This trend will continue in 2012 and become integrated into overall sales and marketing strategies for a lot of businesses.
In summary, the inversion of the relationship between technology and business will become clear in 2012. Cloud computing, mobility and social media will drive this trend. Each of these trends is a major disruptive force in all industries.
Other notable developments in 2012 will be centered around the growing importance of ‘big data’ and the tools needed to analyze it, mobile payments becoming more common, increased corporate involvement in the burgeoning gaming industry, machine to machine technologies impacting multiple industries and the adoption of Smart TV.
In 2012, technology developments will frequently force change in business processes. This has already occurred in some industries, most notably, the media industry. Personal clouds in which people can stream their own content are forcing enormous change in the media industry. In fact, technology has completely transformed the media industry. The inversion of the relationship between business and technology is driving several key developments that will be apparent in 2012.
Executives in all industries will need to closely monitor the activities of technology firms, particularly Apple, Amazon, Google and Facebook. In addition to forcing change in the retail, travel and hospitality and media industries, 2012 will see technology firms forcing change in other industries. For example, mobile payment products such as Google Wallet enable technology firms to compete with financial services firms and will change the way people spend money.
In 2012, this inversion of the relationship between technology and business, will be primarily driven by three key technology trends. These three 2012 developments are:
• Cloud computing will become mainstream
• Cloud computing will drive mobile computing
• Social media will be widely integrated into business activities
#1 Cloud Computing will Become Mainstream
In 2012, cloud computing is set to become mainstream in Asia Pacific. Indeed, approximately 30% of APAC organizations have already adopted some form of cloud computing.
In 2012, the impact of the shift to cloud computing will become apparent. One of the first obvious effects of this type of technology is the cloud-driven transformation of whole industries such as the media industry and the IT industry itself.
Platform-as-a-service (PaaS) is set to be the new battleground in the cloud computing industry as PaaS vendors seek to attract developers to their platforms. Today, Force.com has an advantage over other platforms as a result of its early entry into the market. However, over the last 18 months or so, new platforms have come online, supported by major vendors such as Microsoft, Amazon, IBM, Red Hat, Google and VMWare. Two or three platforms can be expected to dominate as a critical mass of applications is developed on each.
Cloud brokers will emerge en masse, as organizations seek partners that can customize cloud applications for them. These cloud brokers will typically affiliate themselves with a particular platform such as Force.com. In other words, many more applications will be available from the public cloud and these applications will be much more highly customized than most of today’s cloud applications. In turn, industry fragmentation will occur as many more Software- as-a-Service (SaaS) vendors emerge, many with industry-specific applications. Today’s SaaS offerings are predominantly horizontal.
Private clouds will mainly appear in the form of internal clouds that replicate the offerings of Infrastructure-as-a-Service vendors. Many large organizations will engage in datacenter transformation projects or build new datacenters in order to offer business units access to IT resources. Chargeback mechanisms will be built in, resources will be accessed via browsers and apps and the benefits associated with scalability and rapid provisioning will be integrated. These internal clouds will have most of the characteristics of public clouds.
Cloud computing will have a profound impact on the way businesses operate. The cloud model will engender innovation as well as giving businesses an opportunity to enhance existing business processes, this making themselves more competitive.
#2 Cloud Computing will Drive Mobile Computing
In 2012, more smartphones and tablets will be shipped than PCs and laptops. These devices will continue to offer much richer functionality to the extent that they will displace PCs in many business areas. Already, tablets are being used by front line staff, who previously used laptops, for example, sales staff in car dealerships.
It is the provision of cloud services that is leading to the huge growth in mobile-specific applications and other applications that run on smartphones and tablets.
Executives will drive the move to ‘Bring Your Own Technology (BYOT) as they seek to use their mobile devices in their workplaces. This transition to mobile devices in business environments will be reinforced as other workers follow suit in 2012.
The combination of mobile technology and cloud computing will drive change in business. For example, these technologies will make the provision of point of care solutions in the healthcare sector commonplace. In the airline industry these technologies will lead to much more self service. The full service airlines will emulate self service check-in activities that are typical for many low cost carriers. In fact, self service will become widespread across many industries. Where possible, business will seek to use cloud computing and mobile technology to enable self service.
#3 Social Media will be Widely Integrated into Business Activities
In several Asia Pacific countries, more than half of the working population uses social media. In spite of this development, Asian businesses have taken a very conservative stance towards the use of social media. Most Asian businesses have been more focused on blocking employee access to social media rather than viewing it as a new and powerful way of engaging with customers and other stakeholders. Asian companies have also been cautious in their use of social media because best practice in the use of social media has not been established.
Nevertheless, Asian organizations have started to recognize the importance of Online Reputation Management (ORM). For example, ICICI Bank in India has used social media as a means of understanding customer sentiment towards their brand, product and services. In turn, it has used social media to determine how to improve the company’s reputation and to determine which products and services require most focus in terms of improvement.
Commonly used social media tools such as Facebook, Twitter, LinkedIn, YouTube, and Renren and Weibo in China, have been used for some time for marketing and PR activities. They are now being used to support and enable a much wider range of business processes. For example, more wealth management advice is now delivered using Facebook than by any other means. Both Twitter and LinkedIn are now becoming standard tools for recruitment. 2012 will see this trend continue and develop.
In fact, in 2012, organizations will increasingly focus on integrating social media with its other customer and stakeholder touch points. Social media will be the fourth channel, augmenting face to face contact, voice interaction though contact centers, and interaction through web sites.
Social buying, also known as group buying, has become common in Asia and businesses have rushed to work with both local and international group buying companies to increase sales, acquire new customers and manage inventory. This trend will continue in 2012 and become integrated into overall sales and marketing strategies for a lot of businesses.
In summary, the inversion of the relationship between technology and business will become clear in 2012. Cloud computing, mobility and social media will drive this trend. Each of these trends is a major disruptive force in all industries.
Other notable developments in 2012 will be centered around the growing importance of ‘big data’ and the tools needed to analyze it, mobile payments becoming more common, increased corporate involvement in the burgeoning gaming industry, machine to machine technologies impacting multiple industries and the adoption of Smart TV.
Saturday, November 26, 2011
Cloud Computing - 2012 Outlook
In 2012, cloud computing is set to become mainstream in Asia Pacific. Indeed, approximately 30% of APAC organizations will have adopted some form of cloud computing by 2012.
Clearly, decision makers in most Asian organizations, recognize the benefits of cloud computing, which are manifold. These benefits include the ability to offer greater business agility, cost reduction and a switch in IT spending from capital investment to operational expenditure. Basically, cloud computing is becoming critical as a means of gaining a competitive advantage for today’s organizations. It is now a strategic issue.
Against this background the market for public cloud computing is set to reach $5.8 billion by 2015, growing at a CAGR of 39% between 2010 and 2015.
In 2012, the impact of the shift to cloud computing will become apparent. One of the first obvious effects of this type of technology is the cloud-driven transformation of whole industries. The IT industry itself is being transformed by cloud computing as consumers and businesses depend, to a greater extent, on smartphones and tablets. Increasingly, data resides remotely in datacenters managed by third parties. This data is accessed by devices such as tablets and smartphones which require a comparatively small amount of data to reside locally.
Other industries such as the media industry are being transformed as media content is increasingly streamed from ‘personal clouds’ and the downloading of files becomes unnecessary. In addition to this, access to media content from physical sources such as books and DVDs is declining. Cloud computing is impacting all major industries.
The channel is also being transformed by cloud computing. Businesses can source IT functionality by using a web browser. In many cases, they can bypass the traditional channel. Channel players will need to re-focus their offerings to match the needs of organizations that are shifting their IT resources to the cloud, and away from the reselling of commoditized products and the provision of basic support services.
Platform-as-a-service (PaaS) is set to be the new battleground in the cloud computing industry as PaaS vendors seek to attract developers to their platforms. Today, Force.com has a huge advantage over other platforms as a result of its early entry into the market. However, over the last 18 months or so, new platforms have come online, supported by major vendors such as Microsoft, Amazon, IBM, Google and VMWare. Two or three platforms can be expected to dominate as a critical mass of applications is developed on each.
Cloud brokers will emerge en masse, as organizations seek partners that can customize cloud applications for them. These cloud brokers will typically affiliate themselves with a particular platform such as Force.com. In other words, many more applications will be available from the public cloud and these applications will be much more highly customized than most of today’s cloud applications. In turn, industry fragmentation will occur as many more Software- as-a-Service (SaaS) vendors emerge, many with industry-specific applications. Today’s SaaS offerings are predominantly horizontal.
Private clouds will typically appear in the form of internal clouds that replicate the offerings of Infrastructure-as-a-Service vendors. Many large organizations will engage in datacenter transformation projects or build new datacenters. These organizations will seek to offer internal business units access to IT resources and gain some of the benefits of public cloud services. Chargeback mechanisms will be built in, resources will be accessed via browsers and apps, and the benefits associated with scalability and rapid provisioning will be integrated. These internal clouds will have several of the key characteristics of public clouds.
In summary, cloud computing will have a profound impact on the way businesses operate. The cloud model will engender innovation as well as giving businesses an opportunity to enhance existing business processes, thus making themselves more competitive.
Clearly, decision makers in most Asian organizations, recognize the benefits of cloud computing, which are manifold. These benefits include the ability to offer greater business agility, cost reduction and a switch in IT spending from capital investment to operational expenditure. Basically, cloud computing is becoming critical as a means of gaining a competitive advantage for today’s organizations. It is now a strategic issue.
Against this background the market for public cloud computing is set to reach $5.8 billion by 2015, growing at a CAGR of 39% between 2010 and 2015.
In 2012, the impact of the shift to cloud computing will become apparent. One of the first obvious effects of this type of technology is the cloud-driven transformation of whole industries. The IT industry itself is being transformed by cloud computing as consumers and businesses depend, to a greater extent, on smartphones and tablets. Increasingly, data resides remotely in datacenters managed by third parties. This data is accessed by devices such as tablets and smartphones which require a comparatively small amount of data to reside locally.
Other industries such as the media industry are being transformed as media content is increasingly streamed from ‘personal clouds’ and the downloading of files becomes unnecessary. In addition to this, access to media content from physical sources such as books and DVDs is declining. Cloud computing is impacting all major industries.
The channel is also being transformed by cloud computing. Businesses can source IT functionality by using a web browser. In many cases, they can bypass the traditional channel. Channel players will need to re-focus their offerings to match the needs of organizations that are shifting their IT resources to the cloud, and away from the reselling of commoditized products and the provision of basic support services.
Platform-as-a-service (PaaS) is set to be the new battleground in the cloud computing industry as PaaS vendors seek to attract developers to their platforms. Today, Force.com has a huge advantage over other platforms as a result of its early entry into the market. However, over the last 18 months or so, new platforms have come online, supported by major vendors such as Microsoft, Amazon, IBM, Google and VMWare. Two or three platforms can be expected to dominate as a critical mass of applications is developed on each.
Cloud brokers will emerge en masse, as organizations seek partners that can customize cloud applications for them. These cloud brokers will typically affiliate themselves with a particular platform such as Force.com. In other words, many more applications will be available from the public cloud and these applications will be much more highly customized than most of today’s cloud applications. In turn, industry fragmentation will occur as many more Software- as-a-Service (SaaS) vendors emerge, many with industry-specific applications. Today’s SaaS offerings are predominantly horizontal.
Private clouds will typically appear in the form of internal clouds that replicate the offerings of Infrastructure-as-a-Service vendors. Many large organizations will engage in datacenter transformation projects or build new datacenters. These organizations will seek to offer internal business units access to IT resources and gain some of the benefits of public cloud services. Chargeback mechanisms will be built in, resources will be accessed via browsers and apps, and the benefits associated with scalability and rapid provisioning will be integrated. These internal clouds will have several of the key characteristics of public clouds.
In summary, cloud computing will have a profound impact on the way businesses operate. The cloud model will engender innovation as well as giving businesses an opportunity to enhance existing business processes, thus making themselves more competitive.
Wednesday, November 23, 2011
Four Cloud Computing Myths
Today, cloud computing is becoming mainstream. In Asia Pacific, approximately two-thirds of organizations expect to increase their spending on cloud computing over the next year.
Clearly, decision makers in most Asian organizations, recognize the benefits of cloud computing, which are manifold. These benefits include the ability to offer greater business agility, cost reduction and a switch in IT spending from capital investment to operational expenditure. Basically, cloud computing is becoming critical as a means of gaining a competitive advantage for today’s organizations. It is now a strategic issue.
Nevertheless, adoption of cloud computing, in particular public cloud computing, is being hindered by several myths. The most common myths are:
• Cloud computing is less secure than on-premise alternatives.
• Cloud computing is only suitable for consumers and smaller organizations.
It is not suitable for enterprises.
• Cloud computing is not suitable for mission critical activities.
• Private clouds offer the benefits of cloud computing without the drawbacks.
Myth #1 – Cloud Computing is less secure than on-premise alternatives
Currently, there is no evidence to show that cloud computing is less secure than on-premise alternatives. In fact, there are strong arguments to suggest the opposite. Cloud computing is, in many ways, inherently more secure than on-premise alternatives. Most security breaches are caused by human error. In cloud computing enviroments, more activities are automated, reducing the possibility of human error. Additionally, on-premise systems are usually distributed by nature and therefore have more points of vulnerability. Cloud architectures are more centralized and have fewer points of vulnerability.
Cloud service providers also tend to focus, to a greater extent on security, than most individual organizations. Security breaches, for them, destroy their entire businesses and their credibility as service providers.
Major security breaches in recent years have had nothing to do with cloud computing. Sony, the US DoD, the UK government and others had major security breaches as a result of human error and poor process control. It is much easier to manage these two factors in cloud environments than in on-premise ones.
Myth #2 – Cloud Computing is only suitable for consumers and smaller businesses
Clearly, this statement is not correct as there are many examples of larger organizations using both private clouds and public cloud services. Typically, it is public cloud services that are perceived to be unsuitable for enterprise use. This perception can also be proved to be false.
The best known example of a company that runs on the public cloud is Netflix and it is a US$2 billion organization, hardly a small company. The bulk of its operations are run on Amazon EC2. In APAC, even major financial services firms use public cloud services. For example, BankWest, a subsidiary of Commonwealth bank uses SuccessFactors. Salesforce.com is widely used in enterprises as is Netsuite and Concur.
It is true that regulatory and compliance factors inhibit the use of public cloud services by enterprises, particularly in the financial services sector, across Asia Pacific. However, this only relates to customer data. There are many more applications in areas such as HR, ERP and accounting that lend themselves to the public cloud without causing regulatory challenges.
Myth #3 – Cloud Computing is not suitable for mission critical activities
It is true that, in many cases, cloud computing is not suitable for mission critical activities. However, there are examples of cloud computing being used for mission critical workloads and the number of such examples will grow rapidly. For example, Netflix uses Amazon for mission critical activities. Increasingly, we are seeing a variety of workloads shifting to the cloud, including the public cloud. Public cloud service providers are now offering improved SLAs, similar to other providers of services centered around mission critical activities.
The increased use of smart phones and tablets by senior executives and their demands to do their work on these devices is driving mission critical workloads into the cloud. These mobile devices carry minimal amounts of data and are designed to access data located remotely, in the cloud.
Public cloud services also offer high levels of business agility which is important with mission critical workloads.
Finally, 67% of server infrastructures are virtualized. Virtualization is a key step on the journey towards cloud computing. Mission critical workloads can be expected to share this journey.
Myth #4 – Private Clouds offer the benefits of cloud computing without the drawbacks
Security is often given as a drawback of public cloud computing that can be overcome by using private clouds. However, there is no evidence to suggest that private clouds are more secure than public clouds. In fact, most public clouds deploy best practice security policies and procedures. This is not always the case with private clouds.
There are a variety of different types of private clouds offering a few or many of the benefits of cloud computing. Typically, private clouds do not offer the following benefits that are usually offered by public cloud services:
• An Opex model instead of a Capex one.
• As much scalability as can be offered by public clouds.
• Economies of scale associated with sharing resources, which are found in
public clouds.
• Little need for support services and scarce skills.
In summary, there are reasons to be cautious about any shift in the way business is done and this includes the shift to cloud computing. However, over the past few years, outright falsehoods about cloud computing, specifically the public cloud model have spread widely and influenced perceptions within the business community. It is time for these falsehoods to be challenged more widely and for the benefits of cloud computing to be evaluated without prejudice.
Clearly, decision makers in most Asian organizations, recognize the benefits of cloud computing, which are manifold. These benefits include the ability to offer greater business agility, cost reduction and a switch in IT spending from capital investment to operational expenditure. Basically, cloud computing is becoming critical as a means of gaining a competitive advantage for today’s organizations. It is now a strategic issue.
Nevertheless, adoption of cloud computing, in particular public cloud computing, is being hindered by several myths. The most common myths are:
• Cloud computing is less secure than on-premise alternatives.
• Cloud computing is only suitable for consumers and smaller organizations.
It is not suitable for enterprises.
• Cloud computing is not suitable for mission critical activities.
• Private clouds offer the benefits of cloud computing without the drawbacks.
Myth #1 – Cloud Computing is less secure than on-premise alternatives
Currently, there is no evidence to show that cloud computing is less secure than on-premise alternatives. In fact, there are strong arguments to suggest the opposite. Cloud computing is, in many ways, inherently more secure than on-premise alternatives. Most security breaches are caused by human error. In cloud computing enviroments, more activities are automated, reducing the possibility of human error. Additionally, on-premise systems are usually distributed by nature and therefore have more points of vulnerability. Cloud architectures are more centralized and have fewer points of vulnerability.
Cloud service providers also tend to focus, to a greater extent on security, than most individual organizations. Security breaches, for them, destroy their entire businesses and their credibility as service providers.
Major security breaches in recent years have had nothing to do with cloud computing. Sony, the US DoD, the UK government and others had major security breaches as a result of human error and poor process control. It is much easier to manage these two factors in cloud environments than in on-premise ones.
Myth #2 – Cloud Computing is only suitable for consumers and smaller businesses
Clearly, this statement is not correct as there are many examples of larger organizations using both private clouds and public cloud services. Typically, it is public cloud services that are perceived to be unsuitable for enterprise use. This perception can also be proved to be false.
The best known example of a company that runs on the public cloud is Netflix and it is a US$2 billion organization, hardly a small company. The bulk of its operations are run on Amazon EC2. In APAC, even major financial services firms use public cloud services. For example, BankWest, a subsidiary of Commonwealth bank uses SuccessFactors. Salesforce.com is widely used in enterprises as is Netsuite and Concur.
It is true that regulatory and compliance factors inhibit the use of public cloud services by enterprises, particularly in the financial services sector, across Asia Pacific. However, this only relates to customer data. There are many more applications in areas such as HR, ERP and accounting that lend themselves to the public cloud without causing regulatory challenges.
Myth #3 – Cloud Computing is not suitable for mission critical activities
It is true that, in many cases, cloud computing is not suitable for mission critical activities. However, there are examples of cloud computing being used for mission critical workloads and the number of such examples will grow rapidly. For example, Netflix uses Amazon for mission critical activities. Increasingly, we are seeing a variety of workloads shifting to the cloud, including the public cloud. Public cloud service providers are now offering improved SLAs, similar to other providers of services centered around mission critical activities.
The increased use of smart phones and tablets by senior executives and their demands to do their work on these devices is driving mission critical workloads into the cloud. These mobile devices carry minimal amounts of data and are designed to access data located remotely, in the cloud.
Public cloud services also offer high levels of business agility which is important with mission critical workloads.
Finally, 67% of server infrastructures are virtualized. Virtualization is a key step on the journey towards cloud computing. Mission critical workloads can be expected to share this journey.
Myth #4 – Private Clouds offer the benefits of cloud computing without the drawbacks
Security is often given as a drawback of public cloud computing that can be overcome by using private clouds. However, there is no evidence to suggest that private clouds are more secure than public clouds. In fact, most public clouds deploy best practice security policies and procedures. This is not always the case with private clouds.
There are a variety of different types of private clouds offering a few or many of the benefits of cloud computing. Typically, private clouds do not offer the following benefits that are usually offered by public cloud services:
• An Opex model instead of a Capex one.
• As much scalability as can be offered by public clouds.
• Economies of scale associated with sharing resources, which are found in
public clouds.
• Little need for support services and scarce skills.
In summary, there are reasons to be cautious about any shift in the way business is done and this includes the shift to cloud computing. However, over the past few years, outright falsehoods about cloud computing, specifically the public cloud model have spread widely and influenced perceptions within the business community. It is time for these falsehoods to be challenged more widely and for the benefits of cloud computing to be evaluated without prejudice.
Friday, October 14, 2011
How is Plato Relevant to Business Today?
I was recently asked to explain the relevance of Plato in 5 minutes to an audience of senior managers, from across Asia Pacific, at Frost & Sullivan's GIL Congress in Singapore on 13 October 2011. I accepted the challenge. In doing so, I needed to simplify Plato's teachings greatly in order to get my message across. The speech was as follows:
"Throughout my working life, I have heard people talking about the importance of famous writers and thinkers.
For example, I often hear about the importance of understanding Shakespeare, the importance of ancient philosophers like Plato, as well as more recent ones like Nietzche or Sartre.
At school, I learned Latin and Ancient Greek.
But, until very recently I could not comprehend how such studying and such concepts could possibly benefit me at work or help anyone in business. I believe that this view is shared by many.
5 years ago, I completed an MBA. As part of the course, I studied Western philosophy and how it relates to business and the modern world.
For me, this was an epiphany.
I do not have time to talk to you about more than one philosopher or writer.
So I have selected one. I’m going to very briefly talk about Plato and his massive contribution to the way the world operates and, in turn, the way large MNCs operate.
Before Plato, people had a very simple view of the world.
You were what you did, basically. For example, you could be a warrior and that defined everything about you and your role in society.
There was no such thing as a concept, or an idea.
Everything was understood through the use of your senses such as eating, or running or dying.
Plato enabled us to consider concepts such as a thought or knowledge.
Plato argued that there were two worlds, the one we can sense by seeing it, hearing it, tasting it and touching it and the one we can think of using our minds. That’s Plato in a nutshell.
This philosophical view created concepts that we take for granted today such as justice, courage, virtue, innovation and leadership.
These are all abstract concepts and each of us in this room will have a different understanding of these concepts.
By abstract, I mean that we can’t use senses to understand, for example, leadership.
We can’t physically touch leadership. It is a concept.
This is unlike say a potato, we can touch, feel, smell and taste a potato and all of us have a clear idea of what a potato is.
By understanding Plato, we understand that terms like leadership, management, innovation and so forth are abstract and therefore highly subjective.
These terms mean different things to different people, in different contexts.
In business, it is important to understand clearly what is meant by these terms or effective decision making becomes paralyzed and managers become confused by jargon.
Plato’s philosophy, helps us to frame our questions and use reason to understand how such concepts can benefit us and the organizations that employ us.
In other words, Plato arms us with a 'bullshit detector' and forces us to minimize the amount of bullshit that we, ourselves, spout.
Today, many of us do not question the meaning of concepts such as leadership, innovation and management. We need to do this.
Understanding the thinking around them and what they mean in specific contexts is critical.
For example, many of us confuse the meanings of management and leadership.
Plato’s philosophy encourages us to ask the difference between the two as well as ask questions such as 'Is a good manager also a good leader'? Do we want a manager or a leader for a certain role or both?
And in the context of today’s event, 'What is the relationship between growth, innovation and leadership'?
I never imagined I would try to explain Plato and his relevance to business in five minutes. I hope that you have found this to be useful.
Thanks for your attention".
"Throughout my working life, I have heard people talking about the importance of famous writers and thinkers.
For example, I often hear about the importance of understanding Shakespeare, the importance of ancient philosophers like Plato, as well as more recent ones like Nietzche or Sartre.
At school, I learned Latin and Ancient Greek.
But, until very recently I could not comprehend how such studying and such concepts could possibly benefit me at work or help anyone in business. I believe that this view is shared by many.
5 years ago, I completed an MBA. As part of the course, I studied Western philosophy and how it relates to business and the modern world.
For me, this was an epiphany.
I do not have time to talk to you about more than one philosopher or writer.
So I have selected one. I’m going to very briefly talk about Plato and his massive contribution to the way the world operates and, in turn, the way large MNCs operate.
Before Plato, people had a very simple view of the world.
You were what you did, basically. For example, you could be a warrior and that defined everything about you and your role in society.
There was no such thing as a concept, or an idea.
Everything was understood through the use of your senses such as eating, or running or dying.
Plato enabled us to consider concepts such as a thought or knowledge.
Plato argued that there were two worlds, the one we can sense by seeing it, hearing it, tasting it and touching it and the one we can think of using our minds. That’s Plato in a nutshell.
This philosophical view created concepts that we take for granted today such as justice, courage, virtue, innovation and leadership.
These are all abstract concepts and each of us in this room will have a different understanding of these concepts.
By abstract, I mean that we can’t use senses to understand, for example, leadership.
We can’t physically touch leadership. It is a concept.
This is unlike say a potato, we can touch, feel, smell and taste a potato and all of us have a clear idea of what a potato is.
By understanding Plato, we understand that terms like leadership, management, innovation and so forth are abstract and therefore highly subjective.
These terms mean different things to different people, in different contexts.
In business, it is important to understand clearly what is meant by these terms or effective decision making becomes paralyzed and managers become confused by jargon.
Plato’s philosophy, helps us to frame our questions and use reason to understand how such concepts can benefit us and the organizations that employ us.
In other words, Plato arms us with a 'bullshit detector' and forces us to minimize the amount of bullshit that we, ourselves, spout.
Today, many of us do not question the meaning of concepts such as leadership, innovation and management. We need to do this.
Understanding the thinking around them and what they mean in specific contexts is critical.
For example, many of us confuse the meanings of management and leadership.
Plato’s philosophy encourages us to ask the difference between the two as well as ask questions such as 'Is a good manager also a good leader'? Do we want a manager or a leader for a certain role or both?
And in the context of today’s event, 'What is the relationship between growth, innovation and leadership'?
I never imagined I would try to explain Plato and his relevance to business in five minutes. I hope that you have found this to be useful.
Thanks for your attention".
Sunday, September 25, 2011
Will the Public Cloud Model of Computing Dominate in 2020?
I am always interested at how we often fail to see ‘shades of grey’ and instead tend to view choices as being binary.
I have spent the past several years arguing that we are going to source the bulk of our IT resources from remote datacenters that are managed by third parties and that browsers will be the interfaces that we use for these activities. I still believe this to be the case except that increasingly, we will access these resources by using apps on our lighter and more portable devices.
Nevertheless, many still view cloud computing as a binary decision. Either adopt cloud computing across the board and expose yourself to all the risks associated with it, or you do not adopt it and continue to invest in on-premise resources. Clearly, this is not and never will be the case.
Cloud computing, in many ways, is making IT more complex. It is adding yet another dimension to heterogeneous IT environments. Corporate IT environments typically consist of a mix of mainframe technology from the 1960s and 1970s, client/server technology and cloud computing technology. This will continue. Cloud computing technology will increasingly be deployed in the form of private clouds and public clouds. It will soon be the dominant IT environment as client/server technology gets displaced.
However, client/server and mainframe technology will not disappear. It will instead account for a smaller proportion of IT infrastructures. In the meantime, large organizations will focus on integrating cloud computing with their existing infrastructures and this will be a major focus over the next few years. Already, systems integrators are massively benefiting from the huge opportunity that this additional complexity brings to them.
There will be a steady move to adopting IT resources, where appropriate from the public cloud. This is where the real disruption will occur. Why invest in on-site technology whether it is so called private cloud technology or other legacy technology, when you can access the necessary resources over the public Internet? In other words, why not source as much as possible from the cloud?
Some argue that there is a move back to processing on local devices. It is true that many apps carry out processing on local devices, but the bulk of processing and IT activity will occur remotely. Apps will offer some customization and, in my view, are a way of making the cloud work more effectively. They offer more personalized ‘windows to the cloud’ than is the case with traditional browsers. Indeed, browsers will be used much less often as a way of accessing the cloud.
In summary, more and more resources will be sourced from the public cloud. This is the real impact of cloud computing. Public cloud resources will need to be integrated with on-site investments which are made up of legacy mainframe and client/server systems as well as more recent datacenter or private cloud investments. By 2020, on-site IT activity will account for a very small proportion of an organization’s overall IT activity. In other words, the public cloud will be the dominant model of computing very soon.
I have spent the past several years arguing that we are going to source the bulk of our IT resources from remote datacenters that are managed by third parties and that browsers will be the interfaces that we use for these activities. I still believe this to be the case except that increasingly, we will access these resources by using apps on our lighter and more portable devices.
Nevertheless, many still view cloud computing as a binary decision. Either adopt cloud computing across the board and expose yourself to all the risks associated with it, or you do not adopt it and continue to invest in on-premise resources. Clearly, this is not and never will be the case.
Cloud computing, in many ways, is making IT more complex. It is adding yet another dimension to heterogeneous IT environments. Corporate IT environments typically consist of a mix of mainframe technology from the 1960s and 1970s, client/server technology and cloud computing technology. This will continue. Cloud computing technology will increasingly be deployed in the form of private clouds and public clouds. It will soon be the dominant IT environment as client/server technology gets displaced.
However, client/server and mainframe technology will not disappear. It will instead account for a smaller proportion of IT infrastructures. In the meantime, large organizations will focus on integrating cloud computing with their existing infrastructures and this will be a major focus over the next few years. Already, systems integrators are massively benefiting from the huge opportunity that this additional complexity brings to them.
There will be a steady move to adopting IT resources, where appropriate from the public cloud. This is where the real disruption will occur. Why invest in on-site technology whether it is so called private cloud technology or other legacy technology, when you can access the necessary resources over the public Internet? In other words, why not source as much as possible from the cloud?
Some argue that there is a move back to processing on local devices. It is true that many apps carry out processing on local devices, but the bulk of processing and IT activity will occur remotely. Apps will offer some customization and, in my view, are a way of making the cloud work more effectively. They offer more personalized ‘windows to the cloud’ than is the case with traditional browsers. Indeed, browsers will be used much less often as a way of accessing the cloud.
In summary, more and more resources will be sourced from the public cloud. This is the real impact of cloud computing. Public cloud resources will need to be integrated with on-site investments which are made up of legacy mainframe and client/server systems as well as more recent datacenter or private cloud investments. By 2020, on-site IT activity will account for a very small proportion of an organization’s overall IT activity. In other words, the public cloud will be the dominant model of computing very soon.
Sunday, August 7, 2011
Managing Complexity in the Cloud
Although cloud computing offers enormous benefits to today’s organizations, it also adds to the overall complexity of IT environments.
If the bulk of IT resources and workloads, including IT management and monitoring, were sourced remotely from the cloud, IT environments would, in many ways, be simplified and would focus to a greater extent on the provision of business services and business value to organizations.
However, most IT resources continue to remain on-premise and need to be integrated with and to co-ordinate with resources and services that are sourced from the cloud. This adds to the overall complexity of most enterprise IT environments. Indeed, many of today’s organizations are working with a mix of proprietary mainframe technology, client/server technology, other on-premise resources such as private clouds and public clouds (in which resources reside off-site).
For this reason, there is a much greater need for tools that can manage and monitor integrated cloud and on-premise IT environments. Consequently, many enterprise customers are placing greater emphasis on cloud management software strategies. Organizations are searching for an end to end, top down view of complex business processes and workloads, in order to increase productivity and engender greater business agility. Managing these environments goes way beyond provisioning and VM sprawl reduction. Security management, performance management, utlilization, availability, compliance, and productivity all need to be addressed by management tools.
So, managing and monitoring complex heterogeneous IT environments, in which an increasingly large proportion of IT resources are being delivered from the cloud is critical. Most management and monitoring tools remain on-premise and integrated with legacy infrastructure. Addressing changing needs which are often driven by migration to cloud computing is a major challenge for legacy on-premise implementations of IT management and monitoring software. Therefore, for buyers of IT management software, it increasingly makes logical sense to seek flexible and scalable SaaS versions of IT management software or IT management as a service.
In a recent discussion between myself and some Nimsoft executives, we discussed the SaaS market for IT management and monitoring. Nimsoft combines IT monitoring and service management to provide ITIL based IT Management as a service. It is joined by many small companies such as Spiceworks and Zenoss which have emerged to offer IT management as a service, as well as the larger traditional IT management firms. IT management as a service, offered by companies such as Nimsoft, is much easier to implement and use than traditional on premise IT management and monitoring products. The largest enterprises with the most complex IT environments will continue to express concern about the security, stability and strategic fit of cloud solutions. Nevertheless, IT management as a service offers enormous benefits to small and medium sized businesses and objections from the largest companies can be expected to be steadily overcome.
The ability of IT management as a service products to be integrated with on-premise resources as well as public cloud services, is critical. Organizations now need a console view of their complete IT environments as well as the benefits of cloud computing such as rapid provisioning, agility and scalability. The IT management as a service market, together with other cloud middleware markets, which focus on other forms of cloud computing enablement, will become prominent over the next year. Furthermore, IT management as a service will soon be commonly found in the largest organizations.
If the bulk of IT resources and workloads, including IT management and monitoring, were sourced remotely from the cloud, IT environments would, in many ways, be simplified and would focus to a greater extent on the provision of business services and business value to organizations.
However, most IT resources continue to remain on-premise and need to be integrated with and to co-ordinate with resources and services that are sourced from the cloud. This adds to the overall complexity of most enterprise IT environments. Indeed, many of today’s organizations are working with a mix of proprietary mainframe technology, client/server technology, other on-premise resources such as private clouds and public clouds (in which resources reside off-site).
For this reason, there is a much greater need for tools that can manage and monitor integrated cloud and on-premise IT environments. Consequently, many enterprise customers are placing greater emphasis on cloud management software strategies. Organizations are searching for an end to end, top down view of complex business processes and workloads, in order to increase productivity and engender greater business agility. Managing these environments goes way beyond provisioning and VM sprawl reduction. Security management, performance management, utlilization, availability, compliance, and productivity all need to be addressed by management tools.
So, managing and monitoring complex heterogeneous IT environments, in which an increasingly large proportion of IT resources are being delivered from the cloud is critical. Most management and monitoring tools remain on-premise and integrated with legacy infrastructure. Addressing changing needs which are often driven by migration to cloud computing is a major challenge for legacy on-premise implementations of IT management and monitoring software. Therefore, for buyers of IT management software, it increasingly makes logical sense to seek flexible and scalable SaaS versions of IT management software or IT management as a service.
In a recent discussion between myself and some Nimsoft executives, we discussed the SaaS market for IT management and monitoring. Nimsoft combines IT monitoring and service management to provide ITIL based IT Management as a service. It is joined by many small companies such as Spiceworks and Zenoss which have emerged to offer IT management as a service, as well as the larger traditional IT management firms. IT management as a service, offered by companies such as Nimsoft, is much easier to implement and use than traditional on premise IT management and monitoring products. The largest enterprises with the most complex IT environments will continue to express concern about the security, stability and strategic fit of cloud solutions. Nevertheless, IT management as a service offers enormous benefits to small and medium sized businesses and objections from the largest companies can be expected to be steadily overcome.
The ability of IT management as a service products to be integrated with on-premise resources as well as public cloud services, is critical. Organizations now need a console view of their complete IT environments as well as the benefits of cloud computing such as rapid provisioning, agility and scalability. The IT management as a service market, together with other cloud middleware markets, which focus on other forms of cloud computing enablement, will become prominent over the next year. Furthermore, IT management as a service will soon be commonly found in the largest organizations.
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